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Monthly Archives: February 2016

Terry Broaders

Weekly Update February 29 2016

“If You Want To Make Crime Pay Go To Law School” – “Whitey” Bulger

 

TSX Posts Modest Advance

The Toronto stock market closed with a modest gain Friday but remained in the red for the week as a whole after an early triple-digit advance evaporated. Canada’s main market was well off gains earlier in the day as oil prices turned negative. The Toronto Stock Exchange S&P/TSX composite index finished the day’s trading up 44.19 points at 12,797.79, giving it a slight loss for the week of 15.61 points. The commodity-sensitive loonie rose slightly as well, up 0.15 of a U.S. cent to an even 74 cents US. Michael Greenberg, a portfolio manager at Franklin Templeton Solutions, said higher oil prices early in the day helped drive up the S&P/TSX as energy stocks rose significantly. It’s unclear what caused the oil to fall later in the day, but energy markets have been very volatile recently, something Greenberg expects will level out as expected investment and production cuts by oil companies bring supply and demand more into balance.
U.S. indexes were mixed, with the Dow Jones industrial average losing 57.32 points to 16,639.97 and the S&P 500 falling 3.65 points to 1,948.05. The Nasdaq gained 8.27 points to 4,590.47. Still, all three indexes closed up about 1.5% for the week, their second straight weekly gain. The relatively flat showing in New York came despite encouraging economic news from the Commerce Department, which said U.S. gross domestic product grew at an annual rate of 1% cent in the fourth quarter. That was an improvement over earlier estimates of 0.7% and better than the 0.4% growth economists had expected. However, it remained only half of the third quarter’s two-per-cent growth rate. In a separate report, Commerce said consumer spending increased 0.5% in January, the best showing since May and far higher than December’s 0.1% gain.

 

Ever Wonder How Much All Those Government Tax Breaks Really Cost ?

Finance Canada has released its annual report showing what hundreds of tax measures cost the government. Turns out, the TFSA is worth about the same as giving us a break on apples and bananas for one year. The TFSA is estimated to cost $3.7 billion per year in forgone revenue from 2010 to 2017, while not charging sales tax on basic groceries cost an average of $3.9 billion per year over the same period (a total of $31.6 billion).
Meanwhile, the RRSP, net of taxes on withdrawals, cost about $107.7 billion over seven years. But that’s not the largest tax measure from 2010 to 2017: it’s the basic personal amount ($11,327) given to all Canadian taxpayers, which cost $256.3 billion. Collectively, education-related tax breaks cost $28.9 billion, with the RESP accounting for $1.2 billion. Charity-related breaks cost $36.7 billion, with the First-Time Donor’s Super Credit taking $25 million out of government coffers. Ottawa spent $6.3 billion over the period on the Disability Tax Credit, but only $250 million on the RDSP – illustrating the complaint that the account is underutilized. Women will be pleased to know it only costs $35 million per year to remove the tax from feminine hygiene products (also known as the tampon tax). For comparison, allowing clergy members to deduct their residence expenses costs about $85 million per year.

 

RRSP DEADLINE is Monday February 29 

 

BLOG LINKS 

You Bought a Property In The U.S. When Prices Were Low. Now What?

 

Weekly Market Wrap Up as of February 26 2016

North America
The TSX closed at 12798, down -15 points or -0.12% over the past week. YTD the TSX is down -1.46%.
The DOW closed at 16640, up 248 points or 1.51% over the past week. YTD the DOW is down -4.51%.
The S&P closed at 1948, up 30 points or 1.56% over the past week. YTD the S&P is down -4.70%.
The Nasdaq closed at 4591, up 87 points or 1.93% over the past week. YTD the Nasdaq is down -8.31%.
Gold closed at 1224, down -11.00 points or -0.33% over the past week. YTD gold is up 15.58%.
Oil closed at 32.98, up 3.94 points or 13.57% over the past week. YTD oil is down -10.99%.
The USD/CAD closed at 1.35187, down -0.0249 points or -1.81% over the past week. YTD the USD/CAD is down -2.30%.

