Hey there, time traveller!
This article was published 31/1/2015 (2421 days ago), so information in it may no longer be current.
The dollar is tanking and the price of oil is in free fall, yet somehow Bruce Flatt isn't out on a ledge somewhere hanging on by his fingernails.
The New York-based CEO and senior managing partner of Brookfield Asset Management has been around long enough to know no matter how many people are convinced the sky is falling, they'll ultimately be proven wrong. You know, just like the last time.
"Very few places are as good as Canada to invest. Canada is an amazing place, followed by the U.S., Australia and the U.K.," he said.
Flatt was the guest speaker at the CFA Society Winnipeg's 50th annual dinner Thursday night at the RBC Convention Centre.
SSLqVery few places are as good as Canada to invest. Canada is an amazing place, followed by the U.S., Australia and the U.K.'
The other piece of good news for consumers is it appears as if the low-interest environment is here to stay, which is good for anybody who owns real estate, including houses.
"That's the big debate, whether the new normal is low interest rates or whether they're going to go up to where they were before. I think the general opinion in the world today is we're going to have low interest rates for a long period of time," he said.
Flatt doesn't believe, however, the Bank of Canada will follow the lead of the Swiss national bank and move interest rates into negative territory -- which means you have to pay to have your money deposited in a bank.
"That's an unusual circumstance. Our economy is doing well, relatively speaking," he said.
Flatt said the falling loonie, which was trading in the mid-90-cent range last summer, should ultimately prove to be a good thing for investors.
"It ensures the country doesn't strain itself too much. There's a natural mechanism to adjust. Exporters can export for cheaper and labour is cheaper," he said.
Flatt believes the loonie should fluctuate between 75 cents US and parity over the long term, and cautions investors to not get too uptight over its yo-yoing.
"Everything always overshoots on the upside and on the downside," he said.
Flatt said the falling price of oil isn't having the same effect in Manitoba, which has a small but growing oil and gas sector, as it is in Alberta, Saskatchewan and Newfoundland, but there is a national impact as countless companies from coast to coast, such as service providers to the oil industry, are affected. Even though oil is sold in U.S. dollars, producers' costs are in loonies.
"That assists in the soft landing of the economy," he said. "But there's going to be some pain along the way. Over two or three years, oil will be a great investment," he said.
On the flip side, the falling price of oil has also made it much cheaper at the pump.
"You're filling up for 40 per cent of what you were before (last summer). That's a big difference. That could mean an extra $2,000 to $3,000 per year for a family," he said.
The Canadian economy is inextricably linked to its neighbour south of the border and the more the U.S. continues to recover, the better off Canada will be, he said.
Prior to the 2008 market collapse, some 2.2 million homes were being built per year in the U.S. That dropped down to 400,000 the following year but it's more than one million now.
"You can imagine the impact of that in the construction industry and everybody working in (related industries)," he said.