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First Choice Savings’ financial experts have answers to your questions



If you have more questions about the different types of investment boxes, April can offer greater detail. them as the different kinds of boxes they can invest in.

“So, you have the RRSP box, your tax-free savings box and then your non-registered boxes that are not in one of those plans.

The money that goes into an RRSP box or a tax-free box, can be invested in multiple ways. The advantage to an RRSP is that every dollar you put into it is like a dollar you haven’t technically ‘made’ and you get a tax rebate at the end of the tax year on the amount that you’ve contributed. So, you get the tax break upfront with the RRSP and that money is meant for long term – meant for retirement, meant for when you don’t have your regular income coming in and you can start to withdraw from that. So, think of that as the long-term saving.”

“The Tax-Free Saving is more for large amounts that you want to invest, that you could access sooner that retirement or, could also be saved for extra income at retirement or extra savings for retirement. Every dollar that you put into that, which you earn interest on, you don’t pay tax on – even when you take it out.”

A growth tax shelter, is the same as the RRSP, but when you need access to your money in your tax-free savings account (TFSA), you don’t have any tax penalties.”

With interest rates so low, is it worth investing?

April says the short answer is yes, “In the boxes, you can invest in multiple ways – for example, there’s GIC is a guaranteed investment (Guaranteed Investment Certificate) – it has a lower interest but you know what you’re going to get at the end of the term. Those can be invested in both the RRSP and the Tax-free savings, you can invest in mutual funds that give you potential higher returns, if you’re in it for the long-haul, and that can also be in an RRSP or Tax-free savings. So, the myth of an RRSP or a tax-free savings account is low interest is not really accurate. It’s what you’re investing inside those boxes.”

What about young people who are just leaving college or university, who may think they don’t have to worry about investing yet?

April dispels that myth, “Starting early means you have more time for your money to compound and grow. So, the ‘rule of 72’ is the amount of interest divided by 72 is how many years it takes your money to double, so the longer time frame you have to invest, the higher your money will grow. The longer time you have in any investment, whether it be GIC’s or the market such as mutual funds, the longer your money ha to grow.”

“Start early – that’s the big one. I love helping young get started, they’re my favourite cause they’re moldable, they want to learn, they listen to you. I often say, just get into the habit of putting something away – $20 a month, $20 a pay-cheque – just get that habit and as you get raises over the years, you can increase that amount, but you can start seeing your money start to grow and you’re paying yourself first. Money is going into investment, to pay you – it’s your money.”

When people are looking for information about investing – how does that work?

“Anyone who comes in, they are more than welcome to sit down and have a conversation and we show them different calculators, show them physically how their money can grow, we can tech people and educate and we don’t charge anything for that service. We are a Credit Union, we’re locally owned and operated, we help our communities that we live in, we pay back to our communities, so we are here to help the people who live in those communities.”

There is a specific product they are featuring over the first few months before tax time.

“We are featuring this new investment product from January to March 6. It’s really exciting because it give people options and some flexibility and we’re calling it “Flex Invest” and it is a five year term product that you invest your money in and it’s still completely guaranteed, so all the money you put in is 100 per cent safe and guaranteed and he interest floats with prime. So prime, minus one-and-a-half per cent is what the interest rate will be. So, if interest rates go up, your investment rate will go up and if the rate goes down, it will follow that as well. But, keep in mind that the investment that you put in is always going to be guaranteed, so you won’t lose any of the principle or interest that you earned.”

It’s a five-year term, but can the money be accessed before the term ends, in the event of an emergency?

“Yes, this one is really unique. We’ve never had an option like this before so on the anniversary date of when you put the money in, you’re allowed to redeem 20 per cent of the balance that you put into it. You’re also allowed to contribute more to it on the anniversary date and that gives it a nice flexibility to if you can’t always put in the amount that you want to start with, every year, you can add to it and help it to grow.”

“Another cool thing about the Flex Invest is that it is eligible for all the boxes, so it’s eligible for the Tax-Free savings, the RRSP and for non-registered money, and the non-registered just means that it’s not in a sheltered growing investment, so you do pay the tax on the interest that you earn.”

One other thing to note, is that with the RRSP’s and the Tax-Free savings, you do have maximum contribution limits, so we always advise people to check their notice of assessment or call CRA (Canada Revenue Agency) to make sure they know how much they are allowed to put into the investment.”

“First Choice Savings is locally owned and operated in Southern Alberta – with locations in Taber, Lethbridge, Cardston and Magrath – and we really help our communities by giving back to school functions, to rodeos, sports teams, or individuals. When you become a member of First Choice Savings, you actually become a member-owner and that gives you a voice in the say of what we do in our communities. We really appreciate our members, value our members and help them reach their financial goals.”

