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Monthly Archives: April 2009

Odette Morin

Tax deadline to file your 2008 is today April 30th.  File to avoid 5% penalty

Don’t forget to file your tax return to avoid the 5% penalty on the any owing balance.  If you don’t owe, there is technically no deadline.  If you owe, interests starts accumulating in addition to the 5% penalty.  If you are self-employment the deadline is June 16 but interests start accumulating from April 30th.

Don’t miss today’s deadline.  File by midnight tonight and pay the tax owing as soon as possible by mailing your cheque to the Receiver General, at any banks or using internet banking. Make sure to use the CRA 2008 tax bill payor option to get it credited to the right tax year!

Where to mail or drop off your return

Odette Morin

Finally positive news for fund investors

It could be a “dead cat bounce”—or maybe, just maybe, the markets have found a bottom. Either way, you have recovered a lot of money last month.

Mutual fund dropped to record levels in January and February but 20 of the 24 fund indices gained 5% or more last month and five of them had double-digit returns.

“Equities rose for the month as U.S. Treasury Secretary Timothy Geithner provided more detail on his government’s proposal to get toxic assets off the balance sheets of large banks, and described plans for new, tougher regulation of capital markets,” says Al Kellett, fund analyst for Morningstar Canada.

Even more remarkable is the comeback in the financial services industry. In Canada, the S&P/TSX Capped Financial Index rose 12.9%, and the Financials sub-index of the S&P500 did even better with a 17.7% gain, according to Kellett.

“Confidence in the financial services sector rose as some of the largest banks in the United States, like Citigroup, Bank of America, and JP Morgan, announced a profitable start to the year,” Kellett says. As a result, the Morningstar Financial Services Equity Fund Index had its best monthly performance in nearly a decade with a gain of 11.1%, tied for second best with the Morningstar Precious Metals Equity Fund Index.

Christine Hughes, manager of one the best performing balance fund of 2008, says that “ Energy is THE buy in 2009, due to oil becoming harder to find and more costly to extract. As the economy improves, demand will rise significantly, particularly in China. Although short-term pressure may exert itself on the price of oil, long term oil will head back towards mid-2008 levels.”

Emerging market equities, especially China, saw a substantial rise in performance last month. Greater China Equity was the top performer among all fund indices in March with a 13.8% gain, reflecting a similar return by the Shanghai Composite Index. Other emerging markets such as Korea, Taiwan, and Mexico also posted double-digit gains contributing to good returns for the Emerging Markets Equity (10.9%) and Asia/Pacific excludingJapan Equity (10.2%) fund indices.

The past month was the first time since January 2007 that all equity fund indices were in positive territory. Among core asset categories, Canadian Equity was up 7.9%, U.S. Equity was up 7.2%, Global Equity, 6.2%, and International Equity, 5.9%.

Odette Morin

You First Tax Flow - How your income tax return is done at You First

You would think that doing income tax returns is just a ‘’punching numbers’’ job?!  Well… definitely not at You First!  We want to make sure you get the most deductions as possible. Everybody in the office will have a look at your file.  Here is the process:

1. Victoria, our receptionist, will take your documents if you come to the office or get them in the mail.  If you are an investment client, she will look at your portfolio and make sure you included all receipts and check for any capital gains/losses by going to the Fund Companies Websites and reviewing all your accounts.

2. Janet or Mona will organize all your papers and will do the first data entry.  Janet is our ‘’medical expenses’’ queen!

3. After I get your file!  I will go through everything the staff did and I will check if there is anything different from last year; the business worksheet expenses (for those of you who are self-employed), rental income, etc. and I will send you an email if I have any questions so far.

4. Once I got everything from you, I will pass your file to Terry, our income tax expert!  He will check everything we did so far and will do all the ‘’advanced entries’’ to make sure you get the most deductions as possible.  He might ask you a few questions too about the things that I missed!

5. And then, Terry will give your file to Odette.  She has the big picture!  If you are an investment client, she knows a lot about your situation and might pick up on things all of us never thought about!  She will make sure that the strategy she had for you is in place to be tax efficient.

6. Terry will get your file again to finalize and print your returns.

All that in a two week turnover!  Please note that if we have to wait for answers to our questions, it takes more time than the scheduled two weeks.

We will guarantee your tax return to be completed by April 30th if we get your documents before April 15th. So make sure we have everything, especially if you think you are going to owe money to CRA this year.  If you owe and you don’t file before April 30th, you will get a 5% penalty on the amount owing. And the interest will start kicking in!  If you are getting a refund, there is no rush at all!

Terry Broaders
Odette Morin

Markets are in recovery mode.  What’s moving these days?

Yes.  You read me well.  Recovery…I am almost afraid to say the word. 

If you have been following markets movements these past few days, you are likely pleased but also surprised to see that markets around the globe are sharply up from their lowest lows.  In fact, today March 31 ended the best month for the Dow i n years.  Up 8% this month.  Here is a snap shot of the recent equity markets movements:

From March 9 lowest point to today March 31

TSX (Canada) +15.3%

Dow (USA) +16.2%

S+P 500 (USA) +18.1%

Hang Seng (China) +23.3%

FTSE (London) +11.2%

DAX (Germany) +11.4%

These are pretty big numbers in 3 weeks.  Why is this happening and will it last?  Well, these are big questions but I think it is fair to say that the new data we are getting daily is a lot more positive than it was a few weeks ago.  Banks are showing profits, yes profits, can you believe that? The Real estate market in the US is picking up, consumer confidence is slightly up and companies are starting to invest in a big way making large acquisitions.  These are leading indicators which show that the economy is gaining progress.  We are far from out of the woods but there are clear signs that it is the early beginning of a recovery.

In the past month, the biggest movers were:

Financial services: with dividend yields of 6% to 7% and drops of 30% to 50% last year, it is no surprise this sector is one of the biggest mover these days.  This is an excellent sector to buy right now.  Every portfolio should hold 20% or more in this sector for regular income and participation in the sector recovery.  Canadian banks present the “safer” bet.

Energy sectors: the price of a barrel of oil went from $150 to less than $50.  Analysts forecast the price of oil to go to over $200 a barrel within 3 years.  It is a pure case of supply and demand.  Natural gas too is well positioned.  This one is a no brainer.  Add exposure up to 15%.

Emerging markets & Asia in general: Emerging markets, Asia and especially BRIC countries (Brazil, Russia, India, and China) are up sharply up to 10% in one month.  These are areas of the world where consumerism on the rise.  They will likely ignite the recovery and carry us to the next level of global growth.  Everyone should have some exposure, more if you are younger and less if you are in the later part of your life or very risk adverse.

We have been repositioning client portfolios to take advantage of these new developments.  Please make sure to come in for your annual review and get your portfolio adjusted to participate in the recovery.