Managed Money Reporter Newsletter — Issue 304, May 2018


Editors: Carl Spiess & Allan McGlade


Featured Articles



Market updates — Our Portfolio Compass and Rising rates

Carl Spiess

By Carl Spiess, CFP, CIM, FMA, FCSI, MBA

The quarterly update from our Portfolio Advisory Group shares insights into the global markets as we move into what has traditionally been a quieter time of the year for markets.

Global unemployment continues to fall, slowly raising inflation concerns. We are of course watching the turbulence in the Middle East and also the effects that rising interest rates and a looming election in Ontario can have closer to home.

We use a number of different sources for market updates and investment expertise. Here is how the portfolio managers at Fidelity are preparing for higher interest rates.

Please contact us if you have any questions at all about your portfolio.

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Revisiting the "100 minus your age as a percent in equities" rule of thumb

For most of my 28 year career, we have followed a very good rule of thumb for risk tolerance in client portfolios. Quite simply we suggested that 100 less your age equals how much to allocate to the growth opportunities of the stock market. Or your age is how much to have in guaranteed investments. So for someone who is 55 years of age whey should have 45% in equities and 55% in bonds/GICs.

Now with historically low interest rates and longer life spans, we are actively reviewing the appropriateness of this rule of thumb for many clients. Some are suggesting that 110 or even 120 less your age seems more appropriate. And for clients who viewed part of their portfolios as part of their offsprings' wealth we have always been more aggressive than the rule would suggest.

We are pleased to work with you to review your risk tolerance and current asset allocation. For clients in our discretionary Managed Portfolio Program, your Investment Policy Statement will provide very specific asset allocation targets. If you would like a review of the risk exposure in your portfolio please contact us.

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Some teens are responsible with money!

Here are 3 quick thoughts on teens and investing.

First investment accounts

Many of our clients ask us to help their children with their investments. We are pleased to help set up a first TFSA or RRSP and are excited when we begin seeing their savings grow.

Lottery winning teenager plans for future

We smiled when we came across this story recently of a young woman in Quebec. While we don't recommend playing the lottery as part of a financial plan, I liked how the young person chose to take her winnings. Annuities can be a good strategy for those concerned about outliving their money — and can be a very practical budgeting too.

Junior Acheivement

As an aside, I'll mention that I like teaching Junior Achievement to grade 7 students. That one day a year gives me great insight into how our younger generations are developing. I'm usually quite impressed with their knowledge of technology and interest in finance.

Please contact us if you have questions about children and investing or how to structure a stable income stream for life — without playing the lottery!

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Scotia's Support for the Arts

Scotiabank and Scotia Wealth Management are committed to the arts. In the month of May there are several major arts events that Scotia supports. Here are some highlights:

The Scotiabank Photography Award

This award has been given out annually since 2012 and celebrates Canada's top photographers. This year's winner Moyra Davey's work includes extreme close ups of pennies — which she started shooting back during the market crash of 1987!

Hot Docs

Scotia Wealth Management is the lead sponsor of the Hot Docs film festival which features major documentaries from around the world. Our big ideas series featuring Mr. Rogers was the hit of the festival this year.

New Generation Photography Award

In keeping with our bank's focus on youth, this year Scotia introduced the New Generation Photography Award. Read more at:

Scotia Contact Photography Festival

Running until the end of May, this annual festival brings photography to over 200 locations in and around Toronto.

(I'll mention that the Contact exhibit running at the McMichael Gallery runs all the way through the summer!)

Stay tuned in the fall for our Giller Prize update and see more at:

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Our Enriched Thinking Brand Promise

Our support for the arts is part of our Enriched Thinking brand promise. This short 100 second video gives a good idea about how we look at the big picture to provide "Enriched Thinking" for our clients.

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CRA Update

Now that tax time is behind us, you may be interested in how CRA spends your tax dollars. Did you know that CRA has almost 40,000 employees? And even with that many employees that over $100 billion remains as "uncollected receivables". This investment industry article has some interesting insights into how CRA works:

Do let us know if you have any questions about your 2017 taxes. And once you have your Notice of Assessment, we would be pleased to help with early RRSP or TFSA top ups, RIF withdrawal timing or with a review of tax strategies for 2018 and beyond.

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Team Member Profile — Debbie Ann Espiritu

We are excited to say that team member Debbie Ann Espiritu is coming up on her 15th anniversary with the Spiess McGlade team. Debbie focuses on helping our clients with regular portfolio reviews and is also our resident RESP expert. She also organizes our annual teddy bear drive and in off hours is very busy with her two young children and husband. Her friendly relaxed nature and great sense of humour keep all of us on the team smiling together. You can find out more about our team at:

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Recommended Link of the Month

May is the official Leave A Legacy Month – sponsored by the Canadian Association of Gift planners, of which I am a member. The Leave a Legacy site has links to charitable calculators, articles and resources for investors interested in planned gving. Please let us know if you have any questions about charitable giving or how to include a charitable legacy as part of your financial plan.

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Contact Us

T.  416.863.RRSP (7777)
     1.800.387.9273
F.  416.863.7479
E. carl.spiess@scotiawealth.com
    allan.mcglade@scotiawealth.com

ScotiaMcLeod is a division of Scotia Capital Inc., member of CIPF.

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