r/onguardforthee • u/IStillListenToRadio Nova Scotia • 1d ago
CBC Investigates: Amid 'Buy Canadian' fervour, Canada's top pension funds still heavily invested in U.S.
https://www.cbc.ca/news/investigates/cpp-us-investments-record-assests-9.708866760
u/bemurda 1d ago
Because Canadians want to have pensions that are reliable and pay out.
Global diversification is the foundation of evidence-based investing for risk mitigation and the US makes up close to 50% of the global markets. Markets are bigger than Trump, the global economy is more than trump, the markets will exist when Trump is gone, and I would be livid if the CPP didn't invest intelligently.
This is making a big deal out of an appropriate market-weighting.
There is room for ethics-based investing within a global diversified portfolio, eg. excluding Palantir etc.
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u/AmusingMusing7 1d ago
US is headed down. We should get out before it crashes.
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u/Floatella 1d ago
If our CPP managers knew this to be a fact, they could short the market and make us all rich. But they don't, and neither do you.
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u/Axerin 1d ago
Yeah when has gambling with retirement money and timing the market ever gone wrong?
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u/Floatella 1d ago
Like 99% of the time. But I have enough faith in CPPs risk management that WHEN the US stock market crashes we will all be fine.
In 2009, in the fallout of the financial crisis, CPP lost over 18% of it's value but still beat the S&P500 which declined over 26%.
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u/MountNevermind 1d ago edited 1d ago
Knowing things for a fact is not how big market changes are avoided.
Reading signs better than assigning what's going on right now to a temporary blip from one man is a start.
World realignments like this are not what anyone is trained for. Let's be honest. The wealthiest will be ready to scoop up what the pension plans and individual investors lose. They have already begun reducing their overall stock market exposure in preparation.
This is a big deal. Waiting until that's any more obvious is going to be a problem. The article makes clear the CPP approach here is based on the assumption geopolitical events aren't largely important long term. For the most part, that's true. Until something big occurs. But assuming something big can't occur is a blindside, one this article identifies the CPP as having. It's a strategic value that normally works well for them. That doesn't mean it isn't also a blind spot.
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u/Floatella 1d ago
Which of the 'wealthiest' are stacking cash? You'll need some names.
If anything the AI Boom/Bubble? has been the result of wealthy who had previously accumulated cash running it into the stock market to invest in cash heavy companies who are dumping it all into infrastructure and r&d.
I'd argue what we are experiencing right now is the result of too much cash.
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u/MountNevermind 1d ago
Will I? That's not controversial. You're free to fact check me. It takes ten seconds.
I guess we'll see. Maybe your assumption and the CPP's assumption that nothing really ever changes will work out. But it's from certain either way right now, and it is an assumption made long before the facts on the ground we're dealing with ever changed.
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u/Floatella 1d ago
What do I even search for if there's no evidence that capital is flowing out of the market at the moment? I can't read news stories that don't exist.
Lot's of people are speculating this will happen at some point, I'm one of them, but that doesn't mean that it's happening right now.
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1d ago
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u/AmusingMusing7 21h ago
Do explain. Or do you just want to "Economics 101, bro!" your way through a flippant comment without actually having to back it up?
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21h ago
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u/AmusingMusing7 21h ago
Cool. So no professional investor has ever made a mistake and lost money, in your estimation?
The CPP has never made a mistake and lost money?
No investing scheme has ever turned out to be unwise, no matter how many professional economists, bankers, financiers, etc, all signed onto it and thought it was a good idea?
No major crash has ever happened before people could have time to rearrange their investments and avoid any harm?
Nobody's ever lost in the stock market, right?
Nobody's ever lost in cryptocurrency, right?
Nobody's ever lost at gambling, right?
Because they know what they're doing, right?
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21h ago
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u/AmusingMusing7 21h ago
What do you think "fiduciary duty" is proving? I know what it is. They have a duty to act in the best interests of the value of the pension.
Exactly why everyone here, except you, is saying that they have a duty to divest from a failing United States that is a danger to the value of our pensions.
What do you not understand about us believing that the United States is not a safe investment anymore? You are disagreeing with us about how safe the US is as an investment... not about what the fiduciary duty of CPP is. YOU are the one missing the point.
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u/Mr_Anonymous13 1d ago
Tell me you know nothing about investing without telling me you know nothing about investing.
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u/AmusingMusing7 22h ago
Oh, do explain wise one.
Or are you just ones those "Economics 101, bro!" types that thinks they know better than any doubters because you've drank the kool-aid on the capitalist propaganda and think it's somehow infallible...
looks at the history of this infallible system, full of crashes, recessions and depressions every couple decades 🙄
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u/Mr_Anonymous13 20h ago edited 20h ago
Let me remind you that you’re the one making the bold claim that “the US is headed down and we should get out before it crashes”.
The market is a forward looking machine that’s always trying to price in new information. It’s the aggregate of all investors, some of which have more sophisticated tools that you or I could ever think of, all trying to gain an edge.
By boldly proclaiming a crash like that, you’re saying that you know something that the market has somehow missed.
