As we move into 2025, it’s essential to maintain focus on our financial goals. The beginning of a new year often brings a surge of motivation to improve our financial habits, but it can be challenging to remain committed. Whether you aim to pay off debt, save for a major purchase, or build long-term wealth, sticking with your financial goals requires strategic planning, discipline, and flexibility. Here are some effective strategies to help you stay on track and progress toward achieving your 2025 financial goals. 1. Set SMART Goals The first step to achieving your financial goals is to set clear, realistic objectives. Use the SMART goal framework — Specific, Measurable, Achievable, Relevant, and Time-bound when setting your goals. For example, instead of just saying, “I want to save more,” set a clear target: “I will save $5,000 for a down payment on a car by December 2025.” This approach helps you focus on a tangible goal, giving you a clear direction to follow. 2. Break Goals into Smaller Milestones Large financial goals can feel overwhelming, but breaking them down into smaller, manageable tasks can make them more achievable. For instance, if you want to save $5,000 by the end of the year, aim to save roughly $400 per month. By dividing your goal into smaller milestones, you can track your progress, celebrate small victories along the way, and stay motivated. 3. Automate Your Finances One of the most effective ways to stay on track with your financial goals, is automation. Set up automatic transfers to your savings and investment accounts, ensuring that a portion of your income is directed toward your goals without requiring active effort. By automating your savings, you reduce the temptation to spend money elsewhere and create a consistent path toward your financial goals. 4. Monitor Your Progress Regularly Reviewing your financial goals regularly is a crucial step to staying on track. Schedule quarterly check-ins to assess your progress and make adjustments, if necessary. If you're falling short of your savings targets or spending more than planned, use this time to identify areas for improvement. This review process helps you remain mindful of your financial objectives and allows you to course-correct before it's too late. 5. Stay Flexible and Adjust When Needed Life happens, and sometimes unexpected events can interfere with your financial goals. If you face a job loss, life event, medical emergency, or a financial setback, it’s important to be flexible. Adjust your goals to reflect your current situation, whether it means extending your timeline or modifying the amount of your goal. Flexibility ensures that you don’t become discouraged and helps you stay resilient in the face of challenges. 6. Build a Support System Staying committed to your financial goals can be challenging, but having a support system can make a significant difference. Whether it’s a financial advisor, a friend, or an online community; having people who can offer advice, encouragement, and accountability can help keep you motivated. Share your goals with someone you trust and ask them to check in on your progress. Their support can help you maintain momentum, especially during difficult times. 7. Avoid Lifestyle Inflation As your income grows, it’s tempting to increase spending on non-essential items. One of the biggest obstacles to achieving your financial goals is lifestyle inflation, spending more as you earn more. To stay on track with your 2025 goals, resist the urge to upgrade your lifestyle unnecessarily. Instead, channel any increase in income directly toward your savings or investment accounts. This disciplined approach allows you to accumulate wealth faster and stay focused on your financial goals.   In summary achieving your financial goals in 2025 is entirely within your reach, if you set clear, realistic objectives, remain disciplined, and adapt to life’s challenges. By setting SMART goals, breaking them into manageable milestones, automating your savings, and consistently monitoring your progress, you’ll position yourself for success. It’s also important to stay flexible, build a support system, and celebrate the small wins to maintain motivation. With these strategies, you’ll be well on your way to achieving your financial goals and setting yourself up for long-term financial success.   Cole Seabrook is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613-258-1997 or visit ofarrellwealth.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

“Bulls markets are born on pessimism, grow on scepticism, mature on optimism and die of euphoria” – Sir John Templeton After a stellar 2024, investors displayed some caution during the month of December, largely driven by the hawkish tone by the United States Federal Reserve during its meeting on December 18th, 2024. The committee delivered a 25 basis points cut, in line with market expectations, however it has dialed back on the expectations of policy easing during 2025. The Fed dots plot that shows the leaning of committee participants on a potential rate trajectory indicated that median policy rate in the United States, as at the end of 2025, is now projected to be 3.875%, up from 3.375% as projected in meeting during September (See Figure 1 and 2). In other words, the rate cut expectations were dialed back from four cuts to only two cuts during 2025. The fixed income asset class witnessed further losses as bond yields jumped higher on a more hawkish than anticipated tone of the Federal Reserve. Figure 1: Federal Open Market Committee Dots Plot 18th December 2024 Source: Bloomberg   Figure 2: Fed Dots Median Source: Bloomberg On this side of the border, the Bank of Canada delivered another jumbo cut of 50 basis points on 11 December and brought the policy rates to 3.25%. Increasing unemployment put together with benign inflation readings had placed the Bank