Market Update – Interest Rate Increase Oct. 24, 2018

We’re not sure about everyone else, but does it not feel like sunshine and 30-degree weather was yesterday? Is there anyone else wondering how it’s already mid October!? We are 16 days away from Halloween and Christmas is around the corner. The organized individuals of the world have probably started shopping however, there is something to be said about those who scramble last minute – we’re either mildly insane for doing so OR is there a sense of achievement attached if you manage to pull it off? It’s almost the same level of pride you experience when you successfully carry your groceries from the car to the house in one trip and who doesn’t appreciate a one tripper?

Speaking of scrambling last minute, let’s talk interest rates. While there is no need to panic, in just over a week from now the BoC should be increasing the benchmark rate a quarter percent on October 24th, followed by another potential increase in January 2019. You should speak with a mortgage consultant if you are 3 or more years into your mortgage term, in a variable rate mortgage or have considered refinancing, now would be the time to act.

There is a lot of speculation when it comes to the future of interest rates, some economists are predicting rates to reach as high as 6% by 2020 but it’s near impossible to predict such thing. While this may seem drastic to some (by some we’re referring to the millennial’s of the world who never experienced 13%-20% interest rates in the 80’s) it’s important to remember that the rates we have now are still considered historically low.

We are starting to see the affects of the new B20 mortgage regulations, introduced over the last two years. Together with interest rate increases, the real estate market in Abbotsford, Mission and Chilliwack have slowed down. Reports show a 33.2% decrease from the same month last year in residential unit sales. The average home price in BC is down 1.1% year-over-year, averaging the detached home price at $685,749.

If you’re interested in accessing the equity in your home, you might want to consider doing it sooner than later. Chances of this slow down continuing are relatively high especially with increasing rates in the forecast, it’s likely that these changes will result in further depreciation.

The slow down we’re starting to experience could open a window for interested home buyers but given all the recent regulatory changes it’s more important now than ever to work with a seasoned team of mortgage advisors who are familiar with the new requirements and know how to work around them.

If you have any questions about how the interest rate increase might affect your current mortgage, please feel free to contact our team. We offer complimentary mortgage reviews and will work with you to secure the best mortgage product suited to your financial goals and needs.

 

October Market Update

TSX UP 2.5%

DOW UP 4.33%

S&P 500 UP 2.22%

Happy Halloween everyone!

Hopefully you are slowly going through the candy you either bought, or are stealing from your children after they put in the hard work getting it ( excellent learning opportunity to show how taxes work).

The markets chose treat this month, and not a tootsie roll; they were giving out full size chocolate bars to everyone.  The Dow refuses to stay down amid another record breaking run. I had a lot of colleagues  calling for a crash by 20,000, but no one told the DOW as its well above 23,000. This rally has been powered by great earnings down south, as well as the proposed changes to the tax code that Donald Trump  is working on. If these tax cuts are passed look for confidence in the American Economy to sky rocket.

Also joining the record books is the TSX; Breaking through the 16,000 mark for the first time on the recovery of the energy sector and solid earnings from the banks.  While interest rates stayed the same it looks like the US is thinking of raising in December. This will depend largely who is appointed to be the new Fed Chair as well as if they want to stay the same course as Janet Yellen who in my mind did a fantastic job navigating the choppy waters. Shockingly the North American markets didn’t see any reaction to the chaos happening in Spain right now as the Catalonian government voted overwhelmingly to separate from Spain in an unrecognized vote of independence. Spain has chosen to not recognize these results and called in the army to handle the situation there. Spain is one of  Europe’s biggest economies, which Catalonia being the economic hub.  If they do end up doing a Brexit like move that might cause ripples in the Euro Zone.

As  always if you have any questions or concerns let me know!

Happy Halloween from my family to yours!

 

By Referral Mortgage Consultants*

“Click, Call, Chat – Award Winning Brokers”

Dave  604 897 2741 Jordi 604 615 1312
www.ChilliwackMortgageBroker.com

www.AbbotsfordsMortgageBroker.com

 www.BRMC.ca

 www.PeaceOfficeMortgageBroker.com

Connect with us on!
BRMC Facebook

BRMC Google review Chilliwack Office

BRMC Google review Abbotsford Office

BRMC Google review Mission Office 

http://www.linkedin.com/company/2410358

https://twitter.com/brmcmortgages

http://www.youtube.com/user/BRMCmortgages

We’re active on Facebook, Twitter, LinkedIn & YouTube. We really appreciate reviews! Good or Bad please let the world hear your voice! Connect with us for ongoing industry news items, contests & prizes.

*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp. 

Volatility

As an investment advisor it’s my job to know what’s going not only in the stock market but also news around the world that might cause ripples through a client portfolio. The first three hours of my day is listening to podcasts on top events, reading the articles and watching the market to see what the pulse of the portfolios my clients invested in are doing.  One of the biggest pieces of news is the constant predictions of doom and gloom in the market for whatever reason- people are much more likely to react to news predicting a stock market correction than their portfolio making another 3 % last month.

The recent election of Donald Trump as president has created a lot of volatility in the short term but also buying opportunities. Take a look at GM, Nordstrom’s, and Ford after he was elected for this volatility. President Trump tweeted out negative news for these companies and their stock value took a fast sharp hit in one day, only to regain its value a few days later. This can be stressful for the average investor; and may result in wanting to try and sell on bad news.

The stock market is unique in that when things get cheaper ( they go on sale) people freak out- if you were to walk into a car dealership and they said cars were 10% lower today then yesterday for the same car wouldn’t you want to buy one today instead of yesterday?  With all this volatility it’s more and more important to stay in contact with your financial advisor to explain why things are up or down and what this means for your portfolio. At Peak Securities my goal is to not only earn a steady return but to educate and inform my clients. If there is a problem in the market you will know what is going on and what the next steps are. With President Trump on twitter as well as news occurring all over the globe the prospects for volatility are a lot higher now than ten years ago, these spikes are usually short lived and having a long term strategy to take advantage of these spikes is a key to success.

