Episode 110 | Back to school, back to business

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Macan Nia   1:04

Welcome to Investments Unplugged. I'm your co-host, Macan Nia, Co-chief Investment Strategist at Manulife Investment Management. And as always, I'm joined here with my partner in crime, Kevin Headland.

Kevin Headland   1:21
How's it going?

Macan Nia   1:22
Yeah, not too bad. It's middle of August. The kids been out or have been at home for six weeks now, so I'm looking forward to them going back. Yeah, I'm about to go on vacation, so expect markets to correct 10%, but won't be my issue while I'm on vacation.

Kevin Headland   1:28

And you're about to go on vacation. And you're about to go on vacation.
Yeah.

Macan Nia   1:42
It'll be you handling all the the heavy the leg work, but.

Kevin Headland   1:42
Yeah.
Yeah.
If sorry, Macan, if anybody wants a little insight on that inside joke, check out Macan on's LinkedIn. He's got a great post on his vacation and how the SP500 tends to have some pullbacks and corrections while he's out of the office and enjoying vacation.

Macan Nia   2:01
So much so that clients, as much as they, you know, respect and they want to get our opinions, they just say, Macan, just tell me instead when you're going on vacation. That's all you really need to know given given the experiences, but we could save that for another day.
What we would talk, Kev, what we do for this Investments Unplugged is what we do every year at this time of the year. Dog Days of summer in August, September's coming up and it's personally my favorite holiday of the year, which is back to school.
Kevin, if I asked you, there's a there's been surveys done. What do you think Canadian's favorite holiday is?

Kevin Headland   2:37
OK.
Favorite holiday? Christmas.

Macan Nia   2:45
Yes.
Yep, 40% followed by.

Kevin Headland   2:51
Uh, Halloween. Is that a holiday? Early holiday?

Macan Nia   2:53
That's third at 8%. The second one surprises me, actually.

Kevin Headland   2:59
Labor Day. Oh yeah, it's always Midsummer. Fun celebration.

Macan Nia   3:00
Canada there.
Really. So it goes, goes quick. Sure, but it goes Christmas 40. I'm using round numbers. Kennedy at 16, Halloween at 8, and Thanksgiving at 7. I'm actually surprised by that. What?

Kevin Headland   3:15
You know what my second favorite holiday is?
My birthday.

Macan Nia   3:21
Oh, really? Those. Yeah. So with that, what we thought we would do is, you know what, given the theme of back to school is we would go back to school. We would, uh, you know, rip from the headlines things that are of interest for investors. So over the next.
Half an hour or so question we're going to answer. So are the risks of the global economy failing increasing?
We're going to also try to dive into what are corporations telling us about the current environment.
When it comes to bonds, it's never been a wilder time, maybe in history to be a bond investor. What happens now?
Adding two questions at the end, we'll talk to in terms of, you know, what's the most lucrative season of the year for retailers? And obviously it's back to school, but we're going to dive into the numbers. And last but not least is as our kids go off to school, we're going to look at where we would like them to go for post-secondary school, the world's highest ranking.

Macan Nia   4:22
Post secondary schools, but let's get started with the first question is are the risks of the global economy failing increase as we go into the last couple of months of the year? Do you wanna get it started or did you want me to go?

Kevin Headland   4:38
Yeah, I think, you know, just to get us started here, I think when you start about failing, I think you know a lot of people are talking about recessions and and that you know the the dreaded R word comes up. And last time many economists and and strategists like ourselves were talking about a weaker US economy and perhaps a recession was a couple years ago. A lot of the data points were pointing to recessions.
The Conference Board, the Economic Indicators, among others. And of course, we know it didn't work out. We haven't had a recession outside of COVID since the financial crisis. So it's been it's been quite a while since we had a typical recession. And when we look at some of the data points, you are seeing some weakness and we look at manufacturing.
And that is the key one for us. When we look at the US manufacturing, it's kind of right around that 50 level. It's not too hot, not too cold. 50 is that that positive line. Anything above 50 is expansionary, below 50 is contractionary for a manufacturing data set.
It's a survey based index and then you'll get Canada. That's one where we've been looking at really closely. I think you know a lot of people are talking worried about the tariff impact and that hasn't happened yet. But the Canadian manufacturing PMI index has contracted for the sixth straight month in July and it has.
Edged up slightly, so it's up from 45.6 in June to 46.1 in July, but it's still contractionary. It's still, you know, it's tweaking less quickly, shall we say. So that's something that's quite interesting. And one thing we really look at is underneath the the headlines, underneath the index.
Some of the contributing factors, both output and new orders remain in negative territory. I think that is one of the risks going forward is saying if people aren't or manufacturers aren't increasing production through demand or purchasing inventory to prepare for future demand.
That could really cause an impact on the economy, and perhaps tariffs are one of the aspects where we're kind of in this holding pattern, especially in Canada, in terms of where they're going, what should manufacturing manufacturers do?

