Winter 2012

Occupying possibly a third of your lifetime, retirement today is more a progression of stages than a single destination and must be planned for accordingly. In the first of a four-part series, we examine the retirement spring—a time for tilling the fields and planting the seeds for a fruitful retirement.

In just a single generation, our picture of retirement has changed dramatically. Only in the 1950s did life expectancy at birth in Canada finally stretch past age 65 making life after work a reality for many. According to the latest numbers from Statistics Canada, on average a male born in 2008 could expect to celebrate his 79th birthday, while a female born in the same year would likely reach age 83. Furthermore, those making it to the retirement age of 65 will have another 20 years of retired living on average and stand a good chance of living even longer. As a result, our view of retirement has evolved from a short period of respite at the end of a working life to a succession of four phases, the duration of each dependent on factors such as age, state of health and financial circumstances. Like the seasons of the year, each phase is marked by defining characteristics, activities and distinct challenges.

Winter 2012

Best practices for ensuring your income tax return adds up.

Each year Canada Revenue Agency electronically analyzes approximately 25 million income tax returns and selects some for further scrutiny. Getting tapped for a review can simply be the result of random sampling or for reasons that include higher than usual deductions, discrepancies between the income that you report and information slips filed by employers and excess RRSP contributions. There’s no way to guarantee CRA won’t choose your return for review but here are some tips for making sure you are ready.

Winter 2012

After experiencing what has been called a lost decade in terms of investment returns, it would be unusual if investors weren’t discouraged. The average return from a balanced portfolio (60% equities/40% fixed income) from 2000 to 2010 was 3.8% per annum, primarily from bonds. And the current state of economic affairs doesn’t offer much in the way of encouragement. Interest rates remain at historically low levels; the yield on mid-term Government of Canada bonds hovers around 2.6%. Economic growth in the developed world will be weighed down for years to come as governments seek to slash deficits through reduced spending. Aging populations place growing demands on the public purse and de-leveraging continues by governments as well as among consumers. Emerging markets, while still likely to experience higher GDP growth relative to the developed world, still do not have sufficient domestic consumption to offset lower demand from the developed world. The one bright spot is inflation, which has remained in check for the better part of two decades, and the low rates on long-term bonds indicate that this is not expected to change soon. So where can the long-term investor look for returns?

Winter 2012

Growth in the economy has the potential to be constrained by debt, whether it comes from countries reeling in spending through austerity measures, consumers reducing debt on household balance sheets or tighter lending as a result of uncertainty in the financial markets and the European sovereign debt crisis. Collateral requirements could increase along with stricter loan covenants. Both corporate bond markets and equity financing already reflect higher risk premiums.

Winter 2012

When your children blew through their allowance as if it was burning a hole in their pockets, you thought it was just a phase. Away at school, the calls for cash infusions kept coming and the credit card bills kept climbing. Sure you can afford it, but that’s not the point. With a sizeable inheritance coming their way, how can you make your kids more fiscally responsible?.

“One of the biggest issues I see with young people today is not having a sense of what is realistic for their financial situation. Too many assume that they can live their parent’s lifestyle now, without putting in the time and hard work to build up their earning power,” says Paul Gainor, Consultant with T.E. Wealth in Calgary. He explains that parents aren’t doing their kids any favours by always coming to the rescue. In this case, he recommends that the parents start by setting some limits.

Winter 2012

You talk. We listen.

By Kostas Andrikopoulos, President and CEO, T.E.Wealth. kandrikopoulos@tewealth.com

Good companies become great companies when they listen to their clients and the best companies anticipate what their clients want and need and make sure they give it to them. At T.E. Wealth, we want to be seen as a great company in our clients’ eyes. So not only do we want to hear what you have to say and take what you tell us to heart, we are creating more opportunities for you to tell us how we can do better.

