Bad news sells newspapers. It is always enjoyable to read a good news article in the paper. Though many are suffering through poverty and lack of jobs, economies around the world are improving, and governments are developing plans to reduce their growing deficits. Baron de Rothschild’s famous quote is “invest when blood is running in the streets”. Our impulse is to pull back and worry about our investment during tough times. When the news is really bad, it is usually a good time to invest.
Our clients are most comfortable when they invest monthly on a regular basis through the good times and bad times. Consistent and regular investing is the key to most investor’s success.

Please read David Olive’s article “Olive: Economic end of the world predictions are premature” published in the Toronto Star on Satruday February 4, 2011.

 The government is sending a strong message that “Freedom 55″ is no longer a reality. Starting January 1, 2012, the penalty has been increased by starting your CPP payments before Age 65. There was always a reduction in place, but now it is a larger deduction being phased in over the next few years. Rumors are floating around that OAS (Old Age Security) will be delayed until age 67. The attached article explains in detail the changes to CPP payments starting in 2012.

Please read “6 big Canada Pension Plan changes arrive in 2012″ published on the Sympatico homepage on Feburary 1, 2012.

 We have all been reading in the paper about the high levels of consumer debt that Canadians are carrying. I have personnally seen a growing trend of more Canadians with very high personal mortgages with low interest rates. Though the federal reserve says that they won’t raise interest rates until at least 2014, this is not guaranteed. A 2% rise in mortgage rates will cripple many Canadians as they are now almost at the limit of the debt they can carry. Too many Canadians have houses bigger than they can afford, and this is going to hurt them in the short term, and affect their retirements as they don’t have enough funds to pay down the mortgage and save for retirement. The government has made adjustments to the CPP payouts for new retirees this year lowering the amounts they collect from age 60-65. Next on the agenda is to adjust OAS (Old Age Security). If you plan on retiring before age 65, then you need to be more aggressive on paying down debt and building up your retirement savings plans.

Please read Tavia Grant’s article “Older cunsumers pile on new debt” published in the Globe and Mail on Friday January 27, 2012.

John Heinzl writes a very interesting article. As of today. U.S. 10 year treasuries are paying 1.87% per year. This is almost an all time low. Last week the federal reserve announced that they are planning on keeping interest rates low until at least 2014. It is very difficult to earn a decent return on government bonds. Many seniors are nervous about stocks and corporate bonds. There really isn’t much choice. To enjoy a good retirement, investors need to include good dividend paying stocks and corporate bonds. In my opinion it becomes a self fulfilling prophesy. The lower the interest rates are, the more likely decent returns can be earned on stocks and corporate bonds.

Please read John Heinzl article “ Will my portfolio earn double-digit returns? Probably not”  published in the Globe and Mail on Friday January 27, 2012.

 The first three weeks of January have been strong in the markets. Though corporate profits rose strongly in 2011, markets had a difficult time. Corporate profits are continuing to rise in January, and so are markets. The turning point is that countries like Spain, Portugal, Italy etc have been able to sell government bonds at lower interest rates than in the second half of 2011. Investors are starting to gain a little confidence that the government turnaround plans show some promise. No one thinks we are “out of the woods” yet, but there are signs that government deficits are peaking and starting to fall. This is very promising for markets as corporate profits continue to increase.

David Rosenberg, who is always negative, and admits it in the attached article, is actually showing signs of enthusiasm for stocks. He feels that this could be a good time to continue to invest into good companies that are paying dividends. Markets so far are proving that the hypothesis is credible. Long term investors are always rewarded.

Please read David Rosenberg’s article “Low P/E ratios offer ray of hope and amid dark outlook” published in The Globe and Mail on Thursday January 19, 2012.

 Is a strong start to the year important? There are trends in the market that many investors follow. In 2011 the market got off to a very strong start, but then fizzled as the year progressed. This year, the last few trading days of 2011 and the first couple of days of 2012 are positive. This is a good sign. Please read more in the attached article.

Please read David Parkinson’s article “Market rally a harbinger of good things to come” published in the Globe and Mail on January 4, 2012.

This past few weeks is the time when columnists make up their year end lists. Favorite movies, favorite restaurants, and investment themes for the coming year. David Rosenberg is usually negative about the markets, but as a strategist, it is his job to look for areas of the economy where money can be made. I agree with all the comments he makes in the attached article. US multi national companies have never been more profitable than now. They are flush with cash, raising their dividends, and expanding into new markets. The Dow Jones in 2011, which is made up of the 30 largest companies in the US was one of the only positive stock indexes in 2011. Our managers are looking for those companies providing a service or product that people need irregardless of how the economy is doing. Companies like Macdonald’s, Coke, Walmart, are very profitable. In Canada, managers love Tim Horton’s. In Europe, a favored company is Nestle’s. Money will be made in 2012. The challenge is to have your money with managers who understand the markets we are in today.

Please read David Rosenberg’s article “10 investing themes for the year ahead” published in the Globe and Mail on December 20, 2011.

2011 started strongly in the markets but since March, it was a downhill slide. The debt crisis in Europe was the main story of 2011, with the stalemate in the US congress a close second for filling the news media with negative stories.
A new year brings new enthusiasm and optimistic outlooks for the markets. Good things are happening in the emerging markets and especially in the BRIC countries. Brazil, Russia, India and China. Rising middle classes bring new wealth, and new markets for international companies.
I have attached an article that highlights different themes that might be in the news in 2012.

Please read Rob Carrick’s article “Twelve ways to build wealth in 2012″ published in the Globe and Mail on December 22, 2011.

 We often hear from our clients that they should not be invested in the stock markets because as the baby boomers retire, they will be taking their money out of the markets, and therefore markets won’t go up. Our argument is that as the world becomes more global, there is a much larger pool of investors entering their prime savings years, as retiring. We are seeing countries like Russia, Brazil, China and India with growing middle classes. As you will read in the article we have linked, there is already a next wave of countries with large pools of labour who will become more industrialized over the next twenty years. There are still great investment opportunities around the world, but it is becoming more difficult to identify them in this time of more fragmented world markets. There has never been more of a need to have professional advice to help “stick handle” through these difficult markets.

Please read Rick Westhead’s article “Taking advantage of the worlds’ ‘Next 11′ ” published in the Toronto Star on December 4, 2011.

 At Independent Planning Group we are big fans of the RESP program. We think it is very important that every Canadian is well educated. We have seen clients use the RESP program for university, college, and trade school programs. We had one client use their RESP money to go to a specialized fire fighting school in the States. The only way Canadians can make sure that they are not part of the low income class is to make sure they have a skill. We see shortages today of computer programmers, electricians, plumbers, pipe fitters, and masons. There are shortages of labour in the oil sands, and there is always a need for engineers. Please ask us about our RESP’s as they are very flexible.

Please read Dana Flavelle’s article “Why the gap between rich and poot in Canada keeps growing” published in Toronto Star on Monday December 5 ,2011.