Macan Nia   6:45
Yeah. And when you reference the global PMI is as you mentioned from a manufacturing perspective.
It's generally weaker across the board. When you look at it from a headline perspective, the globe business confidence for the year ahead. So they ask them a question whether they're optimistic about the year ahead that has slipped to a three month low across the world.
Growth across North America has slowed. the US is seeing only a mild increase in production, while you're seeing, as you mentioned, steep downturns in economies, manufacturing economies like Canada and Mexico. So when you look at it from a manufacturing perspective, it's a mixed bag.
They also have the service side of the equation where they they survey managers and service based companies and.
There was a general weaker trend over the last, I would say three to five months, Kev. And then in July we've got this one data point where July there seems to be a pickup back in services and one month of data point like a one month is not a trend. We typically look at least you got to see three months of it, but something.
Interesting, but it just speaks to not too hot, not too cold, as you mentioned, right in the middle. We still believe that the balance of risks are to the downside, but when you look at OK, the global economy, the risk of it failing, I EA recession, while it is possible.
The odds, we believe it's probably not probable. Another interesting thing to look at, Kev, and we've been talking about this, is tourism, specifically in the US, and we have seen sharp decreases in tourism in the US, which has led investors to take OK is.

Kevin Headland   8:27
Yeah.

Macan Nia   8:35
This, you know, international travellers, elbows up right in Canada. I'm not going to spend my tourist dollars in the US. Is it? Maybe some are afraid of going into the US and, you know, just given what's happening with immigration policy, there's a maybe a heightened level of fear.

Kevin Headland   8:39
OK.

Macan Nia   8:54
Vegas is being brought up a lot because Vegas travel is down significantly and in the month of June, year over year, it's down 11%. And this has been month over month of continuous declines. And I think one thing, and we've learned this by researching it, is the mix. OK, who's going to Vegas?

Kevin Headland   9:04
No.

Macan Nia   9:13
I initially thought it was majority international travelers, when in fact it's actually not the case at all. You said it's probably more domestic. We looked into it. 80% of travelers to Vegas are actually American, 20% are international.
All that 20% that are international, Canadians and Mexicans make up the vast majority. It's closest 60%. So Americans matter for Vegas travel, Canadians and Mexicans matter for international travel. So when you see the numbers are down.
It's not based on those three reasons I talked about before. Maybe it's a sign of, you know, the health of the US consumer in terms of spending disposable income.

Kevin Headland   9:56
Yeah, it could be, you know, that decision matrix, right? You you go ahead and spend on a travel here. Maybe you're traveling closer to home, a little bit cheaper and more staycations. But definitely it's interesting again as these traditional data points or data sets have not necessarily worked in the recent past or recent history to point to weakness in in.
In in either the US economy or global economy, maybe it is looking at these kind of softer data or service surveys or these underlying transport data. What's you know, how are the airports doing kind of like we did in COVID to kind of show at least the direction of softening, but something to be mindful of going forward.
I think right now it seems that yes, we're getting a slower economic growth, something to watch, but nothing is pointing to an imminent recession just yet.

Macan Nia   10:45
And they pointed to, they asked the Las Vegas Travel Council, why do you think travel is down? And for the reasons we highlighted before, but they also didn't mention it's just more expensive to go to Vegas when you factor in the cost of dinner when you.