of Canada in a comfortable position to ease monetary policy. The resilience of the United States economy, even in the face of high interest rates, backs the caution in the tone of the United States Federal Reserve on forward trajectory of policy rates. On the other hand, back-to-back jumbo rate cuts by the Bank of Canada were underpinned by the anemic growth in the Canadian economy. While Bank of Canada guided for a more measured approach to rate cuts going forward, the concern around the uncertainty caused by threat of 25% tariffs on good exported from Canada to the United States was palpable. We think the heightened caution resulted in the absence of a typical ‘Santa Claus rally’ during 2024. The Santa Claus rally refers to a seasonal advance in the North American markets during the sparsely traded last weeks of the year. Nevertheless, we think the silver lining of recent price action and market commentary is that the market sentiment can no longer be classified as euphoric, i.e., if one were to heed to the wise words of “Sir John Templeton”, the case of bull markets being over is not strong yet. We think the that markets in 2025 are set up to face several crosscurrents and investors are taking a notice. We note a few of the most importance as below The rising bond yields even in face of the lower interest rates implies bonds markets’ concerns on potential resurgence of inflation continue to linger, therefore, Central Banks can not put this issue to bed yet. The potential for increase in geopolitical tensions is high given the recent posturing of the incoming Trump administration on political issues around the globe. Trade and tariffs are going to be the weapon of choice for aggression and retaliation, which bring direct but idiosyncratic risks to the capital markets.   The risk of a recession remains low; and policy rate trajectory continues to be favorable, though at a slower pace. Lower regulations and business friendly policies from the new administration in the United States are likely to support markets. As per Bloomberg data, the index level headline earnings growth expectations for the S&P 500 Index and S&P TSX Index are in the range in low-to-mid double digits. As long as the expected earnings growth remains robust, the case for constructive outlook on markets remains strong, in our opinion. Overall, we think the ebb and flow of developments around the above topics will determine the direction of the markets. Layering on high valuation and healthy corporate profits, we think a choppy but still a net positive price action could be the theme for North American markets this year.

The S&P 500 Index and the S&P TSX Index both registered healthy gains during the month of November as the North American equity markets celebrated the results of the United States Presidential Elections.  Equity Investors viewed the expectations of continuing tax breaks from 2017 and less onerous regulations as a positive.  The fixed income asset class was also green on both sides of the border; however, we think this was largely driven by investors dialing back expectations of higher inflation due to trade wars. The Cabinet announcements by the President-Elect, Donald Trump, were keenly analyzed by investors. The announcement of ‘Scott Bessent’ being picked as a Treasury Secretary, who has been known to have a moderate and prudent voice about tariffs, brought some relief to fixed income investors after a tough October. Higher tariffs will increase the cost of imports and, therefore, are inflationary.   The uncertainty around the policy rate trajectory has increased again with a higher potential of trade wars and its inflationary impact. Although the details on tariffs are still missing, initial volleys have been fired. China has prohibited exports of Gallium, Germanium, and Antimony to the United States in response to the USA's latest ban on export of advanced memory chips and chip-making tools to China. These banned materials are used in applications across semiconductors, solar cells, and military. The fixed income markets have reacted adversely to the developments given the impact of tariffs on inflation and the rate trajectory. Equity markets, however, are still to discount this development, in our view. The United States accounts for nearly two-thirds of Canada’s trade and therefore tariffs will have a substantial impact on the Canadian economy. Whether tariffs are implemented or not remains to be seen, however, it is certain that the rhetoric on trade will increase with the incoming United States administration. We think it will bring idiosyncratic volatility to the North American equity markets. Notwithstanding some concerns, the macro environment has continued to remain mostly favorable for the markets so far, in our view. The headline inflation has been benign for Canada and the United States (see Figure 1). The unemployment rate in Canada has continued to increase; while the unemployment rate in the United States has remained low by historical standards (see figure 2). Given the increase in unemployment numbers in Canada, industry participants are expecting a 50 basis points cut in policy rates after the upcoming Bank of Canada meeting on the 11th of December. In the United States, the expectations are more muted at 25 basis-points cut on the 18th of December. Figure 1: Headline inflation remains benign in Canada and the United States Source: Bloomberg Figure 2: Unemployment has been rising in Canada Source: Bloomberg Looking ahead, we think some market jitters can be expected due to the tariff talks and the potential escalation in geopolitical tensions. However, as long as macro environment remains favourable with robust economic data and accommodative Central Banks policies; the markets should overcome any short-term jitters and extend the current bull run. We wish our readers very Happy Holidays.

