19 NOVEMBER 2012WEEKLY

BehaviouralEconomics 2 2

Canadian ResaleHousing Activity Stable in October

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Canada's gross domestic product two to three years. On Tuesday, he had would suffer a significant and immedi- presented a fiscal update which pro-ate decline if the United States were not jected a surplus only in 2016-17, but to avert its "fiscal cliff," Canadian Prime Minister Stephen Harper said on Finance Minister Jim Flaherty said on Friday the goal was still to balance the Friday in a speech in New York. budget by the October 2015 election.

(Source: Reuter)The "fiscal cliff" refers to automatic tax hikes and spending cuts that are to be triggered on Jan. 2 if legislators and the White House cannot agree on a more nuanced budget deal.

He also said the government was on course to balance the budget in the next

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Dream Issue2 24

CANADA EYES IMMEDIATE,

'FISCAL CLIFF'SIGNIFICANT HIT FROM

"The commitment to growth and job creation."manage public finances in a The Minister noted that responsible manner has been the Canadian economy has a key element of our experienced one of the best Government's comprehen- performances among Group sive long-term agenda to of Seven (G-7) countries over foster strong, sustainable, the recovery, more than long-term economic growth recouping the output lost and the creation of high- during the recession and outperforming quality, value-added jobs for Canadians, all other G-7 countries in job creation. In said Minister Flaherty. " Our addition, Canada is the only country in Government is striking the right balance the G-7 to have more than fully recov-between returning to balanced budgets ered all of the business investment that over the medium term and continuing to was lost during the recession.invest in the key drivers of economic

The outlook for the 0.02 percentage points in economy has brightened September, after going somewhat for Canada and unchanged in August and two countries--the United dropping slightly in the States and China-- critical to previous three months.C a n a d i a n e x p o r t e r s , For the U.S., Canada's according to Organization biggest export market by for Economic Co-operation far, the index rose one-tenth of a point, and Development while China's steep decline appears to

OECD's new leading indicator have been arrested.reading for Canada shows a small rise of (Source: CBC)

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Canadian Business Confidence Dropsfor Second Straight Quarter

Business confidence in Canada fell in the third quarter, the second decline in a row, as sentiment deteriorated to levels of a year earlier, the Conference Board of Canada said.

The organization's index of business confidence dropped 5.5 points from the second quarter to 92.3. In the first quarter of 2012, it stood at 101.8. six months, compared with 43 percent

Only 32 percent of business leaders six months ago.surveyed reported that their businesses Two-thirds of respondents now are operating at, or close to, full capac- expect conditions to remain the same, ity. This was the lowest capacity the highest percentage since 2007.utilization rate since the beginning of

The respondents were more optimis-2010, early on in the economic recovery.

tic about the future of their own compa-Only 14 percent of business leaders nies versus the overall economy. Fifty

surveyed said they believe economic percent said they expect profits to conditions will improve over the next improve over the next six months, down

Toronto andGlobal Market

Review

News & ViewsDigest

Economic update:

Resilience Amidst Canada's Economic

Global Uncertainty

slightly from 53 percent last quarter. 47.3 percent from 49 percent last quarter.The percentage of respondents who

said they expect the financial position of The Conference Board conducted its their companies to improve over the survey between Sept. 12 and Oct. 10next six months was down slightly at (Source: Reuters)

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Standard economics typically assumes people make rational decisions.

But behavioural economics brings emotion and thinking traps into the equation – examining those irrational tendencies that see us falling for the special deals in store, investing with the “herd”, being reluctant to sell our losing investments and more. It is said to be the study of how people actually behave rather than how they would behave if they were perfectly rational.

(Source : ezonomics)

1. Be Wary of Overconfidence

2. You Can't Believe Everything You Read

3. Avoid Situations That Require More Self-Control Than You Can Muster

4. Don't Blindly Follow the Herd

5. You Can't Trust Everyone

6. Invest Simply (i.e. Use Simple Approaches for Investing)

7. Pay Attention to Sample Size ( Never Decide Based on One Success Story)

8. Read the Fine Print

9. Being Nice Pays (i.e. Niceness, Fairness & Social Responsibility have positive effects)

10. Educate yourself (about Finance)(Source: Behavioral Economics For Dummies)

Insure your dreamsBEHAVIOURAL ECONOMICS

WHAT IS.IT ? IT IS “Mind + Money”

HOW TO AVOID EMOTIONWITH MONEY? AND THINKING TRAPS,

WHEN DEALING Here are Morris Altman's Advice (10 Decision-Making Lessons)

Ÿ Demand for Canadian Bonds: Foreign investors acquired $10.6 billion of Canadian debt securities in September, the largest such investment since May. This activity reflected increased demand for Canadian bonds, partly offset by lower purchases of money market instruments. Foreign investors have acquired $55.8 billion of Canadian debt securities so far in 2012, on par with the level of investment observed for the same period in 2011. The investment focus, however, has shifted from federal Treasury bills in 2011 to federal bonds in 2012.

