The Best Registered Tax Shelter in Canada/Market Updates

Thu, Feb 18, 2010

Thought you may want a fresh perspective in the form of a newsletter from one of the best in his line of work.

Paul Lauzon, Kelowna B.C.

Mr. Paul Lauzon, CFP, CHFC, CLU, EPC, Financial and Insurance Advisor working out of Kelowna, British Columbia.

Paul deals with clients from all over the country. Don’t just hand over all your income tax every year, you WORK HARD for that net pay!…Take charge and have that extra money around tax time!

Quote of the Month:

It’s not what we don’t know that gets us into

trouble.

It’s what we know for sure that just ain’t so.

~Mark Twain

MARKETS

For both January and the better part of February, markets continued a flat progression as investors generally adopted a “wait and see” attitude. Much of this was spooked on uncertainty brought about by…

Misreading of China’s belt tightening credit policy which was meant to slow down a lending surge to prevent a property bubble
Financial crisis potential in Greece, Spain, Portugal, Ireland. The fringe countries of the European Union who could not issue extra Euro‟s to increase credit
President Obama’s bank regulation proposals meant to rein in banking abuses

Being that these events are on the heels of a long run up in the markets, many investors decided to remove some of those profits from the table thus explaining the mild volatility we’re experiencing while they wait for more solid news factors. Unfortunately what’s being overshadowed by these uncertainties are, as per usual, the good news items such as:

4th Quarter earnings in U.S. are solid and beating expectations. U.S. manufacturing is expanding at its fastest pace in five years.
U.S. and Canadian economics expect a very healthy first ½ year.
While interest rates will rise by year end to get away from the 0% rate currently, it will only rise to slightly above 1%. Not the excessive rates being flaunted about.
Global trade is picking up and making a comeback, as is U.S. consumer spending – so necessary for driving the global economic engine.
Canadian employment, business and government spending is increasing. Also being heavily weighted in resources, Canada will do well satisfying demand for oil and hard assets.

Market experts still expect another 30 – 40% to go yet over the next two years as we move into a more normalized growth phase of the cycle. So while many are sitting on the sidelines looking for direction, a few are positioning themselves for growth. Most of our major fund partners are buying cheaply in this uncertainty for what they know will add significant profitability to their portfolios. We are all well positioned in our portfolios participating in well over 200 major corporations around the world.

Let’s understand the multitude’s indecisiveness and the volatility which stems from the uncertainties. Much of which we understand is anchored in our emotions. It’s all about choices, isn’t it? We had over the last month the TV show (Channel 26) “X-Weighted” use our offices to film a Season 5 episode (which will air sometime in September). In it they talk about the choices we make over the food we eat and the results of these choices. That’s the great thing we have as humans. The ability to choose; and our fortunes will rise or fall accordingly. We can choose optimism over pessimism, equities over cash, knowledge over fear, tax savings over tax spending, positive over negative. It’s all over how we handle our emotions and especially the emotions of fear and greed, which are so prevalent with the markets.

With this in mind, I find it important to comment on “Alternative” investments which are popping up everywhere as they do with any recession, but even more so with this past one. It is easy to see why people would consider moving this way when one considers that for most this recession wiped out a decade of profits (even though almost all of that has been restored). Generally, this disillusionment produces a lack of confidence in the traditional markets as the luster of limited partnerships, mining flow throughs, Mortgage Investment Corps and property syndicates take centre stage along with individual non-listed stock offerings. All too often the other side of the coin relating to their risk is missed entirely with the new enthusiasm along with the forgetting of objectives. When you‟re in this game, you really need to know what you‟re doing.

For the more frightened, they get caught on the slick GIC advertising trying to rationalize that a 4% 3-year GIC is better than a diversified fund portfolio. Unfortunately, the 4% ends up only being 2 1/3% for three years as in reality and on inspection, the 4% is paid only on the third year while this investor only gets 1% in year one and 2% in year 3. Compare 2 1/3% after tax and inflation and we have an investor losing 3 1/3% after tax and inflation. The sad part is they left their portfolios behind for this which are now earning at a 20 – 25% annual rate. Yes, my dear friends, we do have choices, but we need to really consider the entire picture, understand all the associated risks and most importantly, keep the emotions at bay. Our new models are positioned for this new expansion period which is moving forward. We will do well indeed. As always, the best time to buy is when there is plenty of uncertainty in the markets.
I will be travelling to San Francisco the first weekend of March for a weekend U.S. workshop which should again prove very informative.
My best for a prosperous 2010.

TAX SHELTER

There are many looking for a great return investment. The best I’ve seen is what we have available in our donative Tax Reduction Program. This will be our fifth year and our numbers of participants have grown immensely as a force for good in our world. Profitable in that our program equates to a one year term deposit in excess of 148% at this time.

I know the numbers look far too good to be true, but this REGISTERED program does deliver and you need to at least look at it. Again for the rest of this month and into March we will be conducting some more 1½ hour workshops to show you how. Please call Susan to reserve your seat in our Seminar Room (we need to know the numbers for the muffins. ).

Our dates are as follows:

February 20 – 10:30
February 27 – 10:00
March 13 – 10:30
March 20 – 10:30
March 27 – 10:00

Also for all of us who are currently participating, you will need to wait for all of your paperwork to arrive. Most of you will have received your T5003 and T5004’s by now along with Schedule 9’s for your tax return, but you have to wait for your Donation Receipts from the charities. If you haven’t got these by mid-March, please let us know so we can follow up on this for you.

Sincerely,
Paul Lauzon, CFP, CHFC, CLU, EPC
Financial and Insurance Advisor
302-1630 Pandosy Street
Kelowna, BC V1Y 1P7
250-717-8444

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