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    The dog days of August … A time to reassess success

    The summer is a great time to take a break from many of the day-to-day activities that take up most of our time and thoughts. It’s time to enjoy the outdoors and share it with family and friends. It’s also an opportunity for reflection when we perhaps better see the forest from the trees.

    As wealth managers at Newport Private Wealth we encourage our clients to reflect on personal, family and business goals. Some questions to ask are: Where do you see yourself in five years? What obstacles or challenges do you need to overcome to get there? What is the greatest risk to your financial prosperity?

    If retirement is part of the plan, are you on track? Is your personal balance sheet up to date? Have you recently done financial projections to test your plan (see summertime offer to crash test your retirement plan)?

    If you are a business owner, how current is your business plan? Should you re-examine your growth strategy, target an acquisition or plan for succession? Do you even know what your business is worth should a suitor come knocking?

    For me, summer is the best time of year to share quality family time. It’s a great opportunity to reinforce family values, strengthen ties and build on shared experiences that are, frankly, priceless.

    For most of the year we get caught up in the details of managing our lives. At Newport Private Wealth, we structure and manage investment portfolios, plan to minimize taxes, prepare effective estate plans and generally help our clients manage their financial affairs. Our job is to plan and implement strategies to help our clients achieve their objectives. Defining those objectives is critical to the success of any plan and should be considered thoughtfully at a time when the mind is less cluttered.

    During these dog days of August, take some time to consider some of the more important questions towards achieving success in your personal, family and business life.

    Special summertime offer

    CTA Buttons BW 150x150 Special summertime offer This summer we’re extending a special offer to high net worth individuals who want to get greater clarity on their retirement plans.  We call it our Retirement Crash Test.

    We do a lot of retirement planning for clients in our wealth management practice and we know it’s something people worry about. And many aren’t prepared for:  According to a research report released this past April by McKinsey & Co., 41% of high income Canadians between 55 – 64 years of age will be challenged to maintain their income during retirement.  Either because they haven’t saved enough or investment returns have been sub-par on the savings they have accumulated.

    We’ve developed proprietary financial modeling that will simulate your retirement under a variety of scenarios using inputs you provide. Our clients have found it gives them tremendous peace of mind.  We thought to extend the offer to other high net worth individuals who are at the same life stage i.e. less than a decade from retirement.  It’s a great opportunity to take charge of your financial future and ‘kick the tires’ on our capabilities at the same time.

    Visit Retirement Crash Test to get started.

    Increased wealth after age 70? Don’t bet on it.

    retired couple beach 150x150 Increased wealth after age 70?  Don’t bet on it.A recent article in the Financial Post concludes that spending by those who are retired declines with age and correspondingly wealth increases for those over 70 years of age. Our experience is quite the opposite among the higher net worth clients we have helped through retirement. In fact, I continually caution my clients to count on higher expenses in the future for the following reasons: [read more >>]

    Even the wealthy worry about retirement

    FPArticle 2009 golden egg Even the wealthy worry about retirementCan I afford to retire?

    This question, more than any other, is asked by clients approaching retirement.

    Individuals balance their spending and savings during their working years to reach a point at which they have accumulated sufficient capital to augment any pension income to support their expenses. That’s retirement affordability.

    The retirement affordability equation appears simple. It isn’t. That’s because there are too many variables like life expectancy, future health care costs, investment returns and inflation, etc. that can change materially and have a dramatic impact on whether you enjoy a comfortable retirement or not.

    [read more >>]

    Is the next generation ready to fund retirement?

    succession 5April Is the next generation ready to fund retirement?Last week’s federal budget included the much anticipated changes to the Old Age Security (OAS) pension. But not nearly as soon as some thought.

    With changes being phased in over six years beginning in 2023, the reality is that the majority of Canada’s baby boomer population will be unaffected by the changes. Currently, at over $6,000 per year with a claw back feature reducing the amount received based on income, the reality is that for most of our clients OAS is an afterthought in their retirement planning.

    But what this change does signify is a continuation of two societal trends that have been going on for decades. [read more >>]

    Reset your clock. Market timing doesn’t work.

    I recently met with two of my clients, a retired couple, to review their investment accounts. They were pretty pleased with the performance so they asked me to take a look at an account they had managed elsewhere that hadn’t performed as well. After doing a bit of digging, it became apparent that a different strategy was being employed: market timing. This involves buying securities when you believe the market is about to go up and selling them when you believe the market is about to go down.

    Market timing, technical analysis, program trading, whatever terminology is used to describe the process, is a method that rarely benefits an individual investor and often serves to generate higher commissions for the advisor. Anyone who has taken an introductory finance course will remember that missing the ten best trading days in any year can result in an investor missing a substantial portion of their potential return. This is so often quoted that it is treated as gospel by advisors. So I decided to look at returns for the S&P TSX over the three-year period ending December 31, 2011, the same time frame that my client had asked about.

    i 3f601c535d40d856a000812be5f88c61 Ten Best Days Reset your clock. Market timing doesnt work.

    Over the three year period, the stock market generated a positive return of 29.47%. $100 invested on January 1, 2009 would be worth $129.47 on December 31, 2011. If an investor missed the ten best trading days in each of the 3 years, 30 days in total, they would have lost 41.1%. So the saying is true.

    However, when you look at the data, many of the worst performing days fall right around the best performing days. To be fair, a market timer probably isn’t only going to be out of the market on the 30 best days. If you had also missed the three days preceding and following the best performing days, you would have generated a positive return of 2.49% over the three year period. Much better than the loss of 41.1% but significantly lower than the buy and hold strategy.

    It is only natural that as investors we seek to outperform the market. However, over the long term the best strategy is to diversify your portfolio across a large number of investment categories in a manner that reflects your tolerance for risk and your objectives for your portfolio. Properly structured, you will be able to withstand any market volatility and remain invested, resulting in superior long-term returns.

    How much is enough to retire on?

    i 6f9cba4c27f32783a7686d761c17eb69 nestegg hands(1) How much is enough to retire on?One of the most common questions we hear from people is, “how much do I need to retire comfortably?”  And from those who are already retired, “do I have enough to support my spending for the rest of my life?”

    It’s our job as wealth advisors to run the sophisticated and detailed analysis that provides the assurance — or occasionally, the cold water dousing that says savings and spending habits need to be changed.

    [read more >>]