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32 Issue #98 March 2021 www.sportsenergynews.comom
the Spotlight on
Neighbourly Advice From Our Local Professionals
Neighbourly Advice Fr om Our Local Pr ofessionals
investments with low fees - this is not something fees (compared to other growth mutual funds). Is this
Max Ming unique to self-directed brokerages. It is important to really the case? When we compare them to similar
T
ALENT
Investment Advisor remember that these online brokerages also impose solutions within the industry that we frequently use,
other fees on transactions as well, outside of the it shows there are many other solutions that provide 1397 Brookdale Ave., TALENT
“Retire up to 30% Wealthier?” MERs. Since they are a discount broker, clients will higher returns after fees (fees that also include the
In the past couple months, it is likely you’ve witnessed have to pay for any and every additional service cost of advice!), making “retire 30% wealthier” that Cornwall
the continued obsession put on “Retiring 30% (purchases, sells, switches, transfers, etc.). This is much more misleading.
Wealthier”. If you have seen these ads, it suggests you like a discount airline that will charge you for your Does this hold true for every solution on the market?
would do well with them. The constant undermining bag, seat, selection, and maybe even a bag of peanuts. Of course not. The purpose of this is not to tell you
of “Dad’s Guy” has led us to write this, debunking the The other reason they are cheap is that there is no what future returns will be, because ultimately no one
promotional ads that discount the value of financial professional advice attached to your portfolio outside knows, and we never pretend to know. The purpose
advice. Our team feels that investors deserve to see of rebalancing investments. The importance of is to illustrate that picking an investment based Collectors Edition
the transparency of these products. retirement, education, estate, and tax planning are
They’re low cost, right? Yes. The actual on-going Management Expense Ratios completely disregarded. on the lowest cost possible does not automate to
success, as many times there is value added in those
(MER) and management fees for some self-directed portfolios are on average 30% Wealthier – is this true? With lower management fees for professionals. Remember, it’s important for
cheaper than an actively managed portfolio. This makes sense given that there fees and the avoided cost of an advisor over a 30-year investors not to be misled by these claims on TV and
is no active management and no experienced, well-trained, and proven portfolio period, surely this equals the 30% they are claiming;
managers making decisions. They are simply using passive Exchange Traded but how have these portfolios performed? This sift through the facts to get a clear apples-to-apples
Funds to mimic sectors of the market, and slightly underperform after fees. self-directed investment brokerage states that with comparison of investment products and services. As
We are not saying there is anything wrong with this; the problem is that they are their growth solution, you will be on average 21% Warren Buffet famously said, “Price is what you pay,
not using an apples-to-apples comparison. Many other providers also offer passive wealthier in 10 years by making sure you have low value is what you get.”

By Michael VanderMeer Sale #1 - Assessed $207,000/Taxes $3378/Sold the future, as they could be very different than
Real Estate Agent $381,000/New Taxes $6185 what they are now. It should be noted that the
Sale#2 - Assessed $211,000/Taxes $3425/Sold tax raise is usually done over a 4-year period.
CAN YOU AFFORD YOUR PROPERTY $400,000/New Taxes $6492 MPAC uses past sales history to determine what
TAXES? BUYERS and HOMEOWNERS Sale #3 - Assessed $166,000/Taxes $2366/Sold homes are assessed at and so the surge in market Byron
BEWARE! $340,000/New Taxes $5520 values may affect all homeowners’ assessments.
The Municipal Property Assessment Corporation These examples are extreme cases where It is too soon to tell how assessments will
(MPAC) had frozen reassessment of homes last bidding wars came into play and drove the sale be affected, as we do not know what sales
year, which is a factor in determining what you price of these homes up; but if MPAC uses these base (time range) that MPAC will be using to
pay for property tax. At the time we thought sale prices to determine the new assessment on determine values. Typically, 2019 values would Roche
that was a good thing; but as it turns out, this may be a bad thing because these homes, it will raise the taxes on each home have been used to determine the assessments
property values have soared, which means property taxes are sure to follow. about $250 per month. Anyone on a tight budget which were due in 2020. If they use 2019’s
I pulled 3 example sales from the City from this year and show how the already may be finding themselves having to values, then taxes will raise, but not as much as
taxes may be affected when reassessed by MPAC. If MPAC raises the sell their homes within months of moving into if they use 2020 sales. Using the 2020 sales will
values to the sale prices, taxes will almost double over a 3- to 4-year period, it. If you are purchasing a home, you should ask mean we will be in for quite a hike.
depending on how MPAC implements these raises. your realtor what the estimated taxes will be in LET IT BE - Mike V.

new stimulus spending over the next three years government spending being offset by an earlier
By Brian Johnston could contribute to over-stimulating demand. “A need to hike interest rates to contain inflation.
Mortgage Specialist key risk is that the proposed $70-100 billion in What Should Borrowers be Thinking About?
three-year stimulus funds will outlive their need, Holt’s advice to those who are heavily indebted Cornwall
Could mortgage rates start to rise? at least when it comes to boosting demand after is to plan their finances on the basis of the BoC
Canada’s economy recorded its largest-ever annual 2021,” wrote CIBC economist, Avery Shenfeld. starting to hike rates considerably sooner than
GDP drop of 5.1% last year; however, it’s also on Implications for interest rates 2023.
track to post a comeback in the 4th quarter, which All of the above translates into the potential for “If slack is eliminated into next year and inflation Sea Lions
could force the Bank of Canada’s hand in reining the need to raise interest rates earlier than the 2023
returns closer to target, then there should be little
inflation in sooner than anticipated. timeframe that the BoC has messaged in recent compelling reason for why the BoC would still be
“That carries potentially strong policy implications months. sitting on such emergency levels of stimulus if the
for the Bank of Canada that is increasingly looking “If Canada’s economy outperformed expectations emergency has long passed,” he wrote.
as if it over-committed itself to keeping rates on without vaccines, then just imagine how it might This may also give new homebuyers reason for
hold until 2023,” wrote Scotiabank economist, Derek Holt in a recent research perform as herd immunity approaches by fall and pause if they’re considering getting a variable
note. what that may come to mean for monetary policy,” mortgage rate. With variable-rate mortgages priced
While Gross Domestic Product (GDP) data isn’t out for December yet, the Holt added. as little as 30 basis points below certain fixed-rate
fourth quarter (Q4) is on track to post a gain of 7.8%, according to estimates. “With average core inflation trending around the mortgages, it could take just one Bank of Canada
Holt added that based on preliminary Q4 data, the first quarter of 2021 now 1.6–1.7% range and just tenths beneath the 2%
target, the BoC might wind up on its inflation rate hike for that edge to all but disappear.
has roughly 1.7% annualized GDP “baked” into it. That would be in stark
target or above it and sooner than it thinks.” For that reason, many have already been choosing
contrast to the 2.5% contraction forecasted by the Bank of Canada in its
Shenfeld drew the same conclusion, saying that if the security of today’s historically low fixed rates.
January Monetary Policy Report.
enough demand is added post-2021, the economy But they too could start to rise in short order at the
Additionally, some say the federal government’s talk of up to $100 billion in
could close in on full employment with additional first sign that a recovery is taking hold.