Many investors believe the new year and new hope begins this week with
the swearing-in of Barack Obama as president of the United States. With
him comes an approximately $875-billion stimulus package that will
address health care, infrastructure, education and the creation of more
than three million jobs. This package, along with the next $350 billion
of Toxic Assets Relief Program (TARP) funds to further handle the
banking crisis, should set the stage for a comeback for the broader
U.S. stock markets in 2009!
Canada’s ties to the U.S economy are so tight that whatever the next
American administration puts forth with respect to a stimulus package
and banking assistance will have a profound effect on our economy.
The Canadian government, which will unveil a new budget on Jan. 27, is
expected to put forth a massive stimulus package of their own
consisting of infrastructure spending and tax cuts. Prime Minister
Stephen Harper believes that this may be one of the biggest budgets
ever tabled.
All these new positive events are ready to shape our country and
economy, yet investors still seem timid and nervous about the markets.
People seem to be dwelling on past negatives and not looking to the
positive future. The lingering effect of this past year’s events are
causing a lot of fear and anxiety amongst individuals.
Investors should understand that the economic numbers that are being
presented of late are numbers from the last quarter of 2008 and thus
should not be dwelt on. We all know that time period was one of the
worst in history for economic growth. Car sales were down, retail sales
were flat to negative, manufacturing seemed non-existent and it felt
like there were thousands of people being let go from their jobs daily.
Why should we expect anything but doom and gloom from the numbers being
released from the last quarter of 2008?
If investors were to look ahead at the many positive factors about to
affect markets instead of dwelling on past news and commercial
performance, then maybe we can move forward with the economic recovery
sooner. Those investors that can look ahead, remain positive, and have
the discipline to invest when others are nervous and fleeing the market
will be the winners in the long run.
With interest rates at a 50-year low and going lower, and stocks at
multi-year lows, this is the best environment for buying solid
investments with limited downside risk. Investors can take advantage of
blue chip investments paying attractive dividends to grow their
portfolios. Investors should look to the future and not behind them to
see where this market is going. What will be the hot sectors for 2009?
Will it be infrastructure and oil, or perhaps metals and banks?
Investors should take their cues from our politicians and set up their
portfolios to take advantage of the opportunities that these stimulus
packages will provide.
If you have any questions regarding the above article or are looking
for an Investment Advisor to help you with your portfolio, please send
me an email at asmall@dundeesecurities.com. I will be glad to speak
with you!
Allan Small is an Investment Advisor with Dundee Securities
Corporation, a DundeeWealth Inc. Company. This is not an official
publication of Dundee Securities and the author is not a Dundee
Securities analyst. The views expressed are those of the author alone,
and are not necessarily those of Dundee Securities or Metro.
