December 2019
In looking back on 2019, it seems that the majority of the uncertainty we've experienced (and continue to experience) relates to words that start with T. From Trump, trade, tariffs and Trudeau, sentiment is still dampened by the lack of resolution on all fronts. Elections failed to provide a majority government in Canada and the media is gearing up for a 2020 battle royale in the US. Trade progress with China has gone cold and will likely stay frozen through the winter. The factors that will keep the economy spinning are aggressive central bank policy and a fearless consumer. With a solid Black Friday in the books for most e-commerce platforms, it seems that nothing will stop the US consumer from hunting for more. The Christmas shopping season may be the biggest determining factor for the next set of corporate earnings. What is on your gift list?
Happy Holidays
As snow starts to fall on our local mountains and winter storms pummel the East, we are warmed by the memories of the year behind us and look forward to spreading some cheer with our friends and families over the coming weeks. Lights are glinting all over the city and we note the return of the Holiday Markets and seasonal attractions springing up all over town. December is a time for celebration and joy. Whether staying near or venturing far, we hope that your December is full of warmth and happiness.
From our families to yours, we wish you the very happiest of holiday seasons.
In the Shopping Cart: Let's Get Tactical
This month our shopping cart highlights a unique investment strategy in the Purpose Tactical Asset Allocation Fund. This dynamic strategy is tactical in its approach - working within the confines of a traditional portfolio and utilizing a non-emotional, rules-based system to take advantage of short-term market imbalances. Simply put, this system helps insulate a portfolio from market declines by tilting its overall holdings towards a higher bond allocation during periods of weakness market weakness. Conversely, the fund will allocate increasingly to equities during market advances.
With today’s more pronounced market volatility and the ever-increasing uncertainty around the impact of trade and central bank policy, Tactical helps to quickly rebalance accounts for defense and offense on a daily basis. For these reasons, we see the Purpose Tactical Fund as a smart allocation within a well-constructed portfolio.
Click here for a very detailed analysis of the Tactical Fund.
The New Year is Near
As a reminder, the countdown is on for completing any of your 2019 items on your to-do list! We noted the Year End Tax Planning Checklist in our commentary last month. If you have any questions please give us a call.
Around Christmas and New Year Day there are seasonal closures and reduced volumes on most markets. If you have any transactions planned for later in the month, please let us know at your earliest convenience so that we may plan accordingly.
As we approach 2020, we would like to remind you that the Tax Free Savings account contribution limit will increase by $6,000 in January, raising the lifetime limit to $69,500*. The TFSA is one of the most efficient ways to invest and we recommend that everyone maximize their TFSA contributions every year.
*$69,500 will be the cumulative limit for Canadian residents who have been in Canada and over 18 since 2009
In the Spirit of Giving
The holidays tend to warm our hearts as a time of giving. Sharing our bounty with those around us, it is often not limited to family, friends and coworkers. It is also the season for giving to those we have never met and may never see; those that are not so fortunate and might need a helping hand. With healthcare causes, humanitarian efforts and environmental initiatives among countless others, there are many ways that we can improve the world around us.
The National Post recently shared an article noting some of the tax efficiencies and strategies that can help you make the most of your donations. It illustrates specific examples of how the tax credits work when you donate. You can find it here.
Charitable giving is a major pillar of most wealth plans. Finding ways to maximize your impact through tax efficient donations and creating a legacy of giving for those in your family are just two ways that we help clients make the most of their philanthropic efforts. For more information on how we can help you plan your charitable legacy, visit our webpage here.
Digital Security and Preventative Measures
Fraud and theft is another hallmark of Winter as Grinches come out of hiding and descend on the world once more. In the world of online shopping, parcel theft is a major issue as those boxes get dropped off on our doorsteps. Car theft rises due to holiday packages being left in vehicles. Do what you can to mitigate these risks by keeping your parcels out of sight.
Email phishing and phone scams are on the rise as criminals find new ways to steal from us. We would like to encourage everyone to remain vigilant and to reach out to some of the most vulnerable people in our circles. The digital world is new to some and comes with risks that they might not be familiar with.
As a good general rule, anytime you are sending funds to a third party we would recommend double checking all the information directly with that party, ideally verbally. Hackers are getting increasingly sophisticated and extra due diligence should be employed any time you're moving money around. Fraudulent emails can come from anyone, even family and friends.
If you are suspicious, pause and verify. The alternative can be quite costly.
Chernick & Associates Wealth Management Group
Richardson GMP Limited
Guinness Tower
1055 West Hastings Street, Suite 2200
Vancouver, BC V6E 2E9
Tel.: 604.640.0400
Toll Free: 1.866.640.0400
www.ChernickandAssociates.ca