Kevin Headland   10:58
Yeah.

Macan Nia   11:00
Fact put aside your lose, your losses at the at the casino, but it's also expensive and what the hotels are doing is offering deals that we haven't seen in quite some time. So as you mentioned, something we're watching is the risk of the global economy failing, increasing it is.
But.
Is it from a grade perspective there? It's probably in AB, right? It's in. It's in that middle area. Next question, I'm sorry.

Kevin Headland   11:24
Just Marco, just I want to add just that one of the things also is is one of things coming up recently on the road with advisors in my discussions is also do we trust the data coming forward big issue with the US jobs members that came out recently and and that impact.
There's talk about perhaps going forward, maybe not publishing some of the data sets. So again, that is an issue trying to forecast economic growth and some of the risks that exist if a trust factor or lack of publishing of data might be something going forward.

Macan Nia   11:57
Right. So let's go into the next one. If we may not be able to rely on the typical data sets we have, maybe not all of them equally like we used to. I think 1 area that we can continue to focus on is what corporations are telling us and what have corporations told us.
About the current environment, we've gone, we're going through earning seasons right now. When we look at the US, 90% of reported as of right now 80. So again, I always like using round numbers, easier to remember 80% of S&P 500 companies.
Have reported positive EPS surprises. Approximately 80% have have reported positive revenue surprises. When you look at the US, for example, earnings growth is around 12% for the quarter. The number of S&P 500 companies citing recession on the current earnings call.
This quarter compared to the first quarter is down 90%. You're seeing this trend globally. Earnings, you know, interesting enough, when you look at earnings internationally, they're not as robust as the US, Canada also not as like they're not at like the US has shown very resilient earnings.
But what corporations are telling us right now is, again, resilient earnings.
What happens with earnings during recessions, you get a negative year over year earnings decline. We're not seeing any sign of that. So to what you talked about when with the fundamentals makes me feel better about the fundamentals that core global corporations, obviously there's nuances depending on the region, the sector, the business.
But equities have been doing pretty well, been driven both by earnings growth and a bit of valuations.

Kevin Headland   13:46
It's interesting that the stats you you just mentioned come from Factset, which is a really great source of of understanding some of the earnings environments in in different quarters. One thing I found a little bit interesting from the report is the guidance. So for Q 3/20/25.
38 SP500 companies have issued negative earnings per share guidance and 40 have issued positive. So kind of split in the middle. This is when we look at the drivers of Market returns. If we think about equities, it is very.
Company specific and I think it's going to get more company specific given where valuations are on a Macan cap weighted perspective, they're above long-term averages on an equate perspective, they're right in line.
That tells me that value should, value should may not be the material drivers of the next leg of performance higher and it's like going to be earnings. And when it comes to earnings, again, we want to look underneath the hood, look at specific companies to see where their earnings are going.

Macan Nia   14:40
Right.
Yeah. And as of the time of recording, when I'm looking at the valuation landscape across the globe, there is no screaming opportunity. I look at S&P 500 Market cap, we're twenty-four times forward.
When I look at even equal weight, we're at 19, which is a little bit more in line, TSX at 18 times above its five and 10 year across the board, EM, Europe, EFE, they're all trading at higher than their five and 10 year. So to your point Kev.
Valuations cannot be the driver of returns every year. As much as we all would like that, it becomes a story where valuation passes it on the baton to earnings. Moving forward, we're optimistic on the earnings growth.
But it is going to be the driver of returns. Now we're not sitting here saying that we're not vulnerable in the short term to a pullback. Of course we are. We are and we always mention this and it's funny when we mention this usually get do get a pullback is Market seen price for perfection.
Valuations are stretched. The big beautiful bills been priced in tariff uncertainty. While there's still some that remain, most of that has been taken out. What's going to be that driver of the catalyst, you know, moving forward? Seasonality becomes an issue in September.
Also you have very concentrated position. So I think in the near term we may be vulnerable for a little bit of a pull back. I welcome it. I think it would be very healthy when we look at the year plus it's still I think positive backdrop for equities.

