In short, Polymarket is a betting exchange, although they prefer to call it a prediction market. But let’s be honest … it’s gambling. The difference is in the structure.
In traditional sports betting, you gamble against the house. The sportsbook sets the odds, takes your bet, pays out winners: and keeps a hefty share of the profits.
Polymarket flips that model. Instead of betting against the house, users bet against each other, while Polymarket simply takes a small 2% fee from the winner.
The platform launched in 2019 — just six years ago — founded by college dropout Shayne Coplan, who has already become one of the youngest self-made billionaires at just 27.
Only in America can someone go from bathroom coder to billionaire in under a decade. Bill Gates, Mark Zuckerberg, Larry Ellison, Michael Dell, Steve Jobs — and now Shayne Coplan — all proof that dropping out of college can pay off massively.
Polymarket first exploded during the 2020 and 2024 U.S. presidential elections, when users wagered millions on political outcomes. Originally focused on non-sports events, Polymarket eventually added sports betting, and that’s when things went vertical.
Now I believe Polymarket is on track to become the #1 sports betting platform in the world — potentially disrupting giants like FanDuel and DraftKings.
Alternative assets are investments that go beyond traditional stocks, bonds and cash. These include real estate, private equity and commodities. Unlike conventional investments that move with the broader market, these assets often behave differently, which gives your portfolio extra stability and opportunity.
Diversifying beyond the usual mix has become essential as market volatility and inflation make returns less predictable. Adding alternatives can smooth out performance swings, protect your purchasing power and access growth opportunities that public markets can’t always offer. It’s a wise way to strengthen your portfolio and prepare for whatever the market brings next.
What are Alternative Investments?
Alternative investments come in many forms, offering different ways to diversify your portfolio. Real estate provides steady income and long-term appreciation. At the same time, private equity and hedge funds aim for higher returns through active management and exclusive opportunities. Commodities like gold and oil can hedge against inflation, and infrastructure projects offer a stable cash flow tied to essential services. Even collectibles such as art, wine or rare coins can hold value beyond market trends.
These assets often move independently of public markets, which helps balance your portfolio during volatile periods. While they require high initial minimums and upfront investment fees, their transaction costs are often lower than those of traditional assets. Still, they come with unique challenges, such as limited liquidity, complex valuations and higher entry barriers that demand careful planning and due diligence.
Benefits of adding Alternatives to a Portfolio
Alternative assets offer new ways to manage risk, protect against inflation and uncover growth opportunities in areas often overlooked by public markets. When used thoughtfully, they can make your portfolio more resilient and better equipped to handle economic ups and downs. Here are some key benefits to consider:
Steady income streams: Real estate and infrastructure can generate reliable cash flow through rent, dividends and yield.
Inflation protection: Real estate and commodities tend to retain or grow in value when inflation rises. For example, gold prices are up more than 40% in 2025, proving how commodities can be a powerful hedge during uncertain times.
Higher long-term return potential: Private equity and venture capital can outperform public markets over time, rewarding patient investors.
Enhanced portfolio resilience: Combining alternatives with traditional assets can reduce volatility and create a more balanced, adaptable investment strategy.
Risks and Complexities to watch out for
Many of these investments require long holding periods, meaning your money could be locked in for years. Private equity and hedge funds often charge high management and performance fees that can affect your gains. Some alternatives don’t have transparent market prices, so tracking their real value isn’t always easy.
Commodities and emerging market assets can also swing sharply in value, reacting to global events and economic changes. Understanding these risks early allows you to make informed decisions, choose investments that match your comfort level and build a strategy that balances opportunity with smart risk management.
Determining the Right Allocation
When deciding how much to invest in alternative assets, it is important to align your allocation with your risk tolerance, time horizon and financial goals. Conservative investors might dedicate a modest amount of their portfolio to other options. At the same time, those with a higher risk appetite could go beyond that. Interestingly, 37% of Americans have expressed interest in using artificial intelligence tools to help manage their money. Continue Reading…
CMHC [Canada Mortgage and Housing Corporation] is unique among federal entities. As a Crown Corporation, it carries out securitization and insurance operations under a corporate mandate while also receiving public funding for federal policy initiatives. Once funding is allocated, CMHC reports to its board rather than the minister responsible on a day-to-day basis.
