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How Much Shopify Stock Is Safe To Own?

How Much Shopify Stock Is Safe To Own?

By Karl Anvik, BSc, MA, CIM®, CFP® As an emerging competitor to Amazon, Shopify has become increasingly popular with tech sector investors in the last few years. This growth has been magnified during the pandemic as traditional brick-and-mortar retail stores have shifted to online sales and have started to rely more heavily on online platforms. In its most recent report to investors, Shopify reported a revenue of $978 million, an increase of 94% over the previous year. Shopify executives also reported a sharp increase in the number of merchants using the platform, reporting in February that the merchant solutions revenue increased by 117%. However, what has made this stock particularly interesting in 2021 is that the share price dropped 30% from its 52-week high after Shopify told investors during that call that consumer spending could “rotate back” to traditional brick-and-mortar retail. (1) With its sharp rise in popularity over the last year and then a quick downturn in the first quarter, many investors have been wondering how much Shopify stock is actually safe to own. It’s important to remember that every individual portfolio and every investor is different. So what works for your friend or family member likely won’t have the same intended result for you. In general, we recommend not having more than 5% of your total portfolio in any single stock. Be careful not to make changes to your wealth management strategy without first talking to a professional. That being said, if you are considering re-examining your tech stock portfolio, here are a few points to keep in mind. Online Retail Is Here To Stay Even as more and more people become fully vaccinated and start venturing out of the home to conduct their shopping, increasing brick-and-mortar shopping in the near future, the truth is that online retail is now embedded as a convenient choice for consumers. The pandemic accelerated a process that was already years in the making. Consider the decline of big chain department stores and the epidemic of abandoned shopping malls across the continent. The prevalence of this type of shopping environment has been steadily declining for at least two decades, while the rise of online retailers and marketplaces, like Amazon, has been steadily increasing for years and experienced a sharp escalation due to the pandemic curtailing traditional shopping experiences. So any investment in Shopify should be seen as a long-term commitment. Fluctuations due to extenuating circumstances, such as the pandemic and the subsequent availability of a vaccine, are the exception and not the rule, and will not likely have a steep influence on Shopify’s overall performance over an extended time period. Shopify, Amazon, And Antitrust In January, Amazon acquired Selz, an Australian competitor to Shopify. (2) While Amazon has bought dozens of companies without too much pushback from American antitrust regulators, this doesn’t mean that Amazon will escape severe repercussions in the future. Many U.S. lawmakers continue to condemn the “monopoly power” of the American tech giants, including Amazon, and have called for sweeping changes of the U.S. antitrust laws to establish a more competitive landscape. After a 16-month investigation, Democrats on the House Judiciary Committee proposed policies that would break up tech giants and block the companies’ attempts at purchasing other smaller startups or established retail companies. (3) While this doesn’t affect Shopify on its surface, as a smaller competitor to Amazon, it may mean that in the future Shopify will be able to achieve more stable growth while Amazon grapples with antitrust roadblocks. This underscores our point that Shopify stocks should be considered a long-term rather than short-term investment strategy. Questions About Your Portfolio? If you are reconsidering your investment in Shopify or the tech industry, we can help you review your portfolio. We strive to offer the best tools and services in the industry and can help you design a stable investment strategy that will support your wealth management plan well into the future. Call 403-571-8960 or email info@northfront.com for more information. About Northfront Financial Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit our website and schedule a complimentary appointment. ____________ (1) https://www.fool.com/investing/2021/02/17/shopify-pulls-back-on-earnings-beat-cautions-about/ (2) https://sites.law.berkeley.edu/thenetwork/2021/03/17/shopify-amazons-antitrust-counterargument/ (3) https://www.nytimes.com/2020/10/06/technology/congress-big-tech-monopoly-power.html