Kevin Headland   16:30
Momentum continues to be a big driver and it seems that every time there's a slight little bump in the road, buyers come in. There seems to be a willingness to be invested. Things are are less bad than they perhaps were worried about, especially post Liberation Day. Europe as well. Fundamentals are better there. Manufacturing data picking up.
Up spending, government spending, fiscal spending. There's a lot of support there. As you said, it's hard to push against the momentum. It'll take a pretty big catalyst, I think, to get a material pullback, but I would expect some some choppiness going forward. Things don't go up in the directional line forever.

Macan Nia   17:08
So what are corporations telling us about the current environment in the US and to an element in Canada? I think they're telling us that the impacts of tariffs have yet, if they're going to be felt, have yet to be, you know, digested by consumers.
Earnings environment is resilient in the US. There's pockets of opportunity internationally, but from a broad-based perspective, they're actually much weaker than the US. But what they're telling us is, again, similar to the macro backdrop, it's not too hot, not too cold.
Just meandering through. Let's go to the next conversation. It's never been a wilder. Maybe I'm being dramatic, but it's never been a Wilder time in history to be a bond investor. What happens?

Kevin Headland   17:55
I think, I think you're being very dramatic there. I was like back to basics. Why do bonds matter versus it's it's a wild time invested fixing them.

Macan Nia   17:57
Doubt.
Well, we know that wild headlines drives or is likely to increase subscribers. So maybe that's why I'm being dramatic, Kevin. But to your point, what are bonds telling us? Let's start with.
Why are you owning bonds? I think we are conservative and we're saying we're going to own bonds for just the income. We're comfortable, we're clipping our 5%. When we factor that in a balanced portfolio with our equities, we get that, you know, balanced approach of seven, 8%.
There is opportunity for more price appreciation, but I would not be relying on that as we move forward. The inflation, what's at risk for bonds is the inflation backdrop if it starts increasing materially.
We have not yet seen that happen. I think a risk for some bonds today is the fact we're almost pricing in three cuts now, right? For the US Federal Reserve, you look at September, I think when's the one after that? Is it October, December or is it September? No. Yeah, so September, October.

Kevin Headland   19:06
Yeah.

Macan Nia   19:09
Basically Markets are pricing 100% chance of that cutting and in a 60% chance I believe in December they may be disappointed by that. That being said, Markets are all time high, Bitcoins at all time high, home sales are at all or not home sales. Home prices are very high. Does Jerome Powell really want to be cutting materially in this?

Kevin Headland   19:27
Yeah.

Macan Nia   19:28
Backdrop. I think we could debate back and forth, but so that's the risk in the near term. But again, when I look at bonds, the biggest risk to bonds for a medium term investor is a hiccup in inflation and we're just not seeing that.

Kevin Headland   19:41
Yeah, it's interesting you're talking about what's being priced and I'm just looking right now on on my Bloomberg terminal here, roughly about 100% pricing for the mid-September rate cut, about 70% pricing for the end of October rate cut and about 85% for October, yeah.

Macan Nia   19:48
Yeah.
Oh, it's only 70% now. I checked a couple days ago. It's closer to 100. OK, so 70 for October and then how much for December?

Kevin Headland   19:57
It.
At about 85. So just look 2 1/2 rate cuts fully priced in between the next three meetings. So that's you know definitely a big change. I think when you talk about wild ride, I would say it's been a really wild ride in terms of the movement in Market expectations for central bank rate cuts.

Macan Nia   20:02
Oh wow.
Yeah.
Absolutely.
Absolutely.

