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Tag: Investments

  • ETFs and RESPs: It’s always a good time to invest in education – MoneySense

    ETFs and RESPs: It’s always a good time to invest in education – MoneySense

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    With that in mind, here’s a key date to circle on your calendar: Dec. 31. That’s the deadline for making RESP contributions to maximize government RESP grants each year. The Canada Education Savings Grant (CESG) matches 20% of what you put in, up to a limit of $500 annually. To receive the full $500, your contributions must total at least $2,500 by the end of December. The lifetime CESG maximum per beneficiary (child) is $7,200, and you can only catch up one year at a time—so, you can see why that annual deadline merits attention. That’s especially true if you only have a few years to save before your child heads off to school.

    Now is a great time to plan your contributions for this year. Here are some things to consider.

    Despite its name, an RESP is much more than just a cash savings account. In fact, just holding cash in an RESP may not always be the best strategy, as inflation can erode its value over time. It’s worth looking into different ways to grow that money.

    There’s no one-size-fits-all answer for the best RESP investment options. The right mix for your family will depend on several factors, including your financial circumstances, how much time you have, and how comfortable you are with risk. To help you make the most of your RESP, the Canada Revenue Agency (CRA) provides a list of “qualified investments” for this account, including the following:

    • Bonds: These can be either government-issued or corporate-issued. Bonds are generally seen as a safer investment compared to stocks, offering fixed interest payments over time.
    • Guaranteed investment certificates: GICs are issued by financial institutions, and you can choose terms such as one, two, three or five years. At the end of the term, you’ll receive a guaranteed amount of interest. Generally, you must wait until then to access your money.
    • Stocks: Investing in individual stocks can offer high returns, but they generally come with higher volatility than bonds and GICs. It’s essential to thoroughly research the companies you’re thinking about investing in—and remember, picking stocks can be risky!
    • Mutual funds: These funds can hold a mix of stocks, bonds and other assets. They offer diversification and are managed by financial professionals. Investors pay a percentage of the value of their investment towards annual management fees.
    • Exchange-traded funds: ETFs are similar to mutual funds in that they can hold a mix of assets like stocks and bonds. However, ETF shares trade on stock exchanges, just like individual stocks. Most ETFs are passively managed, but more active ETFs are coming onto the market.

    ETFs are a fast-growing asset class in Canada. They offer investors numerous benefits, including:

    • Built-in diversification: ETFs may bundle various assets, providing wide exposure across different sectors, asset classes and geographies, which helps in reducing investment risk.
    • Professional management: With ETFs, a fund manager oversees the selection and rebalancing of holdings, often trying to replicate specific stock market indices (such as the S&P 500), thus reducing the complexity of managing individual stocks and bonds.
    • Ease of transactions: ETFs are traded on stock exchanges and are accessible through financial advisors and online brokers.
    • Flexible asset allocation: ETFs offer a spectrum of asset allocation options, so they may be suitable for investors with different risk tolerances and investment timelines.

    Choosing the best ETF for your RESP largely depends on two variables: your time horizon (how long until your child needs the funds) and your risk tolerance (how much market fluctuation and potential losses you can comfortably handle).

    To simplify this decision-making process, one option to consider is an all-in-one ETF, such as those offered by Fidelity. These ETFs offer different asset allocations and risk classifications. Fidelity’s All-in-One ETFs have the following target asset allocations and risk classifications (as at Oct. 31, 2023):

    Fidelity All-in-One ETFs Conservative Balanced Growth Equity
    Risk classification Low to medium Low to medium Medium   Medium
    Ticker FCNS FBAL FGRO FEQT
    Equity 40% 59% 82% 97%
    Fixed income 59% 39% 15% 0%
    Crypto 1% 2% 3% 3%
    Source: Fidelity Investments Canada ULC

    Fidelity’s suite of All-in-One ETFs offers strategic diversification, with most of them giving you exposure to global bonds and stocks from all market sectors. Interestingly, they even include a small exposure to cryptocurrency (1% to 3% depending on the fund), adding a modern twist to traditional investment portfolios. (Read more about crypto in Fidelity ETFs.)

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    Tony Dong

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  • Making sense of the markets this week: January 7, 2024 – MoneySense

    Making sense of the markets this week: January 7, 2024 – MoneySense

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    A look at 2024

    Since we made this crystal ball thing look pretty easy last year with our 2023 markets forecast, we’re at it again for 2024. And, it’s always good to begin a market predictions column with the caveat that this stuff is really hard to do.

    It’s impossible to make accurate predictions consistently, especially about the markets, as there are just too many variables at play to always get it right. I mean, if you could tell me the outcomes of wars, upcoming elections, more pandemics and unexpected natural disasters of 2024, then I could give my some predictions with a little more confidence. 

    All that said, there are some big-picture trends and general rules of thumb that Canadian investors can apply to their thinking about the year ahead. 

    So, with those caveats out of the way, here’s a look at how we see the markets playing out this year.

    Canada’s TSX 60 will gain 15%, outperforming the 8% gain for the S&P 500

    It’s not that Canada’s economy is going to do better than America’s, or that our domestic companies have any hidden advantages. A prediction for TSX 60 outperformance is simply a bet that lower valuations may suffer less from the negative headlines than any higher-priced valuations of the S&P 500 composite index.

    The 500 biggest companies in the U.S. had a fabulous 2023 and finished up 23% for the year. The markets always look ahead, true, and I think they foresaw sunny skies for late 2024 as early as spring 2023. Consequently, there would have to be additional excellent news coming to light for a repeat of such a strong year.

    Canada, on the other hand, saw its TSX 60 index go up about 8%. There were a lot of negative headlines about lack of economic growth in Canada, and no equivalent of an “AI bubble” to drive a positive narrative for boring companies like Canadian railways or pipelines.

    Right now, a TSX 60 exchange-traded fund (ETF), such as XIU, trades at about a price-to-earnings (P/E) ratio of 13x. An S&P 500 ETF, like SPY, clocks in at about 24x. I don’t think there’s any debate that the U.S. has more world-beating companies and a much more favourable tax environment than Canada. But are American companies that much better that they should be valued so much higher? Based on historical averages, we’re betting no.

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    Kyle Prevost

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  • ICICI Securities leases 1.9 lakh square feet space for ₹92.2 lakh/month

    ICICI Securities leases 1.9 lakh square feet space for ₹92.2 lakh/month

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    ICICI Securities has taken on lease around 1.9 lakh square feet of space in Mindspace Juinagar at a monthly rent of ₹92.2 lakh, registration documents showed.

