Serious sickness doesn’t have to halt your finances

Most millennials may not think a lot about insurance. If you are young, healthy and low on savings, you may not feel that it is a priority, especially if you haven’t started a family. But it could be important for you — and the kind of insurance that makes sense might be surprising. Traditionally, the first policy many people buy is term life insurance. It’s a straightforward, affordable solution that pays a tax-free lump sum to a beneficiary upon the death of the insured. But over the next few decades Canadian millennials are more likely to be diagnosed with — and survive — a critical illness than to die. To help put this into perspective, a woman who is 30 and a non-smoker has a five per c

What you need to know about Mutual Fund Fees

RECENTLY, THERE HAS BEEN a lot of marketplace chatter about mutual fund fees — what they are and how much they cost. You may have seen a crop of TV commercials that ask why they even exist in the first place. Raising questions is a good thing. The more investors know, the more empowered they are to get the value they seek from their portfolios. This year, investment account statements have started providing more information on fees, but the new level of detail might raise more questions than it answers. If you are looking for clarity on what you’re paying for (and getting in return), here is an overview of the industry players plus a mini-guide to fees. Who’s who To understand the world of

3 Ways to Maximize Benefits in Retirement.

WHEN CANADIANS AGE 65 OR OLDER think about their overall retirement plan, most focus on ensuring their savings, investments and other forms of income are appropriately managed. But most people’s retirement income also includes a range of valuable benefits available from the government, two of the most familiar ones being Old Age Security and the Age Credit. And a critical feature of these benefits is that they’re highly connected to your taxable income. They can be clawed back or forfeited altogether if your reported income (line 234 of the federal tax return) is too high. Therefore, in order to avoid reducing the government benefits you receive, you may want to think about ways to reduce y

Focus on What Matters Most

EVERY DAY, WE MAKE COUNTLESS DECISIONS. Some are fairly trivial, such as what colour shirt to wear or what to have for lunch. Others have much bigger consequences. If you’re a business owner, these may include how to manage your cash flow, how to protect your company with insurance, and how to choose the right benefits plan to attract and retain the best employees. If you have ever struggled to make an important decision, you are not alone. Researchers have found that each of us has limited decision-making resources, with “decision fatigue” setting in as the day wears on.1 As the hours roll by and the day’s decisions pile up, our tired brains start looking for the easy way out. Sometimes tha

In Life, Everyone Experiences Setbacks

These can run the gamut from losing a job to going through a divorce, to recovering from a serious illness. Then there are the unexpected expenses life throws your way. They happen all the time. A leaky roof, a flooded basement, a car breakdown – any one of these may cost thousands of dollars to fix, with the money required right away. Sometimes, more than one of these difficult situations occur at once. It goes without saying that challenging circumstances can affect your finances – but just how do you recover and get back on track? Here are some tips. 1. GET PROFESSIONAL ADVICE Whether a financial setback is big or small, a professional perspective can be invaluable. Your advisor can work

Oil, Trump & the Last Quarter

Considering the year began with such uncertainty, equity and fixed income markets performed exceptionally well in the first quarter. Investors overestimated the magnitude of market volatility that would ensue from an Obama to Trump transition of power and markets shrugged off the political drama and took equities higher. Challenges in the quarter This past quarter exemplifies what investors should consider with regard to their portfolios. There are many sentimental reasons to fear the stock market, including recent examples like Brexit, Grexit, the Fiscal Cliff, the Debt Ceiling, the election, and the budget. Markets can be swayed over the short term by daily headlines. Equity markets can mo

Seeking Shelter in Stormy Seas

MANY CANADIANS ARE APPREHENSIVE about investing. And who can blame them? Between plunging oil and commodity prices, and the Canadian dollar’s free-fall, the economy has taken a big hit. So has investor confidence. Market volatility, together with economic uncertainty, is the new normal – at least for now. But even in a tough investment environment, diversification, with at least some exposure to stock markets, may be one way to stay ahead of inflation. This is precisely why today’s turbulent conditions are leading some investors to take a second look at segregated fund solutions. What is a segregated fund contract? A segregated fund contract combines the growth potential offered by a

The Right Fit.

EVER NOTICE HOW MANY OF LIFE’S BIGGEST GOALS have some financial component? Sure, you can master a foreign language or run a marathon without making a significant financial commitment. But try buying a home, starting a family or helping your kids go to university. Same goes for retiring early or leaving a legacy. Without disciplined planning and saving, these goals can just slip away. If you’re juggling a job and a busy family life, you probably don’t have time to figure it all out for yourself. Then again, like many Canadians, you may feel you don’t have the expertise to tackle the complexities of your financial affairs alone. That’s when turning to professional advice is a huge advantage.

