2022 Economic Outlook
By iA Private Wealth, January 26, 2022
*Refers solely to the Investment Industry Regulatory Organization of Canada licensed advisors within HollisWealth.
By iA Private Wealth, January 26, 2022
By iA Private Wealth, January 17, 2022
As we begin a new year, some people make resolutions like dropping a bad habit or exercising more often. Other common resolutions pertain to financial well-being, such as earning more money, watching credit card debt or investing regularly.
Working with an Investment Advisor is a good way to address all aspects of your financial circumstances in your wealth plan. Here are some key elements an advisor will cover:
As you can see, a wealth plan has many components that will impact your financial future. You’ve also seen how an advisor plays a crucial role in creating and maintaining your plan. As circumstances change (e.g., marriage, children, job, home/business ownership), an advisor can revise your plan accordingly and ensure the investment component of your plan remains sufficient to fund life’s needs.
By iA Private Wealth, January 10, 2021
It might sound like an issue specifically for winter, but deciding whether to follow the “avalanche” or “snowball” approach to tackling debt is relevant at any time of year.
If you’ve accumulated debt – something that’s more likely once the bills arrive after the holidays – trying to reduce it can seem intimidating. Where do you start? How do you limit the amount of interest you have to pay?
The avalanche and snowball approaches are proven ways to pay off consumer debt. Before we consider how each strategy works and which one may better suit your circumstances, let’s see what these strategies have in common.
For each method, make a list of all your consumer-related debts and commit to making the minimum payment, except for one. The debt balance that you’ve singled out is what you’ll target to eliminate first. Once that balance is cleared, proceed to the next balance on your list, and so on.
Organize your list of debts by the interest rate that’s being charged, from highest to lowest. The primary objective of the debt avalanche method is to minimize the overall interest you pay. After making the minimum payments on all debt balances except the one with the highest interest rate, put as much money as possible toward reducing the balance on this highest-rate debt (while ensuring you still have enough to live on and can maintain an emergency fund for unexpected, urgent expenses).
As you retire that highest-rate debt, set your sights on the debt with the next highest rate, and apply the same approach of paying down as much as you can each month, until that debt is retired. As you work through your list of balances – always targeting the one with the highest rate – you’ll reduce your debt and save on interest charges.
Organize your list of debts by the balance owing, from the lowest-dollar balance to the highest. As with the debt avalanche approach, ensure you have sufficient money to live on and to sustain an emergency fund. After making the minimum payment on all balances, your first target will be the smallest balance on your list. Each month, apply discretionary cash to eventually pay off this smallest balance, and then do the same for your next-smallest debt.
The snowball approach focuses on systematically eliminating the number of balances outstanding. It may be good for people who enjoy the sense of achievement that comes from seeing fewer bills arrive in their mailbox or inbox. A series of small wins could help people stay motivated to repay their debts.
The avalanche and snowball methods have their merits and drawbacks, but each can put you on track to eliminate debt faster. While it’s important to stay disciplined with the strategy you choose, it’s also crucial to manage future debt obligations.
An iA Private Wealth Investment Advisor can help get your budget back on track for a successful 2022. Contact one today.
By Grant White, December 03, 2021
No matter how rigorous and thorough we are when making investment decisions, some of our ideas won’t turn out as planned. But there’s a silver lining: when you sell a non-registered investment at a loss, you can use that loss to help offset any capital gains tax you owe for the current year or future years. You can also apply the loss retroactively to capital gains realized in the previous three years.
Tax-loss selling may be right for you if:
When tax-loss selling, it’s important to be mindful of the “superficial loss” rule, which says that once you crystalize a loss on a security, you can’t rebuy that security within 30 days if you want to retain the ability to use the loss to offset capital gains tax. The rule also specifies that if you bought the security within the 30 days prior to the sell date, you cannot use the loss to cut your capital gains tax.
The superficial loss rule also applies to what the Canada Revenue Agency refers to as “affiliated persons,” which include your spouse or common-law partner, or a corporation that you or your spouse or common-law partner controls. This means, for example, that if you sell a stock at a loss to lower your capital gains tax and your spouse buys the same stock a week later, you’re no longer able to use the loss to reduce the tax you owe.
Lynn invested $10,000 in each of TD Bank and Peloton at the start of the year, both within her non-registered account. Year to date (as of November 23, 2021), TD has shot up 33% to $13,300, while Peloton went the other way, dropping 71.7%.
Lynn still believes in the future of Peloton but thinks it’s time to take some profits on TD, so she sells half of her position. This triggers a capital gain of $1,650, 50% of which, or $825, is subject to tax at Lynn’s marginal rate. Since she’s in the top tax bracket, that works out to a $412.50 tax bill.
The idea behind tax-loss selling may seem straightforward, but for most investors with a well-diversified portfolio, deciding when to use this strategy – and with which holdings – typically requires professional-level judgment.
For example, you may have multiple holdings that stand out as candidates for profit-taking, but in the absence of in-depth analysis it may not be clear which ones still have meaningful upside potential and which ones are likely running out of gas and therefore worth selling off.