How Business Owners Can Manage Their Money

How Business Owners Can Manage Their Money

By Shamez Kassam, CFA, MBA Proper financial management is crucial to the success of every small business. Not only does proper financial management free up your cash flow—allowing you to invest in your business and yourself—it also allows entrepreneurs to make timely, well-informed, and educated decisions based on objective facts surrounding the health and well-being of their business. Despite this, many Canadian small business owners don’t have a firm grasp on their finances. Some only look at their financial reports annually or make decisions about the direction of their business based on a narrow slice of financial information instead of the entire picture. Other owners allow other parts of running their business to take precedence over paying attention to their company’s financial state. Below we compiled a list of financially healthy habits business owners should implement to manage their money to ensure that their business thrives. Effectively Manage Corporate Cash One of the key objectives for business owners should be to utilize capital efficiently. For example, some business owners prefer not to utilize bank financing. Rather than sitting on excess cash in corporate bank accounts, many business owners would be better off obtaining a line of credit that is asset backed, with borrowing based on accounts receivable and inventory. That way, corporate cash can be invested to obtain better returns, and the asset backed line of credit would be available when needed. At Northfront Financial, we help business owners talk to their bankers to obtain the flexible and suitable form of financing for their business. In some cases, by employing this one technique, we have helped business owners generate over $100,000 in additional investment income. Over the longer term, business owners should also be thinking about how to liberate cash from their corporation using the Capital Dividend Account (CDA). Review Financial Indicators Frequently It is important to conduct a thorough review of your company’s financial data every month and compare your company’s performance to your long-term goals and objectives. Reviewing your finances frequently throughout the year can allow you to tweak certain details which will ultimately help you meet your goals by the year’s end. Some financial indicators to monitor every month include liquidity, profitability, and growth. You should also research any financing available to small businesses from the government or the banks—particularly when interest rates are low like they are right now. Educate Yourself The reason you got into your business or line of work was probably because it enabled you to focus on doing what you love and what makes you happy. Your passion has now grown into a full-fledged and profitable business because you are really good at what you do, and your clients expect a quality product or service from you. However, you probably don’t have the same passion or knowledge base for accounting, which can be problematic when managing your bookkeeping and trying to keep track of your cash flow. Thorough accounting can really help your business thrive, but understanding the fundamentals will help you implement the right financial tools in your day-to-day business. Consider taking a beginning accounting class so that you can manage your company’s finances effectively. Learning the basics will help you create a financial foundation to expand your business and reach more long-term goals. Hire Professionals So you now understand the basics of accounting, which will help you manage your day-to-day, but what about meeting your long-term goals? What steps do you need to make today to ensure that you are where you want to be in five years, 10 years, or even during retirement? Hiring the right professionals can help you implement financial tools and healthy habits that will allow you to invest in your business, save on taxes, and prepare for your future. We’re Here To Help We know you are an entrepreneur and that running your business is a full-time job. That’s why we are here to offer you the assistance you need to effectively manage your money and invest in your future. At Northfront Financial, we specialize in helping business owners achieve their goals. Call 403-571-8960 or email info@northfront.com to set up an appointment with our financial advisors. About Northfront Financial Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit our website and schedule a complimentary appointment.

5 Ways Family Physicians Can Grow Their Practice

5 Ways Family Physicians Can Grow Their Practice

By Shamez Kassam, CFA, MBA You’ve spent the better part of your life becoming a doctor, and now that you have your practice, you’re poised to expand. But you might be feeling some growing pains. Staffing, training, and discovering your specialty all take time, and with growth comes an increased focus on the financial aspects of your practice. Read our advice on growing your practice in a sustainable way. 1. Hire The Right People Your medical staff is your greatest—and most expensive—asset. It’s impossible to keep your business running like a well-oiled machine unless you have a strong team in place. When the time comes for you to hire someone, take your time and ensure you find the right candidate. You want someone who can get the job done but who also has excellent people skills. This means you shouldn’t wait until you’re overflowing with patients to seek help. Be proactive. Create an organizational flow chart of which employees you plan to hire at each stage of growth. Create a written job description for these roles. Knowing what you want in each position will help you find the right candidate, and you will be ready when the time comes. 2. Consider A Specialty Would you rather go to a general family doctor or one who specializes in the specific health issue you’re facing? Someone who focuses on certain clients and specific needs. Most of us would rather see a specialist because they have in-depth knowledge of that particular issue. General practice doctors are invaluable, but in today’s “Dr. WebMD world,” some patients believe a specialist may be better suited for their healthcare needs. One of the most effective ways to grow your practice is to pinpoint what sets you apart from the competition and embrace it. Maybe you’re known for women’s healthcare or you’re an expert in healthy weight loss. Whatever it is, find your competitive edge and use it to your advantage. 3. Make Your Staff And Patients Feel Welcome A strong work culture is everything. Once you’ve hired the right people, make every effort to make them feel like family. Celebrate their birthdays and work anniversaries. Host holiday parties and after-work socials. Appreciation goes a long way. The same goes for your patients. Instead of assuming what they like or dislike about your practice, ask them directly. A recent study shows that 80% of “better performing” practices regularly conduct patient-satisfaction surveys. (1) Use surveys in your own office and use the feedback to make your practice even better. For example, if several patients state they had a poor phone experience with the front-desk staff, offer phone training so your staff knows how to deal with all types of patients (even the frustrating ones). You may be a brilliant physician, but your front office is the face of your practice and the first and last experience for your clients. They need to be amazing! 4. Be Seen As An Industry Expert The more valuable information you can give your patients, the better. But this goes beyond simply having a wall of pamphlets in your waiting room. In today’s digital age, your information needs to be online. Create a user-friendly website that’s chock-full of blog posts and videos on the latest health issues in your field. Offer tips and tricks on how your patients can stay healthy. Build an email list and send your latest insights to your audience, so you always stay top of mind. As you begin to release more information, your patients and prospects will begin to see you as an industry expert. And they’ll be more likely to schedule an appointment with you when the need arises. 5. Make Sure You’re On The Right Financial Track Growing a medical practice is no easy feat—especially in today’s world of strict regulations and decreasing reimbursements. But if you identify what makes your firm unique, focus on the patient experience, and hire the right team, growth will follow. We at Northfront Financial are here to help organize the financial aspects of your practice so you can focus on being a doctor. We give advice on creating a business plan, we help you pick the right employee benefits for your employees, and we coordinate with your other trusted advisors to give you comprehensive service. To learn more, contact us today 403-571-8960 or email info@northfront.com. About Northfront Financial Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit our website and schedule a complimentary appointment. _____________ (1) https://www.softwareadvice.com/resources/use-patient-satisfaction-surveys-to-improve-performance/

Is Your Financial Advisor A Fiduciary?

Is Your Financial Advisor A Fiduciary?

