A Good Time To Invest?
By: Clarence Bick
Many people believe that the problems facing investors today are greater than at any time in history, but a brief look at the last 60 years gives a different perspective.
1950 Korean War starts
1951 Excess Profits Tax
1952 US seizes steel mills
1953 USSR explodes H-bomb
1954 Senator McCarthy witch hunts / French defeat in North Vietnam
1955 Churchill resigns/Pres. Eisenhower suffers heart attack
1956 War over the Suez Canal
1957 Sputnik launched
1958 Recession / record unemployment in Canada
1959 Castro takes over Cuba.
1960 USSR blockades West Berlin and shoots down U2.
1961 Cuban Bay of Pigs fiasco / Berlin wall built
1962 Cuban missile crisis
1963 President Kennedy assassinated
1964 Gulf of Tonkin – Vietnam war escalates
1965 US economy drained by war effort / civil rights marches
1966 Inflation hits 10 year peak
1967 Arab- Israeli Six Day War
1968 Martin Luther King assassinated –race riots / USS Pueblo seized
1969 Interest rates hit 9% / Market crash
1970 FLQ crisis brings War Measures Act / War in Cambodia
1971 Inflation spiraling – Nixon imposes wage & price freeze
1972 Bombing of North Vietnam resumed / record US trade deficit
1973 Watergate breaks / Inflation surges-food prices up 17%
1974 OPEC oil crisis / Nixon resigns
1975 World recession
1976 Anti-Inflation Board restrains growth / Parti Quebecois elected
1977 Canadian dollar drops below 90 cents US / Inflation tops 9%
1978 Canadian dollar drops below 84 cents / Interest rates over 10 %
1979 Iranian hostage crisis/second oil crisis / Unemployment over 10%
1980 Monetary squeeze/Olympic boycott because USSR in Afghanistan
1981 Pres. Reagan and 3 aids shot / Separatist referendum in Quebec
1982 Canada introduces “6% and 5%” restraints / recession / Tylenol scare
1983 Unemployment of 12.8% highest since 1930s / KAL shot down
1984 Olympic boycott/3rd World Debt crisis grows / HIV & AIDS linked
1985 US Govt. deficit over $200 billion / State of Emergency in S. Africa
1986 Space Shuttle explodes / explosion at Chernobyl nuclear plant
1987 October 19 stock market drop of 20% / Gorbachev starts Peristroika
1988 US trade deficit grows / Soviets withdraw from Afghanistan
1989 Free Trade Agreement implemented/Berlin Wall collapses
1990 Meech Lake Constitution failure / Iraq invades Kuwait/GST starts
1991 USSR collapses / War in Yugoslavia / Rajiv Gandhi assassinated
1992 Olympia & York bankruptcy / Charlottetown Referendum defeated
1993 Bloc Quebecois in opposition / Yeltsin bombs Russian Parliament
1994 Bond market collapse / Orange County bankrupt
1995 Mexican Peso crisis / Quebec Referendum / Barings Bank demise
1996 Oklahoma City bombing
1997 Asian debt crisis / Bre-X
1998 Clinton scandals
1999 Impeachment Trials / Kosovo / Y2K
2000 NASDAQ/Tech bubble bursts – 78% drop
2001 Al-Qaeda attacks World Trade Center on 9/11 / Recession.
2002 Corporate Accounting Scandals – Enron & WorldCom
2003 War in Iraq / SARS outbreak
2004 US $ drops / rising oil prices
2005 Natural Disasters (Hurricane, Katrina, tsunami), fuel prices skyrocket
2006 Iraqi sectarian violence, new tax rules hammer Income Trusts
2007 U.S. real estate bubble bursts, Sub-Prime mortgage crisis
2008 Oil reaches $147 a barrel & drops to $38 / financial sector bankruptcies / global credit crisis.
2009 Gold prices spike on depression fears / economic recover begins
Many think today’s problems are worse than any time in history, but a rational review shows otherwise. $100 invested in GICs in 1950 is worth $5,789 in December 2009, and $34,453 in the Toronto stock market (TSX). If you accept that problems will be solved as they were in the past, today can be a great time to invest.
Clarence Bick, MBA, CFP is a principal of Burgeonvest Bick Securities Limited. Burgeonvest Bick Securities Limited is a member of CIPF.
Source:
Andex 2009. PalTrack: $100 invested in 5year GICs on 1 Jan 1950 represents $5,732 on June 31, 2009. The total return on 5year GICs for the six months ending 31 December 2009 was 1.0%. $100 invested in TSX in on 1 January1950 represents $29,985 on June 31, 2009. The TSX composite total return for the six months ending 31 December 2009 was 14.9%.
RSS Feed