Mainstreet Blog

Written by: Marc Pranger (Mainstreet Advisor, Sarnia Region – London Rd.)

A lot of my friends and I are new homeowners and we often find ourselves talking about home-ownership and our mortgage rate. So many are concerned about who has the best rate and might not give other important features of the mortgage enough attention. I’ll outline a few.

Pre-payments or Increase per Payment

Make sure when shopping for a mortgage you ask your bank, credit union, or mortgage specialist about the pre-payment privileges that come with your mortgage and rate. You can save thousands of dollars and shave years off your mortgage by taking advantage of pre-payment options (learn more by reading our blog on the power of pre-payments here). Some low-rate mortgages may not offer pre-payment privileges or the ability to increase your regularly scheduled payments. If you have the funds available, or maybe get a raise at work, it will be reassuring to know if you can pay more towards your mortgage and what the prepayment penalties (if any) will be. Paying more towards your mortgage will have you mortgage-free sooner meaning you pay less interest on the loan and keep more in your bank account.

Flexibility

Need to move, upgrade, or another unexpected life event comes up? Ensure your mortgage has flexibility! Can you blend your mortgage, can you move your mortgage to another home, what options are available? Life changes, make sure your mortgage can adapt with you.

Expertise 

It is important to have trust in your mortgage specialist– this is likely one of the biggest purchases in your life. This trust will come from the comfort of knowing your advisor has experience with mortgages and your best interests in mind.

Banking Perks

At some financial institutions, the more business you have with them translates to discounts or free services. See how else you can save by having your mortgage with this provider. At Mainstreet Credit Union, for example, if you have a mortgage or any total combined business with Mainstreet of $100,000.00 or more, you have a choice from several free chequing accounts and higher interest rates available on some of our savings products as well.

Community 

Does where you bank and have your mortgage improve and invest back in your community? Knowing that your bank supports local programs, teams, events, and services can make a big difference.  Challenge your mortgage specialist to see if they can show and teach you where the interest you pay goes and if it benefits where you live, work, and play.

If you want to hear more about other important mortgage tips and tools,  reach out to any of our Mainstreet financial advisors who are here to help you.

Marc Pranger
Mainstreet Advisor
Sarnia Region – London Rd.

Before working at Mainstreet, Marc studied Business Finance at Fanshawe College in London where he focused on the areas of retirement planning, estate planning, accounting, personal and business taxation, investments offered in Canada, and many other financial topics useful to his role today. Marc has gained experience across a variety of personal and business financial services, from lending, mutual-fund advice, account processing, and more. Outside of the office Marc enjoys being surrounded by friends and family, cycling around our beautiful province, singing with his church band, and spending time on his family’s farm.

Book a meeting with Marc

Written by: Doug Price- Investment Services Manager

2020 certainly has turned out to be a surprise for many investors.  In February, many equity markets achieved all-time highs.  In March COVID-19 changed many people’s perspectives and equity markets became strained under heavy selling and asset liquidations. Many people were selling whatever they owned in an effort to raise cash.  Uncertainty reigned and this feeling was reflected in market activity.  

In April, just as quickly, outlooks and attitudes around investing began to change.  Major indexes rallied approximately 30%, restoring much of the value lost the previous month. In fact, the Nasdaq Index is close to even for the year and approximately 6% away from the all-time high set in February.

It makes sense if this seems like a bit of a rollercoaster ride.  Volatility has been present creating an unsettling feeling for many investors.  This cycle has been repeated many times in the past.

How is someone supposed to process these events and ensure they remain in a position to prosper in the future?
Do an inventory of personal assets.  Make sure an adequate emergency fund or Line of Credit is available to deal with short-term unexpected events.  This helps many people sleep at night knowing they can cover immediate expenses.  It takes the stress away from worrying about the short term performance of investments targeted at long term goals.

Review any outstanding debts.  Today’s low interest rates have created an opportunity to restructure high-interest debts, freeing up cash flow.