Fall 2011

Expect a bumpy ride in equity markets, at least until some semblance of investor rationality returns. Why have stock prices been beaten back to the valuation lows that followed the financial crisis of 2008? Yes, there has been a parade of bad economic news, frustrating political posturing and seemingly ineffective monetary policy. But the economy has grown, albeit at a reduced rate, and companies continue to produce strong earnings. Instead of the irrational exuberance of the past, we may now have irrational despair.

Fall 2011

Plan. Invest. Preserve. Just what is so special about these three words? Essentially, they describe the key elements of a sound wealth management strategy. While important individually and more powerful when working together, these three words sum up what we do for our clients at T.E. Wealth. They also show how we are different from others in our industry. Many advisors consider investing to be their core service, with financial planning and wealth preservation added on as “extras.” Not us. At T.E.Wealth, we take a fully integrated approach to your wealth management delivered through our financial consultants and the investment counsellors at T.E. Investment Counsel (T.E.I.C.). Planning is what drives our process; everything starts with you and what you want to accomplish. Investing is there to fuel your overall plan and see you reach your financial goals. Preservation is how we protect all that you’ve accomplished from expenses, taxes and risk.

November 2011

Discover what you can be doing tax-wise throughout the year with our helpful checklists. If you want to make staying on top of your taxes even easier, have your T.E. Wealth consultant prepare and file your family’s income tax returns.

Summer 2011

When it comes to reasons for procrastinating, planning for the distribution of your estate may top the list. Few people want to contemplate their ultimate demise, never mind discuss what happens to all of their worldly goods. Yet putting off looking after what and whom you leave behind can be a nagging concern. Without instructions and proper documentation, the courts may have to make decisions for you. Our checklist for success gets you started with small steps, moving on to more sophisticated strategies depending on your situation. What’s most important is that you don’t delay. Plan to review this checklist with your T.E. Wealth consultant right away.

Summer 2011

A number of recent polls have confirmed a trend that financial planners have been noticing – increasing numbers of Canadians are now planning to work in retirement. Changes in public policy have made this a more valid choice today than it was just a decade ago. All provinces in Canada, with the exception of New Brunswick, no longer have a mandatory retirement age. Modifications to the Canada Pension Plan that are being phased in over the next five years reward people for staying in the workforce beyond age 65 and removed restrictions on earning an income while collecting CPP benefits. The Quebec Pension Plan recently announced planned harmonization with the CPP changes. But beyond the rules and regulations, there are other factors that are leading the majority of Canadians to expect to work beyond age 65.

Summer 2011

Slowing global growth and a pullback in resource prices undermined equity performance during the second quarter. Among developed markets, it was only the resource-heavy Canadian market that experienced what was, thankfully, a minor correction. Diversification beyond the Canadian market was an important factor in mitigating investment losses through this period.

Spring 2010

Are ETFs just one more investing flavour of the month or a new portfolio mainstay?
If you haven’t heard about ETFs, you can’t have been reading the financial press of late. Although they have been around for the last two decades (the first ETF was introduced in the Canada in 1989), ETFs’ popularity has exploded in recent years and so have the number of ETFs available. Currently, it’s estimated that there are more than 1,600 ETFs offered worldwide and, in Canada alone, a recent tally had 145 ETFs listed on the S&P/TSX index. As an investment vehicle, ETFs have currently captured the attention of investors but do they have the staying power to earn a place in your portfolio?

Spring 2011

In the opening chapter of his book Future Babble, Dan Gardner chronicles the events of the last century that went unforetold and the numerous predictions about the future that failed to materialize. He goes on to explain why wanting to know the future is part of the human condition and how we get it wrong, over and over again. Anyone paying attention since the start of this century knows that there have been some spectacularly wrong predictions in the last decade or so, beginning with the Y2K non-event. At the same time, much of what has shaped life in the 21st century, such as 9/11, wasn’t even on the radar screen. People seeking that extra edge for exploiting developments when investing will find this revelation disappointing. But for others, the certainty of uncertainty serves to reinforce the wisdom of following a disciplined investment plan.

