All posts by Jonathan Chevreau

Having retirement options means freedom

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robb-engen
Robb Engen, Boomer & Echo

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

Saving outside of my defined benefit pension plan will give me several options to consider when it comes to retirement.  To me, options mean freedom, even though I’ll be faced with some tough choices.  Here’s why:

According to my plan provider, I should be able to retire at 57 and receive an annual pension of roughly $64,800.  That will equal approximately 55 per cent of my average salary in my top five earning years.

(Note that I contribute nearly 12 per cent of my salary toward the pension plan each year, in case anyone believes these retirement benefits were conjured out of thin air).

I’ve also built up a decent sized RRSP portfolio – over $100,000 before my 35th birthday.  If left alone with no further contributions, and assuming an 8 per cent annual return, this portfolio will be worth $543,000 by the time I turn 57.

To stay in a 32 per cent tax bracket (22 per cent federal, 10 per cent provincial) I could withdraw up to $23,000 (in today’s dollars) from my RRSP to give me an annual salary of $87,800.

The RRSP Meltdown strategy Continue Reading…

Secular bull market is very much alive: BMO’s Brian Belski

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Brian Belski

By Jonathan Chevreau

“The largest stealth bull market of our careers” is still very much alive, says BMO Capital Markets chief investment strategist Brian Belski.

In the keynote address  Wednesday for BMO Global Asset Management’s Global Vision, Global Perspectives conference in Chicago, the American-born investment veteran said U.S. stocks are now six years into a 20-year secular bull market.

“Bull markets rarely end when everyone is looking for an end to them,” he said, “The media is consumed with negativity.”

Canada “bottoming”

While Belski believes America is setting the pace for global markets, Canada “is in the process of bottoming,” he said. Most of the investment professionals at the three-day conference on mutual funds and ETFs are Canadian. It might not yet be quite time to buy Canada, he added, since the first quarter has been one of “shock and awe” caused by the worldwide plunge in energy prices. Looking further out, though, he said “Canada is the place to be.”

One reason the Canadian market has languished is a call by a large Wall Street firm to “sell Canada.”   Continue Reading…

Settling on the elusive definition of Financial Independence

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Money flying out of cage birds , Financial independence , eps10Here’s my latest MoneySense column, which tries to nail down a definitive definition of Financial Independence. As I note in the above headline, this exercise is a bit more elusive than you might think, and the waters continue to be muddied by the mainstream term, Retirement, which I do NOT regard as synonymous.

As also noted in the Hub’s version below, I’m inviting reader feedback: Has Wikipedia’s definition nailed it, or can the term be improved?

Maybe I should grab the bull by the horns and create my own formal definition of Findependence, even though I view that term simply as a contraction of Financial Independence.

Reader input welcome! Continue Reading…

Why are all these Canadian financial experts in Chicago this week?

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Trump International Hotel and Tower in Chicago, IL in morning
Trump International Hotel and Tower in Chicago

By Jonathan Chevreau

This week, a chunk of Canada’s financial community and media commentators are descending on the Windy City for a half-week conference on ETFs and mutual funds.

They include CBC’s Rick Mercer, BNN’s Larry Berman, author and radio host Andrew Busch, BMO Capital Market’s chief investment strategist Brian Belski and BMO private Bank CIO Jack Ablin, robo-adviser pioneer Randy Cass, Morningstar director of global ETF research Ben Johnson, ShareOwner CEO Bruce Seago and even myself.

You can find the full agenda here. Located at the Trump International Hotel, there are two concurrent streams, one devoted to mutual funds, the other to ETFs.

Wednesday morning (April 8th) kicks off bright and early with a keynote by Brian Belski on the market outlook: It’s titled (reassuringly) The Secular Bull Market is Very Much Alive.

Robos crash the party

One of the big topics within the ETF stream is robo-advisers, most of which have ETFs as their fundamental building block. Continue Reading…

ETFs: the next 25 years

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Mark Yamada

By Mark Yamada, PUR Investing Inc.

Special to the Financial Independence Hub

From zero assets in 1989, to $79 billion in 2000, to $2.7 trillion into 2015, it has been quite a ride for global exchange-traded funds (ETFs). Few financial sectors have approached the over 25% compounded annual growth that ETFs have enjoyed. Yet many industry observers are disappointed.

ETFs’ value proposition is well known: diversification, professional management, shared expenses, all the benefits of mutual funds at a fraction of the price plus better transparency and continuous intraday trading. Yet ETFs represent only 12% of US and 6% of Canadian mutual fund assets (10% if US-traded ETFs owned by Canadians are included). If ETFs are so much better than mutual funds, why haven’t they replaced them by now?

Adopting new ideas Continue Reading…