This differs from the typical departmental reporting model, which has created issues for the PMO, particularly as housing became such a hot-button political issue. Over time, the Department of Infrastructure and Communities evolved into Housing, Infrastructure and Communities, and CMHC’s reporting shifted to the department rather than directly to the minister.
As budgetary spending responsibilities have gradually been peeled away from CMHC, the structure has become more complex and confusing. Policy responsibilities now overlap between the department and CMHC, and some areas – such as addressing homelessness – are jointly managed.
Reducing Chronic Homelessness
A 2022 Auditor General of Canada report found federal efforts to reduce chronic homelessness have been ineffective because departments lack clear accountability for the National Housing Strategy’s target of reducing chronic homelessness by 50 per cent. The report also found that federal departments and CMHC did not know whether their initiatives were effectively improving housing outcomes. In addition, it highlighted a lack of coordination among various federal housing and homelessness programs.
The fragmentation of roles has worsened with the creation of Build Canada Homes, a $13 billion plan to build social housing, starting with development on public land. The initiative is designed to speed up delivery, strengthen Canadian supply chains, and ensure homes are affordable and sustainable over the long term. It focuses on a Canadian, factory-built, net-zero housing platform capable of delivering quickly in major cities, rural communities, and the North.
In the past, CMHC was responsible for social housing programs, typically under Section 95 of the National Housing Act, providing funding for non-profit and co-operative housing. More recently, new initiatives have included the Federal Community Housing Initiative, the Co-operative Housing Development Program, and preservation funding to support asset management planning.
Do 3 agencies make sense for social housing?
Does it make sense to have three agencies responsible for social housing? These agencies have demonstrated poor accountability when responsibilities overlap. Consolidating CMHC’s social housing activity under Housing, Infrastructure and Communities or under Build Canada Homes could create a more streamlined and cost-effective framework for delivering on policy.
This would allow CMHC to focus on its two commercial mandates – securitization and insurance – while retaining some housing finance activities that require a commercial perspective for reviewing and underwriting loans. Continue Reading…
Six months after “Liberation Day” — when sweeping US tariff reversals and revisions redefined the global trade landscape — investors are positioning for asynchronous recoveries shaped by domestic policy, trade integration and technological competitiveness.
The dispersion among global equities had already begun widening in the final quarter of 2024, revealing a performance gap between the top and bottom markets that now exceeds 60 percentage points: a vivid illustration of how post-tariff dynamics have redrawn the investment map.
For now, the scoreboard is clear: South Korea, Mexico and China have been this year’s breakout winners.
Australia, India and Saudi Arabia may be the next cycle’s sleepers.
The big picture: A world of divergence
From Asia’s chip exporters to Latin America’s nearshoring hubs, the market response has been strikingly uneven. Total returns in 2025 show the power of policy normalization and supply-chain realignment: South Korea (+64%), Mexico (+42%), and China (+37%) are leading global markets, while Australia (+17%), India (+3%), and Saudi Arabia (+2%) round out the year’s laggards so far.1
We believe macro shifts and trade reordering have made country-level differentiation essential. This is leading many investors to turn to specific countries for tactical exposure, layering allocations to markets that most directly benefit from evolving tariff and growth dynamics.
We evaluated about a dozen economies for their role in global index composition.
The top three: Reordering global leadership
South Korea: Tech-led takeoff
No market has benefited more since “Liberation Day” than South Korea. Korean stocks are up nearly 64% year-to-date in U.S. dollar terms, marking the strongest global equity performance in 2025.2 The unwinding of semiconductor export tariffs, coupled with booming artificial intelligence (AI) infrastructure demand, has revitalized Korea’s manufacturing base. If global chip investment remains strong and memory prices continue rising, we believe Korea’s export momentum should persist. While we remain alert to potential escalations in geopolitical tensions, we will also be watching for any slowdown in technology spending, which could lead the market’s cyclicality to reassert itself. That said, we view Seoul’s consistently elevated trade surplus with the United States through mid-2025 as a signal that net exports remain well-placed to make a meaningful contribution to gross domestic product (GDP) growth.