Spring 2011

Identity theft is the modern day nightmare. Someone gains access to your personal information and uses it to drain your bank accounts, rack up charges on your credit cards, borrow money in your name and re-mortgage your home to access your equity. You are left with a myriad of tasks as you try to recover financially and restore your credit history. Even once you’ve repaired the damage, the unease that comes from being a victim of a faceless crime lingers. Given the potential for harm, make preventing identity theft a top priority.

Spring 2011

If you’ve been following the financial press of late, it would appear that the bloom is off the Registered Retirement Savings Plan (RRSP). Once lauded as the best way for Canadians to save for their retirement, there are cracks now appearing in the RRSP’s appeal. Depending on where you sit in terms of income and age, the RRSP can be your retirement saviour or a Faustian bargain with Canada Revenue Agency. For sure, the RRSP offers the tempting combination of tax-deductible contributions to reduce income taxes today and tax-deferred investment growth to boost your plan’s value. But it also demands that any money coming out of your RRSP is taxed as regular income. And it is this latter requirement that has people rethinking their RRSP strategy.

Spring 2011

At the end of the 2010, the outlook for the global economic recovery had brightened considerably. In just three short months, new threats have emerged.

Spring 2011

When the Federal government appointed its Task Force on Financial Literacy in June 2009 all of us at T.E. Wealth had high hopes. After all, we’ve been in the business of elevating financial literacy through financial education and one-on-one financial counselling for nearly 40 years. Over an 18-month period, the Task Force consulted with Canadians and other stakeholders about improving financial literacy in Canada and issued its findings and recommendations in December of 2010. There is much within the Report of Recommendations on Financial Literacy* that we agree with. However, in our opinion, the Task Force’s recommendations simply do not go far enough.

Spring 2011

Concerned about taxes? Worried about preserving your estate? Want to make sure inheritances are used wisely? A properly executed trust may be the answer for you.

Trusts, whether they are inter vivos (created while you are living) or testamentary (created through your will after death), are highly effective instruments for achieving precise tax and estate planning goals. On the tax front, trusts can be used to reduce current income tax or lower probate fees and preserve assets in your estate. In addition, trusts can be used to provide financial security for dependent beneficiaries or ensure inheritances are protected. T.E. Wealth has helped many clients achieve these goals through the proper execution of trusts. Keep in mind that the availability of, and rules governing, trusts vary based on provincial jurisdiction. Your T.E. Wealth consultant can help you assess the suitability of a trust for achieving your particular goals.

Spring 2011

The Canadian Women’s Foundation (CWF) Women Moving Women campaign is a unique movement aimed at helping 2,500 women in Canada escape poverty. Their Sisterhood Soiree events bring together women who are committed to raising another woman out of poverty and T.E. Wealth is proud to be the sponsor of this initiative for a second time. The CWF is now halfway towards reaching its goal, with pledges secured to change the lives of 1,260 Canadian women. In the upcoming months, T.E. Wealth will be hosting Sisterhood Soiree events to help the CWF achieve its goal.

Spring 2011

In the face of the unexpected and potentially disruptive events of the past quarter, the resiliency of the financial markets has been nothing short of remarkable. Political unrest, inflation threats, sovereign debt concerns and natural disasters all ganged up on markets in the first quarter of 2011 and, despite an initial negative response, returns for the most part have been positive.

Spring 2011

At T.E. Wealth, we are continually looking for new ways to be of value to our clients. As clients plan for lifestyle and life stage transitions that come with retirement, or experience age and health-related changes, additional services are needed. While the delivery of these services may extend beyond the traditional in-house expertise of a financial services firm, planning for them does not. As particular needs are identified by our consultants through the comprehensive planning process, we have often been able to provide clients with customized solutions. Recently, we have taken a closer look at one such area, medical concierge services, to see if these might be of interest to our clients.

Winter 2011

Despite a last-minute reprieve for the Bush-era estate tax cuts, Canadians who own property south of the border are well advised to assess their situation and plan accordingly.

