Summer Client Note

Aug 09, 2019 | Dr. Patrick O’Brien DVM, Wealth Advisor at RBC Dominion Securities Inc.


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The first half of 2019 has been one of the best for financial markets in many years, but they come on the heels of a steep downturn in global stock and bond indexes in the last 3 months of 2018.

Dear Friends and Clients,

The first half of 2019 has been one of the best for financial markets in many years, but they come on the heels of a steep downturn in global stock and bond indexes in the last 3 months of 2018. Of greater importance, I am very pleased with the portfolio performance both in mitigating that downturn, and then participating in the subsequent upswing in 2019. The key to successful investing has not changed - buy quality companies with valuable fixed assets that deliver both a critical service (such as electricity), and a monthly bill to consumers.

One has to expect that there will be periodic downdrafts such as 2018 that are unpredictable in timing, duration, and depth, but keep in mind that they are also temporary. So don’t be frightened of them or expect to be able to avoid them by being “clever” - selling at the peak and buying back in at the bottom. The last nine months have demonstrated this reality perfectly - Our conservative style protected us from most of the drop at the end of 2018 and because we held firm, we were there for the rapid upswing starting on Boxing Day.

So there you have it – invest conservatively and recognize that downturns are both periodic and temporary.

Financial Planning Note from Cameron - Donating Publicly Traded Securities Tax Efficiently:

Many of you make regular, and sometimes large donations to your favourite causes and charities. This is truly a testament to giving back and helping those in need. When you make your donations, there is a tax credit you receive (15% on the first $200, and 29% thereafter) for your donation. However, if you donate publicly traded securities from your investment account that have grown in value, you will still get the tax credit, but will not have to pay any capital gains tax. The charity of your choosing is allowed to receive the full value of the donated security, and is exempt from tax. Therefore, you get the full donation tax credit, and your charity gets all the value of your donation. Please contact us if you would like more information on how this may be beneficial to you.

Patrick’s Financial Planning Tip - Multiple Will Strategy:

For those with valuable private BC corporations, it may be in your best interests to utilize a multiple will strategy. The second corporate will, properly prepared, removes the need for a grant of probate to transfer the shares. On a 10 million dollar corporation, the expected savings are $140,000. There are also savings in time, bother, and legal costs. Those over age 65 might consider an alter ego trust as an alternative. Please call/visit us to discuss.