Category Archives: Investments

Odette Morin

The ABC of tracking of your Investment Gains & Losses

There was a great article today in the Globe & Mail about tacking your Adjusted Cost Base.  This is essentially needed when you dispose of equity investments in a non-registered account.  Gains and Losses must be reported.  You do not get a Tslip for that investment income.  You only pay tax on 50% of the gain you make.  This article explains it very well.  Of course if you are our client, we will do this for you!!

Odette Morin

2014 Q1 Market Commentary

Equity markets around the world posted mixed results in the first quarter of 2014. Despite some volatility early in the period, the global economy’s moderate growth, low interest rates and controlled inflation gradually supported investor confidence and resulted in increases for many markets by quarter-end. Fixed-income securities were also higher for the quarter, with prices for 10-year government bonds in Canada and the U.S. rising slightly, pushing yields down, while demand for corporate bonds remained strong.

The crisis in Ukraine, instability in emerging markets and slower growth in China created headwinds for global equity markets in the first two months of the year. By the end of the quarter, however, the S&P/TSX Composite Index in Canada had benefited from higher prices for commodities to gain 6.1%, including dividends. The index was broadly positive, with the strongest results coming from the energy and materials sectors, while industrials and financials had smaller increases.

Performance among foreign markets was more muted, but Canadian investors in global securities benefited as the Canadian dollar weakened against several major currencies, including the U.S. dollar and the euro. After posting stellar results in 2013, for example, the S&P 500 Index added a modest 1.8%, which translated to nearly 6% in Canadian dollar terms. Early declines for the U.S. market were ultimately reversed by improving economic data and the market’s increasing comfort with the new Chair of the U.S. Federal Reserve, Janet Yellen, and its resolve to “taper” its economic stimulus. Stronger business conditions and greater stability in Europe, meanwhile, led to results that were mixed in local currency terms, but positive when converted to Canadian dollars. Investor anxiety about the effect of tapering on emerging markets and China’s cooling economy led to negative results for China’s Shanghai Index and the MSCI Emerging Markets Index, and after making strong gains in 2013, Japan’s Nikkei Index declined 9.0%, or 3.3% in Canadian dollar terms.

We marked the fifth anniversary of the current bull market during the first quarter of this year. It has been gratifying to see how well both the global economy and stock markets have recovered in this time – the S&P 500 Index in the U.S. has gained more than 180% and the MSCI World Index is up 140% from their lows of March 2009 to the end of March 2014. Nevertheless, the volatility experienced in the most recent quarter is a reminder that capital market investments typically do not take a path uniformly upward, often experiencing declines or “corrections” before moving forward again. For that reason, I believe it is important to take a longer-term approach, and to invest in a portfolio that is well diversified among asset classes, geographies and sectors, depending on your individual investment objectives.

In closing, I would like to thank you for your continued trust and business. If you have any questions or concerns about your account, please do not hesitate to contact me, Terry or Anthony.

Source of information: Investments, Signature Global Asset Management, Cambridge Global Asset Management, Globe and Mail, National Post, Bank of Montreal Economics, and Trading Economics. Index information was provided by TD Newcrest and PC Bond.

Terry Broaders

Weekly Update February 24 2014

“She Shoots! She Scores! “


TSX Down For The Day Up For The Week

The Toronto stock market gave up a modest gain to close little changed Friday while investors looked to the release of a disappointing read on U.S. home sales last month.The S&P/TSX composite index slipped 4.65 points to 14,205.72 at the end of a positive week for the Toronto market. The Canadian dollar continued to pile up losses for a third day, down 0.28 of a cent to 89.82 cents US as Statistics Canada said that December retail sales tumbled 1.8% from November. Economists had expected a drop of just 0.4%. The agency also reported that the Canadian consumer price index was up 1.5% in January compared with a year earlier. U.S. indexes were lacklustre as the National Association of Realtors said existing house sales dropped 5.1% in January following a 0.8% rise in December.

The Dow Jones industrials fell 29.93 points to 16,103.3, while the Nasdaq lost 4.13 points to 4,263.41 and the S&P 500 index dropped 3.53 points to 1,836.25. Techs were the biggest TSX drag as BlackBerry shed 24 cents or 2.3% to $10.17. The TSX ended the week with a solid gain of 1.07%, reflecting general satisfaction with fourth-quarter earnings reports and positive U.S. manufacturing data on Thursday. The Dow faltered somewhat this week, down 0.3% but strong earnings reports have left the index up 2.57% for the month while the TSX has jumped 3.73% so far in February.


Canadians Don’t Understand CPP, OAS

Canadians appear optimistic about their retirement lifestyle, but few have a firm handle on what their cost of living will be and what their pensions will offer, shows a February 2014 survey by Investors Group. More than two-thirds (69%) of people near retirement are unaware of what the maximum monthly payout is for Canada Pension Plan ($1,038 at age 65) and Old Age Security ($551), yet more than 80% of them say they plan to use these programs as a source of retirement income, and more than 33% anticipate this will be their primary source. Employer pension will be a source of income for 60% of those surveyed, and 37% say it will be their primary income source. However, of those who say they have workplace pensions and plan to rely on it as their primary source of income, 55% didn’t know the monthly benefit they could expect.  Nearly three-quarters (72%) of pre-retirement individuals are confident they’ll be able to maintain their current lifestyle in retirement. This number jumps to 91% among those working with a financial advisor. In addition, 66% of Canadians are less confident in governments’ ability to continue to provide an acceptable level of pension and retirement benefits.