In the United States, from an estate tax perspective, 2010 was a good year to die. Wealthy Americans, such as New York Yankees owner George Steinbrenner and Cargill Inc. heiress Mary Janet Cargill, had their billion-dollar estates escape U.S. estate tax. The same fate applied to wealthy Canadians who died before January 1, 2011 and whose ownership of U.S. real property (real estate and stocks of U.S. companies) would have exposed them to U.S. estate tax. Despite a reinstatement for 2011 and 2012 of the lower estate taxes carried over from the Bush regime, if you own U.S. property, the impact of U.S. estate tax on what your heirs receive can still be substantial. It all depends on your worldwide assets at death and the proportion of those assets that are considered to be property in the United States.

How to make the most of tax-sheltered investing The next best thing to not paying tax on your investment earnings is deferring the tax until later. Either way, you can boost the potential gains from investing your money, whether those gains come as interest, dividends or capital gains. By keeping more of your investment earnings …

Winter 2011

A year ago, the concern was that government stimulus would diminish in 2011, the inventory cycle would wear off and central banks would raise interest rates prematurely. Now with the after effects of the financial crisis beginning to fade, business conditions have improved, hiring has picked up, balance sheets are being repaired and the outlook for 2011 has brightened.

Winter 2011

Equity markets told two different stories in 2010. In the first half of the year, markets were occupied by crisis and uncertainty and ended down at the six-month marker. The last six months saw a return of confidence and greater stability, with markets rebounding to end the year well into positive territory With regard to the global financial crisis, while we are not out of the woods yet, 2010 has ended with greater optimism than it began.

Summer 2007

Avoid these all-too-common estate planning pitfalls.
If you’re looking to tear your family apart, there’s no better way than having your will contested. Not only can this exceptionally delay the settling of your estate, possibly causing your heirs financial hardship, it can forever damage relationships between feuding family members. Blood may be thicker than water but matters of money seem to trump all. You have the right to distribute your assets in any way you wish but keep in mind that the following areas can be contentious.

Spring 2010

The tables are being turned as Canada emerges from the recession. With hiring gearing up, the competition for talent is also on the rise. Employees may be feeling a little undervalued, especially if, as a result of the recession, they had to cope with staff cuts, escalating workloads and low, or no, pay increases. A November 2009 survey by Right Management Inc. of 904 North American workers found that six out of 10 intend to pursue new job opportunities in 2010 and only 13% reported that they intended to stay where they are. Employee turnover of this magnitude could put a company out of business, or, at the very least, the loss of productivity and costs associated with hiring and training would put a substantial damper on earnings. So how does an employer avoid this kind of turnover tsunami that could be headed their way?

Our T.E. Wealth Consultants set the record straight on some of the more common misconceptions they have encountered.

Winter 2009

By Kostas Andrikopoulos, President and CEO, T.E. Wealth

According to Mercer’s 2009 Compensation Planning Survey, which was conducted in October of 2008, 23% of companies in Canada are planning layoffs in response to the economic downturn, and more than half are considering reducing headcounts. If the economy continues to worsen, these numbers can only be expected to rise.

What you need to know about managing your finances when facing employment changes.

How a financial education program can help boost participation rates

The debate surrounding commodity prices has heated up in recent months. It’s not the first time this issue has captivated investors nor is it likely to be the last. In the past decade alone, the boom or bust question about commodities made headlines in 2000, 2002, 2006, 2008, 2009 and now again in 2011. For Canadian investors, with almost half of our market’s capitalization linked to two commodity-based sectors – energy and materials, it’s an important discussion.

How one of our Consultants has established a support network of professionals to assist clients with the many issues associated with aging.

Fall 2010

Why do investors so often act against their own best interests and sabotage their investment plan? The answer lies in the relatively new science of behavioral finance.

For the past twenty years, DALBAR Inc., an investment research firm, has published its annual Quantitative Analysis of Investor Behavior. The results, for any investor, are sobering. For the 20 years ending December 31, 2009, the S&P 500 index had an average annual return of 8.20%. During the same period, the annual return for equity fund investors averaged just 3.17%. Fees can account for some of the difference but the rest is credited to investor behavior. To paraphrase the comic strip character Pogo – we have seen the enemy and he is us.

