Peace of mind through financial confidence

AFS Insights

Here’s our Spring roundup: what we’re reading this month

Market volatility, investments and taxes

Why do I have a tax bill for my investment even when the value has dropped?

During times of volatility, it’s natural for investors to worry that their investments will lose value – in fact they may even expect a decline at times. What’s unexpected, however, is getting a tax bill for an investment that has dropped in value. Many mutual fund and segregated fund investors may wonder why this happens.

The reason is fairly straightforward. The fund has either received income (interest or dividends) from its underlying investments during the year, or the portfolio manager sold underlying investments, realizing a capital gain. Even though the price of the fund has dropped, the income from transactions that have occurred throughout the year must be passed along to investors, and that income is taxable.

Read the rest of the article here

Can your retirement savings stand up to inflation?

The high cost of living is convincing some people to adjust their plans.

Across Canada, the effects of inflation are being felt in different ways these days by various age groups. For young people and students, a lack of cash on hand or an increase in personal debt may be the biggest concerns. People in mid-life and mid-career might find the series of rapid interest-rate hikes has made it difficult to meet their loan and mortgage payments. For retirees or those nearing retirement, inflation has likely chipped away at their savings and investments with worrying intensity.

Most retirees depend on investment income to fund their lifestyle, but rising prices and underperforming markets could reduce the value of a substantial nest egg that’s been designed to see them through their golden years. As the economy strives to get inflation back under control at a time and an age when most of their wealth-accumulating years are behind them, this setback could dim their outlook for the future.

Read the rest of the article here


The sensibility of sustainable investing

Taking a mainstream approach to making the world a better place.

Many investment options now available on the market feature a clear set of criteria to align with people’s values, financial goals and tolerance for risk. Amon those continuing to rise in popularity are approaches relying on ESG (environmental, social and governance) factors that characterize a company’s commitment to responsible business practices. These are companies with a keen focus on sustainability – a term that captures the underlying philosophy and purpose of ESG.

What is sustainable investing?

Not so long ago, sustainable investing was recognized as a necessary but niche alternative to traditional, broad-based investments that were connected to industries some investors considered harmful to society and the environment. Oil, tobacco, gambling and weaponry are examples that immediately come to mind. But the tables have turned. Today, sustainable investing is mainstream, recognizing the fact that more investors are interested in knowing how their money can gain value while supporting helpful, rather than harmful, pursuits. It’s a way to deliver competitive financial results while driving sensible and constructive outcomes for people and the planet.

In a 2021 study, 77% of investors surveyed said they wanted their advisor to inform them of sustainable investment options.

Read the rest of the article here


More into listening?

Inflation’s One-Two Punch from the art of boring.

Why store brands are taking over the grocery aisles from the Cost of Living with Paul Haavardsrud


For more information, reach out to your Arbutus Financial team member.

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