By Karl Anvik, BSc, MA, CIM®, CFP® Do you know if your financial advisor is acting in your best interest? Some financial advisors are bound by ethical and legal obligations to put their clients’ needs first, but others are not. If you weren’t aware of this, you may want to check that your financial advisor is attentive to your needs first and foremost—not their own. Since the 2008 Great Recession, the Canadian Securities Administration has more closely scrutinized the standards financial professionals are held to when providing investment and financial advice. But the fact remains that there is no requirement for all financial advisors to act in their clients’ best interests. It’s up to you to make sure your advisor is a fiduciary. What Is A Fiduciary? A fiduciary is a person or organization that acts on behalf of another person and is legally and ethically bound to act in that person’s best interest. To be considered a fiduciary, the Canadian Securities Administration has determined that an advisor must ensure: Client interests are paramount Conflicts of interest are avoided Clients are not exploited Clients are provided with full disclosure Services are performed with reasonable prudence (1) Your financial security is paramount to your well-being. You work hard your entire life to build and protect your wealth, so you want to be sure your hard-earned assets are also protected by the professionals you partner with. Working with a financial professional requires a degree of vulnerability, so you should only partner with professionals who put your best interests first. What Kind Of Financial Advisors Are Fiduciaries? Not all advisors or wealth managers are fiduciaries. Some financial professionals, such as trustees, are always fiduciaries. But others, including broker-dealers, wealth managers, and financial advisors, vary in their fiduciary responsibilities depending on their legal status, the services they perform, and the credentials they carry. For instance, broker-dealers are advisors who make trades on behalf of their clients, but can also trade securities for themselves. Some broker-dealers sell in-house investment products, while others sell products from outside sources. These practices can create conflicts of interest, as broker-dealers may be motivated to sell products to receive a high commission—even when those products aren’t a good fit for the client. How Do You Know If Your Advisor Is A Fiduciary? Different types of advisors are more likely to be fiduciaries than others. Broker-dealers are almost never fiduciaries, while fee-only financial planners almost always are. You can look to your advisor’s title to help you determine whether or not they might be a fiduciary. Specific advisor designations are another clue. Advisors carrying the Certified Financial Planner (CFP) designation are held to fiduciary standards by the FP Canada Standards Council™, which includes a Code of Ethics requiring CFPs to act in their clients’ best interests. You can also often tell if an advisor is a fiduciary based on how they’re compensated. If they receive commissions, they’re not a fiduciary. The simplest way to find out if your advisor is a fiduciary is to ask them. If an advisor claims to be a fiduciary when in fact they are not, there are legal consequences. It’s never too late to ask your advisor if they’re a fiduciary. If they’re not, they should be able to clearly and concisely explain why. Northfront Financial Inc. Is A Fiduciary Firm The fiduciary standard is one of the top criteria you should consider in a financial advisor. Fiduciaries want to help you reach your financial goals, not their own. When you work with a fiduciary, they do well when you do well, so their motivation rests on your success. At Northfront Financial Inc., we have a legal requirement and duty to act with the utmost care, in good faith, and always with our clients’ best interests at the forefront. Enjoy more peace of mind in your financial planning and wealth management by partnering with a fiduciary firm. Please call 403-571-8960 or email info@northfront.com to schedule a meeting with us today. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit our website and schedule a complimentary appointment. ______________ (1) https://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20121025_33-403_fiduciary-duty.htm

Your 2021 Tax-Preparation Checklist

Your 2021 Tax-Preparation Checklist

By Shamez Kassam, CFA, MBA The 2021 tax-filing season is just around the corner. With all the stress of the last year, you may be as ready as we are to leave 2020 behind as soon as possible—and that means you may want to file your taxes sooner rather than later. While the Canadian Revenue Service extended the filing deadlines last year to help residents deal with the COVID-19 pandemic, it is still unclear if they will do the same this year. As of now, employees can start filing their taxes on February 22 and are subject to an April 30 deadline. Self-employed Canadians, or those who have a partner or spouse who is self-employed, have until June 15 to file their taxes. Regardless of when your taxes are due, it is a good idea to start gathering your documents and getting organized now to give yourself plenty of time to file. Organizing your documents is the key to filing your taxes with the least amount of stress possible. Step 1: Organize All Income Information The first step is to gather all income documentation for both you and your spouse. This could include any of the following income slips: T4 State of Remuneration Paid T4A Statement of Pension, Retirement, Annuity and Other Income T4E Statement of Employment Insurance and Other Benefits T3 Statement of Trust Income Allocations and Designations T5 Statement of Investment Income T5008 Statement of Securities Transactions T4A(OAS) Statement of Old Age Security T4A(P) Statement of Canada Pension Plan Benefits T5007 Statement of Benefits You may also have other sources of income, so you will also need to gather documentation related to those alternative sources, such as capital gains or rental income. This documentation could include the following: T2125 Statement of Business or Professional Activities documenting any self-employment T776 Statement of Real Estate Rentals documenting rental income and expenses Capital gains Charges and interest expenses related to investments Tips and gratuities not already on your T4 or T4A Spousal and/or child support payment documentation Step 2: Collect Documents And Receipts Verifying Your Expenses Canada has over 400 different deductions and credits. (1) This is good news for many Canadians who qualify for deductions or are eligible for a tax credit. Eligible expenses can count toward deductions which could lower your tax bracket and help reduce your tax liability. Eligible expenses could include the following: Moving expenses Medical expense for yourself or members of your family Employment expenses Charitable donations Adoptions expenses Home accessibility expenses Tuition documentation Support payments made Student loan interest amounts Childcare expenses Facility expenses This is not a comprehensive list and some credits or expenses are very case-specific. Before you start looking for your receipts, it may be a good idea to consult with a tax professional to nail down which tax credits or expenses you can deduct. Step 3: Gather Personal Information Completing your taxes is not the most exciting activity for most people, but there is nothing quite like the feeling of relief and success you feel when you finish them. Don’t add to your stress by waiting until the last minute to gather together the personal information you know you will need. Have the following on hand: Social Insurance Numbers for you and yourself Copies of last year’s tax returns Bank account numbers and routing numbers Document Changes It’s a good idea to use last year’s tax returns as a starting point in filing this year’s tax returns, but remember to keep in mind any possible changes to your life this year that could affect the deductions you qualify for or any tax credits you may receive. Did you have another child? Did your family adopt a child? Did your oldest start college? Did you start withdrawing from a retirement account? These changes will need to be included in this year’s filings. Financial Planning When it comes to taxes, there is a lot of information to know. As we mentioned before, sitting down with a knowledgeable tax professional who understands your situation and is also familiar with your available tax strategies could help mitigate your tax liability. We at Northfront Financial are here to help you through this year’s tax season. Please call us at 403-571-8960 or email info@northfront.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit our website and schedule a complimentary appointment. ____________ (1) https://turbotax.intuit.ca/tips/ready-to-do-your-taxes-this-checklist-will-help-1766.