When making money is short and sweet Few professional athletes are renowned for their money management skills. Sure there are exceptions. Magic Johnson comes to mind. But all those years spent focused on honing their skills in their respective sport, left little room for financial education. In 2009, Sports Illustrated reported that after two years …

Fall 2010

At the start of the summer, the outlook for markets was subdued at best. The global economy was slowing, possibly slipping back into recession, and the fiscal woes in Europe had many investors wondering how this most recent crisis would play out. Amidst all the uncertainty, equities staged a remarkable third-quarter rally, having the best September since 1939, and the bond market continued to show surprising strength.

Fall 2010

Many of the concerns that gripped the world economy just three months ago appear to have faded. However, continued weak economic growth is not among them.

The threat of a European financial crisis now seems past its peak intensity. Although Europe’s debt problems are not going to go away, there is confidence in how Europe is handling the crisis and investors are now willing to buy Spanish, Portuguese and Greek government bonds. Concerns that China was in the midst of an economic slowdown have been diffused by a string of indicators (industrial production, retail trade, imports and fixed asset investment) that have been stronger than expected. In addition, the risk of another global financial crisis has been reduced through the proposed Basel III regulations that would require a near doubling of banks capital requirements, boosting their balance sheets and helping them to absorb losses.

Slow growth ahead There is now compelling evidence that the U.S. recession ended in August. A financial crisis has been averted and we are now in a post-recession growth phase that should last several years. The key question is how strong will the economy be over the next six to 12 months? It is unlikely …

Summer 2010

Privacy concerns are growing these days. What with social media sites and information being collected and shared electronically, it’s natural for people to be concerned about who is seeing their information and why. When it comes to financial information, your privacy is paramount. The obvious reason is to protect against fraud and identity theft. Your financial information should only be shared with those who need to know and only under the assurance that the information will be kept private.

Fall 2007

Institutional investors have used alternative investments for years and now retail investors want to get in on the action. Is this necessarily a good thing?

Investors can be a fickle lot. Despite having substantially boosted portfolio values in recent years, traditional equities and bonds are losing favour. With the likelihood of lower returns on the horizon from both stocks and bonds, investors are throwing these traditional investments over for “alternative” investments – hedge funds, private equity funds and venture capital funds. So what exactly are these alternative investments and are they right for you?

Summer 2010

For some time now, the consensus has been that interest rates have had nowhere to go but up. Now that interest rates are on the rise, what does the increasing cost of credit mean for your portfolio?

It’s easy to believe that rising interest rates are bad for portfolios. As interest rates rise, bond portfolios may fall as existing bonds in the portfolio decline in value. On the equity side, the increased cost of borrowing takes away from earnings, at least until businesses adjust by either raising prices or cutting cost or a bit of both. But history gives us a different perspective on the effect of rising interest rates on portfolio returns.

Summer 2010

What to consider when deciding when to start receiving CPP*

T.E. Wealth Strategies first reported on the then-proposed changes to the Canada Pension Plan in the Winter 2010 issue. Now that those changes have been given royal ascent, people are wondering what they should do. Should you take CPP early, even though the discount for early payment has increased? Or would you be better off to continue to work and contribute to the plan to receive an enhanced payment at age 65 or later?

Summer 2010

New rules for the taxation of stock options could mean a rethink of your financial plan.

Stock options have always been a great compensation tool for motivating the executives and key employees who can make a significant difference to how the company and its stock perform. The theory goes that by giving employees and executives a financial stake in the company’s future, they will make decisions and efforts that will positively affect the company’s financials and, ultimately, its share price. For the most part, this arrangement has worked well and stock options have been considered an attractive perk. A little bit of that attractiveness is being eroded with new taxation rules effective in the 2010 tax year.

