Canadian CANNAINVESTOR Magazine January 2019 | Page 198

How to make Cent$

in 2019

Listen, closely everyone, I’m going to tell you where to invest and what will make money…. insert silence. Anyone that tries to tell you where to invest with certainty is delusional or telling a tall tale. What we can do is follow some simple rules in an attempt to increase our wealth.

1. Diversify your portfolio

When choosing a portfolio you want something that will reflect the risk you're willing to take and the returns you're looking to receive. It used to be quite simple, of stocks and bonds, if you wanted something more conservative increase the bond. Well with bonds coming off of a 30-year bull market and stocks showing a lot more volatility investors need to branch out. The chart below represents the change in asset mix required to receive 7.5% and how it changed over time. I would suggest we model our investments similar to that of the big pension plans. The key ingredient is private equities. These are investments that typically don’t suffer the same way that stocks and bonds do, they are not correlated to the market and offer returns similar to the stock market. As I write this, the Canada Pension Plan is sitting at roughly 47% percent private equities. What percentage do you have and how is your portfolio designed to provide cash and protection?

2. Pull money out from your

RRSP or RRIF in this tax year.

If you are 65, consider making a withdrawal from your RRIF and taking advantage of the $2,000 federal pension income amount. It may also

at have qualified for the DTC since 2008 may actually lose entitlements after 2018

6.Make any charitable donations. Charitable donations must be done by year-end to qualify for 2018 taxes. Consider this, if you like to donate but have lower income, why not donate in your adult child’s name. If they are not retired, their income could be higher, and they benefit more from the donation tax credit. Investors with non-registered money with a capital gain could also consider donating the investment in-kind. It would give you donation worth the value of the investment, and you won't have to pay capital gains on the investment.

7.Make a Tax-Free Savings Account withdrawal. If you withdraw funds from a TFSA, an equivalent amount of TFSA room with be re-instated in the following calendar year. The exciting news is the new contribution room for 2019 is $6000. That makes the maximum contribution now $63,500…that’s a lot of tax-sheltered growth.

By Jason A. DeJean

FCSI®, PFP®, CFP®, CPCA®, EPC®

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