We all had to adapt to a new reality this year. We came together to face these difficult times both personally and professionally. We did everything in our power to maintain our service model and optimize your finances during a challenging market environment. We thank you for your patience, cooperation, and ongoing support.

With good news on the horizon thanks to a new vaccine, we are looking forward to 2021 being a year of renewal and opportunity.

In our final blog entry of 2020, we provide you with an “everything update”, a list of recent headlines in the areas of financial aid, investments, and taxation.

Please note that due to the holidays, our office will be closed on December 25 and January 1. Our team will have reduced service between December 21 and January 3, processing only urgent requests (contributions, withdrawals) during this time. We will be back to full service on Monday, January 4 to begin the new year together.

Anthony, Sandrine, Frank, & JoAnne

Financial Aid

Online application for the BC Recovery Benefit begins on December 18

Investments

From Myles Zyblock, setting the stage for 2021

Worried about investing near all time-highs?  All-time highs are not unusual

BlackRock’s current positioning: Upgrade U.S. equities

Brexit: What you need to know about the UK leaving the EU

How does Gold fit in a portfolio?

The Canada Pension Plan Investment boards commits $200M to a renewal energy projects

Taxes

It’s official: CRA allows simplified home office deduction process (max $400 deduction):

Year-end tax tips

Pandemic spending has budget watchers once again fretting about capital gains tax hikes

New York Property taxes will increase 5% next year

ICBC to drop rates by 15%

Retirement / Registered Accounts

The 2021 TFSA limit will remain $6,000

CPP premium increase to cover program enhancements will continue in 2021

Deferring CPP payments is the surest way to secure lifelong income (two articles on this topic)
Article 1
Article 2

COVID-19

Health care worker becomes first person to receive vaccine in B.C.

All Canadians who want a shot will be vaccinated by September 2021, public health agency says

Province confirms 1,215 British Columbians vaccinated so far

Canada expected to receive 168,000 doses of Moderna vaccine by month’s end, Trudeau says

The post The Everything Update appeared first on Smof Investment Manager, LLC.

Further downside risks include the U.S. elections, global trade tensions, aging demographics, and technological disruption. 

However, no two economic cycles follow the exact same path. For example, despite weaker corporate earnings, global equity markets showed renewed strength last year, and with several central banks cutting rates in recent months to encourage business activity, this may be a longer than usual “late-stage”.   

We compiled 20 charts that summarize the economic and financial picture for 2019 and 2020:

1: 2019 Equity returns were strong, more than recovering from the 2018 pullback 
After a turbulent finish in 2018, markets rebounded across the board in 2019 to end the decade on a strong note.  Here are the 1, 5, and 10 year returns for the major indexes:

2 & 3: TSX (Canadian Market) and S&P 500 (U.S. Market) sector returns
Last year, the top-performing Canadian sectors were Information Technology, Utilities, Industrials, Materials and Financials. Overall, returns for the 11 S&P/TSX sectors were strong, except for Health Care. This sector declined 10.9%, led by the “return to earth” performance of many of the previous year’s “high-flying” cannabis stocks.  One of the common themes across the best-performing sectors was the market favouring stocks that look like bonds (high-yielding sectors such as Utilities and Financials).   

For the S&P 500, the strongest returns in 2019 were in the Information Technology, Utilities, Industrials, Materials and Financials sectors. The wide gap (75% for the TSX and 40% for the S&P 500) between the best and worst performing sector makes a strong case for diversification.  

4: U.S. equity valuations to end 2019 were slightly above the historical average
The chart below tracks various valuations methods for the S&P 500. You can read more about the P/E ratio and expected market returns in Anthony’s article, New Decade, New Expecations.

5: Economic Report Card
From RBC Global Asset Management (RBC GAM), here is an overview of recent positive and negative developments as 2019 wound down, as well as some “interesting” items that may end up in positive or negative territory when the dust settles.

6 & 7:  Most countries are exhibiting late–stage market signals
Another chart from RBC GAM. A gauge of various economic metrics suggest the U.S. is most likely in a “late cycle” phase. 

