Spent the day in Ottawa at Canada Life’s Advisor Roadshow with a great group of investment leaders, portfolio managers, and minds in our industry.
As expected, the major conversations were around AI, gold, Iran, inflation, and interest rates.
Fair enough. Those are the topics most investors are hearing about right now.
AI continues to be one of the more exciting pieces of our future. We are seeing potential applications in biotechnology, new molecule discovery, manufacturing automation, energy grid management, investment modelling, financial planning, and countless other areas.
But the more I learn about AI, the more I come back to the same view I have had for a while.
AI is not replacing the human side of advice. If anything, I believe it gives professionals in many industries more ability to focus on what actually matters.
In finance, health care, planning, and business, that still comes down to the personal relationship. The human connection. Understanding someone’s full picture. Their family, their business, their concerns, their goals, and sometimes simply being able to reassure them when the headlines feel overwhelming.
That part cannot be automated.
On the market side, there is no shortage of noise right now.
Geopolitical tension continues to create volatility. Some days it feels like peace and resolution are a long way off. But my view is that the world’s largest economies still have a strong incentive to find stability. Even the U.S. needs resolution to protect its own economy from burning too hot in the wrong places. Concessions continue to be made, and while nothing is guaranteed, I do believe this can be resolved to the best of everyone’s ability in the near future.
Inflation is the other major concern.
It feels like we just came out of a very hot inflationary period, with central banks around the world raising interest rates to cool things down. We felt that everywhere: mortgages, real estate, business lending, hiring, fuel, groceries, and day-to-day household cash flow.
Now, with oil prices moving higher due to Middle Eastern conflict, it is natural that people are talking about inflation and rates again.
But I think it is important to separate the inflation we saw after COVID from the inflation pressure we are seeing today. COVID created a much stickier inflation problem. Supply chains, labour, stimulus, demand, housing, and consumer behaviour all collided at once.
What we are seeing now has the potential to normalize if conflict settles and energy pressures ease. Not overnight, but over time.
For what it’s worth, central banks are not going to turn around and start hiking rates aggressively without giving the data time to play out.
Gold and precious metals were also a major topic.
I do believe commodities, gold, and hard assets have a place in most portfolios to some degree or another. They can play an important role as a hedge, especially during periods of inflation, uncertainty, or geopolitical stress.
That said, my long-term thesis still leans toward owning strong underlying businesses.
Businesses that provide a real product or service. Businesses with revenue, margins, cash flow, leadership, and the ability to grow value over time.
As a business owner myself, I understand how companies build value, and how that value can ultimately translate into greater value for owners and shareholders.
Gold has had an incredible run. Commodities may continue to matter if deglobalization remains a long-term theme. But for most long-term investors, I still believe the proof is in the pudding when it comes to quality businesses and consistent growth over time.
Not investment advice, just a reflection after a full day of great conversation.