Financial Planning

Be proactive with your financial plan
Reviewing your financial plan on a regular basis is an important part of your investment strategy. While a well-designed plan can help you achieve the long-term returns you need and see you through changing markets, it’s necessary to make periodic adjustments as market conditions warrant, or as your personal circumstances change.

This is especially important in today’s climate, as economic conditions are changing quite rapidly. As a result, you may have more questions about your investments and how they affect different parts of your financial plan. We can help you see how your overall financial picture affects your short-term and longer-term goals, and help you fine-tune your portfolio to address your concerns. As well, we can suggest strategies to keep you moving toward your goals.

Here are some that you may want to explore.

Bridging the gap
A decline in your portfolio may have set back your progress toward achieving major financial goals. While in some cases it may be necessary to revise your time horizon, it may be possible to bridge the gap in other ways. For instance, it could be worth considering boosting your savings by making short-term lifestyle changes. If you are near retirement age, you may consider an alternative strategy, such as negotiating a phased-in retirement with your employer or taking on a consulting role.

Depending on the kinds of assets in your portfolio, we can also consider selling certain assets to direct toward more important uses. We can also revisit your risk profile to see whether rebalancing your portfolio with more growth securities is appropriate.

Boosting income
Some investors may have experienced a reduction in income as a result of reduced investment returns. Redeploying some of your assets into high-yielding dividend stocks, income trusts, or fixed-income investments can produce new sources of income, while still retaining some growth potential.

Today, for instance, corporate bonds have more attractive yields than government bonds. We can discuss these opportunities in the context of your goals and risk tolerance.

Tax-efficient investing
Paying less tax on your investment earnings is another important strategy in today’s more challenging climate. We can help ensure that your overall portfolio is managed from a tax perspective, including making full use of the Tax-Free Savings Account (TFSA).

Another strategy to increase your family’s after-tax income is to lend money to a lower-income spouse. The prescribed rate for family loans is at a historical low and creates an attractive income-splitting opportunity.

Addressing a portfolio imbalance
Sudden market movements can quickly cause an imbalance in your portfolio, increasing your risk. In today’s markets, rebalancing your portfolio can present opportunities to increase your potential long-term gains by acquiring core equity holdings at low prices.

Revisiting estate issues
The sweeping revaluation of assets in recent months may have changed the value of property you have bequeathed to your heirs. We can carry out a strategic review of your estate plan, and suggest ways to rebalance your bequests to equalize their values. Depending on your estate-planning needs, this may involve bringing in our trust specialists or coordinating strategies with your lawyer and accountant.

While it’s important not to overreact to short-term changes in the markets and economy, taking a fresh look at your financial plan is a prudent decision whenever significant changes occur.

We can help your plan evolve to accommodate changing markets and your changing needs.

This publication has been prepared by ScotiaMcLeod, a division of Scotia Capital Inc.(SCI), a member of CIPF. This publication is intended as a general source of information and should not be considered as personal investment, tax or pension advice. We are not tax advisors and we recommend that individuals consult with their professional tax advisor before taking any action based upon the information found in this publication. This publication and all the information, opinions and conclusions contained in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained in it be referred to without in each case the prior express consent. Scotiabank Group refers to The Bank of Nova Scotia and its domestic subsidiaries.

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