Jul 15, 2024
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The Copa America semi-final match between Canada and Argentina on July 9, prompted more than a few cheers and jeers — among soccer and music fans. Argentina won the match with a final score of 2 to 0 with the win largely attributed to long-time fan favourite and internationally-decorated Argentinian striker, Lionel Messi. However, the loss wasn't just felt on the field. Shortly after the final score, social media was made aware of hometown rapper and “6ix God” Drake's staggering USD$300,000 bet supporting the Canada's soccer team.
The actor-turned-musical juggernaut revealed on Instagram that he'd made the bet, in part, because he could've won USD$2.88 million had the Canadian team pulled off the win. Just after the Les Rouges loss, a cleverly-timed response from Argentina’s social media account showed their players celebrating the victory with the tagline “Not like us, not with us.” Immediately, those well-versed in rap beefs recognized the diss — since “Not Like Us” is also the name of a ruthless diss track by American rapper and Pulitzer Prize winner, Kendrick Lamar, who aimed the acerbic tune directly at his musical nemesis, Drake.
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For Drake this recent sports bet loss may not put a big dent into his current bank balance, but the impulsive actions of the “Rich Baby Daddy” rapper should illustrate that placing bets based purely on chutzpah is never a reasonable decision.
For investors — or thrill-seeking speculators with an appetite for an adrenaline rush and the stomach for market volatility — here are three ways to put your money to work, responsibly.
1. Try your hand at crypto
Cryptocurrency, such as Bitcoin or Ethereum, is one of the most volatile investments you can make, especially since it is unregulated. As a digital, alternative form of currency, it’s managed by the people who use and buy it.
Expect extreme fluctuations and dedicate a small percentage of your portfolio to crypto investing rather than your entire life’s savings. Otherwise, you risk losing a portion – or all – of your hard-earned cash.
On the other hand, we’ve seen incredible returns in the 1000% or more range, so investors with an appetite for big gains (with a risk for big losses) may want to invest, accordingly. Even those with less of an appetitite for risk can capitalize on these market gains with Canada’s first robo-advisor, Wealthsimple, offering a regulated cryptocurrency trading platform called Wealthsimple Crypto. An an online platform, this crypto exchange allows investors to buy and sell crypto — for free. You can even invest your TFSA or RRSP in the Bitcoin ETF. Sign up for Wealthsimple Crypto today.
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2. Try investing in a precious metal like gold
Unlike stocks or real estate, gold doesn’t produce an income. Its future value is tied to price speculation rather than earnings or dividends, unlike an exchange-traded fund (ETF). In the last year, due to high inflation and geopolitical uncertainty, analysts have been cautious about the outlook for the gold market.
Moreover, there’s considerable risk in taking physical ownership of gold bars, coins, or even certificates, since they could get lost, damaged or stolen.
However, gold investors have made a mint over two decades, with an annual average return of 9.7% between 2000 to 2020.
If you’re interested in investing in this flashy — and megastar musician-approved — commodity, it may make more sense to get your gold exposure through a low-cost gold ETF backed by physical gold (stored in secure vaults), which tends to move with the spot price of gold. If you can’t resist the allure of individual stocks, stick with the big names like mining companies such as Barrick Gold (TSX:ABX) or Kinross (TSX:K) that have proven operations and performance.
3. Try investing in income producing trusts (aka: REITs)
Real estate investment trusts (REITs) are surely the less risky and more consistently lucrative choice for an alternative investment, since they can represent different property types in different markets.
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Some examples include:
- Commercial (office buildings, warehouses or shopping malls)
- Multi-residential like apartment buildings
- Storage facilities
- Data centres and server faciliites
However, choosing the optimal REIT isn’t always easy, since you’ll want to find one with the right mix of assets and a strong management team that can consistently grow profits. That requires due diligence on your part, and will involve having to sniff out lucrative partners from their potentially subpar counterparts, or even bad-faith actors looking for a quick buck.
Another risk to be wary of involves interest rates. REITs don’t typically perform well when interest rates rise. Investors often see it as an opportunity to purchase bonds and other forms of fixed income instead, which tamps down REIT demand and share prices.
As such, the last few years would have been quite cumbersome for REIT performance, with the suffocating effects of inflation and higher interest rates providing hurdles for investors looking to capitalize on the real estate market. Hopefully, the June 2024 rate decrease will signal further dips in the future and more breathing room for investors — and make returns from REITs more appetizing for investors.
To get started, open a brokerage account that offers access to publicly traded REITs. Good options include:
- Qtrade: Customers get free trades on hundreds of ETFs, while stock trade fees and other share purchase are as low as $6.95 for elite account holders. Receive a sign-up bonus when you open and fund a new Qtrade account today.
- Questrade: Trading fees range from $4.95 to $9.95 (depending on the account). Open a Questrade account today and get $50 in free trades.
Bottom line
Investing can seem like a daunting journey, but with a diverse portfolio and acknowledgement of risk, it can also be incredibly rewarding. Whether you're dipping your toes into the exciting world of cryptocurrency, safeguarding your wealth with precious metals like gold, or exploring the steady income potential of REITs, there's a strategy out there to match your risk tolerance and financial goals. Remember, the key is to stay informed, diversify your investments, and be patient.
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A Toronto-based writer and editor with both in-house and freelance experience on a variety of topics, including art, fashion, pop culture, film, television, music, current affairs, breaking news, and managing and money and P&C insurance.
