Market Watch

On October 23, the Bank of Canada aggressively lowered its policy interest rate from 4.25% to 3.75%,¹ in response to shifting economic conditions. The next interest rate announcement is slated for December 11.

Based on the Consumer Price Index, year-over-year inflation in Canada rose by 1.6% in September – the smallest such increase since February 2021 – down from a gain of 2.0% in August.² Falling gasoline prices were the main driver of this lower inflation rate, offsetting higher prices for rent and food.

On the labour front, employment in Canada rose by 47,000 jobs in September (an increase of 0.1%), the first notable change in several months. However, the actual employment rate declined by 0.1% as more people looked to enter the workforce.³

In the Spotlight – Focus on saving and investing

Most people recognize the importance of saving money and investing for the future. They make an earnest effort to build their wealth, but it’s not easy when everyday life presents so many challenges and obstacles. Since financial strength and stability are important, let’s look at some saving and investing tips.

Quick Fact

As of March 2024, a Canadian Securities Administrators survey found 53% of investors get investing information from social media, up from only 18% in 2020. Since not all sources are credible, continue to be a careful, informed investor.

Fact vs Fiction

Here are three common misconceptions about saving and investing.

1. Saving and investing are the same.
While both activities can make good use of your money, they’re different. Saving is useful when building an emergency fund or trying to meet short-term goals. Investing is for the longer term and intended to grow your wealth over time.

2. It’s fine to delay saving for retirement.
Starting as early as possible lets you take advantage of compounding, which may result in significant long-term growth and a more comfortable retirement. Delaying your efforts to save will reduce opportunities to multiply your wealth.

3. Prioritize paying off debt.
Depending on circumstances, this could be true. Although it’s important to reduce debt, don’t ignore saving and investing. Consider paying off high-interest debts while also saving some money for emergencies and investing to meet your financial goals.

¹https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/

²https://www150.statcan.gc.ca/n1/daily-quotidien/241015/dq241015a-eng.htm

³https://www150.statcan.gc.ca/n1/daily-quotidien/241011/dq241011a-eng.htm?indid=3587-1&indgeo=0