Since our last update, the most important developments for the North American markets have been the monetary policy announcements from the Bank of Canada and the US Federal Reserve. Bank of Canada raised policy rates by 25 basis points to bring them to +4.50% and announced its intention to pause the further hikes. Tiff Macklem, the governor of Bank of Canada, said that the pause was contingent on the economy evolving in line with expectations, including inflation dropping to ~+3% by mid-year. The US Federal Reserve also raised policy rates by 25 basis points to bring policy rates in the US to +4.75%. The US Fed chair, Jerome Powell, maintained the message that their work is far from over, as the current inflation readings remain high and the job market is still very tight. Further, the FOMC (Federal Open Market Committee) expects a couple more hikes before considering a pause. Notwithstanding the hawkish message, the US Fed Chair acknowledged that the disinflationary process has begun, and was not very forthcoming to pushback on the recent easing of financial conditions driven by run up in capital markets. Overall, Mr. Powell’s stance of a reluctant hawk, i.e., the impression of lack of conviction to keep monetary conditions tight, was read by the market participants that a change in policy stance is likely nearby, in our opinion. Year-to-date, the capital markets have been off to a good start on expectations of a policy pivot as inflation readings have continued to cool off their highs. The inflation reading for Canada fell to +6.3% in December (reported in January) from +6.8% in November (reported in December) and in the US fell to +6.5% in December (reported in January) from +7.1% in November (reported in December). This, put together with a lack of any pushback from the US Fed chair and the indicated pause in the policy rates hikes by Bank of Canada, has fanned the risk-on sentiment among investors. However, it is noteworthy that the year-to-date rally has been concentrated on the companies that were hit the hardest during the year 2022 (See Figure 1). Figure 1:S&P 500 Index Members, Price performance 2022 vs Year-to-date While several of these companies are still down significantly from their highs during the last year, indicating recovery potential on a return to normal, we believe the macro environment of 2023 warrants a selective approach. As the high inflation and policy rates narrative gradually fades, growth narrative will begin to take over and therefore companies will have to deliver on revenue and earnings growth expectations to sustain the stock price performance. Given that the impact of high interest rates has just begun to work its way through the economy, many of these companies could find it difficult to meet their revenue and earnings expectations. Furthermore, the latest readings on the unemployment rate in the US unexpectedly falling to +3.4% from +3.5% and the ISM Services PMI (Purchasing Managers Index) jumping back to expansion territory (55.2 in January) from contraction territory (49.6 in December) could force Central Banks to rethink any potential change in policy stance. Though the recent change in Central Banks’ tone is positive and strengthens the case for adding risk-on exposure, we believe investors need to be mindful of bumps in the road ahead.

By Cole Seabrook Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. One solution to help individuals grow their wealth overtime, while maximizing the timing into the market is Dollar Cost Averaging (DCA). What is dollar cost averaging? Dollar cost averaging is when you invest a fixed sum of money on a regular basis, regardless of the market conditions. This strategy helps individuals develop a disciplined savings and investing habit over time. How does dollar cost averaging work? In most cases when individuals are dollar cost averaging into the market, it is done automatically through a direct deposit from their bank account to their investment account, making the transactions seamless. By dollar cost averaging, you are buying more when prices are lower and less when prices are higher, depending on the market price of the shares/units. Over the course of time this strategy could lower your overall cost per share/unit compared to what it may have been if you purchase the investment in one larger lumpsum. What are the benefits of dollar cost averaging? While you may be reducing your cost per share/unit, there are many other benefits to consider when implementing the DCA strategy. One of the major benefits is establishing savings and investing habits. Because in most cases the contributions are set up automatically, over a period of time individuals are accustom to the money being transferred to an investment account on specific days of the month. When implementing the dollar cost averaging strategy, individuals are less likely to miss the money they are investing while establishing discipline to stick to their financial plan. In addition to developing good habits, it keeps individuals open for investment opportunities when in down markets or experiencing high volatility. In summary, dollar cost averaging is a great low-cost strategy for individuals who do not have excess funds or are looking to compound their savings while keeping a steady cash flow for their day-to-day expenses. It is a great way of saving and investing on a regular basis to help individuals achieve their short & long-term financial goals. If you are looking to start saving/investing for your future financial goals or, have questions around best strategies for your individual financial situation, the team at O’Farrell Wealth & Estate Planning would be more than happy to sit down and have a conversation to help you stay on track. 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