Fidelity’s chart below presents a similar case. Most countries are firmly in-between the expansion and contraction phases. 

8 & 9: Global GDP growth slowed as expected in 2019
Last year, we speculated a reversion to about 2.0% in 2019 was a likely outcome. Actual Q3 year-over-year growth was 2.1%. Looking to 2020, the U.S. economy could see a bump if any of the economic headwinds (for instance, the U.S.-China trade dispute) were removed, with additional Quantitative Easing (QE) or with a continued “lower for longer” rate strategy at the Fed.

The Purchasing Manager’s Index (PMI – measure of manufacturing strength) data shows that only a handful of global economies continue to operate in expansion mode. 

10: U.S. unemployment hit lowest level since the late-60s
Unemployment hit a 50-year low in 2019. Persistent factors limiting labour force growth (baby boomers retiring, tight immigration policy, etc.) remain. Wage growth also ticked upward from 3.2% in November 2018 to 3.7% in November 2019. 

11: Inflation was stable 2019, but expect an uptick in 2020
U.S. inflation, measured by the personal consumption deflator, dropped from 2018 levels (1.9%) and sat at 1.6% as of November 2019. Rising wages and lowering unemployment have not impacted inflation as one might expect. The U.S. Federal Reserve (the Fed) will likely continue its “lower for longer” rate strategy to stimulate inflation up toward the Fed’s 2.0% target.

12: U.S. Central Bank changes course, lowering key rate 
After slowly raising rates the last few years, the Fed and other central banks around the world made an abrupt 180 in 2019 and cut their key rates. Global Central Bank activity could be described as “over-reactionary” in 2018, as tightening effects helped lead markets downward to end the year. 2019 saw a reverse, with nearly 40% of central banks easing throughout 2019. 

13: Volatility during U.S. election primaries is often followed by strong returns
Historically speaking, whether a Democrat or Republican is elected President has had little bearing on market results. However, investors who chose to ride out the volatility experienced during primary season tend to be rewarded in the following 12 months.

14: Brexit will hurt the United Kingdom’s GDP…
Note that this chart was as of October 31, 2019. As expected, Boris Johnson was elected Prime Minister of the United Kingdom. The most likeliest Brexit outcome is Johnson’s “Soft” Brexit*, which would still negatively impact the U.K.’s GDP. However, this outcome would still be superior to the “Middling” or the “Hard” Brexit scenarios.

*Editor’s Note: This week, parliament voted Boris Johnson’s “Withdrawal Agreement Act” into U.K. law. The U.K. is now set to leave the European Economic Union on January 31st.

15: …But international equities continue to offer long-term opportunities
Structural issues in Europe have resulted in lower valuations for European equities relative to the U.S. Historically, the U.S. and Europe have had alternating periods of outperformance.

16: Climate change’s first “corporate casualty”
2018 saw California wildfires run out of control, culminating with the so-called “Camp Fire” which caused ≈ $7 Billion in property damages, including the complete destruction of over 14,000 homes in November. Lawsuits ensued. The Pacific Gas & Electric Corporation (PG&E), under extreme financial duress due to the incoming lawsuits, filed for Chapter 11 Bankruptcy protection on January 29, 2019. PG&E is now widely cited as the first corporate casualty of climate change.

17: Broad diversification is a great risk-mitigator
2019 returns exceeded most analysts’ expectations and there is reason to be cautiously optimistic as we look ahead to 2020. With valuations for many assets near record highs, a well-diversified investment portfolio can help to maximize returns and mitigate risks as they occur.  

18: Intra-year declines happen every year, don’t panic!
History has shown that a large majority of calendar years see at least one market pullback of 5% or more. Last year was a perfect example of this, with the S&P 500 finishing up 29%, but declining 7% in May. It is generally a good idea to ride out the volatility, as markets always rebound over time.

