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It turns out that, as with most things involving taxes, it is complicated. Much depends on how old you are, whether you want to hold the stocks you might sell for a long time, how high the dividend is on the stock, and how well or poorly the stock market will do in the future. In order to assist in decision making, here is a numerical example.

Many people in their 30s or even 40s have lived and worked their entire adult lives in a world of persistently very low interest rates. While a 40-year-old American was (barely) alive during Paul Volcker’s often double-digit interest rates during the 1980s, during their working life, rates have only exceeded 4% twice – once from 2006 to 2008, and again starting in late 2022. For much of the remaining time, rates have been well below 2%.  This was, of course, a huge benefit to borrowers, allowing them to spend more on houses, cars and other goods, whether wisely or otherwise. [...]

While social media can be a negative force and always threatens to be a huge time-waster, it does have the virtue of bringing material to hand that we might otherwise miss. One of the best writers in the economics and finance sector right now is Ben Carlson CFA of Ritholtz Wealth Management. His blog, “A Wealth of Common Sense” contains not only common sense, but some real wisdom, and always good writing. Here is an essay that our Portfolio Management Committee recently reviewed together. We agree without almost everything he has to say. It is well worth your time.

There has been some misunderstanding about the Baskin Fixed Income Pool, and the returns or losses that clients have experienced. We accept responsibility for bad communication on this issue. Fund accounting is tricky, and in this case, has been made harder to explain by two factors. We have, in the past, reinvested income paid by the Pool, issuing additional units to our clients rather than paying them cash; and the bond market experienced a record decline in value in 2022.

There may be no word discussed more in the world of investing than “risk”. Risk means many different things to different people. To some, it represents how much a given investment might fluctuate in a given day, month, or year. To others, it represents the chance an investment might lose its value entirely. A third option is that risk represents the chance an investment or portfolio will suffer a permanent loss of capital that will never be recouped. At Baskin Wealth Management we typically discuss risk as the latter; and we believe it possible to significantly reduce the risk of permanently eroding one’s capital through diversification, wise asset allocation, and owning high quality investments.

In its 2022 Budget this past Spring, the Federal Government announced a new account to help first time homebuyers save for a down payment on their first home. While this Tax-Free First Home Savings Account (FHSA) will not be available until sometime in 2023, no time like the present to beginning planning.

Why we are buying an oil company Not that long ago, I wrote a blog explaining why we don’t own oil companies. We recently purchased shares of Canadian Natural Resources, one of the largest Canadian oil sands producers, for many of our clients and in our equity pool. Let me explain why. Our investment strategy is to own great businesses. Some characteristics of “greatness” that we look for include a strong cash flow generation, predictable growth, and good capital allocation by the management. Despite being an oil producer that is subject to the volatility of energy prices, we believe Canadian [...]

Given the current environment, interest rate hikes, inflation, further disruption to supply chains and the Russian invasion which resulted in a very bumpy start to 2022, Barry & Ernest share their views on the market as well as specific examples of companies we are holding and how we analyze them.

If there’s anything to be learned from the last few years, it’s that unprecedented events occur much more often than one would expect. This isn’t exactly a new concept – the idea is borrowed from famous investor Seth Klarman – but the events that have taken place recently have really driven this concept home.

If your house is like my house, you have a box of ear swabs that you use regularly for their intended purpose, cleaning your ears. But if you read the fine print on the box, you will find a warning. You are told that you must not put this product in your ear, that it is dangerous to do so, and whatever made you think to call cotton swabs “ear swabs” anyway?

The client comes first. That, in a nutshell, is the message of the Client Focused Reforms (CFRs) put into place by the Canadian Securities Administrators in 2021. As discretionary portfolio managers, able to buy and sell securities on behalf of our clients, we have always been subject to this principle. Now, the rules have been made more explicit, and new standards have been put in place in the areas that can be broadly defined below.