For more information or to set up an investment discussion, contact First Choice Savings

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Federal cabinet declines to overturn ruling on wholesale broadband rates – The Globe and Mail



A man walks and texts on his smart phone in downtown Toronto.

Nathan Denette/The Canadian Press

The federal cabinet says the new, lower rates that Canada’s large phone and cable companies are allowed to charge smaller internet providers for access to their networks could stifle investment in telecom infrastructure.

However, the Governor in Council declined to overturn the August 2019 ruling that reduced wholesale broadband rates or send it back to Canada’s telecom regulator for reconsideration, saying it would be premature to do so because the Canadian Radio-television and Telecommunications Commission (CRTC) is already in the midst of reviewing its decision.

“We will continue to monitor the CRTC proceedings closely,” Navdeep Bains, Minister of Innovation, Science and Industry, said in a statement Saturday.

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Consumer advocates and smaller internet service providers (ISPs) criticized the decision, saying it would result in higher costs for internet users.

“The government has effectively told the CRTC that they expect the rates to go up because they’re worried about investment. But these increases will most certainly be passed along to customers,” Laura Tribe, executive director of OpenMedia, an organization advocating for widespread inexpensive internet access, said in a statement.

Matt Stein, CEO of Distributel and chairman of the Competitive Network Operators of Canada (CNOC), an industry group for independent ISPs, called it a bad day for internet consumers.

“This is the kind of thing that causes rates to go up,” Mr. Stein said. “This creates new delay and new uncertainty, which unfortunately are the tried-and-true weapons of the big phone and big cable companies.”

Large telecoms are required to sell wholesale access to third-party operators such as TekSavvy Solutions Inc. and Distributel Communications Ltd., who then sell internet services to their own customers. The system is meant to increase competition in the internet market.

Last summer, the CRTC lowered the rates that the larger players are permitted to charge third-party operators and ordered them to make retroactive payments to compensate for the higher prices that have been charged since the commission set interim rates in 2016. The phone and cable companies said at the time that the retroactive payments would total $325-million, according to court documents.

The decision was stayed on appeals to the federal court by BCE Inc. and a group of five cable operators: Rogers Communications Inc., Shaw Communications Inc., Quebecor Inc.‘s Videotron Ltd., Cogeco Communications Inc. and Eastlink Inc.‘s owner Bragg Communications Inc. That case was heard in June and a decision is pending.

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BCE and the cable companies, along with Telus Corp., also appealed to the CRTC, asking it to review its decision, and petitioned the federal cabinet. BCE wanted Ottawa to overturn the decision and reinstate the previous rates, while Telus and the cable companies requested that the decision be sent back to the CRTC for reconsideration.

Mr. Bains said the Governor in Council is concerned that the new rates could undermine network investments, especially in rural and remote areas, where it is needed most.

“Incentives for ongoing investment, particularly to foster enhanced connectivity for those who are unserved or underserved, are a critical objective of the overall policies governing telecommunications, including these wholesale rates,” Mr. Bains said.

“Given that the CRTC is already reviewing its decision, it is unnecessary to refer the decision back to the CRTC for reconsideration at this time,” he added.

However, Ms. Tribe said that if the government is really concerned about network investment, it should get going on its plan to dole out funding for projects aimed at bringing high-speed internet to rural and remote areas.

Maryam Monsef, Canada’s Minister of Rural Economic Development, said in June that the Universal Broadband Fund, which is expected to pay out up to $1-billion over 10 years, would start taking applications “in the coming days.”

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The phone and cable companies, meanwhile, welcomed the decision, saying they were pleased that the government has acknowledged their role in keeping Canadians connected during the COVID-19 pandemic.

Rogers spokesperson Andrew Garas said the rates set by the CRTC last summer do not reflect the cost of building and expanding broadband networks and would have an impact investments, particularly in rural and remote areas, where the costs of building telecom infrastructure are higher.

BCE called it a “welcome recognition” that the rates set by the CRTC in August were too low.

“We trust the CRTC’s review will reflect the government’s objective to drive network investment, especially in rural and remote regions, with wholesale rates that are fair and reasonable,” BCE spokesperson Marc Choma said in an email.

Chethan Lakshman, vice-president of external affairs at Shaw Communications, said the company looks forward to working with the CRTC to create a new wholesale framework that “more appropriately balances” objectives such as network investment and affordability.

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Huawei-built data centre a ‘failed investment,’ Papua New Guinea says – The Globe and Mail



A surveillance camera is seen in front of a Huawei logo in Belgrade, Serbia on Aug. 11, 2020.


A Huawei-built data centre in Papua New Guinea is a “failed investment,” that country’s government says, after a technical review found serious security vulnerabilities in what was designed to be an important piece of the country’s digital infrastructure.

