I think everyone would agree that it’s been a tumultuous year. We’ve seen unexpected highs as digital technology takes us into worlds we could never have imagined. Bitcoin, a cryptocurrency, and the first digital, decentralized peer-to-peer payment system, is trading above $15,000 against the Canadian dollar, up from CAD$962 only a year ago.
Then, of course, there are the continuing negotiations around the North American Free Trade Agreement (NAFTA). In particular, the US has raised what an article in the National Post describes as five “extreme” proposals that Canada will not accept, according to our country’s lead NAFTA negotiator. As well, Brexit negotiations continue amid a swell of uncertainty around not only economic issues, but also border issues between Ireland and Northern Ireland, and independence issues with Scotland’s desire to remain in the EU.
Yet, despite these uncertainties, markets continue to show resilience. Banks continue to report record earnings, corporate profits are up across the board, oil has returned to a steady US$60 per barrel, interest rates are rising and inflation remains low.
Ignore the naysayers
Today’s markets seem to be ignoring the naysayers. But that doesn’t stop the negative nellies from having a say. Some predict doom if NAFTA negotiations collapse. Others say new regulations will drive Canada’s housing market off a cliff. And now, there are those who are saying that despite record profits, Canada’s banks are vulnerable because they aren’t spending enough on innovation and technology. This is particularly hard to fathom given the partnerships our financial institutions are forming to improve their fintech position. In July, Royal Bank of Canada acquired fintech firm Wiser Investments and launched an in-house innovation lab within its asset management division. CIBC has partnered with Thinking Capital Inc. for online small-business loans, and Toronto-Dominion Bank has joined forces with Movencorp Inc. to deliver its MySpend budgeting app. Canadians may be slower to adopt fintech, but we also didn’t experience the same crisis of confidence in our financial institutions as others did during the Global Recession. The Globe and Mail published a good article in July 2017 about why fintech adoption may lag in Canada, but also why it isn’t as dire as many are portraying.
Last year, analysts were predicting that a Trump win in the US elections would negatively impact the global economy. That hasn’t materialized. Similarly, pundits for years have foretold the collapse of the real estate market. And yet, real estate markets, particularly in Canada’s large urban centres, continue to rise.
There will always be naysayers looking to spread their negativity. From time to time they may even be right. It’s been almost 10 years since we’ve experienced a market correction. That’s an almost historic period of resilience given that markets tend to experience a correction every three to five years. In 2018, we may very well be due for a correction—but I won’t predict it because I believe in our persistent resilience, as individuals and as a country.
When I talk of my belief in resilience, I would like to highlight the story of one of my clients. I am especially proud of his achievements as Toronto Argonauts football player and his contribution to the team’s 2017 Grey Cup win. But my client’s success might not have been if he had listened to the naysayers in his life. This is a man who was cut from his grade nine football team because the coach didn’t think he was good enough. Instead, he and his team competed for the oldest professionally played for trophy in North America, and won!
Speaking of persistent resilience, we’re growing! The relationships we have with our clients—with all of you—is so important to us. Your support and referrals have helped us to grow our business and expand our ability to help others with their financial goals. To that end, we have hired Gabrielle to help Sabrina with the administrative aspects of our business. In the New Year, we’ll also be searching for another analyst so that we can continue to provide the level of support you have come to expect from us.
As we say goodbye to 2017, we say welcome to Gabrielle. From our Howard, Barclay & Associates Ltd. family to yours, we wish you a wonderful holiday season and a Happy New Year. We’ll look forward to connecting with you again in 2018.
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