“The Bank of Canada has emphasized a concern for Canadians already fretting over the country’s depressed energy sector and overvalued housing market: Stock valuations are near record highs.
The warning follows long-simmering concerns about a rising appetite for risk among investors searching for higher returns in an era of ultralow interest rates,” wrote David Berman – Banking Reporter for The Globe and Mail last Thursday June 11, 2015.
Berman continued, “In its Financial System Review, released on Thursday, the bank said that the valuation of the S&P/TSX composite index was “above historical averages and is close to all-time highs” when assessed using estimated earnings.
The twice-yearly review focuses on the downside risks to Canada’s financial system, without making forecasts for the near-term.
The bank said lower oil prices and high levels of consumer debt have raised the risks to Canada’s financial stability, even as it suggested that the full impact of the depressed oil market is not fully understood.”
Read the full article here.
Raymond Matt, CFP, CLU, TEP, CHS
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