Have a well-developed plan in place outlining goals and ensuring the money set aside for each of these goals is invested appropriately.  Some goals will take place this year, some will take place in 3 years and some will occur 10 or more years in the future.  The funds for each one of these goals needs to be invested in different solutions to ensure you are balancing the right amount of risk with the right amount of opportunity for growth.

Invest. It is always a good time to invest.  The question is always: what is the right investment solution?  Savings accounts, term deposits, mutual funds, and others, can all be the right solution depending on the goal.

Invest in quality solutions.  There are ways to determine if an investment is of quality and stands up to scrutiny against peers.  Not all investments are structured the same and not all investments perform the same.  Some will take a very conservative approach, others will use more aggressive approaches.  The best intentions in the world won’t matter if the underlying investment is poorly managed.  

Invest regularly.  Using a predetermined schedule helps many people avoid trying to pick the perfect time to invest funds.  Picking the single best day or moment to invest has proven to be virtually impossible for investors.  Investing regular amounts on a regular schedule takes the guesswork out of this process

Keep perspective.  The wealth created in today’s world is all a reflection of human ingenuity.  This process of innovation and wealth creation will continue.  There have been stops along the way and periods of tremendous growth.  This process will continue.  Right now we are all in the middle of one of those stops. 

As this message is written countries around the world are beginning to re-open economies.  Our own economy is also beginning to re-open.  It is always most difficult to believe in prosperity and economic recovery in uncertain times.  One thing we have seen throughout history is better days do lie ahead.  It is like traveling through a valley.  Sometimes you cannot see the other side of the valley but it is there. 

We cannot know what the future will bring; however, I do suspect the attributes which have stood the test of time will continue to provide comfort and guidance.  Have a plan in place, invest regularly in quality assets, diversify properly and appropriately, maintain a long term view and control emotionally driven responses. If you need help with any of those items an Investment Advisor is a fantastic resource to guide you throughout your financial and investment journey.

Disclaimer:

Mutual funds are offered through Credential Asset Management Inc. Online brokerage services are offered through Qtrade Investor. Mutual funds and other securities are offered through Credential Securities. Qtrade Investor and Credential Securities are divisions of Credential Qtrade Securities Inc. Credential Securities and Qtrade are registered marks owned by Aviso Wealth Inc.

“The four most dangerous words in investing are: “This time it’s different”.”- Sir John Templeton

Whether it was SARS, the housing crisis of 2008, or other world events that came before, we probably caught ourselves thinking “this time is different”– this time housing prices, the markets, whatever it may be, will plunge and not recover. Yet if history has taught us one thing it would be you would have been wrong, markets have done one thing over time- go up. So why is it every time there is a bump in the road we feel like “this time is different”?

The latest bump in the road is the impact on the investment market as a result of the fear surrounding Covid 19 (Coronavirus). The global threat of the virus spreading and how that will affect our economy continues to impact the investment market. It’s important that we look at the market changes in context, which is that over the past 10 years the S&P 500 index has more than doubled in value. Less than 2 weeks ago it was at an all-time high. This all-time high was achieved despite wars, recessions, global panics, political scandals, and any number of troubling events stretching back over dozens of years. The index has rebounded from every other event which occurred during the 20^th century and there is no reason to believe this time is any different. Sometimes it rebounds quickly, sometimes it takes a bit longer. The important thing to keep in mind is that recovery has always occurred.

The media has painted the situation with one brush, that the stock market has plummeted. A balanced, diversified and reasonable portfolio gets ignored in the hype. It is all about risk and reward- if you are heavily invested in equities you will have seen a bigger decline but during good times you likely experienced higher returns. Alternatively, a more diversified portfolio would have experienced a smaller decline with slightly lower returns when markets are performing.

When markets decline, whether it is 1% or 12% or more, even the most seasoned and intelligent investors can succumb to fear and panic. Panic selling leads to locking in losses, possibly never reinvesting, or making even riskier choices to try to make up lost ground. Market conditions come and go.  This is repeated time and again. There is never a sign held up indicating “troubling times are about to begin”; likewise there is never a sign held up indicating “all clear” however history has shown that no global health crisis has had an enduring impact on the market’s growth.

