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  • Investors Invited To Real Estate Table - Private Wealth Canada
    designed manufactured and sold at a handsome profit Real estate investors have never before been invited to sit at the table as partners of the developer until now Greybrook Realty Partners a division of Greybrook Capital has grown to become one of the leading financial partners to some of Canada s most recognized property developers including Castlepoint Cityzen Fernbrook Homes Empire Communities Stafford Homes Andrin Homes and Tribute Communities to name a few Through Greybrook Securities a Greybrook Capital sister company which is an OSC registered Exempt Market Dealer accredited investors those who meet certain income or net worth criteria can invest alongside these leading property developers and share in the project s profitability as partners Greybrook Securities has completed some 50 projects representing some of the best known communities and buildings in the Greater Toronto Area including Liberty Village Garrison Point and the Yorkville area among others The deals range in duration from between two to 10 years depending on the size and complexity of the project Typically the target is returns of over 20 per cent net to investors on an annualized basis and to protect downside risk A fundamental tenant of their strategy is to acquire their developable land on a private sale basis at conservative market valuations and with use of very little or no leverage at all Investors Receive Return Investors are indirect beneficial owners of the property being developed through investment in either a limited partnership or mutual fund trust It s important to distinguish that these are equity investments and not loans or syndicated mortgages which make up a different asset class Investors do not receive regular interest payments but rather as owners of the project s equity they realize their return upon successful completion of the development Depending on whether there are

    Original URL path: http://privatewealthmagazine.ca/articles/RealEstateTable.php (2016-04-26)
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  • Investors Invited To Real Estate Table - Private Wealth Canada
    s stock market versus those of the rest of the world And because nearly two thirds of Canada s S P TSX Composite Index is comprised of financial and resource stocks Canadians are likewise making a big bet on these cyclically sensitive areas As a result over time their portfolios will likely exhibit more volatility and realize smaller returns than one that is more globally diversified Over the past five years Vanguard s Vanguard Total World Stock Index Fund VTWSX has bested the return of Canada s benchmark stock market index by an average of more than two per cent per year Over the past several decades numerous academic studies have attempted to explain this behavioural flaw Besides investors understandable preference for the familiar their expectations for stock market returns seem to play a role as well Researchers have found that investors almost invariably expect equity returns in their home markets to be significantly higher than those offered in other countries We might call this the Lake Wobegon effect whereby all country stock market returns are above average Of course we know that all countries can t offer above average returns there must be some laggards Different corporate governance and investor protection practices among countries may also play a role when it comes to explaining home country bias Family controlled firms are quite common across Europe and Asia much more so than in North America and there is a perception that minority shareholders are disadvantaged when it comes to investing in the stocks of family owned companies Similarly investor protections are not uniform across borders As a result investors may be reluctant to take a more global approach to constructing their portfolios Then there is globalization As economies become more interconnected domestic companies are deriving more and more of their revenues from abroad It s natural therefore for investors to think they are getting all the international exposure they need through the stocks of multinational companies in their portfolios However studies show that even a multinational company s performance is highly correlated to that of its home market To truly realize the benefits of international investing portfolios need more direct exposure to foreign economies Smooth Out International investing provides risk reducing benefits that come with diversification Similar to the old adage about not putting all your eggs in one basket investing globally means not tying your fortunes to a single country By diversifying across countries investors can lessen the correlations among stocks in their portfolio which in turn helps to smooth out their ups and downs Being globally diversified also offers the opportunity for better returns Investors in developed markets like Canada can gain exposure to faster growing emerging and frontier markets and the prospect of higher returns Similarly investing outside of one s home market allows an investor to target countries where valuations are most attractive Investing internationally is not without risks The effects of currency fluctuations political turmoil and regulatory uncertainty are just some of the factors that

    Original URL path: http://privatewealthmagazine.ca/articles/GoingGlobal.php (2016-04-26)
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  • Bring Main Street Back To Wall Street - Private Wealth Canada
    salary and a bonus based on how well they did for their customers Research was separated from investment banking and became truly independent free to recommend a sell as well as a buy The company also developed free seminars and publications and devoted a tremendous amount of resources to educating the public about how to invest in stocks Over the next few decades Merrill Lynch succeeded in bringing Wall Street to Main Street In 1940 fewer than 15 per cent of households owned stocks but by the 1990s a majority of Americans had become investors Unfortunately I hear tremendous distrust for Wall Street today especially after the near collapse of world economies that was brought on by the subprime mortgage and CDO problems of 2007 and 2008 Average Americans don t understand how certain executives who nearly brought down the financial system were allowed to walk away with hundreds of millions of dollars in severance pay and suffer no legal consequences They don t understand what fast trading is all about but it smells bad They don t think that Wall Street cares about them There are many many honorable professionals working for financial services firms and while many people might trust their financial advisor they don t trust the collective Wall Street This is a shame because our capital markets are essential to the sustainability of our economy and financial intermediaries like banks and brokers and are needed to make the capital markets work If Main Street doesn t trust Wall Street this will be reflected in the attitudes of their elected officials which can lead to legislation with unintended consequences While government has an important role to play it is not the solution That lies with the leaders of Wall Street So what needs to be done I

