Tolerating Risk - A Guide for Canadian Investors

By, Amelia Dookhee, Pycap Venture Partners

Canada has long been criticized for its minimal risk appetite when it comes to investing outside of the typical ‘blue chip’ options. But, in order for an economy to thrive, and in order for Canadians to generate wealth instead of just preserving it, we need to reconsider how we invest. An exciting tradeshow will take place in Toronto on September 25-26, 2014 called Canada’s Investment Conference, hosted by Cambridge House International. This ‘candy shop’ for savvy investors will house a plethora of many different asset classes, for the first time, all under one roof. The conference will showcase exhibitions and presentations by expert analysts and entrepreneurs from Mining, Technology, Energy, Agriculture, Real Estate and Life Sciences.

 

Consideration of alternative asset classes could prove to be a valuable exercise for investors. Resource based firms continue to be a staple for Canadians and many investors have recently profited as a result of the mining sector’s 2014 M&A activity. One example is Yamana Gold’s takeover of Osisko Mining. This takeover allowed market sentiment to improve and helped to propel more deals¹. Technological advances have been creeping up into Canada’s private financing landscape with the increase of accelerators and incubators throughout Ontario, British Columbia and Quebec. Other alternative investment opportunities such as Real Estate and Life Sciences are now seen as a viable investment option in Canada as well. Toronto’s condo market is the largest in North America and construction is still going strong. Canada is on a major breakthrough to becoming the world leader in drug exploration and disease management – especially in the areas of Cancer, Diabetes, Heart Attacks and Strokes. With all this excitement and advancement Canada has to offer, we should seriously start ‘tolerating’ more risk.

 

The mining and metals industry has benefited from recent advancements allowing it to evolve and operate more efficiently. Mobile devices have been used to monitor expeditions as well as provide miners with better status updates that result in faster decision-making³. The arrival of analytics and big data into the mining sector has helped the metals and mining companies better control operational costs through the integration of resource modelling data and operational status updates³. These new advancements in the mining sector will allow resource-based firms to maintain their competitive position and control costs⁴.

 

Canada is a hotbed for new and exciting companies focused on Technology. At the conference you will get a chance to see a Toronto-based firm demo the world’s fastest, cheapest, smallest bioprinter. Another Toronto-based firm will demonstrate the abilities of a virtual, robotic assistant, that allows employees to work from home, while having a physical presence in their office. This new wave of technological advances is raising the bar of innovation in Canada and putting us on the world stage for promising investment opportunities.

 

Real Estate continues to be an exciting investment option as well. Toronto is seen as the ‘high-rise boomtown of 2014’ and has 50% more high-rises in construction than New York². This stable, investment opportunity could be a great addition to your portfolio for diversification purposes and as well as its return potential.

 

The Life Sciences sector is booming in Canada. The MaRS Discovery District - which is Toronto’s premier institute for medical and research sciences - are introducing groundbreaking innovations in the fields of biotechnology, nanotechnology, drug development and many more. With Canada seen as a global life science leader⁵ this will allow investors to take pride in adding new and innovative medical companies to their portfolio.

 

With all of this activity taking place in the Canadian financial landscape, it is difficult to understand why we are so risk-averse to the great investment opportunities found within Canada. Canada will continue to excel in the resource-based market and now its knowledge-based industry, in the form of technological advancements and breakthroughs in life sciences, will surpass all expectations, allowing Canada to become a powerhouse nation for investment opportunities. Now is the best time for Canadians to shed their ‘sissy state’ persona, and start adding a pinch of risk to spice up their investing appetite.

 

Works Cited:

1. http://business.financialpost.com/2014/07/30/mining-deals-defy-the-doubters

2. http://www.huffingtonpost.ca/2014/01/21/cities-most-high-rises construction_n_4638559.html

3.http://www.newswire.ca/en/story/1317241/digital-investment-to-disrupt-and-drive-mining-and-metals-industry-over-next-three-years-accenture-survey-shows

4.http://www.newswire.ca/en/story/1317241/digital-investment-to-disrupt-and-drive-mining-and-metals-industry-over-next-three-years-accenture-survey-shows

5.http://www.marsdd.com/news-and-insights/canada-emerging-global-innovation-hub-life-sciences-companies/