Odette Morin

Odette Morin

Recent Posts

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…



What will your next statement reveal? Will you engage in Market Herding?

Odette’s Market commentary a must read to the end.


You will soon be getting your year-end statement in the mail and will immediately feel a sinking sensation. After a stellar 5 year period of market recovery and expansion, we see ourselves in negative territory over the past 12 months. “Here we go again” is what we’re thinking.

It never feels good to see the market value of your account go down. In fact, it is annoying and worrisome. Most of us will be tempted to react, adjust or capitulate. How quickly do we forget that markets are volatile and eventually correct. So, what do the markets know that we don’t? Or do the markets really know? Should we follow or stay the course? Let me go through a few facts first to help you see the big picture before being tempted to participate in Market Herding meaning if other investors sell, it must be because they know something we don’t. Thus, he sells, she sells, you sell, and so down go stock prices. Read more here.

We strongly feel that the markets around the world are currently oversold especially the North American markets. We predict a turnaround in 2016 & 2017. Beyond the “markets always recover” Here is why we feel confident about the year ahead:

• The CDN dollar is very low right now at about 70 cents compared to the US dollar. Canada is predominately an exporting country. A cheap dollar is great for Canada as it makes our products and services inexpensive. The Bank of Canada’s decision not to increase interest rates was a good one. Our main trading partner and buyer of our products is the US. The US economy is actually doing well which is going to be good for our exports.

• The government stimulus initiated last year will start to show results.

• The new Liberal government infrastructure stimulus will help our economy as well.

• The price of oil is ridiculously low. A steel barrel is currently costing more than the barrel of oil in it. Oil is currently at an irrational valuation. Low prices are the key to the market’s rebalancing, and so the latest drop should help accelerate the adjustment. Oil demand is growing and alternative energy, sadly for our environment, is way too expensive to compete. The challenge right now is that several OPEC members are still boosting their production, with Iran set to add yet more in 2016. This is lengthening the journey back to equilibrium for the oil market. Oil prices should gradually find their way higher with the higher demand.

• Concerns regarding China are reducing. While it is true that Chinese GDP is decelerating, the threat of a hard landing for the Chinese economy still seems fairly small. While a sharper devaluation of the currency is not impossible given significant capital outflows and China’s competitiveness challenges, we continue to believe that any further decline will be modest.

• For your investments, we are getting excited about the medium and long term opportunities that are beginning to reveal themselves with the recent declines. We are bullish for the year ahead. It is in fact a great time to make an investment and certainly great timing for those who will make an RRSP top up before the February 29th deadline.

I will close by simply reminding you that negative events like the market volatility we have been experiencing in the past few months create incredible investment opportunities. These TD Bank’s graphs below confirm this. In the past three decades alone, there have been a number of events that may have kept investors on the sidelines. When you look at the big picture, over the last 30 calendar years, the S&P/TSX Composite Index gained approximately 1316% or 9% per year and 22 of the 30 years had positive returns!

Investors who remained focused, invested and diversified have typically benefitted. The following chart illustrates historical downturns in the Canadian equity market and its subsequent recoveries.

All portfolios are not invested 100% in the stock markets. Your portfolio has mixture of fixed income and equities.

Finally, please read the following article from Oaktree capital. It just shows that the market does not know that much. This is the must read! Thank you for your confidence throughout the years. We work hard to stay on top to offer current recommendations and deliver consistent results.

As Terry and I always say, there is one rule that always works, buy quality and diversify.

Common sense is never as sexy as mass hysteria. MUST Read article here.

TD Graphs




2016 TFSA limit reduced to $5500


It’s official. Finance Minister Bill Morneau announced yesterday that for 2016, the TFSA limit will be brought back to $5500. The 2015 limit will remain at $10,000.

If you have already signed a form to process your contributions in January, we will adjust the contribution amount to $5500 to ensure that you stay within the limit.

If you have not made your 2015 TFSA contribution, $10,000 will be added to your TFSA carry forward amount. You can maximize that limit or past years, anytime in the future.

Please remember that you can invest your TFSA as a long-term investment or save it for the short-term depending on your needs and personal situation.

Please contact us if you have any questions regarding your TFSA contributions and personalized planning.

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How will the new Trudeau government affect your pocket book?

Trudeau PM

History was made this week with the stronger than expected come back of the Liberals lead by the high value and enthusiastic Justin Trudeau. With a majority government in hand, he has all the political power he needs to implement his party platform unimpeded.

Trudeau and his Cabinet will be sworn in on November 4, and it will likely be months before the new government releases its budget or starts passing legislation.

