The bad news is North Korea remains a hotspot for instability, although
most experts feel this won’t amount to much. Iran is again in the news as
U.S. President Donald Trump doesn’t like an anti-nuclear-development
agreement that was signed by the previous administration, and this isn’t
making Iran happy. Some sanctions against Iran have been lifted, allowing
them to sell oil in world markets once again and normalize their economy,
which relies heavily on oil exports.
Donald Trump is still a wild card, but that is what some people wanted in a
politically divided America. I recently attended a seminar where we heard
that the markets don’t care about who is president of the United States.
The presenter said markets go up when most companies show good results and
goes down when their results are poor. Corporate profits (or lack thereof)
are what drive the stock markets. And investment growth is what we’re all
going to need when considering my next topic.
Seniors’ living and the demographic nightmare
Demographics are such that about 10,000 people a day are turning 65 in the
U.S. as this huge wave of Baby Boomers ages. This means that about 1,000
people a day in Canada are hitting that same age. This will stress our
hospitals and medical system from top to bottom for 20 to 30 years. Finding
a retirement home for yourself or your parents will get very tricky and
A typical senior’s residence cost an average of about $4,000 per month,
depending on where you live and the type of facilities you want, often
rising to about double that amount for cases where increased medical care
is also required.
I don’t mean to scare you. Units are available between $3,000 and $4,500 a
month. A few are as low as $2,000 a month for a one-bedroom unit with
kitchenette and three meals a day included. This is still a lot of money
for most folks. You can get cheaper care but that means waiting in line for
subsidized government care and then going to a facility of their choosing –
not your favorite choice.
You can also request a specific care facility, and then pay the bill
yourself until you your turn in the government’s line comes up. That means
you could pay the rent for 12 to 24 months to ensure your loved one gets to
the choice facility. That could be a $40,000-60,000 bill.
All this may create difficulties with family dynamics, when it comes to
funding parents’ stays in temporary facilities, while awaiting the
residence of choice. Some family members may not be as well off as others,
leaving an unequal distribution of the cost burden.
There are many different scenarios with many different family
circumstances. This is a minefield many are navigating now or will be
within the next decade. Each situation is truly different, and often the
result may not be equal or equitable to all parties. The trick is to talk
about the issues in the open with an impartial arbiter, such as your
financial planner, get the care your loved one needs without destroying
family harmony in process.
As a result of the mostly positive news in the world picture, most global
stock markets have posted good returns year to date (YTD). Canada’s
benchmark S&P/TSX Composite index is up 4.5%, with most gains coming in
the last few months. New York’s blue-chip S&P 500 Composite Index is
ahead 10% in Canadian dollar terms, while the 30-stock Dow Jones Industrial
Average is up 13% in Canadian dollars.
Taken together, this means that your year-end portfolio statement will most
likely be a good-news story, unless you are overweight cash and fixed
income, which has been a difficult space to earn decent returns for a few
For those approaching or in early retirement now, this is not the time to
be overly conservative unless you have a very large lump sum and no debt,
and unless you are 85 or older. Locking in a risk-free portfolio if you
between ages 60 and 70 could mean that you will run out of money before you
Bruce Loeppky is based in Surrey, B.C. and is registered with
Portfolio Strategies Corporation as a mutual funds person. He is a regular contributor to the Fund
Library. He can be reached at email@example.com.
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