Invest in Canada – The World’s “Safest” Economy

| Monday, 13 August 2012 16:00
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Canada’s natural resources are abundant, and the economy is considered to be one of the ‘safest’ economies in the world today.  With uncertainty in the U.S. markets and a recession that has a grip on the U.S. economy – Canada represents a solid solution to investment query and offers a market that is just north of the border and rich with natural resources.  In fact, the entire Canadian market could be a safe bet.  In addition, Canada’s banks are among the most solid and safest banking systems in the world, as ranked by the World Economic Forum during one of the worst financial crisis in October of 2008.  The Economist  correctly anticipated Canada to have a 2010 budget deficit of only 4.5% of the Gross Domestic Product – far more solid that U.S. with an 8.9% budget deficit on Gross Domestic Product (at that time).  Furthermore, Canada just happens to be rich in “up and coming” natural resources that are likely to provide very powerful, long-term growth potential which makes investments in Canada’s natural resources and commodities a strategically good move to make.

Canada vs. U.S. – Consider Investing Abroad

Canada’s economy is solid while the U.S. continues to lag behind with excessive budget deficits and slow economic growth.  The U.S. and Canada have much in common, but two major differences become crucial to the long-term advantages of choosing to invest money in Canada versus the United States.  Canada’s governmental officials chose a far less ‘self-indulgent’ route to ‘fiscal stimulus’ at the onset of the recession than that of its Southern neighbor – the U.S.   With a significantly lower budget deficit Canada and abundant natural resources Canada stands to continue recovery more vigorously than the U.S.  Canada is rich in natural resources such as oil, gold, and uranium.  The importance of uranium is the increasing demand for it around the globe due to the fact that it is a necessary element in nuclear power programs.

Nuclear power is an economical approach to the global warming and the need for alternative energy sources.  Canada possesses 9% of the world’s uranium reserves, including the world’s largest uranium mine, the “McArthur River Mine”.  Operated by Cameco Corp (NYSE: CCJ) the shares are presently quite reasonably priced and trading at 10.8 times trailing earnings.  Given the potential value of the shares, there is much potential in the uranium.  Energy sources are moderately priced and expected to grow.  Companies such as Suncor Energy, Inc. (NYSE: SSJ) is one of the most important producers of tar sands oil and investors could be expected to see substantial increases, with shares recently trading at 19 times trailing earnings.  The key to profitability is to consider diversification – particularly in Canada’s resource rich market.

Overview of Canada’s Wealth of Resources and Solid Economy

In addition to uranium and oil, Canada has many other ‘strengths’ to consider for investment and financial growth.  Canada’s banking system did not permit the outgrowth when the U.S. found itself in a most precarious and out-of-control situation in the financial sector. The U.S. required governmental bail-outs and stimulus packages to reinvigorate the system following a period of rapacious spending. Canada has five large banks and thanks to the tighter regulations in the banking industry has a clear and viable advantage over the U.S.  Betting on Canada by buying into the market as a whole which is reasonably priced is a great way for investors who seek to maximize their financial gains outside of the U.S. to diversify.  Copper shares at Teck are trading for a reasonable 10.4 times earnings and could increase with the rise in copper prices.

Canada will soon be shipping efficiently to the Chinese market allowing coal, copper, and other metals to present yet another sector that should increase earning potential with the rising demand and cost.  Martin Hutchinson of Money Morning’s, a long-time merchant banker and economic guru has been spot-on with numerous predictions – for example, his recommendation Germany which reported stronger than anticipated GDP and Chile which posted double digit returns on stocks that are up nearly 25%.  As a leading global investment strategist, Martin Hutchinson’s advice is worth considering, and he recommends Canada as a ‘simple alternative’ for investment success and financial prosperity during the U.S. recession.  Hutchinson knows money and possesses global investment savvy with a proven track record of investment success. 


Feel free to share your thoughts on investing in Canada. We welcome your feedback here at eToro.

Note: Past performance is not an indication of future results. This post is not investment advice. CFD trading bears risk to your capital.
| Monday, 13 August 2012 16:00
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349
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