    The tenure of the lease is 144 months, starting from January 1, 2024 and the effective monthly rental rate works out to ₹49 per square feet. The rent escalates 4 per cent annually, according to the documents made available by the data analytics firm Propstack.

    The company, which provides a range of financial services right from investment banking to investments, has taken space on five floors and the terrace of the building. Mindspace Juinagar, B3, is an office building located in Navi Mumbai, part of a 55-acre campus development and has been developed by K Raheja Corp.

    The lease has a lock-in period of five years for ICICI Securities, while the entire term of the lease is locked in for the landlord. The lease also includes the use of 190 car parking slots.

    ICICI Securities is in the process of being delisted and last month, its parent company, ICICI Bank, received ‘no objection’ letters from the exchanges for the delisting. The decision to delist its shares was taken in June, with the bank saying that it would drive synergies between the two companies.

    The bank currently holds around 75 per cent stake in it and the delisting process, conducted through a share swap, will result in it becoming a wholly-owned subsidiary.

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  • The No. 1 Reason Why This New Battery Tech Will Make Traditional Batteries Obsolete… | Entrepreneur

    The No. 1 Reason Why This New Battery Tech Will Make Traditional Batteries Obsolete… | Entrepreneur

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    Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

    Lithium batteries, the current industry standard, can be ticking time bombs. They’re expensive, environmentally unfriendly, and, frankly, potentially dangerous. Remember those headlines about phones and electric cars catching fire? They’ve gotten worse.

    In New York, one out of every five fire deaths this year were from lithium batteries. That’s the legacy lithium’s left behind. And if New York is any indication of what’s to come, the longer we rely on lithium batteries, the more lithium deaths we’ll be hearing about on the news.

    Even still, our future relies on batteries. Forecasts project the market for global energy storage systems to rocket up to a staggering $435.32 billion by 2030. Right now, there’s not even enough batteries for less than 1% of all global power needs.

    Therefore it stands to reason, with so many headwinds against lithium batteries, investing in a non-lithium technology could represent a significant opportunity. Thankfully, today there is a seismic shift away from lithium happening, and there’s one investment you can make today to cash in on this growing trend. A new company has introduced a revolutionary next-gen battery–a lithium-free innovation that’s safe, cost-effective, and incredibly powerful.

    Say goodbye to sleepless nights worrying about battery fires. That’s because the next-gen battery platform is based on a battery chemistry that is dramatically safer than lithium.

    Unlike lithium, this pioneering battery technology uses materials that are inherently safe. These next-gen battery cells can’t explode or catch fire, even under extreme conditions. In all of the stress testing, gas leak, and nail puncture tests, these cells beat every other cell tested.

    A new investment that can redefine your future.

    The company behind this revolutionary next-gen battery is an early-stage battery upstart called Next Thing Technologies. And they recently opened a new funding round to allow anyone like yourself to invest in their technology platform.

    That means you can invest in the next-gen battery right now.

    This technology can be so disruptive, it’s poised to transform how we power our lives. While the company’s flagship home storage battery is just the start, these next-gen battery modules are set to transform not just homes, but everything from data centers… to commercial buildings… to the utilities themselves!

    Click here to invest in Next Thing Technologies and their mission for safer and more affordable energy storage for all.

    Reasons to consider investing in early-stage companies:

    • Potential for returns: First of all, private companies may provide the opportunity for greater a return on investment than public companies. Their valuations often increase as they grow and scale, resulting in potentially higher gains for early investors before they reach the public market.
    • Early access to innovations: Secondly, investing in early-stage companies allows you to support groundbreaking ideas and technologies. Oftentimes, these technologies have the potential to fundamentally change the market landscape of the competition. And with disruptive potential, comes disruptive value creation.
    • Diversification: Lastly, if you are already invested in the stock market, early-stage companies offer new exposure to new companies in industries like technology or green energy that you can’t access as easily in the public markets.

    Next Thing Technologies says it fits those three criteria perfectly. And the company has already raised more than $6 million and counting. To date, they’ve made progress in five generations of testing commercial-grade battery cells. Now, they’re taking everything they’ve learned from all the previous tests and creating their latest generation module as well as a residential prototype.

    As a result, they intend to produce units in as little as 18 months. So there’s never been a better time to invest in their innovative technology platform.

    With an investment of $1,500, you can join thousands who have already backed this solution to our looming lithium-dependence crisis, and play a pivotal role in the shifting landscape of a massive industry.

    Learn more about Next Thing Technologies’ investment opportunity here.

    Disclosure: Past performance and forward-looking statements are not indicative of future results. This is a paid advertisement for Next Thing Technologies’ Regulation A+ offering. View the offering circular and disclaimers at invest.nextthing.tech.

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    StackCommerce

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  • Will GIC rates keep going up in 2024? – MoneySense

    Will GIC rates keep going up in 2024? – MoneySense

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    As a result of these rate hikes, the interest rates available on guaranteed investment certificates (GICs) have risen as well—leading to renewed interest from savers and investors. In fact, over the past 12 months, the average one-year Canadian GIC rate has shot up from 2% to 4.90%. As a result of this move-up in rates, even market-linked GICs—which offer a lower guaranteed interest rate because of higher potential gains linked to the stock market—are offering a minimum guaranteed rate over 2%, as of mid-December 2023.

    How high will GIC interest rates go?

    The interest rates you pay on various types of debt, like a mortgage or a line of credit, depends mainly on the benchmark rate set by the BoC. This, in turn, depends on the prevailing rate of inflation. Simply put, the higher inflation is in Canada, the higher the BoC’s benchmark rate, and the higher the interest rate you pay on your loans. On the bright side, a high-rate environment also offers high GIC interest rates—a boon for Canadian investors.

    When you buy a GIC, you lend money to a bank or other GIC issuer in exchange for a guaranteed amount of interest at the end of an agreed-upon period (such as one, two or five years). 

    We can’t predict future interest rates, but for now, here are some interest rates you can get on long-term non-redeemable GICs at Scotiabank as of mid-December 2023.

    Term Interest rate
    1-year 5%
    2-year 4.3%
    3-year 4.1%
    4-year 4.45%
    5-year 4.35%
    Rates are provided for information purposes only and are subject to change at any time.

    It’s notoriously tricky to pinpoint precisely where interest rates will go, but we can expect that GIC rates will remain relatively high as long as inflation persists in Canada. While inflation is down from the scary heights of 8% in June 2022, it’s still above the BoC’s target rate of 2%. So, rates may remain flat until we see significant cooling in the Canadian economy. This means that while GIC rates may not spike further, the current rates could persist for a while.

