A Scary Graph Leading to Buying Opportunities


Here’s a quick post this morning that will give you some food for thoughts.

Take a look at the graph below:



When I look at this graph I think about two things:


#1 Canadians’ debt keeps growing higher and higher


#2 Americans seem to understand the importance of deleveraging


More traditional banks such as TD Bank (TD),BMO (BMO) and CIBC (CM) will probably be at risk in 2015-2016 due to their important mortgage book. I think their provision for bad debts and default will increase. Other banks such as Royal Bank (RY), National Bank (NA) and ScotiaBank (BNS) should perform better. Why? because RY and NA show respectively 33% and 38% of their revenue coming from the stock market while ScotiaBank is well established outside of Canada.


On the other side, as a Canadian, I look at the US and think: my dollar will drop and US economy will continue to bloom. This mean I should invest even more in US stocks to benefit from both dollar value and growing profits.


What do you think? do you think Canada is the right place to invest right now?

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