BUSINESS

Investment Reporter gives
positive economic forecast

AS ITS Christmas-New Year’s gift to us, the Investment
Reporter nas come up with something we all badly need:
positive predictions about the economy and _ investment

climate.

In its annuat forecast issue, the
weekly Investment
(published in Toronto by Cana-
dian Business Service/MPL
Communications Inc.) sees better
times ahead, for a variety of
reasons. .

Commenting on concerns about
a repeat of a °30s-type depression,
the newsletter says:

“If history repeats itself, we'd
bet against a replay of the depres-
-sionary 1930s.

“Our best guess is that instead,
we'll have a post-Cold War boom
— a repeat of the post-Second
World War boom between 1945
and 1970.

“And if we’re wrong, maybe we
ere by under-estimation. Maybe
our model should be the golden
age of ancient Greece, in the fifth
century B.C., when trade
flourished and wealth ballooned
after the Greek democracies

- defeated Persia.”

The newsletter agrees we have
high levels of. personal and gov-

‘ernment debt which reduce the.

’ potential for: economic , growth,
but notes:

~ Sts not the “high debt but its
rapid’ unravelling that causes the

trouble. Besides, debt i is s just 0 one —

Reporter’

Michael

DOLLARS AND SENSE

” “That's only a little wealth, to
be sure. But that’s how companies
like Procter & Gamble get
started.”’

Reviewing concerns about debt,
the Investment Reporter said a
two-income baby-boom couple
aged 40, with two children and a
big mortgage, can thrive despite a
high debt ratio, while the same
ratio could be precarious for a
single-income. family with a 60-

century.’’

Election years in both Canada
and the U.S. should produce at
least scme tax cuts and govern-
ment spending, despite budget
deficits.

Falling interest rates mean peo-
ple who renew their mortgages
will find their payments drop
substantially if they keep their
same amortization (repayment)
periods. Those individuals will
probably spend that extra money.
Helping to boost the economy.

Low interest rates also mean
people are more likely to invest
their money — especially their
higher RRSP contributions (up to
$11,500 for 1991 and $12,500 for
1992) — in the stock market.

The Investment Reporter lists 25°

stocks it expects to perform well
in 1992 and 25 that could lag
behind the market, with a risk rat-
ing and brief reason for each.

For income, it recommends
stocks with steady or rising divi-
dends like the ‘‘very conservative’’
BCE, BC tei, Bank of Montreal
and Scotiabank, and the ‘‘conser-
vative’? BC Gas, Burncor, Fortis,
Maritime T&T, newTel, Quevec
Tel and Telus.

The Investment Reporter feels
the threat of Quebec separatism
falls each time the unemployment
rate rises.

“Some compare Quebec and
English Canada to partners in an
unhappy marriage. Far better, we
think, to compare the two to
neighbors with a history, of spats

Wednesday, December 25, 1991 - North Shore News - 39

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amel

; rT Our best g guess is that instead, we'll have a
_Post-Cold War boom — a repeat of the post-
Second, World War boom between 1945 and

fo, 1970. 79

who use a jointly-owned right-
of-way to get into their own
garages.

*n the heat of the argument,
either might threaten to put up a.
fence along the property fine. But
that wouldn't serve anybody’s

LONSDALE INSURANCE

part-of the econom-
ic-social-political picture.’”

The- Investment Reporter. said
falling trade barriers amd the

‘downfall of central planning “are,

- more important factors.

~ “You don’t create any wealth
. when you stand in line to ‘buy
soap, as millions still do in
Russia.. You do create wealth if
you, spend that time Making soap
and’ are allowed to sell your out-

—Investment Reporter

year-old breadwinner.

““Today, though, it’s the two-
income 40-year-old couples and
the government that owe all the
money. The 60-year-olds, raised
during. the Depression, are the
lenders.

‘Corporations, 00, can cope
with more debt when they face an
inviting political climate and ex-
panding international prospects, in
a more stable world than we've

purpose.
“Our guess is that negotiations
on Canadian unity are a little like
GATT and other trade talks:
when the exchanges grow peeved,
they are close to a deal.’”
Copyright 199)
Mike Grenby is a North
Shore-based columnist and in-
dependent financial adviser who
works with individuals; he will
answer your questions as space
allows — write to him c/o The
North Shore News, 139 Lonsdale
Ave., North Vancouver V7M
24, :

Susie Duquesne ‘Alex Maier Lori Maier _
tonsdale k Insurance
Brokers:

1925 Lonsdale Ave.

986-9599

Lynn Valley
insurance Agency
3171 Mountain Hwy.

984-4515

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— Hair Salon
— Pet supply store

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844-5723 « (Res.) 985-1270 844-5724 + (Res.) 980-4099

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Investment advisors to Candin enterprise and enterprising Canadians
500-1066 West Hastings Street, Vancouver, B.C. V6C 3E8

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as well as businesses requiring office space (500-3,000 sq.ft.). Prospective tenants
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— Book store
— Travel agency