By Cyndy Batchelor, FMA, BCom Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. A critical illness is more common than you think. A serious, life-altering illness affects one in three Canadians in their lifetime. One in two Canadians will be diagnosed with some form of cancer in their lives. How are you able to manage the risk protection against a serious illness? A Critical Illness Policy allows you to manage this risk and protect yourself, your family, and your assets against the unpredictability of getting critically sick or injured. Critical Illness Insurance can allow you to focus on your recovery knowing that you have the money to help with costs of a serious illness. A CI policy is an excellent complement to the provincial health care plan because the amount paid can allow you to: Replace your income, or even your spouse’s income so that he or she can take time off work to accompany you during your treatments Pay for assistance at home Pay for medications not covered by provincial health insurance Pay the costs of treatment abroad Continue repaying financial obligations such as your mortgage Take a much-needed break after medical treatment before returning to work full-time Additionally, a CI policy can ensure that you don’t have to dip into your retirement savings or investments to cover these extra costs. Some Critical Illness policies will also offer additional benefits to holders and family members of the policies. These include access to expert medical assistance. This expert assistance can help you by: Providing a second opinion on your diagnosis Helping you to understand medical conditions Explaining your treatment options and Helping you navigate the healthcare system Supplementary assistance can also be provided and include: Counselling services Family support services (childcare or home care) Legal and financial consultations Nutritional advice I am often asked, is a Critical Illness policy really worth it? What happens if I don’t get sick? My favourite benefit that can be included as an option in a Critical Illness policy is known as a return-of-premium benefit. If you remain healthy and don’t have the need to use your policy, after as early as 10 years, you may choose to get your money back. If you do elect to use this option, your policy then expires. Contact your Financial Advisor today to discuss Critical Illness Insurance options. We welcome questions so please reach out! See our ad in this week’s North Grenville Times and follow us on Facebook @OFarrellWealth. Cyndy Batchelor 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

By Sarah Chisholm, BA Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. As a business owner you are constantly faced with challenging decisions. What expenditures will help your business grow? What strategic changes can you make? What will add value to your operation? January is the season of annual general meetings and crop conferences for farmers across Ontario. Having attended a few different meetings, one common thread has the importance of evaluating the return on investment for cropping decisions. Does extra fertilizer add value? What about more spraying or using a different seed? Each of these extras adds to the input costs for the crop, but does it add value? Farmers track their own data with new technology, and they rely on experts and researchers who run trials throughout the year to provide tests results. Taking the time to assess the return on investment is a great practice for any business owner whether they be a farmer, crop consultant or any retail/commercial business. For any business owners out there, grab your favourite cup of tea or coffee and start thinking about Return on Investment (ROI). Focusing on Return-on-Investment means looking at your inputs and analyzing which ones have added value. For farmers this could be the cost for the extra round of spraying – did it increase yields or did the larger combine reduce labour costs? For another business, it might mean looking at marketing expenses from last year to see which advertisements or events were the most successful and to what extent. The best time to start looking at your return on investment is now. Start now and know that it will get easier as you begin to understand what inputs you need to track in order to make the analysis. For most businesses, marketing is a great place to start your analysis. If you broke down all your marketing costs, are you able to track exactly where specific advertisements or events added value? If not, is there a way to update your tracking systems to make it easier to collect the information? Having the information allows you to make informed decisions on which marketing practices to invest in and which ones to leave behind. Consider another return on investment – rest and relaxation. As a business owner, you may feel tied down by the business and always wanting it to improve it. Do you find it difficult to step away from the business for a vacation? January is a great time to look back at your vacation and time off from 2022. Did you take enough time off to truly feel relaxed? Did you experience any burnout in 2022? It may seem counter intuitive but try booking more time off in 2023. Test out the return on investment for rest and relaxation. How much more efficient can you be in 2023 if you have quality time off? Return on Investment is a simple calculation if you have the data. So, start thinking about what ROI calculations you can analyze now and which ones you would like to run. Take a cue from our Ontario farmers and start implementing processes to collect the data and build ROI into your regular business calendar. A trusted financial advisor can help steer you towards which ROI calculation will bring the most value to your business practices. We welcome questions so please reach out! See our ad in this week’s North Grenville Times and follow us on Facebook @OFarrellWealth. 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

