Market update: As the world turns
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Valuable insight and opinion on financial, investment, and retirement planning from an experienced industry expert.

By Bruce Loeppky  | Thursday, November 09, 2017


This has been a pretty good year, all things considered. The European and Asian economies are moving along smoothly and America is chugging along. Canada has done its part by posting strong economic results even as oil prices have remained generally low. Our dollar even made some nice gains even as oil prices remained low through most of the year, which doesn’t normally happen. That is where we got the “petro currency” tag some years back. But as always, there are growing risks and storm clouds brewing.

The bad news is North Korea remains a hotspot for instability, although most experts feel this won’t amount to much. Iran is again in the news as U.S. President Donald Trump doesn’t like an anti-nuclear-development agreement that was signed by the previous administration, and this isn’t making Iran happy. Some sanctions against Iran have been lifted, allowing them to sell oil in world markets once again and normalize their economy, which relies heavily on oil exports.

Donald Trump is still a wild card, but that is what some people wanted in a politically divided America. I recently attended a seminar where we heard that the markets don’t care about who is president of the United States. The presenter said markets go up when most companies show good results and goes down when their results are poor. Corporate profits (or lack thereof) are what drive the stock markets. And investment growth is what we’re all going to need when considering my next topic.

Seniors’ living and the demographic nightmare

Demographics are such that about 10,000 people a day are turning 65 in the U.S. as this huge wave of Baby Boomers ages. This means that about 1,000 people a day in Canada are hitting that same age. This will stress our hospitals and medical system from top to bottom for 20 to 30 years. Finding a retirement home for yourself or your parents will get very tricky and very expensive.

A typical senior’s residence cost an average of about $4,000 per month, depending on where you live and the type of facilities you want, often rising to about double that amount for cases where increased medical care is also required.

I don’t mean to scare you. Units are available between $3,000 and $4,500 a month. A few are as low as $2,000 a month for a one-bedroom unit with kitchenette and three meals a day included. This is still a lot of money for most folks. You can get cheaper care but that means waiting in line for subsidized government care and then going to a facility of their choosing – not your favorite choice.

You can also request a specific care facility, and then pay the bill yourself until you your turn in the government’s line comes up. That means you could pay the rent for 12 to 24 months to ensure your loved one gets to the choice facility. That could be a $40,000-60,000 bill.

All this may create difficulties with family dynamics, when it comes to funding parents’ stays in temporary facilities, while awaiting the residence of choice. Some family members may not be as well off as others, leaving an unequal distribution of the cost burden.

There are many different scenarios with many different family circumstances. This is a minefield many are navigating now or will be within the next decade. Each situation is truly different, and often the result may not be equal or equitable to all parties. The trick is to talk about the issues in the open with an impartial arbiter, such as your financial planner, get the care your loved one needs without destroying family harmony in process.

Stock markets

As a result of the mostly positive news in the world picture, most global stock markets have posted good returns year to date (YTD). Canada’s benchmark S&P/TSX Composite index is up 4.5%, with most gains coming in the last few months. New York’s blue-chip S&P 500 Composite Index is ahead 10% in Canadian dollar terms, while the 30-stock Dow Jones Industrial Average is up 13% in Canadian dollars.

Taken together, this means that your year-end portfolio statement will most likely be a good-news story, unless you are overweight cash and fixed income, which has been a difficult space to earn decent returns for a few years now.

For those approaching or in early retirement now, this is not the time to be overly conservative unless you have a very large lump sum and no debt, and unless you are 85 or older. Locking in a risk-free portfolio if you between ages 60 and 70 could mean that you will run out of money before you want to.

Bruce Loeppky is based in Surrey, B.C. and is registered with Portfolio Strategies Corporation as a mutual funds person. He is a regular contributor to the Fund Library. He can be reached at

Notes and Disclaimers

© 2017 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. However, please contact the author to discuss your particular circumstances.

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