Kevin Headland   20:19
Over the last two years, not too long ago, the expectation was 6 rate cuts and we didn't get any. So it's been quite interesting there. And what that really means I think is also when you talk about bonds, a lot of investors and listeners think about.
Bonds as government bonds. I'm buying Canadian government bonds. I'm buying U.S. Treasury bonds. Not even thinking about the different maturities, short duration, long duration, but there's different asset classes in one area that I think is kind of a sweet spot right now seems to be investor grade rated bonds.
Those companies that issue bonds in above a triple B rated level, they're very low risk of default. Currently, average prices are below par, which tends to be $100 on a bond and yields remain.
Very attractive, I would say they're above average. We're sitting just around 5% on the Bloomberg US Invest Grade credit index. As you mentioned, 5%, OK, maybe you think about a fee, get a bit of price appreciation. That is the average as well. We talk about equities and it being such a stock pickers Market or maintain.
Paying attention to individual companies, I think the bond Market right now is so specific in terms of the individual issuer. There's little nuance and opportunities for active fixing of managers to take advantage of this Marketplace, I think many.
Listeners might be surprised that some bond funds.
For the first half of the year, we're already up 3%. You know if you think it's strapping that full year net of fees, you're up 6%. If your target is 5 or or three to six, you're kind of rain that range. And I think given the how strong the equity Market is, many might be surprised at how good certain fixed income management doing and just like equities I think.
It's not about just Canada or US, but globally, there's opportunities in Europe, there's opportunities in Asia, in Australia. This, you know, bond Market is is a big, big universe globally and I think it's important to to scour the world to find the best opportunities.
In fixing them like equities.

Macan Nia   22:32
Yeah. And the volatility is likely to continue moving forward over the next 3 1/2 years, providing not only our equity managers, but our bond managers opportunities to invest given wild moves we're seeing within the.
The bond basically the the move index which is the equivalent to the VIX for the S&P 500. So when we look at the bond backdrop, we continue to be rewarded for the pain that we had to endure in.
2022 and 2025 looks like it's going to be another, you know, Goodyear for bonds.
So let's move forward to the next question. Kev is back to school shopping. It's the second most lucrative season of the year for retailers. Clearly the number one is Christmas I have.
Nightmares about back to school shopping. I think back have. Oh my goodness, I had one horrible experience when I was young. I was 5 going into grade one, went back to school shopping or it had a obviously a very profound impact on me.

Kevin Headland   23:32
Really?
Can we remember this?

Macan Nia   23:45
Go back to school shopping to with my mom. Remember unlimited basics.

Kevin Headland   23:50
I don't think we had that in Montreal growing up.

Macan Nia   23:51
The clothing brand. Oh OK, so very well known brand across Canada and my mom back to school shopping buys me this pink and purple outfit, T-shirt and shorts.

Kevin Headland   24:05
Love it. Do you have pictures? I'm going to call your mom.

Macan Nia   24:06
Try to push back. Oh my goodness. I wonder if actually if I do have pictures. Try to push back. You know, you're five. You only have so much. I don't know why my mom was adamant about this first day of school. Kevin, imagine grade one going to school. Now pink and purple are popular.
Back then, it was a different view. Got made fun of a lot. Dr. First day, Kev had an impact on me. Told my mom, came back. I'm like, never again. But for most kids, it's, you know, remember going with your parents, buying Macaners, buying pen or buying whatever it is, school supplies. What's interesting.
Interesting about this back to school. So they're already getting the the info out because right now back to school seems to start in July. Deloitte does a back to school shopping survey every year and what they've come out and said is back to school spending is expected to decrease.

Kevin Headland   24:52
Yeah.

Macan Nia   25:00
Due to tariff driven price increases, economic uncertainty and overall spending is projected to be roughly 31 bill down 7% from a few years ago. What they've also noticed pardon in.

Kevin Headland   25:13
In the US.
Sorry, is that US?

Macan Nia   25:16
This is in the US. I assume it's the same in Canada. Families are focusing more on essential items like clothing. They're cutting back on technology supplies, school supplies. More shoppers are opting in for cheaper private label brands and.

Kevin Headland   25:17
OK. Yeah. OK. Yeah.
Yeah.

Macan Nia   25:33
When they say I like economic, like the surveys of the parents. So it's a survey of parents. Parents are saying they're anxious about potential price increases. They're cutting back on other aspects like dining out, recreation activities. So I find this soft data also aligns with maybe the soft data with Vegas travel.

Kevin Headland   25:49
Again.

Macan Nia   25:53
That highlights that not the US consumer, never count out the US consumer rule #1, but they are at the margins are facing challenges from a disposable income perspective.

