By Fund Library News Wire | Friday, August 28, 2015
A week that began with major stock indices dropping hundreds of points ended with those same major stock indices rebounding by an equal amount and more, to close the week with gains overall. Led by energy stocks and financials, the S&P/TSX Composite Index rallied from Monday’s 771-point plunge to gain 2.9% on the week. And the blue-chip U.S. S&P 500 Composite recovered from its 100-point drop on Monday to close Friday with a 0.9% gain on the week. Analysts blamed all the excitement on a combination of China’s currency devaluation the previous week along with its deteriorating economy and volatile stock market, combined with investors’ fears that the U.S. Federal Reserve would still pull the trigger in September on its first interest rate hike since the financial crisis in 2008.
Q – I have a successful dental practice, organized as a corporation, which has allowed me to make maximum RRSP contributions towards my retirement savings. With my personal RRSP contributions maxed out, I’m wondering whether there are other tax-efficient retirement plans available that would let me enhance my retirement savings. I’ve heard about Individual Pension Plans, but I’m not sure they would apply in my case. Could you explain how these work? – S. O., Calgary, Alberta
The times have changed. No doubt, most investment strategists will feel it in their bones. After a long period of policy convergence around the globe – some seven years – we now have entered an era characterized by a globalization of instability. There are cracks, fissures, and hissing steam pipes seemingly everywhere.
Barring a total economic disaster, the U.S. Federal Reserve Board is likely to begin raising interest rates later this year, perhaps as early as September. That, combined with fears of a China-led global economic slowdown, has rattled markets and resulted in the steep selloffs over the past week.