The holiday season is upon us! We are quickly approaching one of the busiest times of the year and it can be so easy to get wrapped up in its comings and goings. We partake in family traditions like Christmas gatherings, decorating the tree, or perhaps for your family it means watching “The Grinch” together every year.   We tend to focus on those closest to us – family, friends, and/or colleagues. But perhaps there are takeaways we could draw on from The Grinch. We must not forget to show kindness to not only those around us, but to strangers as well, just as Cindy Lou Who demonstrated to The Grinch. There are many who no longer have family with them to celebrate with and some may be less fortunate. A small gesture can go a long way to help everyone in our community have a wonderful holiday season. Several community organizations host social gatherings or Christmas meals for everyone to enjoy. This is an easy and meaningful way for our community to come together, enjoy each other’s company, and make new friends in what can be a difficult time for many.   You could also consider donations to local organizations or charities, like food banks or service clubs that help those who may have fallen on hard times. Donations do not always have to be monetary; often organizations struggle to find enough volunteers during these busy times. Your time is often just as valuable as financial assistance. It is also a good way for those who want to help but may not necessarily be able to financially.   We are lucky to live in a community that takes care of each other. We can continue to care for and support each other by buying from local businesses. We are fortunate to have such a wide array of small businesses in our area, so take the time to go out and see what they can offer you and your loved ones this holiday season.   So, in the words of Dr. Seuss “What if Christmas, he thought, doesn’t come from a store. What is Christmas…perhaps…Christmas means a little bit more!”.   We wish you all a very happy holiday season and a healthy and prosperous new year!     Allison Martin is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact her at 613-774-2456 or visit ofarrellwealth.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

In our previous update, we highlighted the investors dilemma of whether there could be two or three rates cuts before the year-end. The month of October tilted the debate in favor of only two rate cuts with one 25 basis-points cut already delivered by the United States Federal Reserve on the 7th of November. The Bank of Canada’s rate decision was announced on October 23rd , and it delivered a 50 basis-points cut in line with expectations. Despite the announced policy rate cuts which are positive for the fixed income asset class; the bond investors were in red for the month on both sides of the border. The yield curves in Canada and the United States shifted upwards as investors dialed back expectations of the number of rate cuts and baked in a slower path to inflation normalization. (See Figure 1 and 2) Figure 1: Canada Sovereign Curve Source: Bloomberg Figure 2: US Treasury Actives Curve Source: Bloomberg   The United States presidential elections were top of mind of investors across the globe given the difference between policies announced by the Republican and Democrat candidates. Trump presidency was being viewed by markets as relatively more inflationary as telegraphed intentions of tariffs on imports put together with promises of tax rate cuts translated into simultaneous increases in supply bottlenecks and a stimulus that could increase demand. Though the exit polls were showing a close contest; the financial markets traded on expectations of a Republican win as evident from the rise in bond yields, in our view. In addition, better-than-expected economic data also corroborated to support the move in bond yields. In Canada, the headline inflation dropped to +1.6% in September (reported in October) from +2.0% in August (reported in September). This was below the expected number of +1.8% for September. In the United States, the headline inflation was at +2.4% for September (reported in October); lower than +2.5% in August (reported in September), but higher than expected +2.3%. The unemployment rate in Canada dropped to +6.5% in September (reported in October) from +6.6% in August (reported in September). In the United States, the unemployment rate dropped to +4.1% in September (reported in October) from +4.2% in August (reported