Here’s what you can expect from the Liberals once Parliament gets into full swing:

How will personal tax rates change, if at all?

  • Middle class tax rate decrease: Rate for taxable income between $44,700 and $89,401 would drop from 22% to 20.5%, for tax savings worth up to $670 a year per person.
  • High income marginal tax rate increase: Marginal tax rate for income above $200,000 would increase from 29% to 33%. On a $250,000 income, this would mean paying up to $1,329.50 more.

Will any tax credits or deductions change?

The Liberals have promised the following changes:

  • TFSA: Return TFSA contribution rates to $5,500 from $10,000.
  • OAS at 65: The Liberals have said they would not go ahead with plans to gradually raise the eligibility age to 67. This will restore eligibility at age 65 for everyone born from 1958.
  • Child benefit: the Universal Child Care Benefit will be replaced with the Canada Child Benefit, a tax-free monthly benefit for the middle class. Families would receive up to $6,400 a year per child under six, and up to $5,400 a year per child aged six to 17. The amount would decrease as family income rises. Families with incomes of $200,000 or above wouldn’t get a benefit.
  • Employment Insurance: Eligibility will be enhanced and premiums reduced.
  • Create a Teachers School Supply Tax Benefit: teachers and educational assistants who buy their own classroom supplies will benefit from a refundable credit worth up to $150.
  • Home buying: Allow Canadians to put RRSP money toward buying a house more than once. The Home Buyers’ Plan currently focuses on first-time buyers; people would additionally be able to use it multiple times when moving for work, after the death of a spouse, after a marital split or to take in an elderly relative.
  • CPP Enhancement: The Liberals have talked about working with the provinces to bolster Canada Pension Plan benefits.
  • Student loans: Grads would not have to repay student loans until they have earned at least $25,000 a year, with interest paid by the federal government during that period; also, the maximum Canada Student Grant for low-income students would rise to $3,000 annually for people studying full time.

How about income splitting?

  • Pension income splitting will be kept.
  • Income splitting for families with children under 18 will be eliminated.

I own a small business. What happens to me?

  • The small business tax rate is expected to drop from 11% to 9% by 2019.

These were promises made. There is no way to know if and when these will be effective. We will continue to keep you up to date through these blog posts. Keep reading us regularly!

How is your account doing & Fall Market Outlook

world map

World Markets have been very volatile since the summer. The past week has been a welcome reprieve with 6 straight days of recovery but we are bound to see more ups and downs as global growth uncertainty continues.

Before I give you a brief fall Economic Outlook, I feel the need to remind you that your account results have been quite good compared to the markets. The North American markets have lost about 9% year to date. Most of you hold a combination of fixed income, cash and a healthy dose of International Equities, not just North American Equities. Your account will likely show a small gain or very small loss if any.

We do not anticipate any recessions or long-term downturn. Short-term volatility is a normal and healthy process of financial markets. You should not be alarmed at all.

Here is a quick fall 2015 economic outlook. We look forward to seeing you at your annual review meeting to further discuss these events as they pertain to your personal situation. In the meantime, never hesitate to contact us.

Please see the attached Economic Outlook – Fall 2015 from RBC GAM’s Chief Economist Eric Lascelles.

Key Highlights

– Oil Prices – Estimates indicate that West Texas oil prices can rise moderately, but probably not all the way back to US$60 a barrel in the near term;

– Financial-market weakness and volatility are naturally concerns at present, though we expect the former will fade. Commodity-oriented risks – mostly connected with resource-exporting countries and companies – may linger due to a fundamental supply-demand mismatch;

– Gazing into 2016, most regions should manage faster growth, though we have more conviction about this view for the developed world than emerging nations. In the developed world, North American growth prospects have been reduced, while the outlook for Europe and Japan is little changed. All appear on track for growth next year that is no worse than 2015, consistent with the economic-recovery narrative;

– The U.S. dollar continued to perform very well last quarter, but the greenback has been in a bull market for four years now and we feel confident declaring that the “easy money” has been made. To be clear, we’re still bullish on the U.S. dollar but are more tentative now, recognizing that the pace of the gains has been significant and that the currency is no longer undervalued.

– Global inflation remains very low and is likely to fall even more in the near term as the latest wave of oil-price weakness washes over the economy.

– In our view, the long-term case for stocks remains intact. Equity valuations were broadly fair before the downturn, but the decline has pushed equity markets below equilibrium, potentially providing an attractive entry point for investors. With stable earnings and the potential for rebounding valuations, total-return prospects for equities remain compelling.