What are the current Key Investment Themes ?
.. and a warning on Housing and Consumer Spending
Top Investment Opportunities
Utilities - Positioned at the center of infrastructure upgrades, electrification for climate goals, and AI/data center power needs.
European Equities - Expected to benefit from increased fiscal support (led by Germany relaxing borrowing limits) and attractive valuations after underperformance.
Gold & Gold Miners - Supported by central bank buying, geopolitical uncertainty, and "de-dollarization" trends. Gold miners remain undervalued despite strong fundamentals.
Bank Preferred Shares - Offer attractive yields with capital appreciation potential, especially benefiting from deregulation efforts.
High-Quality Bonds - Elevated interest rates provide attractive returns while real rates remain at multi-year highs.
Canadian Infrastructure - Set to benefit from increased government spending after years of underinvestment.
Housing Crisis Warning
The housing market faces a severe affordability crisis:
Median income needed to buy a home: ~$100k
Actual median income: <$70k
Mortgage rates doubled from 3% to nearly 7% in five years
Starter home prices jumped from $247k to $342k in just five years
Monthly mortgage payments now consume 37% of median buyer income
Climate change adds another $1.2 trillion in potential housing value destruction by 2055, with 55 million Americans expected to relocate due to extreme weather.
Real Estate Strategy: Cash-only, unleveraged positions in healthcare REITs, data center REITs, and climate-resilient areas.
Consumer Spending Shifts
Americans are becoming increasingly frugal:
Volume spending on discretionary items down in 4 of the last 5 months
Shift from dining out to dining in
When dining out, consumers skip appetizers and share meals
Restaurant activity fell 1.2% in May alone
Grocery buying shifted toward frozen pizza, canned goods, and store brands over name brands
This consumer retrenchment pattern historically occurs only 8% of the time and previously coincided with recessions in 2009 and 2020.