Last week I was watching a truck trundle down my back lane collecting Christmas trees to be recycled and I thought – “How amazing to live in a place where your now, sorry looking tree, bereft of its Christmas glitter is disposed of for you! “
The same day my eldest daughter announced she was travelling to Rwanda in April as part of her University program. I've worked in Rwanda and like most African counties no one collects your Christmas tree there for you. In fact 80% of the country doesn't even have running water. The truth is 75% of the African Continent doesn't have running water or electricity at all!
So we are very lucky - and when I think of those African children, who spend all day, every day fetching and carrying water, just to stay alive, laboriously lugging their Yellow buckets along dusty roads and then I pick up my Globe and Mail and see Canada is doomed to bankruptcy and all of us to poverty, because oil is now $52.00 a barrel, the word “perspective” jumps into my mind.
None of us have escaped the inane media coverage about what is going to happen to Canada now that oil has dropped like a stone. The truth is, what is going to happen is this: Nothing, or very little anyway - you see oil was at $40.00 a barrel in 2008. Did World War III break out then? Did water stop coming out of the taps in Alberta? Was there rioting in Richmond? (Perish the thought).
The answer is no.
Of course the current situation poses financial challenges for some, I'm not going to gloss over that - but the problem it creates for areas of Canada is self-made, owing the consistent short sightedness of successive provincial and federal governments’ not encouraging investment in other sources of long term growth for the economy.
I don't want to get drawn into politics, but you get the picture. So what does all this mean for you as a saver and an investor? If you are reading this as my client you need not be concerned as you will have a well-diversified international portfolio. In fact most of you will become even more global in a short space of time. The world has gotten a lot smaller in the last decade, most companies sell their products and invest all over the globe.
A good example would be Europe - many people have said to me recently that Europe is a place to avoid. What they don't know is that in 2013 the European stock market had the greatest growth on the planet! (Compared to everywhere else) How can that be? What about Greece? And Italy?
The truth is, Government debt in Europe has little to do with stock market growth. If a company like Nestle starts selling less breakfast cereal to Greece, then they will sell more to the US or Canada - although based in Europe, they operate globally, like most.
Once again you have to be very careful about how you let the media affect your decision making, think global and long term - ignore economic cycles and the ups and downs of the markets, they are as natural as the air flowing in and out of your lungs and reset us to default every five to seven years and it’s their volatility by nature, that gives you your long term growth.
Despite all the hype and a reduction in interest rates, bar an earthquake or meteor strike, when you turn on your tap to fill the kettle – water will flow.