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Investment Philosophy

An investment philosophy is designed to define how we feel about the wealth management side of our business.

Our investment philosophy is similar to our philosophy on life. We follow some simple tenets that are time-tested. In our opinion, a relative is a sibling or parent. There is no such thing as relatively honest, or relatively loyal. In our values, we believe completely.

The tenets of our investment philosophy are as follows:

  • Simplicity: all else being equal, we strive for the simplest path to advance a goal.
  • Diversification without dilution: we believe in diversifying for risk mitigation, without chasing the index.
  • We do not make changes for the sake of making changes: we do not believe that an investor benefits from a high turnover in their account. When there are real reasons to make adjustments, we do, but activity without cause is not productive.
  • Don’t chase trends: we are not momentum advisors. This approach serves our clients well as fads come and go, but good companies persist.
  • Partner with time-tested management: we only do business with people and entities that have a verified track record. We also look for outperformance at a lower risk than benchmark.
  • Consider absolute returns, not investment returns: we understand that taxation is a driving factor in investment returns, and take tax into account in all of our investment decisions.

Registered Retirement Savings Plan (RRSP)

If you are like most Canadians, chances are you could use some help when it comes to saving for your retirement. When used to its full advantage, a Registered Retirement Savings Plan (RRSP) can be a powerful tool that can save you money on your annual tax return while helping your savings grow.

What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a retirement plan that is registered with the Canada Revenue Agency (CRA) and that you or your spouse make contributions to. Because deductible contributions can be used to reduce your tax and because income or growth earned in the plan is usually exempt from tax while the funds remain in the plan, a RRSP acts like a tax shelter that provides you with a powerful incentive to save money for your retirement years.

A RRSP is designed to hold a number of qualified investments such as stocks, bonds, and other popular securities including mutual funds, segregated fund contracts and GICs. A RRSP is generally available to you if you have qualifying income. Once you contribute funds into a RRSP, any growth or income earned on the underlying investment will not be taxed until you withdraw that money. In addition, you can
claim tax deductions for contributions you make to your RRSP. Since you received a tax deduction when you contributed funds to the RRSP and the funds accumulated on a tax-free basis, if you decide to withdraw those funds prior to the plan’s maturity, any amount withdrawn will be regarded as taxable income by the government and will be subject to tax in the calendar year you receive it.

Why should I contribute to an RRSP?
There are two important reasons why you would want to make regular contributions to an RRSP:

  • To lower the amount of tax you pay now
  • To provide financial security for you and your family during retirement

Tax savings
Contributing to a RRSP can help you save tax. When you contribute to a RRSP, the amount youcontribute is tax-deductible, thus lowering your taxable income. In addition, the investment growth earned on assets held within a RRSP will not be taxed as long as they remain in a registered plan. This is very significant since the value of your savings has the opportunity to compound tax-free, which means
it could grow much faster than it would if you had to pay tax on your profits on an annual basis. Contributing to a RRSP to the fullest extent possible can help to supplement your pension benefits.

Tax Free Savings Account (TFSA)

A TFSA is a flexible, general purpose savings vehicle that allows you to make contributions each year and to withdraw funds at any time in the future. A TFSA provides you with a powerful incentive to save by allowing the investment growth to accumulate and be withdrawn tax free. However, unlike a RRSP, you cannot claim a tax deduction for contributions you make to a TFSA and your withdrawals are added back
to your unused contribution room for the following year.

Once you contribute funds into a TFSA, any growth or income earned on the underlying investment will not be taxed.

There is no restriction on how withdrawals can be used. Withdrawals may be made for personal reasons, investment, education or any other purpose.

Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP) is a flexible and convenient way to save for a child’s future education. Government incentives are available to qualified Student Beneficiaries to help RESP savings grow. Investment income generated in a RESP is tax-sheltered as long as it remains in the plan. When withdrawn, plan growth and government grants can be taxed at the student’s tax rate (he or she could
pay little or no tax on this money).

Anyone can open a RESP – parents, guardians, grandparents, other relatives, or friends. Helping to fund a child’s post-secondary education is one of the most important investments you can make in their future, especially in today’s competitive environment where a good education is crucial to success. Yet, with the rising cost of tuition fees and living expenses, personal savings alone may not be enough to cover the cost of higher education.

Government grants available with RESPs

  • Basic Canada Education Savings Grant (CESG)
    This grant increases the annual RESP contribution by 20% to a maximum of $500 per child per year (carry-forward of grant room can allow up to $1,000 per year) until the child is age 17, up to a maximum of $7,200.
  • British Columbia Training and Education Savings Grant (BCTESG)
    Families in British Columbia are encouraged to start planning and saving early for their children’s post-secondary education or training programs. To help, the BC Government will contribute $1,200 to eligible children born after 2006.

Non-Registered Investments

Non-registered investments are not registered with the federal government, they do not have limits and earned income must be included as taxable income each year.

To save for retirement, you can contribute to investments that are non-registered, meaning they haven’t been registered with the Canada Revenue Agency (CRA), and that are sometimes called open accounts. You can also save for retirement by way of savings plans that are registered with the CRA.

The benefits of non-registered savings plans or open accounts:

  • They can be easier to access should you need your money
  • No legislated restrictions on the amount of contributions you make to them

Because of the advantages of both non-registered and registered savings plans, it can be a good strategy to hold both in your portfolio.

Investment options can include: Segregated fund contracts, Mutual funds, Annuities, GICs