    GIC vs. high-interest savings account (HISA)

    Just as the rates for GICs are up, so are those offered on high-interest savings accounts (HISAs). As a result, Canadians are exploring HISAs and drawing comparisons between these and GICs to determine the better investment. While a HISA may be more flexible than a GIC, if you’re looking for higher guaranteed rates of return, GICs could be the way to go. For example, as of early December 2023, money held in a Scotiabank HISA for 360 days will offer you 2.55% to 2.65%.

      HISA Cashable GIC Non-redeemable GIC
    Term 360 days 1 year 1 year
    Interest rate 2.55% to 2.65% 2.85% 5%
    Rates are provided for information purposes only and are subject to change at any time.

    Choosing a GIC

    If you’re considering investing in a GIC, here are the various types on offer:

    • Non-redeemable GICs: You buy a GIC for a set period (called the “term”), with a fixed and guaranteed annual interest rate. At the end of the term, you get your principal back, along with the interest earned. These GICs cannot be cashed in prematurely.
    • Cashable GICs: Unlike non-redeemable GICs, cashable GICs can be cashed in prematurely—before the term of the GIC is complete. You must hold this GIC for at least 30 days, and you can keep the interest earned up to the date you redeem it.
    • Personable redeemable GICs: At Scotiabank, these GICs are currently available for a two-year term. They offer a higher rate of interest than a cashable GIC, and they can be redeemed early, either partially or fully.
    • Market-linked GICs: Market-linked GICs offer investors the safety of traditional GICs and the potential to earn higher returns linked to the stock market. Like a conventional GIC, your principal is protected, and you get a minimum guaranteed interest rate (though it is typically lower than for other GIC types). Additionally, the GIC is linked to a major U.S. or Canadian stock market index—such as the S&P 500 or the S&P/TSX 60. For example, if the index rises 8%, you will get 8% on your GIC instead of the minimum guaranteed rate of about 2.4%.

    Market-linked GICs: pros and cons

    Before you buy a market-linked GIC, here are some points to consider:

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    Aditya Nain

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  • Making sense of the markets this week: December 24, 2023 – MoneySense

    Making sense of the markets this week: December 24, 2023 – MoneySense

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    So, given that context, we’re pretty proud of how these predictions held up.

    Inflation will continue to dominate the news

    “People who are unemployed feel the unemployment rate: but everyone feels the inflation rate.

    “Nothing gets people’s attention faster than paying higher prices for housing, gas and groceries. That’s what makes it such a tempting news story to keep reporting on. It also makes it almost impossible for politicians and policy makers to ignore.

    “Until the inflation rate comes down, to at least 4% (it’s currently 6.8%), I don’t see most investment commentators talking about much else.”

    Making sense of the markets this week: January 1, 2023

    Grade: A

    OK, admittedly, I started with a layup. Given how important inflation and interest rates are to the pricing of assets in almost every market, it was a high-probability bet that this would dominate markets in 2023. That said, it’s undeniable that the rapid pace of interest-rate rises took up most of the oxygen in the room this year. Over the last few months inflation has been coming down to the 3% to 4% level. And, as predicted, we’re finally seeing some other stories emerge. This week, for example, the Bank of Canada (BoC) announced a headline inflation rate of 3.1% and it failed to lead the news anywhere I looked (despite being slightly higher than predicted).

    The Russian invasion remains predictably unpredictable

    “None of the experts I read about a year ago predicted Russia would invade its neighbours and send geopolitical shockwaves reaching every corner of the planet.

    “None of the experts I read about 10 months ago predicted the Ukrainian military response would be able to stand up to the Russian war machine for more than a few days.

    “At some point maybe it would be best to admit that the experts really have no idea where this conflict is headed. Despite the tragic loss of life and catastrophic disruption of society, it seems to me that there is little evidence that either side will back down as we enter 2023. 

    “If—and this appears the more likely situation—the war drags on or escalates, it becomes difficult to quantify the damage inflicted on economies, like Germany’s, which are so dependent on Russia’s energy. 

    “Sure, demand destruction and the Green Revolution are coming… eventually… and at substantial cost. Even scarier is the unpredictable nature of the response to food shortages in desperate countries around the world. Generally speaking, food riots aren’t good for business (or humanity).”

    Making sense of the markets this week: January 1, 2023

    Grade: B+

    It’s not fun predicting that war will be awful. The tragedy taking place in Ukraine continues to be a struggle for all parties involved, and I don’t think we’re much closer to a long-term peace than we were at this time last year. The war has definitely contributed to high food costs around the world and continues to be quite disruptive within specific industries.

    That said, much of Europe adapted to new energy supply chains more quickly than originally anticipated. A new market equilibrium appears to have been established, but there is no question that the war continues to be a worldwide drain on resources and, more importantly, an absolute tragedy.

    The much-talked-about recession will continue to be talked about

    “At this point, I feel like we might forecast a recession forever.

    “Whether a recession will ever actually arrive or not is another story. 

    “With inflation in the U.S. falling to an annualized rate of 3.7% over the last three months, I’d argue we’re not only past peak inflation, but are actually well on our way to some sort of ‘new normal.’ With a substantial lag between when monetary policy is announced, and when its full effects are felt, we might not need a recession to lower inflation despite all of the headlines.

    “Of course, I continue to refer to the fact that whether we see two quarters of -0.1%, and -0.1% GDP shrinkage, or a quarter of -0.3% growth followed by a quarter of 0.2% growth, the distinction of ‘recession or not’ is irrelevant. The first scenario is a technical recession by most definitions. The second scenario is just a bad quarter followed by a less bad quarter. Whether we have a recession or not really isn’t that important in the long term.

    “Have the asset markets (such as stock or property markets) in which I’ve invested my money already anticipated the bad stuff coming by ‘pricing it in’?

    “Almost assuredly.

    “Remember that the stock market and the economy are not the same thing. Professional investors look past current events—they’re aware of the recency bias. They foresaw some rough waters ahead throughout 2022, but that doesn’t mean 2023 will also be so bleak.”

    Making sense of the markets this week: January 1, 2023

    Grade: A+

    Given the gross domestic product (GDP) situation Canada announced two weeks ago, we’re comfortable saying we knocked this one out of the park. Considering how many experts were predicting a recession at the end of 2022 and calling for falling markets, the theory that markets had priced in a pretty rough ride was the correct one.

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    Kyle Prevost

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  • Should you consider ETFs that include crypto? – MoneySense

    Should you consider ETFs that include crypto? – MoneySense

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    But 2023 has been different. Aside from a few prominent scandals, it’s been a year of resurgence and renewed investor interest. The price of bitcoin (BTC) has risen from about $16,500 at the start of the year to about $41,300, as of Dec. 18, 2023—an eye-popping gain of about 150%. But is crypto too volatile to invest in—especially if you’re a conservative investor? Is it worth exploring, or should you stay away from all the hype?

