Canadians’ net worth suffered a significant decline during the three months ending June 30. Both real estate and financial investments fell in value making this the largest drop of household wealth on record.
This information was recently released by Statistics Canada.
Stock markets performed poorly during the first half of the year. Many investors diversify their portfolio with bonds to add safety however the bond market declined as well.
Any effort to improve their financial position will be met with strong headwinds. Canadians have too much debt and the Bank of Canada’s main strategy to control inflation is increasing interest rates.
While we are all continually bombarded with negative financial news.
A few years earlier the value of real estate and investments increased significantly. Even after the sharp decline in value earlier this year many are in a stronger position than they were a few years earlier.
What history has taught us is values rise and fall and that is normal.
Interest rates are higher, but the result will be the Bank of Canada will control inflation.
Our suggestion is to do what is needed to manage your personal finances in the short-term but to look to the future with the optimism it deserves.
That is what investors have done over time.
Peter Watson is registered with Aligned Capital Partners Inc. (ACPI) to provide investment advice. Investment products are provided by ACPI. ACPI is a member of the Investment Industry Regulatory Organization of Canada. The opinions expressed are those of the author and not necessarily those of ACPI. Only investment-related products and services are offered through Watson Securities of ACPI. Peter Watson provides wealth management services through Watson Investments. He can be reached at www.watsoninvestments.com
