3 things to do with your tax refund

Make the most of it

April 19, 2018

As the deadline to file 2017 income tax returns approaches, many Canadians are either hurrying to submit their paperwork or patiently awaiting a refund from CRA. While it may be tempting to treat a tax refund as “free money”, it’s smart to look at it as you would any other income. Before you go out and start spending, read over our tips for making the most of your tax refund.

Clear (or reduce) any high interest debt

Many of us have some debt in the form of a mortgage or perhaps a home line of credit – both common scenarios that generally pose little risk to one’s long-term financial plan. The Bank of Canada raised the key interest rate several times in the past twelve months but it remains well below 4%, keeping mortgages and home LOCs fairly reasonable in terms of repayment. However, a credit card can have an interest rate as high as 18-20%. If have any high interest debts, such as a credit card or unsecured line of credit, make paying them down your first priority. Simply put, there is no investment with a guaranteed return high enough to counteract the monthly payments owed on a credit card carrying a balance. Knowing this, it’s wise to pay down any “bad debt” before using your refund for any investments or discretionary spending. For advice that is specific to your situation, please contact my team – we’d be happy to help guide you.

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Feds double down support for Trans Mountain

Canadian Market Summary

April 17, 2018

While no definitive milestones were reached at Sunday’s meeting between the prime minister and the premiers of B.C. and Alberta, we nevertheless view it as a positive data point for Kinder Morgan Canada’s Trans Mountain Expansion Project (TMEP). The federal government reiterated its support for the project, and the prime minister once again stated that the project will get built and that this year’s construction season (which is likely required for the project to make its timeline) will be made. Kinder Morgan Canada’s shares were very volatile last week following its announcement that it would stop non-essential spending, but the shares rallied through the week off the Monday lows as the market gained greater confidence in TMEP. We maintain our bias that the pipeline gets built, and Sunday’s events were supportive of this view. We reiterate our Sector Outperform rating and $23 target price.

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Market volatility the new norm

Here's what we're thinking

April 10, 2018

Elevated market volatility has gripped global markets in recent weeks, with the latest bout of selling pressure dragging markets back to the lows of early- February. In this iteration, fears over escalating trade tensions between the U.S. and China and government intervention in the U.S. technology sector are at the centre of market concerns. We see these factors as having a transitory effect on markets. At the same time, we would characterize last year’s near all-time low in volatility readings as an aberration and this year’s spike in volatility as a return to a more normal volatility environment. This is particularly true in view of the late stage of the economic and market cycle in which we find ourselves, characterized by above-average valuations, rising interest rates, and crowded positioning. The key for investors is the outlook for medium-term global macro and market fundamentals, and on this score we remain bullish. We see global economic growth easing slightly from the red-hot pace of late last year to a still- impressive above-trend pace, thanks to solid employment and income growth and supportive policy settings.

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