Category Archives: Investments

Frank Mueller

BC Training & Education Savings Grant – Who Says Nothing in Life is Free?

In 2013, the Government of British Columbia introduced the BC Training & Education Savings Grant. This grant is a great way to help build your child’s RESP, as your child’s RESP account will receive a one-time grant of $1,200.

According to the BC Training and Education Savings Grant’s info website, the following 3 conditions must be met in order to qualify for the $1,200 one-time grant:

  1. The child must be born in 2007 or later
  2. You and the child must be residents of British Columbia
  3. The child is the beneficiary of a Registered Education Savings Plan (RESP) with a participating financial institution

The earliest you can apply to receive the grant is on the child’s 6th birthday, and the latest you can apply is the day before the child’s 9th birthday.

If your child meets these 3 conditions, they are eligible to apply for and receive the one-time grant of $1,200. We have been reviewing all of our client RESP accounts, and looking for accounts with beneficiaries that meet the above criteria. If you have an RESP account with us, and would like to find out if your child qualifies for this one-time grant, please do not hesitate to contact us.

Anthony Sabti

Corporate Class Switching Deadline Extended – Will Take Effect January 1, 2017

In March, the 2016 Federal Budget announced that the tax-deferred switching advantage of corporate class funds would be ending this year. Originally, the budget called for the regulation change to take effect on October 1, 2016; however, the regulation change will now take effect on January 1, 2017.

Until this year, an investor was able to use this fund structure in a non-registered account and switch from one corporate class fund to another – within the same fund company – on a tax-deferred basis.  For example, an investor could switch from ABC Canadian Equity Fund Corp. Class to ABC Global Equity Fund Corp. Class without incurring a capital gain. With a regular fund structure, the investor would normally pay capital gains taxes on the profit incurred on the fund being sold.

While this is unfortunate news, corporate class funds will continue to offer the advantage of tax-efficient distributions.  These funds will restructure any income distribution (including interest income) in the form of capital gains or dividends, and are taxed at a lower rate than interest income.

Since the announcement was made, we have reviewed and will continue to review all non-registered portfolios at client meetings for any changes we would like to make before the rule change takes place. If you have a non-registered account with us and would like to see if we should act on your portfolio before the end of the year, please do not hesitate to contact us.

Anthony Sabti

The 2016 Presidential Election: How Will Markets Be Affected?

Intro – General Impact of Elections to Markets

In 2000 and 2008, the last two elections where we knew we were getting a new president, markets were in the midst of a downward correction. In November 2000, the S&P 500 was three months into the Dotcom bubble correction that wouldn’t bottom out for almost another two years. Similarly, in 2008, the S&P was one year into the financial crisis that wouldn’t hit bottom for another four months.

Investors are fortunate enough to not have experienced any such bad luck since then. American markets are trading at market highs, and aren’t defined by any one sector, or a highly leveraged consumer. Fiscal policy is still very accommodating, with interest rates at historical lows.

Although studies show that no one party (Democrat or Republican) is better for the markets, change and uncertainty usually lead to short-term market volatility.  Certainly, the potential of a Trump win could bring a Brexit-like shock to the markets. Frank and I will examine the potential impacts of a Clinton vs. Trump win:

Anthony – What Happens If Clinton Wins?

The research shows that since the 1950’s, whichever candidate leads the polls in October usually goes on to become president. Going by this trend, it seems Hillary Clinton has the better chance of winning the election. The Republicans are expected to maintain control over the Congressional House of Representatives.

This “status quo” outcome would have lesser economic and market impact. Two major policy actions of a Clinton presidency could benefit the economy: changes in corporate tax laws to promote repatriation of corporate profits held overseas to fund infrastructure spending, and immigration reform. Both of these could garner bipartisan support and have a high possibility of enactment.

Possible risks to business of a Clinton win include executive orders on drug pricing, antitrust enforcement, and restrictions on fracking for domestic oil & gas production. Inflation and interest rates will likely remain lower for longer.

Frank  What Happens If Trump Wins?