    What are cryptocurrencies? A quick refresher for Canadian investors

    Cryptocurrency is a form of digital money based on blockchain technology, which securely and permanently records transactions in a digital ledger. Unlike traditional fiat currency, crypto isn’t created, managed or backed by banks. Bitcoin, for example, operates on a multitude of computers around the world (called “nodes”) that run a specific algorithm. Together, they contribute massive amounts of computing power to create new coins, process transactions and maintain the decentralized ledger of these transactions.

    In the past, Canadian crypto investors bought coins, or fractions of coins, via crypto exchanges. Today, you can invest in exchange-traded funds (ETFs) that hold bitcoin and ethereum, making crypto more accessible to a wide range of investors.

    The potential benefits of investing in crypto

    Many Canadian investors remain cautious about crypto, wary of the dizzying volatility of crypto prices. Nonetheless, crypto is quickly emerging as an asset class for some long-term investors, exemplified by Fidelity’s All-in-One ETFs—which blend a small yet potentially impactful allocation of 1% to 3% of cryptocurrency into diversified portfolios of stocks and bonds. Adding a sprinkling of crypto assets to your portfolio could have these advantages:

    Diversification and hedging against traditional markets

    Diversification has typically meant allocating your portfolio to a certain percentage of stocks and bonds. However, bonds have had a torrid couple of years, and high inflation rates are spooking stock markets. So, investors are seeking fresh ideas. Diversifying with crypto could be promising because—although volatile and risky in itself—crypto does not suffer from all the same systemic risks that some stocks and bonds do. However, investors need to consider other crypto risks, such as regulatory uncertainty and technology risks.

    Potential for higher returns

    In diversified portfolios, stocks have so far been the growth engine. But, with crypto offering higher historical returns over the past 10 years, even a small allocation of 1% to 3% to crypto can potentially enhance an ETF’s returns.

    A slice of the future

    A small allocation to crypto gives you a slice of (what could be) the future of money and investments. Nobody knows how big the crypto market will be in 10 years and what role crypto will play in the future. A Fidelity All-in-One ETF with a small 1% to 3% allocation to crypto allows you to participate in the (possible) future without managing or storing it yourself. 

    Pure crypto ETFs vs. all-in-one ETFs

    Fidelity’s All-in-One ETFs allocate 1% to 3% to crypto. It’s a low percentage, but BTC has delivered annualized gains of over 50% over the last five years, so even a small allocation can give your investments a big boost. While many Canadian investors will be content with this 1% to 3% crypto allocation, some experienced investors may want to manage their crypto allocation themselves—with the ability to increase or decrease their crypto allocation independently. For these investors, there’s the Fidelity Advantage Bitcoin ETF, which invests substantially all of its holdings in bitcoin. In fact, Fidelity’s All-in-One ETFs gain exposure to BTC through this very ETF. Here’s an overview of Fidelity’s All-in-One ETFs that include crypto in their neutral asset allocation mix (as at Oct. 31, 2023).

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    Aditya Nain

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  • What is a cashable GIC? – MoneySense

    What is a cashable GIC? – MoneySense

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    How cashable GICs work

    Traditionally, GICs offer Canadian investors three core benefits:

    • Principal protection to ensure your money remains safely invested
    • A guaranteed interest rate to ensure you get a fixed return on your investment
    • Canada Deposit Insurance Corporation (CDIC) coverage of up to $100,000 per depositor (in the event of bank insolvency), subject to CDIC rules and regulations

    In addition to these three core benefits, a cashable GIC offers investors the option of getting their money back even before the term of the GIC has ended, if they so choose. For example, as of Dec. 14, 2023, you could buy a one-year cashable GIC from Scotiabank at an interest rate of 2.85%. If you need your money back sooner than anticipated, you can redeem the GIC. There is no interest penalty for cashing out early—so you will get the interest earned to date—but you must hold the GIC for at least 30 days before you can do so. Cashable or redeemable GICs offer investors great flexibility but note that banks typically offer higher rates for non-redeemable GICs—currently even 5% for a one-year GIC, as shown in the table below.

    1-year non-redeemable
    GIC
    (paid annually)    		 1-year non-redeemable
    GIC
    (paid semi-annually)    		 1-year cashable GIC
    (paid at maturity)
    Interest rate 5% 4.92% 2.85%
    Redeemable early No No Yes
    Eligible for registered accounts Yes Yes Yes
    CDIC-eligible Yes Yes Yes
    Rates are provided for information purposes only and are subject to change at any time.

    Are cashable GICs a good investment?

    Here are some reasons why cashable GICs may be a good investment:

    • They’re eligible for non-registered and registered investment accounts, including registered education savings plans (RESPs), registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), registered disability savings plans (RDSPs), first home savings accounts (FHSAs) and tax-free savings accounts (TFSA).
    • They can be used for tax planning—for example, by buying a GIC in an RRSP account to get a tax deduction, or by holding a GIC in an FHSA to get a deduction and tax-free growth—as long the money is eventually used towards buying a first home.
    • They are flexible—giving investors the option of fully or partially redeeming their investment, depending on the type of product chosen.
    • These GICs have a low minimum investment amount of $500 and no investment fees—making them accessible to smaller and newer investors.
    • Cashable GICs are eligible for CDIC protection, up to $100,000 per depositor, at CDIC member institutions.

    Given these benefits, a cashable GIC may be suitable for an investor who wants to combine the benefits of traditional GICs—like principal protection and a guaranteed interest rate—with the flexibility of cashing out anytime. (Note, however, that if you redeem within 30 days of the GIC’s issuance, you will forfeit the accumulated interest.)

    If you’re saving up to buy a car or a home, for example, GICs are a safe and reliable way to grow your money and access it when you need it.

    Can I transfer my GIC?

    Canadians are accustomed to transferring their investments from one institution to another if needed—say, from one bank to another. However, unlike mutual funds, exchange-traded funds (ETFs) and stocks, GICs typically cannot be transferred. This is because a GIC is a contract between you and the institution, and each institution offers its own GIC interest rates, terms and conditions. So, if you’re buying a GIC, be prepared to hold it at the financial institution where you bought it. If you have a cashable GIC and you need to move your investments to another institution, you could cash in the GIC and reinvest the cash in a GIC at the new institution.