Dated encryption technology and the placement of some devices in the centre meant that “data flows could be easily intercepted,” according to a review commissioned by Papua New Guinea’s National Cyber Security Centre and obtained by The Globe and Mail. The security centre receives funding from Australia’s Department of Foreign Affairs and Trade. Canberra was given a copy of the report, whose findings were first reported by the Australian Financial Review.

The report details numerous technical deficiencies in the National Data Centre, including firewall devices “with basic settings for defence”; the use of 3DES, a 1995-era encryption standard “considered openly broken since 2016”; and the installation of core switches outside firewalls, which means “remote access would not be detected.” The physical configuration of the data centre was different from the schematics for its design, and the differences made it more vulnerable to hacking.

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The data centre was financed by a US$53-million loan from the Export-Import Bank of China and designed by engineers from Huawei Technologies Co. Ltd. Its deficiencies have renewed questions about the trustworthiness of Huawei technology at a time when Ottawa and other Western capitals are mulling whether to allow equipment from the Chinese company in 5G networks.

“To some extent, we can conclude that it truly is a failed investment,” Timothy Masiu, Papua New Guinea’s Minister for Information and Communication Technology, said in a statement on Thursday. He suggested looking instead to cloud storage from companies like Amazon.comInc. and Microsoft Corp., before cautioning against geopolitical point-scoring over digital infrastructure. “Our national issues are our business, and must not be used to fit any other narrative,” he said.

Outside Papua New Guinea, however, the problems with the data centre add to concerns about the security of technology made by a company headquartered in China, where the law compels organizations and citizens to “support, assist and co-operate” with the country’s intelligence apparatus.

The United States, the U.K. and Australia have to varying degrees banned Huawei’s 5G technology.

Last year, the UK’s Huawei Cyber Security Evaluation Centre oversight board faulted Huawei more broadly for problems with “basic engineering competence and cyber security hygiene that give rise to vulnerabilities that are capable of being exploited by a range of actors.” In April, 2019, Ian Levy, the technical director of the National Cyber Security Centre in the U.K., told the BBC that “the security in Huawei is like nothing else – it’s engineering like it’s back in the year 2000 – it’s very, very shoddy.”

Huawei was also the main digital supplier to the Chinese-built African Union headquarters, where, for five years, data were transferred to servers in Shanghai, according to reports in Le Monde Afrique and The Financial Times. Officials have denied such problems existed, and Huawei has said that if any data leaked, it wasn’t from the company’s equipment.

Still, such problems point to “a relatively immature … security culture in the company,” said Christopher Parsons, a senior research associate at The Citizen Lab, which specializes in communications and security studies at the Munk School of Global Affairs and Public Policy.

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In Papua New Guinea, “some of the issues being raised are not particularly advanced problems to have identified and then remediated,” Mr. Parsons said. “The fact they weren’t is unfortunate, and speaks poorly of the security culture that Huawei has.”

Huawei did not offer an on-record response to detailed questions about the Papua New Guinea data centre from The Globe. It told the Australian Financial Review: “This project complies with appropriate industry standards and the requirements of the customer.”

Huawei has a deep foothold in Papua New Guinea. The company built 4G networks for the country, a high-speed broadband network, and a network of submarine cables to connect coastal settlements. At least one local community complained that excavators used to lay underwater cable broke reefs.

Huawei was also the contractor for a national identity project that includes an electronic identification (e-ID) system backed by a database. That database, service for which has occasionally been interrupted for days, is at the National Data Centre.

The company’s importance to Papua New Guinea means trouble with the data centre is “a very sensitive issue,” the Ministry of Information and Communication Technology said in a chat message.

In Beijing, foreign ministry spokesman Zhao Lijian said the “Chinese government always requires Chinese companies, in their overseas operations, to strictly follow international regulations.” But, he said, the Chinese government firmly opposes “some foreign media’s malicious discussions about the data centre.”

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In Papua New Guinea, security vulnerabilities have become less of a concern than disrepair. The data centre has a slow internet connection, and some of its components – including backup batteries and an e-mail server – are broken. Software licences have expired, and the report says local authorities do not have enough funds to properly maintain the centre.

As a result, it “is not currently used by a significant portion of the government of PNG,” the report found. “It is assessed that a full rebuild would need to occur to modernize the facility.”

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When is the right time to start investing? Plus, the importance of patience and a growing disconnect between markets and the economy – The Globe and Mail



If we waited for an ideal time to start a lifetime of investing, few of us would ever get into the stock market at all.

The March crash was a great time, in retrospect. But a lot of investors held back because they worried about worse losses ahead as the pandemic spread globally. Stocks have powered back from their lows with a vengeance, which brings a new set of complications. If the economic recovery from the pandemic disappoints, stocks could fall again.

