Financial Advisors Calgary

The Markets

U.S. became a member last August and, now, so has most of the eurozone. Unfortunately, it’s not a club you want to join.

Late last week, Standard and Poor’s (S&P) announced it was downgrading the credit rating of nine of the eurozone’s 16 members including behemoths France and Spain. In addition, 14 of the 16 members have “negative outlooks” which means S&P believes, “that there is at least a one-in-three chance that the rating will be lowered in 2012 or 2013.” The only two countries with stable credit outlooks are Germany (no surprise) and Slovakia, a former Communist country that became an independent state in 1993 after the dissolution of Czechoslovakia.

What does this mean for the future of Europe and the economy? 

The New York Times called it, “A move that may have more symbolic than fundamental financial impact, but served as a reminder that Europe’s economic woes were far from over.” Underscoring that, the U.S. downgrade, has – so far – not caused much of a problem. The 10-year U.S. Treasury bond yielded a slim 1.85 percent last Friday, an indication that investors still view the U.S. as a safe haven. The bottom line is everybody knows Europe has problems and the downgrade, while not helpful, simply puts an exclamation point on the obvious. 

Back in the U.S., investors seemed more interested last week in tracking the economic momentum which included an eight-month high in consumer sentiment and an improved assessment of the economy from the Fed’s Beige Book. Econoday summed it up nicely when they wrote, “Traders and investors have been moving toward the position that European problems deserve less weight than they have been given in recent months.” That may be true in the short term, but if Europe craters because of their sovereign debt problems, it’s unlikely the U.S. of for that matter Canada will escape unscathed.

Unlike Las Vegas, what happens in Europe may not stay in Europe.

THE ANNUAL CONSUMER ELECTRONICS SHOW (CES) just wrapped up in Las Vegas and, as usual, it featured a dazzling array of must-have new gizmos and gadgets that will likely show up in your hand or in your family room sometime down the road. With 2,700 exhibitors and 150,000 total attendees, it’s the showcase event for everything electronic.  We thought it’d be fun to take a look at some of today’s commonplace gadgets that were introduced at CES and have you guess the year of their debut. So, here goes…

What year did these devices debut at CES?

 - Digital video discs (DVDs) 

- Satellite radio

- Videocassette recorder (VCR) 

- CD player 

- Blu-ray disc

- High-definition television

- Camcorder

It’s not all fun and games at a show like CES. As you can see from the list above, these devices have spawned major industries that generated tremendous economic activity. Innovation is vital for economic growth, and a show like CES helps spotlight the latest electronic advances and, perhaps, the next driver of the economy.  One of the big highlights at the just concluded show was the unveiling of LG’s 55-inch OLED TV packed with 3D bells and smart TV whistles. So, what in the world is an OLED TV? It’s a TV that uses a new display technology called OLED (Organic Light Emitting Diodes). OLED televisions are brighter, more efficient, thinner, and feature better refresh rates and contrast than either LCD or Plasma TVs. And boy is it thin. The LG 55-inch OLED TV is only 0.2 inches deep at its thinnest point and weighs a measly 16.5 pounds. If you’re an early adopter, you’ll want one of these beauties in your home theater later this year. (as a person that just hung a 60″ LCD in my living room, lighter would have been WAY better….)

Okay, here are the answers to the “device debut” question, according to CNBC. Digital video discs (1996), Satellite radio (2000), Videocassette recorder (1970), CD player (1981), Blu-ray disc (2003), High-definition television (1998), and Camcorder (1981). 

How many did you correctly answer?

Weekly Focus – Think About It

“It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date.” –Roger von Oech, author,
inventor, consultant

Best regards,

Kevin MacLeod CFP, CDFA

For many Canadians, it’s all too easy to treat an RRSP as just a tax-deduction vehicle rather than as part of a long-term retirement savings strategy. But an RRSP is first and foremost an investment-one that’s registered and allows for tax-deferred growth
Read more » http://www.nationalpost.com/related/topics/Retirement+Inside+RRSP/4339519/story.html

For the first time in many years, there seems to be more and more people wanting to get more money into their RSP and TFSA accounts.  Contact us as soon as possible if you are thinking of making your contribution prior to the end of February!  Remember you can also start a monthly contribution at ANY TIME. 

Before you spend any tax refund you receive, be sure to consider these five great ways to get the most out of your tax refund.

1. Pay off debt.  If you are carrying large credit card bills at double-digit interest rates, wipe the slate clean. If you have no credit card debt, pay down your mortgage. A $1,000 prepayment on a $100,000 mortgage amortized over 25 years at 7% will save you over $4,000 in interest.

2. Make a lump sum contribution to your Registered Retirement Savings Plan. The sooner you make your contribution, the sooner it starts compounding. A $1,000 RRSP contribution earning an annual average return of 10% over 25 years grows to nearly $11,000. And your RRSP contribution could result in a tax refund next year.

3. Pay back your RRSP Loan. If you took out a loan to make an RRSP contribution, use your refund to pay that loan back. You’ll save on interest charges and free up money that would otherwise go to your monthly loan payment.

4. Contribute to a Registered Education Savings Plan. The federal government provides a 20% grant on up to $2,500 contributed each year ($500). That’s free money.

5. Contribute to a Tax Free Savings Account. You can invest $5,000 per year in a TFSA. You don’t get a tax deduction, but any income earned in the account grows tax free.

The very best thing you can do with a tax refund is to plan to avoid getting one. After all, the refund is actually a repayment of an interest-free loan you made to the government by overpaying your taxes. If you make a big RRSP contribution each year, ask your employer to deduct less tax off your paycheques. You won’t get a big refund each spring, but your monthly cash flow will increase and you’ll be able to put your money to work in your interest instead of the government’s. Talk to your Human Resource Department about how to get less tax taken off at the source.

There are many things that can impact your short and long-term planning needs. Please don’t hesitate to contact us if you have any questions or if you require further assistance.