As the end of summer quickly approaches, we are feeling grateful that we have all had the opportunity to unplug a little and enjoy some of the sunshine. Many of us on the team have either enjoyed a nice staycation or taken a few trips to a cottage. While most of us were having some fun and trying to find relaxation, Nicky spent many of her nights studying to obtain her Certified Financial Planner certification. The CFP is the world’s most recognized financial planning designation and is considered the ‘gold standard’ for the profession, encompassing all aspects of tax, insurance, estate and retirement planning. In early August Nicky shared the wonderful news that she had passed the six hour exam. Congratulations Nicky!

As Canada emerges from its “two dose summer”, and the country hits a new high of completed vaccinations, many Canadians are looking back at some of their hasty purchase decisions that were made in the early stages of COVID. When COVID turned the world upside-down, many bought things that made life a little bit more comfortable – regardless of whether it made long-term sense. As restrictions start to ease, we are shifting our purchases from goods to services. This summer's growth drivers have been hospitality and entertainment as Canadians rediscover the wider world. According to the most recent RBC Spending Tracker – Canadians are shifting their spending from home comforts to spending on restaurants and accommodations.

While Canadian spending is changing, the Creativity Boom from Covid is upon us. The pandemic has transformed the economy and disrupted all aspects of our lives, but it also has released a remarkable wave of creativity. All areas of businesses are feeling this boom, creativity is being seen as the new "it" skill. Surprisingly the greatest spike has been found in education, healthcare and sales and services. As the article suggests we are increasingly convinced that creativity is going to be a critical skill through the 2020s, as we re-emerge, re-build and re-invent, delivering ideas at a rate never seen before right across Canada.

Federal Election

Mid-August our government announced that a Federal election will take place on September 20th, 2021. As we head to the polls next month, a key area of focus for voters will be how each party addresses the housing market. Last week Justin Trudeau was in Ancaster announcing a list of measures to help Canadians 'unlock home ownership'. In last month's blog we discussed how many of our clients are becoming anxious to help their children afford their first home. This article breaks down the promises each party is making on this front. Key highlights:

• Liberals: introducing a first home savings account allowing those under 40 to save up to $40,000 and withdraw it tax free; double the first time home buyers tax credit; build, preserve or repair 1.4 million new homes; ban new foreign ownership for the next two years
• Conservatives: build 1 million homes over the next 3 years; ban new foreign ownership for the next two years; introduce changes to the mortgage stress tests
• NDP: introduce a 20% tax on foreign homebuyers; double the existing home buyers tax credit; build 500,000 housing units within the decade

Market Update

Global markets have been relatively resilient through a summer period that has had its fair share of uncertainties. More specifically, renewed political and geopolitical uncertainty, a fourth (and in some countries fifth) wave of Covid-19, moderating global economic growth, and a U.S. Federal Reserve that appears to be on the verge of fine tuning its ultra-accommodative approach to monetary policy. All of these challenges are coming at the stock market from different directions, but the stock market rally continues. What’s pushing U.S. stocks to climb the wall of worry? Investors remain focused on earnings growth and profits; a particularly strong Q2 earnings season and constructive outlooks from management teams. Having said that, a market pause or pullback can occur and would be normal in periods of peak earnings growth. Historically, we see that pullbacks of 10% or more are not uncommon even in good years (see chart below). The key takeaway from this is that volatility is back and its presence is normal. We wrote about why Asset allocation matters during these times in this blog and it is still relevant today.

Wealth Management Online Update
 

To better support our clients, RBC Dominion Securities recently updated the RBC Mobile App. The updated app has all the same great features as RBC Wealth Management Online - but also includes the following:

• Sign in effortlessly on your mobile device with Touch ID®, Face ID® or fingerprint authentication when linked with your RBC Client Card.
• Access information and tools to help you manage your wealth while you’re on the go.
• Quickly toggle from RBC Banking to RBC Wealth Management Online to view your accounts, when linked with your RBC Client Card.
• Share important information with us through two-way secure messaging 
• Safely transfer funds between your RBC accounts whenever and wherever it’s convenient for you
• Enjoy all the same features as the full website version of RBC Wealth Management Online.

To download the app, please search for RBC Mobile app from your device. If you have any questions, please email Lauren or review the article The How to Install the RBC Mobile app

Financial Literacy 

With the end of cottage season approaching, the complexity of a family cottage is very common. In this latest article from the The Wealthy Barber, David Chilton looks at the complexity of how a cottage can complicate many aspects of your financial health including estate planning. He emphasizes the importance of being aware of the real facts of having a family cottage. Although cottages often pull families together, the tensions that can arise when transitioning ownership from one generation to the next can cause bitterness amongst everyone. As Chilton suggests, it is important to have open conversations with your family now about their hopes and wishes for the property down the road. Planning ahead is key, we encourage you to reach out to us to explore and build the best path for your own situation.   

 

The pandemic has made many of us rethink plans, goals and how we want to live our life in general. The 2021 RBC Retirement Myths & Realities Poll sheds some light on what many not-yet-retired Canadians aged 50+ are now rethinking. Some of the plans include postponing retirement and updating wills and beneficiaries, while many are rethinking where they will live, what they will do to fill their time in retirement and will they outlive their retirement savings. Having your financial projections update-to-date and having these important conversations with us is a good place to start if the pandemic has made you rethink some of your retirement plans.

 

With the final long weekend of summer coming up, we hope that everyone is able to enjoy it with family and friends. If you are attending any parties or bbq's, Andrea Robinson world renowned sommelier has a few recommendations. The former dean of the French Culinary Institute shares her expertise on her favorite’s wines that sparkle, a perfect way to celebrate summer or any occasion.

 

We hope you enjoy the last few weeks of summer and stay safe and healthy!