19 & 20: Bull (rising) markets are longer and stronger and last longer than bear (declining) markets
Going back to the mid-1950s, the average bull market gain has seen the TSX gain 129% with an average length of 54 months, while the average bear market sees the TSX drop by 28% while lasting only 9 months. As we can see, bull markets last longer and more than make up for their preceding bears. 

Using data going back to The Great Depression, we see that the average S&P 500 bull market is also 54 months and the average total return is 164%, whereas the average bear market lasts 22 months but sees a 42% drop. Once again, the average bull market lasts longer and gains more than the preceding bear market lasts & drops.  

Sources: Capital Group, Fidelity, JP Morgan, RBC GAM, NEI Investments, Mackenzie, Forbes.com, CI Investments, Sky News 

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post 20 Charts for 2020 appeared first on Smof Investment Manager, LLC.

Happy New Year!

After a difficult 2018, where markets drew down by ~20% from July until December 24th, markets rebounded handsomely in 2019, with strong returns across the board.

The Nasdaq, one of the major U.S. indexes, led the way with a final return of 35.24%. On the lower end of the scale, the FTSE 100, the United Kingdom’s major index, gained “only” 12.31%, no doubt hampered by the ongoing Brexit saga. In Canada, the S&P/TSX Composite enjoyed a gain of 19.13%.

All in all, it was a great year for portfolio returns.

You can look forward to our January E-Newsletter, which will include some useful informational pieces including a full market outlook for 2020, in mid- to late-January.

2019 Results – By The Numbers

Sources: Yahoo Finance, CNBC.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post 2019 Market Results appeared first on Smof Investment Manager, LLC.

Boris Johnson’s Tories Win Decisive Majority in UK Election

Boris Johnson has won another term as the Prime Minister of the United Kingdom. His Tories gained 66 seats, improving from 299 seats previously to 365. In the process, the Tories secured a majority in the 650-seat UK parliament.

Their mandate is clear: finalize the UK’s exit from the European economic & political union, and to do so by the end of 2020. The current Brexit deadline is January 31, 2020.

The Pound Sterling, a bellwether of international confidence in the UK’s economy, shot up on the news of a Tory majority.

Major domestic European and Asian indices, such as in England (FTSE 100), France (CAC 40), Germany (DAX), Switzerland (Euro Stoxx 50), Japan (Nikkei 225) and China (Shanghai Composite Index) closed the week positively.

North American markets also reacted positively on the election news, with the Dow Jones, S&P 500 and Nasdaq hitting intraday all-time highs. The S&P TSX Composite closed just above the 17,000 mark.

Weekly Update – By The Numbers

Sources: theguardian.com, irishtimes.com, Yahoo Finance, Advisor.ca

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post Weekly Update – December 13, 2019 appeared first on Smof Investment Manager, LLC.

Here is where markets stand for 2019 (year-to-date return as of August 30. Foreign market returns are expressed in Canadian dollar terms):

–TSX (Canada): 14.8%
–DOW Jones (U.S.): 10.5%
–S&P 500 (U.S.): 13.9%
–FTSE 100 (UK): -0.4%
–DAX (Germany): 7.5%
–MSCI EAFE (Europe and Asia markets): 4.6%
–MSCI World (Aggregate of all global markets): 10.8%
–TMX Canadian Universe Bond: 8.7%

Following last fall’s decline, stock markets experienced a v-shaped recovery from January to June 2019. The ‘Powell pivot’ (the U.S. Federal Reserve Chairman’s change in approach to monetary policy) and hopes of more Chinese fiscal and monetary stimulus and the end of the trade war were the primary reasons behind the recovery.

U.S. indices continue to hover near all-time highs despite the uncertainty created by the U.S.-China trade dispute, growing trade protectionism, Brexit, the weakening euro zone, and other macro and geopolitical risks. Although the U.S. economy remains stable, there are signs of the global economy slowing and corporate earnings growth trends continue to decline.

We generally do not recommend any attempts to time the market by making drastic portfolio changes. However, there are tactical moves investors can make to position their portfolio more defensively while maintaining their overall asset mix, if their situation calls for it. For example, those who plan on retiring or drawing heavily from their portfolio in the next few years should reposition their portfolio accordingly.

