Monthly Archives: July 2015

Terry Broaders

Weekly Update July 21 2015

“People Won’t Have Time For You If You Are Always Angry or Complaining” -Stephen Hawking


TSX Snaps Fine Day Rally

Canadian stocks fell Friday, halting the biggest rally since February, as raw-materials producers sank with commodities prices amid a slump in the nation’s currency to a six-year low. The Standard & Poor’s/TSX Composite Index fell 88 points, or 0.6%, to 14,642. The benchmark equity gauge had gained 3.2% in the past five days. Gold prices tumbled 1% in New York, the lowest close since April 2010, as a commodity meltdown deepened amid an expanding glut in supplies of assets from gold to oil and wheat. The Canadian dollar weakened to a six-year low amid speculation the nation’s central bank will cut interest rates again to buttress a weakening economy. The price of crude oil, the nation’s top export, is down 51% in the past year. Energy stocks have slumped 11% this year, the worst- performing industry in the S&P/TSX. The Nasdaq Composite added 46 points, or 0.91% to end at 5,210, its second straight record high close. The S&P 500 gained 2.35 points, or 0.11%, to end at 2,126, just shy of its record high of 2,130.82. The Dow Jones industrial average fell 33.8 points or 0.19%, to 18,086.


Toronto, Vancouver Real Estate Markets Still Hot

Toronto had the hottest real estate market in the country during the second quarter, with double-digit increases in all types of housing, finds Royal LePage. The Vancouver market was also strong with double-digit price increases for two-storey homes and detached bungalows, although condo prices were up a more moderate 6%. But prices were down for some types of residential property in Montreal, Calgary and Winnipeg. Royal LePage says other major markets across the country saw moderate increases or flat prices for most types of housing during the quarter, including in Halifax, Fredericton, Ottawa and Edmonton. The national average price of a bungalow was up 7.5% from last year at $438,938. The average price for two-storey detached houses rose 6.8% to $471,002 and the average condo price was $268.583, up 3.9%.

Royal LePage notes the standard condominium price in Calgary was up 1.6% from a year ago at $291,022, while prices for standard two-storey homes declined 3.1% to $474,239 and detached bungalows slipped 0.9% to $496,689.  The Calgary market has been remarkably stable with only marginal price differences compared to the same period last year, Zaharko notes. The volume of transactions in Calgary was down compared with the same time last year, when oil prices were near recent highs, but about flat compared with the second quarter of 2013.


Blog Links

Are We In A Recession? Who Cares ! 


Market Update as of July 17 2015

North America

The TSX closed at 14643, up 232 points or 1.61% over the past week. YTD the TSX is down -0.75%.
The DOW closed at 18087, up 327 points or 1.84% over the past week. YTD the DOW is up 1.42%.
The S&P closed at 2127, up 50 points or 2.41% over the past week. YTD the S&P is up 3.35%.
The Nasdaq closed at 5210, up 212 points or 4.24% over the past week. YTD the Nasdaq is up 10.22%.
Gold closed at 1133, down -26.00 points or -2.24% over the past week. YTD gold is down -3.33%.
Oil closed at 50.79, down -1.95 points or -3.70% over the past week. YTD oil is down -3.61%.
The USD/CAD closed at 1.297285, up 0.0260 points or 2.05% over the past week. YTD the USD/CAD is up 10.54%.

The MSCI World closed at 1782, up 35.00 Points or 3.75% over the past week.  YTD the MSCI World is up 4.23%.
The Euro Stoxx 50 closed at 3670, up 141.00 points or 4.01% over the past week.  YTD the Euro Stoxx 50 is up 16.65%.
The FTSE closed at 6775, up 102.00 points or 1.52% over the past week.  YTD the FTSE is up 3.18%.
The CAC closed at 5124, up 221.00 points or 4.51% over the past week.  YTD the CAC is up 19.93%.
The DAX closed at 11673, down 357.00 points or 3.16% over the past week.  YTD the DAX is up 19.05%.
The Shanghai closed at 3957, up 79.00 points or 2.05% over the past week.  YTD the Shanghai is up 22.34%.
The Nikkei closed at 20651, up 871.00 points or 4.40% over the past week.  YTD the Nikkei is up 18.34%.


Sources: Bloomberg; Investment Executive;

Odette Morin

Enhanced Child Care Benefit starts today!


Many Canadians are about to receive the largest one-time benefit payment in federal history. The Harper government is sending out its enriched Universal Child Care Benefit (UCCB) starting today.

And since the payments are retroactive to January, families will receive cheques or direct deposits representing a total of  $3-billion payout.

The UCCB was increased to $160 per month for each child under the age of six.  The retroactive payment will be $360 per child.

The UCCB was expanded to children aged 6 through 17.  Formerly none were paid. Parents will receive a benefit of up to $60 per month for each child in their care aged 6 through 17.  The retroactive payment will be $360 per child.

How will you spent the enhanced Child Benefit?  or will you be saving some of it?  Let us know your plans!

Find out the details here

Odette Morin

Are we in a recession? Who cares?

