Friday, December 02, 2011

Investment Advice

Investors always advise you to invest for the long term. Is that good advice? Some problems are not likely to go away anytime soon because of worldwide government debt that is on the rise. As long as we have unmanageable government debt, we will have long-term problems with the markets.

In Canada, annual health-care costs have more than double since 2005. They went from $140 billion to near $200 billion in that time. $25 billion comes from the federal government’s transfer of funds to the provinces. Additionally, the federal government spent well over $10 billion to fight a ten-year war in Afghanistan.

The Harper conservative government cannot stop spending money and has a growing national debt crisis they do not know how to stop. If they did then they would not have contracted a private company costing them millions more in expenditures to tell them how to stop spending and adding to the national debt. That tells you how smart our elected officials are, including their administrative officials.

The left liberals interestingly have a better record managing government debt than do the right leaning conservatives who moved to the middle. Various media reports have detailed this many times. The history of Canada’s national debt is a matter of public record.

It seems controlling government spending is the best way to stabilize the markets. Otherwise, the debt in Greece, Italy or any other country in Europe would not affect the markets. The debt in Europe, US, and Canada are all a problem and will be for the long term. Where does that leave investing for the long term?

Where was the Canadian dividend fund before 911 and where is it today? That would be the best indicator of where long-term investing will get you.