As the Vancouver forecast calls for snow for the first time this winter, I fondly recall a great road trip Warwick and I took through Scandinavia several years ago. I remember hearing of Hygge (pronounced “hoo-gah”) for the first time. Hygge is roughly translated to “coziness”. It means creating a warm atmosphere and enjoying the good things in life with good people. You can practice hygge at any time of the year, but the height of hygge is winter. Imagine walking in freshly fallen snow (with an excited canine companion), reading a good book under a blanket (wearing woolen socks), or drinking hot cocoa in front of a crackling wood fire. For more inspiration, buy The Little Book of Hygge: The Danish Way to Live Well. From our group to you and your loved ones, we wish you all a very hygge winter!
Family First
We want to empower you to influence the causes you care about most. This month we share a series of RBC Wealth Management articles filled with tips, tools and considerations to complement your wealth and legacy planning. Please see brief summaries below and reach out if you'd like the full articles.
- – Charitable Donations – To encourage charitable giving, the government provides you with a tax credit when you make a charitable donation to a registered charity, which you can use to reduce your taxes payable.
- – Formalized Donation Options – Beyond a direct gift to charity, there are many other ways you can support the causes that are important to you, including private foundations, donor advised funds and endowment funds.
- – The RBC Charitable Gift Fund – Establishing a Charitable Gift Fund provides many of the same advantages of a private foundation, without the upfront costs, complexity and ongoing administration responsibilities.
- – How Alternative Minimum Tax (AMT) Could Affect Your Giving – Recent AMT changes have left high-income earners re-evaluating their personal giving plans, including reviewing what, how much, and when to donate.
- – Maximizing Impact – The Five Ts provide a holistic framework for individuals to maximize their impact. By embracing Time, Treasure, Talent, Ties and Testimony, individuals and organizations can move beyond traditional notions of charitable giving.
* Deadline Extension – On a related note, The Department of Finance released draft legislation for the previously announced deadline extension for charitable donations from December 31, 2024 to February 28, 2025. It includes donations transferred by cheque, credit card, money order or electronic payment (not in-kind donations of securities).
Market Moment
- – Update on Change to Capital Gains Inclusion Rate – The Government of Canada announced the deferral of changes to the capital gains inclusion rate.
- – Canada confronts U.S. protectionism – The possibility of U.S. tariffs has cast a shadow over Canada’s economy. Nearly three-quarters of Canada’s exports flow south of the border, predominantly within sectors such as energy, metals, and auto manufacturing. We believe resisting knee-jerk reactions to headlines is the best way to navigate what could be repeated bouts of market volatility.
- – A Pause in Interest Rate Hikes or the End of Hikes? – Global central banks have offered something for everyone this month. The central banks of Canada and Europe both pressed ahead with interest rate cuts; the Bank of Japan raised rates further; and the Federal Reserve, after a series of reductions late last year, opted to take a pass on additional rate hikes.
- – Threat of slowdown in AI Growth – Investors were caught off guard by last weekend’s announcement of a new Chinese artificial intelligence (AI) chatbot called DeepSeek. Investments immediately flowed into traditionally defensive sectors, though moderated by the latter part of the week. Some analysts noted the open-source nature of DeepSeek allows Western AI researchers to emulate the smarter algorithm, and others observed the performance of DeepSeek was not as good as advertised.
- – Canada’s Housing Market Recovery Hits Bump – Interest rate cuts in Canada set the housing market on a recovery path in 2024, but there have been bumps along the way as demonstrated by activity in December. Home resales fell 5.8% last month from November, following solid advances totaling 16% in the previous four months.
Team Touch
We’re inspired by RBC’s deep and longstanding commitment to the communities where we live, work and play. In fact, RBC’s Celebration of Impact 2024 results were just released, and our team is proud to have contributed our personal time, energy and money to the collective impact:
- – A record-breaking $30.2 million in personal donations
- – More than 12,500+ charities supported worldwide
- – 339,000+ volunteer hours (34% increase year-over-year)
VACATION ALERT:
*** In search of a summer kind of hygge, Warwick & Lisa will be away from the office on vacation in Costa Rica from February 7-17.
Chart Corner