Kevin Headland   26:01
Yeah.
I was thinking, as you said, it's at the margins. It's a little bit, little tweaks, little changes in mentality. Now, you know, I have less perhaps apprehensions about back to school shopping. You don't go into stores anymore, really, and walk around like you used to. You're online. For me, it's it's shoes for the kids. They keep moving and getting. It's like they get.
Your shoes so fast. I'm like, oh, do they have shoes and they need indoor shoes and outdoor shoes and trying to figure that out and trying. Of course, as we know, I'm Scottish and a bit frugal, like perhaps you're frugal as well. I like to find deals and you're noticing you have to get earlier and earlier to get the deals like deals are starting in June and July. It's interesting you talked about.
Deloitte, but we're looking at the National Retail Federation and start the 2/3 of Americans with school-aged children started shopping for the upcoming school year in July, the earliest on record. So again, people are getting ahead of things.
One is the deals are starting earlier. Remember that it was like back to school advertisements the week before school. Now it's two months before school starts now in the US.

Macan Nia   27:10
Yeah, just like anything now with these seasons, it seems.

Kevin Headland   27:15
And the US school starts earlier. Worse in Canada, we're used to that after Labor Day. For some school age children in the US, they go back to school already, which is unreal to me. Like, imagine going to school in August. I can't hope they have air conditioning, but it's quite interesting there.

Macan Nia   27:17
Yeah, it does.
And then one thing I found interesting before we move on to the next topic is demand for standard shipping has increased nearly 75%. So and consumers are opting in for longer delivery times to reduce the cost of shipping. So just another sign that you know what?

Kevin Headland   27:45
Is.
Hmm.

Macan Nia   27:47
Do I really need it to get it tomorrow or today? I'll wait three days, pay less in shipping now.

Kevin Headland   27:52
There's a sorry, going back, just want to talk about Canada for a bit because we're seeing the same issues in Canada.
Where we have right now rakuten.ca actually did some another some more surveys on on Canadian back to school shopping and 89% of Canadian parents believe that shopping costs have risen in years.
With clothing being more than half of that, which is the 49% of the spending for that bit. So it's not just the US, Canadians are feeling a pinch. A lot of talk about tariffs in in surveys, a lot of uncertainty. Should I go buy things now before tariff impacts? A lot of worry about increased prices. So we're seeing it not just in Canada, not just in the.
US, but also within Canada as well.

Macan Nia   28:38
Let's go to our last topic where we're sending our kids off to school. As parents, we all dream of them reaching heights that we didn't reach, living vicariously through them. And one area is school, so the world's highest ranking post secondary educations and.
The reason I'm bringing this up is there has been questions of US exceptionalism and for me there may be bumps along the road, but as long as you have one of the top tier post secondary educations in the world, I think you're set up for success in the future. So there's.
There's three major ranking systems, the post-secondary QS ranking, the ranking RRW, sorry, excuse me, ARW ranking. And of the top ten, there's usually 70% of them are American institutions. So the examples are MIT, Harvard, Princeton, Stanford, Berkeley.

Kevin Headland   29:18
Yeah.
2.

Macan Nia   29:29
The international ones are typically Oxford and Cambridge. Why that matters is they're pumping out the top grads. These grads are going out and creating that new company. They're creating the Googles of the world. They're creating. Well, Matt is a bad example cause he was a, you know, high school, he was a college dropout.
The Teslas, as long as you have the top Uh education system, you will pump out top talent and they are more likely to be able to create cutting edge companies. And these top schools have substantial funding, right? So they can.
Engage in innovative projects. They can engage in hands on experience in the field. And when you look at the CEOs of Fortune 500 companies, they come from these names. So of this 400 or Fortune 500 CEOs, 20 of them come from Harvard, 12 of them Stanford, MI T's five. So as long as you have the top.
As long as you have the top education system in the world, you'll continue to pump out top tier talent that are more likely to pump out top tier companies that will pay revenue and do hiring.

Kevin Headland   30:34
Seriously, I figured it'd be higher your Fortune 500 companies you're you know we're looking at maybe 1015% of them are are coming from those mainstream institutions and it'll be interesting to see going forward, do you see more you know entrepreneurs and innovators?
Not going to the schools we used to see and maybe that's change that will change in the future. We'll be interested to see what happens there. A lot of talk about AI shifting those younger individuals like what? What do your kids want to do when they, you know, go to school? My son says right now he wants to be a lawyer. Maybe that changes. I don't know. He also says.

