Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

U.S. financial planner Blair Duquesnay argues that it’s not portfolio returns or the rate of withdrawal that determines retiree standard of living, it’s inflation.

Most investors are familiar with the calculations that show how long it takes for a rate of inflation to cut the value of one dollar in half. Ms. Duquesnay turns this on its head to make a good point – these formulas also show how long it takes for living expenses to double.

The column includes a chart showing that an average inflation rate of 2 per cent doubles living expenses in 35 years, 3 per cent accomplishes the same task in 23 years and 4 per cent in a short 17 years. With Canadians living longer, spending longer in retirement, these numbers are extremely important.

Story continues below advertisement

Canadians haven’t had to worry about inflation for a long time. Both the U.S. Federal Reserve and the Bank of Canada have repeatedly failed to push inflation levels to their 2 per cent target rate, and definitely not through lack of trying.

Morgan Stanley global strategist Andrew Sheets believes that, with his estimate of 7.4 per cent real global GDP growth in 2021, the era of ultra-low inflation and bond yields (which reflect inflation expectations) is ending.

In Morgan Stanley’s Outlook 2021, edited by Mr. Sheets, the research team wrote “we expect Treasury yields to move higher over the forecast horizon. We see 10-year Treasury yields trading slightly below 1.5 per cent by the end of 2021, and continuing to move higher into 2022.” The team expects Canadian bond yields to closely track Treasuries.

We are not yet at the point where older investors need to attempt portfolio inflation-proofing. It is not, however, too early to consider the potential effects of rising inflation levels down the road.

“Inflation is the single most important assumption in a financial plan,” writes Ms. Duquesnay. “It’s the reason retirees cannot live on a ‘fixed’ income and will need stock market appreciation to keep pace with price increases.”

-- Scott Barlow, Globe and Mail market strategist

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

Story continues below advertisement

Stocks to ponder

Greenlane Renewables Inc. (GRN-X) This Canadian company is a provider of biogas upgrading systems. On Friday, the share price closed at a record high on high volume. The stock has six buy recommendations and an average one-year target price that implies a 51 per cent return - on top of its 107 per cent year-to-date gain. Jennifer Dowty gives us a profile of the stock. (for subscribers)

The Rundown

Large pile of cash awaits corporate Canada when spending ways return

Canadian businesses have built up an excess cash position of approximately $80-billion over and above the pre-pandemic trend, according to CIBC estimates. And that means good news for investors when it comes to the continuity of dividends. Tim Shufelt reports. (for subscribers)

Does the bitcoin comeback really have legs?

Story continues below advertisement

Bitcoin is back. The flagship cryptocurrency, left for dead a couple of years ago, has more than doubled in value in recent months. It has far outshone gold, the traditional shelter for nervous investors. It has also left high-flying tech stocks, such as Amazon.com Inc. or Netflix Inc., in the dust. At nearly US$18,000, bitcoin is within spitting distance of its record high of almost US$20,000 back in 2017. Can it continue its rise? That depends on what is propelling its ascent. As Ian McGugan tells us, there are at least three theories that deserve attention. (for subscribers)

A steeper yield curve is a bank investor’s new best friend

Bank investors, meet your new best friend: a steeper yield curve. Canada’s Big Six bank stocks have risen nearly 15 per cent since the start of November, on average, and are now down less than 4 per cent for the year. To be sure, there are several factors working in the banks’ favour right now. But the role of the yield curve, which compares short-term government bond yields with longer-term government bond yields, is a welcome tailwind that could help lift bank stocks even as vaccine euphoria wears off. David Berman explains. (for subscribers)

Global dividends forecast to inch back from coronavirus cliff edge

Dividend payouts by the world’s biggest firms in 2020 will fall by 17.5-20 per cent, equivalent to some US$263-billion, as a result of the coronavirus crisis, a report on Monday forecast, but could rebound strongly next year. However, some firms that axed payments have restarted them, even if at lower levels, while vaccine breakthroughs are also providing hope of a bounce back in 2021. Marc Jones of Reuters reports. (for subscribers)

Others (for subscribers)

Story continues below advertisement

The highest yielding stocks on the TSX, plus risk data

Monday’s analyst upgrades and downgrades

Monday’s Insider Report: Company president invests $900,000 after a selloff and an 8.7% dividend hike is announced

Research report: What the charts are saying about where markets will go from here

Others (for everyone)

Blackrock ups U.S. equities to overweight, cuts Europe

Story continues below advertisement

Ask Globe Investor

Question: I’m wondering what your thoughts are about the company Stripe Inc. I have read some interesting things about it and have a small amount of spare funds that I’m considering investing in it. – Teresa S.

Answer: Stripe is a San Francisco-based software company that provides complete payments infrastructure for the internet. Its customers include Shopify Inc., Instacart, Microsoft Corp., Amazon.com Inc., Slack Technologies Inc, and Zoom Video Communications Inc. Its platforms support 135 currencies and payment methods. According to its website, 90 per cent of U.S. adults have bought from businesses using Stripe.

What we don’t know is what this means in terms of revenue and profits. Stripe is not a public company, so it is not required to release financial information. Since the shares are not publicly traded, individuals can’t buy in.

Presumably, the company will eventually announce an initial public offering (IPO) and list on a major exchange. There would be an opportunity to buy the stock at that time. But, based on recent hot IPOs, there will likely be high demand which could drive the shares sharply higher in the early days of trading. And the initial pricing will probably be higher than the company’s financials warrant.

I suggest you advise your broker of your interest in the stock and ask to be put on the list in the event he/she gets an allotment (not likely for a Canadian broker so if you have a U.S. contact try there). When the IPO is announced, check the financials carefully and decide whether the share price is reasonable. It probably won’t be.

Story continues below advertisement

--Gordon Pape

What’s up in the days ahead

The Contra Guys have some advice when it comes to Suncor Energy. And Rob Carrick makes an argument for locking in the TFSA maximum contribution at the current $6,000 level for many years to come.

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.

Compiled by Globe Investor Staff

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies