April Newsletter

April has turned out to be much better than the past few years. I have even gotten a couple of partial rounds in on the golf course. I trust the following information will be useful and informative for you.  As always, thank you for placing your trust in our office. 

March was generally a sideways month for most of our portfolios. Small gains and small losses in a variety of assets generally offset each other. The TSX(Canada) is only up about 2.6% so far this year while the S&P 500(USA) is up about 10%. The big surprise for a lot of people is likely Europe with the MSCI all Europe up 13% so far in 2015.  (source:Fidelity Investments:Datastream)

The strong growth in Europe helps to illustrate why I am in favour of diversification. It is terribly hard to predict where returns are going to come from in any one year.  

Our rolling 12 month rates of return are all still well above average.  One thing I am watching and studying is whether we will be looking for a currency hedge for the Canadian dollar in the future. A rising Canadian dollar would put pressure on some of our foreign holdings. Historically, unhedged investing has provided the stronger return and, as of now, there is not a good case for a rising Canadian dollar or excess risk but it is something I am monitoring.


 There are three big costs we actively look to control on your behalf. Overhead, Behavioral, and Taxes. 


 Overhead is the cost for you to have your money invested. We actively look for managers and products with lower cost MER’s.  In 2015 we have decided to stop opening any new accounts using funds that pay a commission and we are currently moving clients to lower costing options as they become available. We are doing this simply because it is the right thing to do. 
 We help reduce the behavioral cost for you by assisting all our clients in making sure decisions reflect good financial reasons and not emotion.  Finally, being a CPA, I am always mindful of minimizing client taxes.


 I enjoyed speaking to the Pioneer Prairies Kiwanis this week.  I explained the costs and benefits of having an advisor and received some excellent, well thought out, questions from the members of that group.  I also updated them on changes in the budget.  The members were telling me that their number have been dwindling over the years.  The exact reason service group numbers are dwindling is the exact reason interest rates are low worldwide.  Our aging population is not consuming the way they did 30 years ago. The baby boom generation is retiring and there simply aren’t as many consumers behind them.  This is going to mean the service groups will continue to decline and, very likely, long term investment rates will continue to be below averages we saw from the 1950’s to the 1990’s.
 As a CPA (Chartered Professional Accountant), I will be providing some tax tips from time to time to help in our financial planning.


TFSA contribution doubles to $10,000.00 per year.

If you have never made a contribution to a TFSA, you and your spouse can each have $41,000.00 inside a TFSA as of 2015.  At $81,000 and growing this is now a very important planning tool. If you don’t already have a TFSA please contact us. If you have a TFSA and are not sure you are getting the maximum out of it, please contact us.