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 […]
University Costs Can Disrupt Your Retirement Plans
Beware – the cost of your children’s university education can compete with funds you need for retirement, writes Peter Watson. The closer you get to retirement the more focused you can become on paying down or eliminating personal debt including a mortgage. Plus increasing your savings that will be necessary to provide a revenue source […]
Investments Too Good to Be True
Another large speculative company fails, and investors lose billions, writes Peter Watson. In life, people like to pick a winner, and this is certainly true in the world of investing. But this can sometimes backfire. Until recently, FTX was a global giant as a cryptocurrency exchange platform. According to CNBC its value was $32 billion. […]
Stock Market Volatility Can Leave You Depressed
There is a reason why the normal ups and downs of the stock market can leave you depressed, writes Peter Watson. It has to do with human behaviour. People are emotional. Investors value gains and losses differently. A loss has more significance on an investor than a gain of an equal amount. For example, if […]
How to Build Your Investment Portfolio
A good portfolio will address two important principles. Investing to achieve a higher expected return and managing risk, writes Peter Watson. As an example, we will consider saving for your child’s university education. The same logic can be applied to other financial objectives. Assume a university education will cost $25,000 per year over four years […]
Bank of Canada Increases Interest Rates Again
Managing personal finances just got more difficult, writes Peter Watson. Another significant interest rate hike was just announced by the Bank of Canada. The most recent rate increase was three quarters of one per cent. The Bank of Canada is determined to reduce the annual inflation rate to the target of two per cent. This […]
Prices Increasing and Spending Decreasing
Prices are increasing so Canadians are reducing their spending, writes Peter Watson. The annual inflation rate as of the end of July decreased slightly to 7.6 per cent. That is good news for the Bank of Canada who are trying to control inflation. The reality is things are significantly more expensive than one year ago […]
Why investors should understand stock market details
In Canada only 33 per cent of managers outperformed the underlying index after one year. After five and 10 years the outperformance was only six and 19 per cent respectively. Similar results were experienced by US managers. This information is from S&P Dow Jones Indices from their Year-End 2021 SPIVIA Scorecard. SPIVIA stands for Standard […]
Dollar Cost Averaging: A Strategy to Consider
When is the best time to invest? The problem is it is impossible to accurately predict how stock prices will fluctuate during the short term. Dollar cost averaging is a technique where you invest the same amount of money on a regular basis over time. For example, you could invest monthly and the most likely […]
Full-Service Investment Firms Can Be Challenged at Providing Comprehensive Advice
Financial advisors face challenges in delivering the services they offer, writes Peter Watson. Individual financial advisors and the firms where they are employed proudly communicate their service as “holistic advice.” That makes sense because certain things in life, including your personal finances, should be done thoroughly. However, from a theoretical perspective, nothing is always perfect. […]