Advisors

2020 – Who Would Have Thought?
by Shelly Appleton-Benko | December 29, 2020

This has definitely been a unique and unexpected year, to say the least. Last January, would you have placed your bet on Shopify to have more market capitalization than the Royal Bank of Canada? Or that the world would depend on video chatting to meet with colleagues, friends and family, with Zoom returns peaking at over 300% this year?

These are just a few examples of the many things in 2020 that have not made sense. Corporations with billions of dollars of tangible assets and forecastable future earnings are trading at lower valuations than companies with, well, no assets at all. What does this mean for 2021 and your portfolio?

With so many people focused on the Pandemic Recession and working hard to relieve us all from the confines of our homes, something we can be thankful for is the low interest rates this year has provided. You may ask, why on earth should we be thankful for low interest rates? While it may be true that low rates provide us with low returns on our fixed income, they also attract money to new mortgages, homes and homebuilder stocks. This means that there is an abundance of cash on the sidelines that will inevitably move into the markets and, as lower rate alternatives become less attractive to investors, more will choose to invest in blue chip stock dividends. Materials, industrials, healthcare and infrastructure stocks should all move ahead nicely in 2021.

Many people are asking what will happen to our wonderful technology stocks that have been the superstars of the market in 2020? There are some analysts that have drawn a comparison between the technology bubble of the 1990s and the 2020 run up in technology stocks. The key difference that we see is that back in the dot-com era, the corporations were not profitable, whereas today many of these investments are not only profitable but are also strong and resilient businesses. While this is true, there is no harm in diversifying our portfolios, so be sure to expect some review of these giants in the next few months. The cloud storage, data transmission and online business activity will not just end with a vaccine. We are hopeful that these investments continue to add value for the long term.

In the next few months, we will be encouraging our clients to contribute to their TFSA and ensure that if you are still saving for retirement, you consider topping up your RRSP account as well. We will be sending out our year-end reporting mid-January and look forward to chatting with you all in the new year. Happy New Year to all!

Be sure to check out the mini video (40 sec.) on the making of our holiday card:

5 Financial Tips for Donating to Charity
by Shelly Appleton-Benko | December 1, 2020

Canada has long provided generous tax incentives for Canadians who donate to charitable organizations. Here are five simple tips to help you get the highest value available from tax credits when giving to charities.

1. Donating Securities – Cash versus Shares. Since 2006, an additional incentive has allowed Canadians to donate publicly traded securities with unrealized gains. Donating eligible securities “in-kind” rather than donating cash could allow you to receive the same tax credit for your donation while not having to include a capital gain on an appreciated eligible security in your income.

2. Carry forward donation receipts up to five years. For example, you can claim tax credits for donations made in 2020 on a 2020, 2021, 2022, 2023, 2024 or 2025 tax return, or split the claim across any of those years. If carrying forward donations allows you to receive a higher tax credit, it can be worth the effort.

3. If possible, claim donation tax credits after accumulating more than $200 in donations. You are eligible for a federal donation tax credit worth 15% on the first $200 donated, plus a tax credit worth 29% on any amount above $200.¹

4. Donations made by spouses can be claimed on either spouse’s tax return(s), unless made in a will. If you and your spouse combine donations on one tax return, you may reach the $200 threshold for a higher donation tax credit sooner to save more tax.

5. Consider making your charitable donations before December 31, as this will allow you to claim them sooner and take advantage of the tax credit.

¹ A federal donation tax credit of 33% is available on donations over $200, to the extent that an individual has taxable income that is taxed at 33%. An additional provincial tax credit for the first $200 of donations is at the lowest personal tax rate (except for Quebec) and the tax credit for donations over $200 is at the highest tax rate in most provinces.

² Odlum Brown Financial Services Limited is a wholly owned subsidiary of Odlum Brown Limited offering life insurance products, retirement, estate and financial planning exclusively to Odlum Brown clients.

Blue Moon
By Shelly Appleton-Benko | October 30, 2020

Fitting for a unique year like 2020, our Halloween this Saturday will be extra “spooky” as the sky will be lit by a “blue moon.” A blue moon is when there is a second full moon in the same calendar month. Blue moons are rare, hence the phrase “once in a blue moon.”

We can look at 2020 in two ways, the first being that which we all seem to identify with most days – this has been a difficult year full of hardships and uncertainty for a lot of people. However, the second way to look at things is to consider that this is a time of change. A time to learn to adapt and change for the better.