    How to buy Scotiabank cashable GICs

    If the ability to access your cash early is what you need, here are two options available through Scotiabank:

    Cashable GIC Personal redeemable GIC
    Minimum investment amount $500 $500
    Term 1 year 2 years
    Annual interest rate 2.85% 4.75%
    Partially or fully redeemable Fully or partially Fully or partially
    Investment fees No No
    Principal protection Yes Yes
    Guaranteed interest rate Yes Yes
    Eligible for registered accounts Yes Yes
    CDIC-eligible Yes Yes
    Rates are provided for information purposes only and are subject to change at any time.

    How do you buy a cashable GIC?

    Cashable GICs are typically available wherever you buy your other GICs. For example, you can purchase Scotiabank GICs, including cashable/redeemable GICs, through a Scotiabank advisor. Book an appointment with an advisor online or by phone. Read more about Scotiabank GICs.

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    Aditya Nain

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  • How to buy Fidelity ETFs in Canada – MoneySense

    How to buy Fidelity ETFs in Canada – MoneySense

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    ETFs may have lower management fees than comparable mutual funds. And, with such a wide variety of ETFs with different asset allocations to choose from—including funds that combine equities with fixed income and even cryptocurrency—there are ETFs for a range of investors, from conservative to aggressive. You can choose ETFs that try to replicate an entire stock index, such as the S&P 500, or focus on a specific sector or geographical region. Most ETFs are passively managed, but a growing number of funds are actively managed.

    Plus, you can hold ETFs in both non-registered and registered investment accounts. Examples of registered accounts include the registered retirement savings plan (RRSP), tax-free savings account (TFSA) and first home savings account (FHSA).

    Investing in Fidelity ETFs

    In Canada, Fidelity Investments offers a variety of ETFs for investors with different investment objectives, time horizons and tolerance for risk. Investors can consider ETFs in the following categories:

    • Equity ETFs invest in stocks across a broad range of sectors, market capitalizations and geographies.
    • Fixed income ETFs invest in bonds and can be used to generate income, with the potential for capital preservation. 
    • Balanced or multi-asset ETFs invest across asset classes, including stocks and bonds.
    • A sustainable ETF that invests in companies with favourable environmental, social and governance characteristics.
    • Digital asset ETFs have direct exposure to cryptocurrency, such as bitcoin and ether.

    Fidelity ETFs are available through financial advisors and online brokerages. Learn more about Fidelity ETFs.

    Learn more about ETFs

    On this page, we’ll share articles to help you learn about and evaluate ETFs for your investment portfolio. Check back often for more insights.

    • How many ETFs can Canadian investors own?
      ETFs offer Canadian investors an appealing combination of convenience, diversification and low fees. But how many ETFs should you own, and which ones?
    • What investments can I put in my TFSA?
      The TFSA contribution limit for 2024 was recently announced. TFSAs can hold more than just cash. Get to know your TFSA investment options, including some Fidelity All-in-One ETFs that offer portfolio diversification.

    Know your investing terms

    Brush up on investing basics with helpful definitions from the MoneySense Glossary.

    This article is sponsored.

    This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers and approved by the client.

    Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual funds or ETF’s prospectus, which contains detailed investment information, before investing. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

    The statements contained herein are based on information believed to be reliable and are provided for information purposes only. Where such information is based in whole or in part on information provided by third parties, we cannot guarantee that it is accurate, complete or current at all times. It does not provide investment, tax or legal advice, and is not an offer or solicitation to buy. Graphs and charts are used for illustrative purposes only and do not reflect future values or returns on investment of any fund or portfolio. Particular investment strategies should be evaluated according to an investor’s investment objectives and tolerance for risk. Fidelity Investments Canada ULC and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.

    Portions © 2023 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC.

    The presenter is not registered with any securities commission and therefore cannot provide advice regarding securities.




    About Jaclyn Law

    Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities and freelancing for The Globe and Mail, Report on Business, Profit, Reader’s Digest and more. She completed the Canadian Securities Course in 2022.

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    Jaclyn Law

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  • Strategos Group Announces Strategic Hire to Lead Market Intelligence, Investment and M&A Venture

    Strategos Group Announces Strategic Hire to Lead Market Intelligence, Investment and M&A Venture

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    TAMPA, Fla., December 13, 2023 (Newswire.com)
    –
    Strategos Group, a Tampa-based national management consultancy, announced today that Kevin Jenkins will join the firm as Director of Enterprise Growth and Investments. 

    Jenkins is a proven strategy and finance leader with buy- and sell-side experience, having led investment committees and M&A transactions. Jenkins has overseen financing, fundraising, pricing strategies and strategic partnerships for startups and national enterprises.

    Strategos Managing Partner Adam Giery said, “Kevin is a leader with deep expertise, abilities, and intentionality. His arrival furthers our mission of providing unmistakable client value and serves as a cornerstone addition to our newest endeavors in support of founders throughout the investment and M&A journey.”

    Giery expressed gratitude saying, “Kevin’s arrival furthers our subject matter expertise in the education sector and bolsters our investment within the Tampa community. We’re grateful to Kevin and his wife Jasmine for their trust in our team and belief in our vision.” 

    Jenkins brings more than a decade of experience strategy, finance and corporate development roles across the financial services, public sector consulting, crypto, and EdTech industries.

    Previously, Jenkins worked at DreamBox Learning in corporate development and partnerships, where he designed and scaled its inorganic growth process.  

    Jessica Kuperberg, former General Counsel and VP of Corporate Development at DreamBox, said, “Kevin was invaluable to our DreamBox Learning Executive Team during a critical growth phase, adding market-forward analysis and insights during multiple M&A transactions. Kevin’s financial acumen not only guided us through complex negotiations but also ensured that our decisions were both fiscally sound and aligned with our long-term objectives. His contributions positioned DreamBox at the forefront of the EdTech market, ensuring positive returns for both students and shareholders.” 

    Jenkins is hopeful for the future in this role and looks forward to the team he’ll enhance. 

    “One of the most important but often overlooked considerations when evaluating a new role is not just what you will be working on, but also who you will be doing it with,” he said. “I’m thrilled to join such an entrepreneurial team and build upon their ‘laboratory culture’ that celebrates experimentation and learning — all while helping EdTech companies to transform the way the world learns.”

    Notable Tampa-based VC firms celebrate this announcement. 

    “Strategos is a strong organization in the EdTech advisory world, and the addition of Kevin Jenkins only adds to the arsenal. Having worked with Kevin for several years, he brings a great combination of passion for EdTech, industry knowledge, and financial acumen. I refer many EdTech companies to Strategos and this only increases my confidence in the deep team Adam Giery is assembling,” said Ryan Whittemore, Partner and CIO at Florida Funders.