Important Financial Actions To Take Before The End Of The Year

Important Financial Actions To Take Before The End Of The Year

By Jeffrey Ady If you feel like someone tossed 2020 in a blender, pressed start, and threw everything in an uproar, you’re not alone. Most, if not all of us, have experienced canceled plans, work stoppages or adjustments, complicated family decisions, and (as if that weren’t enough) financial challenges. To add to the uncertainty, we don’t know what the near future will bring in regards to COVID-19, political turmoil, and our markets. How do you prepare when there is so much unknown? How can you look ahead to 2021 when you don’t even know what next week will bring? You go back to the basics. Here are 7 financial actions that could make all the difference as we near the end of 2020. 1. Rework Your Budget Even if your income hasn’t been affected by COVID-19, it’s likely that your spending has. Whenever you experience life changes, it’s wise to take another look at your budget to make sure your spending is in line with your goals and shift things around to manage your priorities. For example, this year might have shown you the importance of having financial margin and now you want to double down to get rid of debt. It’s also possible that many of your daily expenses have experienced some ups and downs. You might be spending less on gas and eating out, but more on groceries, masks, and online shopping, not to mention that prices on many basic items have increased. If you have experienced income changes, make sure you factor those in and adjust your spending accordingly. Go into 2021 with a rock-solid budget that helps you feel financially secure. 2. Adjust Your Goals and Set New Ones Don’t be afraid to set new goals for 2021. Look at your new budget and priorities and find ways to work toward your savings goals. Get creative with things you want to accomplish next year. You may not be able to take that international trip you’ve been dreaming about, but you can get your family together for a local vacation or refocus your energy on tackling a home renovation. If you’re planning to retire, relocate, sell your business, or make any other big financial moves, identify now what changes you can make to smooth the transition. 3. Don’t Skimp On Your Savings If there’s one thing this year has taught us, it’s the importance of having an emergency fund. If you haven’t already, now is the time to ensure that you have enough money set aside to cover 3-6 months of necessary living expenses or unexpected extras. While these savings should be easily accessible, you also want your money to be working for you. Contact us to learn about options that will keep your money liquid but also pay a competitive interest rate. And while things seem uncertain, don’t shrink back from saving for the future or try to wait things out. Consistency, compound interest, and effective, diversity asset allocation makes all the difference in the growth of your investments. If possible, max out your contributions to your RRSP by the end of the year to make the most of your retirement savings. For 2020, the deduction limit is $27,230. You might also consider contributing to a TFSA. In 2020, you can put up to $6,000 in this account. Finish the year strong by investing in your future! 4. Revisit Your Plans And Policies Along with updating your budget, take another look at your estate plan and insurance coverage. If you took the time and energy to create an estate plan, check it periodically to ensure all the documents are up to date and no major details have changed. If you change a beneficiary in one place, such as a life insurance policy, make sure you are consistent with your other documents to avoid confusion. Your insurance needs may change as the year goes by, so periodically review your coverages and designated beneficiaries to bring them up to date to reflect your current financial situation. For example, if you paid off debt, you may not need as much life insurance coverage since your family’s liabilities have decreased. You might also want to evaluate your need for other types of insurance, such as long-term care or disability insurance. 5. Give When And Where You Can The end of the year is always a good time to make your charitable contributions so you can benefit on your tax return, but this year in particular many worthy organizations are struggling to make ends meet. Support local nonprofits or charities that share your values, and make the end of this year brighter for someone else. You can even donate appreciated securities, which may help you avoid paying taxes on the gains. 6. Find An Advocate If this year has taught us anything, it’s that we all need each other’s support. Before the year is over, seek out a financial professional who can take an objective look at your financial situation and help you take your finances to the next level regardless of what comes your way in the coming months and year. In a time of heightened emotions, dramatic headlines, and a temptation to panic, you need to know you have someone in your court watching out for your money and making sure you are on track to your ideal future. If you know you need the support of an objective financial professional, our team at Northfront Financial Inc. would love to partner with you on your financial journey. Get started now by calling 403-571-8960 or emailing info@northfront.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you,visit their website and schedule a complimentary appointment.

