Optimism #81 - January 29, 2025
Dear clients and friends,
Portfolios continue to do well.
TFSAs and spousal loan payments are largely done and if needed / desired I am here to discuss RRSP contributions over the next six weeks or so. The RRSP deadline is March 3rd this year. (Please don’t leave it to the last day.)
I just finished reading Willful Blindness, by Sam Cooper. Highly recommended.
And Die with Zero. I wasn’t fussy about the beginning, but it made some worthwhile points.
If you have short term cash looking for a home, CIBC is offering 5% for four months.
I believe up to 1 million dollars. It’s called the “CIBC E-advantage Savings account”. EQ Bank is apparently offering 5% as well, in their 30 Notice Savings account. RBC has a similar e-savings account offering slightly more interest, but only for 3 months.
Good news, the OAS clawback limit moves up to $93,454 for 2025 (from $90,097 for 2024). The pension is completely taken back if individual income exceeds $151,668. For those over age 75, the ‘clawback ceiling’ (when your last dollar of OAS is entirely gone), is $157,490. If you elected to defer past age 65 , these ceiling figures are higher.
The deadline for Charitable contributions has been extended to the end of February but does not include donations of securities in-kind.
Insiders continue to buy at Tourmaline (mostly natural gas), Suprerior Plus Corp. (propane & other similar liquids), Element Fleet Management (Trucking Logistics) and Rogers (Telecom).
Here is an article about owing real estate in the US. It contradicts what I have read and heard elsewhere, but interesting nonetheless.
My colleague and friend Terry Ritchie penned this, about the dangers of working while on holidays in the US.
Every year I tick that box saying I am in their county for leisure only. Then I check my emails. Just a word of caution if you do as well. Here is a relevant article.
I see many interesting factoids these days in the world of money management:
Somebody on Twitter (X), calling themselves Rudy Havenstein, says, “A hedge fund is a compensation scheme masquerading as an asset class. Investors in hedge funds have paid out almost half of their profits in fees since the early days of the industry more than half a century ago, the data shows.” There are a few good ones and many duds. Steer clear I suggest.
Here is an article in the Globe (PDF) about a professional money manager based in Kelowna. I know him and he is very likeable and smart, well educated, top licensing etc.. However, his process simply is not working that well. We have done far better with our ‘keep it simple’ dividend stock approach, with less risk, more income, lower volatility and better tax consequences. Halfway down in the article it says long term annual performance (since September of 2009 which was a really good time to invest) net of fees is a bit over 4.7%. (for comparison the TSX (Canadian broad index) did 8.73% and the TSX 60, Canada’s largest 60 public companies and a better reflection of our focus, paid 8.88%).
At 4.7% per year, $100,000 becomes $203,800 after 15 years. At 8.88%, it would become $362,300. The 2nd return is 253% more. We can’t afford such errors.
If you think government is getting too big in Canada, you may be right. Martin Pelletier says there is 1 IRS employee for every 4049 US residents. CRA employs one for every 676 residents, roughly six times as many.
I think it’s time to simplify the tax code.
Have a super week.
Derek Moran
