Once you receive your letter in the mail, go to the BC government website’s speculation tax page here.

On the right side of the webpage, click “Declare Now”.

The letter you received will include a Declaration Code and a Letter ID. You will require these to complete the declaration.

Note that joint owners must both file declarations.

It is always advisable to save a copy of your confirmation.

Weekly Update – By The Numbers

Sources: Yahoo! Finance, CNBC.com, Government of British Columbia

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The existing CRB Benefit of $500 per week remains and the maximum claim period will increase from the 26 weeks to 38 weeks.

In addition, the federal sickness benefit will expand from two weeks to four weeks, allowing employees to remain at home in the event of illness or if they have to isolate due to COVID-19.

Finally, Employment Insurance eligibility is being nearly doubled, from 26 weeks to 50 weeks for any claims filed since September 2020.

These proposals aim to stave off benefit panic for those who are nearing the end of their benefit periods and remain out of work.

Weekly Update – By The Numbers

Sources: Yahoo! Finance, CNBC.com

The post Federal Government Announces Extended COVID-19 Benefit Period appeared first on Smof Investment Manager, LLC.

The New York S&P TSX Composite index has had a strong run over the last 2 weeks. It has posted daily gains in nine of the last 10 trading sessions and has risen 6.5% over that time and is up 5.89% year-to-date. The TSX closed Friday at an all-time high of 18,460.21.

The Nasdaq closed above 14,000 for the first time on Tuesday and hit an intra-day all-time high of 14,102.04 on Friday before closing at 14,095.47. Year-to-date the Nasdaq is up 9.37%, continuing its torrid pace.

The S&P 500 is up 4.77% year-to-date and continues its march toward the 4,000 mark. Friday saw the S&P 500 hit an all-time intra-day high of 3,937.23 before closing at 3,934.83.

Most major European and Asian markets – even London’s FTSE 100 – posted weekly gains and are all positive for 2021 year-to-date.

Working from home: calculating your workspace deduction percentage

We have had several clients reach out with questions around tax deductions for employment expenses incurred while working from home throughout COVID, and specifically, how to calculate the appropriate workspace percentage.

As a reminder, there are two options for claiming home expenses: the temporary flat rate method ($2 per day worked at home, up to $400 maximum) or the usual detailed method. You can read a more thorough breakdown of these options here.

When calculating your workspace at home, you must prorate your workspace versus total home space, but you must also prorate your work time spent in your workspace within the context of a full week’s worth of hours.

For example: Jim worked from home from March until December 2020. His home is 1,300 square feet and his workspace is his living room/dining room, which is 300 square feet in size.

The first step in calculating the percentage of home expenses is to prorate the workspace by the total home space. In this case, 300 / 1300 = ~23%.

Next, Jim must consider that he is only using that workspace for 40 hours per week (his normal work week). There are 168 hours in a week (7 days, 24 hours per day). The second calculation is to divide Jim’s 40 hours by 168, giving him 24%.

So for work, Jim uses 23% of his home, 24% of the time. Multiplying these two amounts, Jim’s deductible percentage of home expenses is ~5.5%.

Using the detailed method of calculating home expenses is not worthwhile unless Jim ends up with a tax saving greater than the $400 flat rate method. In order to deduct more than $400 using the detailed method, Jim would need to have eligible home expenses of ($400 / 5.5%) ~$7,300.

A reminder to contact us if you have questions about your home use percentage or what constitutes and eligible expense. We can work with you to determine if the flat rate method or detailed method is the most applicable to your situation.

Weekly Update – By The Numbers

Sources: Yahoo! Finance, CNBC.com

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Markets south of the border saw increased volatility as a battle between Wall Street hedge funds and retail “do it yourself” investors raged. Several trouble stocks which had been shorted by hedge funds and others saw DIYers engage in a coordinated effort to drive these stock prices upward, leading to a “short squeeze”. The upward and downward sJesskate have been extreme.

These attempts were abated to some extent on Thursday as some online brokerages temporarily halted buys to these companies but Friday saw a return to the wild upward sJesskate for these stocks.

Silver, a precious metal which has been shorted recently, spiked upward on Friday as retail investors turned their attention to those short-sellers. Gold also took part to some extent, riding Silver’s rally to a modest Friday gain. However, both were down for the week.

Weekly Update – By The Numbers

Sources: Yahoo! Finance, CNBC.com, Globe Investor

The post TSX declines on vaccine concerns; Wall Street vs “The Little Guys” appeared first on Smof Investment Manager, LLC.

The e-newsletter will include a 2021 market outlook, our favourite 21 charts for 2021, and a couple of other topical articles.

Markets Down Friday on Lockdown Fears, Rising Coronavirus Cases

Markets were down for the day and most markets were down for the week, as “third wave” cases continue to rise. The possibility of additional lockdown measures added to the daily & weekly decline. For the year, the New York S&P/TSX Composite is up a modest 2.73%.

