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 😀
Fast forward to today and it looks like events are unfolding thus far 🙂 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 now 25% higher since last year’s post.
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 😉 The following image demonstrates the importance of planning ahead. Can you figure out what’s wrong with this sandwich?
Today I will make some more predictions 🙂 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 😀