Inflation Does Not Harm Investors
Inflation is not bad for investing, writes Peter Watson. There is a relationship between investment returns and inflation. Stock market returns in the United States, as measured by the S&P 500 index, posted an annual return of 10 per cent over the last 30 years. Inflation during that same period, as measured by the […]
Investment Fee Disclosure Will Improve
Investment fees are important. Fees and costs that are fair and pay for services that benefit an investor is acceptable. Fees that are too high or are charged for services not provided result in a lower investment return to you the investor and unfairly compensates your financial advisor. That is unacceptable. An upgrade to disclosing […]
AI is Not a Tool That Can Successfully Predict Stock Market Values
Can Artificial Intelligence be used to successfully predict stock values? My opinion is no. The benefit of AI is the ability to search vast amounts of known data at an extremely fast rate. That will change many aspects of our lives. Investing is different. It requires an opinion of the future. If you buy […]
A Financial Strategy for Change
A strategy to make financial changes easier to implement, writes Peter Watson. One of the strengths of humans is our ability to change. Yes, we have the ability, but it is often very difficult. The strategy for change we are suggesting is to look ahead at the benefits of making changes that most likely will […]
Financial Pain Caused by Higher Interest Rates
Bank of Canada interest rate increase will be painful, writes Peter Watson. It was a surprise the BOC increased interest rates again. The BOC has a delicate balancing act. One consideration is controlling excesses inflation and that is done by increasing interest rates. The second consideration is to try not to put the brakes on […]
Bridging Finance Failure Highlights the Importance of Diversification
The lesson to be learned about the risk of losing money is the importance of diversification, writes Peter Watson. Bridging Finance Inc was a well-known business that raised money from private investors and lent that money to companies. It has been in receivership since 2021. During the good times, Bridging managed $2 billion for 26,000 […]
Household Debt Continues to be a Risk
Many Canadians will not be able to make higher interest rate mortgage payments, writes Peter Watson. Canadians’ personal finances are at risk because of high debt levels. A recent report by Canada Mortgage and Housing Corporation sounded an alarm. Since 2010 Canada has had the most personal debt levels of all G-7 countries. The UK […]
Housing Has Become a Financial Stress
Increased interest rates and higher house prices are causing financial stress, writes Peter Watson. The attraction to homeownership remains strong; however, the financial risks are growing. The Bank of Canada predicted that homeowners renewing their mortgage in the next few years will see an increase of 20 to 40 per cent in monthly payments. This […]
Will Canada Adopt a Digital Dollar?
The Bank of Canada is studying the use of a digital dollar, writes Peter Watson. The world is changing. In the past people purchased goods and services with cash and sometimes by cheque. Often writing a cheque was followed by putting it in a stamped envelope and dropping it in the mailbox with the hope […]
Are You at Risk if Your Bank Fails?
Investors are encouraged to manage their investments to be insured with the Canadian Deposit Insurance Corporation, writes Peter Watson. The banks that have failed in the US and Europe recently likely had customers that thought their bank would never go out of business. The reality is this can happen, not likely, but can happen. The […]