The Japanese Nikkei 225, the English FTSE 100 and Chinese Shanghai Composite indexes are up by modest amounts as well to start the year. The major U.S. indexes – the Dow Jones Industrial Average, S&P 500, Nasdaq, and Russell 2000 – are all relatively flat but slightly positive thus far.

Weekly Update: By The Numbers

Sources: Yahoo! Finance, CNBC.com, The Globe and Mail

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 January 2021 E-Newsletter Coming Next Week appeared first on Smof Investment Manager, LLC.

Since the market bottom in March 2020, the TSX has now risen over 60%. In the process, the index erased the last remnants of the COVID-related market losses.

Canada’s tech and materials sectors have performed well through the recovery while financials and energy have struggled.

Looking forward, cheap money via low interest rates should help the index continue moving upward, though we should expect some bumps along the way.

2020: By The Numbers

Sources: TDAM, Yahoo! Finance, The Globe and Mail

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 TSX breaches 18,000 mark for the first time appeared first on Smof Investment Manager, LLC.

The S&P 500 rose by 10.7% in November and closed this week at an all-time high of 3,699.20.

The Nasdaq rose by 11.8% in November and also closed this week at an all-time high of 12,464.23. For 2020 year-to-date, the Nasdaq has risen nearly 39%.

Not to be outdone, the S&P TSX Composite posted a double-digit November (10.3%) of its own and is now in the black for 2020 YTD, up 2.68%.

There are a number of reasons for optimism that drove markets upward in November. The conclusion of the U.S. election clarified who will occupy the White House for the next 4 years. Also, several pharmaceutical companies announced their respective COVID-19 vaccine candidates had completed Phase 3 trials with strong efficacy rates.

This week, the United Kingdom became the first country to approve a COVID-19 vaccine that had been tested in a large clinical trial. The road has now been paved for the U.K. to begin a mass inoculation campaign. U.K. Health Secretary Matt Hancock expects the U.K. will receive its first shipment of 800,000 vaccines “within days” and stated that people will begin receiving shots shortly after the National Health Service receives the vaccines.

Weekly Update – By The Numbers

Source: Yahoo! Finance, CNBC.com, Dynamic Funds, CBC.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

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Yesterday, Dynamic Funds’ Chief Investment Strategist, Myles Zyblock, offered his thoughts on the Q3 Earnings results.

Earnings Rocket Past Expectations

Third quarter reporting season is effectively complete with filings from nearly 95% of S&P 500 constituents now in the books. Expectations were surpassed across the entire capitalization spectrum with a record proportion of positive surprises. Breadth of beats was +80% while both top- and bottom-line growth projections were exceeded by a wide margin. S&P 500 earnings growth still contracted but only at a -7.1% rate instead of the initial -18% estimate. Sales came in at -1.8% compared to the -5.6% target.

The small-cap segment of the equity market was the most impressive with an earnings surprise of +57% for Q3. Analysts were far too pessimistic for these names as actual S&P 600 EPS performance came in at -7.6% compared to the -48% estimate. For the S&P 500 sectors, Health Care, Information Technology, and Consumer Staples stood out as the sectors with the highest breadth of beats and were positive year-over-year for both earnings and sales.

Bottom-up consensus estimates suggested that this quarter would be the trough in aggregate earnings and the strong results certainly helped support that prediction. S&P 500 trailing earnings has fallen 14.3% since peaking in February 2020 and currently stands at $140. If estimates are met over the coming year, the Index should see +16.7% growth and a full recovery by November 2021 (see the chart of the week below).

• The strong start to earnings season reported in our preview a month ago held up to the end with results remaining heavily skewed to the upside. The breadth of beats for earnings and sales are well above average for all capitalization segments. Economic uncertainty around COVID-19 and the lack of management guidance likely caused analysts to set very low targets.
• The magnitude of earnings surprises has also been very strong with double-digit beats for all three indices. The S&P 600 stands out with a stellar +57% surprise.

Earnings Growth Came in Far Above Expectations

• Q3 2020 earnings growth targets were slashed leading up to reporting season and the final results suggest that the analyst community were far too pessimistic. Only single-digit contractions were seen in earnings compared to the staggering double-digit projections.
• A similar story is seen for the top-line as actual sales growth also fell much less than anticipated in Q3.

All S&P 500 Sectors Beat Earnings Growth Projections

• Every major S&P 500 sector surpassed earnings growth expectations in Q3. Five of them, including Health Care, Consumer Staples, Communication Services, Information Technology, and Utilities, posted positive quarterly year-over-year earnings growth.
• Almost the same story was seen for top line (sales) growth, but Materials came in slightly lower than expected. The relative order of growth for sales mirrored that of earnings in Q3 with defensive sectors posting the highest growth rates.

(End of Myles Zyblock commentary)

Weekly Update – By The Numbers

Source: Yahoo! Finance, CNBC.com, 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 S&P 500 Q3 Earnings Results appeared first on Smof Investment Manager, LLC.

The first to reach 270 Electoral Votes will be the presumptive winner. Virtually all major news outlets give Biden the current lead in the “Race to 270”, though the precise Electoral Vote count varies somewhat depending on the news outlet.

