September 18, 2021

Drop in numbers of super rich Canadians

It's a first-world problem, but still an interesting one. It turns out that the number of ultra-rich Canadians, people who have a net worth of $30 million, is shrinking, according to a recent study done by UBS and Wealth-X.

The number of super wealthy dropped to 4,980 in 2013 from 5,015 in 2012, according to the study. While there's been a 0.7 per cent drop between the numbers, it turns out that the ultra rich still account for a large amount of wealth, $595 billion US. Now that's a lot of dough between a small group of people.

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July 29, 2021

Misery index suggests that stocks have more room to rise

The misery index, as the name suggests, is designed to measure the level of wretchedness felt by ordinary people in the economy. Created by Yale economist Arthur Okun some years ago, it’s calculated by adding the U.S. unemployment rate to the prevailing inflation rate.

Since fear of job loss and shrinking purchasing power through inflation have pervasive effects on the lives of most workers, the index is considered to be a good snapshot of the real economy.

As inflation rises the cost of living increases and, as unemployment rises, more people cross the economic line into poverty.

In both Canada and the United States, the index peaked well above 20% in the early 1980s, largely due to incredibly high inflation. More recently, the 2013 number is around 9 down from a recent peak of 12.9% in November 2011 which is up slightly from a month ago when it was 8.6%.

All of which is good for stocks, claims strategist Ed Yardeni, who took a look at how the misery index has matched up with with bull and bear markets.

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May 08, 2021

Boomers seek to create a new retirement reality

When it comes to retirement, baby boomers seem to be favouring lifestyle choices over wealth preservation, quite a different path compared to the generations that came before them, according to recent Bank of America Merrill Lynch survey.

The study found that retirement has been redefined – with people expecting to live and often work longer than any preceding generation, and taking different approaches to preparing for and living their best life during these years.

Most are seeking flexible work arrangements, such as part-time work (39%) or going back and forth between periods of work and leisure (24%), but not always for the same reasons.

Most boomers have "mixed feelings about living longer and transitioning into retirement," said Ken Dychtwald, CEO of Age Wave, the group that conducted the research.

"While they welcome the extra time to pursue new interests and spend more time with family and friends, they are concerned about outliving their assets and experiencing a serious health disruption. Even those who have saved adequately can be anxious and often overwhelmed by this complexity and the unknowns they face."

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December 08, 2021

Ontario guidelines for rent increases please nobody

As housing prices continue to rise, more and more potential buyers are opting to rent, fueling a bit of a rental shortage in some urban centres. And then there's all those people who couldn't afford to buy a house no matter what.

One factor driving people to rent is an uncertain job market. Despite low mortgage rates, people are reluctant to get tied down in a mortgage if they don't know where they'll be working next.

To ease the squeeze on tenants facing maximum rent hikes of 3.1 per cent next year, residential rent increases would be capped at 2.5 per cent starting in 2013 under legislation proposed this week by the Ontario government.

Click here for a historical view of previous rent increase guidelines. The average from 2004 to 2011 was 1.89 per cent whereas it was 3.17 per cent from 1993 to 2003.

Not surprisingly, landlords are already starting to howl: “The government is unilaterally imposing a cap without any discussion with an entire industry and is initiating a policy that will be particularly devastating for small landlords," says Vince Brescia, president of the Federation of Rental-housing Providers of Ontario.

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November 08, 2021

MSN readers are feeling pressured by inflation: Poll

Three quarters of MSN readers admit to feeling the pinch of rising prices. And the older you are, the higher the apprehension.

At least retirees' government retirement benefits and (if they’re lucky) pension plans will keep their purchasing power intact over time though. 

However, warn many financial advisors, this isn’t necessarily the case.

“Many of my clients keep needing extra infusions of income, even though their private pension, Canada Pension Plan and old-age security income is indexed to inflation,” advisor Christine Butchart told Investment Executive.  

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October 06, 2021

Just how miserable do you feel these days?

When it comes to North America’s economic outlook, things do look rather gloomy right now. If you have any doubts, have a look the Misery Index.

 Like the dreaded wind chill factor, the index takes unpleasant facts of life – unemployment and inflation – tries to gauge just how bad they make people feel. It’s a U.S. measure but the Canadian picture isn’t that much better.

Right, now the index is at a 28-year high, reflective of how weak the economic recovery has been and how bleak the future looks to many people.  

In fact, the index, first compiled during the runaway inflation days of the 1970s by economist Arthur Okun, is registering a nausea-inducing 12.7 — 9.1% for unemployment and 3.6% for annualized inflation.  

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March 17, 2022

Inflation level really not as high as it seems: Report

For many Canadians, higher inflation is a foregone conclusion. It’s no longer a matter of if we will experience it, but how soon it will be here.

And if consumers truly believe prices will be higher in the future, they should be out buying goods today. After all, why wait for higher prices?

But what if, as a recent C.D. Howe Institute paper argues, Canada's inflation is actually quite a bit less than advertised?

According to McGill University economist Christopher Ragan, the way Statistics Canada measures changes to the cost of living regularly causes to overstate inflation.

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...