Business
Trump, Brexit Signal Rocky Road Ahead for Investors: Gordon Pape
It’s been a year none of us will ever forget. In fact, historians looking back on 2016 a century from now will probably identify it as one of the most pivotal in modern history.
It was a year that set in motion a train of events that will reshape our world for years to come. At this stage, we cannot know the consequences of all the forces that have been unleashed but we do know they will dramatically change the world and how we make our investment decisions.
On a macro scale, historians will zero in on two game-changing events: the British decision to leave the European Union and the election of Donald Trump as the U.S. president.
Both are related in the sense that they represent a rebellion of the middle class against the established elite in the two countries. Both signal the start of a retreat from the political realities of the post Second World War era into a new period of isolation and xenophobia.
The first shock came with the Brexit vote in June. No one expected the Leave side to win but it did, handily. In doing so, it triggered more than Great Britain’s departure from the European Community.
It was the first shot in what will probably be the eventual collapse of the EU. The second came last Sunday with the defeat of Italian Prime Minister Matteo Renzi in a national referendum aimed at strengthening the government.
With the rise of Eurosceptic parties across the continent, it now seems to be only a matter of time before the EU disintegrates and Europe reverts to a collection of inwardly focused states. That would be a sad end to one of history’s great political experiments but unless something dramatic happens to change the equation, that’s where we are heading.
The second big shock was the election of Donald Trump. We all hope for the best for his presidency but let’s be realistic. Mr. Trump has the potential to be the worst president in U.S. history — worse than Calvin Coolidge, worse than Herbert Hoover, worse than George W. Bush and worse than Andrew Johnson, who succeeded Abraham Lincoln.
Trump is egotistic, narcissistic, reckless and arrogant. He has a hair-trigger temper and a total lack of respect for truth. He’s a bully. Any one of these characteristics would be dangerous in the most important leader in the world. He displays them all.
The next four years are going to be the most perilous and disruptive period we have experienced since the Second World War.
So how do you plan your investments in the context of these unfolding events? With great care. Here are my suggestions:
Avoid Europe. It has not been a good year for European stocks. As of this week, the Stoxx Europe 600 Index was down 7.2 per cent for 2016 and most national indexes were also off. Ironically, Britain’s FTSE 100 was the only winner, gaining 7.8 per cent year to date.
It’s hard to see how 2017 will be any better. GDP growth in Europe is agonizingly slow and unemployment is high in countries like Italy (11.6 per cent), Spain (18.9), France (10) and Greece (23.4).
Add to that the political turbulence that is coming with elections in France, the Netherlands, Germany and probably Italy and the outlook is grim. Europe will be a good place to visit, with an increasingly cheaper euro, but not for your money.
Be wary of China. It’s in no one’s best interests, but Donald Trump appears determined to launch a trade war with China. He has already branded the country as a currency manipulator and threatened to impose huge tariffs on its exports to the U.S.
He has shown a callous disregard for relations with Beijing by breaking a 40-year precedent and speaking directly with the president of Taiwan. All this bravado may play well in Indiana but it will not benefit either the U.S. or Chinese economies. The Shanghai Composite is down 8.3 per cent this year. Next year may be worse.
Be selective in the U.S. American stocks have been on the rise since the election on the expectation of a rollback in financial and business regulations, a tax reduction and stimulus spending.
I suspect the Trump Bump will give way to the Trump Slump once the new president takes office and the implications of his policies become clearer, especially as they relate to trade.
However, some sectors of the economy are expected to prosper under his mandate. One of them is defence, which is likely to see expanded budgets to beef up America’s military presence. One way to participate is through the iShares U.S. Aerospace and Defense ETF.
Invest in Canada. We’re vulnerable to Trump’s protectionist tendencies but it’s not likely we’ll experience any serious disruption in our trade with the U.S., unless his administration decides on a policy of raising the drawbridge and hunkering down in the castle.
In fact, our energy sector may actually get a boost from the new government, since the president-elect has vowed to approve the Keystone XL pipeline.
