All posts by Financial Independence Hub

Helping entrepreneurs thrive as pandemic-driven small business trends stay for the long haul

Posted By Financial Independence Hub | October 22, 2021

By Don Ludlow, Vice President, Small Business, Strategy & Partnerships and Business Financial Services, RBC

(Sponsor content)

While the COVID-19 pandemic brought significant challenges and uncertainty to small businesses across Canada, it also became a catalyst for many new business practices.

In many ways, it also accelerated the need for small business owners to adapt to other trends and consumer expectations that were steadily on the rise over the last several years.

To help us better understand these trends, RBC recently conducted research to gauge the types of experiences and expectations Canadians have when interacting with small businesses in the coming year as we continue to navigate the ongoing pandemic and journey toward economic recovery.

The survey revealed three important trends that will continue to impact small businesses in the year ahead:

First, we’ll see a growing demand for digital payment and engagement options, whether customers are connecting with small businesses in person or online.

While eCommerce and digital solutions were already on the rise pre-pandemic, they became pandemic necessities as businesses adapted to health and safety measures.

Now, more Canadians are expecting this to be the new way of doing business, with two-thirds (64%) of Canadians saying that partnering with digital platforms to make products and services more accessible will be important post-pandemic, especially among millennials (72%).

Meanwhile, four in five Canadians polled say that they would like to continue to shop online at small businesses, even after the economy is fully reopened, and 72% say that increased social media presence helped them become more aware of what small and local businesses had to offer.

Small businesses that focus on prioritizing employee wellness and overall customer health & safety will be greatly valued by Canadians.

The majority of Canadian respondents in our poll said providing more wellness and mental health benefits and resources to employees will be important going forward (87%).

They also expect heightened hygiene standards to continue post-pandemic (99%) and would like businesses to continue offering flexible curbside pickup and delivery services (78%).

As a result, offering employee benefits, resources and safety protocols that meet these expectations will be critical differentiators for small businesses looking to attract and retain talent and customers.

We’ll continue to see a rise in socially and locally conscious consumers – especially among millennials and Gen Z.

Supporting small, local, and diversity-focused businesses is here to stay post-pandemic. According to our research, the majority of Canadians (77%) polled plan to spend more at small, local retail stores, restaurants and businesses to support their recovery than they did before the pandemic.

Many respondents also said they are actively seeking out and supporting 2SLGBTQ+* (52%) and BIPOC **(61%)-owned businesses, products and services. These numbers are greater among Millennials and Gen Z, indicating the next generation of consumers will increasingly purchase through a diversity-focused lens.

Being aware of these trends, and adapting business strategies and operational practices to address evolving consumer expectations will be important to the success of small business owners in the next year.

In light of these insights, we have three tips for entrepreneurs to consider as part of their 2022 playbook for success. Continue Reading…

Checking in on the balanced asset allocation ETFs

Posted By Financial Independence Hub | October 21, 2021

By Dale Roberts, cutthecrapinvesting

Special to the Financial Independence Hub

If you are not yet familiar with the all-in-one asset allocation ETFs, do yourself a favour and get up to speed. These are game changers for Canadian investors. You might also hear them referred to as one ticket ETFs. TD calls their offerings ‘one click’. And one click explains it quite nicely. With one click on your laptop or smartphone you can purchase a very well-diversified global investment portfolio, with total fees in the range of 0.20%-0.28%. These ETF portfolios are then managed for you. What’s not to love? And you can access the level of risk that’s right for your investment goals and time horizon. Today, we’ll look at the year-to-date performance for the balanced asset allocation ETFs.

Vanguard gets much of the credit for bringing the asset allocation ETFs to Canada. It was actually iShares who were first, but no worries on that front.

Here’s a post on the Vanguard one ticket asset allocation ETFs. That post is entitled ‘which of the Vanguard asset allocation portfolios should you invest in?’ That will help you select the right ETF at the right level of risk.

I recently helped MoneySense refresh and rewrite the Canadian Couch Potato section on their site. In the core couch potato section you’ll also find a table that categorizes and frames the risk levels, while offering the suite of ETFs in each category.

What’s in a one ticket ETF?

You’ll own the majority of publicly-listed stocks in North America and around the globe. Of course the bonds are there to manage the risks. Think of them as portfolio shock absorbers. You’ll usually find Canadian and U.S. bond ETFs in the one ticker offerings.

At one-tenth the cost of a typical Canadian mutual fund, it is a no-brainer.

Yup, you can open up your Questrade account right here and get on with it. That is the top-rated brokerage in many places, including on MoneySense. Who doesn’t want to retire with 30%, 40% or 50% more?

Here’s an example of the ETFs held, using Vanguard’s VBAL.

The portfolios offer a simple but wonderful mix. It’s an easy way to do that couch potato thing. It is also very easy to leave your advisor or bank that might have you invested in high fee mutual funds. I suggest you give that some serious consideration.

