A few topics our newsletter touches on this week:

• Reminder: RRSP & TFSA Deadlines
• Our Thoughts: A Volatile Year
• Interesting Listening: Disruptors Podcast
• Interesting Reading: Global Insight 2021 Outlook
• Distraction Content: Lockdown options

Reminder: RRSP & TFSA Contribution Room

If you have not discussed this with us already, please let us know if you are planning on making a contribution and indicate whether it will come by cheque/online transfer or if you want us to move money between your DS accounts. Key figures and dates to know before making your contributions:

• Additional TFSA contribution room for 2021 is $6,000. Contributions by cheque should be made payable to RBC Dominion Securities. 
• Current TFSA maximum contribution limit for an individual that has been eligible (over 18) since its introduction in 2009 is $75,500.
• RRSP and TFSA contribution limit for 2020 can be found on your Notice of Assessment from the Canada Revenue Agency (or online through your MyCRA account).
• Maximum RRSP contribution limit for 2020 is 18% of earned income to a maximum of $27,230 less any pension adjustment. For the new year of 2021, the maximum will be $27,830.
• RRSP contributions must be made by Monday, March 1^st if they are to be applied to your 2020 tax year.

Our Thoughts: A Volatile Year

The last two months of 2020 saw markets rally on election certainty in the US as well as vaccine announcements, marking a potential turning point in the fight against COVID-19. Since then we have seen a slow roll-out of vaccines and lockdowns re-instated as cases have risen dramatically across the world. Stock markets, led by growth stocks and especially tech names, have seen large gains while economies continue to be plagued by uncertainty. This dichotomy will likely continue into 2021, which we expect means further volatility as we await full vaccine rollout.

By the numbers (December): December proved to be a strong final month of 2020, though more normal growth as compared to November’s spike. The TSX rose 1.7% while the S&P 500 rose 3.8% (1.7% in Canadian dollars). Europe, Australia & Far East (EAFE) was up 2.4%. The Canadian bond universe was up 0.4%, delivering stability amongst the equity rally.

By the numbers (2020 calendar year): Overall, the TSX composite total return earned 5.6% in 2020. The S&P 500 index rose 18.4% on the year (16.1% in Canadian dollars). These numbers, however, include a tale of two cities as high dividend paying stocks underperformed while growth stocks led the index. The energy and financials sectors, hard hit by the pandemic, are expected to rally further along with vaccine rollout in the new year. The Canadian bond universe rose 8.7% as central banks slashed interest rates (leading to one-off price gains) amid pandemic economic fallout.

What we are watching: The senate run-off race in Georgia appears to have gone in the Democrats favour, meaning control of both houses of congress for the start of Joe Biden’s term as President. Vaccine rollout continues, slowly, through much of the world – although we anticipate a continued increase in cases (and resulting restrictions) until vaccines can reach a larger percentage of the population sometime later this year.

Interesting Listening

• Disruptors – a great, dynamic ~30 min RBC podcast hosted by SVP John Stackhouse about re-imagining Canada’s economy in a time of unprecedented change.
  • Recent episodes cover 2020 Lessons from Canadian Entrepreneurs, and How COVID-19 Complicates the Fight to Protect Our Data.
  • Find it wherever you get your podcasts (Spotify, Google, Apple, Simplecast). Link to list of episodes can be found here.

Interesting Reading

• Global Insight Monthly Dec 2020 edition is out, find the link on our website here. You can also view the weekly/daily editions on the same page.
• RBC Wealth Management has launched the Global Insight 2021 Outlook, which showcases unique perspectives on issues and opportunities that could define the year ahead. You can enjoy the complete report in PDF format here: 2021 Outlook
  • Highlights include discussions on the debt dilemma facing global governments, low interest rate environment fixed income opportunities, and inflation scenarios.

Distraction Content – Lockdown Ideas

Everyone is disappointed to be returning to lockdown, we hope you and your family are staying safe and healthy during this time. Copying below some ideas we shared back in April for how to spend all this extra time stuck at home:

For kids & grandkids:

• Learn at Home: Resources for elementary and secondary students from the Ontario Ministry of Education.
• NASA STEM @Home: Science, tech, engineering, and math activities for families with kids in grades K-4.

For adults:

• You won’t be getting on a plane anytime soon, but Thrillist has compiled a list of interesting virtual travel experiences that are a great way to temporarily “escape” your home office.

Our team is here for you

We are happy to run our next meeting with you by video conference (WebEx Meetings) rather than by phone if you so choose. We also continue to be available if you have friends or family who might be seeking a consult on their portfolio, wealth or estate planning goals.

Happy New Year from all of us on the Gallivan Wealth Management Team!

Regards,

Mark, Peter, Sarah, Corinne & Andrea

Gallivan Wealth Management Team