The theme of last month's trading could be the theme that prevails in the markets for the next few months. Lower-than-expected inflation numbers combined with stronger-than-expected economic data raised investors’ hopes for a soft landing or only a mild recession. Investor optimism on these developments faded amid cautious remarks from Central Banks. In the US, the headline inflation rate dropped to +7.1% in November (reported in December) from +7.7% in October (reported in November). This was lower than the expected +7.3%. Canada saw inflation rates of +6.8% for November, down from +6.9% in October. The ISM Services PMI (Purchasing Managers Index), a gauge of the US services sector, rose unexpectedly to +56.5. A reading above 50 indicates activity is expected to expand, while a reading below 50 indicates the activity is anticipated to contract. The unemployment rate in the US at +3.7% and in Canada at +5.1% indicates a marginal increase from previous months, however, remains well below historical levels. The above data supports the notion that inflation can potentially cool off without harming the economy in a major way. However, authorities at the Federal Reserve continue to exercise caution that lowering defences against inflation prematurely could cause inflation expectations to become entrenched and result in a bigger problem in the coming years. The Federal Open Markets Committee (FOMC), decided to raise policy rates by 50 basis points at the December meeting, and their “Summary of Economic Projections” showed that the participants expect policy rates to rise to 5.25% in 2023 (from +4.50% at present) and stay there for the entire year. The Fed's major concern is that a strong job market indicates wage inflation, which may continue to fan broad inflationary pressures. The ratio of job openings to unemployed workers has come off its recent highs but remains high in the historical context (See Figure 1). We acknowledge that, at this juncture, the Federal Reserve is right to be cautious in their approach given the strong jobs market; however, we remain optimistic that the wage inflation scare might not turn out to be as bad as expected. The major wage surveys indicate that wage inflation pressures could moderate in the coming months (See Figure 2). Figure 1: Job markets remain strong from historical perspective Figure 2: Wage inflation expectations are trending down Additionally, we are encouraged by the fact that: a) energy prices have dropped from their recent highs; b) the pandemic-induced frictions in supply chains are fading; and c) bottlenecks in the manufacturing supply chain may further ease as the Chinese government softens its stance on the zero-Covid policy. This could mean that inflation surprises to the downside in the coming months, in our view. Reset of investors’ expectations after corporations release their earnings and outlooks, and the Central Banks maintaining the hawkish tone until inflation numbers decline meaningfully, indicates market volatility might remain elevated. That said, during 2022, investors’ sentiment has moved from ‘irrational exuberance’ to ‘healthy skepticism’ and asset valuations are now more reasonable. This put together with a potential change in the Central Banks’ hawkish rhetoric later in the year means the investing environment for 2023 will present opportunities for long-term investors. We wish our readers a very Happy New Year 2023!

By Sarah Chisholm, BA Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. The Christmas Season is a time for family gatherings and celebrations, good food and presents. We all get joy from giving to our loved ones and those in need. Let’s grab your favourite cup of tea or coffee and discuss ways to give in 2022. As parents and grandparents, we often find it challenging to come up with ideas for gifts for our children or grandchildren. Do they really need more clothing or toys? Consider making an investment into their Registered Education Savings Plan. RESP contributions up to $2,500 per year (subject to CRA guidelines) are eligible for a 20% Canada Education Savings Grant. Giving your grandchild $100 for their RESP account could earn them an additional $20 in government grant. What about gifts for our adult children or our siblings? Our adult children or our siblings are often named the executors of our estates. While they are often willing, being an executor can prove to be quite complicated for our loves ones when we eventually pass. One major hurdle of estates can be the presence of physical share certificates. A loved one may have passed away while still holding those shares and the executor is then faced with a mountain of paperwork to have the shares re-issued in the name of the estate. This includes working with a brokerage to deposit the shares before being able to sell or distribute those shares to the beneficiaries and file the realized capital gains or losses with the CRA. If you have physical share certificates filed away in a safe or lock box, take the time to pull them out and get them deposited into an investment account that is easier to manage. Dealing with stock certificates now will save your executors a major headache down the road – a truly wonderful gift. We all have family and friends who truly need nothing. Consider making a charitable donation in their name. Take the time to consider what charity or foundation they truly value and then send in your donation. Many charities will then send a notification to your loved one to let them know a donation has been made in their honor. For tax purposes, make sure your donation is made before December 31, 2022 so you can claim the tax credit on your 2022 tax return. Finally, as you cross the final items off your list for this holiday season, consider making those purchases from locally owned businesses. Our community has an amazing wealth of products and services – spread some cheer and support the local community. We welcome questions so please reach out! See our ad in this week’s North Grenville Times and follow us on Facebook @OFarrellWealth. 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

