Global Economy Updates

World Economy

First Published Date: May 8, 2016

The recent global economic outlooks provided by IMF forecast a grim picture for the upcoming months. The global economy will continue to recover, but at a slower and fragile pace.

Due to uncertain growth and confidence, advanced economies have deteriorated economic growth in the near future. Also, due to declines in commodity and prices, emerging economies will continue to suffer along with commodity-exporting countries.

As China is moving towards an economic growth based on consumption and services, there will be spills along the way that could affect other countries, especially emerging markets and developing economies. Emerging markets also suffer from slowing capital inflows and accelerating outflows.

Countries should emphasize accommodation monetary policies supplemented by complementary fiscal policies to boost economic growth and output.

However, another report published by Oxford Economies indicated that the global economy is no longer likely to fall into a full recession due to a surge in the global stock market, stable oil prices, and surging commodity prices. Economy health is at a better position now than it was in early January when oil prices were heading towards $20 a barrel and the stock market was in a free-fall.

The US Federal Reserve also keeps maintaining its current interest rate until at least June. Faith in the strengthening US economy makes the Fed believe that evolving economic conditions will make it possible to increase interest rates gradually in the future.

Guaranteed Income Supplement (GIS)

The Guaranteed Income Supplement

Published Date: May 11, 2016

As we get older in Canada, there are many things in place to ensure that you have money after you retire. The Canada Pension Plan, which you pay into, will help pay those bills, as will Old Age Security, which is taxable. However, if you are a low-income pensioner, with very little or even no income, then you can look at supplementing the Old Age Security you receive through the Guaranteed Income Supplement (GIS). GIS is non-taxable and the amount you receive will depend on how much you make, whether or not you are married and the age of your spouse.

Currently, the maximum you can receive through the GIS program is $597.53 per month, and this is if you have no other source of income. If you and your spouse both collect from the GIS program, then you can each receive a maximum of $392.01.

Since your annual income changes each year, and since the GIS program is based on your income, you need to renew your GIS every single year.

Most seniors can easily renew their GIS automatically by filing their income tax return by April 30. If a tax return is not filed because there is no income, then you can request a renewal application to be sent to you. Once you do this, you will receive a letter in July that explains to you the new amount of your monthly payment.

In order to qualify for the GIS, you need to be first eligible for the Old Age Security pension, meaning you need to be over 65 years of age, a Canadian citizen, and have lived in Canada for the past 10 years.

Currently, the Old Age Security Act provides a GIS earning exemption of $3,500, up from $500 in 2007. This means that a single pensioner who earns $3,500 or more, will be entitled to keep an additional $1,500 in their annual GIS benefits.

If you get married, separate from your spouse, or your spouse dies, then you must contact the GIS program to let them know about the change. If you separate due to reasons beyond your control, like your spouse is put in a nursing home, then you can both be considered a single person and that will give you a larger monthly payment.

Since the GIS program is based on income, what counts as income then? Here is a quick rundown:

1.    Canada Pension\Quebec Pension Plan

2.    Private pension income

3.    Foreign pension income

4.    RRSPs cashed during the year.

5.    Employment insurance

6.    Interest on savings

7.    Capital gains and dividends

8.    Rental property income

9.    Employment income

If you want to get an application for the program, you need to contact 1.800.277.9914

The GIS program can help you get a little extra money to live on each year, making being in your retirement and golden years that much easier for you. All you need to do is apply and start receiving your benefits from the government.

Canadian ETFs Explode

WisdomTree ETFs Canada

First Published Date: May 15, 2016

The Canadian ETF market passed a milestone by adding 400 available ETFs trading on the Toronto Stock Exchange (TSX). As average investors are gradually realizing the significance of paying low fees on ETFs, they are ditching high-fee mutual funds in favour of low-fee ETFs. After all, why would someone want to pay a 2.50 percent MER on a mutual fund when they can obtain a very similar ETF with a 0.10 to 0.25 percent fee? It’s no wonder assets under management for ETFs on TSX have passed or are close to passing $100 billion.

Big mutual fund companies, which have been in denial of getting into ETFs for decades, are coming to the realization that there is no other choice but to enter the ETF arena. Their excuse was that, due to its low fees, no money could be made from ETFs. However, the change of heart happened when they finally (although they were late) realized that people are shifting from mutual funds and ETFs and if they don’t change now other providers will keep grabbing market share and they will be left out in the middle of nowhere. Big mutual fund companies like CI Investments and Mackenzie are now active in ETFs.

