Outlook

"One Up on Wall Street" by Peter Lynch advocates for the investment strategy of buying what you know, emphasizing personal observations over traditional financial analysis. David’s newsletter discusses how Canadians tend to invest heavily in domestic companies due to familiarity, despite the risks of home market bias. He highlights the under-performance of the Canadian equity market compared to global markets, attributing it to factors like scale, sector concentration, and lack of international investor interest. Despite these challenges, there are reasons for Canadians to hold domestic stocks such as tax benefits and currency risk mitigation. At Baskin Wealth Management, we will always be investors in Canadian stocks but we have been increasing investments in non-Canadian stocks.

In this month's newsletter, David runs some experiments using Microsoft's AI tool - Copilot - to better understand what it is and isn't capable of. He starts with a basic question, to which it provides a pretty good answer. He then asks if Copilot is good at picking stocks. For David, the answer demonstrated that while Copilot has plenty of knowledge, it lacks wisdom, an essential ingredient in making decisions in the markets where there are large numbers of somewhat irrational humans involved.

Spring has arrived, ushering in the annual ritual of filing income tax returns. This is a process marked by the increasing complexity of the Canada Income Tax Act to which the Government has responded by hiring at a rate exceeding that of the general population by almost 4-fold over the past 10 years. Unfortunately, this is not isolated to CRA and is symptomatic of declining productivity across the country. In this month's newsletter, David discusses how this impacts growth prospects for Canada and how we are addressing it in client portfolios.

In this month’s newsletter David writes about how the Canadian government's got a reminder for us – hey, you're getting old! They let him know this by telling him to start taking money out of his RRSP, which is now a RRIF, and begin paying the taxes that go along with it. They say death and taxes are inevitable, which is at least half true, but good planning can sure take the edge off taxes. Just don't wait too long.

In our year-end newsletter, David reflects on the unpredictability of financial markets, highlighting the surprising success of the stock and bond markets in 2023 despite widespread predictions of a recession. He emphasizes the importance of acknowledging uncertainties and suggests that understanding what is known and unknown is crucial for successful long-term investing. David expresses confidence in active management over passive strategies and discusses the uncertainties surrounding stock market movements and interest rates. He underscores the focus on high-quality stocks, the recognition of value over time, and the significance of behavioral biases in investment decisions.

Alphabet Soup As 2023 draws to a close, we have added another new acronym to the ever-growing alphabet soup of government financial and tax planning programs. Here’s a quick update on what’s new (and old): FHSA.  The First Home [...]

Why We Hate The Stock Market, And Why It Is So Necessary Every now and then we encounter a potential client who wants to open an investment account but doesn’t want to put money into the stock market. “It’s just [...]

Ignore the Merchants of Fear, and Count Our Many Blessings Back in the days when everyone got their news from newspapers and television, the wisdom in the media industry was “if it bleeds, it leads”. In other words, bad news [...]

In this newsletter David draws parallels between the winding journey of a road trip and the unpredictable nature of life and financial markets. He discusses recent economic news, including a minor GDP dip in Canada's second quarter, and emphasize that recessions are a natural part of the economic cycle. David advises against worrying about a potential recession and highlights the importance of long-term investing, encouraging a patient and steady approach to investing, emphasizing the potential benefits of market downturns in the long run.

This months newsletter delves into the issue of productivity, growth, and investing in Canada. David highlights Canada's productivity challenges and its struggle to keep up with other wealthy nations, resulting in lower per capita income. He discusses possible factors contributing to this situation, including low business investment, regulatory obstacles, and high taxes. He also compares Canada's technological progress to that of the United States, where companies like the "Magnificent Seven" have experienced significant growth and wealth creation. While Canada certainly has its strengths and investment opportunities, David suggests that, right now, the U.S. is where the money is.

In our newsletter this month we have a double shot from David to supplement your summer reading. In the first article, he discusses the significance of the recent milestone of 40 million people now in Canada and the importance of continued immigration to our long-term prosperity. The bonus content outlines why the summer economic recession has not happened, concluding with his best advice to clients.

The good news – on average, we are living longer and healthier lives. On the flip side – we need our savings to last as long as we do meaning we may need more. How long we live is one of the key determinants of how much savings are required to maintain our lifestyle in retirement but there are others that are equally important. In this month’s newsletter, David outlines these and explains how we work with our clients to increase the likelihood of achieving their goals.