A cautious start to the month of November after the FOMC’s (Federal Open Market Committee) meeting and policy rates guidance on November 2nd proved to be short lived. Investor enthusiasm was re-ignited after the US inflation report showed that the headline inflation in the US declined even lower than the expected rate of +7.9% to +7.7% from the previous +8.2%. The report for Canada showed that inflation in the country stayed flat at +6.9%, keeping in line with the expectations and last month’s readings of +6.9%. Investor enthusiasm grew on expectations that if inflation has taken a turn, the case for the pace of policy rates hikes to decline in the coming months has become stronger. The fixed income asset class also gained after bond yields at the long end of the curve declined. The inversion of the yield curve, however, deepened after bond yields at the short end of the curve continued to advance given that the policy rates are still expected to advance, albeit at a lower pace. Historically, an inversion of yield curve has been usually followed by an economic recession (See Figure 1). Given that the extent of current inversion is very deep and the last time this level of inversion was witnessed was during the late seventies or early eighties, the argument that the much-anticipated recession in 2023 will be deep and long, has gained ground. The conditions such as a spike in commodity prices, increasing interest rates, along with a yield curve inversion, do indicate that a recession is on the horizon. However, we believe the jury is still out the on the length and extent of a recession. The sooner that inflation falls back to targeted levels, the less need there is to keep interest rates in the restrictive territory for long. In our view, this lowers the chances of a deep and prolonged economic contraction. Figure 1: US yield curve inversions and recessions (Jan-1977 to Nov-2022) The impact of higher interest rates on the real economy is now increasingly becoming visible and will eventually manifest as lower earning expectations for corporations. The news of mass firings and hiring freezes by large corporations has hogged the limelight in the recent weeks. This indicates that the unemployment rate will increase, which, on one hand this means lower inflationary pressures, and on the other hand, means a tough operating economic environment. The Institute of Supply Management’s (ISM PMI) manufacturing Index slipped into contraction territory (49 in November from 50.2 in October). A reading above 50 indicates the manufacturing activity is expected to expand and a reading lower than 50 indicates the manufacturing activity is expected to contract. Notwithstanding the deteriorating fundamentals, having been fixated on inflation and policy rates through the year, the markets are now staging a relief rally as inflation seems to have finally taken a turn and the Central Banks have begun to signal their willingness to reduce the pace of interest rate hikes. This gift could not have come at a more opportune time as investors have been waiting for the Santa Claus rally in anticipation. We wish our readers a Merry Christmas and Happy Holidays.

By Cyndy Batchelor, BCom Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. As the holiday season nears, we all search for ways to create special memories for our families, children, and grandchildren while still staying within our budget. It is important to remember that you do not have to “break the bank” to have a good holiday. There are many Holiday activities you can take part in that that cost very little: Check out the local Christmas Parade and enjoy the wonder of the season. Take a Holiday Lights Tour – you can attend an official one at a cost per car or set your own route. Finish the night off with a cup of homemade hot chocolate and cookies. At home movie nights – it is always fun to break out the pjs and popcorn and get cozy on a cold winter night with some Holiday Classics. A Visit to Santa – many local markets feature a Santa your family can see without the need to brave the busy mall. Family Baking – enjoy a day baking Christmas Treats. This is not only budget friendly, but it is also a fun activity where life skills can be incorporated. There are many budget-friendly gift ideas that can bring joy to those you love: Homemade presents – if you are artistic or fantastic in the kitchen, consider making something for the people on your list. RESPs – if you have grandkids/nieces or nephews and they have or get everything they need, consider contributing to their Registered Education Savings Plan. Be sure to remember these budget tips when planning your holiday shopping: Prioritize the wish list – it isn’t necessary to buy everything on someone’s wish list – make sure to manage their expectations. Start your holiday shopping early. You can budget a small amount every month so that you are not looking at a big bill in December or January. Shop for sales – Black Friday and Cyber Monday can be a budget shoppers dream. Pay in cash – this will help to not rack up the credit cards and, in turn, credit card interest. Remember, Holiday memories are made up of the fun things we do and the people we spend our time with. This is what makes the season so special. I wish you all a very Happy Holiday. We welcome questions so please reach out! You can also follow us on Facebook @OFarrellWealth. Cyndy Batchelor 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