Grant White, CIM®, CFP® is a Portfolio Manager & Investment Advisor with Endeavour Wealth Management | iA Private Wealth in Winnipeg, Manitoba. He can be reached at (204) 515-3440 or firstname.lastname@example.org
By iA Private Wealth, December 06, 2021
Most people look forward to the holiday season because it’s a time to shift focus from work to family and friends. Whether the holiday gatherings are in-person, virtual or a combination, it’s nice to reconnect with loved ones in a festive setting.
First, create a budget for your holiday spending. Although few people enjoy going through the process of listing what gifts they plan to buy and how much money is assigned to each gift, having a budget is a practical way to keep spending under control.
If you promptly pay your bills every month, credit cards are a good way to make purchases without fronting the cash. However, many people find it easy to spend using credit and then are shocked once the bloated card statements arrive.
Many people enjoy creating their own gifts, and the recipient often treasures these homemade presents because they know how much thought and effort went into them. Think about what each person really wants or needs, and then consider if it’s something you can make. Not only does the process let you flex your creative muscles, but you’ll also save money. Buying gifts this holiday season could be more expensive than usual since higher inflation has raised costs significantly.
A trusted Investment Advisor can help you create a manageable and practical budget this holiday season. Find an advisor near you.
By iA Private Wealth, November 10, 2021
November is Financial Literacy Month. It’s a great initiative, but in reality, every month is a good time to learn about personal finances. As you gain more knowledge, you’ll become a better saver, spender, consumer and investor.
The world of financial products is more complex than ever, given the growth of online platforms. With so many financial institutions and so many products to consider, it can be overwhelming.
Before making a decision, shop around and weigh your options. Let’s say you want to open a bank account. Conduct an online search and learn what services each bank provides and what features each account type offers. Do you require a physical branch nearby, or will you do most of your banking virtually? Based on your circumstances, determine which account best meets your needs.
To satisfy regulatory requirements, financial institutions use clear, plain language in their contracts and other documents. For instance, banks provide easily understood information about their credit products, while investment managers publish materials like a Simplified Prospectus and Fund Facts document that highlight a product’s key features and risks. You should read these materials before signing any agreement, as understanding all terms and conditions will ensure you know what you’re getting into.
Protecting assets is the responsibility of every individual. Fraud and cybercrime are on the rise, targeting those who are vulnerable or careless. Scammers may call, email or text you, posing as a someone from a recognizable company or government agency. They often use aggressive tactics and threats that pressure you to provide banking or credit card information. If you question the identity of someone claiming to represent a legitimate organization, get their name/contact details and call the organization to confirm.
Everyone wants to build wealth for the future, but there are many investment products to choose from – and some are highly complex. Your advisor can help you choose products that best match your investment objectives, time horizon and risk tolerance.
An iA Private Wealth Investment Advisor can help you navigate the financial marketplace as you work to achieve your wealth goals. Speak with one today.
By iA Private Wealth, November 01, 2021
By iA Private Wealth, October 04, 2021
Having a strong brand identity is one of the best ways you can differentiate your business from the competition. Whether it’s new or established, every business can benefit from effective marketing to enhance brand awareness and generate strong leads.
Here are five basic tips to help you build a solid plan to market your small business:
There’s more to marketing your small business and brand, but these five tips provide a solid foundation to build upon. If you want more help, reach out to professionals who can support your marketing needs. Your contacts may recommend experts they’ve had a good experience with.
By iA Private Wealth, September 30, 2021
While operating a small business is challenging, it can also be highly rewarding and provide business owners with autonomy as they pursue their passion. That’s why they invest so much time, effort and money into running their businesses.
Fortunately, an Investment Advisor can help build and maintain a sound plan that considers the complexities of your business and how it fits into your overall financial circumstances. An advisor can help your business be more efficient and profitable by assessing all your income sources and expenses. Equipped with that information, an advisor may uncover strategies for earning more and spending less, paving the way for growth.
There are many benefits of working with an advisor, but it’s crucial to select one who’s right for you. During your search, find out if a candidate has experience with small business owners, since this background will be useful when addressing your financial needs.
The advisor-client partnership is built on trust and a long-term commitment to the process. To determine if your personalities mesh well, interview each candidate and request references, preferably from other business owners. Also inquire about an advisor’s employment history, such as where they’ve worked, years in the financial industry and field of practice. You’ll want to know about their professional and academic designations as well (e.g., CFA®, MBA, CFP®, CIM®).
Another important question pertains to compensation. Some Investment Advisors earn commission for each transaction – like a stock or mutual fund trade – while many are compensated based on a percentage of the assets under administration. There are other ways to be compensated, so find an advisor whose compensation model suits your service requirements.
It’s also useful to ask about their professional network. While Investment Advisors offer a range of capabilities, your circumstances as a small business owner may call for specific knowledge in other areas. For instance, your advisor may engage the services of external collaborators* such as accountants, lawyers and insurance professionals. Consider your Investment Advisor as the “quarterback” of the team, overseeing your comprehensive wealth plan and bringing in others when needed.
You can’t be an expert at everything. Just as you understand your business and industry, an Investment Advisor has deep knowledge of finances. By delegating complicated financial matters to your trusted advisory team, you can concentrate on running and growing your business.