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Market Update as of February 21 2014

The TSX closed at 14206, up 151 points or 1.07% over the past week. YTD the TSX is up 4.29%.

The DOW closed at 16103, down -51 points or -0.32% over the past week.YTD the DOW is down -2.86%.

The S&P closed at 1836, down -3 points or -0.16% over the past week.YTD the S&P is down -0.65%.

The Nasdaq closed at 4263, up 19 points or 0.45% over the past week.YTD the Nasdaq is up 2.06%.

Gold closed at 1323, up 4.00 points or 0.30% over the past week.YTD gold is up 9.88%.

Oil closed at 102.27, up 9.34 points or 10.05% over the past week.YTD oil is up 3.71%.

The USD/CAD closed at 1.1124, up 0.0136 points or 1.24% over the past week.YTD the USD/CAD is up 4.63%


Sources:  Bloomberg; Investors;; Investment Executive

Terry Broaders

Weekly Update February 18 2014

“They Can Because They Think They Can” -Virgil


Markets Sweet on Valentine’s Day

Rising gold stocks helped push the Toronto stock market higher Friday as traders digested a mixed bag of economic indicators. The S&P/TSX composite index was up 58.15 points to 14,059.8. The Canadian dollar was down 0.01 of a cent at 91.09 cents US as manufacturing shipments declined 0.9% during December. It was the first decline since last August. New York indexes turned mainly higher after the latest reading on U.S. consumer confidence, the University of Michigan’s index, was unchanged at 81.2. A slight drop had been expected. Another report showed that harsh winter weather led to U.S. factory output falling by 0.8% during January. The Dow Jones industrials moved up 63.35 points to 16,090.94, the Nasdaq was 9.56 points lower to 4,231.12 while the S&P 500 index was ahead 3.38 points to 1,833.21. Elsewhere, China’s consumer prices rose 2.5% over a year earlier in January, unchanged from December. Traders found the inflation data encouraging because it leaves the Chinese government room to stimulate the world’s second-biggest economy. Other data showed that economic growth across the eurozone was stronger than expected as gross domestic product grew by 0.3% in the fourth quarter from the previous quarter. That adds up to an annualized rate of about 1.2%. Analysts had been looking for fourth-quarter growth of 0.2%.


RCMP Arrest 7 in Alleged CRA Fraud

The RCMP has arrested seven people as part of alleged fraud that involved Quebec Canada Revenue Agency employees. Charges laid include bribery of public officers, conspiracy, fraud, breach of trust by a public officer and fraud against the government. Five of the accused allegedly received commissions on tax credits that were obtained through fraudulent means. The Mounties say that three of those five were active CRA officials at the time the alleged offences took place. The five are scheduled to appear in court in Montreal on April 7. One of the five, plus two other people have also been charged in a separate component of the investigation and will appear in court on March 19. The investigation, known as Project Coche, began in 2008 and resulted in the arrest of 15 people, including eight former CRA officials. National Revenue Minister Kerry-Lynne Findlay says any misconduct by agency officials is “completely unacceptable.” She adds, “CRA will continue to investigate any allegations of misconduct and continue to cooperate with the RCMP to ensure that the individuals responsible face the full force of the law.”



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Market Update for February 14 2014

The TSX closed at 14055, up 267 points or 1.94% over the past week. YTD the TSX is up 3.18%.

The DOW closed at 16154, up 360 points or 2.28% over the past week.YTD the DOW is down -2.55%.

The S&P closed at 1839, up 42 points or 2.34% over the past week.YTD the S&P is down -0.49%.

The Nasdaq closed at 4244, up 118 points or 2.86% over the past week.YTD the Nasdaq is up 1.60%.

Gold closed at 1319, up 52.00 points or 4.10% over the past week.YTD gold is up 9.55%.

Oil closed at 92.93, down -7.03 points or -7.03% over the past week.YTD oil is down -5.76%.

The USD/CAD closed at 1.0988, down -0.0052 points or -0.47% over the past week.YTD the USD/CAD is up 3.35%.


Sources: Bloomberg; Investment Executive;


Odette Morin

Even Dr. Doom, Nouriel Roubini, is positive on the year ahead.

nouriel_roubiniHere is a nice recap prepared by the Golden Girls Finance on January 20, 2014.Blog post

So what’s in store for 2014?

