Budget 2019: New Housing Affordability and Retirement Planning Initiatives

In late March, the Federal Government tabled their final budget prior to October’s federal election. The Budget holds key initiatives aimed at helping young people with housing affordability, and to help seniors with retirement planning. Here are some notable changes that may impact you or your loved ones, specifically targeting the young and the old:
The Young: Housing Affordability
While many children may be hoping for support from the bank of mom and dad to purchase a home, if this isn’t […]

Read more...
Investing is a bumpy road

Investing: Never a Smooth Road

Fear and greed—the two emotions that are said to drive the equity markets. How quickly, it seems, that the sentiment can oscillate from one extreme to the other. Over recent times, Canadian and U.S. equity markets have experienced periods of remarkable advances in prices, as well as many months which seemed to forecast an Armageddon just around the corner.
It is interesting how quickly the focus of many market commentators can shift with these movements. After a volatile December for […]

Read more...

Investing to Beat the Average

I WILL stick to the investment plan when things are calm, and especially when I’m feeling anything but calm. When my emotions are running high, it is the wrong time to make rational decisions, including rethinking my investment objectives.

Think about the last financial decision that you made – whether that be a major purchase like a home or vehicle, booked a vacation or simply bought a new wardrobe. How much time did you spend researching that decision, and how […]

Read more...

Human Psychology, Market Timing, and the Inverted Yield Curve

Clients have asked recently about the reported inverted yield curve and what that means for their investments. Further, they have been asking if it is time to sell and go to cash. 
Many are pointing to the inverted yield curve as the predictor that a recession is around the corner. An inverted yield curve is when longer term interest rates (10 years) move lower than short term interest rates (3 month). This can be a good predictor that a recession will occur sometime […]

Read more...

New Retirement Investment Vehicle coming in 2020

The federal budget has introduced a possible solution to help Canadians highly concerned about out-living their money. A recent CBC news article refers to a new type of retirement savings product — ALDAs, or Advanced Life Deferred Annuity, and VPLAs, or Variable Payment Life Annuities — that may be hitting the product shelves of financial institutions in 2020. 
The plan will allow retirees to keep more savings tax-free until later in retirement. The rules are being amended to permit seniors to purchase […]

Read more...

No Safe Bets: Invest to Stomach some Uncertainty

I WILL NOT crave certainty. Although it’s our nature to seek assurances, “safe bets” in investing are either frauds or won’t deliver returns that keep up with inflation.
There are two types of “safe bets,” both of which promise a guarantee, but one results in financial hardship much more suddenly.
Bankers refer to the first type of “safe bet” as a deposit account. The second type is typically referred to as fraud, but conmen prefer descriptors, such as “risk-free” and “a […]

Read more...

The Patient Investor

The human brain is not equipped to be patient and stay disciplined when the market is in a tail spin. We are conditioned through millions of years of evolution to avoid pain and seek pleasure. This is why so many investors make the mistake of selling at the very worst times when the market is down. It’s moments like this that you see some of the best opportunities in the market.
How do you counteract making investment errors at […]

Read more...

A Global Perspective: Where Does Canada Stand?

We may sometimes forget that the Canadian equity markets are small. Just how small? Canada’s equity markets represent less than 3 percent of the world’s total equity market (by market capitalization) and we rank as the 6th largest in the world.1 The largest, our neighbour to the south — the United States — represents around 42 percent of the worldwide equity markets.
When it comes to investing, in the past Canadians often had a home bias. Remember that until 2005, the federal government […]

Read more...

Diversify Investments for an Unknown Future

I WILL NOT try to predict the future or listen to those who claim they can. Whatever happens next is anyone’s guess. I can take comfort in knowing that I am properly diversified.
Living up to our “wet-coast” reputation, it rains nearly every second day on Vancouver Island. Although, rainfall and sunshine generally don’t alternate, forecasting the weather is extremely difficult – especially over longer periods of time. I have no idea if it is going to rain on this […]

Read more...

Investing while in a Coma

As advisors we can get frustrated with our clients when we know that they are making the wrong decisions at the wrong times. Sometimes the most important part of my job is saving people from themselves.
I would like to demonstrate my point with a story of fiction, based on actual data:
Many years ago there were 3 friends named Chris, Bob and Alfred. They decided to each invest $100,000 with me at Precision Wealth Management. They all had similar risk […]

Read more...