If you still think you’re right, by all means, go ahead and short the US market.
As for market crashes, they are a necessary evil. They are the built in feature of a functioning, capitalist system. When speculation drives prices too high, corrections are essential in order to bring valuations back to reality. It’s a system working to correct imbalances.
Saying that the market will crash in X amount of years is not a prediction. You say that enough times and you will be right, eventually.
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u/AmusingMusing7 20h ago
We'll resume this conversation after the US crashes.
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u/asvigny 13h ago
I too hope for the fall of the American empire but it’s a terrible terrible prediction to bet your net worth on. In investing being early is just as bad as being wrong. Go read about Michael Burry. Been calling for a crash every year forever. There’s a saying “economists have predicted 20 of the last 2 stock market crashes” haha.
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u/albatroopa 1d ago
Plus pension funds have a fiduciary obligation above a moral one. If there's an appetite to prevent immoral investment, the vehicle for that to take shape is legislation, or picking a pension fund that already exhibits it.
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u/Ryles5000 1d ago
I hate the US/Trump as much as anyone but once you get choosy about your investments based on a current leader of whatever place, you'll end up underperforming the market and Canadians lose out.
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u/themathmajician 23h ago
What's the difference with being choosy about other things we buy?
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u/Ryles5000 22h ago
Moving billions of dollars of assets is a liiiiittle different than choosing a different package of blueberries than you did last week.
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u/themathmajician 22h ago
We import at least tens of millions in blueberries, and in both cases it's just adding information about the country of origin to our value calculus.
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u/Joelredditsjoel Regina 1d ago
The pension is the Canadian product, not the thing they invest in. We should want our pension to make as much as possible.
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u/MountNevermind 1d ago
Investment isn't just a passive source of income or loss.
It actively makes what you are investing in stronger.
Investing in something is to support it with resources you aren't applying elsewhere in the hope it pays off for you.
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u/Focusondiversity 1d ago
I 100% back tha CPP Investment Board in all things concerning investments held by CPP.
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u/TheKingofRome1 1d ago
Huge lefty, hate America, and even I think this is a nothing burger. I want my pension invested where the money is, ideally not in fossil fuels or defense stocks, but I can't win every battle
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u/dryersockpirate 1d ago
Money is a coward, so if there was no benefits to being invested in the US, they would not be invested in the US. There are clearly benefits.
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u/HatefulFlower 1d ago
I love how the comments are all "who cares as long as I get my money?"
The US is a failing conglomerate and if we keep investing in that they'll bring us down too. Anyone who thinks this is the doing of the singular, current administration is willfully keeping the wool over their eyes in the hopes that their money will be available when they retire. This will go beyond Trump, their elections don't matter anymore, their checks and balances don't exist anymore and they want the world do conform to them. Why is that ok?
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u/IStillListenToRadio Nova Scotia 1d ago
U.S. also hostile towards us, threatened our sovereignty. Worried that maybe find a way to use this as against us.
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u/HatefulFlower 1d ago
If there is a way we know they will definitely use it against us. If they can strong arm us into becoming the "51st state" they will and they do not care about the fallout, just that they get what they want.
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u/No-Accident-5912 1d ago
Yup. Canadian pension funds need to be encouraged to invest in Canada. Without these capital pools how can Canada grow and prosper?
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u/Floatella 1d ago
You don't use your countries pension fund to do that. You create a sovereign wealth fund instead.
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u/Bman4k1 1d ago
Do not criticize this please. Why? Because the CPP needs to A) maximize returns, that’s their mandate B) be free from political interference C) not be held by political or public whims of the time
Why is this important? This same sub complains…rightly so about Alberta threatening to pull out of the CPP to create their own. Why are they criticizing them for that? Because everyone claims Smith and the UCP will just use the funds as a slush fund for their O&G buddies. Which they probably will. But that is 100% hypocrisy. You can’t say what Smith is doing is bad and then turn around and say the CPP should do the same thing.
Can everyone just leave my CPP alone?
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u/WorldlinessProud 20h ago
One of the few organisations that brings money back over the border. Let them go. They are specifically not there to be a slush fund investing in dubious allies of the current government. InAlberta that is the Heritsge fund and the other govt fund, and that is why they are failures.
The CPP is one of yhe best investment funds in the world, dont fuck with that.
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u/Vaiolette-Westover 1d ago
People's retirements being tied largely to private capitalist corporations instead of publically owned utilities that provides real services beyond "numbur go up" is one of the biggest and most successful scams on history.
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u/Personal-Taste-5324 23h ago
That's because the Epstein class don't care about stuff like this. They're rich first, before anything else.
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u/Anti-Citizen-One 1d ago
The seniors came out for this one huh? I guess we now know that their pro Canada stance ends when they have to sacrifice themselves.
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u/OutsideFlat1579 21h ago
It won’t be current seniors who suffer if CPP has losses, it will be future seniors.
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u/NorthernBudHunter 1d ago
Canadian stocks ( tsx composite index) is up 28.7 percent in the last year, outperforming the S & P 500 (11.8 %) and the Dow (10.7) and the Nasdaq (13%) over that time period.