Year-end money management strategies

These tax and investment tips could save you a bundle

Year-end is fast approaching, and with the holiday season getting into full swing, you probably won’t want to think about investments and taxes. Still, there are a few tax and investment moves you could make before Dec. 31 that could save you a few bucks in tax come next April. So here’s my annual list of favorite year-end tax and investment tips. READ MORE

Should you buy hard assets now?

Precious metals, gems a risky way to hedge risk

The headlines are hard to miss. There’s the seemingly endless tariff war between China and the U.S. Then there’s the truly endless sabre rattling in the Middle East, most recently between Turkey and the Kurds in Northern Syria. How about the tit-for-tat oil tanker attacks and hijackings between Saudi Arabia and Iran? Brexit anyone? Efforts by Democrats to impeach U.S. President Donald Trump. Mass rioting in Hong Kong, Chile, Bolivia. Separatist sentiments rising in Canada following the election of a weak minority Liberal government. For some investors, it’s all a bit much, and many are asking if market risk has cranked up to new highs. Is now the time to switch at least some of your funds to so-called portable hard assets, like gold and gemstones, which tend to keep their value in times of turmoil? READ MORE

Dealing with market scares

Resist the urge to “do something”

Unless you’ve been away on vacation in a secluded place, you’ll know that stock markets sank alarmingly earlier this month as the U.S. Treasury bond yield curve “inverted” – that is, the yield on short-term bonds climbed above the yield on long-term bonds, albeit only very briefly. Fearing that an inverted yield curve signals a recession (as it often has historically), traders went into full-on panic mode, dumping stocks and moving to “safe haven” investments, like gold and, yes, bonds. The big North American stock market indices consequently lost ground, some sinking by triple-digit amounts in a span of two days. So is it really time to panic, sell all your stocks, and hunker down with your piles of cash? READ MORE

Don’t panic! But do review your portfolio

Some annual housekeeping to keep allocations on track

Concerns about the health of the global economy, the effects of the U.S.-China trade and tariff dispute, rising interest rates, and the flattening yield curve combined to make the stock market slump of the fourth quarter one of the worst in a long time. Toronto’s benchmark S&P/TSX Composite Index dropped 11% in the quarter, as a 38% drop in the price of crude oil weighed on energy producers. The index ended the year with an annual loss of 11.6%. Similarly, New York’s blue-chip S&P 500 Composite Index plunged 14% in the fourth quarter for an overall 6.2% loss in the year. So is it time to sell stocks and re-set your portfolio with a heavier weighting to cash? READ MORE

Four investing mistakes to avoid in 2019

Novices especially prone to classic investment pitfalls

Markets go through periods of volatility, and we are in one such period now. Market sentiment has been decidedly sour for the past few weeks. The Dow Jones Industrial Average recently sank into correction territory. And crude oil prices have slumped, hitting the energy sector hard. Economic growth in China is coming in slower than expected rattling exporters and commodity producers. So what’s an investor to do? Do you sell your stocks, get out of the market, and put your money under a mattress? But that would be precisely the wrong thing to do. Investors can go a long way to calming down if they simply avoid these four classic investment mistakes.

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Year-end tax and investment planning tips

They could save you a bundle

Even though most of us are preoccupied with other things at this time of year, there is a handful of year-end investment and tax tips that make a lot of sense to look at now. That’s because they could save you money now and next April, when it’s time to pay your taxes.

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How inflation makes your money disappear

Protect your portfolio against inflation erosion

The Bank of Canada raised its interest rate to 1.75% on Oct. 24. It said that CPI inflation dropped to 2.2% in September, but that its core measures remain around 2%. For many novice investors, this may sound like a foreign language. What do these various inflation measures mean? And in any case, 2% inflation seems really low, so do you really need to be concerned about it for your longer-term investment portfolio? The short answer is yes, you should take inflation into account, because it can seriously erode your purchasing power over the long term. READ MORE

DIY dangers!

When your investments take control of you

There’s nothing quite like the thrill of managing your own investments. That is, until things go south and you wonder whatever possessed you to buy that two-times daily bull crude oil ETF! Then there’s all that paperwork to contend with (what the heck is a “T3 – Statement of Trust Income Allocations and Designations”?) When should you sell to take a tax loss? And can you apply it against gains? Those brokerage fees that get into triple digits can really give you that sinking feeling at year-end (are they deductible or not?). Take heart. You’re not doing anything wrong. But you may have fallen into the trap that so many do-it-yourself investors do. You’ve let your investments start controlling you instead of the other way around. READ MORE

Fixed-income investing in a rising rate environment

Carefully selected bond funds as part of a diversified asset mix

If you haven’t checked your portfolio for a while, you may have noticed that the performance of your bond mutual funds and ETFs has been lagging a bit. And you may be thinking of selling or switching. But before you do, think about how bonds are priced and the purpose they serve in a portfolio. While bonds are the classic defensive investment, and should generally be a part of a well-diversified portfolio as an asset class that is uncorrelated to equities, their prices react directly to the prevailing level of interest rates. READ MORE

The right financial advice doesn’t cost, it pays

Choosing the best financial advisory team

Once you’re established in your profession or career, and you’re accumulating a sizeable nest-egg, getting financial advice from your second cousin or the bank teller just won’t do. You need to get some professional money advice. But where to begin? There seem to be so many people offering advice, and you often read of people losing their investments through fraud or incompetence. Begin by asking yourself what you think you might need a financial advisor to do. Very likely, you’ll be running across some of these experts. Here’s a look at what they all do. READ MORE

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