Your best bet is to invest on a regular basis in a thoughtful manner balancing stability, risk, and opportunity. Invest in a manner that respects your own tolerance for volatility. Sleep soundly at night by sticking with your plan and taking comfort in decades of positive market history.

If you are about to hit “sell” and jump out, call your advisor, it is times like this that their advice can help you from locking in losses and give you the confidence through the turbulent times so you can be there to reap the rewards when markets recover and once again grow.

Disclaimer:

Mutual funds are offered through Credential Asset Management Inc. Online brokerage services are offered through Qtrade Investor. Mutual funds and other securities are offered through Credential Securities. Qtrade Investor and Credential Securities are divisions of Credential Qtrade Securities Inc. Credential Securities and Qtrade are registered marks owned by Aviso Wealth Inc.

Written by: Jennifer McQueen (Investment Advisor – CFP, RRC)

You’re 28 years old. You’ve been applying to be a contestant on Survivor for 10 years now. You’ve watched the show since you were a kid waiting for your chance to compete. You haven’t given up, and you FINALLY get chosen. You quit your job, pack a small bag of clothes and leave your whole life behind to reach the goal of being the ultimate survivor and winning the $1-million cash prize. You get to the island and it is completely different than you thought. You are sleeping on a rickety bamboo platform, it has been raining constantly for 3 days and you’ve barely eaten because you can’t keep a fire going long enough to cook the small amount of rice each person has been given. How are you going to get to day 39? You think about giving up and going home but if you give up, you won’t reach your goal.

Now, picture yourself today. You’ve just entered the workforce in the career of your dreams. Instead of spending 39 days on an island, you are now planning to work for 25 – 30 years with the ultimate goal of enjoying retirement. How will you get there? What do you do? What does an enjoyable retirement look like for you? The first step is finding a Financial Planner that you trust to lead you through the process.

Financial planning is a circle, not a straight line. There is no end. Constant review and re-evaluation is key to achieving success. Setting new goals and adapting existing ones to meet your current situation is paramount to reaching the top.

Investing in mutual funds can be an up and down ride. Economic cycles change at the drop of a hat without notice. And after seeing your portfolio drop 20% in 3 months you may be thinking it’s time to call it quits. But if you give up, you won’t reach your goal and could miss out on some of the best returns trying to time the markets. For example: If you had invested $10,000 on August 1, 2002, and during the market decline of 2008/2009 you chose to change your investment to something more conservative until the volatility evened out – if you missed only the best 10 days in the Canadian market from then until December 31, 2018, you would have missed out on over $15,000 in growth – and being that much closer to your goal.

Your advisor is there to help you. They are here to give you advice and to show you how you will still be able to reach your goal within your time frame – even if it means having to change the path.

The average CPP in 2019 is $683.65 per month starting at age 65*. Relying on only programs like this may not afford you the kind of retirement you’ve always dreamed of. If you don’t have an advisor helping you understand what the future may look like, and showing you the way to get there, you could miss out on something great. And if you leave the island before the final immunity challenge, or stop applying to be on your favourite show, you won’t reach your goal.

Whatever your income level, whatever your job, whatever your age, whatever your financial status…always have a goal and a way to reach it. Financial planning is for everyone, not just the rich and famous, not just the doctors and lawyers of the world, everyone can benefit from having a plan and an advisor to help them reach those goals.

*Source – https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html

Disclaimer:

Mutual funds and related financial planning services are offered through Credential Asset Management Inc.

Jennifer McQueen
Investment Advisor – CFP, RRC
Credential Asset Management Inc.
Chatham Region & Mount Brydges

Jennifer has been working in the investment industry since 2004. After graduating with an Honours BBA degree from Wilfrid Laurier University, Jennifer continued her education by obtaining FPSC’s Certified Financial Planner® and Registered Retirement Consultant® designations. Jennifer believes in building a holistic financial plan by reviewing a member’s full financials whether they are planning for, or already in, their retirement years. Outside of the office, Jennifer enjoys spending time with her family and friends, traveling, cooking, and watching sports.

Book a meeting with Jennifer