You may soon find yourself with a tax refund.
- How should you spend it?
- What is the right answer for you?
- Would you be interested in a value added idea?
Presented by Henley Financial & Wealth Management – please continue to read you may find this of some value.
The average individual tax refund is between $1,500 and $3,000. Not everyone will get a tax return essentially a return means that you paid the government too much in tax during the year and now they want you to have it back… For the chosen few people that do lend the government their own money to invest during the year on a tax free basis, that’s the biggest chunk of discretionary income they’ll see in a year. There’s a lot of temptation to spend this cash as is not readily accounted for so it’s essentially free money.
What would you do with that cash if was suddenly given to you?
Hmm, A Trip, Newest Phone, Clothes, Shoes, Dinner and Drinks (well more drinks than dinner), Raptors Tickets, Concert Tickets and a host of many other ideas come to mind.
Once you see the cheque or the deposit in you bank account a spending rush will come over you. Earning 1% in a high yield savings account does not seem very appealing. Investing in your portfolio for future returns that cannot be seen for years to come does not give you that warm and fuzzy feeling.
You could take a trip of a lifetime. How could that be a bad investment? The experience alone is worth a lifetime of memories. This will subside next month when you realize that you spent the return and then some and have to pay for those memories. Hopefully you took some beautiful pictures to share with your face book and instragram friends. Those will more than make up for the sticker shock price of the trip.
The other items or ideas mentioned are all short term memories but definitely worth the time spent if that’s what you want. Just remember there is a difference between needs and wants.
So what should you do with your tax return? Here is an idea that will work but isn’t sexy at all. Double up on a mortgage payment. Or Pay down a credit card bill as it is the highest interest debt that you are carrying. Either is a good choice…
If you think about it paying down your mortgage with your return you are one month closer to paying off the principle on your house. This is one of the biggest assets you own in your portfolio especially with today’s housing market. Since mortgage rates are historically quite low, you could potentially make more money by investing that return in the market but as we know the market can be very volatile.
In any case it’s just a thought and the value to you in the long run is a great basic investment in yourself and your family.
The greatest compliment we receive is being introduced to family, friends and co-workers. Let us know if you would like to introduce someone to Henley Financial and Wealth Management. Contact us Henley Financial & Wealth Management.
I learned that courage was not the absence of fear, but the triumph over it. The brave person is not the person who does not feel afraid, but the person who conquers that fear. Nelson Mandela
During the Christmas break we find ourselves looking towards next year. Planning our business model or just looking forward to a change. I always try to pick up a book during the holidays usually a biography as I find them to be most interesting. I like reading about other people’s stories.
Generally what you find in every success is the same pattern, if you have a goal in life and want to succeed you will need to know the following…
- Be clear about your goal.
- Face your fears.
- Trust yourself.
- Embrace the unknown.
- Think big.
- Be brave.
To be successful at anything we do we must conquer some if not all of the above. Life is funny as we are held back by our cautious nature we are afraid of the unknown, our own failure. Because of this most of us never reach our true potential. We read about the successful people who fail more than once and keep pushing forward until finally they reach that unattainable goal for most. Success!
Being clear about your goal – we focus more on what we will lose than what we will gain. Therefore if you are going to lose something you must be clear about what it is you want to gain. There will be no guarantee that success will be accomplished but the answer is ‘NO’ if you don’t ask the question and will always be ‘No’! We must know the answer before we start. So ask the question!
Fear – often gets in the way but we are wired from a young age to be cautious to any potential threat to our own safety. That is not only a physical threat but also a mental threat we will undermine our own ability to asses smart risk from safe risks. Sometimes you have to say “what the heck?” and push forward. If don’t challenge your fear it will become you.
Trust – you must believe in the path that you have set out for yourself. If you don’t have trust in yourself to create the future you aspire to have you will only find regret. There will be days you will be overwhelmed. As long as you believe in the path you have set out for yourself and trust the process. Success will come.