We have two vastly different sets of market conditions in March and August, but a common sense of caution about whether it’s a good time to start investing. I offer this up as context for a recent question from a reader in Toronto: “My 27-year-old has never invested and is asking is this a good time to start? She is thinking of using a robo-adviser and has about $50,000 to invest. What would you suggest about timing and robo investment?”

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First off, thumbs up to the idea of using a robo-adviser. It’s a cost-effective way for investing newcomers to instantly start building a well-diversified portfolio of exchange-traded funds with a risk level tied to their personal needs.

Is now a good time to start investing through a robo-adviser or any other channel? Any time is a good time, if you handle it right.

This reader’s daughter should consider a plan to have a preset amount transferred electronically to the robo account and invested every time she gets paid. As for the $50,000, she should give some thought to a staggered approach. Maybe invest $10,000 right now and an additional $5,000 each month for the next eight months. This would be in addition to those regular contributions from her paycheque.

Invest the entire $50,000 now and she runs the risk of getting hit by a nasty market pullback that shears off 20 per cent or 30 per cent of her investment in short order. Hold off on investing the $50,000 until after a crash and she runs the risk of missing the rally that follows all market downturns. It’s asking a lot for an investing rookie to put $50,000 into a stock market that seems to be falling off a cliff.

— Rob Carrick

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

Stocks to ponder

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The Rundown

Stay patient if the pandemic’s get-rich-quick phase has you feeling left out

Who knew five months ago that the pandemic would be such a money-making opportunity? Stocks are flying, the housing market is surging, gold has popped and bitcoin’s on a tear. Did you miss the memo about pivoting from financial self-preservation to aggressive speculation? Feeling left out because you played it safe while others were daring?, writes Rob Carrick (for Globe subs)

How can Wall Street be so healthy when Main Street isn’t?

The stock market is not the economy. Rarely has that adage been as clear as it is now. An amazing, months-long rally means the S&P 500 is roughly back to where it was before the coronavirus slammed the U.S., even though millions of workers are still getting unemployment benefits and businesses continue to shutter across the country. The Associated Press reports (for Globe subs)

Trading in securities could jeopardize your CERB benefits

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As CERB benefits end, the Canada Revenue Agency’s review of Canadians who received the benefit will move into high gear. There are some recipients who may mistakenly think they’re entitled to CERB, but the taxman might disagree and ask for repayment. I’m talking about frequent traders in securities, including day traders. Tim Cestnick explains (for Globe subs)

Others (for subscribers)

Insiders continue their contrarian buying at Corus Entertainment

The week’s most oversold and overbought stocks on the TSX

Friday’s analyst upgrades and downgrades

Friday’s Insider Report: CEO invests nearly $1-million in this beaten-down stock

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Thursday’s analyst upgrades and downgrades

Ten U.S.-listed technology companies with solid earnings growth

Nine global equity ETFs to augment your portfolio and reduce home-country bias

Investors in Belarus face ‘dictator dilemma’, Putin may hold the key

Others (for everyone)

Biden victory? Disputed election? Wall Street prices in November outcomes

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Impasse! World market themes for the week ahead

Commodity traders face rising finance costs as big banks pull out

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Ask Globe Investor

Question: I would like to get some technology exposure for my portfolio. What do you recommend?

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Answer: Unless you have a deep understanding of the technology space, I would not recommend buying individual tech stocks. A low-cost exchange-traded fund that provides diversified exposure is a better bet because it will help to control your risk. I’ll discuss a few worthy candidates among the dozens available.

The iShares Core S&P U.S. Growth ETF (IUSG) isn’t specifically a technology fund, but nearly 40 per cent of its weighting is in tech stocks such as Microsoft Corp. (MSFT), Apple Inc. (AAPL), Inc. (AMZN), Facebook Inc. (FB) and Alphabet Inc. (GOOG). You’ll also find plenty of non-tech growth stalwarts such as Johnson & Johnson (JNJ) and Procter & Gamble Co. (PG), which increases diversification and may enhance stability. IUSG’s management expense ratio is a rock-bottom 0.04 per cent and the fund pays a modest dividend yield of about 1.4 per cent.

For a pure-play tech fund, consider the Vanguard Information Technology ETF (VGT), which has an MER of 0.1 per cent. If you’re investing in IUSG, VGT or any of the dozens of other U.S.-listed growth or technology ETFs, keep in mind that you’ll need to buy them in U.S. dollars. This exposes you to currency conversion costs and exchange-rate volatility. If you want to eliminate or at least minimize such currency impacts, consider a Canadian-listed ETF such as the BMO Nasdaq 100 Equity Hedged to CAD Index ETF (ZQQ), which has about half of its assets in technology stocks and charges an MER of 0.39 per cent.

— John Heinzl

What’s up in the days ahead

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