Introduction
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 Fortis, a Model Portfolio holding which recently reported fourth quarter results.
Under the Wealth Management section, we have included an article with some tips for business owners on how to pay yourself appropriately. We have also included a brief overview on the various tax slips and documents you may receive from BMO, as well as their expected availability dates. The last date to make an RRSP contribution for 2023 tax year is Thursday, February 29th, 2024. We encourage all of those that have not yet completed all their 2023 contributions to their registered plans to proceed as soon as funds are available.
We hope that you have been enjoying your winter. We take this opportunity to 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 Equity and Fixed Income Strategy: Analysts: Stéphane Rochon, CFA, Equity Strategist and Richard Belley, CFA, Fixed Income Strategist. Description: The Amazing Resilience of the U.S. Economy and AI Trade
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 Fortis: FTS-TSX Q4; Steady Growth on Track; Target to $58 From $58.50 Bottom Line:
Q4/23 EPS results illustrate that earnings growth is coming back to the FTS story (12% for 2023) and risk to recent growth projects can be made up given the company's diverse footprint and local business model. Unfortunately, FFO/debt is still not in the sweet zone and S&P recently moved the goalposts from 10.5% to 12% making it difficult to build as much cushion as we previously expected. We believe opportunistic asset sales and ATM issuance could provide a catch-up. Maintain Market Perform rating and target to $58 (vs. $58.50). Read More (please contact us)
Wealth Management Tips for Paying Yourself as a Business Owner
Every entrepreneur knows that to run a business, you need to be a jack of all trades. But while many business owners know how to tackle sales, marketing, finance and business development, most battle with the fundamental question of what they should pay themselves.
There’s typically a push and pull when it comes to take-home salary – there’s pressure to keep money inside the business for growth, but you also need to live and potentially support a family. Many owners work hard for their success and feel they should reap the financial benefits of building a burgeoning operation, but that could lead to cash flow problems within the business. On the other hand, taking too little can lead to burnout and stress from trying to make ends meet at home. Read More
2023 Tax Documents: Overview and Schedule
We appreciate that tax season is an important time of year for investors. Depending on your investment holdings and account activity, you could receive a variety of tax slips that you’ll need to prepare your annual tax return. To help simplify your tax preparation efforts we are providing a brief overview of the various tax slips and supporting documents you may receive from BMO, along with their expected availability dates. It’s important to note that this schedule may be subject to change. Please make sure that you receive all required tax slips before filing your tax return with the Canada Revenue Agency (“CRA”), and Revenu Québec for Quebec residents, to prevent having to file an amendment. As a reminder, most Canadian individual tax returns are due on April 30, 2024. 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 last date to make an RRSP contribution for 2023 tax year is Thursday, February 29th, 2024
RRSP contribution amount for 2023 is the lesser of $30,780 or 18% of your 2022 earned income. The contribution amount for 2024 is the lesser of $31,560 or 18% of your 2023 earned income.
TFSA contribution amount for 2023 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. Regards, Tim, Catherine, and Edward