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Focusing on long-term investment themes like the metaverse

Digital tree sprouting from binary code.

Key messages

  • Given short-term market volatility, it’s important not to lose sight of the long term.
  • Metaverse development has created many long-term investment opportunities.
  • We continue to make short-term tactical adjustments where appropriate, but the majority of MD’s investments will always be focused on long-term opportunities.

With recent market volatility and all the headlines focusing on short-term inflation updates, central bank policy and the pandemic, it’s important to not lose sight of the long term. While we continue to make tactical asset allocation decisions to take advantage of opportunities to reduce risk or improve returns over the short term, we remain focused on long-term investment themes that we believe will have a greater impact on longer-term portfolio returns.

Seeing the forest for the trees

Themes like the metaverse, which I blogged about when Facebook rebranded into Meta and doubled-down on development. Regardless of the short-term market volatility that’s happening now, new technologies and innovations to enable a more immersive internet experience will still happen down the road. Similar to how the internet created investment opportunities, so too will the development of metaverses. One way to think about recent market volatility is that many of these opportunities are, quite frankly, cheaper today than just a few months ago. Given that the investment case is still sound, when valuations come down, the opportunity for growth in these long-term investments becomes better!

To explain why we’re excited about the investment potential of metaverses, here’s Doug Rao, Portfolio Manager, and Denny Fish, Portfolio Manager and Research Analyst, at Janus Henderson Investors (subadvisor on the MD American Growth Fund and the MDPIM U.S Equity Pool).1

Playing the long game

There is a time to be tactical and a time to be strategic. With regards to metaverses, opportunities to be tactical are limited (you can’t really time technological innovation), so it’s a strategic, longer-term, buy-and-hold theme.

In volatile times, it’s important to stay focused on what you can control. As always. we’ll continue to do what we can with shorter-term tactical adjustments, but ultimately, many of the investment themes we focus on are long-term opportunities.

If you have any questions about the long-term investment themes we’re following, recent market events or your portfolio positioning, please contact your MD Advisor*.

1 This presentation is provided for informational purposes only and should not be considered investment advice or an offer for a particular security or securities. The views and opinions expressed by the speakers Doug Rao and Denny Fish are their own, as of the date of the recording (March 13, 2022). The views and opinions expressed do not necessarily represent those of MD Financial Management and are subject to change at any time, based upon market or other conditions. Please consult your *MD Advisor for additional information concerning your specific wealth management needs.

*MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.

About the Author

RICHARD SCHMIDT, CFA, is an Associate Portfolio Manager with the Multi-Asset Management team. His primary focus is MD’s North American equity funds and pools.

Profile Photo of Richard Schmidt