The balanced asset allocation ETF returns

And if you want to look back, here’s the performance of the asset allocation ETFs for 2020. You’ll see that Horizons led the charge, followed by BMO, iShares and Vanguard, who were all quite similar in returns offered across the levels of risk. Continue Reading…

Making investing better for every type of trader

Posted By Financial Independence Hub | October 19, 2021

By Scarlett Swain, Director, Investment Products at Questrade

Special to the Financial Independence Hub

It’s no secret that over the past few years more and more people have started trading and investing. Maybe it’s more time on their hands, maybe they’re becoming more focused on their future and want their money to work harder for them. Regardless of the reason, at Questrade we’ve seen a real increase in the influx of new customers and have heard loud and clear from them that they need trading to be less complex. This is their money, their future, and they don’t want to make mistakes while they learn or want a busy platform full of things they don’t use.

On the other hand, we’ve also heard very experienced and active traders tell us, they want more. More order types, more tools, greater speed, and they want it all in the mobile app. So, we dove deep into customer feedback and conducted a ton of research, through all this emerged themes which created the crystal clear path we’re on today: we need a platform and mobile experience for customers that only want to do basic investing AND we need an even more sophisticated mobile experience for our advanced and option trading customers. One tool could not do it all, so we got to work on building three.

Two new platforms launched

Two of our three new platforms launched on September 27: the new Questrade Trading, a web-based platform specifically designed for those who just opened their first self-directed account and also for people who want to stick to the basics of investing, and its mobile companion, QuestMobile. Screen by screen, we worked to implement the features that gave investors the information they needed to make good decisions. Continue Reading…

Why we took Social Security at age 62

Posted By Financial Independence Hub | October 18, 2021

By Billy and Akaisha Kaderli

Special to the Financial Independence Hub

We decided to take Social Security at age 62. We know there are as many ways to consider this decision as there are days in a year. And many experts advise against taking social security “early” so that you get a bigger check at full retirement age. It is hard to argue against that.

We have always lived an unconventional lifestyle and the fact that so many experts agree on waiting for payment gives us pause for thought. Here is our logic.

First, the S&P 500 index has averaged over 8% per year, plus dividends, since we retired in 1991. If we take social security early and invest it, we won’t be losing the 8% per year the experts claim is the annual increase of waiting – although one is guaranteed and the other is not. Maybe the markets will trend sideways or go down or even up, no one knows. For the last 30 years we have lived off of our investments through up and down markets, so investing the monthly check is definitely an option. More likely, we will just not spend our stash and look for opportunities in the markets as our cash positions grow. Plus we have control of the money at this point, adding to our net worth.

Next let’s look at some numbers

For easy math, say at 62 you are going to receive $1000.00 per month in benefits, but if you wait until you are 66, your payment will be $1360 ($1000 x 8% for the four years you have waited). Sounds great, right? However, you would have missed receiving $48,000 dollars in payments from the previous 48 months. Continue Reading…

Should you own a lot or a little in Canadian stocks?

Posted By Financial Independence Hub | October 15, 2021

By Steve Lowrie, CFA

Special to the Financial Independence Hub

It’s not easy being a Canadian investor, is it? Given recent elections, we’re unlikely to see a pro-business surge anytime soon … to say the least. (It’s not investable info, but did you notice I happened to accurately forecast this?)

Plus, we’ve had to watch other countries’ stock markets beat the pants off our own during the past decade. U.S. glamour or FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) have been living especially fat and larger than life lately.

It’s no wonder I’ve been fielding questions about how to best allocate among the global equity markets these days. How much is too much in Canada? Should we just dump everything into the U.S. market? Is diversification dead?

My short answers are: It depends. No. And, I wouldn’t bet on it. This is an admittedly incomplete response, so let’s consider four points and counterpoints to fill in the blanks.

1.) Canada’s market cap is tiny, and concentrated

While we’re rich in land mass, Canada represents just 3% of the world’s stock market capitalization. Plus, that 3% isn’t very well-diversified, with relatively heavy exposures to banking and natural resources.

2.) Canadians and everyone else have a home bias

Home bias means we prefer familiar objects close to home. If (like me) you’re rooting for your kid’s hockey team, cheer on. But in the markets, this tempts most investors – and many financial professionals – to pile too heavily into their own countries’ stocks.

For example, despite recent underperformance, the typical Canadian still allocates 60% of their investments to Canadian stocks. The Behavioral Investor author Daniel Crosby reports that U.S. investors typically allocate 90% of their holdings to the U.S. market; U.K. investors allocate about 80% of their holdings to the U.K. No matter where you roam, home bias is right at home.

3.) Markets are unpredictable

Before you ship all your investments across the border or overseas, remember: Markets can turn on you, abruptly and without warning. While it might seem like a distant memory, it should be noted, from 1999–2009, Canadian stocks (S&P/TSX composite) returned 7.7% per year, whereas U.S. stocks (S&P 500 in Cdn$) seemed cursed in the new millennium, delivering –2.5% per year … yes that is a negative return for 10 years! Continue Reading…