Complementing these strong external fundamentals, domestic policy shifts are also shaping investor sentiment. In a notable policy reversal, President Lee Jae Myung’s administration scrapped plans to lower the capital-gains-tax threshold for stock investors after pushback from retail shareholders. The decision, initially intended to bolster fiscal revenues, instead reaffirmed the government’s focus on supporting market confidence and sustaining the equity rally.
Still, in our analysis, Korea’s ongoing corporate-governance reforms and deep integration in regional trade networks make it a core tactical overweight for investors seeking exposure to technology-driven growth.
Last year, the country’s current account surplus with the United States grew to more than US$118 billion: from about US$88 billion previously, reflecting underlying external-sector strength in the face of global headwinds.3
Mexico: Still a nearshoring star
Mexico’s 42% year-to-date total return highlights its renewed momentum as North America’s manufacturing backbone.4As global companies diversify away from China, Mexico has capitalized on its proximity to U.S. supply chains and improving logistics infrastructure.
Recently, the Organisation for Economic Co‑operation and Development (OECD) lifted its 2025 growth forecast for Mexico to roughly 0.8 % based on surprisingly resilient exports, underscoring how the external sector is offsetting domestic weakness. At the same time, we continue to see downside risks in slowed formal job creation, somewhat faltering investment and ongoing inflation pressures: a reminder that structural hurdles remain.
Notably, the materials and financials sectors have been among the best performing year-to-date. Materials stocks are benefiting from nearshoring tailwinds and rising demand for metals and inputs tied to supply-chain reshoring. Meanwhile, financials appear to be benefiting from stable currency dynamics, export-led credit extension and improving corporate profitability.
We expect tariff exemptions for goods compliant with the United States-Mexico-Canada Agreement (USMCA) to stay in place, reducing the tariff-related drag on exports. If U.S. industrial demand stays solid and recent tariff disputes can remain contained, we believe Mexico could sustain this performance into 2026. A stronger rule of law under President Claudia Sheinbaum’s administration could provide additional upside, bolstering investor confidence and governance credibility. If U.S. growth slows, near-term earnings may moderate, but we believe structural tailwinds should continue to support Mexico’s medium-term outlook.
Investors have used Mexico allocations as a clear play on the “friendshoring” theme, highlighting the appeal of its currency stability, export momentum and strengthening fiscal discipline.
China: From friction to fragile rebound
A renewed U.S.-China trade row, triggered by fresh rhetoric and tariff threats from Washington, briefly unsettled markets in early October. Yet China’s measured response — in reaffirming its commitment to the June détente that paused retaliatory tariffs — helped calm investors and underscored Beijing’s intent to preserve stability. More recently, both sides announced a preliminary framework agreement to suspend new tariffs and relax certain export restrictions, signaling a tangible de-escalation in tensions. The move boosted market sentiment globally and reinforced expectations for steadier trade and supply-chain conditions.
At the same time, China continues to balance firmness with pragmatism, using its leverage in rare earths and permanent magnets — critical to defense systems, electric vehicles and green technologies — more as a bargaining tool than an active weapon. Against that backdrop, the 37% year-to-date return of China’s stock markets marks a stunning reversal from last year’s underperformance.5 Improved business confidence and firmer export orders point to the early payoff from easing trade frictions and targeted domestic stimulus.
During the extended Golden Week holiday in early October, travel and consumer activity surged. Government data showed nearly 890 million passenger trips and about US$114 billion in spending — both up roughly 15% year-on-year — pointing to renewed momentum in the services and retail sectors. Combined with the upcoming Singles Day shopping season in November, these trends may bode well for a turnaround in China’s household spending.
On the supply-chain front, Beijing’s recent export curbs on heavy rare-earth materials underscores China’s enduring importance in global tech and clean-energy value chains: a structural strength we believe should not be overlooked when considering allocation to China.
If domestic stimulus endures and local governments manage debt effectively, China could maintain its recovery momentum. Structural shifts toward electric vehicles, renewables and advanced manufacturing reinforce a cautiously optimistic case for a more durable market rerating.
Notable midfield momentum: Emerging rotation
Sources: FactSet, official government statistics, Center for Global Development, S&P Global, DBS Bank, Budget Lab at Yale, Nomura, Congress.gov.