Pay off debts. The long era of low interest rates that followed the collapse of 2008 is over. The U.S. Federal Reserve Board is scheduled to meet next week and an increase of a quarter-point in its key rate is almost certain. At least two and maybe three more hikes are likely to follow next year.
The Bank of Canada probably won’t move but commercial rates will go higher (that process has already started). This is probably just the beginning, as Trump’s policies suggest more inflation down the road, which will drive rates higher. Reducing your debt will be one of the safest ways to make money during this period.
I realize this is a rather gloomy outlook. Many of my American friends do not share it; some are convinced that Trump will shake up Washington and restore middle America’s prosperity and the country’s international credibility. I hope they are right. I fear they are terribly wrong.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters. His website is BuildingWealth.ca Follow him at twitter.com/GPUpdates .
Beauty enthusiasts rejoice! Beauty Week at Hudson’s Bay is back in Toronto for another year. It’s time to stock up on all of your fall essentials and, maybe discover some new ones.
From Friday, August 18 to Sunday, August 27, you can expect a truly elevated beauty experience in-store with incredible special offers, limited-time gifts, and exciting activations.
If you’re a diehard beauty lover, you’ll already know that Hudson’s Bay is the place to shop thanks to its extensive range of over 195 skin and makeup brands from both luxury labels and masstige brands — including Tata Harper, Estée Lauder, YSL, Nars Cosmetics, Bobbi Brown, and so much more.
Throughout The Bay’s Beauty Week, visitors can take in some at-counter activations and interactive expert-led tutorials, where there will be chances to get makeup touch-ups from top-tier brands, try a spritz of the most alluring fragrances, and sample tons of new products.
This year’s Beauty Week highlight is the ‘Best in Beauty’ tote, a meticulously-curated selection of 30 deluxe samples from an array of top-tier brands like Dr. Barbara Sturm and Shiseido spanning skincare, fragrance, and makeup — all in a super sleek bag.
The tote, which is valued at over $300, is retailing for just $39 and is a fantastic way to explore new products (without breaking the bank). However, there is a limited quantity, so if you want to get your hands on one, you’ll need to be fast.
Wondering exactly what Beauty Week’s free gifts with purchases entail? If you spend over $95 at Lancôme, you will receive a six-piece set valued at $130. Or, you can get an Estée Lauder gift valued at $170 with purchases over $80. (And that’s just to name a few.)
If you’re a Hudson’s Bay Rewards member, you’ll also get $20 in Hudson’s Bay rewards when you spend over $100 on beauty.
The Canadian Armed Forces (CAF) have several non-combat jobs, some of which do not require a college degree or past work experience.
Life in the forces has several benefits, such as paid education plans (college, university and graduate-level programs), 20 paid vacation days, health and dental coverage for you and your family, maternity and paternal leave, and pension plans. You can learn more about the benefits in detail here.
And to make it easier to gauge if you qualify, the listings also include related civilian jobs to see if it’s your ideal role.
Financial services administrator
Related civilian jobs: Financial records entry clerk, financial manager, accounting technician, bookkeeper, budget officer, cashier clerk, business planner technician, and verification manager.
Description: You’ll help budget resources for all military activities besides providing financial assistance.
Education: You need to have completed Grade 10.
Duties: As a financial services administrator, you’ll be responsible for bookkeeping and managing budgets. You’ll also provide support in accounts payable and accounts receivable.
Work environment: Those in this role work at CAF bases, on ships or overseas. You might also be expected to help special operation units, recruiting offices, schools, and medical organizations.
Postal clerk
Related civilian jobs: Mail clerk, mail sorter.
Description: You’ll provide postal services to members and their families at bases and establishments.
Education: Grade 10. No previous work experience or related career skills are required.
Duties: As the postal clerk, you’ll handle mail duties.
Work environment: Besides a postal office, you may work on a ship or a mobile postal van. You might be expected to serve with Royal Canadian Navy, the Army, and the Royal Canadian Air Force in Canada and abroad.
