There’s a lot to catch up on for 2017 so far. We see a new leader to the south of us, who is already making waves globally and will no doubt create long-term effects for Canada’s economy. What those effects will be exactly, is still to be determined.
Around the world
Global politics have seen many surprises, all beginning with Brexit last fall. Governments have underestimated the voters who want change, and it continues through the U.S. Presidential election, the recent France election and may continue as we see many European nations facing elections in 2017. How does that affect Canada you may wonder? We’ve already seen disruption or complete discontinuation with established trade agreements, and with Canada’s economy depending greatly on export items this could slow our overall economy.
Here at home
In Canada, as we celebrate our 150th birthday, maintain a consistent albeit slow growth in our economy nationally. Consumer debt levels remain high with the low cost of borrowing, however the new mortgage rules in place are preventing the same economic disaster that was seen in the U.S. in 2008. Pressure is on for Canadians to reduce their unsecured debt exposure and save more for retirement.
The Ontario government has implemented a minimum wage increase slated to begin January 2018, however the overall implications of that on small business was not well considered I’m afraid. The legislation may end up having the opposite effect than was intended, as costs of goods or services will have to rise in order to prevent layoffs of employees. Are we any further ahead then?
Investment Insight
The stock markets are forging ahead, seeing continued highs across all North American markets. What does this mean? Business isn’t against the US Republican government (or they’re just ignoring it), and innovative things are happening across many industries, not centralized in one area like we saw years ago with the “tech bubble”. This long-time surge in the markets is pleasant for investors, however there should be caution because historically this is the longest that the North American stock markets have rallied without any correction. We’re due for a downturn, in order for the stocks to be reevaluated. What does this mean for you? Your portfolio’s equity exposure may see similar results as seen in 2008, but with a diversified managed portfolio and long-term goals they will recover. Downturns are always good times to buy more, so making shifts to or building up some cash (in a savings or investment portfolio) could offer future opportunities. When this correction will happen is anyone’s guess. Only time will tell, as we’re kept on our toes.
Have questions? Contact me and let’s chat!