As Anthony astutely points out, there is no historical evidence in favour of either a Republican or a Democrat presidency, in terms of the effect on the markets. However, the prospect of a Donald Trump presidency does introduce one key variable into the equation: uncertainty.

Opting out, or “ripping up” of NAFTA, and other free trade agreements, could hurt emerging markets (e.g. China, Mexico, etc) who have benefitted greatly from free trade with the U.S.  Trump’s intention to put America First could lead to a shift away from globalization and would represent a risk to all asset classes, at least in the short term, similar to the market corrections post-Brexit.

Introducing stiff tariffs would have the effect of increased prices of goods, leading to lower discretionary income for Americans. This would naturally lead to decreased spending on entertainment, luxury items, etc. Increasing government spending on the military and on infrastructure could be bad for the bond market.


A Clinton presidency would certainly offer – in many ways – a “status quo” for the economy and the markets. There would be little chance of serious reform or change, as a projected Republican-controlled House would work to oppose Mrs. Clinton’s policy reform bills. As far as the markets go, they’d likely continue to be unaffected in any meaningful way in the long term. This would continue the historical trend of economic cycles ebbing and flowing independently of the Presidential election winner.

Trump, on the other hand, would be the more unpredictable president, and the uncertainty surrounding many of his platform policies could have a negative affect on the markets for an unforeseen length of time.

In the long term – regardless of the outcome – markets historically have shown resiliency and eventually adapt to the events at hand.

Terry Broaders

Weekly Update July 19 2016

“No Cause Justifies The Killing of Innocent People ” – Albert Camus


After 5 Day Rally, Markets Quiet On Friday

North American markets were relatively flat Friday, ending a five-day rally, even as positive economic news emerged from China and the U.S. The loonie finished the day at 77.30 cents US, down 0.23 of a U.S. cent. The S&P/TSX composite index fell by 32.10 points to 14,482.42. For the week the index grew by 1.6%. Year to date the return is +11.32%.

In New York, the Dow Jones industrial average advanced by 10.14 points to 18,516.55, a new record high. Meanwhile, the S&P 500 gave back 2.01 poi nts to 2,161.74 and the Nasdaq composite slipped by 4.47 points to 5,029.59. In commodities, the August contract for crude oil gained 27 cents to US$45.95, while the more heavily-traded September contract climbed 23 cents to US$46.65.
August natural gas was up three cents to US$2.76 per mmBtu and August gold lost US$4.80 to US$1,327.40 per ounce.



RCMP and CRA Issue Warning On Taxpayer Scam 

The RCMP and the Canada Revenue Agency are warning again about the “taxpayer scam” as Canadians continue to be victimized almost daily. Fraudsters impersonating CRA employees target their victims and demand either personal information, or payment for phony fees or back taxes.   “To date in 2016, almost $2 million has been reported lost by 590 individuals,” says RCMP assistant commissioner Todd Shean, who leads the force’s Federal Policing Special Services.  “And if only 5% of victims report their losses, we can assume that the actual total amount lost to this scam is much, much higher.”  The agencies call on taxpayers to take steps to ensure their personal information remains confidential and to avoid being duped.
“The CRA will never request prepaid cards, ask for information about your passport, health card or driver’s licence, or leave personal information on your answering machine,” adds Diane Lebouthillier, Minister of National Revenue. “Before taking any action, taxpayers should always verify their tax account by checking My Account via the secure CRA portal or by contacting the CRA at 1 800 959-8281. This information, including examples of real scam telephone calls and e-mails, can be easily found on the CRA website,” she says.


Sources: Bloomberg; Investment Executive;,

Terry Broaders

Weekly Update June 13 2016

“It’s Hard To Be Humble When You’re As Great As I Am” -Muhammad Ali


TSX Falls On Friday

The Toronto Stock Exchange saw a triple-digit loss on its last trading day of the week in a decline led by energy companies as the benchmark price for crude slipped. The S&P/TSX composite index was down 202.48 points Friday at 14,037.54, led by the energy sector, which was down 3.8%. The metals and mining sector of the TSX slipped 3.29% and base metals stocks declined 3.02%. The Canadian dollar lost 0.27 of a U.S. cent to 78.39 cents US. That’s despite the fact that Statistics Canada reported that the economy gained 13,800 jobs in May, pushing the jobless rate down to 6.9%, its lowest level since last July.

