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Stettler financial expert told broad global growth will continue in 2018 and beyond

Canadian government seen to have solid asset to debt ratio
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Some thoughts on the current market volatility!

I was in Niagara Falls in November to attend the annual Manulife Investment Forum conference and just in San Francisco two weeks ago to attend the Annual Manulife Elite Agent conference and listened to Bob Boyda, who is the co-head of Manulife Global Asset Management; he commented on the state of affairs in the world as he sees it relating to the average investor.

He started off with the expectation of more volatility in the short term, but confidant that for the next three years we should continue to see relatively strong growth. Beyond three years he had the opinion that we would see slower growth and lower returns for investors, as GDP (Gross Domestic Product) growth is driven by population and productivity growth. Both of which are declining in the developed world due to our aging populations!

The current upswing in equity market volatility can be attributed largely to investor uncertainty about the future direction of USA Federal Reserve policy. Plus with today’s instant computerized electronic trading, investors overreact to any market moves heightening volatility!

Equity markets could remain unstable in coming days as investors adjust to the return of volatility and greater uncertainty about the course of U.S. inflation and interest rates.

However, economic and earnings fundamentals continue to be supportive for equity valuations, in his view. Though he does not see any sign of a recession for the next 18 months for anyone holding a balanced and broadly diversified portfolio. The general expectation is that broad global growth will continue in 2018 and beyond, but that returns to investors could be half of what they are used to.

His comment on government debt was interesting; he talked about net current USA assets of $100 trillion supporting $10 trillion of government debt; and Canada with a similar balance sheet with $35 trillion of assets backing $$3.5 trillion of government debt! In his opinion any company would love this kind of debt to equity ratio in today’s world.