Minimizing Stress this Winter

With everyone talking about how depressing it is this time of year, I thought I would do something a little different and give you some ideas on how to stay positive with some strategies on how to minimize the stress in your life.

Step Outside

Bundle up, head out the front door and brave the cold temperatures.  Let the fresh air energize you.  On a sunny day, soak in the calming light.  On a snowy day, throw a few snowballs to let out some steam. 

Get Active (my favorite)

Physical exercise can be an excellent stress-buster, so walk, run, skate, ski, and dance and enjoy the rush; it really works!  Research cited by the American Psychological Association suggests that physically active people are less likely to suffer from anxiety or depression than sedentary people because their bodies have more of an opportunity to practice dealing with stress.

Start laughing

Laughter really can be the best medicine.  A good laugh stimulates circulation, helps muscles relax and boosts the production of endorphins.  Over the long run, it can improve your immune system, relieve pain and make it easier to cope with tough circumstances.  So see a funny movie, get tickets to a comedy show or hang out with a friend that makes you laugh. 

Breathe deeply

Put your hand on your abdomen and take a few calm, deep, slow breathes, watch your hand move in and out.  Maximize this stress-beating effect by throwing in the scent of essential oils or a steaming cup of herbal tea.  Remember deep breathing can also have a positive effect on your heart, brain, digestion and immune systems.

Break your routine

Routines can be comforting but they can also make you feel trapped.  Set yourself free by taking up a new, creative, hands-on hobby like pottery or baking.  Learning a new skill can boost your confidence and activate new mental pathways that help you come up with fresh approaches to problems.  It could also keep your mind sharp and improve your memory.
 

Clear the clutter

Even hidden out of sight and in cupboards, drawers and attics, disorder and clutter can be distracting and increase stress.  Tackle one room at a time, organizing and streamlining as you go. 
 

Stay healthy

Get enough sleep and eat sensibly.  Sleep deprivation has been shown to boost both blood pressure and levels of stress hormones.  It also affects the immune system, making it easier for you to get sick.  When it comes to your diet eat the foods that have been proven to reduce stress including walnuts, oatmeal, salmon, tea and spinach.

And above all else; be kind to yourself.  Don’t let your stress reduction efforts stress you out!  Be realistic, and give yourself permission to take the time to follow through.  Managing stress is a life-long project, but committing yourself will pay off with better health, a more positive mood and a greater enjoyment of life.

Have a great weekend,

Tracey

 

 

Source:  Manulife Investments, Solutions, Winter edition 2012/13

Should I contribute to my RRSP or my TFSA?

With the availability of Tax-Free Savings Accounts (TFSA), does it still make sense to contribute to a Registered Retirement Savings Plan (RRSP)?  Determining which plan or what combination of plans is best for you will depend on your personal situation and your objectives.

The major difference between a TFSA and an RRSP is the treatment of contributions and withdrawals for tax purposes.  RRSP contributions are tax-deductible, but withdrawals are taxed as earned income.  On the other hand, TFSA contributions are not tax deductible, but withdrawals and the earnings and growth on investments are completely tax free.

Furthermore, TFSA withdrawals have no effect on an individual’s eligibility for federal income tested benefits and credits, unlike RRSP withdrawals, which are included as income for the purposes of calculating benefits.  This may be particularly important to seniors who receive Old Age Security and the Guaranteed Income Supplement.

Generally, an RRSP is used for saving for retirement, while a TFSA can be used for both saving for retirement and other shorter-term needs.  Because TFSA withdrawals are added back to your available TFSA contribution room in the following calendar year there is very little downside to using TFSA savings for mid-sized to large purchases.  Anyone saving outside an RRSP should consider contribution to a TFSA first.

The TFSA and RRSP are both important tax-advantaged savings plans sponsored by the Government of Canada.  Generally, one is not better than the other; they work together to give Canadians valuable tax benefits.  A TFSA can be an excellent complement to an RRSP and may be used to maximize retirement income when RRSP contribution limits have been reached.

The Retirement Income Decision:

·        Choose an RRSP when pre-retirement income is expected to be higher than retirement income.  Income during retirement may benefit from a lower income tax rate.

·        Choose either a TFSA or an RRSP when pre-retirement income is anticipated to be equal to retirement income.  Income tax rates may be equal before and during retirement, so there is no advantage to one over the other.

·        Choose a TFSA when pre-retirement income is expected to be lower than retirement income.  Income during retirement may be withdrawn tax free from a TFSA.