Summer 2010

Canada has been spared many of the disruptions experienced in the United States and is in much stronger financial shape than the other G7 countries.

Canada is experiencing a new economic expansion with real GDP expected to increase by an average of 4.0% annually. The private sector is now taking over from the public sector as the growth driver. Increases in employment have recovered three-quarters of the jobs lost in the recession. Canadians didn’t experience the kind of wealth destruction that has taken place in the U.S. and although household debt has increased, the household debt service ratio of interest payments to disposable income is still low at 7.44%. Every province is sharing in the growth rebound, with Alberta experiencing the fastest rate of growth. This picture is in sharp contrast to the United States, where real GDP growth is expected to have an average annual increase of 3.0%.

Back to the Beginning of the Year Markets retreated over the second quarter to levels not far off those at the beginning of the year. With concerns ranging from the debt crisis in Europe, weak economic news out of the U.S. and slower growth from China, the upheaval in the markets is to be expected. …

Spring 2010

In today’s world of employment uncertainty, before you sign or resign, make sure you know what you are entitled to.

If you’ve seen the academy-award nominated film Up in the Air you’ve had a glimpse into the world of modern corporate downsizing. Interspersed between the actors are interviews with Americans who had recently lost their jobs. At times the movie is funny, poignant and painful, but anyone who has been through this process personally will tell you that it’s more likely to be painful than poignant and it is never very funny. A timely release, Up in the Air, effectively captured the devastating job losses that have characterized this recession, and tapped into our collective anxiety about the precarious nature of modern-day employment.

Spring 2010

To say that the equity market returns for the year ending March 31, 2010 are impressive would be an understatement. Anyone who invested new money since markets bottomed last March has done very well. And those who stayed the course post-financial crisis are on their way to recovery. But despite the outstanding returns for the year, no market has yet to climb to its previous high.

As the sun sets on the worst decade for stock markets since the 1930s, you may be wondering what’s next. A large number of investors cut their investing teeth in the last 20 years. Investing in equity markets was something that just about everyone was doing in the 1990s – by 1999, more than half …

Getting back on track with a post-divorce recovery plan According to Statistics Canada, 38% of married couples will get a divorce before their 30th anniversary. There can be many reasons for getting a divorce but being better off financially isn’t usually one of them. The old adage that two can live as cheaply as one …

Winter 2010

With RRSP contributions due in just a few weeks, we’re in the season of what can only be described as ‘retirement excess’. You know – advertisements that show grey-haired 70-somethings living the good life, whether it is surfing in Hawaii, globetrotting in luxury or riding off into the sunset on their Harley Davidsons. These ads promote a vision of retirement that is far from reality for most people and perpetuate many of the myths that can undermine planning for a successful retirement. What’s more these ads encourage the notion that a successful retirement is all about money. While having adequate income in retirement is clearly important, having a successful retirement depends on much more. If looking after the financial aspect of retirement is all the retirement planning you do, you could be dissatisfied with how your retirement turns out.

Winter 2010

New Canada Pension Plan rules could change your plans.

Last year, the Federal government introduced changes to the CPP that will begin taking effect in 2011. The changes are a result of the regular review of the CPP that federal, provincial and territorial Ministers of Finance are required to conduct every three years. These amendments are, in Department of Finance Canada’s own words, “intended to modernize the Plan to better reflect the many different paths people take to retirement.” Here is a summary of the changes:

Winter 2010

Act now to create lasting memories with your family and friends that will live on long after you are gone.

Videocassettes gather dust. Photos fade. Hard-drives are mysteriously erased. But memories, happy memories, live on in the minds of those who made them. A conversation that begins with “Remember when we…” usually ignites a series of fond memories and warm feelings. But with today’s busy lifestyles, it’s hard enough just to be in the moment, let alone capture it for posterity. How do you get enough time with your growing children or grandchildren to create a legacy of memories? That’s a question that Valerie Pippy, Senior Vice President, T.E. Wealth in Toronto, has been helping some of her clients answer.

