Most investment portfolios have three basic components. Cash that has option value for future buys, equity for growth that hopefully exceeds inflation, and income that generates cash flow. Normally, our income investments are stable - we get some capital appreciation with predictable cash distributions. That was the case, until 2022!
Bull versus bear? Mutual fund versus ETF? How do they work out the inflation rate? How many times have your eyes skimmed cluelessly over an article or nodded in meetings at investment terms that are familiar but mean nothing to you?
Filling up your gas tank in recent months is like seeing the bill for your toddler’s birthday party – “how much?” For a smooth family life, however, both must be paid.
Canada’s benchmark interest rate hit an all-time high of 16% in 1991 – and here investors are in 2022, freaking out over projections it’ll touch 1% by June. But there’s a reason for the current unease. Despite rate increases being forecast the minute governments and central banks opened the floodgates on trillions of dollars of stimulus, things have now “got real”.