Staring At The Sun
Hi, ! Happy solar eclipse day!
Reports are that a million or so people are planning to flock to Niagara Falls for today’s once-in-a-lifetime phenomenon. I firmly believe that following the crowd usually leads to an average or subpar experience. With schools closed today, my family and I have decided to head over to Bench Brewery instead. The views should be nearly as spectacular, but with a limited attendance, the experience promises to be much more enjoyable. Plus, if it’s cloudy and we can’t see the eclipse, at least we’re at an intriguing venue!
Like many Ontarians, I’ve visited Niagara Falls multiple times, and it’s always been crowded. I can only imagine the chaos there today! The thought of the masses jostling for the best spot reminds me of the traditional approach to investing—following the herd.
Investing with the crowd can be as frustrating as the expected congestion at The Falls today. I’ve shared this chart before (below), but it’s worth revisiting as it highlights the pitfalls of “following the crowd.” We partnered with Harbourfront because we were tired of settling for mediocrity. When everyone invests in the same companies with similar allocations, the results are predictably average.
In terms of investment philosophy, we focus on what the “smart money” is doing, rather than what the average investor is doing. According to a Private Market Update by McKinsey & Company, which I had the pleasure of attending, institutional investors are increasingly allocating funds to alternative investments.
They highlighted the stability of the private sector and the significant opportunities in the Private Credit space for 2024 and beyond. Of course, even the “smart money” doesn’t put all its eggs in one basket. A globally diversified stock portfolio is essential to capture the growth of some of the world’s top companies. What sets the wealthiest investors apart is their allocation to alternatives, something often overlooked by the “average” investor.
For those planning to take a few minutes today to watch the solar eclipse, space.com has curated a playlist for you! Featuring tracks like “Eclipse,” “Ain’t No Sunshine,” and “Black Hole Sun,” it’s sure to enhance your viewing experience. You can check it out here.
Until next week, Happy Investing!
Trevor
P.S. Check out our Quarterly Market Outlook here.