If you are behind on your financial news, here are a few links to get you caught up:

Smof Investment Articles

2019 Mid-Year Outlook

Yield Curve Inversion and 800-Point DOW Drop

Odette & Terry got married!

Other Useful Articles

Will a trade war push the U.S. economy into a recession?

Defensive investing has paid dividends in down markets

We hope you find our September newsletter articles useful. As usual, everyone’s situation is unique and there is no single solution for everyone. If you have questions or concerns about your investments, please feel free to contact us.

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post Our September 2019 E-Newsletter Is Here! appeared first on Smof Investment Manager, LLC.

Boris Johnson Confirmed as New British Prime Minister

In the wake of Theresa May’s departure from 10 Downing Street following her formal resignation on July 24th, Boris Johnson was confirmed as Britain’s next Prime Minister. In his opening speech outside the PM’s residence, Johnson addressed Brexit, clearly his highest-priority task.

While economists believe a No-Deal Brexit is in the cards, PM Johnson fired back, guaranteeing in no uncertain terms that Britain would leave the European Union by October 31st of 2019. Johnson stated that he has “every confidence that in 99 days’ time we will have (left the EU with) a new deal, a better deal.”

He further stated that “the doubters, the doomsters, the gloomsters, they are going to get it wrong, again,” and that “the people who bet against Britain are going to lose their shirts, because we’re going to restore trust in our democracy.”

His first move following his speech was to re-organize his cabinet, replacing “Remainers” with Brexit-believers.

Philip Hammond, the British Chancellor of the Exchequer (similar to the Canadian Finance Minister), resigned the same day, refusing to guide Britain out of the EU without a deal.

Economists do not agree with Brexiters’ outlook of a no-deal economic disruption only taking place over the short-term; the wide prediction is a longer-lasting, deep recession.

As a reminder, a no-deal Brexit means that effective November 1, tariffs will be placed on goods moving from Britain to all 27 EU countries, and vice-versa. There will be several other knock-on effects from a no-deal Brexit, such as being removed from trade agreements that the EU had negotiated with non-EU countries, such as Canada.

The British Pound Sterling has already declined to almost a two-year low. Immediately following the original Brexit vote in June 2016, the Pound Sterling was valued at $1.50USD. As no-deal talk has gained steam in recent days, the Pound has slumped, hovering around $1.24USD.

Sources: CBC.ca, Advisor.ca

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post Weekly Update – July 26, 2019 appeared first on Smof Investment Manager, LLC.

2019 Mid-Year Outlook

During this time of year, most investment firms release a mid-year or 3rd quarter market outlook. As usual, some indicators are supportive of a rising market, while others are not. We’ve culled all these outlooks into the following short summary:

Big Picture – Central Bank Activity: Markets experienced a quick recovery following last fall’s pullback. The U.S. Federal Reserve’s (the Fed) decision to pause rate increases and allow for lower-for-longer rates are extending this economic cycle. Central banks from around the world are either following suit or have resumed/revived stimulus measures.

The market expectations are for the Fed to cut rates by 0.50% to 0.75% by the end of 2019. This will be supportive for both equity and fixed-income markets.

Big Picture – U.S. / China Politics: U.S. President Donald Trump’s tariff increase on Chinese imports in May halted this year’s equity market recovery. While the stock market has since rebounded, the lasting impact can be seen in falling long-term government bond yields, the inverted U.S. yield curve, the slowdown in global trade and weak global manufacturing numbers.

The current consensus on the yield curve inversion is to see if it persists for a few more months before taking it seriously. A combination of Fed easing, China stimulus, and trade compromise could make the recent inversion a false signal.

Big Picture – Corporate Profits: Late-cycle conditions are mounting. Rising wages will put pressure on profits, plus a flood of corporate debt could pose problems when the tide turns. Increasing wages inevitably put pressure on profit margins and trigger market volatility.