Ÿ Apartment Building Construction cost increase: The composite price index for apartment building construction increased 0.1% in the third quarter compared with the previous quarter. This change was the result of a slight increase in material prices used in the apartment building construction market.

Of the seven census metropolitan areas (CMAs) surveyed, six reported quarterly increases varying from 0.1% to 0.6%. Halifax (+0.6%) posted the largest increase, while Montréal was relatively unchanged. Toronto posted 0.1% increase

Japan is in a "technical recession”

OCBC Treasury Research noted: Japan has downgraded its economic assessment for a fourth month, citing “weakness recently due to the decelera-tion of the world economy” and “atten-tion should be paid to employment and income situations in the future, and the adverse effects of deflation on the economy”.

The yen headed lower on "expecta-tions of aggressive monetary easing from the Bank of Japan.”

US, UK retail sales down

Euro too down

Singapore cuts 2012 growth forecast

Hong Kong trims 2012 growth forecast

US retail sales reported by the Commerce Department were down 0.3 percent, a drop blamed on uncertainty about the economy and Hurricane Sandy. Retail sales in the United Kingdom were also down, falling 0.8 percent in October over September

Eurostat data showed that GDP for the euro zone contracted 0.1 percent in Q3 after a 0.2 percent contraction in Q2, which means the area is back in recession.

Singapore cut its 2012 growth forecast to 1.5 per cent from 2.5 per cent for this year as a weak global economy hits the island's mainstay manufacturing industries and warned of an anemic expansion in 2013.

Hong Kong's economy expanded 1.3 per cent in the July-September period from a year earlier, slightly higher than the second quarter's 1.2 per cent growth. The sluggish expansion prompted the government to trim its full-year growth forecast to 1.2 per cent from an earlier prediction of 1 to 2 per cent.

Weekly Statistics Canada News

TIDBITS - WORLD NEWSTIDBITS - WORLD NEWS

and sellers should talk to their REALTOR® to understand how the housing market is shaping up where they live or might like to live."

"Little has changed since national activity geared down in the wake of mortgage rules that came into force in July," said Gregory Klump, CREA's Chief Economist. "Opinions differ about how sharply sales have slowed depend-ing on the local housing market."

National sales in October were on par with the same month last year and in line with the 10-year average for the month (Chart 1). Activity for the year-to-date is also running in line with the 10 year average (Chart 2).

"These results suggest that the Canadian housing market overall has returned to a more sustainable pace," added Klump.

A total of 402,322 homes have traded

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19 NOVEMBER 2012MONEYDREAMS & HOUSING MARKETDEBT

Dreams and Money takes care to present all the information as accurately and efficiently as possible. Any advice or recommendation appearing in the paper is also part of information only. They should not be construed as an expert opinion. Please note that no representation or warranty with respect to the accuracy or the completeness of the information is given. Information always keeps changing. Hence all the information, including advice and recommendations are to be treated as of general nature only. For your specific circumstances, you are always advised to consult an expert before acting on any information.

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Editor & Technical AdvisorAishwar Muthuraman

Canadian Resale Housing Activity Stable in OctoberOttawa, ON, November 15, 2012 - and Greater Toronto. However, in

According to statistics released today by keeping with the national trend, transac-The Canadian Real Estate Association tions there remain well below levels (CREA), national home sales activity posted in the first half of the year.and average price were little changed in On a year-over-year basis, actual (not October 2012. seasonally adjusted) activity was also

Highlights: little changed, down 0.8 per cent from levels recorded for October of last year. Ÿ Home sales little changed (-0.1%) Led by Calgary, sales were up compared from September to October.to levels one year ago in almost two-

Ÿ Actual (not seasonally adjusted) thirds of all local markets. Sales activity down 0.8% from October 2011.remained below year-ago levels in

Ÿ Number of newly listed homes Greater Toronto, Greater Vancouver, down 3.8% from September to October. and Greater Montreal.