Unexpected Risks To Your Retirement Plan

Unexpected Risks To Your Retirement Plan

By Karl Anvik, BSc, MA, CIM®, CFP® The word “retirement” can conjure up many emotions: excitement, joy, and even anxiety or nervousness. Reaching retirement is an amazing milestone, but making sure you’re ready for it can be overwhelming, especially if you look at all the unknowns. Thankfully, there are ways to plan for many of the risks and headaches that retirement brings. Let’s look at some retirement planning challenges so you can feel empowered to prevent or work through them. How Is Your Asset Allocation? At retirement, the last thing you want to experience is losing a large portion of your investments due to a misallocated portfolio. It’s important to make sure your assets are handled carefully to guarantee you have money for the long haul. That’s why it’s crucial for your money to be allocated based on your age, time horizon, and personal risk tolerance. Someone who is 20 years away from retirement may be okay with more volatility than someone who is retiring in 5 years and isn’t willing to lose more than 8% of their savings. When you get to retirement, having a portfolio that can generate consistent income is key. In a low-interest-rate environment, generating income is all the more challenging. At Northfront Financial, we specialize in using alternative assets that are used by some of the largest pension plans in the world, such as the Canada Pension Plan (CPP). This allows us to help our clients solve the “income puzzle.” Before you retire, it is important to have a financial professional walk you through the process of determining exactly what level of risk you want to take and can afford to take, how much liquidity you need, and help you design an income-generating portfolio customized to your needs. The Reality Of Inflation Inflation is a reality; not planning for inflation is the risk. CPP factors in inflation through the Consumer Price Index (CPI), but how can you protect your other assets? There are many ways to reduce the risk of inflation, such as diversifying your assets appropriately to strike a balance between principal protection and growth or making a conservative withdrawal plan that accounts for inflation surges in the future. The best way to prepare for the impact of inflation on your retirement savings is to plan for multiple scenarios, seeing how your nest egg will hold up under different circumstances. Outliving Your Savings Perhaps one of the most overlooked items in a retirement plan is your income plan, or lack thereof. We work so hard to get to retirement that we forget to make a plan for how to handle our money after reaching that milestone. Think of it this way: When you climb a mountain, you spend the bulk of your time preparing and strategizing for how you will get to the top (in this case, retirement). But once you’re up there, you realize you didn’t plan for the descent (withdrawing your money in retirement) and are not sure if you will make it to the bottom safely. Having your money last as long as you do requires extensive planning to create a concrete income strategy that is designed to act as a personal pension. This is based on your needs, wants, savings goals, and unique lifestyle factors, which means a cookie-cutter strategy or withdrawal rate won’t give you the security you desire. A financial professional familiar with your situation can help you retire—and stay that way! Don’t Let These Risks Get You Down Retirement is an incredible time of life, one that you’ve worked hard for and deserve. That’s why it’s so important to do more than just save and invest; you need to look at the big picture and prepare for the many variables that could come up. If that sounds overwhelming, don’t fear! That’s what we do best at Northfront Financial. If you are looking for effective strategies for the financial challenges you face in your everyday life, we’d love to talk with you and help you take care of the intricacies of retirement planning. Contact us for an introductory appointment by calling 403-571-8960 or emailing info@northfront.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment.