    Source: Strategos Group

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  • 8 Things Your Pitch Deck Needs | Entrepreneur

    8 Things Your Pitch Deck Needs | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When entrepreneurs try to shore up funding and management for their ventures, they often summarize their business strategies in an abbreviated presentation document called a pitch deck. A pitch deck is typically utilized in meetings with clients, partners and co-founders and when presenting to investors.

    There are two things to remember when creating a pitch deck to attract and interest potential funders. Your pitch deck’s visual appeal (including the text length of each slide) is the first element. The second element is the actual content of your pitch deck, which is critical and challenging to create.

    Related: Successful Fundraising Begins With a Stellar Pitch Deck

    1. Vision statement and value proposition

    Whether they’re on the same slide or are presented separately, each of these needs to be one short sentence or statement. These statements will show prospective investors what your firm does and the value it can bring to consumers. It’s a general rule that these statements must be both clever and concise.

    Related: How to Think Like an Investor When Preparing Your Pitch Deck

    2. Problem statement

    If your company isn’t addressing a compelling, pressing problem, something’s wrong. Explain the issue your company is managing and who this issue affects (i.e., your target market). When describing the case, it’s essential to tell a story that prospective investors can identify with. This will aid in conveying the nature and purpose of your company.

    3. Target audience and market opportunity

    You can use this section to elaborate on your target market and the size of your estimated customer base. Explain to potential investors how big the market is and where you want to position your company.

    Collect as much data as possible on existing market purchases to give investors an accurate market size. If necessary, split your market into segments.

    While you might be tempted to define your target market as extremely broad, you should show investors you have a particular and addressable market. Doing so will add credibility to your presentation.

    4. Product — Show the solution

    At last, you can describe the product or service you’re bringing to the market. Explain to potential customers who use your product or service how it solves the issues you highlighted in the second section above.

    Describing your business here builds up the problem and allows you to define how acute or painful it is for your target market. Then, you can tell how your product or service can come to the rescue to solve (or help solve) the problem.

    Whenever possible, use pictures and stories to describe your solution. Showing is almost always better than telling.

    Related: Pitching Investors With Customer Motivations Won’t Work

    5. Business model or revenue model

    After introducing your product or service, you should discuss its potential advantages and benefits. Some ventures rely on advertising revenue rather than consumer purchases to cover their business overhead and profit. Therefore, make sure you provide some explanation of the financial mechanics here.

    6. Sales and marketing approach

    How will you advertise your company and attract new customers? Use this section to show investors how you intend to promote and sell your product or service. Ensure you include all the advertising and sales methods used to introduce and demonstrate your wares to consumers. You should also emphasize your unique selling points (USPs) here if you have any.

    Related: How to Sell Your Story Through Your Pitch Deck

    7. The money

    Investors need to see sales, profits, and cash flow projections for at least three years. Use charts to display sales, estimated customer numbers, expenditure summaries, and profit projections rather than detailed, difficult-to-read spreadsheets.

    Get ready to talk about the primary expense drivers and the assumptions you used to arrive at your sales projections. Keep in mind that your financial forecasts should be logical and reasonable.

    8. Team

    Present the team you intend to use for your venture, along with their background, qualifications and anything special they bring to the table that would make them especially suitable for their roles. A solid team will enhance your chances of success and give your company much-needed credibility.

    Additional considerations

    Even though the elements above are crucial, a “competition” section is also recommended for a successful pitch deck in most cases. In this section, justify your place in the market and explain how your business can stand out from the rest of the options that will be there. Focus on the USPs that set your company apart from competitors.

    A “Investment and the Use of Funds” section can also be included. In this section, you should tell prospective backers how much money you need and why. Describe precisely how their investment will be used. Investors want to know where their money is going and how it will further your company’s mission.

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    Alexander Galitsky

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  • How to divide the assets of an estate between beneficiaries – MoneySense

    How to divide the assets of an estate between beneficiaries – MoneySense

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    First, it bears mentioning that wills typically provide discretion to the trustees to sell, call in or convert into cash any part of an estate in their absolute discretion. The trustees may also have the ability to postpone a sale if they think it’s best. For example, that could be the case if market conditions made it inadvisable to immediately sell a real estate property, business assets or investments.

    An estate trustee typically has the discretion to distribute specific assets to beneficiaries as part of their share of an estate. In other words, if one beneficiary wanted a real estate property, they may elect to receive a smaller share of the rest of the estate, like cash proceeds from bank accounts or from selling other assets. If the real estate value was more than their share of the estate, they may be able to buy the asset from the estate, paying the incremental amount over and above the value of their share.

    It sounds like your parents’ estate has already been distributed to you, though, if your own names are now on these properties and accounts. As such, you should have free rein to do as you wish.

    Should you hold on to assets jointly or sell them?

    In my experience, it’s more common to sell all the assets and distribute the cash that remains (after paying taxes and estate costs) to the beneficiaries. So, your parents’ wishes may not have been so literal as to continue to hold all of their assets jointly.

    Real estate could be distributed to multiple beneficiaries directly rather than sold if the property holds sentimental value, such as a family cottage or farm. This would be less likely with estates like your parents’, which includes five properties, at least a few of which are presumably rental properties.

    There’s no tax advantage to continuing to hold the properties or the accounts, either. For a couple, tax is payable on the second death.

    Should you hold property as joints tenants or tenants in common?

    If you and your siblings want to continue to hold the real estate as investments, Lisa, you could do so jointly. You could own the properties as joint tenants with the right of survivorship, in which case the surviving two siblings would inherit the property upon the first death. This would be uncommon for siblings, though.

    You could alternatively own the properties as joint tenants in common, which would give you control of the asset even upon your death. You could then leave your share to your spouse or children, for example. This is usually preferred to leaving your assets to your siblings, but perhaps none of you have spouses or children. Even if you do not now, you might in the future.

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    Jason Heath, CFP

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  • ’Tis the season for tax-loss selling in Canada – MoneySense

    ’Tis the season for tax-loss selling in Canada – MoneySense

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    For Canadian investors who have achieved significant taxable capital gains, now is the time to implement a tax-loss selling strategy—the most effective way to find tax savings.

    What is tax-loss selling in Canada?

    Tax-loss selling is an investing strategy designed to offset taxable capital gains and reduce your tax bill. It involves selling investments to trigger a capital loss and claiming them against capital gains.

    Definition of tax-loss harvesting

    Tax-loss harvesting, or tax-loss selling, is a strategy for reducing tax in non-registered accounts. Investors sell money-losing investments, triggering capital losses they can use to offset capital gains incurred the same year. Tax losses can also be carried back three years or carried forward indefinitely. When using this strategy to save on taxes, take care to avoid triggering the superficial loss rule.

