CALGARY — A long life of assorted jobs, good times, hard times, moves and mistakes can result in an investment portfolio that looks like a jumbled basement storage closet.
Your working life goal of accumulating as many assets as possible to build a nest egg for retirement ends along with your employment income when retirement day arrives at last.
Now, investment experts say, de-cluttering those tangled stocks, bonds, mutual funds and can’t-miss-opportunities — and making sense of them so they last at least as long as you do — is your most important chore.
“Many people, especially those who live here in Alberta, have had a lot of different jobs throughout their careers,” said Willis Langford of Langford Financial Inc., a retirement income adviser in Calgary.
“So they may come with a TFSA (tax-free savings account), RSP (retirement savings plan), they may have a LIRA, which is a locked-in retirement account, they may have a defined benefit pension plan, a defined contribution pension plan, plus they have non-registered accounts.
“And those, technically, could be all over the place in multiple carriers with financial institutions all across Canada.”
Returns are vitally important when accumulating investment assets but tax planning and managing risk gain priority when retirement becomes a reality, Langford said.
“If you’ve got things in your plan of action that don’t fit, you’ve got a mumble-jumble, you’ve got stuff bought over the years and nobody can remember why, you have to do something about that,” said Adrian Mastracci, Vancouver-based fiduciary portfolio manager for Lycos Asset Management.
“Quite often, people come in and they’ve got 30, 35 mutual funds. I have no idea how somebody can look after 30, 35 mutual funds. Or even 15.”
Cluttered portfolios are often marked by missing written plans, non-existent savings projections, too many scattered accounts and either too many or too few different classes of investments.
They can contain mutual funds where costs and exit charges are unclear. Or different funds that contain the same kinds of securities.
Both Langford and Mastracci recommend finding a single trusted adviser to look at the entire portfolio and give advice on how to clean it up.
They recommend choosing someone who is paid with fees, not commissions, to get the most unbiased recommendations.
The result should be a schedule of actions designed to provide maximum income and tax efficiency with the least amount of risk over the client’s expected remaining lifespan.
“How you take income from those sources will dictate how much taxes you pay over your lifetime. If you don’t do it right, you will pay more than necessary,” said Langford, adding improper tax planning can cost hundreds of thousands of dollars.
The adviser should be chosen for what he or she can do for you, said Mastracci. Different clients need different services depending on the size and complexity of their investment portfolio.
A good retirement planner should also be able to help the client track down investments he or she has lost track of by tracing past employers and going through records, he said.
He presented the example of a 65-year-old client whose goal is an income of $100,000 a year for the rest of his life.
That could mean 20 or 30 years or more, which is where the math gets complicated enough to test even the smartest non-professional investors.
“Chances are your portfolio will not receive any savings from you, the client, for that period of time,” Mastracci warned.
He added: “Sometimes you have to tell the client something he doesn’t want to hear.”
This report by The Canadian Press was first published Jan. 16, 2020.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