A few days ago, I heard Barack Obama speaking on the news, and his words resonated with me. He said that if there was social unrest in the streets and people were marching for change, then we should listen and not judge. Change takes time, and although we are sometimes quick to make changes with our finances, maybe it is time for us to learn to adapt. Is this rare phase in the universe happening because we all need to stop, review and adapt?

The markets have provided unexpected returns this year, the real estate market is booming in our region and we are now faced with our neighbours to the south making big political decisions. I am not sure how I will feel the morning after the U.S. election, but I do know that I will not be changing my main investment philosophy that has taken years to develop. Taxes may increase and corporations may have to add climate change and inclusion to their corporate plans, but the basis of why we bought these companies has not changed.

Going forward, we want to concentrate on the firms that will develop a long growth runway and participate in the change as well as continue to provide us returns regardless of the world’s political arena. Adaptations are gradual modifications that we make to our plans that will benefit us over the long term. Today we are challenged in several ways; however, this is not insurmountable. We will get through it, and the world will be better because of it. This is indeed a rare and amazing time that most of us will never forget. Let’s stay safe and work together to get through it.

Wisdom of a Parent’s Advice
By Shelly Appleton-Benko | October 20, 2020

As a parent, there is no doubt we want the best for our kids – no matter how old they are (infant, teen or adult), they will always be our children and as parents, we offer our advice in the hopes of guiding them on their life’s path.

Recently, I heard a radio commercial “mocking” the fact that a family member was still using their parents’ financial or investment advisor. Needless to say, we disagree!

Why not use your parents’ advisor? In fact, there are many benefits of working with an investment advisor who understands your family’s background, has experience and proven results, and puts their clients’ needs first. At Odlum Brown Limited, we invest for generations, and we are here to help with every step of your investment journey.

Our team, and our firm, pride ourselves on how we facilitate the intergenerational wealth transfer. We help generations of families with their unique wealth needs across all stages of life.

When the time is right for your children, grandchildren, siblings, nieces or nephews to begin their investment journey, we hope that you will have felt well-supported and guided by the service we’ve provided you and that you will suggest they consider using your Odlum Brown advisor for their personal investment needs. Please know, they are welcome to contact us whenever they are ready, and your recommendation is the highest compliment we could receive.  

This little gem of advice could go a long way.

Happy Thanksgiving
By Shelly Appleton-Benko | October 9, 2020

There is no time more fitting to express our appreciation for your continued business.

Warmest wishes to you and your loved ones for a Happy Thanksgiving!

Just Checking In
By Shelly Appleton-Benko | September 15, 2020

Dog Days
By Shelly Appleton-Benko | August 20, 2020

The dog days of summer are here. As we meander through the last few weeks of summer, there are a lot of unknowns lurking in the shadows. Will we find a vaccine for COVID-19? Can our kids go back to school? When will we all be able to travel and live without fear of stepping outside of our bubble? Will there be a second wave?

Today, I am grateful that there are so many brilliant minds in our economic world helping us get through these hard times. Investing in today’s markets requires careful consideration of many factors, including risk, time horizon and diversification of companies that are nimble and efficient. Odlum Brown’s research team is working hard to mitigate risk and build a long and successful pathway for our investments to travel down. Essentially, it has become important for us to separate our short-term goals from our long-term investment goals, so that we can get through these trying times with some net returns, as well as some great dividend income along the way.

Whatever timeline this journey takes, we hope that you enjoy the last few weeks of summer with your loved ones in your bubble and stay safe. After all, we are all in this together. 

Ready for the Rebound
By Shelly Appleton-Benko | July 29, 2020

Described by many as different, colourful, yet always reliable on the court, basketball player Dennis Rodman¹ was known for his fierce defensive and rebounding abilities. Rodman always came up with the ball, no matter what direction it was headed. Who wouldn’t want their investments to be able to bounce back no matter what is happening in the world?

I recently watched the Michael Jordan documentary, The Last Dance, on Netflix and kept coming back to Rodman’s winning strategy. His ability to adapt and be ready for the rebound made him an irreplaceable defensive player. Unexpected plays, sudden actions and constant rebounds are what we are currently experiencing in the markets.

There are many things to worry about during these challenging times, but what to do with your investment portfolio should not be one of them. Our team at Odlum Brown continues to strategize for the present, as well as the future, of the investment world. Working through these changes, we continue to emphasize the importance of knowing that our positions are not just surviving the current economic crisis, but that they are changing their practices in order to thrive in the future.