Cyndy Batchelor, BCom Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. The cost of daily living is getting more expensive, and many use their Credit Cards to carry these increased costs. Carrying a balance on a credit card will incur interest charges that can take years to pay off. As credit card debt can hold an interest rate of up to 24%, the only way you will ever get ahead is to commit to never carrying a balance. That does not mean that you need to give up using your credit card, it simply means you should be paying off your full balance by the due date each month. Credit Cards can help you build up good credit and give you rewards like dividend dollars, travel miles, or points to redeem for free items. This can help you save money in the long run. If they are used responsibly, credit cards can come with many incentives. Here are some tips for using your Credit Cards to their best advantage: Set a credit limit that you can pay off Make sure you can pay off your credit card each month by the due date. Whatever you are charging to the card needs to be within the budget so that you can afford to make your payment ON TIME. If you go beyond your limit, stop using the credit card. Track your spending Tracking your spending is so important. You can do this by reviewing your credit card balance regularly, setting up a spreadsheet, utilizing an app, or through an alert on your phone. You may even want to make additional payments against the card to ensure the balance does not get out of hand. Live on a Budget Now that you have set a limit and are tracking your spending, ensure you are living up to your budget. Make sure your income is more than your expenses. Allocate your income to 50% needs, 30% wants and 20% savings. If you need to revise your budget and drop some of the wants or sundries, as I like to call them, then revise as needed until your numbers are in line. Make your payment Automatic You can set up your bill payments, including your credit card, to be paid automatically. This will help you to keep to your monthly budget. It will also help you to ensure you are always paying off your credit card. Build yourself an Emergency Fund To avoid a sticky situation, start building an emergency fund. Emergencies like car repairs, a job loss, or a leaky roof can max out your credit card if you do not have emergency funds set aside. This can increase your overall debt. Ideally, your emergency fund will cover four to six months of living expenses. If you do have to use your emergency fund, make sure you plan to build it back up again. A credit card can be a great financial asset as a tool to build credit and earn rewards. We welcome questions so please reach out! See our ad in this week’s North Dundas Times and follow us on Facebook @OFarrellFinancialServicesInc. Cyndy Batchelor 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

By Sarah Chisholm Financial Advisor, O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. As we celebrate small business week it is a great time for business owners to start thinking about retirement. You have built a successful business – when do you want to take a step back, and how will you implement that transition? Every business transition is unique so please grab your favourite cup of tea or coffee and let us consider. Transitioning a business is typically a multi-layer process. A Financial Advisor can work as your quarterback to direct the transition and bring in key players such as your accountant, lawyer, and lender to get everyone on board. Transitioning a business can take a variety of forms. You may sell outright to a third party, negotiate a deal with a current employee, wind down the business, or keep the business going by transitioning to a family member. If you are in certain industries like farming, a family transition can often be implemented tax efficiently with a farm roll over. In all cases, your succession team will provide guidance on how to proceed in the most tax efficient manner and will provide solutions to smooth the transition. Knowing who the business will transition to is often the easiest part. The hardest part may be the transition into retirement – the personal side and the financial side. On the personal side, business owners often connect their identity to the business itself. They see themselves as the business. What happens when you are no longer the business owner? Identifying retirement goals, activities, and networks is part of process to rebuild your personal and family identity. Look at the hours you currently devote to your business and consider how will you fill your time in retirement. As you focus on your goals for retirement, it will help your Financial Advisor build a strategy for your retirement cash flow. Having a good idea of the daily cashflow, vacation, large purchases that you expect to make over the first 5 years of retirement can bring clarity to the investment goals that need to be implemented for retirement. Are there enough savings in retirement savings plans and tax-free savings accounts or other assets to fund the retirement goals? What after tax amount do you need to net from the sale of your business to fund your retirement goals? Having a number in mind can help you weed out lowball offers from potential buyers. For those business owners transitioning to family, another aspect comes into play – fairness. When businesses are transitioned from parents to children it is often done at some sort of discount, potentially with promissory notes forgivable on the parents passing. If there are multiple children in the family but only one is buying the business, it is important to look at the estate and legacy goals. Most business owners with multiple children understand that you can be fair to all your children, without necessarily being equal. Building assets outside of your business can help with this equalization dilemma. Real estate, investment accounts, and permanent life insurance can all be used as part of the estate equalization process for the non-business children. The transition process can be challenging but remember the reason it is challenging is because you’ve built a successful business and significant wealth. Starting to plan early is important. Put your professional team on notice and get them started on a business transition plan for retirement. 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 circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.