So, it’s been a practice on these pages to preach a positive outlook despite potentially negative predictions. And, of course, if you look at much of the financial press, there is no shortage of predictions that bear caution for the future.
However, it’s time to put our money where our mouth is. It’s one thing to say there is positive news when everyone sees the negative. But, if you look hard enough, and that’s what our job is, you can find the good news. So, let’s start.
Let’s start on the home front
First, according to CBC News, Canada’s governor of the Bank of Canada, Stephen Poloz, says the world economy is strong. Specifically, he says — and it’s what we’ve been saying here for months now — that the current trade tariffs and trade-war prospects can actually have a positive effect on investor psychology when these issues are resolved positively, which has recently happened with Nafta. As a result, Poloz is signalling interest-rate increases by the Bank, and believes the stimuli that many central banks have utilized in recent years are no longer necessary.
Now let’s go to RBC’s Global Asset Management’s investment outlook for the fall of 2018. It says the U.S. economy is continuing to lead global expansion, the strength of the U.S. dollar will continue long-term, and inflation might be pushed higher, but not to “problematic levels.” In fact, RBC says “the consensus outlook for global growth in 2018 and 2019 remains the best since 2011.” I bet you haven’t heard that in the news a lot lately, have you.
Finally, according to CNBC, Mohamed El-Erian, chief economic advisor for financial services company Allianz, says the recent downgrade of worldwide economic outlook by the International Monetary Fund (IMF) is too pessimistic. He says that the American economy, fuelled by government and household spending, as well as business demand, will help keep growth above IMF’s expectations.
So, it’s not just us seeing the positive among some of the doom and gloom. There is reason for optimism. And, regardless of what happens, good or bad, investors can always find opportunities where others don’t.
ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.