Economic Update: August 28th, 2015
We have been seeing higher levels of market volatility as a result of global forces driven by Greece, China and the US. This unpredictability has been reflected in the global stock markets which have declined in the last quarter.
Canada’s economy has suffered from continued weakness in the energy sector as reflected by a significant drop in the price of oil. The Bank of Canada has noted some encouraging signs, but has found that low oil prices have continued to significantly dampen the economy.
Looking ahead, we believe that more volatility is likely and that the economy will continue to experience difficulty. However, this is not a time to panic. You can help yourself by taking the following steps:
• Have a disciplined savings plan. Contributions such as $ 500 per month or even $ 10 per month can have a big impact over time;
• Reduce the amount of borrowings you have and avoid making large financial commitments;
• Take a proactive approach to your employment situation. One way would be to start upgrading your skills;
• Test or examine your finances to determine the future impact of rising interest rates, particularly if you have a loan or mortgage or are engaged in speculative real estate;
• Take a long-term investment outlook and avoid fear-based decision making;
• Spend wisely, and not excessively, on consumer goods, personal items or events such as weddings and funerals; and
• Where possible, speak with professionals before taking on any large or risky financial obligations.
It is important to live prudently, responsibly and within your means. Proper planning and a conservative approach to finances will help you manage through this economic difficulty.