 

Europe/Asia
The MSCI closed at 1554, up 10 points or 0.65% over the past week. YTD the MSCI is down -6.55%.
The Euro Stoxx 50 closed at 2929, up 58 points or 2.02% over the past week. YTD the Euro Stoxx 50 is down -10.37%.
The FTSE closed at 6096, up 146 points or 2.45% over the past week. YTD the FTSE is down -2.34%.
The CAC closed at 4315, up 92 points or 2.18% over the past week. YTD the CAC is down -6.94%.
DAX closed at 9513, up 125.00 points or 1.33% over the past week. YTD DAX is down -11.45%.
Nikkei closed at 16188, up 221.00 points or 1.38% over the past week. YTD Nikkei is down -14.95%.
The Shanghai closed at 2767, down -93.0000 points or -3.25% over the past week. YTD the Shanghai is down -21.81%.

 

Sources: Bloomberg; Investment Executive;   advisor.ca,; yahoo finance

Odette Morin
Terry Broaders

Weekly Update February 22 2016

“Always Laugh When You Can, It Is Cheap Medicine” -Lord Byron

 

TSX Pulls Back on Final Day of Strong Week

A pullback in oil prices and disappointing retail sales data pushed the Toronto stock market to a lower close Friday after four consecutive advances. The Toronto Stock Exchange’s S&P/TSX index lost 117.96 points to 12,813.40. Energy stocks on the TSX took a beating, retreating 1.67 % as the March contract for benchmark North American crude slipped $1.13 to US$29.64 a barrel.

In New York, markets were mixed, with the Dow Jones industrial average falling 21.44 points to 16,391.99 and the broader S&P 500 off 0.05 of a point at 1,917.78. Meanwhile, the Nasdaq composite index gained 16.89 points to 4,504.43 as tech stocks strengthened. In economic news, Statistics Canada reported that retail sales dropped 2.2 % month over month to $43.2 billion in December after having advanced 1.7 % in November.

Experts said the decrease was largely due to unseasonably warm weather and lighter than usual snowfalls in December, as well as the impact of Black Friday pre-holiday sales events that led to stronger numbers in November. Meanwhile, the annual inflation rate reached 2% last month as the weakened loonie caused prices of imported goods like fresh fruits and vegetables to soar. Statistics Canada said January’s inflation figure was the highest since November 2014. “Normally, inflation is driven by solid growth, solid demand from the consumer,” said Cavan Yie, an analyst at Manulife Asset Management. “But in this case it’s driven by foreign exchange.”

The Canadian dollar lost 0.10 of a U.S. cent at 72.63 cents US.
In Europe, stocks fell as the leaders of Britain and the rest of the 28-country European Union entered a second day of a summit on the U.K.’s membership in the bloc. Talks were stalled over a series of issues, including immigration rights.  Germany’s DAX fell 0.8 %, while France’s CAC 40 and Britain’s FTSE 100 both declined 0.4 %.

 

Canadian Retirees With Advisors Are Satisfied Savers

Canadian retirees are finding their post-work life to be a positive experience with many declaring they have saved enough and are successfully living on reduced funds, according to a study by Toronto-based Sun Life Financial Inc. Approximately half (49%) of the respondents stated they saved enough for retirement, while 33% say they did not and 19% are unsure of whether they have saved enough, states the firm’s Retirement Now report. Canadian retirees with financial advisors are even more satisfied with their retirement savings, with 62% saying they saved enough while 38% of respondents without an advisor felt the same. Canadian retirees are, on average, living on 62% of the income they had prior to retirement, which falls within the range of income replacement ratios recommended by financial advisors and other personal finance experts, according to the report.

“This is the first time we’ve measured what percentage of pre-retirement income retirees are living on,” says Kevin Dougherty, president, Sun Life Financial Canada, through a statement. “Life in retirement is more sustainable than you might think. Despite current economic conditions, Canadian retirees are doing quite well living on just over 60% of the income they had when they were working. And this average doesn’t change much when comparing men with women or taking marital status into account.”

