9:00 AM to 5:00 PM
Monday to Friday
appointments are suggested
2019 Investment Expectations
"Trees don't grow to the sky forever"
After ten years of relative calm and steady growth, (thanks to Quantitative Easing) the world stock markets have finally had a negative year. A long anticipated Market Correction has caused the Dow to drop approximately 6% of it's Market Value and the S&P 500 to drop 7% in 2018.
The Canadian Market was down 8.8% due to falling oil prices, while even the Canadian Banks were caught in the same downdraft and volatility. Nonetheless, if you look at ten year performance results, North American Markets have grown in the 7% to 8% range.....handsomely rewarding long-term investors.
Not surprisingly, I do remain cautious and recommend that retired client's position their Asset Allocation in a conservative manner with 60% of their holdings to be invested in GICs with British Columbia Credit Unions. The current one year interest rate is now offered at 2.850% and or 3.050% if funds are held for two year terms.
As for the future performance of the Markets it is very hard to measure but I feel 2019 may turn out better than expected especially if the USA negotiates a settlement with China in the area of trade. If a trade agreement goes ahead with China then that should result in better markets for Canadian raw materials and subsequently provide a more prosperous environment for Canadian Stocks, which are overdue to strengthen along with the Canadian Dollar.
Two funds that I continue to favour are the Global Health Care Fund which had a gain 5.87% net after expenses and the Canadian Real Estate Fund that had positive growth. I think the Canadian Real Estate Fund is the perfect investment vehicle for your TFSA Tax Free Savings Account because 100% of all future growth will be completely tax free....not unlike the tax free growth afforded with your personal residence....now that is a great investment concept.
• For 2019 I think it is noteworthy to mention that I.A. Financial Group introduced a new group of Segfunds that offer lower Management Fees along with excellent worldwide diversification. Finally, I do intend to focus most of my energy on my client's Investment Funds in 2019....so if you are interested in arranging a free personal face to face meeting with me please don't hesitate to call my office.
2019 Asset Allocations For Retired Clients
Investment Vehicle % Holdings Risk Tolerance/Strategy
Credit Union GICs 60% Very Conservative
Canadian Equities 15% Moderate
Global Equities Diversified 15% Moderate
Global Health Care 5% Growth
Real Estate Income 5% Growth
Total Asset Allocatio 100% Conservative/Moderate
Allocation formula using age 100 minus your current age is a simple but effective formula for many of my clients: i.e.
Age 100 minus current age 50 equals 50% allocation to stocks.
Age 100 minus current age 65 equals 35% allocation to stocks
Age 100 minus current age 75 equals 25% allocation to stocks
Segfunds which have a 75% Guarantee at Maturity have lower Management Fees compared to Segunds offering a 100% Maturity and Death Guarantee. It is important that each client has their Asset Allocation designed to match their individual Risk Tolerance i.e. Conservative, Moderate, Aggressive.
Sample Fee Structure for Retired Client Above
Portfolio Sample Annual Fees
$65,000.00 Credit Union GICs 0% Management Fee
$35,000.00 Segfund Investment Plans $980.00 Management Fee
Total Fees $980.00 Management Fee
Based on this retired client's portfolio, the overall fees amount to less than 1% annually.
– Rick Reynolds CLU CH.F.C.
Please contact us if you have questions
or would like us to prepare a custom service
package based on your needs.
Tel : (250) 595-2419 Fax : (250) 592-4953
Victoria Office, #206 - 2187 Oak Bay Avenue
Victoria, B.C. V8R 1G1
North island Office, 3713 Shoreline Drive,
Campbell River, B.C. V9H 1L8
R. E. Reynolds Investments
& INSURANCE SERVICES LTD.
©Copyright 2019 HIDEF Productions Inc.