If you have any questions or would like a review of your current portfolio feel free to contact me at testabrooks@peakgroup or 778-325-1373 / 780-709-1373

By Referral Mortgage Consultants*

“Click, Call, Chat – Award Winning Brokers”

Dave  604 897 2741 Jordi 604 615 1312
www.ChilliwackMortgageBroker.com

www.AbbotsfordsMortgageBroker.com

 www.BRMC.ca

 www.PeaceOfficeMortgageBroker.com

Connect with us on!
BRMC Facebook

BRMC Google review Chilliwack Office

BRMC Google review Abbotsford Office

BRMC Google review Mission Office 

http://www.linkedin.com/company/2410358

https://twitter.com/brmcmortgages

http://www.youtube.com/user/BRMCmortgages

We’re active on Facebook, Twitter, LinkedIn & YouTube. We really appreciate reviews! Good or Bad please let the world hear your voice! Connect with us for ongoing industry news items, contests & prizes.

*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp. 

5 Investments Myths You Should Know to Help Build Prosperity


In January we were proud to introduce our new Wealth Management Division ran by Nathan Estabrooks & supported by the whole BRMC family. So as we go forward we are going to use our existing Abbotsford, Chilliwack and Mission Mortgage platform to also educate, motivate and create content to help you understand what a Financial Planner can do for you.

So without further delay here is some info quick retirement savings thoughts.

 

  • Myth 1- Paying high fees is okay if you get the performance right??

The average cost of owning a mutual fund is 3.17% per year!
Below is the impact of fees on fictitious ending account balance:
Tom: $100,000 growing at 7% (minus 3% in annual fees) = $324,340
Jerry: $100,000 growing at 7% (minus 2% in annual fees) = $432,194
Trent: $100,000 growing at 7% (minus 1% in annual fees) = $574,349
Same investment amount, same returns, and Trent has nearly twice as much money as his friend Tom.
By simply removing expensive mutual funds from your life and replacing them with low-cost index funds guided by a competent advisor, you will have made a major step in recouping up to 70% of your potential future nest egg.

 

  • Myth 2: What’s the point in saving $50 bucks a pay cheque??

Well although 50 dollars per pay period doesn’t seem like much, if you start those habits at a young age you will be surprised at what it does for you. If you start saving $50 dollars bi-weekly when you are 25 and assume a 7% return with 1% inflation this will leave you with $256,331 when you are 65.
Take into effect that you should and could start to increase your amounts you contribute as you get older and that is nothing to laugh at. But remember it’s never too late to start saving for retirement at any age, even if you are not 25 anymore. Today is the best day to get on track regardless of age.

 

  • Myth 3: Our returns? What you see is what you get

Average returns are like online dating profile photos. They paint a better portrait than the reality. When the mutual fund advertises a specific return, it’s never the return you actually earn. Why? Because the returns you see in the brochure are known as “Time Weighted Returns.” Sounds complicated, but it’s really not …
Time weighted returns assume that investors have ALL of their money in the fund the entire year and don’t take any withdrawals. But the reality is, we typically make contributions throughout the year
And if we contribute more during times of the year when the fund is performing well (a common theme we learned, as investors chase performance) and less during times when it’s not performing, we are going to have a much different return than what is advertised.

 

  • Myth 4- Your bank advisor has your best interest at heart.

As someone who worked for the banks for 7 years let me let you in on the inner workings of a branch. When you walk into an investment meeting the first thing the advisor will do is sit you down and ask you questions about risk tolerance, and then this program will spit out which fund you should invest in.
While the banks themselves have thousands of mutual funds at their disposal, they usually only offer you the 5 funds they want to push. These funds are often “fund of funds” and have many mutual funds within them. This leads to very high fees. The advisor will very seldom give you other options from this as it is outside their comfort level. As an investment advisor I want you to pay the least amount of fees while getting great return. The bank advisors just aren’t educated enough to provide the high level of advice you deserve.

 

  • Myth 5: Invest with us — we’ll beat the market.

When I hear other advisors bragging about this it makes me roll my eyes and lose interest almost immediately. If an advisor is bragging about beating the market check out the last 5 years or ten years to make sure. Maybe you found the one guy smarter then Warren Buffet. Maybe not though. From 1984 to 1998 — a full 15 years — only eight out of 200 fund managers beat the Vanguard 500 Index. While an advisor can provide calming presence and financial planning tools and guiding your asset mix to ensure your portfolio is customized to your needs, beating the market is unrealistic. Clients that work with an advisors typically make 2% more on their investments because of communication and risk strategies (buying when its down, selling when its high) , not by beating the market. If an advisor brags about this. Run.

By Referral Mortgage Consultants*

“Click, Call, Chat – Award Winning Brokers”

Dave 604 897 2741 Jordi 604 615 1312 www.ChilliwackMortgageBroker.com

www.AbbotsfordsMortgageBroker.com

 www.BRMC.ca

 www.PeaceOfficeMortgageBroker.com

Connect with us on!  BRMC Facebook

BRMC Google review Chilliwack Office

BRMC Google review Abbotsford Office

BRMC Google review Mission Office

http://www.linkedin.com/company/2410358

https://twitter.com/brmcmortgages

http://www.youtube.com/user/BRMCmortgages

We’re active on Facebook, Twitter, LinkedIn & YouTube. We really appreciate reviews! Good or Bad please let the world hear your voice! Connect with us for ongoing industry news items, contests & prizes.

*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp.