One advisor in Alberta who sold his clients’ stakes in energy is patting himself on the back, following a report from the Conference Board of Canada which said there will be no quick rebound for oil.
One advisor in Alberta who sold his clients’ stakes in energy is patting himself on the back, following a report from the Conference Board of Canada which said there will be no quick rebound for oil.
“When I said this, I was laughed at as an Alberta advisor saying energy will go down when everyone said it’s going to infinity,” said Shafik Hirani, a wealth advisor with the Investors Group. “Even my own compliance departments were giving me a hard time.”
“I feel somewhat vindicated in this. I was somewhat right and my clients are happy.”
His comments come following a report released by the Conference Board Wednesday, citing that the crude oil downturn would create long-term pain for the economy, not the short-term rough patch many were expecting.
According to the Ottawa-based think-tank, Canada’s oil industry will see a 37 per cent drop in revenues, a pre-tax loss of $3-billion, with more than 8,000 people expected to be out of work as a result.
The report also hints that the industry is unlikely to bounce back as quickly as it did the last time there was a major drop in 2008 and 2009, something that Hirani has maintained since last summer.
“For those with some energy, they have to realize that “perhaps” it will come back but I don’t believe it will be the “V”-shaped recovery everyone is suggesting,” he said. “So this whole “buy-low” mentality doesn’t apply because you wouldn’t want to catch a falling knife.”
#pb#
Last time oil fell this fast, going from upwards of $135 a barrel to less than $35 in a half-a-year, but this is a new market for oil, according to the Conference Board of Canada. The think-tank’s outlook through 2019 predicts that oil will hover around $80 a barrel, due in large part to fracking technology that has unveiled huge crude volumes.
While the numbers exhibit gloom and doom for many, it’s been a boon for Hirani as he’s had a chance to diversify and differentiate himself.
“The markets are down and my clients are way up, which makes me happy because that is when it’s easy to differentiate yourself,” he told WP. It’s harder to do that in bull markets because even a turkey can fly in a strong wind. Energy will remain low. Unemployment will rise, net migration will dissipate real estate values will plummet, taxes will rise and consumption will decrease.”
“The best bet is to reflect on one’s overall asset allocation and ensure that sectors like Global Dividend Funds are a part. If energy continues to weaken (and Canadian Rates continue to decline) then you will see further erosion in the Canadian Dollar, which will positively affect assets held in Global Funds.”
“When I said this, I was laughed at as an Alberta advisor saying energy will go down when everyone said it’s going to infinity,” said Shafik Hirani, a wealth advisor with the Investors Group. “Even my own compliance departments were giving me a hard time.”
“I feel somewhat vindicated in this. I was somewhat right and my clients are happy.”
His comments come following a report released by the Conference Board Wednesday, citing that the crude oil downturn would create long-term pain for the economy, not the short-term rough patch many were expecting.
According to the Ottawa-based think-tank, Canada’s oil industry will see a 37 per cent drop in revenues, a pre-tax loss of $3-billion, with more than 8,000 people expected to be out of work as a result.
The report also hints that the industry is unlikely to bounce back as quickly as it did the last time there was a major drop in 2008 and 2009, something that Hirani has maintained since last summer.
“For those with some energy, they have to realize that “perhaps” it will come back but I don’t believe it will be the “V”-shaped recovery everyone is suggesting,” he said. “So this whole “buy-low” mentality doesn’t apply because you wouldn’t want to catch a falling knife.”
#pb#
Last time oil fell this fast, going from upwards of $135 a barrel to less than $35 in a half-a-year, but this is a new market for oil, according to the Conference Board of Canada. The think-tank’s outlook through 2019 predicts that oil will hover around $80 a barrel, due in large part to fracking technology that has unveiled huge crude volumes.
While the numbers exhibit gloom and doom for many, it’s been a boon for Hirani as he’s had a chance to diversify and differentiate himself.
“The markets are down and my clients are way up, which makes me happy because that is when it’s easy to differentiate yourself,” he told WP. It’s harder to do that in bull markets because even a turkey can fly in a strong wind. Energy will remain low. Unemployment will rise, net migration will dissipate real estate values will plummet, taxes will rise and consumption will decrease.”
“The best bet is to reflect on one’s overall asset allocation and ensure that sectors like Global Dividend Funds are a part. If energy continues to weaken (and Canadian Rates continue to decline) then you will see further erosion in the Canadian Dollar, which will positively affect assets held in Global Funds.”