    Read the full definition of tax-loss harvesting in the MoneySense Glossary.

    Capital gains and capital losses

    In Canada, when you sell appreciable assets such as stocks, bonds, precious metals, real estate, or other property for more than the purchase price of the investment plus any acquisition costs—a.k.a. the adjusted cost base (ACB)—this is called a capital gain.

    The math is pretty straightforward. If you bought a stock for $100 and sold it for $200, the capital gain is $100. The Canada Revenue Agency (CRA) requires you to report the capital gain as income on your tax return for the year the asset was sold. And, 50% of its value is considered taxable, based on the rate of your income tax bracket.

    In this example, the taxable income is $50 ($100 x 50%), which is taxed at your marginal tax rate. The CRA does not tax capital gains inside registered accounts such as registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs).

    On the flip side, when you sell an investment for less than its ACB, this is considered a capital loss. The CRA allows Canadian taxpayers to use capital losses to offset any capital gains.

    Unlike capital gains, capital losses can be reported on your tax return in any of the three years prior to the loss or to offset future capital gains. Capital losses have no expiration date.

    As an investment advisor in Canada, I track my clients’ portfolios throughout the year to have a clear view of their capital gains’ position and opportunities to minimize tax. That’s when tax-loss selling comes into play.

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    Allan Small

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  • Making sense of the markets this week: December 10, 2023 – MoneySense

    Making sense of the markets this week: December 10, 2023 – MoneySense

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    The S&P 500 (index of the 500 largest U.S. stocks) was up over 8%. That’s significantly better than its November average of 1.54% going back to 1950. November is historically the best month in the U.S. stock market.

    The Toronto Stock Exchange’s S&P/TSX composite index was up 7.2% in November. There are only five single months since 2002 when there was a higher return: November 2020, April 2020, January 2019, May 2009, March 2009. By the way, January 2023 was pretty great too at 7.13%.

    Stock markets across the globe also did pretty well in November, with an all-world index up 9%.

    Remember, the stock market goes up most of the time.  

    It pays to be an optimist!

    Forget “girl math,” here’s “old man math”

    One of the most popular personal finance gurus of all time is Dave Ramsey. He’s incredible at promotion, and he’s written more books than the number of times a Canadian NHL team has ever won the Stanley Cup. Ramsey hosts radio shows, appears constantly on network TV, and is generally a one-man financial content machine.

    But, does any of this mean that Ramsey actually gives good advice?

    I’m sure there is someone somewhere who Ramsey has helped. But the number of times he makes absolutely outlandish, nonsensical claims is incredible. Thanks to Dollars and Data for the assist, here’s his latest take, which is an unedited quote from Ramsey’s show. 

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    Kyle Prevost

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  • Will Canadian HISA ETFs survive the new rule change? – MoneySense

    Will Canadian HISA ETFs survive the new rule change? – MoneySense

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    The Office of the Superintendent of Financial Institutions (OSFI) issued a ruling on Oct. 31, 2023, that requires banks taking deposits from ETF issuers to have 100% of the capital needed to support those deposits in case they get rapidly withdrawn.

    The most popular HISA ETFs 

    The reason for HISA ETFs’ popularity with investors is not hard to see. After a couple of the worst years ever for fixed income, they present a place to park your money with essentially zero volatility, combined with yields tracking ever-higher interest rates (now more than 5%). Not only do these funds find some of the best deals in savings accounts for you, but you can also buy and sell them on a whim.

    As of Oct. 31, the CI High Interest Savings ETF (CSAV) ranked as the fourth largest ETF in Canada, with $8.7 billion in assets under management, CEFTA figures show. And HISA ETFs’ appeal seems undiminished, even as fixed income reasserts its position in investors’ portfolios with interest rates expected to top out soon, if they haven’t done so already. Over the month of October, the Horizons High Interest Savings ETF (CASH) and CSAV were the number two and number three ETFs in Canada, respectively, in net inflows.

    Are HISA ETFs safe?

    The sudden shift of capital into HISA ETFs caught the attention of the OSFI, which oversees banks operating across the country. The regulator was concerned about the potential for instability in the banking system should investors withdraw their money as fast as, or faster than, they deposited it, as the ETF format enables them to do. The OSFI undertook a public consultation process last spring, considering “systemic concerns with contagion, potential for regulatory arbitrage, and the absence of guarantees or deposit insurance typically found with traditional savings accounts,” it said in its ruling on Hallowe’en.

    When new regulations around HISA ETFs take effect

    The OSFI ruled that, as of Jan. 31, 2024, “any deposit-taking institutions exposed to such funding must hold sufficient high-quality, liquid assets, such as government bonds, to support all HISA ETF balances that can be withdrawn within 30 days.” 

    What it means for Canadian investors

    While the decision is directed at the banks offering HISAs, it will have indirect effects on the ETFs holding these savings accounts. Some Canadian investors have expressed concern that the new rules might restrict the number of banks taking deposits from fund companies and might constrain yields as a result. 

    An analysis by TD Securities suggested yields would drop around half a percentage point come January. However, Naseem Husain, senior vice president and ETF strategist at Horizons ETFs, emphasizes the upside of regulatory clarity.

    “At the end of the day, the OSFI decision regulates and confirms the ongoing viability of HISA ETFs, ensuring they’re here to stay and will continue to be a viable investment option,” says Husain. “This decision will likely lead to greater competition in the space from a product perspective, and that could incentivize more investors to consider using HISA ETFs in their portfolios.”

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    Michael McCullough

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  • Serial Entrepreneur Turned VC Reveals 4 Numbers You Need to Know to Scale Your Company | Entrepreneur

    Serial Entrepreneur Turned VC Reveals 4 Numbers You Need to Know to Scale Your Company | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    As a serial successful entrepreneur turned angel investor and venture capitalist and one of the top female seed-stage investors in the world, I see dozens of pitches from entrepreneurs every single day – some through the form on our company site, others in email and loads of them via LinkedIn. Often, though, entrepreneurs reach out to me for advice rather than funding. As a former entrepreneur who once struggled to raise capital myself, I’m sympathetic to their pleas for help.

    One of those requests came from Emma. Her passion for her stationery business was undeniable. She’d spent years perfecting her craft and had a small but fiercely loyal following of customers who adored her exquisite, custom-made stationery. Now, she was ready to take her business to the next level and sought funding from venture capitalists to scale it up.

    Unfortunately, her fundraising efforts were a complete disaster, with investor after investor turning her down. Discouraged, she reached out to me for assistance.

    I had Emma send me her pitch deck, and the problem was immediately clear. She had a good vision but lacked an understanding of what investors look for. Her deck and pitch didn’t align with what investors needed to see, overlooking four key numbers – I call them BFHL – that are most fundamental to scale.

