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.”