Given the new administration in the United States, could there be a possible impact on investing in Canada and how Canada markets its products elsewhere?
Jonathan Morgan, Canadian General Investments
…There’s definitely going to be some sort of impact on Canada. It’s unclear what it is right now. The North America Free Trade Agreement has been very good for Canada. There was a pre-existing Canada-U.S. free trade agreement as well. So we’ve actually had free trade with the United States for a long time.
In that period normally I’d be saying right now you’d want to really look hard at Canada because as the U.S. does well, especially in the central Canadian economy that largely exports into the U.S. does even better.
You have to remember that when we say exporting into the US, we’re also importing. We’re basically in balance.
If you look at auto parts, before a car is built in North America it’s crossed the border seven times for parts. So it’s really hard. I don’t see how they’re going to disentangle it.
So there could be serious disruptions if they take a serious effort to disentangle it. If not, this could be a chance for you to see some mispricing and actually get greater exposure.
I think right now is the time for people to, A, make sure they’re diversified, because although the economies are doing pretty well, we’ve got a fair bit of geopolitical uncertainty right now.
So I think diversification is important. Focus on quality companies, quality funds.
And then I would say that in the long term I would play to the strengths of the American economy and believe that it’s going to do well, and so you’d want to be investing in companies and funds that are going to leverage off of that.