Well, 2022 was an interesting year to say the least, especially when it came to the markets. The bond market had one of its worst years on record, while the S&P 500 was down -18% and the TSX was down   -5.6%. Inflation and interest rates dominate the headlines. I know, it’s a downer, right? But there’s no point in tiptoeing around it. I even shared a laugh with a client recently when we both used the same word to describe the past year – I’ll let you use your imagination.

 

However, being in this industry has made me well aware that there are always highs and lows – and some of the strategic ways to navigate them. As my client and I chatted, we acknowledged that the markets weren’t great, but they’re not the only relevant indicator when it comes to building wealth. Seeing the full picture is important.

 

In a year where markets were down, we were able to help our client take advantage of tax loss selling to capitalize on losses and offset previous or future gains. We discussed life insurance to further diversify the investment portfolio and create all-encompassing financial plans. Other clients are exploring philanthropy as a way to support community in difficult times, honour their values, and minimize their tax burden.

 

I’ll say it again: It's not all about the markets. This past year we’ve explored declining house prices, and the potential of real estate investment, referring clients to trusted mortgage brokers to help guide them through the uncertain interest rates. Expected this April, eligible Canadians will be able to open a Tax Free First Home Savings Account (FHSA). If approved, this new registered plan will allow first time home buyers to save up to $40,000 tax-free. Contributions to the account are tax deductible (like an RRSP) while withdrawals are non-taxable (like a TFSA). The annual contribution limit is $8,000 and withdrawals do not need to be repaid. This account is a great way to save for a first home in a tax efficient way, and we’re making sure that our applicable clients hear about this account from us first, and fold it into their overall financial plan.

 

There are so many pieces that make up wealth management. It’s almost like a puzzle. At first it’s just a bunch of pieces, but with persistence and focus, it starts to come together. Whether it’s investing, estate planning, philanthropy, or any other number of things that are important to you, financial advisors are here to make sure the pieces fall into place.

 

- Monica Mazun

Associate Investment Advisor