in September). ISM Manufacturing PMI (Purchasing Manager’s Index) in the United States was flat at +47.2 in September (reported in October), however, ISM Services PMI jumped to +54.9 in September (reported in October) from +51.5 in August (reported in September). We expect the volatility in bond yields to remain elevated as investors dissect every datapoint with a read through on inflation or policy rates trajectory. The tensions between the Federal Reserve Chair, Jerome Powell, and President-Elect, Donald Trump, have been well known. During the press briefing after the latest FOMC (Federal Open Market Committee) meeting, the United States Fed chair, Jerome Powell, replied with a brief ‘No’ to a question that asked if he would resign should the new President ask him to do so. While we think it is unlikely the President-Elect, Donald Trump, would like to disrupt the Federal Reserve and undermine the progress made on inflation so far, any rhetoric on this front could bring short-term volatility to the broader markets, in our opinion. Resilient economic data put together with supportive central bank policies and benign inflationary pressures for now keep us constructive on the outlook. We think this backdrop continues to make a strong case for investment in risk assets despite stretched valuations.

Each year the Financial Consumer Agency of Canada (FCAC) dedicates the month of November as Financial Literacy Month. The campaign for 2024 is being promoted as “Money on your Mind. Talk about it.”   Financial Literacy is a forever moving target. Some people are just beginning their journey, while others are bordering on expertise. Either way, you can always learn more about finances. The 2024 campaign is focused on reducing the taboo surrounding speaking openly about money. Stop just thinking about money and start talking about it. Talking with friends, family, and a Financial Advisor will not only help you build knowledge and open you up to ideas and solutions, but it can maybe even help you educate your own kids along the way.   Is Inflation on your mind?  The Canadian inflation rate has finally dropped below the coveted 2% and is currently sitting at 1.6%. But this doesn’t mean prices are dropping, this just means the rate of price increases have slowed. If inflation is eating into your finances – or if you just want to learn more about inflation – try talking about it.   A good friend could give you tips and tricks on how to reduce the impact of inflation on your grocery bill. Tips like which stores have the best prices on different products or what day the produce is the freshest to help reduce your food waste. Perhaps if you ask, they would even be willing to share that secret family recipe so you can make the perfect dish at home rather than buying a frozen pre-packaged version.   A work colleague might encourage you to consider asking for a raise or promotion. Have you developed in your role and met or exceeded all your targets? Sitting with your employer and presenting how you have supported the business and asking for an increase may provide fruitful results. Having this discussion can also get your employer thinking more about what their employees need and may generate wage increases or additional benefits for the Team.   A Financial Advisor would happily discuss and explain which inflation metrics they are using in their financial planning software. You can look at your retirement plan together and discuss how inflation impacts your spending in retirement. Are your investments generating enough return to provide an ample after inflation rate of return? Are you contributing enough to your investment accounts to meet your goals?   Maybe its not inflation on your mind. Maybe you are thinking about all the different types of investment accounts, stock market returns, interest rates or how to build a budget.   This November take the time to talk about money. Take the opportunity to learn from friends, family, colleagues and professionals. By sharing some of your concerns you may find that others have similar concerns. It’s important to talk openly and find the solutions together.   If you have any questions about Financial Literacy, reach out to a Financial Advisor at O’Farrell Wealth & Estate Planning. Every question is worth a conversation. Book a complimentary meeting today.   Sources: https://www.canada.ca/en/financial-consumer-agency/campaigns/financial-literacy-month.html https://safa.ontariotechu.ca/resources/financial-literacy-month-november.php https://www.canada.ca/en/financial-consumer-agency/services/teaching-children-money.html   Sarah Chisholm is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact her at 613-258-1997 or visit ofarrellwealth.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