Dental technician
Related civilian jobs: Dental assistant, dental hygienist.
Description: You’ll be helping dental officers provide dental services to CAF members, their families, and dependents.
Education: Level II dental assisting diploma from an accredited college or a National Dental Assisting Examining Board (NDAEB) certificate.
Duties: Those in this role will be responsible for various responsibilities, including disinfection and sterilization of dental equipment, applying rubber dams, placing cavity liners, and controlling bleeding. In addition, you’ll assist in laboratory procedures like creating casts, custom trays, and mouthguards.
Work environment: This role will require you to work in a military dental clinic, a Mobile Dental Clinic, an Air Transportable Dental System, or onboard a ship. You might be expected to work on a base in Canada or other operations in other parts of the world.
Human resources administrator
Related civilian jobs: Records administrator, data entry supervisor, receptionist, office manager, executive assistant, payroll clerk, and information management technician.
Description: Provide administrative and general human resources support.
Education: Grade 10. No previous work experience or related career skills are required.
Duties: In addition to human resources administration and services, you’ll be handling pay and allowances, managing automated pay systems, and maintaining personnel records.
Work environment: HR administrators work at all CAF bases in Canada. They also work on ships and overseas to support the Canadian Army, Royal Canadian Navy, or Royal Canadian Air Force operations.
Medical assistant
Related civilian jobs: Emergency medical responder, ambulance and first aid attendant, registered nursing assistant, licensed practical nurse, and hospital orderly.
Description: Successful candidates will help treat the sick and injured in CAF units. You’ll be assisting and supporting nursing and medical officers.
Education: Minimum of Grade 11 biology, Grade 10 physics or chemistry, and Grade 10 math.
Duties: You’ll provide initial care and essential life support treatments in trauma cases. You’ll help with health assessments (hearing and vision tests, perform basic lab procedures, etc.) and initiate and manage medical records and reports. You’ll also be expected to provide support and first aid during training exercises.
Work environment: Medical assistants may serve with the Royal Canadian Navy, the Royal Canadian Air Force or the Canadian Army as part of the Canadian Forces Health Services Group. Those in this role are exposed to the same risks as the forces they support.
Porter Airlines is once again stirring the pot among Canadian airline rivals, now going after Air Canada’s Aeroplan members by offering to match their loyalty status to an equivalent of their own.
The beloved airline, which recently ranked as having the best cabin service in North America, challenged the competition for the second time this year, after previously deploying a similar tactic against WestJet in the spring.
Earlier in April, Porter presented customers with a limited-time offer to match the loyalty status of WestJet’s patrons with VIPorter levels.
Now, they’re offering Aeroplan members to seamlessly transition to an equivalent VIPorter Avid Traveller status based on their existing membership tier.
Members can then take advantage of an array of travel perks that come with flying Porter, including seat selection, baggage, and flight changes.
For those currently holding an Aeroplan membership, there are two ways to acquire the Avid Traveller status for the rest of 2023:
Status-Based Match:
- Aeroplan 25K members = VIPorter Venture
- Aeroplan 35K members = VIPorter Ascent
- Aeroplan 50K, 75K, and Super Elite = VIPorter First
Flight Segments-Based Match:
- 5 flight segments = VIPorter Passport
- 8 segments = VIPorter Venture
- 17 segments = VIPorter Ascent
- 28 or more segments = VIPorter First
Members will have to first submit their applications on Porter’s website. Registration will remain open until September 6, 2023.
In order to maintain their membership level through 2024, customers will have until the end of 2023 to reach the following reduced qualifying spend (QS) targets:
- Passport = $500 in QS
- Venture = $750 in QS
- Ascent = $1500 in QS
- First = $2500 in QS
Over the past year, Porter has launched an aggressive expansion strategy, including everything from introducing longer flights on newly-purchased jet planes flying out of Toronto Pearson, free WiFi, and a new all-inclusive economy experience.
With Canadians losing both Swoop and Sunwing as WestJet incorporates both into their mainline business, Porter’s direct competition is welcome to keep prices competitive.
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