As many of you know, in addition to providing tax preparation services we also provide financial planning services. This includes estate planning, retirement planning, and investment monitoring and related suggestions.
And as many of you also know, the largest stock market in the world, which is in the US, is unduly influenced by Donald Trump, and whatever you may think of the current President, make no mistake he has enormous influence on this market.
Positive influences, include the lowering of the corporation tax return, and regardless of what you think of him as a person, and his political leanings in general, this has essentially turbo charged the price of shares. No less, than Warren Buffett himself has acknowledged this to be the case.
However, on the flip side, he has now suggested that imposing tariffs on steel (25%), and aluminum (10%) would be good for the United States. This is disputable for a number of reasons. Firstly, it could trigger a trade war, which, if most have studied economics in any great deal will know that this exasperated the depression in the 1930’s. And secondly, it these tariffs are passed onto the consumer, they could result in inflation pressures in the US.
In Canada, the outcome is hard to predict, but if it results in layoffs as reduces exports and GDP, it could lessen the likelihood of interest rates rising and of bond prices falling. In any event, investors should probably just hang on tight with respect to equities and see how things unfold. With respect to fixed income however, we think this would be a good time to consider selling your fixed income investments in order to mitigate any capital losses that could arise when interest rates do increase.
We are aware of a number of alternative investments which we feel are safe, and will also result in higher rates of return, especially on a risk adjusted basis.
If any of our clients have any questions, or concerns, we certainly invite you to contact us at 988-9876, and we would like to take this opportunity to sincerely thank you for allowing us to provide you with our services.