Europe / Brexit: The ongoing Brexit uncertainty continues to weigh on the British economy. Analysts believe the British Pound Sterling will remain volatile in the short-term, but a rebound in the currency looks likely if the UK’s new Prime Minister can secure a deal with Europe, or if a second referendum is called.

But don’t give up on the UK / Europe. The U.S. has rallied over 300% since the bottom of the 2008 financial crisis. The International space has taken a little longer to catch up. On a relative valuation basis, international markets appear to be trading at a 20% discount to the US market or a 10% discount relative to their historical average:

Solution – Update your equity portfolio: Not all equities are equal. For example, a large-cap telecommunications or utility company will have very different risk/reward properties than an up-and-coming technology or mining firm. Different kinds of equities offer a range of characteristics beyond just risk and return. When an investor is in his/her working years, equities can take a more aggressive, growth-orientated approach. As an investor approaches retirement and eventually retires, the characteristics of equities within the portfolio can evolve, taking on a more defensive, equity-income posture. The chart illustrates how equity allocation can be re-characterized over time, in order to pursue investor objective.

Solution – Keep emotions in check and stay the course: Investor psychology tends to creep in when markets are volatile. A bias of loss aversion can influence investors to want to cash out; however, staying the course over the long term has proven to be the better option, historically.

Solution – Ignore the forecasts: There are many credible and educated sources out there, but no one can accurately and consistently predict the future.

At the beginning of 2019, The Wall Street Journal surveyed economists to predict where interest rates would be in June and December of 2019. The graphic below charts these predictions (orange lines) with the actual yield (black line). As you can see, no one came close to predicting the dramatic decline in rates.

We want to keep you informed and educated, but we concede that we don’t know what will happen tomorrow or next year. For this reason, we promote setting a long-term asset allocation, weathering pullbacks and investing in quality companies as being the keys to investment success.

Table: Actual Yield on the 10-year Treasury (black line) Note versus January 2019 analyst predictions (orange lines)

Conclusion: Central bank policy and current valuations suggest equity funds may have room to run, but be ready for a bumpy ride. Investors should expect more late-cycle volatility. It’s not too early to prepare portfolios for rougher seas ahead.

Companies that load up on debt to cover share buybacks and dividends are susceptible to dividend cuts (and stock price declines) when times get tough. In an environment of slowing growth, it makes little sense to invest in feast-or-famine businesses because the feast may be some time away. Higher quality companies are always our preference and we are putting further emphasis on companies with high profitability, returns on invested capital, better balance sheets and better cash generation.

Sources: Capital Group, Dynamic Funds

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post 2019 Mid-Year Outlook appeared first on Smof Investment Manager, LLC.

Victoria Day Office Closure

Please be advised that our office will be closed on Monday, May 20th to observe the Victoria Day stat holiday. We will resume normal office hours of 8am-5pm on Tuesday, May 21st.

On behalf of all of us at Smof Investment, we hope you enjoy your May long weekend!

Trade Uncertainty Continues to Weigh on Markets

The TSX, the Dow Jones, the S&P 500, and the Nasdaq all finished lower on Friday on continued trade tension.

The Chinese yuan also suffered as mounting tariffs and a front-page article in the Communist Party’s People’s Daily news paper stating the trade war would make China stronger, and the US will never “bring the country to its knees”.

The trade dispute has exceeded many analysts’ expectations of short-term resolution.

In North America, the US and Canada agreed that the US would remove tariffs on Canadian steel & aluminum, and in exchange, Canada would limit its “dumping” of Chinese metals and other countries out of the US, in a protectionist move by the American delegation. This announced agreement did offer a short-lived boost to markets, though fears over US-China trade dispute mitigated the Canada-US agreement’s positive market impact.

No Brexit Deal; British PM May Could Resign

As Brexit talks across parties broke down (again), the British pound sterling hit a four-month low. Reports that British PM May has agreed to choose a successor via an election served to pull the pound sterling lower as well. She is prepared to resign if her Brexit deal is rejected a fourth time.

Mrs. May has survived a non-confidence vote in late-2018, so she can’t be challenged until late-2019; thus, the fourth rejection would likely result in the voluntary election call on the part of the PM.

