Here is the recap of the most recent stock market performance.
| Year | Canada | US | Europe | Emerging Markets | World |
|---|---|---|---|---|---|
| Q1 2024 | 6.92% | 10.41% | 8.43% | 4.57% | 10.22% |
| 2023 |
13.31% | 27.10% | 15.04% | 10.29% | 23.75% |
| 2022 | -5.78% | -19.46% | -7.97% | -15.16% | -15.62% |
| 2021 | 25.79% | 26.97% | 23.32% | 0.14% | 24.71% |
| 2020 | 4.35% | 21.37% | -1.71% | 19.50% | 14.06% |
| 2019 | 22.00% | 31.64% | 24.57% | 18.51% | 28.07% |
| 2018 | -9.04% | -4.50% | -10.02% | -9.73% | -6.86% |
| 2017 | 9.22% | 21.90% | 13.72% | 31.00% | 19.13% |
| 2016 | 21.15% | 11.61% | 7.90% | 10.11% | 9.65% |
| 2015 | -8.36% | 1.32% | 5.45% | -5.40% | 2.65% |
| 2014 | 11.43% | 13.36% | 5.22% | 5.57% | 10.40% |
| 2013 | 13.58% | 32.61% | 22.26% | 3.79% | 29.57% |
Source: MSCI gross returns including dividends, all returns in local currency.
Markets finished 2023 on a strong note, and that strength carried on through the first quarter of 2024. The question of when and how much interest rates might be reduced remains a major topic of speculation and discussion and continues to impact the markets – particularly the bond markets.
The latest expectation is that we may see decreases in the Bank of Canada rate later in the year, possibly as early as June. But as always, the degree and timing of rate cuts in both Canada and the US will be data dependent.
The 2024 Federal Budget delivered on April 16th brought a few changes, some of them welcome and some not so much. Below we’ve highlighted a few of the changes that may be of most interest.
Among the positive changes is a proposed increase to the Home Buyers Plan (HBP) withdrawal limit from $35,000 to $60,000. This increase would also apply to withdrawals made for the benefit of a disabled individual. This measure would apply to the 2024 and subsequent calendar years in respect of withdrawals made after April 16, 2024.
In addition, to further help recent and upcoming first-time home buyers, Budget 2024 proposes to allow Canadians who withdrew from their Home Buyers’ Plan between January 1, 2022, and December 31, 2025, to have their repayment grace period extended by three years.
Another positive measure is the increased limit on the Lifetime Capital Gains Exemption (LCGE) to $1.25 million of eligible capital gains. This measure would apply to dispositions that occur on or after June 25, 2024. Indexation of the LCGE would resume in 2026.
Unwelcome changes include increases to capital gains inclusion rates for individuals, trusts and corporations. For capital gains realized on or after June 25, 2024, Budget 2024 proposes to increase the capital gains inclusion rate:
– from ½ to ⅔ for corporations and trusts
– from ½ to ⅔ on the portion of capital gains realized in the year that exceed $250,000 for individuals
While most individuals rarely realize more than $250,000 in capital gains in a typical year, this will impact things like:
– capital gains tax on the sale of a secondary or rental property (i.e. where the principal residence exemption cannot be utilized)
– deemed realized capital gains upon death (this applies to non-registered investment accounts, secondary properties, etc.)
For tax years that begin before and end on or after June 25, 2024, two different inclusion rates would apply. Transitional rules will require taxpayers to separately identify capital gains and losses realized before June 25, 2024 (Period 1) and those realized on or after June 25, 2024 (Period 2) so that the appropriate inclusion rate can apply to the transaction. Also, the annual $250,000 threshold for individuals would be fully available in 2024 and will not be prorated.
As always, I thank you for the trust you put in our firm. If you have any questions about your situation, please do not hesitate to contact us.
Sincerely,
Anne Hammond
BA CIM CFP
Financial Advisor & Associate Portfolio Manager
T 604 732 6551
Planning Team
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Carly O’Connell, BA Lorraine Watson |
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Anne Hammond is a Financial Advisor & Associate Portfolio Manager with RGF Integrated Wealth Management. The views expressed are those of the author and not necessarily those of RGF Integrated Wealth Management, which makes no representations as to their completeness or accuracy.
© 2024 RGF Integrated Wealth Management. Ltd., RGF Wealth Management. Ltd., Member – Canadian Investor Protection Fund
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