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Hello Trade Off players!
Welcome to Trade Secrets, our weekly insider guide to The Globe and Mail’s Trade Off stock-picking contest. Each week, we bring you market insights, investing strategy tips, and a front-row look at how the competition action is unfolding.
Our newest Trade Off challenge officially kicked off this week. Whether you’re returning or joining for the first time, this is your go-to place to stay ahead of the competition over the next 12 weeks. Be sure to sign up to receive the Trade Secrets newsletter in your inbox.
How it works
If you’re new to the competition, welcome. You’ll be joining other participants in testing your investing skills by putting $100,000 in virtual cash to work. While this is a no-risk stock simulation game, you could walk away with real money. The top prize is $5,000, with $3,000 for second place and $2,000 for third. There are also weekly prizes of a three-month Globe digital subscription, along with three random draws for six-month subscriptions.
Every move you make could put you on the leaderboard, so invest wisely. Most importantly, have fun.
This week in markets
As players set up their portfolios, the market tone has been shifting. The war in Iran has added new uncertainty. Energy investors have benefited from the surge in oil prices, but analysts caution that gains could be short-lived if supply pressures ease or demand softens.
Gold stocks, which were standout performers in the last season of Trade Off, have struggled since the start of the conflict. Rising oil prices are stoking inflation, making near-term U.S. interest rate cuts unlikely. Higher rates make gold less attractive because it doesn’t pay interest.
Meanwhile, some AI-related names were stars in the previous competition, but investors are now balancing strong growth against rising costs. Take Micron Technology Inc. as an example: The company makes memory chips that help AI systems process and move data quickly. Demand is surging as AI infrastructure expands, but Micron says it will need to spend more than US$25-billion this year to keep up, adding a layer of caution.
Whatever you choose for your portfolio, consider this competition a valuable lesson in how markets work.
Here’s one idea to keep in mind. One key difference between the Canadian and U.S. markets is sector influence. The Toronto Stock Exchange has much greater exposure to gold and energy stocks. Even though energy names have rallied, the decline in materials has offset those gains. The S&P 500, meanwhile, is heavily driven by technology stocks, with a handful of companies accounting for a large share of returns.
Trade Secret tips
If you’re looking for inspiration, The Globe has a strong investment ideas section where industry professionals share how they screen for stocks. You can explore a range of “Stock Screens” here.
Some of you might be thinking about how to navigate your retirement savings amid the market uncertainty. Here’s a helpful fresh read on that subject.
Good luck out there! We’ll check in next week with our first official Trade Off update.
Cheers,
Jon
Jon Erlichman is the founder of Ticker Take on YouTube and a contributor to BNN Bloomberg.