The unknown – We always choose the path of least resistance because it’s the one we know. What if we walk through a door that’s open and we don’t know anyone on the other side. You have two choices turn around and walk back through the open door, or meet new people on the other side. Within a short period of time you will have made a new contact, a new friend, or had a new conversation. At any rate you will have embraced the unknown. Choose a path unknown every now and then you may be surprised at the result.
Think big – we all have dreams, which get us excited. These dreams are awe-inspiring; they are the end result of an idea. We know for a fact that we can’t go from nothing to something without staring with an idea. If it’s a big idea then that’s the end result, and we you need to take small step along that path to achieve the dream. Don’t stop dreaming big dive in with both feet grounded find the solution to create the idea that fulfils the results.
Be brave – Let’s be clear: Living courageously is not the absence of knots in your stomach, a lump in your throat, sleepless nights or sweaty palms. It’s not about being fearless. It’s about fearing less. Everyone processes greatness within himself or herself.
Do not judge me by my successes, judge me by how many times I fell down and got back up again. Nelson Mandela
Get out of your own way and you will find success!
When will our dollar come back to a common value that we are comfortable with? Since the global oil rout began in late 2014, everyone has been trying to call a bottom in crude prices. Looking at it with a wider perspective, crude prices have a huge impact on the global economy as a whole, directly influencing those countries that are major exporters of it. Canada, the world’s sixth largest oil-producing country by volume is particularly exposed to fluctuations in crude prices, and its currency reflects this by showing a strong correlation to crude oil prices (given no other major economic developments).
Adding to this point, Canada’s largest trading partner for oil is just south, as the United States gobbles up more than 95% of its crude exports. Oil is priced in U.S. dollars (USD), so lower oil prices mean less U.S. dollars coming in per barrel exported. Less USD supply drives up the value of USD versus the Canadian dollar (CAD), resulting in a weaker Canadian dollar.
The weakening of the Canadian dollar is a major concern for anyone who has immigrated to the United States from Canada, and a great boon for anyone looking to move to Canada or buy property here.
So now for the 96.5-billion-barrel question: Have oil prices bottomed? Speculators look to global events for a clue as to a bottom forming for oil, as every OPEC meeting and every meeting between Russia, Iran, or Saudi Arabia about oil production immediately causes a spike in crude. If the talks yield nothing of substance, crude prices immediately fall back down. Is this just the Wall Street, or is there more to it? The answer lies in Economics 101: Supply and Demand.
Oil speculators know that a commodity’s price is dependent on the balance between the supply present and available for use and the current and future demand of that commodity. When representatives from OPEC, Russia, Saudi Arabia or Iran meet with each other, speculators are hoping for an agreement that affects the supply/demand balance with a lessening of the future supply via production cuts, or at least a freezing of the output to allow for demand to outpace supply. It is the underlying supply data, however, that suggests we’ve bottomed out in crude prices and thus the Canadian dollar in the short-term at least.
Is oil turning around, and could it possibly be undervalued.
Well if we look at the price at the pump it seems to be rising slowly. Although yesterday I bought some US currency and paid the highest exchange I have in recent years. Time will tell but as we know our currency is valued to our resources.
After the last debate for the presidency of the United States of America, it’s hard to imagine that these are the best two candidates to lead a world power for at least the next four years. You would think with all the people in the political ring you would have someone who cares about our future generations and not about what happened 20 years ago and how that makes you unfit to lead. If having a skeleton in the closet means you will be called out when you run for office. Then you would never have a leader in the free world as we have all done something that would consider us unfit to lead a country.
Henley Financial and Wealth Management brings you this article with consideration of what might happen moving forward.
Predicting what will happen in the stock market is hard. Nope, scratch that. It’s pretty much impossible. But in light of the looming November vote, I took a look at what happened in the markets over the past few decades in relation to US presidential elections. However, before I get to that, I would like to emphasize that when it comes to markets, the past does not predict the future. And so I am not making any predictions here about what will happen on November 9, 2016, the morning after.
What happens in the markets during the lame duck session between an election and the inauguration of the new president? The performance of the stock market between Election Day and Inauguration Day might be taken, in part, as a statement of investor confidence — or lack thereof — in the incoming administration.
