Portfolio Managers' Notes


May 2024



Enclosed in this Portfolio Managers’ Notes, we present BMO Nesbitt Burns’ latest portfolio strategy report to give you an update on equity markets and our strategist’s perspective. In addition, we have included a report on Alphabet, a Model Portfolio holding which recently reported first quarter results


Under the Wealth Management section, we have included an article about management succession for business owners to consider as they prepare to sell their business. We have also included an article that reviews the proposed changes to the capital gains inclusion rate and some of the key implications. We also remind you of the dates and limits for RRSP, TFSA, and RESP contributions We encourage all of those that have not yet completed all their 2024 contributions to their registered plans to proceed as soon as funds are available.

Please note that Yanne Nankoo, of our administrative team, has left on maternity leave. We wish her all the best as she enjoys this time off with her third baby boy.

Thomas Romary has joined our team and will be assuming Yanne’s main responsibilities. Joanne Shinder, Tracey Regan, Laura Donolo and Branden Hang are also there to support and to ensure a seamless transition while maintaining the quality of the service to our clients.

We would like to wish all of you a wonderful spring and remind you that we are here to help if you have any questions or would like to review your investment portfolio or your financial plan.


Market Research
Market Insights
Investment Strategy - May 2024:

Analysts: Stéphane Rochon, CFA, Equity Strategist and Richard Belley, CFA, Fixed Income Strategist.
Sometimes the best offense is good defense

The long-promised U.S. recession is not even close to materializing. Case in point - and as noted by the excellent BMO economics team - just-released "Q4 GDP data showed yet another year of solid activity, while price pressures eased (which strengthens the case for interest rate cuts later this year). Growth in the fourth quarter came in much stronger than expected at 3.3%, providing a nice handoff to Q1, and setting the stage for the expansion to continue in 2024. But, with the mighty consumer still fueling economic activity, we're not expecting a pivot any time soon and are comfortable with our July rate cut call". Higher-than-expected growth and lower-than-expected inflation! That, in our experience, is not a recipe for a major market pullback. Quite the opposite, in fact.
Read More


Laying the Groundwork for Meaningful AI Monetization

Bottom Line:

As highlighted in our Deep Dive and Initiation, GOOGL has a 20+ year history of integrating AI across products. Given its full-stack AI offering, we view Alphabet as one of the best-positioned AI competitors. 1Q24 highlighted effective monetization of the new GenAI platform shift. Search & Other, YouTube Ads, and Google Cloud exceeded our growth expectations by 260bps, 720bps, and 190bps, respectively, attributable primarily to GenAI products. A $0.20 quarterly dividend was also initiated. Reiterate Outperform and Top Pick. Increasing estimates and target price to $215 from $185.
Read More (please contact us)

Wealth Management

Management Succession Planning 


When we speak of “business succession planning” for private companies, some people think only of tax and estate planning, while others may only consider a transition in the share ownership of a business. While those are each important elements of succession planning, on their own they do not cover everything that needs to be included in an effective succession plan. 


The tax plans or estate plans can quickly become meaningless if nobody is able to run the business. The same goes for the potential sale of a business; if only the owner can run the business, then the business is essentially worthless to any other potential owner. As a result, we believe it is important to encourage our clients to consider management succession as they prepare for a critical time of transition in their business. 
Read More

2024 Federal Budget Review
A Deeper Dive unto the Proposed Increase to the Capital Gains Inclusion Rate


The recent 2024 Federal Budget proposed several important new measures impacting individuals and business owners, most notably a change in the capital gains inclusion rate (from 1/2 to 2/3 effective June 25, 2024) for all capital gains realized by corporations and trusts, and for individuals on annual capital gains exceeding $250,000. 


This article highlights some key implications of an increased capital gains inclusion rate to various taxpayers and considers some potential planning considerations for those impacted. For full details of the most significant income tax measures affecting individuals and Canadian private companies, please refer to our 2024 Federal Budget Review publication.
Read More


Contribution Reminder
For Your RRSP, TFSA and RESP Accounts

Maximizing the value of your registered plans by making annual contributions to your Registered Retirement Savings Plan (“RRSP”), Tax-Free Savings Account (“TFSA”), and Registered Education Savings Plan (“RESP”) is an important wealth planning strategy. By making your annual contribution(s) early in the year, you’ll benefit from the tax-sheltered growth all year long. 


The RRSP contribution amount for 2024 is the lesser of $31,560 or 18% of your 2023 earned income. 


TFSA contribution amount for 2024 is $7,000 or cumulative of $95,000 for 2024 if you have never contributed to a TFSA account. 


The RESP is an excellent way to save for post secondary education for your children. A contribution of $2,500 to the RESP leads to a combined 30% in government matching savings grants.


Tim, Catherine, and Edward