by Bev Moir on February 7, 2012
From Investment Executive By Jade Hemeon
A growing number of Canadians are crossing the threshold into retirement, signalling the end of their saving days and the beginning of living off pension income and retirement nest eggs. The challenge faced by aging baby boomers and their financial advisors is to create a reliable, life-long income stream and preserve capital in the face of zigzagging financial markets, unpredictable health and increasing longevity.
“Clients have had years of experience accumulating assets but are not so used to de-accumulating,” says Bev Moir, senior investment advisor with ScotiaMcLeod Inc. in Toronto.
“It’s a different focus than asset building. There’s a shift in mindset to preservation of assets and income creation, but they still need some growth to preserve the purchasing power of their savings,” says Moir. “Because there is no longer a regular paycheque, savings must last a lifetime, and there’s uncertainty as to how long that lifetime will be.”
There’s no ideal investment that offers both complete security, growth potential and a high level of return. Most advisors are finding an effective approach is to spread client assets among a variety of securities that includes both equities and fixed-income, with some focus on growth and some on interest and dividends.
The gap between retirement and end of life is growing, and many clients want products that will ensure they never run out of money.
by Bev Moir on January 5, 2012
The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view. [click to continue…]
by Bev Moir on December 21, 2011
The General Rate Income Pool (or GRIP) is a corporate tax concept that tracks corporate income that has been taxed at high corporate tax rates, and any eligible dividends received from other sources, such as subsidiaries or public companies. Your corporation may have some built up GRIP that should be addressed before the end of the year. Here’s why.
When GRIP is paid out, that amount is considered an eligible dividend, taxed at a preferred dividend rate. Due to the continually decreasing corporate tax rates, the eligible dividend rate is continuously increasing. The difference between 2011 and 2012 is about 1.4%.
If you have a corporation with a GRIP account, you may consider paying a dividend in 2011 to save this additional tax. If your corporation also has Refundable Dividend Tax on Hand (RDTOH), the dividend payment will also generate a dividend refund with the filing of your corporate tax return.
Speak to your accountant to see how this tax tip applies to you.
This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.
by Bev Moir on December 20, 2011
The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.
- Equities traded lower again last week on sustained concerns regarding Europe and German Chancellor Merkel’s continued opposition to increasing bailout funds or allowing the ECB (European Central Bank) to increase purchases of European bonds.
- Although we had no expectations in this regard, investors were also apparently disappointed when the Fed did not suggest any plans to invoke another round of Quantitative Easing (QE3).
- On the positive side, jobless claims in the U.S. were the lowest reported since May, 2008, both the U.S. and Spain held successful bond auctions, and this morning US housing starts for November came in at their highest level since April 2010 on improving homebuilder confidence.
- Weak Industrial Production numbers from India, PMI (Purchasing Managers Index) data in Europe, and more importantly China had a negative impact on the economic outlook, which when combined with U.S. dollar strength led to commodity price weakness across the board. We expect further evidence of a slowdown in China will lead authorities there to act quickly on growth oriented policy initiatives.
- Yesterday afternoon, European Union Finance ministers eventually agreed to increase loans to the IMF (International Monetary Fund) by an additional 150 billion euros; they will seek further funding from other G20 members. Importantly, these enhanced IMF resources are meant “to fill global financing gaps”, they are not exclusively for bailing out weak eurozone members.
- We continue to believe the situation in Europe will ultimately be resolved. Between the EU leadership, the ECB, and the IMF, an appropriate resolution will be achieved and they will not allow a Lehman-like collapse of the banking system; however, Germany in particular will not feel compelled to act until there is a bank requiring a bailout and Germany is then able to maximize concessions.
- As we are at somewhat of an inflection point in terms of the global economy and stock market sentiment, we expect stock market volatility to continue, resulting in equities trading in a range for the foreseeable future.
- Our investment outlook remains the same as equities are our preferred asset class as we look out toward 2012; North American bond yields are at all-time lows making higher dividend yielding equities a far more attractive investment alternative.
- For fixed income exposure, the current low rate environment offers little value in the mid to long end of the curve and we recommend investors remain short duration at this time. From a sector weighting perspective, investors should be underweight Canada’s and overweight provincials, municipals and corporates. The recent narrowing of high yield spreads leaves us at a point of indifference on these credits. With the Canadian dollar expected to outperform most major currencies over the coming year, we recommend Canadian investors remain in Canadian dollars for their fixed income holdings.
- Despite recent market declines, U.S. equities are still trading at the top end of the narrow range established since early August. We anticipate a further market pullback, but downside might be limited until the New Year due to the expected slowdown in market activity leading into the holidays.
- For trading oriented investors we recommend selective profit taking as certain stocks have demonstrated significant outperformance recently.
- Fundamentals will matter again at some point and prospects for more economically sensitive sectors, particularly for copper and energy, are brighter and not fully reflected in current valuations.
- Commodity cyclicals and industrial stocks offer the most upside potential in the event equities rally again, but they also will likely continue to exhibit the greatest volatility.
- Gold’s multi-year rally has paused of late but we recommend adding exposure on further weakness; gold bullion and gold equities should perform better in the current environment.
For more information on how these ideas pertain to your investment portfolio, please contact Bev Moir.
Summarized by Steve Uzielli – Director, Portfolio Advisory Group
Copyright 2010 Scotia Capital Inc. All rights reserved. This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. ® Registered trademark of The Bank of Nova Scotia, used by ScotiaMcLeod under license. ScotiaMcLeod is a division of Scotia Capital Inc. Scotia Capital Inc. is a member of Canadian Investor Protection Fund.
by Bev Moir on December 15, 2011
Many university students, particularly those studying for a profession, are graduating from university with a great deal of debt. This was highlighted in a recent issue of the Globe and Mail, where the financial situation of a young professional couple was featured in the Financial Facelift column written by Dianne Maley.
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by Bev Moir on December 13, 2011
The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.
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by Bev Moir on December 13, 2011
It’s an attainable goal, with three smart strategies
When I was younger, the notion of having financial freedom at age 55 sounded fantastic. With the passage of time, however, I’ve come to realize it was only an idea. It never did become one of my concrete financial goals, with associated plans and action strategies. In my work preparing clients for their retirement, I’ve learned firsthand that Freedom 55 is a figment of many people’s imaginations. Now our retirement can last up to a third of our lives. That’s a long time to support one’s lifestyle on accumulated savings, especially when so many cannot count on attractive pensions that previous generations relied upon. Not only were specific saving strategies not implemented early enough, but life experiences and associated expenses interfered with our plans, and the extreme market volatility we’ve experienced over the past several years has also taken its toll on our nest eggs.
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by Bev Moir on December 6, 2011
Here’s What We’re Thinking
The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view. [click to continue…]
by Bev Moir on November 29, 2011
The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.
Here’s What We’re Thinking [click to continue…]
by Bev Moir on November 29, 2011
Bev will be on CBC Radio’s “Ontario Today” from noon to 1:00pm on Wednesday, December 7, 2011. The topic: Retiring Comfortably.
The call in show is based on the recent StatsCan survey about Canadians working beyond the normal retirement age. Listeners will call in with their questions about preparing for retirement and the investment strategies they can employ so they won’t have to work after the normal retirement age.
