Q – I’ve been seeing references to something called “CRM2” in the financial media, and I understand it has something to do with providing investors with more information on investment advisory costs and fees. It also seems to have a lot of advisors in a flap, but I’m not sure why. Shouldn’t advisors already be telling clients what their fees are and how their investments are doing? – Kris O., Brampton, Ontario
Sectors are a segment of the economy in which businesses share a similar product, service or function. For instance, the Consumer Staples sector includes industries such as food products, household products and beverages. With sector ETFs, you own a diversified basket of similar companies targeting different segments of the economy which reduces the risk of owning an individual stock. Sector ETFs can also help investors pursue a variety of strategic and tactical investment goals such as sector rotation strategies or thematic investing.
Especially in a low interest rate environment where it is difficult to beat inflation and tax erosion without incurring market risk volatility, any rollback of the Tax-Free Savings Account (TFSA) contribution limit to $5,500 from the current $10,000 would affect seniors, as well as young adults trying to save for their futures, too. Despite political controversy, the reality is that the TFSA has gained broad-based acceptance by 40% of average Canadians. More than 80% of all TFSA holders have incomes of less than $80,000, according to the April 21 federal budget documents. These are hardly the wealthy few. In fact, TFSAs have become a crucial financial planning tool for seniors, and any rollback would have serious implications. Here’s why.
At its September meeting, the U.S. Federal Reserve Board decided to hold off on raising interest rates for now. That’s not good news. For starters, it prolongs the uncertainty about when the Fed would make its move that has been overhanging the markets. A few weeks ago, it was widely expected to come in September. Now an increase is not likely to happen before mid-December and may even be postponed until 2016. What happens next?