By Ian Ardill
Recently I had the pleasure of seeing an absolutely riveting talk about inflation and deflation. The presenter was Drummond Brodeur, Senior Vice-President and Co-Head of Macroeconomic and FX Strategy, CI Global Asset Management (and the event was the National Investment Forum in Vaughan).
Especially fascinating was his characterization of the Bank of Canada as playing a poker game. And, that they are bluffing. In Drummond’s view, the BOC is trying to, well, scare everyone by saying they will essentially keep raising interest rates almost indefinitely.
However, there are market and economic indicators that say inflation is cooling. So it really is unlikely that interest rates will go up dramatically again this year.
That said, inflation is not all bad. If one year ago you wanted to buy bonds, for example, it was not especially attractive, because interest rates were so low. Now, however, with rates much higher, it is a much more appealing prospect.
I believe that we will soon be in a deflationary environment. We have already seen this in the housing market, with prices down an average of 12% across Canada last year, and -9.1% in the GTA.
For business owners, having to drop prices is going to present some pain. Lower prices mean lower profits. So, what do you do? Freeze wages? Let people go?
Here’s what you can do, business owner or not: take a proactive approach to the management of your financial ecosystem by receiving ongoing strategic support from Ardill Group. We should talk about inflation, interest rates, rate of return on your investments, fixed income, your debt level and more.
All it takes is an email, phone call or text to get the conversation started. We look forward to hearing from you.
Ian Ardill, B.A., M.T.S.
Private Wealth Advisor
CEO, Ardill Group
Direct: 1 905 717 5698
Office: 1 905 907 7000