                                                                    
As your Financial Planner I can help you determine which tax-advantage strategy best suites your needs.  Furthermore, I can help you figure out the amount you need to save to achieve your goals, and the most appropriate investments keeping in line with your risk tolerance.  If you are still having trouble making the choice between your RRSP and your TFSA; give me a call.

Have a great weekend,

Tracey

 

Source:  Fidelity Investments, and Manulife Solutions, Winter edition 2012/13,       

 

Reasons to be Optimistic for 2013

With 2012 behind us, here are a few good reasons investors should be optimistic about 2013:

 

·        It looks like the worst is over for the U.S., with both job creation and improvements in the U.S. housing market consumer confidence is on the rise.

·        The Canadian economy continues to remain stable; enjoying low interest rates, a strong dollar and a declining deficit.   However, we need to keep an eye on rising consumer debt levels as this remains the main risk to our economy.

·        The outlook for oil prices in 2013 is neutral to positive.

·        Though no one is expecting to hit the lights out; base metals such as copper, nickel and zinc are expected to generate positive returns in 2013.   Gold is expected to be more neutral in the longer term.

·        North American stock markets are poised to provide another year of positive performance in 2013, with the U.S. leading the way and Canada following along behind.

·        Companies are expected to grow and make money in 2013, the expectations aren’t fantastic, but they remain positive.

·        Trade-dependent Asian markets (and Canada) should get a lift from the recent rebound in Chinese economic growth given recent signs of improvement, due to monetary and fiscal stimulus into the world’s second largest economy.

·        Many larger dividend-paying corporations remain sound and will likely continue to provide investors with a buffer against market volatility.

·        In the bond market; corporate bonds remain the preferred choice over government bonds, with shorter maturities preferred over the longer term bonds.

·        Technology and Industrial companies are favored for their earnings stability and their ability to generate cash flow.

So, it looks like we should see modest improvement in the markets this year.  The last few years have been difficult for investors; it is nice to finally get some encouraging news.

Have a great weekend,

 
Tracey

 

 

Source:  Original article published on Advisor.ca 01/08/13

 

Looking back at 2012

With the New Year just beginning; it’s a good time to look back at what shaped the markets in 2012.

BMO economists say the year was defined by the ongoing problems in Europe, continued low interest rates in Canada, and a tenuous recovery in the U.S. which was continuously threatened by the fiscal cliff crisis.

But the New Year brings light at the end of the tunnel.  Although Doug Porter, deputy chief economist of BMO Capital Markets, only expects the Canadian economy to grow by 1.8% this year, he says there have been great strides made over the past twelve months.

In Europe; policymakers buckled down on austerity measures (tax increases/spending cuts) and government officials like Mario Draghi, President of European Central Bank, are committed to protecting the Euro.

The housing market in the U.S. finally started climbing back; while bond rates remain steady.

Most importantly, there were no negative surprises in 2012 and the forecasts were right on the money, says Porter.  Not only did interest rates remain low, but the Canadian dollar was also stable and the country posted an expected growth rate of 2%.

Though Porter concedes it is tough to ignore the likelihood of continued weak economic growth into 2013, the bank is confident.  It predicted the U.S. would reach a fiscal agreement; and believes the U.S. will come out on top as one of the strongest G7 countries of 2013, which will help improve markets.

The main roadblocks for Canada going forward will continue to be: penny-pinching consumers; wary business owners held back by commodities and spending; sluggish income growth across the country; destitute job markets; and little improvement of government debt.

Also, both Canada and the U.S. will have to watch out for the over-regulation of financials which will impact the markets, as well as a potential overhaul in the U.S. corporate tax system, says Brian Belski, chief investment strategist of BMO Capital Markets.

Globally, BMO expects the landscape to improve over the long-term.  Paul Taylor, chief investment officer of Fundamental Equities for BMO Asset Management, expects the Eurozone will muddle though its problems by “continuing to develop a common bank supervisor (and) a framework for pan-Europe fiscal coordination.”  He also feels investor’s portfolios will be most affected by “how sustainable the U.S. fiscal agreement will be.”

Belski agrees the U.S. will set the tone for stocks and markets.  Though company balance sheets are the strongest they’ve been since the 1950s, he warns investors to be mindful of buying into exposed and volatile emerging markets.

Porter expects the dollar to remain at parity and that interest rates “will hold for the third year in a row, which is the longest standstill since the 1950s.”

Bottom line, although growth rates are expected to improve in the latter half of 2013; we as investors should continue to choose companies that pay dividends when making our RRSP contributions this year.  

May 2013 be prosperous for all of us, have a great weekend.

Tracey

 

Source:  original article by Katie Keir, published on Advisor.ca 12/20/2012