Diversification... so much more than stocks
and bonds!

The past few years have certainly proved this point to be true.
 
Every investor understands the concept of diversification.  It just makes sense to ensure all your investments aren't all in one basket.  Everyone agrees diversification is essential, so it's surprising how few people actually achieve diversification in their holdings. 
 
The standard formula for diversification is well known - and all too frequently accepted at face value.  It calls for a split of 60% stock and 40% bonds.  It's easy to deliver this kind of diversification by simply tapping into stock and bond markets. 
 
An allocation of at least 20% in revenue producing real estate (outside of your personal residence) will not only protect your portfolio from downturns in the stock market but can also elevate the peaks and valley's investors have experienced with stock portfolio's over the past year. 
 
While proper investing is a year-round endeavour, many of us take RRSP season to review our current portfolios and make sure that our investments are taking us in the direction we want to go. 
 
Tax efficiency of investments is also part of diversification.  Depending on where you hold your assets; registered, or non, impacts how income is taxed coming out.  What are the tax implications to your investments? 
 
An analysis of your current portfolio to make sure your holdings are held in a tax efficient manner is a worthwhile exercise.  We would be happy to assist you in providing this analysis.   
 
Contact me if you'd like to review your current portfolio.

New CPP Changes affecting timing
of Retirement Plans

New changes to CPP benefits become effective between 2011 and 2016. If you're thinking about the timing of your retirement these new rules need to be considered. Benefits differ based on age and earnings, as well as how long you want to work.
Starting January 2011 if you delay in collecting your CPP retirement benefit past 65, your pension enhancement is greater than it was under the old rules. Starting in 2012, pension reductions will increase if you take your pension early, between 60-65.

Pension Adjustment Changes Chart:
Link to CPP Rate Changes

A few other changes to note: Removal of the work cessation test and a change to the calculation of Average Career Earnings.

These changes reflect the changes in the employment environment and evolving retirement trends. We've certainly taken note of these changes and will be providing our clients with insight and guidance in best managing your CPP pensions.

If you need help figuring out how these changes might affect your retirement date we can help.

2010 Income Tax Receipts

To help you organize for the upcoming tax season, here is some pertinent information regarding estimated mail dates for various tax slips.

Federal Forms Expected Mail Dates
1099-B, 1099B-DIV, 1099-INT - IRS
Reporting for US Persons		 Feb 1, March 2, 2011
T5008 - return of Securities
Transactions & Trading Summary		 March 1, 2011
T5 & Summary of Investment Income -
Dividend and Interest Income		 March 1, 2011
T3 - Canadian Trust Income March 31, 2011
T5013 &T5013A - Canadian Limited
Partnership Income		 March 31, 2011
NR4 - Canadian Income Paid
to Non-Residents		 March 31, 2011
NR4 - RRSP and RRIF Income Paid
to Non-Residents		 March 31, 2011
T4RSP & T4RIF - RRSP and
RRIF Income		 March 1, 2011
T4A - RESP Income March 1, 2011

Please note that T5's and T3's are issued by the respective fund companies.

Investment Counsellors

Investment counselling is providing portfolio management services for different types of clients: pension funds, other institutional portfolios and private individuals.

Investment Counsellors set out to:

  • Meet the clients investment needs - income/growth?
  • Select the appropriate securities and do discretionary trading on your behalf.
  • Provide regular, detailed reporting - 'true' rate of return reporting.
  • Work in conjunction with your existing professional advisory team: Financial Planner,
    Accountant, and Lawyer.
  • Charge competitive fees based on the size of your portfolio - usually half what is charged
    by traditional mutual funds.
  • Fees are potentially tax deductible.

How do they differ from a traditional stock brokerage?

  • They are regulated by the securities commission.
  • They do not receive compensation for buying and selling securities. (This keeps them free
    from conflicts of interest - they are rewarded for growth in the portfolio, which is very much
    in line with the clients objective!)
  • Typical minimum portfolio size is $500,000.

For clients with larger investment portfolios, investment counsellors can play an important part in their diversification strategies. We work with a number of Investment Counselling firms at WealthCo and can help determine which firm might be best for you based on your personal goals and objectives.