The month of September witnessed heightened volatility early in the first week after lower-than-expected prints of economic data fueled the narrative that the economy might be running out of steam faster than previously expected and the US Federal Reserve is behind the curve. The expectations for non-farm payrolls data for August (reported in September) were at an addition of ~162.83k jobs; instead, the reported number was weaker at ~142k jobs. The Institute of Supply Management’s (ISM) Manufacturing Purchasing Manager’s Index (PMI), a gauge of manufacturing activity, was also lower-than-expected at +47.2 (expected +47.6). However, ISM Services PMI was marginally higher at +51.5 (expected +51.3). Weaker economic data on top of a revised labor market report from Bureau of Labor Statistics (BLS) in late August that showed that economy had added much lower jobs than previously reported between April 2023 to March 2024, exacerbated concerns around the increased likelihood of a potential recession. Consequently, the fixed-income investors baked in expectations of a 50 basis-points cut from the United States Federal Reserve for the Federal Open Market Committee (FOMC) meeting on 18th September. The United States Federal Reserve Chair, Jerome Powell, had been emphasizing for some time that the health of labor market health now weighs more over the inflation in the committee’s decision as inflation has become less of a concern in the previous few months. Keeping true to the Fed chair’s message of “we do not seek or welcome further cooling of labor market conditions” during a speech in the late August, the United States Federal Reserve did not disappoint the investors and delivered a 50 basis-points rate cut to start the policy rate cut cycle on 18th September. However, the committee appeared divided on the remaining number of cuts needed (two or three) through the end of year 2024 (See Figure 1). Each dot shows the expectation of a Fed policy maker for the rates at the end of respective year. Supportive comments and action from the central bank authorities; benign inflation data; better-than expected retail sales put together with no further alarms from the interim jobs data reported through the month (jobless claims); helped the North American markets more than recover from the initial setback and both the equity and fixed income asset classes ended the month on a positive note. Figure 1: Federal Open Market Committee Dots Plot 18th September 2024 Source: Bloomberg The balance of reported economic data has continued to be positive in the early October so far; but stronger-than-expected labor market data has forced the investors to dial back expectations of rate cuts in the United States. The change in non-farm payrolls for September (reported in October) was at +254k, much higher than expected +145.5k. As of this writing, the fixed income investors have reduced expectations to two policy rate cuts from the US Federal Reserve through the year-end 2024 from three rate cuts around the meeting date in September 2024 (See figure 2). While the bond yields in Canada have moved in sympathy with the yields in the United states; in contrast, the chatter amongst the industry participants of a jumbo rate cut (50 basis points) has increased as Canada’s headline inflation is down to +2.0% in August (reported in September) from +2.5% in July (reported in August) and unemployment rate has ticked up to +6.6% in August (reported in September) from +6.4% in July (reported in August). The Bank of Canada meets on 23rd October to decide on the next policy move. Figure 2: Estimated Number of Moves Priced in for the US - Futures Model December 2024 meeting   Source: Bloomberg Looking ahead, we note that geopolitical tensions have increased and election uncertainty in the United States could be a source of short-term volatility in the markets. In addition, the ebb and flow of economic data could also continue to shift investors positioning between expectations of two or three cuts through the year-end and bring some near-term volatility. However, the balance of economic data and supportive stance from the central banks continues to favor an overall constructive outlook on the markets, in our view.