Boris Johnson, one of the authors of the current situation Britain faces – he was a leading figure in the Leave Campaign – has stated his intention to run if PM May indeed resigns.

Sources: Globe Advisor, BBC.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

The post Weekly Update – May 17, 2019 appeared first on Smof Investment Manager, LLC.

Market Rise Again on Brexit & U.S.-China Trade Optimism

Markets rose to five-month highs to close out the Friday session. Renewed optimism on the U.S.-China trade front, combined with hopes of a successful last-minute Brexit deal vote to take place next week, drove markets upward.

After a rocky 2018, markets have mostly trended upward thus far in 2019. The TSX is now up 12.69%, the Dow Jones Industrial Average is up 10.81%, the S&P 500 is up 12.60%, and the NASDAQ has jumped by 15.89%.

2018 Tax Deadline

The 2018 tax deadline for most Canadians is April 30, 2019. If you or your spouse are self-employed, then your return is due June 15, 2019.

Regardless of when your taxes are due, if you owe money on your return, it is due on April 30, 2019.

Let us know if you have any questions about your tax return.

Our tax checklists are available here.

Weekly Update – By The Numbers

North America

• The TSX closed at 16,140, up 144 points or 0.90% over the past week. YTD the TSX is up 12.69%.
• The DOW closed at 25,849, up 399 points or 1.57% over the past week. YTD the DOW is up 10.81%.
• The S&P 500 closed at 2,823, up 80 points or 2.92% over the past week. YTD the S&P 500 is up 12.60%.
• The NASDAQ closed at 7,689, up 281 points or 3.79% over the past week. YTD the NASDAQ is up 15.89%.
• Gold closed at 1,302, up 5.00 points or 0.23% over the past week. YTD gold is up 1.32%.
• Oil closed at 58.41, up 2.45 points or 4.38% over the past week. YTD oil is up 27.45%.
• The USD/CAD closed at 0.7493, up 0.0036 points or 0.48% over the past week. YTD the USD/CAD is up 2.25%.

Europe/Asia

• The MSCI closed at 2,109, up 58 points or 2.83% over the past week. YTD the MSCI is up 11.88%.
• The Euro Stoxx 50 closed at 3,386, up 102 points or 3.11% over the past week. YTD the Euro Stoxx 50 is up 12.83%.
• The FTSE closed at 7,228, up 124 points or 1.75% over the past week. YTD the FTSE is up 7.43%.
• The CAC closed at 5,405, up 174 points or 3.33% over the past week. YTD the CAC is up 14.25%.
• DAX closed at 11,686, up 228.00 points or 1.99% over the past week. YTD DAX is up 10.67%.
• Nikkei closed at 21,451, up 425.00 points or 2.02% over the past week. YTD Nikkei is up 7.17%.
• The Shanghai closed at 3,022, up 52.0000 points or 1.75% over the past week. YTD the Shanghai is up 21.17%.

Fixed Income

• The 10-Yr Bond Yield closed at 2.59, down -0.0400 points or -1.52% over the past week. YTD the 10-Yr Bond Yield is down -3.72%.

Sources: Dynamic Funds, Globe Advisor

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

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 2019 B.C. Provincial Budget Announced

The B.C. New Democrats released their second provincial budget this week. While the budget mostly stuck to the script, there were a few surprises. Here are some key takeaways:

The B.C. Child Opportunity Benefit. A major addition to help lower-income families, this new benefit will replace the Early Childhood Tax Benefit and offers lower-income families a substantial increase in both monthly benefits and eligibility. The COB will cover all children under the age of 18, while the ECTB ended once a child turned six.

A family with income below $25,000 per year will receive a refundable tax credit of $1,600 for the first child, $1,000 for the second child, and $800 for each subsequent child.

The amount of the benefit will scale down as income scales up. Families with one child will receive no benefit at an income level of $97,500, while families with two children will receive no benefit at the $114,500 income level.

