Brokerage

The buy side of the investment world is constantly looking for new methods to generate alpha, the metric that represents the active return on an investment versus the performance of a broader market index or benchmark.

When looking at the performance of major markets such as US equities and oil, 2018 has so far provided much for bulls to cheer. But one market that has clearly underperformed year-to-date is gold.

The name of the Tax Cuts and Jobs Act of 2017 describes its purpose: slashing the US corporate tax rate from 35 to 21 percent would result in executives investing the resultant savings into growing their companies, increasing productivity, creating jobs, equalizing wage inequalities. If only the executives were on the same page. Instead, many are funnelling the lion’s share of the windfall into share buybacks, benefiting their investors.

Secondary stock markets and cryptocurrency markets share a few things in common. First off, they have both been panned by critics. But more importantly, they have slowly gained acceptance as vehicles to provide funds to pre-IPO growth firms, some of which are now worth millions, and create liquidity pools for investors. Will crypto markets follow the trail blazed by the once denounced secondary stock markets into widespread acceptance?

The last few months have seen investors showing more interest in the cannabis industry. As they become more at ease with investing in the once-controversial product, and as authorities around the world continue to relax the rules surrounding its legalization

Cobalt, that versatile ferromagnetic metal, has experienced its own evolution; no longer used just to provide blue colour for glass and ceramics, it is today highly valued as a necessary ingredient for making those prized electric-car and smartphone batteries tick. Cobalt has seen its price rise and fall over recent years, but the current trend is in an upward direction as demand outpaces supply.

Investing has become more complicated over the last few years, and investment managers are stepping up to the plate. It’s not all about the money any more but also about the climate, human rights and diversity. ESG investing is consuming an ever larger share of the investment marketplace as today’s investors grapple with environmental, social and corporate-governance considerations alongside their goals of maximizing monetary returns.

During 2017, a few fortunate investors have made a lot of money very quickly on their investment in crypto-currencies, an asset class that did not exist just eight short years ago. But as with other rapidly evolving assets, that often seem too good to be true, the potential soaring profits of crypto-currencies are offset by the risks of crushing losses. “Investor beware” is the name of the crypto game!

Simply mentioning the topic of artificial intelligence in finance usually elicits a mix of excitement (“AI is amazing and can solve every problem”) and fear (“Will we all lose our jobs? Will robots cause the next market crash?”).

China’s shadow-banking participants, often shady non-bank credit intermediaries, are slowly coming to heel as the government ramps up its efforts to curb leverage in the sector. Once accounting for 87 percent of GDP, the growth of shadow banking’s assets were outstripped by the country’s overall GDP growth during 2017, indicating that China’s financial dragon may finally have been subdued by regulators.