North American equity markets whipsawed during the month of August. The initial leg down was driven by an interest rate increase in Japan which led to an unwind of ‘Yen Carry Trade’ , together with increasing fears of a potential recession around the corner fueled by a few weak economic data prints early in the month. ISM Manufacturing PMI (Purchasing Manager’s Index) at +46.8 for July (reported in August) was weaker than +48.5 in June (reported in July) and the expected +48.8. Non-Farm Payrolls were also lower than expected (later revised further downwards). However, equity markets were quick to recover during the second half of the month on the back of benign inflation readings in the United States, still supportive economic data, and dovish messages from the US Federal Reserve Chair, Jerome Powell, at the annual Jackson Hole event. On the other hand, the fixed income markets benefited as the expectations of policy rate cuts continued to build. Investors also speculated if a 50 basis points cut is more appropriate during the September FOMC (Federal Open Market Committee) instead of a 25 basis points as labor market data continues to deteriorate. Historically, August and September have had the reputation of being the seasonally weaker months for the North American equity market returns. Despite the recent market tremors, some investors have been questioning if it could be different this time as interest rate cuts in the United States are about to start. Afterall, markets have been fixated on the policy rates trajectory for long and the US Federal Reserve has very well telegraphed that it would be prudent to start the policy rate cut cycle from the FOMC meeting on 18 September. The Federal Reserve Chair has made it clear that the Central Banks’ focus has shifted to the health of labor market. This, along with the softening jobs data in the recent past has led the markets to bake in a full percentage policy rate cut by the end of this year, including a 25 basis-points cut in September, a 50 basis-points cut in November; and again a 25 basis-points cut in December. In the absence of a significant weakening in the economic data, we think the Federal Reserve will refrain from delivering more than a single cut (25 basis-points) in any meeting given its potential to send a wrong message (economy is weak or expected to be weak) to the markets. Short-term volatility aside, we think another larger question on market participants’ minds is if it could be different this time and North America avoids a recession as the yield curve dis-inverts and the Central Banks embark on the rate cut cycle? Yield curve inversion has been regarded as an indicator of potential recession in the future and historically a recession has started shortly after yield curve has dis-inverted after inversion (see Figure 1). The US 2-year to 10-year segment of the yield curve dis-inverted on September 6th. Given that this occurrence also typically coincides with the weakness in the labor markets and the start of policy rate cuts by central banks shortly before a recession; the recent jitters witnessed in markets are not without a merit, in our view. Figure 1: US 10-year yield over 2-year yield October 1978- September 2024 Source: Bloomberg   That said, we note that the labour market is weakening from a very high level. The ratio of total job openings to unemployed looking for jobs has declined to 1.3x from its highs. Though the trajectory is worrisome, it is still at a level where it can be classified as becoming more normal after the distortion due to the pandemic (see figure 2). Corporations reported healthy revenue and earnings growth during the second calendar quarter earnings season and the outlook for twelve-month forward earnings has continued to improve. Above all, the Central banks now are in a relatively comfortable position to support the economy by reducing interest rates should a faster than expected deterioration in economic data come to fruition, in our opinion. As markets navigate through these questions, we think volatility is likely to continue with the ebb and flow of the economic data. Nevertheless, the balance of data keeps us constructive on the outlook through the end of this year for now. Figure 2: Ratio of US total Job openings to unemployed looking for full time work October 2014 to July 2024 Source: Bloomberg

In September, we celebrate Life Insurance Awareness Month. Advisors work together to educate our clients about the importance of Life Insurance and the part it plays in protecting families and their financial stability. While we know that Life Insurance may not always be a top-of-mind priority for many Canadians, its importance is vast and should be recognized as a valuable and versatile tool in protecting our loved ones and our assets.   Many find it uncomfortable to talk about, as the conversation does revolve around what could happen when we pass away. Taking steps to put adequate Life Insurance in place, review our Life Insurance needs, and update our coverages accordingly, can help all of us feel more confident and rest easier, knowing our loved ones and finances will be well taken care of.   In essence, Life Insurance is an agreement between yourself and the Life Insurance company where, when you pass away, they will pay a death benefit. The death benefit is a lump sum of money, received tax free, by a beneficiary, or beneficiaries, of your choosing. There are many options available, and you can decide what cost and type of Life Insurance fits best within your budget. During the worldwide pandemic, we all learned that life is very fragile, not one of us is invincible, which makes a campaign like Life Insurance Awareness Month that much more important.   Like many things in life, some level of maintenance is recommended for your Life Insurance. As we go through life, many things change about our overall financial outlook. That mortgage that has been around for years might one day be gone, children will one day be all grown up and able support themselves financially, and other debts may be paid off and no longer need to be insured. Here at O’Farrell Wealth & Estate Planning we recommend:   Reviewing your Life Insurance and Financial Plan with your Advisor on an annual basis. Completing an insurance needs assessment periodically in order to determine if your overall insurance coverages are on track. You may be under insured, over insured, your coverage needs may not have changed significantly, or you may need to make an adjustment. Your Advisor will help review your situation and make recommendations. Review your Beneficiaries and Contingent Beneficiaries annually to make sure your policies are up to date. Discussing Whole Life Insurance as an investment with your Advisor. Whole Life Insurance provides consistent returns in a tax efficient manner and is a powerful addition to your Financial Plan. Life Insurance Awareness Month is a great time to reflect on our overall Life Insurance needs. Take some time to review your coverages and if you have any questions or concerns, contact your Advisor.   Andrew Goetz is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613.258-1997 or visit ofarrellwealth.com  to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc .

