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Category Archive for: ‘Investments’

Prepare for Rising Interest Rates

Going Up1

The Governor of the Bank of Canada expects low interest rates will be here well into 2015, and notes that some banks may even be reducing rates.  So it’s understandable that there isn’t much concern about rising interest rates in the short term.  But the reality is, we should be preparing for rising interest rates that will inevitably come. A …

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Tax-Free Savings Account Guide for Individuals

Tax Free Savings

The following information is taken in part from the document, Tax-Free Savings Account Guide (TFSA) for Individuals on the CRA forms and publications website.   What Is A TFSA Since 2009, a tax-free savings account (TFSA) is a way for individuals who are 18 years or older and who have a valid Canadian social insurance number to set money aside …

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TFSA or RRSP?

Planning1

Life used to be simple.  RRSPs were the only way to go because everyone said so — your TV, your advisor, your bank, and even your relatives.  Today, there’s a new ‘kid on the block’ and the $64,000 question is whether to invest in a TFSA or RRSP. Since 2009, advisors recommend that we max out both our RRSPs and …

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Don’t Be A Turkey When It Comes To Investing!

Turkey 2 R

This advice appeared in a recent special feature by Calgary-based Mawer Global Investment Research in the December/January 2014 issue of MoneySense magazine.  Mawer is a strong proponent of global diversification and believes that our investor home bias is risky.  It was the Don’t Be A Turkey analogy that got my attention… The article highlights a cautionary turkey tale from Nassim …

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Some Current Financial Market Comments

Charts2

As we count down to the end of 2013 I thought it might be useful to pass on some financial market comments from numerous fund managers and economists at investment meetings that I have attended over the last 2 months. In Canada Here in Canada, the TSX is considered to be too heavily weighted in energy, materials and financials.  Consumers …

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Finding Tax-Free Income

Tax Free1

In today’s complicated world of investments, taxes, market risk and volatility, a discussion on ways to earn tax-free income might be useful. The first obvious choice is a Tax Free Savings Account (TFSA).  These allow Canadians over 18 to build savings with after-tax dollars, into a wide range of investments and never pay any tax on the income generated.  Annual …

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The Magic of Compound Interest

Rates Are Up

This article was originally published at, CashCourse.org We think it’s a simple but great example of committing to a short-term financial priority for long-term reward.   “If you start saving early in life, you’ll have an advantage over those who start later. That’s because when you save even small amounts early, you are putting a very important financial concept to …

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Better Investments for Seniors

Couple In Car1

  With GICs at historic lows, it’s time to consider better investments for seniors.  This post is based partly on an article by Boomer & Echo (great financial website plus I just like saying the name), July 2/13, which in turn, referenced another interesting article in Canadian Money Saver magazine stating that, Canadian investors have had mediocre returns and suffered …

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The 21-Year Rule

Reducing Taxes1

  People who put properties into trusts 19 years ago now have work to do, thanks to the “21-year rule.”  Back in February 1994, the federal government cut the capital gains rate from 75% to 50%.  But they also eliminated the $100,000 lifetime capital gains exemption for individuals.  This was popular with investors who planned to cash out stocks sooner …

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Quantitative Easing – Rewards and Risks

Toronto Stock Exchange

  In 2009, after the sub-prime economic meltdown, and the whole global economy was in danger of slipping into a recession or depression, governments and central bankers instituted a strategy known as, quantitative easing. What Is Quantitative easing?  Quantitative easing is a monetary policy used by central banks in an effort to stimulate local economies.  By flooding the economy with …

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Financial Advisors Could Take Some Lessons From Willie Sutton

Sutton's Law for financial advisors

I read an interesting article the other day that suggested that financial advisors could take some lessons from Willie Sutton, who was a bank robber.  Even though he spent more than half his adult life in prison and despite his unenviable career, he had good ideas that translate to other business realms.  My intent isn’t to draw a parallel between …

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12 TFSA Considerations for Canadians

Flags

In the spirit of making last-minute financial plans, here is a bullet list of 12 TFSA considerations for Canadians. While an RRSP is primarily used for retirement savings, a TFSA offers more liquidity for different financial choices over and above retirement. You might be surprised to learn that everything you thought you knew about RRSPs and TFSAs isn’t as complicated …

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We’re Our Own Worst Enemies of Wealth Creation

Buy Low Sell High1

The market crash of 2008 had a lasting impact on investors, resulting in a mass movement out of equities, and trillions of dollars now sitting in low yield accounts.  I feel it’s important for investors to realize that it’s our basic human behavioral response to negative news that helped land us here.  So what do we do to rebuild our …

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Tax-Free Savings Accounts Explained

Coin Jar

Tax Free Savings Accounts (TFSAs) became available January 1st 2009 and to date, about 50% of Canadians have set one up but unfortunately many aren’t following through and continuing to fund them. Here’s a rundown of how TFSAs work and the many benefits for the average citizen. We offer a wide range of TFSA savings plans to suit different needs …

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Should I Contribute to a TFSA, RRSP, or Both?

TFSA-vs-RRSP

Since the introduction of TFSAs, I am often asked if it still makes sense to contribute to an RRSP.  My answer is, that it depends on each individual’s personal situation and financial objectives, as to which plan, or combination of plans, makes the most sense for their needs. Let’s do a quick review of both plans.  RRSP contributions are tax …

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Low Interest Rates – The Good and The Bad

House With Rates Falling1

Today’s current low interest rates are a boon to borrowers but a problem for seniors or others relying on interest income from GICs.  The US Federal Reserve has all but pledged to keep its main interest rate at 0 to 0.25 percent for at least through 2014, and the Bank of Canada expects to keep our rate at its current …

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The Difference Between Volatility and Risk

Market Crashing

With today’s market volatility, investors are anxious and stressed. As global stock markets continue to yo-yo, day traders seem to be the only ones who are happy.  It’s important to understand the difference between volatility and risk.   Risk involves insecure, questionable investments, and putting your money in danger.  Volatility, on the other hand, refers more to the short-term instability …

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