Year ends more positively than it began Investors may be breathing a sigh of relief as many of the dire predictions that dominated the first half of 2009 failed to materialize. There was little encouragement for investors at the beginning of the year, but those who continued to invest were rewarded by both stocks and …

A question of sustainable growth At present, there is enough policy-fueled growth momentum to see the economy grow over the next 12 months. The big question is what happens in 2011 and 2012, when government stimulus has faded and interest rates are on the rise. The sustainability of growth momentum into 2011 and 2012 will …

Fall 2009

Financial planning and the education that goes along with it are a lifelong affair.

The upheavals in the markets last year made a compelling case for financial re-planning – the process of revisiting your financial plan from time to time to make sure you are still on track. As many discovered, a downturn in the markets, no matter how temporary, can have substantial impact on your progress towards realizing your goals. But market conditions are not the only reason for reviewing your financial plan. Life events such as marriage, the birth of a child, a change in career, divorce, retirement and death of a partner are all circumstances when you would be wise to revisit your financial plan and make any necessary updates. As a result, many financial professionals view the process of financial planning as something you carry on throughout your life.

Fall 2009

Plan ahead for sustainable withdrawals to make sure your money lasts.

If people could only be certain of how long they would live, planning for retirement income would be a whole lot easier. One of the greatest fears among retirees is that they will outlive their money. But longevity is only one of the variables that influences how long your money will last. Other factors include the rate of return you earn on your investments, the time-path sequence of returns, the rate at which money is withdrawn and how inflation erodes your purchasing power. That’s a lot of variables to consider, which only reinforces the importance of having a strategic plan for taking income from your investments.

Markets are up but volatility still rules Investors who followed the old adage of “sell in May and go away” are returning to the markets after a summer break with deep regrets. The rally that began in the spring continued throughout the summer months. Those who stayed the course are seeing considerable gains from both …

Fall 2009

A little perspective can have a sobering effect. Here we are, just over a year from the collapse of Lehman Brothers, considered to be the kick-off to the financial crisis, and while unease remains, the widespread panic that resulted from the crisis has long subsided. There are now reports that the recession has ended in most developed countries including the United States. Just how was the greatest financial crisis since the Great Depression avoided? And as we look ahead, what are the risks to the fledgling recovery?

Summer 2009

At one time, diversifying into the U.S. markets was considered a “no-brainer”. The world’s largest and most dynamic economy was the place to be when it came to wealth creation. But with U.S. markets having provided little to cheer about and the U.S. economy facing its biggest crisis since the Great Depression, should Canadian investors take a pass?

Summer 2009

The financial crisis that has sent asset values tumbling could have profound implications for your estate plan.

As one of the worst performing years for markets since the Great Depression, 2008 has left many feeling poorer than they did a year earlier. As if to add insult to injury, the early part of 2009 saw values decline even further. During this period, you could look at just about every asset class and find that prices had dropped significantly. While there has been some rebound in values lately, everything from investment portfolios and real estate holdings to privately owned businesses and philanthropic funds are still off from their previous highs. In times such as these it pays to re-evaluate your estate plan. What made sense when markets were at their peak, may no longer be appropriate. Furthermore, the downturn could provide an opportunity to reduce the amount of tax your estate will have to pay.

Summer 2009

Whether you are lucky enough to have an employer-sponsored pension plan or Group RRSP, or are saving for retirement on your own through personal savings, the current economic climate is cause for concern. Major market losses, sustained low interest rates and a weak economy could mean that you’ll have less for retirement than you thought. Make sure you know where you stand – now’s the time to assess your situation and, if necessary, chart a new course.

Markets make a good start on climbing back The second quarter of 2009 turned out to be a positive one for investors with the rally that began in March carrying on until the end of June. Market performance this quarter reinforced the unpredictable nature of investing – did anyone expect a 40% rally in stock …

The shape of recovery to come Progress has been made toward a global recovery but not enough to guarantee an early recession exit. In fact, it is becoming harder to believe that a V-shaped recovery will take hold by 2010. Banking sector stabilizing Stress test results of U.S. banks have played an important role in …

Spring 2009

In the midst of one of the biggest market meltdowns in recent history, managing wealth through a disciplined investment policy is being called into question. But is there really a better way?

