Fred's Market Update: June 2020

Many economists were expecting job losses for May in the range of 8.5 Million in the U.S., but instead the actual numbers showed an increase of an additional 2.5 Million people employed!

 

While there are now more than 108K people who have died in the U.S. from Covid-19 and there are riots in over 40 American cities, it appears stock markets do not care and continue to move higher.

 

I appreciate this has been a difficult period of time for everyone considering the rampant and invisible virus with no treatment or vaccine available, an economy that is in essence closed, and most of us are required to stay home. Suffice to say, it has been a most difficult test.

 

Unprecedented Central Bank and Government support combined with stimulus packages have been the fuel that has kept the Canadian, American, & European economies from collapsing.

 

In an attempt to promote a surge in capital expenditures and consumption which will help restore GDP growth we are seeing record low interest rates which could, in turn, ultimately result in higher inflation.

 

Possible changes coming could include increases to marginal tax rates, capital gains and dividend income and passive income due to the amount of government support and stimulus that has been dealt out.

 

With that said, professional tax and estate planning is more important than ever. Depending on your current financial situation, we may want to explore the use of tools as Flow Through Shares, Interest Expense on Investments, Permanent Insurance and Segregated Mutual Funds to name a few.

 

I would be happy to have a zoom meeting or telephone call to discuss any of the above ideas if you wish. Send me an email or give me a call to set this up.

 

Have a wonderful weekend and be safe and healthy.

 

Sincerely yours,

 

Fred Banwell

 

 

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