While our focus for this article is spotlighting this year’s standouts and laggards, several markets in the middle of the global pack also merit attention. Brazil, Taiwan and the United Kingdom have each shown mid-tier strength that reflects solid fundamentals rather than cyclical exuberance. Brazil’s commodity resilience, interest-rate cuts and renewed fiscal credibility have fueled market gains of nearly 31%.6
Taiwan continues to ride AI-driven semiconductor demand despite intermittent outflows and its market gained 26.5% year-to-date.7 The United Kingdom’s improving inflation backdrop and revived fiscal confidence have helped deliver returns near 25%.8 We will examine these “next-wave markets” in greater depth in an upcoming commentary exploring the rotation across secondary outperformers.
Japan’s equities have delivered about 21% year-to-date in U.S. dollar terms,9 supported by stronger earnings, governance improvements and renewed investor interest. Global asset managers are returning to Japanese stocks and bonds, drawn by the potential of a reflation-driven government and the relative attractiveness compared with higher-priced US and European markets.
Fresh off leadership of the ruling Liberal Democratic Party, Sanae Takaichi recently became Japan’s first female prime minister. Her appointment triggered what market observers are calling the “Takaichi trade”—a surge in equity appetite as the market priced in increased fiscal stimulus and policy continuity.
At the same time, a recent International Monetary Fund (IMF) upgrade of Japan’s 2025 growth forecast to 1.1% (from 0.7%) adds weight to its turnaround story. Furthermore, a Bank of Japan manufacturing survey also showed a second consecutive quarter of improved sentiment, which we believe may signal traction gaining among corporate capital spending.
Nevertheless, risks persist. Japan’s newly formed coalition lacks a parliamentary majority, policy execution may prove inconsistent and U.S. tariff policy and softness in global growth are notable among potential external headwinds.
If Takaichi’s administration can execute on its reflation agenda and drive stronger global trade ties, we believe Japan could move from midfield to outperformer in 2026. For now, we believe its policy refresh, corporate catalysts and improved sentiment make it a compelling pivot point in the global rotation story.
The bottom three: Value beneath the surface
Australia: A cautious anchor in transition
Australia’s equity market has gained about 16.7% year-to-date in U.S. dollar terms,10 a modest but steady performance reflecting balance rather than exuberance. Growth has been supported by resilient commodity exports, improving consumption and cautious monetary easing. The Reserve Bank of Australia’s recent rate cuts have helped stabilize housing and consumer confidence while keeping inflation on a downward path. Mining and financials have led returns, offsetting weakness in discretionary sectors, even as softer Chinese demand weighs on iron ore and lithium.
Canberra’s fiscal stance remains expansionary, with targeted investment in energy transition and infrastructure to maintain employment. Still, productivity growth continues to lag its long-term trend, tempering longer-term optimism. For global investors, we believe Australia serves as a low-volatility, income-oriented anchor—an economy underpinned by policy stability and fiscal discipline but constrained by external dependency. If China’s recovery falters or commodity prices soften, export momentum could slow. However, in our analysis, diversified fiscal support and resource exposure leave Australia better positioned than many peers to navigate global uncertainty.
India: The pause before the next leg
India’s equities advanced just about 3% year-to-date in U.S. dollar terms,11 cooling after two strong years of outperformance. Elevated valuations, ebbing foreign inflows and slower corporate earnings growth have tempered sentiment, though we believe the subcontinent’s underlying domestic story remains robust. Ongoing infrastructure expansion and rapid digital adoption are delivering measurable productivity gains in India.
Government capital spending has more than quintupled over the past decade, amounting to about 3.4% of GDP in fiscal year 2025–26, while private sector capital expenditure is also at record highs. On the digital front, initiatives like the Unified Payments Interface (UPI), expanding broadband penetration and logistics digitization are improving transaction efficiency and reducing costs. In late July, U.S.President Trump announced a 25% tariff on all goods imported from India, effective August 1, 2025. A week later, however, he issued an executive order adding another 25% levy, taking total tariffs on many Indian products to roughly 50%.
Recently announced U.S. tariff exemptions for select consumer electronics assembled in India — particularly in the premium smartphone segment — have, however, reinforced the country’s position in global high-tech supply chains. These shifts are helping streamline operations, raise capacity utilization and improve output—factors increasingly reflected in stronger total factor productivity metrics. Rural employment programs and government-led capital spending have supported demand, but export-facing sectors have softened as global manufacturing slows.