The line of thinking is that Republicans are better for the markets because they tend to push for more pro-business policies, such as lower taxes and less regulation. However, the stock market has historically performed better under Democratic presidents. American presidents since 1945 show the average annual gain under the blues (Democrats) was 9.7%, while under the reds (Republicans) was 6.7%.
The only two presidents who saw negative market returns during their tenure were Republicans: Richard Nixon, who was in office during the Arab oil embargo, and George W. Bush, who closed out his second term as the Financial Meltdown in 2008.
Taking it a step further, both poor and good stock performance in the year before or after an election had less to do with the president’s party and more to do with what was going on in the actual economy.
As for Obama, he took office the year after stocks lost nearly 40%. And notably, days before stocks touched their lowest in March of 2009, the president stated, “What you’re now seeing is profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective”. Stocks are up by about 209% since he said that. Is it because Obama was a great president and his policies changed the world?
No the strong performance of the market from 2009, was not due to the election of President Obama and retention of a Democrat-controlled Congress in 2008. It resulted instead from a recovery in the economy after the Great Financial Crisis.
So what does this mean for November 8?
The result of that election is unlikely to have a major bearing on the performance of the US stock market.
The markets don’t like uncertainty, as the market sees it, Hillary Clinton is a known player whose policies are expected to be largely a continuation of the current administration.
Trump and his economic positions, however, are less predictable and do not always follow the party, he is for tax cuts and deregulation, but against free trade. Thus, he is perceived as more of a political risk in the market.
That sort of emotional response to a political shock is actually quite typical of investor and, more broadly, human behavior. Unexpected and potentially destabilizing political events tend to make traders and investors nervous, which then sometimes leads to volatility in financial markets. But as history has shown time and time again, these events generally do not have a sustained impact on markets.
Yes, investor sentiment in the immediate aftermath of the election can affect the market. And, yes, presidential policies affect the economy, which then, in turn, can affect the markets.
However, there are a bunch of other factors not wholly connected to presidential policies — such as oil-price shocks, productivity shocks, and things like China’s devaluation of its currency — that all influence what happens with the stock market. In any case, perhaps the most telling historical debate with respect to the relationship between presidents and the stock market (or lack thereof) is the following. Stocks saw their best gains under Republican Gerald Ford — but he wasn’t elected president, and he wasn’t even the original vice president on Richard Nixon’s ticket in 1972.
So whoever wins this circus act called the US presidential election of 2016, the markets will continue to perform based on solid economic performance until that performance is upended by a real economic event.
1987 was our first experience with a violent correction in financial markets since 1929 and it taught us a few things about investing. Or so you would think!
The crash of 1987 was a violent correction in financial markets. Share prices had been on a tear during the first half of the year. Year-over-year through August, the Dow Jones was up 44 per cent. The TSE, as it was called then, was up 34 per cent year-to-date. Good times were rolling. Although this is nothing like what has happened in the last part of 2015 and the beginning of 2016. Good times have been rolling since the correction of 2008 -2009.
In October of 1987, things fell apart. The psychology turned on hints that interest rates might rise and a sense that prices had galloped ahead too far, too fast. Markets trembled on Fri., Oct. 16. Monday, Oct. 19, saw a record 23 per cent drop for the Dow Jones Industrial Average, and 11 per cent drop for the Toronto Stock Exchange. Sounds and looks familiar to all things we hear today.
The scale of the collapse was well beyond anyone’s ability to measure; the damage was the worst since 1929. Early forms of computer trading, which sold blocks of shares as prices fell, helped pile on the downward pressure.
Ever wonder what tycoons like Jim Pattison or Warren Buffet did when everyone is screaming that the world will end in the face of market corrections. They bought shares, mostly in blue chip companies. In the face of a total market collapse, they would be diving in. Why not, opportunities like this didn’t come along very often — great companies with great businesses at a bottom of the barrel prices.
