Paul's Prose March 2019

Mar 08, 2019 | Paul Monette


More Good Than Bad

(About 20 years ago I wrote a song with that title!)

Here we are in 2019 – so far the markets have been great and the weather has been miserable!

There are so many wonderful things going on in this country right now. So why do we (including yours truly) always tend to be talking about the negative? Crazy politicians, potholes (around my place these look more like craters) the latest crime and everyone’s favourite…the weather!

Let’s talk about some of the good stuff going on for a change!

Employment numbers in Canada are among the best in the world. Some will say what about the auto and oil sectors? However, it is important to focus on the big picture when evaluating the state of our economy today and its potential down the road. Perhaps it seems premature but we should all be talking about job trends 50 years out with our kids and even their kids.

Corporate profits and dividends almost seem too good to be true. I always laugh when the banks announce their quarterly “x” billions in profits and their share price proceeds to drop the next day! As I write this the Canadian stock market is up over 10% for 2019!

In the worst of the poor markets of 2018 the dividend yields on banks and other top payers were wonderful! To this day, even with the TSX topping 16,000, the yields continue to be very attractive. For those investors who only require income from their portfolio (interest, dividends, capital gains) and not capital, short term market drops can be one of the best blessings in disguise.

Yet another positive out there is a little less market related but nonetheless a key element of our Canadian economy – generosity! It never ceases to amaze me how generous Canadians are, whether it is to their local hospitals, cancer research or helping their fellow man overseas – we have so many volunteers abroad in third world nations it is astonishing – Doctors without Borders is but one example. Canadians care and we help – yet another more subtle indication of our country’s strong economy. (Donate shares with big gains and don’t pay the tax!!! Ask us or your accountant how.)

Let’s focus on some of this good stuff for a minute and a half! 


What is really going on with interest rates anyway?


Paul’s answer: I don’t know (sorry). Well I sort of do but it really doesn’t matter.

Each day the brightest economic minds throw a myriad of statistics and projections at me –I certainly respect them but I do question their accuracy (kind of like I question weather forecasters)!

The fact of the matter is to most clients it simply doesn’t matter. If the 5 year GIC is 2.5% or 4% - after taxes and inflation (remember, a 6% GIC means inflation is high and eating into your purchasing power) it will have little impact on your long term net worth. Real wealth is created in the equity market (not always but usually). This does not mean we should get out of our guaranteed investments and plow everything into stocks – most people simply do not have the stomach for a 100% equity portfolio. Even if they did, quite frankly, the potential rewards would not even be required – so why have the headaches?

Often I have clients trying to tell me to not buy them GICs or bonds – they say that the rates are too low. If you thought the 4% drop in your portfolio in 2018 was tough to swallow how would you handle a 10% drop?

The key is always a mix – most seem to like a “balance” mix of 55%-60% stocks and 40%-45% fixed income and cash. That said, we are all different – next time we get together let’s make sure you have the right mix!


New Team Member


Last Paul’s Prose, we teased you with an unnamed new team member – well, she’s here! Theresa Lewis has joined our team as an assistant and is here to help you! Theresa can be reached at 613-733-7403 or at


Did You Know (Kristin’s Version)

  • The 2019 TFSA limit is $6000? Give us a call to discuss maximizing your TFSA contributions
  • Income tax packages for 2018 are just starting to be mailed. Mailings of the various tax slips will continue until early April. Looking for more information? Head over to to find the 2018 Tax Reporting Guide or call Kristin or Theresa with any questions about missing information on your slips.
  • You can link your RBC Dominion Securities accounts to your RBC Online Banking if you are a Royal Bank client. Have your RBC Client Card ready and give us a call, we’d be happy to set you up.
  • Not an RBC Banking client? You can view your Dominion Securities accounts, retrieve statements and, new this year, tax packages on line via DS Online.


Personal Thoughts

  • Paul’s going to Kenya! What an exciting trip I have ahead of me in April – wow. RBC has a program that recognizes charitable work done by their employees and I am so lucky to have been selected as one of the recipients. RBC partners with the WE Foundation to provide a trip of a lifetime where we get to go to a remote town in Africa and help build a community. I think I will be mixing cement for a new college in the town we are going to. Wish me luck and the ability to outrun a lion (or at least one other staff member J)
  • Recently Rosanna and I made a trek through crazy weather to Kingston, but was it ever worth it! We went to see our daughter Leah skate in a competition for the very last time – yes, we both cried! She skates as part of a foursome of elite skaters for Queens and they won a silver medal – did she ever want to finish off her skating career with a Gold!!! What a journey her skating career has led her on! It was worth every penny! And fall!!!