Apr 092014
 

Last Fall I made some bold predictions that low interest rates are staying until 2016, which will keep the housing market stable. I also suggested that investing in parts manufacturers like Magna International would be a profitable venture due to the consumer’s love for cars ๐Ÿ˜€

Fast forward to today and it looks like events are unfolding thus far ๐Ÿ™‚ The Prime lending rate is still at 3%, unchanged from last year. Mortgage rates have not moved higher. Home prices have not corrected. And Magna International’s stock price is nowย 25%ย higher since last year’s post.

14-04-magnaint Low Interest Rates

Anyway, the International Monetary Fund (IMF) recently published their growth projections for countries in 2014. Canada’s economy is expected to grow at 2.3% this year, lower than that of the U.S. at 2.8%, and the U.K. at 2.9%.

So we must create a plan to make the best of this current economic situation, because if we fail to plan – then we plan to fail ๐Ÿ˜‰ The following image demonstrates the importance of planning ahead. Can you figure out what’s wrong with this sandwich?

14-04-sandwichmayo Low Interest Rates

Today I will make some more predictions ๐Ÿ™‚ I think the overnight lending rate in Canada, currently at 1%, will increase to 1.25% in 2015. And by 2018, it would only be at 1.75%. Since rates are going up so slowly I would continue to own instead of rent, because I think the national average real estate price will move higher in the next few years ๐Ÿ˜€

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