Ÿ Market remains firmly in balanced "Sales data in October held steady at territory. the national level, but we are seeing

Ÿ National average home price some diverging trends among local unchanged (+0.02%) on a year-over- housing markets," said CREA President year basis. Wayne Moen. "Markets in Alberta and

Ÿ MLS® HPI up 3.6% in October – Saskatchewan are gaining strength, smallest gain since May 2011. while some of Canada's traditionally

most active markets have lost steam. As The number of home sales processed always, all real estate is local, so buyers through the MLS® Systems of Canadian

rea l es ta te Boards and Assoc ia t ions was l i t t l e changed in October 2012 compared to the previous month (-0.1 per cent) and remains below levels reported in the first half of the year.

Sales activity improved in about half of all local markets as compared to September, including Greater Vancouver

unsolicited articles are welcomeselected ones will be publishedemail : editor@dreamsandmoney.com

& community news

Copyright © 2010 Dreams and Money, Canada. All Rights Reserved.

At Dreams & Money, we want to help people lead happy lives. We want to help people reach their dreams. A lot of dreams in the world require financial awareness and proper planning to bring to fruition. To get this financial knowledge can be challenging. We realize this, and want to make this process simpler.

We will bring you financial news happening around you that impacts you, along with timeless classics on topics like financial planning, life skills, health etc. to help you grow all around to reach your dreams.

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THE MISSION>>Cont. Pg.4

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19 NOVEMBER 2012MONEYDREAMS & INVESTING

Review of Global markets

Review of Indian Markets

Gaza Strip with planes and artillery for a second straight day and began mobiliz-Global markets traded volatile ing tens of thousands of troops, while during the week. US markets slightly Palestinian mili-higher on Friday, European and Asian tants mounted their markets ended lower as investors d e e p e s t - e v e r appetite for risky assets largely subdued missile strikes into on escalating geopolitical tensions in the heart of Israel. the Middle East and after data showed

Europe slipped back into recession. Investors were Meanwhile risk appetite also muted on also cautious ahead cautious ahead of Obama meeting with of a White House the Republicans and Euro Zone finance meeting aimed at ministers meet on Nov 20. averting the so-

called fiscal cliff Offshore economic data weighed on that some fear may investors risk sentiment, with the t ip the wor ld ' s European Union's statistics agency said biggest economy that the combined economy of the 17 into recession. The fiscal talks will be countries that use the euro contracted hugely important. U.S. leaders need to 0.1% in the third quarter from the come out of this meeting saying they've previous quarter, signaling the debt-made substantial progress. troubled region had suffered a double-

dip recession.

The risk bias also muted on worried Indian Market declined during the over escalating geopolitical tension on week on weak global cues. Weak the Middle East, as Israel pounded the economic data in domestic market also

Market may follow the global cues in the forth coming week. US fiscal-cliff negotiations in focus. The upcoming winter session of the parliament in India and fiscal-cliff negotiations in the US will dictate trend on bourses in the near term. The winter session of the parlia-ment begins on Thursday, 22 November 2012

US President Barack Obama and Congressional leaders begin fiscal-cliff negotiations on Friday, 16 November 2012. Investors are worried about the possibility of the so-called "fiscal cliff" in US, if the Congress fails to act.

weighed on sentiment. Sensex declined In Europe, an extraordinary meeting 2% to 18309.37 and Nifty fell 1.97% to of euro-zone finance ministers is 5574.05 in the week ended 16 scheduled to be held on Tuesday, 20 November 2012. November 2012 to discuss Greece's

Industrial production declined 0.4% debt crisis and budget deficit, to see if in September 2012. Inflation based on Greece will be eligible to receive the the wholesale price index (WPI) eased second bailout payment almost EUR 31 to 7.45% in October 2012 from 7.81% in billionSeptember 2012. India's exports World is witnessing lot of challenges declined 1.63% to $23.24 billion in in the financial sector, opportunities are October 2012. Imports rose 7.37% to lying everywhere Understanding the 44.20 billion in October 2012. present situation, we have taken the Consumer price inflation inched up to initiative to impart right knowledge for 9.75% in October 2012, from 9.73% in individuals and support them handling September 2012. RBI governor D. there personal investment in a prudent Subbarao said inflation rate of 7.5% is manner with better wealth creation still high, adding that the RBI is on alert thought process. We are happy to see to manage both growth and inflation. you as independent financial planner Finance Minister P. Chidambaram said with more financial freedomthe government is confident of achiev-ing its budget-deficit target

from 19 November 2012

Market outlook – week begins

Further details: shekarm@indiafinancebazaar.com www.indiafinancebazaar.com |www.ifmaonline.com

Ph : +91 9380034431/9962534431

M.Shekar

Global Indian Market and Weekly Review - Week Ended 16 November 2012

TSX Snaps Losing StreakTSX Trend From Nov.12, 2012 to Nov.16, 2012

Till Thursday, Canada's main index was down nearly 400 points over the past week

Stocks in Toronto posted their fifth losing session in a row, with the S&P/TSX composite index recording a triple-digit loss of 118 points, or 1 per cent, to 11,811, led by a sharp fall in gold, utility, and energy shares.

