Santa’s saving tips

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This article was published 24/12/2021 (1742 days ago), so information in it may no longer be current.

Children and the young at heart can hardly wait for tomorrow morning to see what Santa has left under the tree or in their stockings. But what if jolly old St. Nick also left some thoughtful gifts for financial professionals?

Here, five financial advisers offer up what holiday wishes they might whisper in Santa’s ear if they were sitting his knee this holiday season.

Tax-free cash

Most people agree tax-free money is one heck of a gift. Yet only four in 10 Canadian households contribute to a tax-free savings account (TFSA), Statistics Canada data show. That’s why portfolio manager Alan Fustey wishes more Canadians would take full advantage of their TFSA.

“We often encounter new clients who have not fully maximized their allowable TFSA contribution room and are missing out on a simple, flexible tax savings opportunity,” says the Winnipeg investment advisor with Adaptive ETF, a division of Bellwether Investment Management Inc.

With 2022 arriving, Canadians 18 and older could have $81,500 in maximum contribution room as the lifetime limit increases by another $6,000.

Fustey further notes many people who have a TFSA use it as a savings account — as the name suggests. But they are better served using a TFSA to hold investments like stocks, bonds, mutual funds and exchange-traded funds.

“The investment flexibility, combined with tax savings… make TFSAs effective for a wide range of short-term and long-term financial goals,” Fustey adds.

The gift of streaming

Streaming entertainment services have undoubtedly been a good investment for leisure and our portfolios during the pandemic. Netflix, Apple and Amazon often come to mind when it comes to streaming. But one often overlooked streaming company that would make a great ‘stock’-ing stuffer is Roku Inc, says Grant White, Winnipeg portfolio manager and certified financial planner with Endeavour Wealth Management, IA Securities. “With more lockdowns potentially coming, and ongoing supply chain issues, streaming businesses don’t have the same headwinds as other companies in the next little while.”

FYI: Roku sells small devices that connect to your TV so you can stream services like Netflix. The U.S. company also provides hardware now inside smart TVs to allow for streaming capabilities. “Roku actually has so much market share that companies like Apple and Netflix pay it to have their apps on its platform.” White notes he is not suggesting people actually buy Roku stock. But it is worth a closer look for investors willing to do their research on the company.

“Netflix is the poster child for streaming, so everyone thinks of that company first, but there are other great opportunities in this space flying under the radar,” he adds.

A booster shot of patience

Patience is a virtue, especially for investors. As such, portfolio manager Hardev Bains says — with tongue planted in cheek — a booster shot of it would be helpful amid an aging bull market with stocks largely being over-valued. “Equity markets are very expensive, and good quality companies available at reasonable prices are not easy to come by,” says Bains, president of Lionridge Capital Management Inc. in Winnipeg.

Calling himself a “very conservative investor,” Bains adds that when markets have gone up significantly like they have in recent years, a byproduct of this investing discipline is that cash tends to build up in the portfolio because he is often doing “more selling than buying.” Bains notes, however, he is not advising you to do the same. Rather, if you find yourself grappling with an overwhelming sense of FOMO (fear of missing out) to chase returns of top-performing stocks, consider working with an experienced advisor who can administer a shot of patience to help make prudent investment decisions that suit your goals.

An investment with a community impact

Responsible investment specialist Patti Dolan says she’d like to see gift under the tree that can make a positive impact in the community. Impact investments are an actual thing, by the way, at the leading edge of the responsible investment movement. Generally designed to have a positive influence on the environment and society, the advisor with Wellington-Altus Private Wealth Inc. has her own take on an impact fund that has yet to come to market. “This fund would invest in local companies that hire and train individuals to help lift them out of poverty.” While no such fund exists to date, the Calgary portfolio manager has been kicking around the idea for about a decade with on and off interest from movers and shakers in the Alberta city.

But certainly, a community impact fund would resonate with Manitoba investors too.

A little mindfulness after a difficult year

Certified financial planner MaryAnn Kokan-Nyhof agrees “planting money in our own backyard to help the community” would be a great investment. That said, the Winnipeg adviser is wishing for a little more mindfulness, positivity and generosity after a difficult year for so many.

“We could all use a big dose of those right now,” says the investment adviser with Desjardins Financial Security Investments Inc. in Winnipeg. Indeed it has been a challenging 2021 for Kokan-Nyhof and others at the Desjardins office, having lost colleague Cynthia Duncan, killed by an impaired driver this fall. “She was a financial planner extraordinaire, who always went above and beyond for everyone.” A big booster of financial literacy, Duncan “was the guru of our organization, and my wish—to be honest—would be to have her back.”

More practically, Kokan-Nyhof notes: “My other wish is to continue with her passion for financial literacy and to share it widely.”