In order to align with the federal tax code, this benefit will take effect and can be applied for starting October 2020.

No Daycare. A key platform promise was to introduce universal, $10-a-day child-care. While the 2019 budget mentions last year’s commitment of $1 Billion to create child-care spaces and reduce daycare costs over three years, it did not address the universal child-care promise.

Interest-Free Student Loans. The provincial portion of student loans will be interest-free, effective immediately. This covers existing, current student loans as well as new loans going forward.

Disability & Income Assistance Rate Increases. People receiving income assistance or disability assistance will get $50 more each month, starting in April 2019. Last year, the NDP budget increased these payments by $100 per month.

A single, employable person on income assistance will now be eligible for $760 per month, while a person with disabilities will now receive $1,183 per month.

Health Care. An expansion of the pharmacare program with additional $42 Million in funding. This will cover more drugs, including diabetes, asthma and hypertension medicines.

$30 Million in additional funding to combat the drug overdose issue.

Mental Health programs targeting the prevention and early intervention of mental health issues in children, youth, and young adults, in amount of $74 Million.

Medical Services Plan (MSP) premiums will be fully eliminated as of January 1, 2020, saving families up to $1,800 per year.

Housing. The NDP announced a budget for 200 extra temporary modular housing units, plus a new $10 Million rent bank – through Ministry of Social Development – to assist renters who need short-term help to stay housed. The rent bank has been a key recommendation of the 2018 Rental Housing Task Force (one of 23 such recommendations).

There was no progress of the NDP’s promise of a $400 annual renters’ rebate, but Finance Minister Carole James stated that work on this front is ongoing.

Clean B.C. Rebate. $900 Million committed over the next three years to fund rebates and incentives in the Clean B.C. program.

Included: Rebate of up to $6,000 on new zero-emission vehicles, $14,000 for home improvements to improve energy efficiency, and $700 for high-efficiency natural gas furnaces.

The Clean B.C. goal is to reduce provincial greenhouse gas emissions by 40 percent below the 2007 level by the year 2030, as part of an overall strategy to combat climate change.

ICBC Presents Risk. The Crown corporation suffered significant losses in multiple recent quarters, and the insurer has been flagged as a risk going forward, especially if the situation doesn’t improve.

Markets Continue Steady Ascent

Since the end of 2018, markets have rebounded significantly, to the point that your December 31 2018 year-end statements are now quite outdated.

The New York S&P/TSX Composite continued its rise this week, closing out north of the 16,000 mark for the first time since last October, settling at 16,013.01. The TSX has now spiked 16.2 percent since the Christmas Eve trough.

The S&P 500 flirted with the 2,800 mark, settling at 2,792.67. The S&P is now up 18.8 percent since Christmas Eve.

The Dow Jones Industrial Average breached the 26,000 mark for the first time since last November, closing Friday at 26,031.81, good for a rebound of 19.5 percent since Christmas Eve.

The NASDAQ closed at 7,527.54, good for another weekly gain. More importantly, since Christmas Eve, the NASDAQ has rebounded 21.6 percent.

Across the pond in Europe, the FTSE 100, the United Kingdom’s main index, has risen from its December 27, 2018 trough of 6,584.70 to close out Friday at 7,178.60, a 9 percent increase. While the FTSE has not rebounded from its trough to the same extent as the North American markets have, it is facing significant headwinds due to ongoing Brexit uncertainty.

This uncertainty is not expected to dissipate prior to March 29th at 11pm GST. At 11pm on March 29th, the UK will officially be out of the European Union, unless either the UK cancels their withdrawal (highly unlikely at this stage), or all 28 EU members agree to an extension.

RRSP Deadline is March 1, 2019

One final reminder that we are only one week away from the 2018 RRSP Deadline. As we approach the March 1st deadline, we encourage you to contact us with any questions about your RRSP. We can work with you to determine your estimated tax saving on a last-minute contribution.

Contact our office if you have any questions about your portfolio, or to contribute to your RRSP prior to the deadline.

Sources: The Globe and Mail, CBC.ca, theprovince.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

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