Ready or Not? Doesn't matter, it's still going to happen.

IF A MAJOR EARTHQUAKE EVER HITS Nanaimo, B.C., Pam and Bill Merriweather* will be ready. They have two backpacks equipped with water, emergency rations, copies of their passports and other ID, and a small amount of cash in case they need to evacuate. They live by the slogan — Be Prepared. And just as they keep first-aid kits in their vehicles and a stash of candles at home in case the power fails, they’re also ready to deal with financial emergencies. They’ve set up a savings account that holds the equivalent of three months of their basic living expenses (the rule of thumb is to have enough to cover three to six months). And they have access to a low-cost line of credit that would cover sev

5 Really Smart Things To Do With Your Money

IT’S THE BEST KIND OF SITUATION — you have some extra money. Perhaps you’ve saved diligently throughout the year, or it’s arrived all at once as a tax refund. What’s the best way to make use of your windfall? Of course, the answer depends on your personal circumstances. This article will take a look at a reasonable figure — $5,000 — and some strategies that can help you make the most of it. Two strategies that can move you closer to debt freedom More than three-quarters of Canadian homeowners surveyed (77 per cent) say that being free of debt is a top priority.1 If it’s a priority for you too, one of the best ways to help eliminate debt is to put as much as you can towards debt repayment. 1

Global economy: Stabilization, not stagnation

To treat the future with the deference it deserves, we believe that market forecasts are best viewed in a probabilistic framework. This article’s primary objectives are to describe the projected long-term return distributions that contribute to strategic asset allocation decisions and to present the rationale for the ranges and probabilities of potential outcomes. This analysis discusses our global outlook from the perspective of a U.S. investor with a dollar-denominated portfolio. Since the end of the Global Financial Crisis, economic growth has fallen short of historical averages and consistently disappointed policymakers. Deflationary shocks have roiled the markets, and much of the world’

Wedding Bells, Bills & Awkward Questions...

EVERY YEAR, ABOUT 160,000 CANADIAN COUPLES exchange “I dos” in front of family and friends. During the months leading up to the big day, many nearly-weds have their first experience managing a big budget. After all, according to a recent national survey, the average wedding in Canada costs more than $30,000. That cost may be borne by the couple, by their families or by some combination — but any way you slice the cake, it’s a major expense. Depending on the number of guests, the location and a myriad of decisions made along the way, a wedding can cost more than a car or even the down payment on a home. And, as with any major investment, it’s important to make sure the expenditure doesn’t hav

Volatility, Guarantees & Flying Airplanes...?

SHORT-TERM MARKET UPS AND DOWNS can be very unnerving, even if your goals are far in the future. So it’s not surprising two recent surveys have found that many investors aren’t enthusiastic about investing in today’s markets. In February 2016, the Manulife Investor Sentiment Index fell to its lowest level since the financial crisis in 2008. That same month, CIBC World Markets reported that Canadians were holding $75 billion in cash, instead of in investments better suited to longer-term goals. It can be difficult to stay the course when markets are volatile. However, keeping your money inactive and out of the markets may actually mean missing opportunities that could help you meet your inves

I'm not sure... Are You?

As investors, we’re accustomed to hearing about risk. There’s market risk, inflation risk, currency risk, and so on. No form of risk, though, challenges investors quite the way uncertainty can. In my experience, how well we respond to uncertainty can be a key to long-term investing success. Of course, we never have the luxury of complete clarity when investing — none of us has a crystal ball, after all — but the current environment seems to have more than its fair share of uncertainty. There are plenty of question marks over the global economy as the United Kingdom prepares to implement Brexit, the Trump administration rolls out its policies, central banks shift their thinking on monetary po

Navigating the Markets This Year

Never before — not even during the global financial crisis — have investors come to me with such specific concerns about the movements of the markets and governments around the world. We’re living in unprecedented times, so we certainly can’t predict what 2017 will bring. And if you know us, you should know not to expect hot stock tips or “sure bets” from us either. But I do have four suggestions that I believe can help you reach your goals. Prepare for uncertainty. Several political and economic events caught observers by surprise in 2016, including the results of the Brexit vote in the United Kingdom and the presidential election in the United States. Markets respond to surprises with vola

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CLEMENT CHUNG, CFP, CLU

Certified Financial Planner

Fee-Based Financial Planning
Burnaby & Metro Vancouver

©2018 by Clement Chung.