Joe Biden is the current betting favourite to win the election, and markets have experienced a “relief rally” of sorts as the votes have continued to improve Biden’s prospects. It should be noted that it may be some time before Biden officially clinches the election, as President Trump is likely to challenge some results and/or demand recounts in tightly-contested states.

In our September E-Newsletter, we wrote in greater detail about the expected market implications following the election. You can read that article here.

Weekly Update – By The Numbers

Source: 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 Markets Rally Throughout the Week in Reaction to U.S. Election appeared first on Smof Investment Manager, LLC.

U.S. Economy: Q3 GDP and Beyond

The world’s largest economy is in recovery mode. U.S. consumer spending has made an impressive comeback, manufacturing activity has firmed, and the stabilization in international markets is supporting trade. The second-quarter GDP collapse is likely to be followed by a sharp bounce higher, upwards of +25% annualized, when Q3 data is reported later this week.

The economic expansion is expected to stretch into 2021. The gathering momentum across the private sector is being supported by ongoing government stimulus. The combination of excess productive capacity and elevated personal savings rates points to the potential for above-trend economic growth, say close to 4%, over the coming calendar year.

COVID-19 is the wildcard. The key economic risk, in our opinion, is not the upcoming U.S. election. It is how the renewed spread from the coronavirus across many states feeds into behavior over the winter months. At this stage, we do not see it offering enough of a headwind to short-circuit the budding recovery, but it’s something which will require ongoing monitoring.

The Consumer is Making a Comeback

Core retail sales have more than recovered all that was lost during the early days of the pandemic. On a year-over-year basis, retail sales expanded by 9.1% in September which was the fastest pace of growth recorded since this series came into existence in 1993.

The consumer is being helped by an improving labor market. The unemployment rate has dropped to 7.9% from its peak level of 14.7% reached in April. Close to 11.5 million of the 22.1 million jobs initially lost in the pandemic have been restored. While it still has a long way to go, the labor market has made up a significant amount of lost ground over the past few months.

Trade Activity has Started to Mend

Trade was hit hard in the initial stages of the coronavirus pandemic. Exports fell by a whopping 33% and imports declined by 19% from February through to May. Both have started to recover. Firming global end-market demand has lifted exports, which are up by 21% from the May low. Imports have rallied by a respectable 20% since May, buoyed by strengthening domestic demand.

A better tone to trade signifies a recovering global economy and should help further support U.S. corporate earnings given that a growing share, now 21%, of those earnings are sourced from abroad. As a side note, the foreign exposure of S&P 500 earnings is estimated at a much higher 35-40% given that the index is dominated by large multi-national companies.

Government Activity is White Hot

According to the monthly Treasury statement, U.S. federal outlays for fiscal year-to-date have surpassed $3.6 trillion dollars. This represents an increase of about $1.2 trillion over the same period a year ago. This unprecedented spending surge has helped push the Federal Government’s deficit for 2020 to $3.1 trillion, or 16% of GDP. And the year’s not over.

Admittedly, government support has been a critical bridge for the private sector which has suffered staggering job and income losses. At the same time, it is pushing gross federal debt as a % of GDP above 100%, a level which surpasses the debt load carried as a result of WWII.

Wrapping It Up

• The second quarter was one of the weakest quarters for U.S. GDP growth recorded in the past 100 years. However, a new recovery has begun. Growth has resumed for many indicators across the consumer, manufacturing and trade sectors. This is occurring alongside the ongoing support of government policy stimulus.
• Q3 GDP is going to be released on Thursday, October 29th. The economics community expects growth of close to +30% on an annualized basis. GDP growth is likely to remain positive beyond the third quarter, albeit at a much slower pace.
• The key economic risk, in our opinion, is not the upcoming U.S. election. Rather, it is how the renewed spread from the coronavirus feeds through into economic activity. At this stage, we do not see it as offering enough of a headwind to short-circuit the budding recovery.

(End of Myles Zyblock commentary)

New Containment Measures Enacted as Cases Rise, Markets Decline

As case counts continue to rise, new containment measures were announced in the past week in renewed efforts to mitigate the spread of COVID-19:

• The measures announced yesterday remain in line with the base-case scenario, which calls for the use of more targeted restrictions rather than a return to the total lockdown of early 2020.
• The new European measures are similar to those announced by the Quebec government earlier in October: four weeks of closures of restaurants, bars, cinemas, gyms; restrictions on gatherings; while keeping most businesses and schools open. The silver lining is that this approach appears to have had some success in the province as cases have since stabilized.
• Markets are likely to remain hesitant until a date can be put on the arrival of a permanent solution to the pandemic. There is no way to know for sure when that will be, but recent news surrounding vaccine research remains generally positive as evidenced by the increased likelihood of a vaccine being available by the end of Q1-2021.

Weekly Update – By The Numbers

Source: Yahoo! Finance, CNBC.com, National Bank Investments, 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 An Update on the U.S. Economy appeared first on Smof Investment Manager, LLC.