    Original URL path: http://privatewealthmagazine.ca/articles/MainToWall.php (2016-04-26)
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  • A World Without OPEC - Private Wealth Canada
    objective is sought after it might manipulate supply like it did in 1973 and 1977 when it cut production and in 1986 when it flooded the market with oil Historically these production changes have mostly been driven by Saudi Arabia the largest member of OPEC its true helm and the only country that never cheats when lower production targets are selected i e Venezuela often agrees to production cuts but then proceeds to produce as much as it did previously But now OPEC read Saudi Arabia appears to be passing this mantle The question is to whom and why The Rise Of U S Oil Shale If there is a player that has significantly transformed oil markets in the last five years it is the U S shale producers These players produce oil from unconventional resources which have historically been more difficult to reach at a reasonable cost Their production has exploded in recent years as technology has dramatically reduced the cost of extraction There are indications that Saudi Arabia might be passing the swing producer mantle to these guys Why One explanation is that U S shale producers are short cycle they take a shorter period of time to ramp up or down And this creates a very different scenario than the one with which Saudi Arabia previously contended In the 1970s the marginal players in oil markets tended to be those in the oil sands or deep water These kinds of projects are long cycle meaning that they are highly complex and take years to ramp up or down The conventional wisdom is that long cycle producers don t make good swing producers Such long cycle projects take a long time to react to prices meaning scaling development and thus production capacity up or down takes many years to realize You don t want a swing producer that swings like the Titanic turned U S shale producers are different because many of them are on a similar part of the cost curve yet they are short cycled Unlike an oil sands or deep water project an oil shale or tight sands well typically produces over 60 per cent of its oil within the first 18 months The decline rate on the well is high and the lifespan of the asset relatively short This makes U S shale producers a decent fit for the swing producer role The rise of U S shale producers is a common explanation for an OPEC paradigm shift Of course it is one of several possible explanations Perhaps Saudi Arabia simply wants to lift targets produce more oil and generate more revenue Perhaps they are doing President Obama a favour in his battle against Putin as some conspiracy theorists suggest Or maybe they have something entirely different in mind We simply don t know But what we can say is this if Saudi Arabia is relinquishing their swing producer status then U S shale producers are the most likely players to take their place

    Original URL path: http://privatewealthmagazine.ca/articles/WithoutOPEC.php (2016-04-26)
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  • Canada's Oil Slick -Private Wealth Canada
    up more than 80 of the ACWI Equity investors may have been looking at movements in global bond markets and fretting that the additional decline in yields may indicate a further weakening in the global growth outlook But as noted above the drop in oil prices looks to be far more about higher supply than lower demand making it ultimately good for growth a positive for what already appeared to be a global economy in a solid if unspectacular mid cycle expansion The decline in government bond yields in recent months is better interpreted as a reaction to the disinflationary consequences of lower oil prices which among other things should further extend the U S Federal Reserve s willingness to maintain its exceptionally stimulative monetary policy We have long preferred stocks to bonds with the former at generationally cheap levels relative to the latter the valuation advantage for equities has now improved somewhat further Two the Canadian dollar and Canadian assets more generally have not reacted negatively enough to the plunge in oil prices in my view Markets seem to have been pretty efficient in discounting the direct effects of cheaper energy on Canadian asset prices but are almost certainly underestimating the second and third order consequences in my judgment The popular narrative has been that these lower oil prices are a mixed blessing for Canada bad for oil producers but good for the vast majority of Canadian consumers bad for Alberta but good for larger provinces like Ontario and Quebec bad for the energy sector but good for the manufacturing sector in Canada particularly given the associated boost to U S demand and the past depreciation of the Canadian dollar These relative views are correct but I would expect that the absolute effect on the overall Canadian economy will be more challenging than is currently perceived Higher commodity prices oil prices in particular have set in motion a number of virtuous circles in Canada over the past decade or so Higher commodity prices have driven up national income in Canada including the incomes of companies consumers and governments across the country that have nothing to do with the energy patch directly Higher commodity prices have also boosted the Canadian dollar which has limited the inflationary consequences of the boom and so allowed the Bank of Canada to keep interest rates very low The result has been mutually reinforcing increases in Canadian confidence spending borrowing and asset prices resulting most notoriously in record levels of Canadian household debt taken on against overvalued residential property across much of the country see Exhibit 3 These linkages are all difficult to quantify which is why they re underappreciated But we know they ve all been working in the same direction up EXHIBIT 3 More linked than you might think Commodity prices and housing investment in Canada Sources Statistics Canada Bank of Canada Haver Analytics and FMR Co And now they ll all work in the same direction down Lower commodity prices threatened to

