PAGE 8 • WESTSIDE WEEKLY FRIDAY, OCTOBER 2, 2015 The Westside Health Network Society would like to thank the following for their outstanding support for our 14th Funtabulous Annual Seniors Awareness Golf Tournament. Official Sponsor: BAPTIST HOUSING ENHANCED LIVING COMMUNITIES Our hole sponsors: Baybridge-Baltic Group – Lakeview Lodge, City Furniture, MediSystem Pharmacy, Medline Canada Corp., Nature’s Fare, Paynter’s Fruit Market Ltd., Porrelli Law, R & C Appraisers, Royal Bank – Westbank, The Heritage, TNI The Network Inc., True Dental, Valley West Dental Centre, Westbank Lions Club, Westbank Lioness Club, Westwood Retirement Resort Special thanks to all who graciously donated prizes for the Raffle and Silent Auction! Baptist Housing Enhanced Living Communities, Beach Ave. Café & Board Shop, Best Western Hotel, Beaumont Family Estate Winery, Boston Pizza, BCAA, Bylands Garden Centre, Canadian Cancer Society, Canadian Tire, Capri Insurance, Deep Creek Wine Estate, Holiday Inn, Happy Hookers, Home Depot, Home Hardware, Interior Savings Credit Union, Investment Planning Counsel, Johnson Bentley Aquatic Centre, Kelly O’Bryan’s, LaCucina Ristorante, Landmark Cinemas, Lily’s Pad Bed & Breakfast, Little Straw Vineyards, London Drugs, Lucy Philips, McDonalds, Nature’s Fare, New Image Salon & Spa, Niche Wine Company, Okanagan Regional Library, Off the Dock, Prorisk Enterprises Ltd., Quail’s Gate Estate Winery, Rexall Drugs, Save-On-Foods, Shannon Lake Golf Club, Sheila Taylor, the hatch, Thrive Naturals, The Trophy Den, Tim Horton’s, 19 Okanagan Grill & Bar, UBCO, Walmart, Wine Kitz-West Kelowna, Whiski Jacks Pub, Yamato Asian Dining & Sushi Bar. THACKER DRIVE ANDERS ROAD HUDSON ROAD BO U C HE RIE R O A D WESTSIDE ROAD HWY 97 BRIDGE WE ARE HERE WE ARE HERE LAKEVIEW HEIGHTS SHOPPING CENTRE HORIZON DRIVE SHOP’N SAVE at Lakeview Heights Shopping Centre Look for our flyer IN SELECTED WESTSIDE AREAS IN… Misplaced your flyer? See it online at www.shopinkelowna.com Will the U.S. raise its interest rates? As I sit here and write this column, the U.S. Federal Reserve was to meet on September 16 and 17. By the time you are reading this in early October, you will already know the answer to the title of this column. But the big question right now, one week before the meeting is “will the U.S. raise interest rates?” Federal Reserve chairwoman Janet Yellen has come out twice this year and said that the U.S. is going to gradually raise interest rates this year. They still have not raised interest rates as I write this and we are running out of this year. The U.S. Feds were to have this meeting, then then again in October and December. Whenever the Feds do decide to raise interest rates, it will be the first rate hike in almost a decade, which is a big change for the markets and the markets don’t like surprises. Historically, when the Feds have raised interest rates for the first time after a quantitative easing cycle has been completed, we see the markets sell off as investors and institutions alike prefer not to be long when the hike occurs. Just to make sure there are no surprises caused by the first rate hike, the markets are not worried about consecu- tive rate hikes after the first rate hike as the mar- kets realize that the U.S. economy is improving and that’s why the Feds are hiking interest rates. I think we will see the markets rally for sever- al years after the first rate hike in the U.S. I believe we are entering a very long secular bull market that could last for some time. The markets are just waiting for that first rate hike. Whether it takes a month after the first rate hike or a full quarter for the markets to rally is the ques- tion in my mind, not if. The markets as in the Dow and the S&P/TSX have been flip flopping like a fish out of water leading up to the Fed meeting. It is not out of fear, as the price of gold is not moving up. I don’t be- lieve the current volatility in the markets is due to China slowing down or Canada technically in a recession; I think the markets are just waiting for that first rate hike in the U.S. and then I think the markets will be off to the races. I don’t think Canada will be off to the races with the U.S. and global markets as Canada’s markets consist mainly of resources and financials. Canadian banks do well in a rising interest rate environment and it looks like interest rates in Canada are now a function of oil prices and I don’t see oil prices firming up for at least a year or year and a half. As for resources, they have been un- derperforming for years now. I believe Canada is going to remain flat for a couple of years before our market decides to join the party. Historically, commodities are the best perform- ing asset class after the first rate hike, so it is go- ing to be very interesting to see how all the mar- kets play out the balance of 2015. Personally I think an investment portfolio needs to reduce ex- posure to Canada and increase exposure to the U.S. and global markets going forward. Ron Le Stage is an investment advisor with BMO Nesbitt Burns Inc. in Westbank and can be reached at 707-2190. Ron provides this com- mentary for informational purposes only and it should not be considered financial advice. RON LE STAGE Smart Money
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PAGE 8 • WESTSIDE WEEKLY FRIDAY, OCTOBER 2, 2015
The Westside Health Network Society would like to thank the following for their outstanding support for our 14th
Funtabulous Annual Seniors Awareness Golf Tournament.