BMO (Bank of Montreal) deserves credit for recognizing ETF potential many years ago, before any other banks or mutual fund companies. And it has been awarded generously for its far-fetched decision. BMO is the second largest ETF player in Canada today after iShares and before Vanguard with $27 billion assets under management.

Also, WisdomTree, a major ETF provider in the US, has announced that it will launch its ETFs in Canada and is awaiting Canadian regulatory approval. You will see more ETF players from within and outside Canada to offer ETFs for Canadian investors in the future.

More players mean more choices, more competition, and better value; that’s good for everyone and that’s what we want in Canada.

The Shard of Glass London Skyscraper

Shard of Glass

First Published Date: Feb 3, 2011

It may not be the tallest building in the world, in fact it is less than half the height of the tallest building in the world, but the Shard of Glass, also known as Shard London Bridge, is a truly beautiful building.

Currently under construction in London, England, this skyscraper is scheduled to be finished in 2012 for the Summer Olympics in London. Upon its completion, it will become the 45th tallest building in the world, the second-tallest freestanding structure in the United Kingdom after the Emley Moor Transmitting Station and the tallest building in the European Union.

The tower will stand 1,017 feet, or 310 meters and have 72 floors. In addition, there will be an additional 15 radiator floors that sit on the roof.

One of the more interesting factors about this building, and its defining characteristic, is the fact that it has an irregular triangular shape. As well, the building is completely covered in glass, which is where the name Shard of Glass comes from.

The skyscraper, which will have an open-air observation deck on the top of the 72nd floor, was designed by noted architect Renzo Piano who considers the slender form of the skyscraper a positive addition ot the skyline of London.

Piano created the unique angles of the Shard of Glass so that it will reflect light and the changing patterns in the sky, depending on the time of day, year and season.

The public viewing gallery on the top is expected to draw over two million people per year. The skyscraper, along with its smaller companion building known as London Bridge Place, are part of a revitalization project for the surrounding area, which also includes a museum, a concours and a public piazza.

Upon its completion, it will surpass the Frankfurt Commerzbank Tower, which is currently the tallest building in the European Union, and has been since 1997. It was hoped that the Shard of Glass would also be the tallest building in Europe, taking into account cities in Russia including Moscow, but this may not be the case. The Triumph-Palace and Naberezhnaya Tower have both been completed and both are taller than the Shard of Glass. Another building in Moscow, the Mercury City Tower, will also be taller than the Shard of Glass when it is completed.

Needless to say, the Shard of Glass will be the tallest building in the European Union but not for long. It is expected that the Hermitage Plaza, which will rise to 323 metres, will become the tallest building in the European Union when it is completed in France in 2016.

Due to the collapse of the World Trade Center in 2001, a complete re-evaluation was done on tall structures across the planet and the Shard of Glass is among the first in the United Kingdom to be built using the US National Institute of Standards and Technology report on the WTC collapse, meaning it will withstand the most difficult conditions nature and man can put up against it.

Myrtle Beach Vacations, Retirement and Real Estate

Just Completed Myrtle Beach Trip

First Published Date : May 21, 2016

Just returned from Myrtle Beach about two weeks ago. Today, I am posting my Myrtle Beach short video film and will talk about a few things based on my experience.

Lots of Canadian snowbirds go to Florida every year to spend the winter and they own properties in Florida as well. However, I never hear that much about Myrtle Beach. After visiting Myrtle Beach, I am convinced that Myrtle Beach maybe a better place than Florida to go on vacation, escape the harsh Canadian winter, and buy properties.

For those who want to go for vacations, the reason I like it better than Florida is because of its shorter distance (only one and a half hour flight from Toronto) and the sort of people I have seen are mainly family-oriented beach/ocean loving people. Florida is nice; though you possibly will come across lots of party lovers and it can be overcrowded as well. Of course, it depends on where you go and different places may have different appeal.

For the same reasons I mentioned above, snowbirds will find more peaceful neighbourhoods in Myrtle Beach and can spend quality retirement time in isolation if you live little bit off the main city core. The main beaches surrounding the city centre can be crowded in the summer, but it’s still a lot less crowded than big beach attractions in Florida.

Another thing that astonished me was the low value of real estate properties. I have seen many one bedroom ocean front condos, literally in front of the ocean and with a 30-second walk to the beach, going for $60,000 to $100,000. This is hard for someone like me who lives in downtown Toronto to believe, as in my area a tiny one bedroom lake-view condo would start at $400,000.

If I plan to spend my winter in retirement in a warm location, Myrtle Beach will definitely be on my list to consider. And for going on a vacation again? I will consider that again as I really liked Myrtle Beach and wouldn’t mind going back again.