Retirement insecurity, a FICO credit score boost, surprising industry losses and more!
Retirement planning: A new global pensions analysis suggests that the coronavirus pandemic has heightened retirement insecurity, and billions of people worldwide may be facing the need to work longer or risk having less income later in their life. “Even before the crisis, private and public retirement systems were under strain from ageing populations and a low-interest rate environment, which has made it tougher to achieve the investment returns to pay pensions,” reports the Financial Times.
The analysis by the Monash Centre for Financial Studies and the CFA Institute compared retirement systems from 39 countries and ranked them based on sustainability, coverage and adequacy. The findings indicate that countries which provided short-term relief during the pandemic were more likely to have increased retirement insecurity as a result.
Credit boost: FICO credit scores in the U.S. hit a new record high average of 711 in July, despite being in the midst of the coronavirus pandemic and subsequent economic crisis. While this news might be surprising, CNBC explains that there is typically a large lag between any major macroeconomic event and when the average FICO score will actually reflect its impact.
Economic relief actions taken by the government might also be responsible for the credit score boost, as the number of consumers who missed payments in July was also down significantly from January numbers.
Surprising losses: Investing in Canada’s cannabis industry during its first two years may not have been as foolproof of a plan as many initially believed. After peaking just two days before marijuana legalization passed in 2018, many stock values began to fall as Canada rolled up its domestic market. Per The Globe and Mail, industry stocks are currently down by an average of two-thirds to 90 per cent with only five North American companies having turned a positive return over the past two years.
Signs of stress: New York City’s commercial properties are facing signs of trouble, and investors are betting that the trend could spread nationwide. The Wall Street Journal warns that despite the current record high stock market figures, assets closely tied to New York’s tourism and commercial industries could experience deep disruptions as the prices for hotel backed debt have fallen and new loan approvals have slowed. This is worrisome for investors because Wall Street traditionally will package commercial loans into bonds and sell them to pension funds, but collapsing loan prices backed by top-tier properties in the city show that it may be a slow recovery from the harm caused by the monthslong city-wide shutdown.