time for the predictions, another new year and another set of guesses.
here is a look back at 2006 predictions, my comments in brackets.
2006 predictions Jan 4, 2006
1. interest rates in the US raise .50% up to .75% in the first six months of 06.
2. In Canada rates go up .75% in the first six months. probably one more rate hike than in the US. In the first six months.
3. Cdn. dollar now at .86 will go over .90. do not believe it will go to par. last year thought the US dollar would hold up against the Euro. Believe the US dollar will be strong this year, but the cdn. dollar will go up at least for the first 6-9 months.
(dollar did well, however did trade in a range .85-.90 for most of the year)
4. gold goes over $575 and probably hits $600
(it did even better, though traded around 640 most of the year)
5. China and India grow by 5+, growth in these two countries slow however should be 5-8% range. often it is hard to tell how quickly these countries are growing but China grew by roughly 9.8% in 2005. Most countries would be happy with 2-3% growth.
(hard to know what exact level these countries are growing at, however was over 5% and closer to 10%, or 8%. this should continue 5-8% over teh next 5 years.)
6. not a gold bug, in fact of all the metal is the one do not care for; Main reason who still have the same ounce you had thousands of years ago. people will sell gold at a certain price as it rises.
still not a bad idea to have 2-5% of the portfolio in gold stocks, or precious metal mutual funds.
believe these companies will show decent returns. and jr. gold mining stocks may have a great year (run the next 2 years/gold would have to pass $600) moose pasture and worthless properties may have marekt caps in the ten/hundreds of millons once again.
gold stocks are not a good term invesment. shorter mine lifes, harder to replace (find new mines) and their costs energy, labour, environment regs. are going up by double digits every year.
(if you put 2-5% of your portfolio in gold you probably did okay, most cdn. gold mutual funds made over 50%, many 60-70%. will list a few of these funds in next predction thread. have 5% of my portfolio in a gold mutual fund...which is high, after 2007 will reduce this to 2-3%. gold stocks are still expensive. so be cautious on indivual names.)
7. cdn minority government. conservative or liberal not sure; will not matter much anyways.
(Cdn. minority government was conservative. Harper ran a good campaign, reduce the GST (sales tax), probably won a good deal of votes. the liberals own tax cuts were on income tax, and were not sold as well. also Martin ran a terrible campaign.)
8. there will be no cdn. bank mergers. mainly political reasons. BMO, BNS, CM, TD, RY. are still great investments they trade in the US, but are getting to their high end (high end 15-18 pe, low 8-12pe) if they tread water for six months then earnings should catch up. good long term investments. trade in the US and Cnd. should have a financial stock (a few) in your portfolio.
cdn. bank or a regional us player, one that has increasing dividends, earnings.
(cdn. banks at the end of the year are trading near their highs, and did have another great year. the income trust ruling adding 5%+ to the returns, which made it a great year to hold the cdn. banks. )
9. natural gas falls to $9, maybe $8. but will go with $9. still like the long term story. as production (supply) is not keeping up with increasing demand.
prices will cool off, and hopefully a great buying opportunity. missed a few of these last year.
(made this when natural gas was trading around 12, remember when natural gas was double digit. could only see to the fall, gas traded in the 8-7 range, then mild winter, and now 5-6 range. so knew gas would fall, hard to tell sometimes by how much.)
10. oil trades in a range of $50-$55. now it may spike up or down but believe will trade around this range most of the year. do not see $100 oil and also not $30.
(closes at just over $60, if opec does not cut will see 50-55, if they cut should stay 58-68)
11. would still avoid the big 3 GM, Chrysler, Ford, just do not care for the auto sector. many reasons.
a. health care cost, b pension costs. c. strong compeitiion coming in trucks and suvs from japan, korea. d. costs billions to redesign new cars and have to that every 3-5 years. e. car sales in North America should have little growth.
there are some positives and Chrysler has done far better than Ford or GM. if you can come out with a good lineup....ie. cars people will buy with no or little discounts you can do well ie. chrysler 300, charger, magnum, ect.
I do not know what car company will come up with the hot car or just bomb so I avoid the sector.
(Ford was a poor performer, and Benz is wondering why they merged/ takeover Chrysler. and may break it up. However GM is up over 55% this year, so missed out on GM. GM has a better vehicle line up, good international operations, and cut costs, still struggling on North America (in good economic times) so not sure if the stock is not fully valued.
12. believe the US market will do better than cdn. last year TSX did over 21% mainly on oil/gas and metals. this year SP 500 does better than Toronto.
will do stocks in a few days, just do not have that many.