Macan Nia   31:01
Yeah, that's a big one.

Kevin Headland   31:11
He wants to go to Harvard. I say, I hope you better get a scholarship. I don't think I can afford Harvard, but it's nice to see. Obviously that, you know, he's ambitious and he's pretty smart, but maybe that changes. Maybe more people want to go look into, you know, trade schools. That's one thing where AI is not going to replace. You're not going to replace a.

Macan Nia   31:14
Nah.
Yep.

Kevin Headland   31:31
Summer or a drywall or a framer. And I think also when we look at this school systems, perhaps in the past we've looked at trade schools or the general people look at trade schools as kind of lesser. But I don't know if you know anybody that is in the trains right now. It's a pretty lucrative area to be invested in, I think.
A lot of younger people should also look at the wide selection of advanced education, you know, post-secondary education, wherever it might be. And really, ideally they find something they really enjoy doing.

Macan Nia   32:03
Yeah, I think that view towards trades, I think, you know, generally people thought very highly of post-secondary education, which I still do, but it also is very, very diploma specific.

Kevin Headland   32:13
Yeah.

Macan Nia   32:19
Study specific and just going to university to think that I'm gonna have a better job is not necessarily the case anymore. Any guesses? Any guesses, Kev, in terms of the Canadian schools? Who's who's number one?

Kevin Headland   32:27
100%.
Either UBC or McGill.

Macan Nia   32:36
So McGill, 27th ranked U of T is #2 at 29th and then UBC as you mentioned at 40. So we we have top tier post-secondary schools here. I think that's a good, a good, a good place to stop Kev when we look at their back to school, you know, catching up, you know we've been.

Kevin Headland   32:45
This.
Yeah.

Macan Nia   32:56
In a way on holidays over the summer question, the three main questions when it comes to the fundamentals are the risks of the global economy failing, increasing. They are, but it's at the margin. It's nothing that we are as of now concerned with that a recession is imminent globally, especially.
In the US, when we look at equities, what corporations have been telling us about the current environment, the US, despite all the head challenges, they've been able, U.S. companies have been able to remain resilient. International companies not as much, but you're still seeing positive earnings growth, positive revenue growth.
And then last but not least, the back to basics for bonds and back to basics for bonds for us means let's be conservative, let's set realistic expectations and let's just assume for a return perspective that we're only going to clip the coupon.
Anything else is upside, and if you're just clipping the coupon, you're looking at 4 to 5% for probably total return for 2025. Nothing to sneeze at.

Kevin Headland   34:00
Yeah, it looks, you know, a pretty good environment. I think it's something that we should be, you know, always looking for what's going to happen next, but no reason for run for the hills. At the same time, maybe it's not time to be swing for the fences and and look for the the big returns. I think it's being pragmatic, setting expectations.
But at the same time, being invested in the right areas, I think will help investors and listeners achieve their goals.

Macan Nia   34:24
So that's a good place to stop. Again, we want to thank everyone for taking time out of your day to listen to us. We know you have a a lot of options when it comes to podcasts, so we appreciate you tuning in. Recommend us to your friends, families. As we always joke, joke. Put us in the background while you work if you learn one thing over the 30 minutes.
We're not gonna guarantee you're gonna learn more, but if you learn one thing, I think that's good use of your time. Kev's still looking for the elusive one download in Antarctica. We haven't got it yet. If you know anyone, I know Kevin tracks this very closely. It means a lot to him to have this downloaded in every continent.

Kevin Headland   35:01
I.

Macan Nia   35:04
Across the world. So if you are going to Antarctica, please download us. It will make Kevin's day. But other than that, I want to thank everyone for taking time out of your day and listening in. Any last comments, Kev?

Kevin Headland   35:17
No, all good. Marco, have a great vacation. I really hope that I will be taking in extra work if given the Markets pull back. So I'm hoping for a good environment for both you and I.

Macan Nia   35:20
Thank you.