4 Things To Do In A Volatile Market

4 Things To Do In A Volatile Market

By Shamez Kassam, CFA, MBA We have been living in this new normal for months now, and although many of us have adapted to the major changes that turned our lives upside-down, a cloud of uneasiness still looms large. Even the term “uncertain times” doesn’t do justice to the scary or frustrating circumstances in which we find ourselves. As expected, the stock market and economy, neither of which like uncertainty, have reacted to things with unprecedented volatility. If you are worried about your financial security, it’s normal to find yourself asking questions such as, “How will I get through this?” and “What does this mean for my future?” While the severity of these events is not to be minimized, we can battle fear and anxiety by going beyond the headlines and educating ourselves with the facts. With that in mind, here are 4 ways you can help prepare your finances for more volatility so you can feel equipped and empowered to take the next step forward. 1. First, Take A Deep Breath When headlines are dramatic, it’s hard not to respond in kind. But remember, news outlets want to catch your attention, which means they are prone to exaggerate information. Instead, keep a clear head by looking at the stats and put current conditions into perspective. This is not the first time the market has been volatile and it won’t be the last. In fact, declines in the Dow Jones Industrial Average are fairly regular events. In fact, drops of 10% or more happen about once a year on average. Sometimes the market fluctuates in reaction to a global or political event, and sometimes it’s just how the market works. The only long-term guarantee in investing is that there will be short-term fluctuations. 2. Keep A Long-Term Perspective Now that we know to avoid the headlines and dig for the facts instead of making desperate moves to potentially save our money, here’s an analogy that helps us understand how the stock market and our investments behave. People’s moods can fluctuate on a day-to-day basis and so can the stock market. However, if you look at someone’s personality over a long period of time, their moods average out and usually improve with maturity. This probably doesn’t apply to everyone you know, but stay with me! In the same way, the stock market grows over time. The value of your investments also grows and matures with time, even with short-term ups and downs. Here is a graph that shows this long-term stability, despite short-term market fluctuations. This is the Dow Jones Industrial Average (DJIA) showing over the last 30 years of investment value, which is a fair representation of the market as a whole. If you remember the 2008/2009 crash, as seen above, the market recovered really well. Our current situation may seem significantly different from anything in the past, but capitalism and human perseverance will once again prevail and lead to improvement in the markets. 3. Leave Your Money Alone Based on what we’ve covered so far, what is going to happen when we ride out the stock market roller coaster and keep investing consistently? We will most likely experience growth, work toward financial confidence, and save ourselves a lot of stress when future downturns come. When the stock markets go down, you can think of it like a Black Friday or Cyber Monday Sale, where stocks and mutual funds are on sale and you’re getting the best deal on your money. However, if you choose to sell in a down market, you will get a fraction of your money back. You’ll lose money. If you consistently invest and don’t take any money out until retirement, you don’t need to worry. Don’t become frantic and start selling back everything you bought for a much higher price. Let it grow and mature. 4. Talk To A Professional About Risk Research will help you keep a clear head and keep you from panic-induced decisions, but when it comes down to it, it’s extremely beneficial to talk with someone who works with this information daily and can help answer concerns specific to your situation and phase of life. Depending on your age and financial situation, you might not feel like you have as much time to let the market bounce back. This is why it is even more crucial to make sure the types of investments you have make sense considering your risk level. For example, consider using alternative investments in your portfolio – these are less volatile investments that have been used by the largest pension funds in the world for decades. Most individual investors are not aware of this asset class. This is something to discuss with a financial professional to make sure your investments are where they should be and are ready for future market swings. We’re Here To Help! Despite social distancing and sheltering in place, remember that you are not alone. We hope you take comfort in knowing that our team at Northfront Financial is here for you. We know the volatile markets, among other things, are likely causing you concern regarding your retirement plan. Let us share your burden. To learn more about alternative investments, schedule an introductory consultation by calling 403-571-8960 or emailing info@northfront.com so we can show you your options for protecting your money and setting it up to succeed in any market environment. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment. ___________ (1) https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

How To Invest For Retirement Like The Top Pensions

How To Invest For Retirement Like The Top Pensions

By Jeffrey Ady Who are the most successful investors that you know of? Names like Warren Buffet and Prem Watsa may come to mind. It’s common to think of individuals when your mind turns to successful investors, but what about those whose success affects thousands or millions of people? The truth is that many of the most successful investors are not individuals, but pensions. Canada’s top 10 pensions manage more than $400 billion and are a major cornerstone of Canada’s financial system and economy. Thanks to these pensions, Canada has one of the strongest retirement systems in the world. Now, institutional investors and pension funds from all over the globe look to them for best practices. (1) Canada has some great pensions, but how does that affect you as an individual investor? Though you will never compare to their size of power, you can still learn from them. You can imitate their techniques and perhaps get a taste of the investment success that they experience. The Pension Difference: Alternative Investments What do pensions do that individual investors don’t? Pensions invest with the goal of reducing portfolio risk by capturing the long-term diversification benefits among stocks, bonds, and alternative assets. The big difference between the way that individuals and pensions invest is the use of alternative investments. Investing in alternative assets like private equities and infrastructure investments can complement and diversify the typical individual’s stock and bond portfolio. This increased diversification helps provide more stability and dependability to pensions who have so many people depending on them. The Challenge Of Pension-Style Investing Clearly, Canadian pensions are doing a good job with their investments. If pensions experience so much success by investing in alternative assets, why doesn’t everyone do it? The answer is simple: many investors would like to but cannot. The challenge is that accessing the kind of alternative investments that pension funds do is difficult for private investors. They often require a minimum investment in the millions of dollars. Most investors do not have enough assets to put that much into a single investment, and most investment advisors that work with individuals don’t even offer them. The Northfront Advantage At Northfront Financial, we specialize in portfolio management that brings alternative investment options to individual investors. Our investment process looks for opportunities to invest like pension funds do in alternative assets such as timber and farmland, private equity, infrastructure, real estate and venture capital that provide a diversified stream of cash flow and growth opportunities, while being less correlated to the broad stock and bond markets. The Northfront Investment Committee relies on staff and outside service providers’ expertise (including investment managers) in executing its investment management strategies. Our goal is to reduce portfolio risk by capturing the long-term diversification benefits among investments to stocks, bonds, and alternative assets, just like the pensions do. To learn more about how we at Northfront Financial can help you invest like a pension, call 403-571-8960 or email info@northfront.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst (CFA), Chartered Investment Manager (CIM), and Certified Financial Planner (CFP) designations. To learn more about Northfront Financial and how we can help you, visit their website and schedule a complimentary appointment. ______________ (1) https://hoopp.com/docs/default-source/newsroom-library/research/top-10-pension-funds-in-canada.p#:~:text=The%20Top%20Ten%20public%20sector,(bcIMC)%2C%20The%20Public%20Sector