Offi cial Sponsor:
BAPTIST HOUSING ENHANCED LIVING COMMUNITIES
Our hole sponsors:
Baybridge-Baltic Group – Lakeview Lodge, City Furniture, MediSystem Pharmacy, Medline Canada Corp., Nature’s Fare,
Paynter’s Fruit Market Ltd., Porrelli Law, R & C Appraisers, Royal Bank – Westbank, The Heritage, TNI The Network Inc., True
Dental, Valley West Dental Centre, Westbank Lions Club, Westbank Lioness Club, Westwood Retirement Resort
Special thanks to all who graciously donated prizes for the Raffl e and Silent Auction!
Baptist Housing Enhanced Living Communities, Beach Ave. Café & Board Shop, Best Western Hotel, Beaumont Family Estate Winery,
Boston Pizza, BCAA, Bylands Garden Centre, Canadian Cancer Society, Canadian Tire, Capri Insurance, Deep Creek Wine Estate,
Holiday Inn, Happy Hookers, Home Depot, Home Hardware, Interior Savings Credit Union, Investment Planning Counsel, Johnson Bentley Aquatic Centre, Kelly O’Bryan’s, LaCucina Ristorante, Landmark Cinemas, Lily’s Pad Bed & Breakfast,
Little Straw Vineyards, London Drugs, Lucy Philips, McDonalds, Nature’s Fare, New Image Salon & Spa, Niche Wine Company, Okanagan Regional Library, Off the Dock, Prorisk Enterprises Ltd., Quail’s Gate Estate Winery, Rexall Drugs, Save-On-Foods,
Shannon Lake Golf Club, Sheila Taylor, the hatch, Thrive Naturals, The Trophy Den, Tim Horton’s, 19 Okanagan Grill & Bar, UBCO,
Walmart, Wine Kitz-West Kelowna, Whiski Jacks Pub, Yamato Asian Dining & Sushi Bar.
THA
CK
ER
DR
IVE
ANDERS ROAD
HUDSON
ROAD
BOUCHERIE ROAD
WESTSIDEROAD
HWY 97
BRIDGE
WEAREHERE
WEAREHERE
LAKEVIEWHEIGHTS
SHOPPINGCENTRE
HORIZONDRIVE
SHOP’N SAVEat Lakeview
Heights Shopping
Centre
Look forour fl yer
IN SELECTED WESTSIDE AREAS IN…
Misplaced your fl yer? See it online at www.shopinkelowna.com
Will the U.S. raise its interest rates?
As I sit here and write this column, the U.S.Federal Reserve was to meet on September 16and 17. By the time you are reading this in earlyOctober, you will already know the answer to thetitle of this column. But the big question rightnow, one week before the meeting is “will theU.S. raise interest rates?”
Federal Reserve chairwoman Janet Yellen hascome out twice this year and said that the U.S. isgoing to gradually raise interest rates this year.They still have not raised interest rates as I writethis and we are running out of this year.
The U.S. Feds were to have this meeting, thenthen again in October and December. Wheneverthe Feds do decide to raise interest rates, it willbe the first rate hike in almost a decade, which isa big change for the markets and the markets don’tlike surprises.
Historically, when the Feds have raised interestrates for the first time after a quantitative easingcycle has been completed, we see the markets selloff as investors and institutions alike prefer notto be long when the hike occurs. Just to makesure there are no surprises caused by the first ratehike, the markets are not worried about consecu-tive rate hikes after the first rate hike as the mar-kets realize that the U.S. economy is improvingand that’s why the Feds are hiking interest rates.
I think we will see the markets rally for sever-al years after the first rate hike in the U.S.
I believe we are entering a very long secularbull market that could last for some time. Themarkets are just waiting for that first rate hike.Whether it takes a month after the first rate hikeor a full quarter for the markets to rally is the ques-tion in my mind, not if.
The markets as in the Dow and the S&P/TSXhave been flip flopping like a fish out of waterleading up to the Fed meeting. It is not out of fear,as the price of gold is not moving up. I don’t be-lieve the current volatility in the markets is dueto China slowing down or Canada technically ina recession; I think the markets are just waitingfor that first rate hike in the U.S. and then I thinkthe markets will be off to the races.
I don’t think Canada will be off to the races withthe U.S. and global markets as Canada’s marketsconsist mainly of resources and financials.
Canadian banks do well in a rising interest rateenvironment and it looks like interest rates inCanada are now a function of oil prices and I don’tsee oil prices firming up for at least a year or yearand a half. As for resources, they have been un-derperforming for years now. I believe Canada isgoing to remain flat for a couple of years before ourmarket decides to join the party.
Historically, commodities are the best perform-ing asset class after the first rate hike, so it is go-ing to be very interesting to see how all the mar-kets play out the balance of 2015. Personally Ithink an investment portfolio needs to reduce ex-posure to Canada and increase exposure to theU.S. and global markets going forward.
Ron Le Stage is an investment advisor withBMO Nesbitt Burns Inc. in Westbank and canbe reached at 707-2190. Ron provides this com-mentary for informational purposes only and itshould not be considered financial advice.
RON LE STAGE
Smart Money
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