    Original URL path: http://privatewealthmagazine.ca/articles/oilSlick.php (2016-04-26)
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  • Private Wealth Canada
    North Wall of the Eiger A short 25 minute train ride takes you to the quaint town of Murren where a series of three cable cars and a mountain train take you to the summit of the Schilthorn at an elevation of 2 970 metres An amazing feat of construction is the Piz Gloria revolving restaurant where James Bond s On Her Majesty s Secret Service was filmed It now also houses a Bond exhibit A large open sun deck affords breath taking 360 degree views of three of Switzerland s highest peaks the Jungfrau at 4 158 metres the Monch at 4 107 metres and the Eiger of movie fame at 3 970 metres Another train takes you to the small town of Lauterbrunnen site of the 300 metre Staubbach Falls the largest of some 72 falls in this valley However the real attraction here is the subterranean Trümmelbach Falls the world s only glacier waterfalls Encased wholly within a mountain and accessible by an incline lift and a series of tunnels and paths it offers close up views at several stages as 20 000 litres of water per second thunder through constantly carving the surrounding rock The Sphinx Observatory on the top of the Jungfrau at 3 571 metres The most important sight in the Interlaken area is of course the magnificent Jungfrau However a word of caution check the weather forecast before you go to make sure that it s clear at the summit Don t be dissuaded by the weather in town as it can be quite different It s a three train 2½ hour trip passing through Grindelewald and Kleine Scheidegg to the highest railway station in the world at 3 454 metres The last seven kilometres is on a cog railway wholly inside the mountain itself The train does stop twice to let you peer through panoramic lookouts which have been carved into the rock The Sphinx At the top is a building called The Sphinx which sits impossibly precariously on top of a rocky triangular peak and features an open viewing deck The Ice Palace is a series of caverns connected by tunnels all carved out of the solid ice of the glacier Coeur des Alpes Hotel in Zermatt Zermatt in the very south on the Italian border requires two train changes but with typical Swiss Railways efficiency the connections are on the same platform and very easy The two hour trip passes all too quickly given the spectacular scenery In the shadow of the iconic Matterhorn there is no more picturesque alpine town than Zermatt At an elevation of 1 629 metres it draws over two million visitors a year and is car free except for tiny electric shuttles to take you and your luggage to your hotel Amongst a hotel selection to suit any taste and budget are the 160 year old Mont Cervin Palace located right in the bustling heart of town However far more intimate is the owner operated

    Original URL path: http://privatewealthmagazine.ca/travel/articles/Switzerland.php (2016-04-26)
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  • Take Steps To Save Now - Private Wealth
    family members such as your spouse common law partner or children in a lower tax bracket by lending funds to them using the federal government s prescribed rate which is currently one per cent until the end of 2014 If you take out a loan before the end of the year the one per cent interest rate will be locked in for the duration of the loan regardless of future prescribed rate hikes It s also beneficial for couples with children under 18 to review their income splitting options in light of the recently announced Family Tax Cut which provides a non refundable credit of up to 2 000 says Golombek Convert your RRSP to a RRIF by age 71 If you turned 71 in 2014 you have until December 31 to make any final contributions to your Registered Retirement Savings Plan RRSP before converting it into a Registered Retirement Investment Fund RRIF or registered annuity It may be beneficial to make a one time overcontribution to your RRSP in December before conversion if you have earned income in 2014 that will generate RRSP contribution room for 2015 If you have a younger spouse or partner you may also want to consider making contributions to a spousal RRSP until the end of the year your spouse or partner turns 71 Review your investments Non registered investments Year end is an excellent time to review the types of investments you hold For instance in non registered accounts capital gains are typically taxed at a lower rate than both interest income and dividends Consider whether tilting a non registered portfolio towards investments that have the potential to earn capital gains is the right move for you in 2015 RRSP contributions Although you have until March 2 2015 to make RRSP contributions for

    Original URL path: http://privatewealthmagazine.ca/articles/TaxSavings.php (2016-04-26)
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  • Private Wealth Canada
    information needs Even in situations where the asset manager has no direct contact with the end investor the regulator could rule that the asset manager is accountable So the overall effect of the regulators demands for increased transparency will be to force asset managers to think much more clearly about the different risk issues that affect every aspect of their products and the way they are marketed Solutions For A Volatile World Regulators aren t the only ones demanding new strategies to manage risk Many investors had their fingers burnt at the time of the financial crisis and are determined to find better ways to manage market risk and volatility One of the defining experiences of the financial crisis was that investors discovered their supposedly diversified portfolios were in reality comprised of strongly correlated assets It was a painful lesson The current popularity of multi asset solutions a trend underscored by our survey is partly about using a broader range of de correlated assets to diversify their portfolios more effectively These include alternatives such as hedge funds private equity and real estate Multi asset solutions can help to reduce volatility but they create new challenges for the asset manager Risk considerations need to inform every aspect of the manager s investment strategy and approach to portfolio construction At the same time asset managers need new tools to be able to analyze and report on risk holistically across a more diverse set of asset classes Four out of five asset managers in the survey 81 per cent say that risk analytics will be a priority for investment over the next three years On a broader level there is a need for informed debate about the role of innovative products and strategies that could help manage ongoing volatility in the market For

    Original URL path: http://privatewealthmagazine.ca/articles/ReengineeringRisk.php (2016-04-26)
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