3 Things You Need In Retirement Other Than Money

3 Things You Need In Retirement Other Than Money

By Shamez Kassam, CFA, MBA Although our daily routines have changed drastically recently, many of us are still working hard and staying busy—just from home. As we’re all just trying to survive this incredibly challenging season, it’s hard to make plans for what comes next, much less for when our working days are finally over. But planning for your retirement should still be a priority, and we’re not just talking about the financial aspects of your golden years. It’s also important to prepare for the emotional and psychological changes that come along with retirement. Retirement isn’t just about having enough money in the bank to quit work. Yes, you need a stream of income you won’t outlive, but it’s also a time to take adventures, grow, and begin a new chapter in life (a chapter that could last 20-30 years). So, let’s look at 3 things we need in retirement to be happy. 1. A Structured Schedule Most of your life you’ve lived by some type of schedule, but retirement is arguably the only time in your life when you have no structure at all. The calendar is completely blank, and you’re free to plan out your days how you wish. This newfound freedom is fun at first, but a lack of structure can lead to restlessness. The days turn into weeks, weeks turn into months, and before you know it, you don’t know where the time has gone. To help with this aimlessness, keep some type of schedule when you retire. You don’t have to plan out every second of every day, but implement some routines to keep yourself from getting bored. Even better if those routines help you achieve your goals as well, like signing up for workout classes so you can stay healthy, or scheduling a weekly lunch date to stay in touch with friends. Create a schedule that gives you something to look forward to. 2. A Sense Of Purpose For most of us, we find our purpose in our careers. Our work is ingrained in our identity and it’s hard to find new passions once we retire. So, what will your purpose be in retirement? How will you stay engaged and content? According to a recent retirement survey, 76% of retirees who engage in 10 or more activities are very satisfied in retirement, compared to only 52% for those engaged in 1-4 activities. (1) Some activities that give retirees a new sense of purpose include: Spending time with family Socializing with friends on a regular basis Gardening and improving the home Traveling Volunteering Joining a club or organization And don’t think it’s too late to find your life’s passion. A recent study found that people with a sense of purpose have a 15 percent lower risk of death compared to those who are aimless. (2) The study also found that it doesn’t matter when you find your direction. Even if you’re in your 70s, it still leads to a longer life. 3. A Strong Community Last but not least, surround yourself with people you love. Many retirees admit that they miss their interactions with colleagues after they retire. (3) If you stop and think about it, this makes sense. We spend the bulk of our time at work and friendships naturally form in the workplace. Once retired, it can be difficult to replace this type of day-to-day connection with others. The good news is, engaging in the activities listed in point #2 (spending time with family, volunteering, joining a club, and so on) is a great way to stay connected and add meaning to your life. Let Us Help You If you’re feeling uncertain as you prepare for retirement, you don’t have to walk this journey alone. Let us at Northfront Financial be your guide, and we’ll start taking steps today to make sure you’re financially, emotionally, and psychologically prepared. Schedule a complimentary consultation to see if we are the right fit to help you secure your financial future and plan for a happy, worry-free retirement. Contact us by calling 403-571-8960 or emailing info@northfront.com. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment. ___________ (1) https://www.tiaa.org/public/about-tiaa/news-press/press-releases/pressrelease641.html (2) https://www.npr.org/sections/health-shots/2014/07/28/334447274/people-who-feel-they-have-a-purpose-in-life-live-longer (3) https://www.fool.com/retirement/2018/05/21/the-surprising-thing-seniors-miss-the-most-about-p.aspx