When I started in this business I would hear the seasoned veterans at round table talks advocate for buying low and selling high. Which sounded like reasonable advice to me, and if I followed their advice I would create a sound financial investment portfolio for my clients.
Markets always seem to recover, regardless of the pessimists. The Dow ended 1987 with a small gain, as did the TSX, which was up 3 per cent on the year. It takes a while for the lessons to sink in, but here’s how to look back on that experience
Nobody can predict the future though many claim they can. How long or lasting will this setback be is only a guess by anyone claiming to know. In 1987 and in 2001, the corrections were short and sharp.
In 2008-09, it lingered. But when prices took off in mid-2009, it was a four-year spree. One reason was record low-interest rates; the other was an expectation of a global recovery that would fuel profits.
But the recovery has been weak and share prices have run ahead of the profits behind them. The rise in share prices has not been supported by growth. The issue for Canada is the rapid fall in commodity prices. Our resources are not all we have going for us, but the global war for oil dominance has caught us smack in the middle. Companies that are dominant with a history of profitability are good bets in good times and bad. Sentiment can turn quickly. Irrational exuberance can give way to irrational pessimism. The TSX is down again, as is the price of oil and the loonie. It may go on for a while yet. There’s no question it hurts, but where we are in the last week of January isn’t necessarily where we’ll be at the end of the year.
So 50, is the new 40, why do people always want to count backwards? Women never seem to age past 29; until it’s obvious and then they age to forty something. I act like a teenager most of the time and sometimes feel like a twenty something. There are days when my aches and pains set in and that is what being fifty is sometimes like. But that’s what happens when you age.
If I rate my younger years I would realize how many mistakes I’ve made along with all the things I’ve learned in the five decades of life.
I prefer to live by this motto and enjoy life.
“Growing old is inevitable, Growing up is optional”.
Don’t wait until you have time to travel. Travel the world while you can, the world is your oyster so they say. How do you know what’s out there if you don’t explore? Don’t just travel to the obvious places. Travel to learn, travel to discover and try not to go to the same place over and over. Travel to the places that will challenge your adventure.
In life we spend entirely too much time working on other people’s visions or in other people’s meetings. Meetings are ways for us to procrastinate implementing good ideas. If you find yourself in a job that you wish you could leave then do it. Find something you love and make your dream job a reality. I realize that is sometimes unachievable. But do something you love to do and you will never regret getting up in the morning and going to work.
In all relationships personal or business you must have trust. Trust in yourself, and your ideas good or bad. Some of your ideas are good and will work out, other ideas may not but what is the harm in trusting in yourself. You may lose friends, or even get hurt. But you must trust people until they give you a reason not to. Don’t waste time on people who you don’t trust.
Find the best in people, they will be best and worst that will happen to you. Some people will help you go further in life. Others will pull you down to their level and hold you back. A few people will change your life forever. As the saying goes you have not met your best friend yet. If you think like that you will meet many amazing people in your life searching for another best friend. Just think what life would be like to have many best friends. You need amazing people who do for you as you do for them in your life. Don’t waste time with friends who don’t treat you the way you treat them.
Value other people’s time. That means that if you’re late, you think you’re worth more and can keep them waiting. Now I realize that there are times when being late cannot be avoided. Call ahead and let them know that you will be late. Don’t be that person who gets invited to the surprise party an hour early just so you will be there in time for the surprise.
In Life we fail a lot. We fail… often, at love, at socializing, at making friends, at work, at business, and with family. Our biggest problem when we fail is we blame that failure on something or someone else. We should learn something every time we fail. If you have not learned anything from failure then you have failed. If you learn something, then you’ve gained a valuable lesson. Every time you grow you learn and fail, you become better at figuring out life.
Life for me has been 50 years in the making. I don’t need to go back 10 years to find it nor do I believe I have completely succeeded at life quite yet. Without many mistakes along the way I would have never learned the patience needed in growing older.
We often forget to plan for our future financial security needs because we are to busy looking behind us to see where we have been. Before you know it, that time will be here and it may be too late. Live life and plan for the future.
Growing old is inevitable… The rest of this quote is yours to finish!
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