Read this great article from Andrew Coyne.  It is very well said. Here is an except:
“The media fascination with whether we are or are not in recession is age-old. It reflects our general preference for binary oppositions: up-down, right-left, in-out. We like trials (convicted-acquitted) and hockey games (win-lose: don’t even think of calling it a tie). So much so that where no such opposition exists, we make it up. What did we learn about the candidates in the televised debate? Who cares? Just tell me who won, and whether there were any knockout blows. We don’t like grey zones, or judgment calls. We desire rules, finality, seeming precision.”

The full article is here

Terry Broaders

Weekly Update July 14 2015

“Wisdom Begins In Wonder” -Socrates


TSX Back In Positive Territory as Global Concern Eases

North American markets posted solid gains Friday as traders took in encouraging developments in the Greek debt negotiations and a rebound on Chinese markets that continued to gain traction. The S&P/TSX composite index closed up 132.58 points at 14,411.07, as the latest employment survey from Statistics Canada showed a big increase in full-time employment in June despite an overall loss of 6,400 jobs as 71,200 part-time positions were eliminated. In New York, Dow Jones industrial soared 211.79 points to 17,760.41, although the widely watched index ended the week only slightly above where it started. The Nasdaq shot up 75.30 points to 4,997.70 and the S&P 500 advanced 25.31 points to 2,076.62. The Canadian dollar rose for a second consecutive day, up 0.17 of a U.S. cent to 78.87 cents. Meanwhile, Greece and its creditors appeared to be narrowing their differences after Athens offered an austerity package that included concessions in key areas such as tax increases and cuts to pensions.


Greek Drama in Context

The Greek drama is likely to be a source of uncertainty and volatility for global financial markets over coming days and, perhaps, weeks. The Eurozone is considered to be in a better place today than it was during these prior stressful episodes. Four key reasons support this view.

There is small direct economic linkages. The Greek economy represents 1.9% of Eurozone GDP and an incredibly small end-market for major-economy exports (e.g., 0.1% of GDP for France, 0.1% for Spain, 0.2% for Italy, and 0.2% for Germany).

Eurozone economies are in a better place to absorb shocks. Fiscal pressure is receding as many of the formerly weak links such as Italy, Ireland, Spain and Portugal make progress on structural budget balances. At the same time, these economies are beginning to grow once again and have shifted their current accounts into net creditor positions.

Private Sector financial exposure is modest. According to Bank for International Settlements’ data, total foreign claims on Greece have declined by 70% since 2009 to a manageable level of about €65 billion (~US$73 billion). Note that the private sector holds only €63 billion of Greek debt, of which €18 billion is held by non-Greeks.

Stronger firewalls are in place. After €250 billion in capital raises since 2008, Eurozone banks are much stronger than they were in 2010-12. At the same time, the Eurozone now has several facilities in place to limit the impacts of illiquidity and/or a financial crisis. These include a €500 billion crisis resolution mechanism , the Outright Monetary Transactions facility whereby the European Central Bank (ECB) can purchase bonds in the secondary market in order to stop a downward spiral in sovereign bond prices, and Quantitative Easing which is a central bank tool used to prevent price deflation from hampering a country’s efforts to right size over-indebtedness.


Blog Links

But I will Not Live To Age 90 !

Sweet Rewards of a Retirement Well Planned

What Does Greece Mean To You



Sources: Bloomberg; Investment Executive;

Odette Morin

“But Odette, I will not live to age 90!”

Fauji Singh

When we prepare retirement plans, we run numbers to make sure that your money will last until at least age 90. Invariably, I get the “but Odette, I will not live to age 90”.

If you can’t imagine living to age 90, think again. Meet Fauja Singh, the 104 year old marathoner. He took up running at the age of 89 and up until last year, has ran a marathon every year.

There are plenty of these examples. The number of centenarians (people aged 100 and over) in Canada is rising. Statistic Canada says that group grew 25.7% between 2006 and 2011. It’s also been the fastest-growing segment for nearly 40 years.

Many of our clients in their late 80s and early 90s also live a very full and active life requiring just as much money as in their 60s and 70s.

In a financial planning perspective, we have to plan for the worst case scenario. Living beyond age 90 and running out of money is not something we want to experience. Depending on our children or the state is even worse.

When calculating sustainable drawdown rates for retirees, we need to plan for the retirement funds to last for life, whenever that age is. Too much money is never a problem, I often say, or “Too much is just enough” as my 92 year old mother says.

So, those numbers I calculate for you are not inflated. They are more realistic than you may think. Who knows, you may be the next Fauja Singh we see happily running into the 100s!

You can read more about Mr. Fauja Singh here.


Odette Morin

The Sweet Rewards of a Retirement Well Planned

Classic car

After decades of working every single day, the long-awaited arrival of retirement can understandably mean a chance to relax and enjoy the finer things in life.

It’s time to take that cruise you had promised yourself, enjoy more regular trips to the theatre, perhaps even buy a new classic car!

This is what clients of ours did recently and I could not be happier for them. These long-term clients have planned properly, saved enough for a very comfortable retirement and followed our advice along the way.

Too many pensioners spend far too much money during the early few years of retirement and end up facing a ‘life of frugality’ in their later years.

Buying a classic car or taking that month long cruise is not for everyone but when you have planned properly, started the process early and saved diligently, it sure is comforting to be able to afford a worry free retirement life and to occasionally splurge a little as well.