Our Mid-Year Economic Update

Our Mid-Year Economic Update

By Karl Anvik, BSc, MA, CIM®, CFP® How are you feeling about 2020 so far? Not what you expected, eh? The world as we know it has been turned upside down by five letters and a number: COVID-19. While the coronavirus pandemic is at its core a health issue, the downstream effects of it on other aspects of our society have been significant, perhaps the greatest being economic. As we reach the mid-year mark of 2020, let’s look at what’s ailing the economy, most of which can trace its roots back to COVID-19. Stock Market Developments The year started off strong, with the S&P 500 reaching all-time highs and peaking on February 19. Then it all fell apart. In a little over a month, the index fell 34%, bottoming out on March 23. It’s been a bumpy ride, but the market has climbed out of the hole it was in and gained back 36% (as of May 27) from that low. (1) Now, it may seem as if the S&P 500 has made up for all of its losses if it lost 34% and then gained back 36%. However, that is not the case because each percentage is based on its relative high or low. The index peaked at 3,386.15 points before falling 34% to 2,237.40. That loss was 1,148.75 points. Growth of 36% from the low point only accounts for 798.73 points, which means that the index overall is still down 10% from February’s high. In addition to stock prices improving, volatility is calming down as well. In mid-March, things were swinging around so fiercely that the S&P 500 achieved double-digit movement in single days. Things have calmed down a lot since then, but volatility is still higher than it was pre-crisis. Things just seem calm now compared to the craziness of what has been called the longest March ever. (2) Daunting Unemployment Numbers Perhaps the area that has been impacted the most by the COVID-19 containment efforts is employment. It’s hard to keep a job when companies are shutting down and people aren’t allowed out of their homes. The official unemployment rate for April is 13%, more than double what it was in February. (3) The true number might be even higher, as this number does not capture the true picture because it doesn’t include those not looking for work or the 2.5 million people who worked less than half of their usual hours due to the coronavirus. (4) Federal Reserve & Government Intervention The U.S. Federal Reserve stepped up early on in the pandemic to slash rates to near zero. And of course, we’ve all heard of the $2 trillion CARES Act Congress passed to help individuals and businesses and keep the economy chugging along. In Canada, the government passed a bill to provide $52 billion in aid to individuals and businesses and $55 in tax deferrals, including a freeze on student loan repayments, loans for commercial landlords, business loans, and an increase to the Canada Child Benefit. (5)(6) The Economy’s Struggles As we begin to ease out of lockdown and restrictions are being loosened, there has been an uptick in economic activity, though not enough to stop the economy from contracting. The leisure and hospitality industries have been devastated (7) while the service sector is still struggling under social distancing guidelines. (8) Factory activity is still down (9) and agricultural conditions are deteriorating. (10) Overall, pessimism reigns supreme over the economy even while some Federal Reserve policymakers believe we are either at or near the bottom and are expecting a rebound in the second half of the year. (11) The global economy is continuing to decline, but at a slower pace than it did in April, (12) which seems to confirm their predictions. How Should You Respond? As you can see, this year has been anything but normal so far, and there are more than likely going to be even more plot twists as we enter the summer and fall. While the global economy seems to be gasping for breath, it is not the end of the world. We may have some hard months and years ahead of us, but it isn’t the first time we’ve faced challenges like this. While our economic woes may not be historically new, they very well could be new for you. In difficult times like these, it is helpful to have a trusted advisor that you can turn to for financial guidance and support. If you don’t want to go through this economic crisis alone, our team at Northfront Financial Inc. is here for you. Give us a call at 403-571-8960 or email info@northfront.com so we can have a no-obligation conversation about where you are and how we may be able to help. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. The firm specializes in pension-style investing so that the quality of your retirement is not dependent on the stock market. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment. __________ (1) https://www.google.com/search?q=s%26P+500&oq=s%26P+500&aqs=chrome..69i57j69i59j0l3j69i60j69i61j69i60.5893j0j7&sourceid=chrome&ie=UTF-8 (2) https://www.carsonwealth.com/insights/market-commentary/market-commentary-economy-slightly-improves-as-restrictions-loosen/ (3) https://tradingeconomics.com/canada/unemployment-rate (4) https://www150.statcan.gc.ca/n1/daily-quotidien/200508/dq200508a-eng.htm (5) https://www.reuters.com/article/us-health-ccoronavirus-canada/canada-doubles-value-of-coronavirus-stimulus-package-promises-cash-loan-delays-idUSKBN21C1QO (6) https://www.canada.ca/en/department-finance/economic-response-plan.html (7) https://www.ctvnews.ca/politics/covid-19-wreaking-havoc-on-canada-s-hospitality-industry-mps-told-1.4909161 (8) https://www.politico.com/news/2020/04/09/canada-sheds-more-than-1m-jobs-in-absolutely-massive-coronavirus-driven-decline-176981 (9) https://www.reuters.com/article/canada-economy-pmi/canadian-factory-activity-slumps-to-record-low-as-coronavirus-slams-output-idUSZON000G7C (10) https://globalnews.ca/news/6905883/canada-coronavirus-food-agriculture-funding/ (11) https://www.marketwatch.com/story/feds-beige-book-says-businesses-are-pessimistic-about-pace-of-a-recovery-2020-05-27 (12) https://www.carsonwealth.com/insights/market-commentary/market-commentary-economy-slightly-improves-as-restrictions-loosen/

Do Your Friends And Family Need Financial Guidance? We’re Here To Help

Do Your Friends And Family Need Financial Guidance? We’re Here To Help

By Jeffrey Ady We are living in unprecedented times, with hourly briefings and updates that cause many of us to panic or at least lose sleep at night. We get it. Life is going to look very different for a while, but thankfully one thing that won’t change is how our team at Northfront Financial is committed to you, your life, and your finances. Whether you have questions, concerns, or need help processing the market roller coaster, you have us to rely on. Do your friends and family have this kind of support system? A Helping Hand In Hard Times Most of us are now at home with our families day in and day out. We’re reminded of the importance of our friendships and other relationships and learning how to be there for each other in creative ways. We know that you are not just concerned about yourself, but also your loved ones. There is a lot of fear in our world right now, and fear can make people do unwise things with their money. Our goal is to see you and those you care about weather this storm with confidence and come out the other side ready to move forward and work toward your goals. If you have friends or family members who are in need of financial guidance during this stressful time, we’d love to be there for them like we are for you, analyzing and evaluating their financial picture and sharing solutions to help them stay on track to reach their goals despite market turmoil and economic uncertainty. We Are Here For Your Friends And Family…Virtually We want to let you know that we are still working and operating our business…just not in the same way as before. Just because you are quarantined, locked down, or adhering to social distancing guidelines doesn’t mean you are alone. If you or your loved ones have any financial questions or concerns and need a shoulder to lean, we are available virtually. Contact us anytime at 403-571-8960 or email info@northfront.com to schedule a complimentary consultation. About Northfront Financial Northfront Financial is a boutique full-service financial planning firm serving individuals and families in Calgary, Alberta. The firm specializes in pension-style investing so that the quality of your retirement is not dependent on the stock market. As one of Calgary’s leading wealth management teams with highly skilled, certified team members, they help create financial capacity for their clients by deeply understanding their needs, opportunities, and strengths through their unique Northfront Process™. To learn more about Northfront Financial and how they can help you, visit their website and schedule a complimentary appointment.