The month of July was mixed for the North American markets as the rotation out of the heavyweights in favor for small-and-medium capitalization companies continued for the most part. The technology sector heavy NASDAQ index ended up in red at ~-0.73%, S&P 500 Index at ~+1.2%, while S&P TSX Index played catch up and was up by ~+5.9%. However, the market tremors at the beginning of the month of August revealed that there is more to the recent market moves than the rotation trade. The Bank of Japan raised the policy rates to +0.25% on July 31st, in alignment with market expectations that were building up over the month. The increase in policy rates by the Bank of Japan was at a time when the rest of the world is on the other end of the cycle, i.e. close to embark on a cycle of cutting policy rates, which led the Japanese YEN to appreciate more than +10% against the USD during the month. This made the ‘carry trade’, a practice of borrowing from lower yielding economies and investing in high yielding economies, unattractive to a lot of investors. As they were forced to unwind their positions, the NASDAQ nosedived almost in unison with the USDJPY currency pair (See figure 1).   Figure 1: NASDAQ vs. USDJPY, year-to-date Base: 2 January 2024 = 100 Source: Bloomberg Given the ultra-low interest rates in Japan for a very long time, the country has been a source of capital for the rest of the world’s financial markets. Should this dynamic change in a quick and disorderly fashion, it has the potential to bring more wild swings in the financial markets, in our view. The recent comments from the deputy governor of Japan that the ‘Bank of Japan will not hike interest rates while the financial and capital markets are unstable’ restored some calmness back into the markets.    Apart from the shockwaves from the east, the recent economic data releases also added to investor anxiety. The unemployment rate in the US increased from +4.1% in June (reported in July) to +4.3% in July (reported in August), triggering the Sahm rule indicator, which indicates the start of recession if the three-month average unemployment rate is +0.50% above its low in the previous 12 months. The unemployment rate in Canada also increased from +6.2% in June (reported in July) to +6.4% in July (reported in August); higher-than-expectations of +6.3%. The Bank of Canada reduced policy rates by 25 basis points to +4.50%, and while the US Federal Reserve held policy rates during the July meeting, it hinted at a possible rate cut in September. The emphasis during the press conference was that the job market seems to be better balanced, but the Federal Open Markets Committee (FOMC) will be more attentive to any sign of deterioration. The Central Bank’s indication of becoming more sensitive to the labor market followed by weaker job data did not help ongoing investor concerns. The worries of a potential recession given the cooling of economic data could persist for some time, keeping a lid on further market gains in the short-term, in our view. That said, we note that factors such as Hurricane Beryl might be behind the surge in unemployment numbers and thus prove temporary. The Institute of Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) dropped to +46.8 for July (reported in August) from +48.5 in June (reported in July) indicating contraction in manufacturing activity. However, the ISM Services PMI Index jumped to +51.4 in July (reported in August) from +48.8 in June (reported in July) indicating expansion in the services activity. As per world bank data, services sector constituted about +76.7% of United States GDP in 2021. Overall, we think the balance of economic data does not lend much credence to the concerns of a significant slowdown at present, in our opinion.