Some investors have rotated toward more attractively priced Asian peers, yet India’s long-term appeal — anchored in its demographic dividend, manufacturing expansion and reform momentum — remains compelling, in our analysis. Key initiatives such as industrial corridor development, renewable energy build-out and streamlined logistics should sustain medium-term growth. If fiscal prudence holds and private investment rebounds, India could reassert leadership among emerging markets in 2026, making the current consolidation a potential entry point rather than a structural setback.
Saudi Arabia: Patience amid a shifting energy map
Saudi Arabia’s market has been the weakest among major peers this year, rising only about 2.2% in U.S. dollar terms,12 as subdued oil prices and reduced foreign participation weighed on returns. Brent’s slide below US$80 per barrel earlier in the year compressed fiscal surpluses and energy-sector earnings, dampening investor appetite. Yet, the non-oil economy continues to expand at over 4%, driven by record tourism arrivals, real estate development and large-scale Vision 2030 projects. The government’s willingness to tolerate budget deficits reflects a deliberate strategy: funding near-term imbalances to accelerate long-term diversification away from hydrocarbons.
In essence, Saudi Arabia is trading short-term fiscal comfort for structural transformation, underpinned by its strong reserves and modest debt load. The Public Investment Fund (PIF) remains a central stabilizer, channeling sovereign wealth into green energy, infrastructure and logistics hubs. Despite near-term market softness, capital-market liberalization and diversification efforts are progressing, with new regulations encouraging greater institutional participation. The IPO pipeline has been slower than expected, but renewed listings in 2026 could revive sentiment. For long-term investors, Saudi Arabia offers a contrarian value story: short-term headwinds mask the steady transformation of its growth model from hydrocarbons to services and technology. As reforms mature, we believe a gradual rerating of Saudi assets appears increasingly plausible.
Dina Ting, CFA, is senior vice president and head of Global Index Portfolio Management at Franklin Templeton. Her team is responsible for managingFranklin Templeton’s suite of index-based strategies, including ETFs.Prior to joining the firm in 2015, Ms. Ting spent nearly a decade at BlackRock, where she led the Institutional Emerging Markets team thatmanaged over 70 global equity portfolios for clients worldwide. She also managed a multitude of iShares ETFs covering smart beta, global realestate, sector-based and emerging market strategies. In 2019, Ms. Ting was named one of Money Management Executive’s Top Women inAsset Management and in 2018, she was recognized by the San Francisco Business Times as one of the Most Influential Women in Bay AreaBusiness.She earned a master of science in management science and engineering from Stanford University and holds a bachelor of science degree inindustrial engineering from Purdue University. She is a Chartered Financial Analyst (CFA) charterholder.
Endnotes
Source: Bloomberg as of October 15, 2025. The FTSE RIC Capped Net Tax Indexes represent the performance of their respective countries’ large- and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE South Korea RIC Capped Net Tax Index represents the performance of South Korean large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Yonhap News Agency, June 20, 2025
Source: Bloomberg, as of October 15, 2025. The FTSE Mexico RIC Capped Net Tax Index represents the performance of Mexican large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE China RIC Capped Net Tax Index represents the performance of Chinese large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE Brazil RIC Capped Net Tax Index represents the performance of Brazilian large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE Taiwan RIC Capped Net Tax Index represents the performance of Taiwanese large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE UK RIC Capped Net Tax Index represents the performance of UK large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE Japan RIC Capped Net Tax Index represents the performance of Japanese large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE Australia RIC Capped Net Tax Index represents the performance of Australian large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE India RIC Capped Net Tax Index represents the performance of Indian large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
Source: Bloomberg, as of October 15, 2025. The FTSE Saudi Arabia RIC Capped Net Tax Index represents the performance of Saudi Arabian large-and mid-capitalization stocks. Securities are weighted based on their free-float-adjusted market capitalization and reviewed semiannually. Net Tax indicates that the index’s performance is calculated after accounting for the net withholding tax on dividends received by a US Regulated Investment Company. Past performance is not an indicator or a guarantee of future performance. Indexes are unmanaged and one cannot invest directly in an index. Important data provider notices and terms available at www.franklintempletondatasources.com.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal.