Staring out on the cover of the Spring 2009 issue of Globe Investor is a rather chagrined looking Donald Coxe. One of Canada’s leading money managers, Don Coxe made a big bet in 2008 and lost. He launched the Coxe Commodity Strategy Fund near the peak for commodity prices in June of 2008 only to see the fund’s value slip 55% by October. Coxe remains bullish on commodities over the long term but his experience illustrates the problem of cherry-picking hot sectors or asset classes.

Spring 2009

Our goal at T.E. Investment Counsel is to provide clients with access to investment managers who will consistently deliver added value over the long term. We take a proactive approach, meeting regularly to discuss issues and conducting qualitative and quantitative reviews at least quarterly.

Income splitting just keeps getting better Looking for ways to lower your household’s income tax bill? If you and your spouse or partner have different marginal tax rates, income splitting can help you realize substantial tax savings. The goal is to have income taxed at a lower marginal tax rate and with recent developments the …

Spring 2009

With markets having recovered around 15% to 20% of their value from the March 9th lows, investors everywhere are wondering – is this the start of the recovery or just another bounce? The answer (at time of writing) is anyone’s guess. However, we have now had three bottoms – October 10, 2008, November 20, 2008 and March 9, 2009, each successive one testing new lows. But with each of these big drops, we also experienced a subsequent quick recovery. Extreme volatility is likely to continue but for a more positive outlook to emerge, we need to see that future declines don’t result in new lows.

Spring 2009

The financial crisis began in the U.S. housing sector and its recovery path depends on housing stabilizing and, fortunately, there are now encouraging signs of a bottoming in the U.S. housing market.

Winter 2009

The Economist wrote in its December 6, 2008 issue, “If savers treated financial assets as they do other goods, they would sell them when they are expensive and buy them when they are cheap. Actually they do the opposite. They piled into the market in 1999 – 2000, at the peak and are piling out of it now.” The Economist is referring to the U.S. market, but here in Canada we have had our own version of this phenomenon. According to the Investment Funds Institute of Canada, in 2007 when markets were near their peak, net sales of mutual funds soared to $34.9 billion, the highest since 1997. By October of 2008, net redemptions were $8.4 billion and year-to-date net sales were just $2.2 billion.

Five ways to gain with TFSA’s Although you’ve been hearing about them for months, Tax-Free Savings Accounts (TFSAs) finally became available on January 1, 2009. At first glance, with a modest annual contribution limit of $5,000, TFSAs may appear to be not worth the effort. Amidst all of the hype and advertisements, T.E. Wealth has …

Rethinking retirement If falling equity markets and a slowing economy have you wondering whether you can retire on time and in keeping with your plan, you’re not alone. Here’s what our experts recommend you do. Call it a rude awakening or a painful reality check. Just about everyone is opening their investment statements and seeing …

Winter 2009

From an equity investing perspective, 2008 will likely go down as one of the worst calendar years on record. Just six months ago, the Canadian market and economy appeared to be out of sync with what was happening elsewhere in the world. Not any more. Remember the concerns over rising commodity prices and possible food shortages last summer? Since then, commodity prices have fallen dramatically, perhaps none more so than the price of oil. In May of 2008 Goldman Sachs was predicting the price of oil to hit US$200 a barrel. By the end of the year, they were calling for oil to be in the US$30 range. The collapse of the commodity markets is just one of several ills that plagued the capital markets in 2008.

Winter 2009

On December 9th, the Bank of Canada made it official – the Canadian economy was entering a recession. According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 and has been in recession ever since. In addition to the recession arriving later in Canada, several other factors indicate that it is likely to be less severe.

A letter to a concerned client from one of our Consultants putting recent market turmoil in perspective.