Global Sweet Spots Include Canada

Canada’s economic growth is poised to be in a sweet spot.

It’s currently the second best in the world behind Britain, this  according to an International Monetary Fund (IMF) Update published in July 2014. 

But at a growth rate of about 2.3%, it will lag behind Britain and the US next year. Key risks in the global economy include political instability which may influence potentially higher oil prices; therefore global growth rates have been downgraded to 3.4% for 2014 and remain projected at 4% for 2015. 

The Bank of Canada, meanwhile has noted that Canada’s quicker growth in the future relies on increasing exports and business investment. Continued growth in the US, our largest trading partner, will help Canada over the longer term.

How does this impact savers in Canada? Continued uncertainty always points to a requirement for debt management and tax efficiency. But in addition, there are opportunities to rethink investment strategy, according to two speakers at the upcoming Distinguished Advisor Conference (DAC).

A massive renormalization phase is taking place, according to Michael Gregory, deputy chief economist at BMO, but the “new normal”, he believes is moving far away from the norms.  As emergency stimulus measures are slowly withdrawing, investors face more uncertainty. This requires a rethinking of classic knowledge on portfolio development in a new global economy and as a result new investment strategies.

Financial assets, such as stocks and bonds are, however, only one component of an investor's total economic worth. Other assets, such as human capital, real estate, and pensions, often represent a significant portion of an investor's total wealth, but are not frequently considered when building portfolios despite the fact that they share common risks with financial assets. That’s the position of David Blanchett, head of retirement research at Morningstar and co-author of a new research paper. David will also embellish on those findings at DAC.

The final agenda has now been released and can be found at www.knowledgebureau.com/DAC.