The steep correction has erased nearly 400 points, or 3.3 per cent, of the market’s value over the past week and put the index into negative territory for the year to date. Investors have been beset by a range of worries, including figures released Thursday indicating that Europe has again slipped into recession

However, Friday sentiment changed thanks to the US news: The US House Speaker John Boehner said that he had “constructive” talks about the U.S. budget with President Barack Obama. on the fiscal cliff

Friday, the S&P/TSX composite index closed at 11,877.72, up 66.34 points, or 0.6 per cent.

Within Canada’s benchmark index, commodity producers remained weak: Materials fell 0.9 per cent and energy stocks fell 0.3 per cent.

The recent market setbacks had driven the S&P 500 down as much as 8 per cent from its recent high in September. U.S. industrial production fell 0.4 per cent in October, well below expectations for a gain of 0.2 per cent

Source : Yahoo Finance

Canadian Resale Housing... Excluding these two markets from the national average price calculation From Pg.3yields a year-over-year increase of 2.5 hands via Canadian MLS® Systems per cent, reflecting average sale prices over the first 10 months of 2012, up 0.8 that rose in 70 per cent of all local per cent from levels reported over the markets in October 2012.same period last year and 0.4 per cent

Unlike average price, the MLS® below the 10-year average for the Home Price Index (MLS® HPI) is not period.affected by changes in the mix of sales, The number of newly listed homes so it provides the best gauge of Canadian retreated by 3.8 per cent in October home price trends.following a jump in September. Monthly

The Aggregate Composite MLS® declines were reported in almost two-HPI rose 3.6 per cent on a year-over-year thirds of all local markets, with Greater basis in October. This marks the sixth Toronto and Greater Vancouver exerting consecutive month in which the price a large influence on the national trend.gain slowed and is the slowest rate of The monthly decline in new listings increase since May 2011.caused the national sales-to-new listings

Year-over-year price gains deceler-ratio to edge back up to 50.9 per cent in ated for all Benchmark property types October compared to September's tracked by the index with the exception reading of 49 per cent. Based on a sales-of the townhouse/row segment. The to-new listings ratio of between 40 to 60 townhouse/row segment nonetheless per cent, nearly two-thirds of all local posted the slowest price growth among markets were in balanced market Benchmark properties.territory in October.

Year-over-year price growth remains The number of months of inventory strongest for one-storey single family is another important measure of the homes (+5.3 per cent) and two-storey balance between housing supply and single family homes (+4.5 per cent). demand. It represents the number of Prices for townhouse and apartment months it would take to sell current units continue to post more modest inventories at the current rate of sales gains, rising 1.2 per cent and 1.5 per cent activity. It was another measure that was respectively.little changed in October. Nationally,

there were 6.5 months of inventory at the Most markets continued to see end of October. This is virtually positive but slowing year-over-year unchanged from the reading of 6.4 price growth in October. The exceptions months at the end of September after were Calgary, where price growth accounting for rounding (6.479 in accelerated, and Greater Vancouver, October vs. 6.448 in September). where the year-over-year price decline

was smaller in October than it was in The actual (not seasonally adjusted) September.national average price for homes sold in

October 2012 was $361,516. This The MLS® HPI rose fastest in represents an increase of $80, or 0.02 per Regina (13.0 per cent year-over-year), cent compared to the national average but the increase was smaller than it was price in October 2011. in September (14.2 per cent).

The national average price continues The MLS® HPI also climbed in to be influenced by compositional Calgary (6.8%), Greater Toronto factors, most notably by fewer sales in (5.1%), Greater Montreal (1.8%), and Greater Vancouver this year compared the Fraser Valley (1.5%). In Greater to much stronger levels last year, and Vancouver, the MLS® HPI eased 0.8 per more recently by fewer sales in Greater cent year-over-year in October.Toronto.