If your credit card is still smoking from its Christmas workout, don’t talk to Garth Turner.
The financial adviser and onetime MP says debt is the “albatross” that will weigh most of us down during these tough economic times.
And he believes Canada hasn’t seen the worst of the job losses yet.
“2009 is going to be a stinker. It’s just going to get worse,” says Turner, who was in town this week offering a financial-advice seminar in Halifax. “Almost nobody has lived through a time like this.”
The real-estate bubble has burst, and values will stay depressed for years to come, he says. In Atlantic Canada, where prices didn’t skyrocket like in Vancouver, he figures home values will drop a modest 15 per cent. Think that sounds bad? He expects a 30 per cent plunge in larger centres.
That’s bad news if you just bought an expensive house with five per cent down. It’s also bad news if you’re about to retire and your house is worth more than 40 per cent of your net worth. If that’s the case, Turner’s got one piece of advice for you: Sell it right now.
“Don’t wait till the spring or summer or fall, because things are only going to get worse.”
Depressed yet? Don’t be. Turner says if you’ve got cash, now is a great time to invest in things like banks, energy companies, oil companies, because their stocks will rise again. Gold would also be a good safeguard, since he figures U.S. megaspending will depress the greenback.
If you own a small house, fear not — he figures small, energy-efficient, green homes will be hot tickets in the new market.
And if you’ve always been a saver, Turner says you’ll do well in this new economy.
“This is a giant reset button. We’re going back almost a generation. People are going to start saving. This is going to scare the crap out of people.”