In the wake of the COVID era, the economic landscape has been tumultuous, marked by surging bankruptcies at a rate unseen in decades. This unsettling trend underscores the profound strain imposed by the current high interest rate environment. However, amidst these challenges, there lies a glimmer of hope as interest rates are anticipated to decrease, potentially stabilizing the situation.
The 2024 Federal Budget
In parallel, a noteworthy development has been the proposed increase in the capital gains inclusion rate from 50% to 66.7% for individuals, corporations, and trusts. This change has planning implications, particularly for those that hold most of their assets within holding companies. Our team is conducting a thorough review and will proactively contact clients who may be impacted to explore tailored solutions.
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A weaker Canadian dollar won’t necessarily derail BoC interest rate cuts
The Bank of Canada (BoC) is set to cut interest rates faster and deeper than the U.S. Fed, aiming to boost an underperforming Canadian economy. They're not letting fears of a falling loonie and pricier imports slow them down, betting that lower rates will warm up the economy just in time. However, it’s worth considering the effect a weaker loonie may have on the already high household shopping bill.
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The Psychologist Who Turned the Investing World on Its Head
The pioneering work of Daniel Kahneman in behavioural economics illuminates crucial insights into human decision-making processes. By unraveling the intricacies of cognitive biases, Kahneman's work underscores the importance of humility, evidence-based decision-making, and simplicity in navigating complex investment landscapes. His teachings serve as a guiding light, reminding us to approach decisions with introspection and prudence.
As we reflect on these multifaceted developments, it becomes evident that navigating economic challenges requires a holistic understanding of both macroeconomic trends and human behavior. By embracing thoughtful economic policies, proactive financial planning, and insights from behavioural economics, we can forge a path towards resilience and prosperity in the face of uncertainty. If you enjoyed this edition of insights, feel free to forward it. You can also reach out to our team for any specific inquiries.