Recently, one of our Equity Analysts reminded us of a quote by Andrew Grove, Intel’s co-founder and former CEO, who said, “Bad companies are destroyed by crisis, good companies survive them, [and] great companies are improved by them.” I know that we have spent a lot of time talking about diversification and owning good companies in the past, but today more than ever, I believe that staying positioned in high-quality companies that have the ability to quickly rebound and perform consistently during challenging times remains the strongest game plan going forward.

¹ Rodman is a five-time NBA Champion and seven-time NBA Rebounding Champion.

Summer Road Trip
By Shelly Appleton-Benko | July 10, 2020

For many, the end of this quarter marks the beginning of your summer vacation plans. Most of us have been cooped up at home for the past 12 weeks and are ready to expand our social network bubble within beautiful British Columbia. We’ve made a plan, picked a destination and we’re ready to head out on a road trip!

Time seemed to have sped by this year, and in what felt like the blink of an eye, the markets made an impressive return from the March lows in only a few months. As a result, many are asking, “Why is the stock market going up? With so much to worry about these days, shouldn’t the markets reflect that we are experiencing record unemployment, political unrest and accumulating millions of government debt?” In addition to these concerns, many of us are working from home, avoiding social contact and feeling restricted in our daily lives.

There is much to be worried about; however, there is also a lot to be grateful for. The stock market is a forward-looking economic indicator (which points to trends that can predict future performance)* and despite the choppy performance lately, it is sending us a strong message. Economies around the world stopped working for a few weeks and there will inevitably be damage from that; however, the companies that changed their business plans to reflect the current challenges are those that will continue to add value to our portfolios over the long term.

When we embark upon a summer road trip, we don’t look behind us and say, “What will we miss at home?” We look forward out the windshield, onto the next exciting adventure that awaits us and although it could be a complicated and challenging trip, the memory of the trip is what we cherish.

As we drive past the first long weekend of the summer, remember that we are all in this together. After all, we are one big happy Canadian family on this road trip
together!

Happy Canada Day
By Shelly Appleton-Benko | June 30, 2020

We hope you enjoy this this 3-minute video on reasons we are grateful to be in Canada!

Music: bensound.com                               

“Adjust. Adjust.”
By Shelly Appleton-Benko | June 19, 2020

A wise old doctor and family friend (who had a rather wry sense of humour) came to mind today. He passed away just over a year ago, but he had some great one-liners and gems of good advice. In particular, his go-to phrase, “adjust, adjust” has always stuck with me, especially in today’s environment. He would say it, then smile, and then move on, always ready to pivot and adapt to the next task at hand. There was rarely a meeting with him when he didn’t use this magic phrase at some time or another, and there was always a way that we could make it work, simply by adjusting. Lately, I wonder how he would be adjusting to the current pandemic.

The official start of spring was March 19, just eight days after the WHO declared COVID-19 a global pandemic. Springtime is normally associated with renewal and rebirth, and in its own right, this year is no exception. Our society underwent a major awakening, followed by a lengthy adjustment period and are now adapting to the re-start of our economy and a new normal. Saturday, June 20 marks the beginning of summer. While it will likely feel very different under this adjusted “normal,” we are still looking forward to the sunshine and new opportunities that the months ahead will bring.

And since this weekend is also Father’s Day, what would the celebration be like without a good old dad joke?

What type of investment do Wall Street traders call a "007?"

A Bond.

Cheers to all of the Dads near and far; those who are father figures, those who will be future dads and those dads who have passed and are still in our hearts, we celebrate YOU!

Message to the Grads of 2020
ByShelly Appleton-Benko | June 2, 2020

What often separates savvy investors from the rest of the pack is building a solid foundation. This video covers some lessons to learn as you first start out. Feel free to share it with other young adults in your life who are starting their financial journey. Congratulations to the graduates of 2020!

Reminder: Taxes, Refund and Notice of Assessment
by Shelly Appleton-Benko | May 27, 2020

For those who may not have filed their personal taxes for 2019 yet, please note that you only have a few more days to do so. The government extended the filing deadline until June 1, 2020. Should you owe taxes, you have until September 1, 2020, to remit.

