Investing to potentially mitigate public market volatility

Investing to potentially mitigate public market volatility

For some investors, volatility, or swings in the market are an opportunity to buy, or to rebalance their investment portfolio. However, to others, volatility represents a higher level of risk and uncertainty that they wish to hedge against.

The world is currently facing a rapidly changing geo-political condition with the Russia-Ukraine conflict. Oil prices have soared as increased sanctions on Russia have spurred worries of a potential energy crisis; other commodities, including metals and wheat, have also seen steep increases. In addition, economists are still touting for central banks to tighten inflationary control, and the question remains: what impact will this have on the global economy, and on investment markets? The combination of these pressures has created up to 800-point swings in the stock market in a single day.1

An investor’s overall approach to investing may simply hinge on whether they lose sleep over volatility in their investment portfolio or whether they can stomach the potential risks and reward associated with the stock market. Guaranteed investments aside, taking risk at one level or another is a component of investing. Some investors’ ‘panic buttons’ are activated at the first sign of volatility, leading to questioning and doubting their previous investment strategy or third-party investment advice. This panicked mindset may even result in decision-making that may not be aligned with the investor’s risk profile or financial objectives.

Other investors are content to stay the course and resist emotion-based decisions, such as redeeming their investment based on current global events.

Diversifying one’s portfolio across a range of asset classes may assist with reducing portfolio volatility and increasing returns. Some private investments can potentially offer shelter from stock market volatility due to their low correlation to public sentiment and other drivers that create irrational market swings. For example, three real estate investment trust (REITs) owned by Skyline Group of Companies (Skyline) recently announced unit price increases, based on the growing underlying value of the real estate assets in the portfolios and their respective cash flows.

Skyline has a 23-year history of investing in institutional Canadian real estate. The unit price for each of Skyline’s REITs has over time, and historically has never experienced a regression.2 For example, Skyline Apartment REIT, the most established of Skyline’s three REIT investments, launched in 2006 at a starting unit price of $10; as of February 25, 2022, that unit price sits at $26.25,3 and investors continue to receive regular monthly distributions.

Each of Skyline’s REIT investments is classified as a private real estate investment and is not traded on the public markets thus less subject to market volatility. These investments are available exclusively through Skyline Wealth Management Inc., the preferred Exempt Market Dealer for the REITs, which has helped more than 5,000 Canadian investors help to diversify their portfolios with institutional-quality real estate in the private investment space. To learn more about these investments, visit SkylineWealth.ca.

Ray Punn
Vice President, Wealth Solutions
Skyline Wealth

Ray Punn is an experienced leader in management across the public and private sectors, including the Financial, Automotive, and Private Equity industries. As Vice President of Skyline Wealth, he leads a comprehensive team of Advisors, and oversees business operations, marketing, investment management, and investor relations. With a deep understanding of how each component of wealth management contributes to an exceptional investor experience, Ray and his teams focus on building long-term partnerships with Skyline Wealth’s valued investors.

References

  1. DeCambre, M. (2022, March 7). Nasdaq Composite enters bear market, and Dow tumbles 800 points to enter correction as Ukraine crisis worsens. MarketWatch. https://www.marketwatch.com/story/nasdaq-enters-bear-market-and-dow-industrials-tumble-nearly-800-points-to-enter-correction-as-ukraine-crisis-worsens-11646687108
  2. Past performance doesn’t guarantee future performance.
  3. Skyline Apartment REIT annualized returns as at February 25, 2022 are 16.89% 10-year, 19.40% 5-year, 20.68% 3-year, 15.42% 1-year, and 14.91% since inception (June 1, 2006).

Skyline Wealth is the exclusive investment dealer for four private alternative investment funds, each with historically stable performance since inception: Skyline Apartment REIT, Skyline Commercial REIT, Skyline Retail REIT, and Skyline Clean Energy Fund.

Skyline Wealth Management Inc. (“Skyline Wealth”) is an Exempt Market Dealer registered in the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec and Saskatchewan. The information provided herein is for general information purposes only and does not constitute an offer of securities. Sales of interests in any investments offered by Skyline Wealth are only made to certain eligible investors pursuant to regulatory requirements and available exemptions. Any information provided herein is current as at the date of publication and Skyline Wealth does not undertake to advise the reader of any changes. Commissions, trailing commissions, management fees and expenses all may be associated with investments in exempt market products. Please read the confidential offering documents before investing. There is no active market through which the securities may be sold, and redemption requests may be subject to monthly redemption limits. Exempt market products are not guaranteed, their values change frequently, and past performance may not be repeated. Nothing in this email should be construed as investment, legal, tax, regulatory or accounting advice. Prospective investors must make an independent assessment of such matters in consultation with their own professional advisors. Some of the investment products offered by Skyline Wealth are from related issuers. A full list of issuers related to Skyline Wealth and details of the relationship between them is available upon request.