Retirees were also asked whether they would have money to pass on to heirs. Almost half (46%) say it is very likely they will leave an inheritance to the next generation while 31% say it is somewhat likely, 10% believe it is very unlikely, 7% declare it to be somewhat unlikely and 6% do not know.
Four-fifths (81%) of respondents say they have a will and 51% of those with a will say they have discussed its terms with all of their heirs. However, 27% have only discussed the terms with some of their heirs, while 22% have not had the conversation with any of the heirs.  This is Sun Life’s first Retirement Now report. Ipsos Reid conducted the research for the report through an online panel between Dec. 15 and Dec. 23, 2015. A total of 2,006 retired Canadians and 2,004 working Canadians were surveyed for the report.

 

RRSP DEADLINE is Monday February 29 

 

BLOG LINKS 

http://www.you-first.com/2016/02/19/why-you-should-spend-big-in-a-bad-economy/

 

Weekly Market Wrap Up as of February 16 2016

North America
The TSX closed at 12813, up 432 points or 3.49% over the past week. YTD the TSX is down -1.35%.
The DOW closed at 16392, up 418 points or 2.62% over the past week. YTD the DOW is down -5.93%.
The S&P closed at 1918, up 53 points or 2.84% over the past week. YTD the S&P is down -6.16%.
The Nasdaq closed at 4504, up 166 points or 3.83% over the past week. YTD the Nasdaq is down -10.05%.
Gold closed at 1228, down 65.00 points or -0.89% over the past week. YTD gold is up 15.96%.
Oil closed at 32.09, up 3.01 points or 10.35% over the past week. YTD oil is down -13.39%.
The USD/CAD closed at 1.376765, down -0.0080 points or -0.58% over the past week. YTD the USD/CAD is down -0.50%.

Europe/Asia
The MSCI closed at 1544, up 75 points or 5.11% over the past week. YTD the MSCI is down -7.16%.
The Euro Stoxx 50 closed at 2871, up 115 points or 4.17% over the past week. YTD the Euro Stoxx 50 is down -12.15%.
The FTSE closed at 5950, up 242 points or 4.24% over the past week. YTD the FTSE is down -4.68%.
The CAC closed at 4223, up 228 points or 5.71% over the past week. YTD the CAC is down -8.93%.
DAX closed at 9388, up 420.00 points or 4.68% over the past week. YTD DAX is down -12.61%.
Nikkei closed at 15967, up 1014.00 points or 6.78% over the past week. YTD Nikkei is down -16.11%.
The Shanghai closed at 2860, up 95.0000 points or 3.44% over the past week. YTD the Shanghai is down -19.19%.

 

Sources: Bloomberg; Investment Executive;   advisor.ca,; yahoo finance

Odette Morin

Why you should spend big in a bad economy

Bulk-Buy-and-Save-banner

When I was in high school, I had a crush on Jean Marc McDreamy. When I’d see him, my heart pounded, my face flushed and my eyes lit up. Then, I’d run in the other direction. To this day, he’d probably only recognize me from the back.

I have the same relationship with Costco. I love it and run from it. The prices are so good I’d load up on food, dog toys and appliances. Then Terry would have to give up his closet space (relationships are filled with compromises!).

Needless to say, I don’t usually encourage bulk spending. But here’s the exception – it’s RRSP time and this year, more than ever, I strongly recommend you buy big.

Stocks are low right now. There’s truly no better time to invest. In fact, Warren Buffet, one of the world’s most successful investors, just invested $1 Billion in oil in a big way. He did this not despite market volatility, but rather because of it. Read about it here.

In his words, “Be fearful when others are greedy and be greedy when others are fearful.” Right now, many investors are fearful. This is the time for you to get greedy.

The market is low right now. It won’t stay that way. It never does. So don’t let irrational emotions sway good judgement. Market recovery comes in bursts. Missing the best few days to act can be devastating on your long-term returns. See why here.