Already filed?
If you have already filed your 2019 taxes and received a refund, it is time to consider your options for how to best utilize the funds. You may consider applying the refund to your credit card, line of credit or mortgage, topping up your TFSA or tucking a little away in your RRSP to get a future tax break. Given the current environment and because every household is unique, we encourage you to reach out to an investment professional to discuss the possible scenarios and options available to you. If you are interested in reviewing your refund allocation together, please give us a call.

Already have your Notice of Assessment (NOA)?
Your NOA contains some important pieces of information, including your RRSP deduction limits, Home Buyers’ Plan or Lifelong Learning Plan repayments, capital loss carryforwards or taxes owing. Be sure to review the information provided and have it available for future reference and next year’s filing.

Stay well,

Shelly

Summary of Canada's Economic Measures in Place
by Shelly Appleton-Benko | May 15, 2020

As we continue to adjust to this new world, we thought that you may find this link to Canada’s COVID-19 Economic Measures, prepared by Heather Rivers, Communication and Education Specialist with Odlum Brown Financial Services Limited,* helpful when navigating your options. There have been a variety of new measures put in place by federal and provincial governments to help alleviate the economic fallout from COVID-19 and its unprecedented impact on communities, individuals, families, businesses and industries. We found this summary very helpful and hope you will too.

Stay well,
Shelly

* Odlum Brown Financial Services Limited is a wholly owned subsidiary of Odlum Brown Limited offering life insurance products, retirement, estate and financial planning exclusively to Odlum Brown clients.

Happy Mother's Day!
by Shelly Appleton-Benko | May 8, 2020

Please Stand By
by Shelly Appleton-Benko | April 17, 2020

Recently, while I was rereading an old presentation that our research team had prepared, I came across this image and it struck a chord.  

For those of us old enough to remember, we’d see this graphic on the TV as we anxiously waited for our favourite program to return to the screen. For the newer generation, this is akin to Apple’s never-ending, spinning rainbow circle or the Windows hourglass that appears while we wait for our technology to get back on track. Back in the day, the television broadcasters were working behind the scenes to fix the problems, test solutions and figure out how to get back to the regularly scheduled programming.

In a sense, it feels like we are currently living in “please stand by” mode. For many of us, life as we know it has been put on pause, while other areas of business have ramped up in an effort to develop solutions to fight this pandemic. Some companies are pivoting their strategies and figuring out new and innovative ways to adapt, while others are not. As we head into earnings season, it’s important to remember that “Mr. Market” will reflect both the companies on pause and those continuing to grow. We will continue to actively monitor portfolios and will make adjustments as deemed beneficial.

On a final note, while we “stand by” for the new normal, we also want to acknowledge and stand beside all of the front line workers, the amazing doctors, nurses, healthcare workers and hospital staff, those caring for the elderly, the grocery store clerks and delivery workers, postal workers and everyone who gets up each morning and works to keep our lives moving forward and functioning as normally as possible. We thank you all.

Rocking the Fundamentals
by Shelly Appleton-Benko | March 30, 2020

The last few weeks have made me think a lot about the simple things. What do we really need to survive and thrive in our daily lives? Right now, some of you may be thinking of toilet paper and hand sanitizer, but I encourage you to think beyond daily needs. As an investor, I look at the portfolios we manage and ask if we have covered the fundamentals.

Four years ago, I heard John Herdman, then the coach of the Canadian women’s national soccer team, speak. He brought to light that no matter how distracted we get by the outside world, we always need to remember to “rock the fundamentals.” Be it soccer drills or prudent financial decisions, there are some things that we must do routinely, each and every day.

For me, rocking the fundamentals of portfolio management means ensuring that:

• income needs are met,
• taxation is not excessive and
• the overall portfolio is mitigating risk but still achieving growth over the long term.

Sometimes stepping back from the trade desk and knowing that inaction is the best action are the best ways to rock those fundamentals. Selling in a volatile market is tempting but not always the best decision. Sometimes it is just as difficult to stand on the sidelines as a spectator as it is to be a player, and the last few weeks have been a confirmation of that for me. Our positions are in high-quality companies with management teams who have a vested interest in not only the survival of these businesses, but also in how they will grow from new opportunities in the next few quarters.

At this time, it is important to stand strong together and remember that we can effect change by continuing to rock the fundamentals and adjust our investment strategy along the way. Our team continues to work remotely and hold telephone reviews with our clients. If you need anything in the coming weeks, please call or drop us an email; we look forward to catching up.

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