For a long time we’ve stated that one of our goals was to remove industry jargon from the conversation about investing and investments. That’s because we see so many examples of jargon in the financial press. I’m not sure who the intended audience is, but it certainly can’t be real people. This week I was asked about the difference between a tax and a tariff.

At the beginning of the year, if we had swung a hammer in a room full of industry analysts, no amount of fancy footwork would have made it possible to avoid injuring at least one or two analysts who were predicting several or more interest rate cuts early during the year to tame inflation. And they would have been wrong! Because as we all have witnessed, interest rates were held higher for longer, as governments continued the battle against inflation.

Who hasn’t looked at a bunch of dots and instantly seen squares or lines? The human brain is wired to find patterns. It’s an evolutionary advantage. Patterns helped our early ancestors understand when to plant crops or how to ensure success during a hunt. It also kept us safe. That shadow at the edge of the forest that breaks the pattern of the tree line – it could be a predator. Be prepared.

Non-profit organizations such as charities, endowments and foundations play a vital role in society. According to Imagine Canada, there are over 170,000 charitable and non-profit organizations in Canada - 85,000 of these are registered charities. Many Canadians have donated time or money to a charity or non-profit at some point. The truth is, most Canadians will interact with hundreds of non-profits and charities over the course of their lifetime.

At the Paris 2024 Olympic Games, there are 32 sports and a total of 329 events. As a results, almost 1000 medals will be awarded. If past Olympics are any indicator, several athletes may win more than one medal. So, it could be that only 400 or so athletes out of 11,040 total will actually win a bronze, silver, or gold.

But what does this have to do with investing?

So…the Bank of Canada (BoC) did what it was widely expected to do this week and lowered interest rates to 4.5 per cent by implementing a 25 basis points (0.25 per cent) cut. It also signalled that more cuts could be coming in a few months’ time. The cut brings some relief to borrowers who have been struggling to make regular interest payments.

The 1964 movie “Goldfinger” (based on the seventh novel of Ian Fleming’s James Bond series) featured criminal mastermind, Auric Goldfinger. He is a man who, in the words of the great singer, Shirley Bassey, “is the man with the Midas touch.” The first two letters of his first name are “Au” (the symbol for gold on the periodic table of elements). Not exactly the most original of names, but we digress.

But Goldfinger isn’t alone. Over the centuries gold has been cherished and revered. From ancient Egypt to Spanish galleons and the Klondike gold rush, the love and lust for gold has been relentless.

Some scientists would suggest that time is an arrow, moving forward in a single direction. This negates the possibility of travelling back through time, which would be disappointing because so many great books and movies are based on that premise. HG Wells wrote about time travel famously in his 1895 novel, The Time Machine, for example. It also means the likelihood of encountering the Terminator or Marty McFly are slim.

In the 2000 film, Frequency, starring Dennis Quaid, a man from the present provides someone from the past with a wealth-changing stock tip. If only investing were as easy as talking to time travellers.

The human and economic cost caused by natural disasters such as hurricanes is staggering. Of the 363 billion-dollar weather disasters since 1980 in the United States (as of August 2023), hurricanes are responsible for over $1.3 trillion in damage, with an average cost of $22.8 billion per event. Mother Nature is a force to be reckoned with. (2)

This isn’t a treatise about climate change. It’s about the economic impact of natural disasters. Damage caused by storms, earthquakes and other disasters is almost always repaired - at a cost.

Summer is finally here! For some that means more gardening and more golf, for others it’s a chance to spend more time with children or grandchildren who are enjoying a summer break. However you enjoy your summer, enjoy it to its fullest!

But just because the season may have changed, it doesn’t mean that the markets have paused to notice.