With respect to the investment climate, there are changes in the economy that are clearly happening now. This morning, the headline job figure came in at a much higher number than what was expected. And while most of you really don’t care too about this, I pay attention because it represents the 7th consecutive month of job gains. Canadian employment gains this year have already outpaced gains seen in 2013, 2014 and 2015. The report also showed a 50/50 split between employees and self-employed which is an indication of a very healthy labour market.

So what does this mean to us? We will now probably see our first interest rate hike. The Bank of Canada is now pricing in a 94.8% chance that interest rates will go up, probably this month. Yields on all bonds have already increased across all maturities. This means, you will see a drift downward in bond prices. For stock prices, it is a different story. Initially, rising interest rates are a very good thing as it sends a signal that the economy is on firm footing. So while markets will always be bumpy, the stock markets should essentially keep moving forward. It is when we have 8 increases….otherwise referred to as tight money…. that I will advise you be cautious. At that point in time you will need to start to reduce equity exposure and move towards more fixed income exposure. It will take us at least 2 to 3 more years to get there, so we have time.

And finally with this surprise in the headline job figure, the Canadian dollar has very quickly moved up because of the expected increase in interest rates. So for those of you who are snowbirds, you may wish to take advantage and convert Canadian funds right now to US currency. And, for those of you who would like more US exposure in their portfolios then now is as good a time as any to convert funds to build or continue to build a US portfolio!!!!!