Want to significantly increase your long-term returns? Then invest big in the low equity market for your RRSP this year. Though equity returns can fluctuate in the short term, they can become less volatile in the long term and provide potential for growth.

Still not sure? Then have a look at my previous blog for even more information.

If you don’t take big, calculated risks now then you’re taking a big risk on your retirement later. People make the mistake of thinking they’re safe because they have interest-bearing investments. However, they forget to factor in inflation. Consider the effect inflation has over just one year and then imagine it over several.

Interest-bearing investments aren’t likely to generate the growth you need for a secure retirement, let alone a happy one.

Is that really a risk you want to take?

Instead, I strongly suggest you contribute in a big way to your RRSP this year – now, in fact. You never know when the market will recover. But, you can bet it will. So contact us today and we’ll defer payment until the February 29th deadline.

 

 

 

 

 

Anthony Sabti

Weekly Update – February 12, 2016

February 12, 2016 – Weekly Brief

TSX Rallies on Friday, Cutting into Earlier Losses as Oil & Financials Jump

The S&P/TSX Composite finished down again this week, but rallied on Friday with a 2.4%, 293.87 point jump, to finish trading at 12,381.24. The Friday uptick was the first positive finish for the TSX in 6 days. As one might expect, this positive finish was mainly driven by increases in the financial and energy sectors; however, all 10 of the TSXs main sectors were in the black on Friday.

Oil, which hit a 12-year low earlier in the week, rebounded strongly to finish the week only slightly down. Once again, renewed optimism over the possibility of an OPEC deal with other producers to cut supply led the to the rebound. From week to week, analyst sentiment seems to be flipping between optimistic and pessimistic on the future of an OPEC agreement. West Texas Intermediate saw future contracts rise 12%.

The Loonie finished the week at 72.22 cents to the US Dollar, up 0.5% for the week. Gold has been seen all year as a safe haven, and that sentiment did not change this week; indeed, Gold increased on the week to $1238.50 per ounce, up 5.5% for the week. Gold maintained its status trend as a safe haven, as evidenced by it’s nearly 11% increase year-to-date.

In the U.S., data from Friday revealed that consumer confidence has declined in February, with stock prices and the perception of weaker global conditions being front-and-centre in consumers’ thoughts. A difficult week in the U.S. markets did nothing to bolster consumer confidence either, as all markets were down for the week.

Much of the selloff was sparked on Wednesday, as U.S. Federal Reserve Chair Janet Yellen’s Tuesday remarks to Congress indicated a potential delay in further rate hikes. Worries about a softening U.S. economy were certainly not eased by these statements, and Wednesday saw a selloff in Europe and Asia which was followed by similar such selloffs later in the day in North America.

Many banks also scared investors, as plunging rates around the world have led to fears of decreasing profitability for banks; consequently, banks in Greece, France, Italy and Germany saw their stocks decrease. Sweden Central Bank “Riksbank” also added fuel to the fire with an additional rate cut, plunging the key Swedish rate to -0.5% from -0.35%.

Falling markets continue to offer a stellar opportunity for Canadians looking to invest for the long term. By adding to their current portfolios, investors in Canada can enjoy a lowered average cost base on their overall portfolio. To be sure, low oil prices are transferring money out of the hands of oil exporters and into the hands of oil importing countries.

Inevitably, that transfer will lead to increased spending by these importing countries. Increased spending will help the economy to grow, and the ensuing market rebounds will allow today’s investments to enjoy strong growth down the line. It cannot be stressed enough how opportune the timing is of the markets declining, as the RRSP contribution deadline for the 2015 Tax Year is a little over 2 weeks away (February 29th).

Blog Links

Why A Bad Economy Can Make for a Better Lifestyle

Market Update as of February 12, 2016

North America

The TSX closed at 12381, down -383 points or -3.00% over the past week. YTD the TSX is down -4.67%.