Life insurance is a financial tool designed to provide a safety net for loved ones in the event of the policyholder's death. While life insurance is commonly associated with adults, there is a growing recognition of the benefits of securing life insurance for children. Despite the discomfort that may come with contemplating such scenarios, there are compelling reasons why individuals should consider investing in life insurance for their children.   Firstly, life insurance for children offers financial protection in the face of unexpected tragedies. No parent wants to imagine the unthinkable, but the reality is that accidents and illnesses can strike at any time. In the event of a child's passing, a life insurance policy can help cover funeral expenses, medical bills, and other associated costs. This financial cushion can provide much-needed support during an already emotionally challenging time, allowing families to focus on healing rather than worrying about financial burdens.   Furthermore, purchasing life insurance for children at a young age can lock in their insurability for the future. As children grow older, they may develop health conditions or engage in risky behaviors that could make it difficult or expensive to obtain life insurance later in life. By securing a policy early, parents ensure that their children have guaranteed coverage regardless of any future health issues. This proactive approach to securing financial protection offers peace of mind for both parents and children alike.   In addition to providing financial security, life insurance for children also offers the potential for cash value accumulation. Many life insurance policies include a savings component that accumulates cash value over time. This cash value can be accessed later in life and used for various purposes, such as funding education, purchasing a home, or supplementing retirement savings. By starting early, parents give their children a head start on building financial assets for the future, providing them with greater financial flexibility and security as they navigate life's milestones.   Lastly, life insurance premiums for children are often more affordable compared to policies for adults. Since premiums are typically based on factors such as age, health, and coverage amount, children's policies tend to be more cost-effective due to their youth and generally good health. This affordability makes it easier for parents to provide financial protection for their children without breaking the bank, ensuring that their loved ones are safeguarded against life's uncertainties.   In conclusion, while the idea of purchasing life insurance for children may seem daunting, it offers numerous benefits that can positively impact their future. From providing financial security and locking in insurability to accumulating cash value and teaching financial responsibility, child life insurance serves as a valuable asset in securing a child's future. By taking proactive steps to protect their children's financial well-being, parents can ensure that their loved ones are supported no matter what the future may hold.   Cole Seabrook is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613.258-1997 or visit ofarrellwealth.com  to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

The month of June witnessed price action that looked like last year when a small number of stocks drove most of the market returns for the most part of the year. The difference between large capitalization companies and small-to-mid capitalization companies has become even larger (See Figure 1), forcing investors to think if this will reverse and when. Halfway through the year 2024, we note several headlines highlighting market concentration and the ‘Magnificent 7’ stocks still cornering much of the market action, year-to-date. Recall that in 2023, the broader S&P 500 Index except for the magnificent 7 (Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla) was in red until the end of October 2023. After the hints of a shift in interest rate policy stance towards a pause in late October 2023, broader market also took off (See Figure 2). Figure 1: Large Cap vs. Mid Cap vs. Small Cap, (Jan 2023 to present) Base: Jan 2023 = 100   Source: Bloomberg Figure 2: S&P 500 Index vs. S&P 500 Index (ex – Magnificent 7), (Jan 2023 to Dec 2023) Base: Jan 2023 = 100   Source: Bloomberg Our analysis suggests that year-to-date, except for NVIDIA, the remaining 6 companies within the ‘Magnificent 7’ umbrella have traded in line with the broader S&P 500 Index (See Figure 3). This suggests that the participation of stocks in the market rally so far this year has been relatively broad, in our opinion. This does not mean that the market concentration problem has reduced, it only means that it has not become any more dire than it was last year. This concentration poses risks that if there is a change in the factors that provided wind in the sails of a select few, the markets might struggle. Figure 3: S&P 500 Index vs Magnificent 7 vs. Magnificent 7 (ex-NVIDIA), (Jan 2024 to present) Base: Jan 2023 = 100   Source: Bloomberg A high interest rate regime helped the cash rich companies (typically larger cap) as they have been able to earn more on their cash hoards, while small-and-mid companies with larger debt loads in general, have struggled. In addition, layering on the rush for artificial intelligence, the difference between ‘the haves and have nots’ has become even starker. The companies that are beneficiaries of this theme and have been sitting on higher cash balances have witnessed turbocharged performance, while others lagged. As the central banks start cutting interest rates in the coming months, it raises the question of whether the current dynamic will change. We think the answer is in how the fundamental outlook of the economy evolves. A softer economy or a recession will hurt the small-to-mid cap companies more than the larger and cash rich companies with stronger balance sheets, negating much of the benefit of lower interest rates. In this scenario, the market concentration might continue to get worse or stay the same. If the economy stays on firm footing as central banks cut interest rates, the small-to-mid cap companies should start to play catch-up, in our view.