Equity securities are subject to price fluctuation and possible loss of principal.
ETFs trade like stocks, fluctuate in market value and may trade above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns. ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for ETF shares will be developed or maintained or that their listing will continue or remain unchanged. While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically. The government’s participation in the economy is still high and, therefore, investments in China will be subject to larger regulatory risk levels compared to many other countries.
Diversification does not guarantee a profit or protect against a loss.
Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.
By Dale Roberts, CutTheCrap Investing, Retirement Club
Special to Financial Independence Hub
More Canadians feel nervous and unsure about retirement. About 60% of Canadians feel they will outlive their money. I’m here to bring good news. There are a few, simple strategies that will set you up for retirement success. If you read the retirement experts, if you watch all of the wonderful Canadian advice-only financial planners’ YouTube videos, you’ll notice they all repeat the same core strategies. It’s a version of going around the internet and back. Eventually you can stop and realize ‘wow, this is easier than I thought’. It is a good feeling when you discover that creating a successful retirement plan is not that difficult, at all.
Let’s assume that you’ve done most everything right. You’ve read The Wealthy Barber books. You need to pick up another one, and ask your kids, nieces and nephews to read it, as well.
I condensed my financial planning book down to 1200 words …
You cleared your debt, good debt and bad debt. You got the house purchases right, you got the car purchases right. Perhaps you’re entering retirement with no mortgage and no vehicle payments (not a bad idea). You have or had proper insurance, created a will, etcetera, etcetera. If need be, you took advantage of the Spousal RRSP account.
You’re in very good shape.
The retirement basics
Now on to the simple core strategies that will set you up for a successful retirement. You’ve been a very successful DIY investor in the accumulation stage. You might create your own retirement plan. With some research and the retirement tools available, it is certainly ‘doable’ for most Canadians.
If you want more help or a second opinion you can certainly contact an advice-only planner. Yup, those same folks who (many of them) offer the advice for free in blogs and via video channels. You can pay a one-time fee, there’s no need to have an advisor in your pocket every day. You’ll receive conflict-free advice, they are not attached to any poor performing Canadian mutual funds, ha. 😉
Retirement Cash Flow Plan
You’ll use a free-use or very affordable retirement cash flow calculator to discover an optimized, tax-efficient spending strategy. There’s comfort in seeing and knowing that your money is going to last.
Delay CPP and OAS for greater payments
Most Canadians (many planners suggest it’s almost all Canadians) will benefit if they delay The Canada Pension Plan (CPP) and Old Age Security (OAS) payments. From age 65 to age 70 you’ll receive a 42% boost to your CPP payments and a 36% boost to your OAS payments.
The retirement cash flow calculator will show you the way. It’s different for everyone, of course. To enable the delay of those government monies (let’s call those pensionable earnings), you’ll enact the RRSP meltdown strategy.
You’ll spend down your RRSP / RRIF in an accelerated fashion early in retirement to provide a bridge as you await those larger pension-like earnings from CPP and OAS.
The flexible cash flow plan
You’ll embrace a variable withdrawal strategy. The retirement cash flow calculator will show you that a flexible spending plan offers a much higher success rate compared to a static or rigid plan. For example, you might set a desired spending range of $90,000 – $100,000 annual after taxes, compared to a rigid $100,000. If we enter a severe recession and market correction you’re OK to spend a little less.
The investment returns and life events will shape your retirement plan over time. We will certainly evaluate the plan every few years.
The U or You-Shaped spending plan
Speaking of life events, out of the gate you might start with a U-shaped retirement spending plan.
Of course, we build the cash flow plan around your life plans, and the life you want to live in retirement. You might embrace and plan for a U-shaped retirement plan.
Spend more in the early go-go years
Spend less in the mid slow-go years
Boost spending in the no-go years
Spend more when you have your health and energy. Be prepared for surprisingly high healthcare and residence costs in the late-in-life stage.
Income splitting, sharing is caring
When you run a retirement calculator you might be shocked by the low-tax environment you are entering if you are ‘with spouse’.
To lower the tax burden you can split employer pensions, RRIF amounts and even CPP in some situations. Income splitting with strategic use of your RRIF, TFSA and Taxable accounts can enable a ridiculously low effective tax rate for many Canadian retirees. Continue Reading…
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