Insights: Family businesses, GICs vs balanced portfolio + the Worm Moon

Good reads:

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·????????Weekly Investment Strategy

·????????Family businesses need to adopt new priorities to secure their legacy

·????????Six tips to help you file your tax return properly

·????????Don’t Chase the Past

·????????Capital gains tax and more changes that could target higher-income Canadians in the next federal budget

·????????What is the Real Cost of Raising a Child in Canada?

·????????How to Talk to Your Partner About Money: 5 Tips and Expert Advice

·????????How does the Bank of Canada set the interest rate?

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Best quote of the week:

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"The earth laughs in flowers." – Ralph Waldo Emerson

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Best soundbite of the week:

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PwC came out with their annual Global Family Business Survey and the results were quite interesting. I’ve linked the full report in my Good Reads section but have summarized a few of the key points. Family businesses saw the largest growth increase in 15 years and they attribute traits like values, employee communication, and digital capabilities as the ones which stood out in companies which outperformed peers:

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• 71% of family businesses reported growth in their latest financial year, with 43% reporting double-digit growth and 77% reporting that they expect to grow in the coming two years
• Family businesses with a communicated ESG strategy are more trusted by customers (62% vs. 49%) than those that do not, yet 67% of family businesses put little/no focus on ESG
• Family businesses with diverse boards (46%) have a slight advantage of those that do not (43%) in terms of double-digit growth this year
• Two thirds of family businesses say employee trust is essential – yet only 36% say they are focused on attracting and retaining talent

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Best visuals of the week:

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GICs have been offering some of the best rates they’ve had in a long time, meanwhile equity and bond markets have been volatile. Naturally this has some wondering whether they should throw in the towel with traditional investments and put everything into GICs.

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Making short-term decisions with long term capital is never a great idea.?As the chart from RBC shows, risk should be measured over a relevant time horizon.?Historically, a traditional balanced portfolio has generated and average annualized return of 7.1% over a 20-year rolling period. That factors in extremely volatile periods such as the financial crisis and tech bubble, etc. Meanwhile the average annualized return of a GIC comes in at 2.4%.

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GICs can certainly play an important role for short-term needs and cash flow planning, but for long-term investors, the best opportunities for growth are generated through the market. The tradeoff of course is putting up with the headache of short-term volatility, but it is well worth it.

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Current market volatility also tends to raise the question: well, what if I sit in cash for a while and wait for things to settle? The answer is simple: when the tides of change shift in the market, they can do so in a hurry. Below is another great chart from RBC that shows how waiting on the sidelines can mean missing a large share of performance following market bottoms, even in just a matter of weeks.

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You’re Invited: One Size May Not Fit All – Creating a Meaningful Legacy in Your Estate Plan

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Whether you are a business owner, retiree, professional/executive, single, part of a married or common-law couple, or part of a blended family, more and more Canadians are looking to do good for causes that are close to their hearts. Did you know that in the last few years, over 5.5 million Canadians donated almost $11 billion to charity on an annual basis?

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If leaving a lasting legacy is important to you, join us to hear valuable insights and ideas on how to achieve your charitable goals.

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Date: March 30, 2023

Time: 10:00 am PT/ 1:00 pm ET

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Contact me for a registration link: [email protected]

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Reminder: Working with your accountant

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As we move through the tax season, we wanted to reach out and remind you that we are happy to work directly with your accountant to help ensure a smooth filing process.?

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If you’d like us to liaise with your accountant, please send an email connecting us and providing your approval to communicate with regards to your 2022 taxes (we need to confirm this annually). Please be sure to include my assistant Saundra on the email as well.

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In case you missed it:

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When it comes to financial planning, there are some challenges that tend to be more commonly experienced by women. I had a great chat with Jonathan Forsgren from Asset TV Canada where I highlighted some of those challenges + shared advice on how to better address them. Watch the full interview here:

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I’d love to hear from you

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Do you have a question about the markets? Or perhaps you’d like to learn more about a particular financial planning topic? Maybe you’ve got a question about your own personal situation?

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Send me your question, and I’ll include it as a topic in an upcoming newsletter: [email protected].

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Beyond the markets:

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Spring has finally arrived and I couldn’t be happier. Although I’m a big fan of winter, this year has been an especially long one since the snow arrived in November and never left. Needless to say, I’m ready for some warmer weather! To celebrate, I thought I’d share some interesting facts about spring:

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·????????The first day of spring is usually associated with the spring equinox, but it actually only signifies the astronomical start of spring as opposed to the meteorological one. The meteorological one is March 1.

·????????An equinox is a moment in time and space when the sun is positioned directly above the Earth’s equator, which happens just twice a year on the vernal and autumnal equinoxes.

·????????The word “equinox” comes from the Latin for “equal” and “night.” As the sun crosses the equator (Earth’s midline), the hours of daylight and nighttime are very nearly equal.

·????????The equinoxes are the only times when the sun rises directly due East and sets directly due West for everyone on Earth.

·????????Every planet in the solar system has an equinox.

·????????The first full moon in March is known as the Worm Moon. That’s because of earthworms. They typically spend the winter buried deep below the frost line, but the annual spring showers reduce the oxygen in the soil and cause them to make their way up to the surface.

·????????Folklore claims that special magnetic or energetic changes on the day of the vernal equinox make it possible to stand a raw egg on its end. Spoiler alert: it’s a myth.

·????????A cemetery in Stull, Kansas apparently has a so-called gateway to hell. Legend has it that this gateway is one of several places around the world where the devil himself can enter the human world. He can only do it twice a year, and one of those days is the vernal equinox. The other is Halloween, naturally.

·????????In ancient Judaic mythology, there’s a claim that the water in springs and rivers becomes unsafe to drink during the vernal and autumnal equinoxes (and during the winter and summer solstices too). The solstices and equinoxes were considered spiritually vulnerable moments, when warring supernatural powers might release cosmic poisons into the water.

·????????The exact date of Easter changes from year to year. Easter is celebrated on the first Sunday after the first full moon following the vernal equinox.

·????????Powerful river waves known as “tidal bores” appear during the spring equinox.

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Source: Reader’s Digest

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Thanks for reading, and I wish everyone a great weekend!?

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Cheers,

Kim

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Kim Inglis, BCom, CIM, PFP, FCSI, CAFA

Portfolio Manager

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T: 416.777.6417 (Toronto)

T: 604.654.1160 (Vancouver)

T: 250.979.1803 (Kelowna)

TF: 1.877.363.1024

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www.inglisprivateinvestmentcounsel.com

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