Investment Management and Financial Planning Thoughts

Markets are starting the day off in the red this morning. In Canada, it's the energy sector leading the way down. In the U.S. it's an unexpected rise in new claims for unemployment benefits weighing on markets and globally Greece's debt crisis is the culprit. As a result Greece's borrowing costs continue to rise. The yield on a 10 year bond in Greece is now over 7% which is 4% higher than a German bond. Quite a spread in the Eurozone.
With all this downward pressure on stocks, bonds are getting a lift in Canada. Scotia Capital's current recommendations with regards to bonds are to underweight government of Canada's, overweight cash, provincial, municipal and corporate bonds. The recent strength in the Canadian dollar means little upside to foreign currency trades. Some alternative strategies include overweight high yield and emerging market bonds and underweight inflation protected bonds. For more details visit our blog on yourlifeyourplan.ca.