Season 1 of the Smart Advice Podcast brought a wealth of financial advice, tips and insights to help support Canadians along their financial journey. We covered a variety of timely and important topics, from the state of the economy and the markets to advice around investing and saving for life’s major goals.

In this bonus episode, we  look back at highlights from this season that can better position you for a successful 2024.

If you’re new to the Smart Advice podcast and want to learn more about the topics we cover , or you’re a loyal listener looking for the biggest takeaways of the year, this episode is for you.

Resources

• Visit CIBC for more smart advice
• If you want more insights, check out these previous Smart Advice podcast episodes:
  • Beyond the 60-40 rule: Rethinking the asset mix for modern investors with David Wong
  • Rent vs buy: A conversation with Benjamin Tal  
  • Banking on resilience: An outlook on Canada’s financial sector
  • The great Canadian wealth transfer: From baby boomers to beneficiaries  
  • Estate planning simplified: The Willful way with Erin Bury 
  • How the FHSA helps first-time Canadian homebuyers with Jamie Golombek 
  • What's next for inflation and interest rates? with Avery Shenfeld 
  • The art of financial multi-tasking with Rob Carrick 

Episode Highlights

[01:07] Financial advice 1: Rethinking the 60-40 asset mix rule

• A portfolio with 60% stocks and 40% bonds has provided a long-term balance of growth and stability.
• Remember that in the short term, you will face volatility in the market. When your assets are not diversified, it’s easy to make bad decisions.
• There’s a spectrum within the equity market. This includes markets that are from developed or emerging countries; as well as small-cap and large-cap markets.
• In bond markets, there’s a difference between value investing and growth investing.

[03:43] David Wong: “The more granular we can get in that asset mix, the more we can give better potential reward to risk in our portfolios.”

[03:51] Financial advice 2: Renting vs buying

• The changing real estate market has made many Canadians rethink homeownership options.
• There is nothing wrong with renting property. In fact, this may be the more sensible decision for some.
• Real estate investors should realize there will be more families looking to rent and prefer dealing with a landlord linked to a company.
• Demand for purpose-built rentals is rising annually, yet Canada does not have a good supply.

[07:06] Financial advice 3: The state of Canada’s financial sector

• The US banks are not likely to impact Canadian banks.
• The Canadian financial sector is much more regulated with 6 major banks and some financial institutions. On the other hand, the US has over 4500 banks.
• Over the past 10 years, the US had 73 bank failures. Canada did not face any bank failures in nearly 100 years.

[09:18] Financial advice 4: All about wealth transfer

• Passing along assets is not a simple task, some may have tax implications.
• Before thinking about gifting, you need to make sure you’re in a good financial position to do so.

[12:19] Financial advice 5: The importance of a will in estate planning

• Willful was founded for everyday Canadians who  need a simple way to set up a will.
• Insurance is about planning for people you will eventually leave behind. Similarly, an estate plan gives your family assets.

[14:43] Erin Bury: “This is not something you should be waiting to do until retirement. As soon as you have assets to protect, loved ones like a spouse that you want to ensure know your wishes, or children that you'd want to make sure [are] accounted for, even pets more increasingly these days. It's time to think about getting a will…this is not a really time-intensive cost cost-prohibitive process anymore.

[15:08] Financial advice 6: Using the FHSA to buy a home

• The FHSA helps first-time homebuyers by giving a tax-deductible contribution of up to $8,000 a year for five years.
• The FHSA is now available at CIBC

[17:17] Financial advice 7: Canada’s financial future

• Interest rates will eventually stop inflation from rising, we just need to be patient.
• Lower interest rates may start by the spring of 2024.
• Currently, the rate of interest is at 5%. By the end of 2024, this may fall as much as 3.5%.
• However, a 3.5% interest rate is still double the rate of the last business cycle; so, most Canadians would still find this rate very high.

[17:49] Avery Shenfeld: “Interest rates are high enough to do the job. That doesn't mean that inflation is going to magically melt away tomorrow, we're going to have to go through some economic pain, some period of slower growth, [and] a bit of an upturn in unemployment, before we cool spending power enough for inflation to come down. Our view is that…the impact of all those prior rate hikes was kicking in even before the Bank of Canada's last interest rate decision, which was back in July, was slowing spending. And with time, that will bring relief on the inflation front. So we'll need to be patient.”

[19:48] Financial advice 8: Navigating the current economy

• We live in an age where people in their 20s are already buying houses and saving for retirement.
• The reality is that these people are exceptions. Many are struggling to save, much less thinking about retirement.
• Most people have the mindset that 65 years old is the start of retirement. However, working longer may be more strategic and keep you active.
• If you consider working past 65 years old, start thinking about how you can shift to a consulting type of relationship in your career.

[20:57] Rob Carrick: “If we were to talk to more people in our position more of our peers, honestly about money, we'd find that there's a lot of people with the same struggles as us, I think that will calm and relax us and make us feel that I have time. And you know what, I got a late start on saving for retirement, but I'm doing it now and I'm 100% committed and I'm going to make up for lost time…getting into the housing market…you could do it in your late 30s, you could even do it in your early 40s. If you are willing to work past 65, time can help take the pressure off.”

[22:11] Rob Carrick: “In your 50s…in your career, start thinking about how am I going to create a post-65 reduced workload consulting type of relationship from what I'm doing now.”

About our guests

The Smart Advice Podcast has hosted a powerhouse of guests from CIBC and supporters. We thank our colleagues for their immense support for this program: 

• David Wong, CIBC Managing Director and Head of Total Investment Solutions
• Jamie Golombek, CIBC Managing Director, Tax and Estate Planning
• Benjamin Tal, CIBC Deputy Chief Economist
• David Andrich, CIBC Senior Equity Research Analyst
• Richard Voss, CIBC Director of Wealth Strategies
• Marilyn Andrade, CIBC Senior Trust and Estate Consultant
• Mark Herzog, CIBC Managing Director and Head of Institutional Equities
• Erin Bury, Willful CEO and Co-Founder
• Tashia Batstone, President and CEO of FP Canada
• Scott McGillivray, Real estate expert, contractor and media personality
• Avery Shenfeld, CIBC Managing Director and Chief Economist
• Robertson Velez, CIBC Global Equities Portfolio Manager
• Rob Carrick, Globe and Mail personal finance columnist

To learn more about our guests, refer to our episode show notes and highlights.

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