Have you been following the trade war between Canada and the United States? I do know that I have had, and frankly it freaked me out for a bit. Such changes are about to have a profound impact on us economy and we must be ready for it.
So, what's the deal with our economy? Obviously, these tariffs will generate deep and catastrophic results. We're talking about a potential hit to our GDP, slower economic growth, and even higher unemployment rates. That's not exactly what we want to hear, right?
We must keep cool and play the long game. After all, no, that is not a knee-drop reaction to short-term fluctuations of the market, is it?
Yet today, let's talk about the industries that are going to be hit hardest. You see on admission that the ones most reliant on the US market - sector - people are going to have to respond extremely rapidly. They may face decreased export value and hence, their income may be even reduced, which is very hard to compensate.
And then there's the consumer side of things. The retaliatory tariffs that we're imposing against US goods, however, can ultimately result in higher product costs to us consumers and, perhaps, accelerate inflation. That is, our "retrenchment" fund could be shallower than it has been until now.
So, what's an investor to do? Well, diversification is key. Spread your investments across different sectors and regions, and you'll be better equipped to handle the market ups and downs. And, do not forget to take exchange rate into consideration, especially with the high US dollar exposure.
But here's the thing: every challenge presents an opportunity. Producers of substitutes to US imports in Canada may face higher demand. Companies investing in the Canadian market seem to be more attractive acquisition. Organizations that want to enter markets outside of the U.S. may be at the start of something quite unique.
So, what's the takeaway? I suggest you stay informed but keep calm. It is time to take your investment portfolio, sit down and reassess it, to see that it is in line with your long term goals. However, in an integrated and balanced manner, it is in fact also possible to override such challenging situations and even to take advantage of new opportunities in our market environment.
Remember, every economic shift brings both risks and opportunities. If you are open and flexible enough, you will emerge the other side transformed