Managing Expectations and Important Aspect of Investing
Most investment categories had disappointing returns during the first quarter of this year. First a few details. We looked at seven different sectors. Four different stock markets, a global real estate index and two bond indexes. Six of the categories had declining values in the range of five to eight per cent for the quarter […]
Significant Interest Rate Increases will be Painful
Last week the Bank of Canada increased interest rates by half a per cent. This is the largest interest rate hike in two decades, writes Peter Watson. Plus, there were warnings additional rate increases will be announced. The BOC also announced it will stop buying federal government bonds which it has been doing to keep […]
War and the Effect on Stock Markets
When Russia invaded Ukraine there was disbelief, sorrow, and anger. From a financial perspective, how will this affect my investment portfolio? We can learn a lot about the stock market from past observations. That does not allow us to predict the future, but it can provide a perspective. Here is what is known. One. Over […]
Normal economic cycles can hurt the individual
Economic activity in Canada ebbs and flows, writes Peter Watson. We have prosperity, then things slow down and we can have a recession. Then a recovery. The goal of the Bank of Canada is to manage our economy, provide slow and steady growth and hopefully allow us all to prosper. That’s good for the country, […]
Rising Interest Rates Ahead
The Bank of Canada continues to sound the alarm that higher interest rates are just around the corner. There are two significant reasons why. One. Inflation, as measured by the consumer price index had an annual increase of 4.8 per cent in December. This is the highest level in three decades. The target inflation rate […]
Are you afraid of losing all your investments
Fear of losing money is a real challenge for investors, writes Peter Watson. There is a strong element of fear when it comes to investing. If your entire portfolio is invested in one or two stocks, then the risk of losing most or all of your money should be a significant concern. Many investors today […]
What Companies Should You Invest?
Owning many stocks in your portfolio may be a good investment strategy, writes Peter Watson. My suggestion is to change your perspective on investing. Don’t focus on which companies to invest. Expand your focus to be much broader. Considering having a globally diversified portfolio that could have many different companies. In effect, you are buying […]
Estate Planning Gone Terribly Wrong
The Rogers family public battle is a lesson on how estate planning efforts can backfire, writes Peter Watson A large part of estate planning is deciding how to allocate your wealth to different beneficiaries. For most families this means distributing your wealth to your children. The late Ted Rogers built his tech company and according […]
Invest in Stocks – Prepare to Lose
There will be a time when you lose money. That is a certainty. The assumption is based on a broadly diversified portfolio versus owning just a few stocks. Information is taken from the S&P 500, a US stock index. Yes, some years you win when your stock portfolio increases in value. Winning is easy. Anyone […]
Failed CMHC Policy Could Not Control Rising House Prices
Canadian house prices continue to rise and are increasingly unaffordable, writes Peter Watson. Canada Mortgage and Housing Corp. failed at its attempt to slow the increase of house prices. This could affect homeowners and prospective homeowners. Last year CMHC increased the financial requirements to qualify for mortgage insurance. Mortgage insurance is required for buyers who […]