Thursday, January 27, 2011

Update for Canadian Investors

As we review 2010, one is struck by the divergence between the year’s gloomy headlines and the generally positive results shown by the financial markets. Some of the challenges facing the global economy during the year included the effects of the major oil spill in the Gulf of Mexico and ongoing concerns that some European governments will default on their debts. These joined lingering problems in the U.S. economy, including high unemployment, slow growth and an expanding government deficit. Nonetheless, many of the world’s major stock and fixed-income markets made gains during the year.

In Canada, the S&P/TSX Composite Index was up 13% in 2010 and benefited from strength in commodities such as gold, oil, copper and potash to become one of the world’s best-performing markets. U.S. equities also moved up, with sectors such as industrials and consumer discretionary products among the leaders. It’s worthwhile to note that those sectors are cyclical – they perform best during a period of economic growth. Overseas, equities in emerging markets and Asia also rose, while European stock markets were mixed. Equity indexes in those countries with the biggest debt problems were down for the year.

Why have so many markets rallied despite what seems to be an inhospitable environment? Stock markets are a leading indicator – they tend to anticipate future developments rather than reflect what is happening now. Judging by the results of the past year, equity market investors are expecting continued recovery and growth.

Indeed, there are several factors supporting a positive outlook. The economy has continued to grow in all major regions of the world in 2010, including Europe. Although government and consumer debt levels are a concern, many corporations are in good shape, with strong balance sheets. This has left them well positioned to take advantage of some of the key trends in the global marketplace – such as the robust growth in emerging markets. Bond markets are also pointing to a strengthening economy, as indicated by the increase in U.S. bond yields in the fourth quarter.
Of course, events may conspire to change this outlook. That is why I suggest  having a diversified portfolio tailored to your individual circumstances, and maintaining a long-term view for your equity investments.

Tuesday, January 11, 2011

IMPORTANT: Buy Business equipment by Jan 31/11 - 100% Write Off

Electronic equipment
You can write off 100% of the cost of computers.The accelerated capital cost allowance (CCA) for eligible computers announced in the 2009 budget allows businesses to claim 100% of computer costs (including systems software) purchased after January 27, 2009 and before midnight, January 31, 2011.
To qualify for this rate, the asset must also:
- be situated in Canada
- not used or acquired for use for any purpose before acquired by the taxpaper
- acquired by the taxpayer
- for use in a business carried on by the taxpayer in Canada or for the purposes of earning income from property situated in Canada
- for lease by the taxpayer to a lessee for use by the lessee in a business carried on by the lessee in Canada or for the purpose of earning income from property situated in Canada