(both US and cdn. markets had a great year. )
thanks
selkirk
here is a look back at 2006 predictions, my comments in brackets.
2006 predictions Jan 4, 2006
1. interest rates in the US raise .50% up to .75% in the first six months of 06.
2. In Canada rates go up .75% in the first six months. probably one more rate hike than in the US. In the first six months.
3. Cdn. dollar now at .86 will go over .90. do not believe it will go to par. last year thought the US dollar would hold up against the Euro. Believe the US dollar will be strong this year, but the cdn. dollar will go up at least for the first 6-9 months.
(dollar did well, however did trade in a range .85-.90 for most of the year)
4. gold goes over $575 and probably hits $600
(it did even better, though traded around 640 most of the year)
5. China and India grow by 5+, growth in these two countries slow however should be 5-8% range. often it is hard to tell how quickly these countries are growing but China grew by roughly 9.8% in 2005. Most countries would be happy with 2-3% growth.
(hard to know what exact level these countries are growing at, however was over 5% and closer to 10%, or 8%. this should continue 5-8% over teh next 5 years.)
6. not a gold bug, in fact of all the metal is the one do not care for; Main reason who still have the same ounce you had thousands of years ago. people will sell gold at a certain price as it rises.
still not a bad idea to have 2-5% of the portfolio in gold stocks, or precious metal mutual funds.
believe these companies will show decent returns. and jr. gold mining stocks may have a great year (run the next 2 years/gold would have to pass $600) moose pasture and worthless properties may have marekt caps in the ten/hundreds of millons once again.
gold stocks are not a good term invesment. shorter mine lifes, harder to replace (find new mines) and their costs energy, labour, environment regs. are going up by double digits every year.
(if you put 2-5% of your portfolio in gold you probably did okay, most cdn. gold mutual funds made over 50%, many 60-70%. will list a few of these funds in next predction thread. have 5% of my portfolio in a gold mutual fund...which is high, after 2007 will reduce this to 2-3%. gold stocks are still expensive. so be cautious on indivual names.)
7. cdn minority government. conservative or liberal not sure; will not matter much anyways.
(Cdn. minority government was conservative. Harper ran a good campaign, reduce the GST (sales tax), probably won a good deal of votes. the liberals own tax cuts were on income tax, and were not sold as well. also Martin ran a terrible campaign.)
8. there will be no cdn. bank mergers. mainly political reasons. BMO, BNS, CM, TD, RY. are still great investments they trade in the US, but are getting to their high end (high end 15-18 pe, low 8-12pe) if they tread water for six months then earnings should catch up. good long term investments. trade in the US and Cnd. should have a financial stock (a few) in your portfolio.
cdn. bank or a regional us player, one that has increasing dividends, earnings.
(cdn. banks at the end of the year are trading near their highs, and did have another great year. the income trust ruling adding 5%+ to the returns, which made it a great year to hold the cdn. banks. )
9. natural gas falls to $9, maybe $8. but will go with $9. still like the long term story. as production (supply) is not keeping up with increasing demand.
prices will cool off, and hopefully a great buying opportunity. missed a few of these last year.
(made this when natural gas was trading around 12, remember when natural gas was double digit. could only see to the fall, gas traded in the 8-7 range, then mild winter, and now 5-6 range. so knew gas would fall, hard to tell sometimes by how much.)
10. oil trades in a range of $50-$55. now it may spike up or down but believe will trade around this range most of the year. do not see $100 oil and also not $30.
(closes at just over $60, if opec does not cut will see 50-55, if they cut should stay 58-68)
11. would still avoid the big 3 GM, Chrysler, Ford, just do not care for the auto sector. many reasons.
a. health care cost, b pension costs. c. strong compeitiion coming in trucks and suvs from japan, korea. d. costs billions to redesign new cars and have to that every 3-5 years. e. car sales in North America should have little growth.
there are some positives and Chrysler has done far better than Ford or GM. if you can come out with a good lineup....ie. cars people will buy with no or little discounts you can do well ie. chrysler 300, charger, magnum, ect.
I do not know what car company will come up with the hot car or just bomb so I avoid the sector.
(Ford was a poor performer, and Benz is wondering why they merged/ takeover Chrysler. and may break it up. However GM is up over 55% this year, so missed out on GM. GM has a better vehicle line up, good international operations, and cut costs, still struggling on North America (in good economic times) so not sure if the stock is not fully valued.
12. believe the US market will do better than cdn. last year TSX did over 21% mainly on oil/gas and metals. this year SP 500 does better than Toronto.
will do stocks in a few days, just do not have that many.
(both US and cdn. markets had a great year. )
thanks
selkirk