The DOW closed at 15974, down -231 points or -1.43% over the past week. YTD the DOW is down -8.33%.

The S&P closed at 1865, down -15 points or -0.80% over the past week. YTD the S&P is down -8.76%.

The Nasdaq closed at 4338, down -251 points or -0.57% over the past week. YTD the Nasdaq is down -13.36%.

Gold closed at 1239, up 56.00 points or 5.54% over the past week. YTD gold is up 17.00%.

Oil closed at 29.08, down -1.77 points or -5.74% over the past week. YTD oil is down -21.51%.

The USD/CAD closed at 1.384803, down -0.0058 points or -0.42% over the past week. YTD the USD/CAD is up 0.08%.

Europe/Asia

The MSCI closed at 1469, down -80 points or -5.16% over the past week. YTD the MSCI is down -11.67%.

The Euro Stoxx 50 closed at 2756, down -123 points or -4.27% over the past week. YTD the Euro Stoxx 50 is down -15.67%.

The FTSE closed at 5708, down -140 points or -2.39% over the past week. YTD the FTSE is down -8.55%.

The CAC closed at 3995, down -216 points or -4.90% over the past week. YTD the CAC is down -13.85%.

DAX closed at 8968, down -512.00 points or -3.42% over the past week. YTD DAX is down -16.52%.

Nikkei closed at 14953, down -1867.00 points or -11.10% over the past week. YTD Nikkei is down -21.44%.

The Shanghai closed at 2765, up 1.0000 points or 0.04% over the past week. YTD the Shanghai is down -21.87%.

Sources: Globe Advisor, Yahoo! Finance, Dynamic Funds

Odette Morin

Why a bad economy can make for a better lifestyle.

The economy is suffering, but that doesn’t mean you have to. Instead, put your money toward a vacation, a boat, a beach house and – oh, and a dark, perfectly ventilated, temperature controlled wine cellar with nothing, but the finest reds…but I digress.

I know it sounds crazy, but the advice is sound and here’s why: stocks are low. When stocks are low, they inevitably and eventually increase in value. When you buy low, you can look forward to higher returns later.

In other words, if you invest now, you’ll have a greater return down the road. For anyone serious about retiring in style, this is the time to make that happen.

RRSP season is upon us. February 29th is the deadline. I strongly suggest you act now and think ahead.

I know that every year at this time we’re bombarded with RRSP messages. We’re always reminded of the immediate tax breaks and the rewards ahead. There are so many messages that we shut them out. But, this year, for your sake, please don’t. The greater your investment, the further your dollars go toward achieving your retirement goal.

To me, this is as exciting as a great Boxing Day sale. The difference is that this isn’t an opportunity that comes around every year. By next year, the deal may well be gone.

Stocks don’t stay low. They never do. In fact, here are just some highlights of how positively our market has recovered over the years:

  • In 1985, our market increased by 107% over 36 months
  • In 1995, it increased by 105% over 46 months
  • In 2003, it increased 168% over 68 months

In short, over the past 30 years, the S&P/TSX Composite Index increased by approximately 9% per year with 22 of those years ending with positive returns*. Bear markets usually recover within 9 months with an average loss of -28%. Meanwhile, the average length of a bull market is 50 months with an average gain of +126% **

What’s more, here’s some positive news to consider with regard to our forecast:

  • Our cheap dollar makes our exports very appealing to the US, our biggest customer
  • Positive effects of various government stimuli will show results in the next year or two
  • The price of oil has increased demand and increased demand helps bring up our prices

Just for fun, let me say again – invest now while prices are low because both the past and the future indicate they’ll all go back up again. Invest now and in a few years, you’ll be doing a happy dance (on your boat, in your beach house and in your wine cellar!).

Call us to make your contribution today and we’ll defer payment until the RRSP deadline on February 29th.

*Source: TD Asset Management Inc. and Morningstar En Corr

**Source Bloomberg S&P /TSX Composite data 1956 to 2015

Actually, the economy is great…

RRSP-2016-Camp-1