If you would like to read the full text of Dr. Roubini’s forecast for 2014, published on New Year’s Eve, check it out on the Project Syndicate website here.  For those of you who just want the highlights, we’ve summarized and translated them from ‘econ-speak’ for you here:

  • Advanced economies (think: Canada, US, UK, Australia) will benefit from the past five years of deleveraging (debt reduction) and monetary policy (low interest rates and generous money supply). Economic performance will slowly chug away and we can expect modest growth…not so doomy at all!
  • Emphasis on modest. Dr. Doom is not one to be overly cheery (which is maybe why people tend to trust his prognoses more than the resolutely optimistic forecasts of banks and mutual fund companies). He warns that any growth in our developed economies will be average (less than 2%), at best. Debt reduction among families and corporations is far from over and many still have much work to do in this regard. Governments will continue reigning in the purse strings, so long-term productivity and capital investments could suffer.
  • Low risk of any major shocks to the system, or what economists call “tail risks”.  Any external threats to the economy – such as Middle East wrangling, eurozone drama, government shutdowns and such – will have less economic impact in 2014 than in the past. (Of course, the biggest shocks are always the shocks we haven’t dealt with before and didn’t see coming, right?)
  • The US economy will be helped out by growth in four areas: the shale gas industry, the housing market, the labor market and the trend of bringing manufacturing jobs back to America. There are risks that the US Congress (always fighting) or the Federal Reserve (with unclear policies) could still mess things up.
  • The policy of ‘Abenomics” in Japan seems to be working well so far and deflation is finally under control after nearly 20 years. The plan to increase consumption tax may become an issue.
  • Although economic growth in China has slowed, it is still expected to hold fast at a rate of around 7% in 2014. Dr. Roubini expects no big crash or drama in the Chinese economy this year, although there will be conflicts between public and private enterprises as new reforms are introduced. Through it all, the middle classes will continue to expand and consume more goods and services.
  • European economies continue to slowly grow, while high unemployment and public debt are still big concerns. Fortunately, the big ‘doomsday’ scenarios seem to be behind us.
  • Emerging economies in South America and Asia will see their growth rates accelerate to around 5% this year. However, keep your eye on the more fragile economies of India, Indonesia, Turkey, Ukraine, Argentina, Venezuela and Brazil, which are all at risk of any “external shocks” that could rock their markets
Terry Broaders

Weekly Update January 21 2014

“In A Time of Universal Deceit Telling The Truth Is A Revolutionary Act” -George Orwell


TSX Rises For The Day, Rises For The Week

Rising gold stocks helped push the Toronto stock market higher Friday on top of three straight days of advances that have left the TSX at its highest level since April 2011. The S&P/TSX composite index was ahead 56.63 points to 13,888.21. The Canadian dollar slid 0.42 of a cent to 91.11 cents US. U.S. indexes were mixed amid U.S. earnings reports from a variety of sectors and economic data showing rising industrial production and declining housing starts. The Dow Jones industrials rose 41.55 points to 16,458.56, the Nasdaq fell 21.11 points to 4,197.58 and the S&P 500 index was off 7.19 points at 1,838.7.Analysts note that the start to the fourth-quarter earnings season this past week has been positive but with the Dow and S&P 500 trading at all-time highs, there are fairly high expectations.The TSX ran ahead 141 points or 1% this past week, with advances paced by the precious and base metal mining sectors. But the Dow industrials ended the week flat amid the mixed earnings news, up just 22 points or 0.13%.


Tax Cheats Beware: CRA Launches Snitch Line

CRA has a new way to catch up with Canadians cheating on their taxes.  The government has launched a tips hotline to catch those hiding money in offshore accounts. On cases worth $100,000 or more, a tipster would get a cut of any money the CRA recovers based on her information. But if she’s convicted as part of the tax scheme herself, she won’t be compensated.  The tipster would also have to wait until the CRA has collected all taxes owed and the case has gone through all avenues of appeal. The government has also recently tightened rules surrounding foreign income reporting. It also wants to make reporting international electronic money transfers of more than $10,000 mandatory. The government will spend $15 million over five years to fund the electronic funds transfer program, and another $15 million during that time on compliance and auditing activity. The government promised a tips hotline in the 2013 budget. With its launch, four of the five tax measures in the budget have been implemented, and the fifth will come into effect in 2015. Closing tax loopholes and catching tax avoiders have been increasingly important to the government as it works to eliminate the deficit in time for the 2015 federal election. The hotline is open at 1-855-345-9042.


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Market Update as of January 17, 2014

The TSX closed at 13888, up 140 points or 1.02% over the past week. YTD the TSX is up 1.95%.

The DOW closed at 16459, up 22 points or 0.13% over the past week.YTD the DOW is down -0.71%.

The S&P closed at 1839, down -3 points or -0.16% over the past week.YTD the S&P is down -0.49%.

The Nasdaq closed at 4198, up 23 points or 0.55% over the past week.YTD the Nasdaq is up 0.50%.

Gold closed at 1254, up 8.00 points or 0.64% over the past week.YTD gold is up 4.15%.

Oil closed at 94.3, up 1.50 points or 1.62% over the past week.YTD oil is down -4.37%.

The USD/CAD closed at 1.0965, up 0.0075 points or 0.69% over the past week.YTD the USD/CAD is up 3.13%.