In New York, markets were also down as uncertainty around global economic risks weighed on investors’ minds.  The Dow Jones industrial average was down 119.85 points at 17,865.34, the broader S&P 500 composite index slid 19.41 points to 2,096.07 and the Nasdaq composite fell 64.07 points to 4,894.55.  Some of the key risks that have traders worried include the upcoming referendum on June 23 that will determine whether the United Kingdom will exit the European Union, as well as uncertainty relating to June meetings of the U.S. Federal Reserve and the Bank of Japan..


Canadian Baby Boomers To Inherit $750 Billion In Next Decade 

Canadian baby boomers will inherit an estimated $750 billion in the next decade, according to a new CIBC Capital Markets report. It will mark the country’s largest-ever wealth transfer and is expected to alter the retirement landscape. There are currently more than 2.5 million people over the age of 75 in Canada, about 45% of whom are widowed, according to the report. That’s a 25% spike from the level seen 10 years ago.

According to the report, just over half of Canadians between 50 and 75 have received an inheritance. Of those, half received it within the past decade. The average inheritance was $180,000, with British Columbia leading the way in the amount of the average bequest. More money is going to people already in higher income brackets, the report found; Canadians who earn more than $100,000 inherited almost three times more on average than lower-income Canadians. Those with higher education levels also received more. About 40% of higher-income Canadians saved or invested their inheritance, while lower-income people tended to use the money for daily expenses, the report found.


Weekly Market Wrap Up as of June 10 2016

North America
The TSX closed at 14038, down -189 points or -1.33% over the past week. YTD the TSX is up 8.08%.
The DOW closed at 17865, up 58 points or 0.33% over the past week. YTD the DOW is up 2.53%.
The S&P closed at 2096, down -3 points or -0.14% over the past week. YTD the S&P is up 2.54%.
The Nasdaq closed at 4895, down -48 points or -0.97% over the past week. YTD the Nasdaq is down -2.24%.
Gold closed at 1277, up 28.00 points or 2.90% over the past week. YTD gold is up 20.59%.
Oil closed at 48.95, up 0.33 points or 0.68% over the past week. YTD oil is up 32.12%.
The USD/CAD closed at 1.277878, down -0.0168 points or -1.30% over the past week. YTD the USD/CAD is down -7.64%.

The MSCI closed at 1689, up 10 points or 0.60% over the past week. YTD the MSCI is up 1.56%.
The Euro Stoxx 50 closed at 2911, down -87 points or -2.90% over the past week. YTD the Euro Stoxx 50 is down -10.92%.
The FTSE closed at 6116, down -94 points or -1.51% over the past week. YTD the FTSE is down -2.02%.
The CAC closed at 4307, down -115 points or -2.60% over the past week. YTD the CAC is down -7.12%.
DAX closed at 9835, down -268.00 points or -2.65% over the past week. YTD DAX is down -8.45%.
Nikkei closed at 16601, down -41.00 points or -0.25% over the past week. YTD Nikkei is down -12.78%.
The Shanghai closed at 2927, down -12.0000 points or -0.41% over the past week. YTD the Shanghai is down -17.29%.


Sources: Bloomberg; Investment Executive;  CIBC;,

Odette Morin

How did the latest “Sell everything” strategy work out?

In my 28 year career in the investment industry, I had to reassure clients time and time again. Investors get really concerned when they hear Doom & Gloom predictions from well meaning friends or the media.
Time and time again I have to remind them to disregard market fluctuations. Good quality investments in a well balanced portfolio always recover. It is safer to stay the course.
Here is a fantastic article about would have happened if you would have followed the latest sell everything strategy that did its rounds earlier this year.