    B. Big market numbers

    The foundation of any scalable business is the market it serves. For investors, the bigger the better. To understand why, it’s essential to understand VC math.

    Assume my fund invests in 15 companies. Ten of them will fail, and I’ll lose my money. Three or four will do okay – I’ll get my money back or make a bit (1 to 5 times my money). That means the remaining one or two companies need to generate enough returns to make up for everything else (i.e., 100 times my money). Otherwise, my fund won’t do better than other far less risky things my investors could have put their money into.

    VCs look at every company through this homerun lens. What is the maximum revenue your business could generate if it captured 100% of the available market (Total Addressable Market, or TAM)? While no business can realistically achieve that, TAM provides a sense of the market’s overall size.

    For some industries, a market size in the billions of dollars might be considered large. In others, it could be in the trillions. Either way, a substantial market size offers massive potential for growth and a high ceiling for revenue and profitability.

    Related article: What Nobody Tells You About Taking VC Money

    F. Fast growth rate

    The market’s growth rate is also vital. VCs favor rapidly expanding markets because they enable a company to scale more quickly.

    Again, let’s turn to VC math to understand why rapid growth is crucial. Remember, VCs back the most risky companies (startups are unproven; most of them fail), so they and their investors expect extremely high returns. VC funds are also time-bound. They have eight to ten years to scout for startups, make their bets, help portfolio companies grow and achieve “exits” to get their returns. As a result, they want to know:

    1. How quickly can your business grow? How long until you can sell your company or take it public so they can sell their shares and get a return?
    2. How big can your company get? How much could it be worth (“valuation”) at the point they sell our shares?

    To deliver homerun-level returns, you need to grow from a startup to $100 to 500 million in revenue in the five to eight years your investor has left in its fund life. Why? We determine what a company is worth based on “multiples of revenue.” On the high end, SaaS companies can be valued at ten times or more of revenues. E-commerce firms come in around 2 to 3 times. Others can be as low as 1 to 2 times. So, to build a company that is a “unicorn” ($1 billion valuation), you need to quickly grow enough to generate $100 million to $500 million in revenue. Growing that big is hard to do, and do quickly, in a stagnant, crowded market.

    Related article: 4 Crucial Indicators To Know Before Seeking Venture Capital Funding

    H. High revenue numbers from each customer

    VCs want businesses that can generate high levels of revenue from each customer — from the initial sale and subsequent purchases, upsells, cross-sales, and retention (aka, keeping them for the long term). This is called the Lifetime Value (LTV) of a customer, and it’s a critical indicator of scalability.

    Investors prefer businesses with recurring revenue over those relying on one-time purchases because they provide predictable and continuous streams of income. Sell once; earn revenue indefinitely. Even better if that recurring revenue grows through upsells and new offerings. Better still if customers become advocates and bring in more new customers. It’s all about demonstrating to investors that your business is a revenue growth machine.

    Relevant article: 8 Things You Need to Know About Raising Venture Capital

    L. Low cost to get customers signed up

    VCs also prefer businesses that can find, sell to and secure customers efficiently. This includes your marketing and sales tactics (and budget) and the rate at which you convert prospects into paying customers. A low cost of acquiring a customer (CAC) means your business is efficient, which is vital for scalability.

    CAC is also a critical metric because it directly affects a company’s profitability. VCs favor businesses that can scale their customer acquisition efforts without proportionally increasing their costs. And a scalable customer acquisition strategy is crucial for achieving rapid growth.

    So, where did that leave Emma? After our talk, she could see how essential it was to have a business (and a deck) that aligns with investor preferences:

    • A massive market with high growth rates and an open landscape to disrupt and capture market share.
    • Subscription models and recurring revenue streams that increase over time, with customers that drive virality.
    • And a combination of high customer lifetime value and low customer acquisition cost ensures that the business can grow quickly and efficiently without eroding profits.

    The BFHL framework gave her what she needed to rethink her pitch and her approach to growing her business. Whether you’re an entrepreneur like Emma trying to attract investment or you’re simply seeking to scale your business, these four key numbers — market size and growth rate, lifetime value and cost of acquisition — should be your guiding lights. By focusing on these crucial metrics, you can set your business on a path to scalable success. Understanding these numbers and optimizing them is the key to unlocking the full potential of your venture.

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    Donna Harris

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  • Making sense of the markets this week: December 3, 2023 – MoneySense

    Making sense of the markets this week: December 3, 2023 – MoneySense

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    When a recession is not a recession

    This week saw a perfect example of why the word “recession” has now largely been rendered irrelevant. 

    Recession notes

    Before we get to why all this recession talk can be misleading, here are the facts:

    • A recession means two consecutive quarters of negative gross domestic product, GDP. (Read my recession explainer from a year ago). 
    • In the past few years, several economists argued about whether the definition of recession should be that simple. Now, there’s also the term “technical recession” to describe two consecutive quarters of a contracting GDP, while reserving the generalized term “recession” for a vague set of parameters that include unemployment and whatever else they want to include. 
    • Three months ago, Statistics Canada told us that our GDP had contracted 0.2% from April to June.
    • On Thursday, Statistics Canada said our GDP had contracted 0.3% from July to September.

    So, obviously we’re in a recession, or at least we’re in a technical recession, right?!

    Nope.

    In its Q3 announcement, Statistics Canada revised its second-quarter GDP measure. To me, it says: “Yeah, so we had another look at the numbers, and, uh, it turns out instead of a slight contraction of GDP, we actually had a very small growth in GDP. So, if you look at the six months from April to September, there was a very small overall shrinkage in Canada’s GDP, we’re not in a ‘technical recession’.”

    Source: CBC News

    The much bigger story here could be that Canada’s large immigration numbers are creating an overall GDP number irrelevant to the average Canadian. After all, most people want economic reporting to explain if their own personal situation is likely to get better or worse.

    When you look at our GDP-per-capita and overall production-per-capita numbers, Canada is right where it was in 2017. 

    That’s not to say that increased immigration is a problem or that it has a negative economic effect. I personally feel quite the opposite. 

    It’s simply a question of how to explain math to Canadians. Whether Canada’s economy grows by 0.2% or shrinks by 0.2% from quarter to quarter is much less important than the fact we’re increasing population by 2.7% per year, and getting nowhere near the level of GDP growth. If our collective economic pie is staying essentially the same size (or perhaps growing very slowly), but we’re cutting it into more and more pieces at an increasing rate, then the most relevant statistic isn’t GDP. Rather it’s the real GDP per capita.

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    Kyle Prevost

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