July 17, 2024

Data Will Drive Economic Policy Forward

In his Q2 Update, Portfolio Manager Simon Bowers discusses recent developments in the financial markets and the issues that remain top of mind as we head into the second half of 2024.

Simon notes that the Bank of Canada recently reduced its interest rate from 5% to 4.75%, indicating confidence that inflation is under control and that economic conditions are robust enough to ease restrictive policies. He feels this move signals potential further rate cuts but expects the Bank will be careful not to diverge too much from the U.S. Federal Reserve to avoid depreciating the Canadian dollar, which could spur uncontrollable inflation. He also notes that the U.S. Federal Reserve, which also raised rates in 2022, is expected to cut rates twice this year, although opinions on this vary. 

Portfolio Positioning

In terms of portfolio positioning, Simon feels that investment strategies that emphasize diversification and regular portfolio rebalancing are critical in today’s markets, especially given the recent U.S. market outperformance driven by AI. He strongly suggests that investors should take caution against chasing hot sectors, recalling the Nortel experience from past market events. 

Canadian Tax Policy

Simon notes that a significant policy change in Canada recently involved increasing the capital gains inclusion rate, which is primarily affecting corporations and the entrepreneurial class rather than the ultra-rich as intended.
Simon believes that the proposed tax changes, though not yet law, highlight the importance of proactive financial management. The IPC Private Wealth program helps investors achieve their financial goals through constant oversight, strategic rebalancing, and tax planning to improve after-tax outcomes for IPC Private Wealth clients. This proactive approach is crucial in navigating changes in legislation and economic conditions, ensuring better investment decisions and increased confidence for advisors.

For more information about how IPC Private Wealth can help you achieve your objectives, please give us a call.

Disclaimers:

The views expressed in this commentary are those of Canada Life Investment Management as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Prospective investors should review the offering documents relating to any investment carefully before making an investment decision and should ask their advisor for advice based on their specific circumstances. The content of this material (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it. 


This material may contain forward-looking information that reflects our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as ofJuly 17, 2024. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.  Investment Planning Counsel Inc. is a fully integrated wealth management company. Counsel Portfolios are a family of funds managed by Canada Life Investment Management Ltd., a subsidiary of the Canada Life Assurance Company. Trademarks owned by Investment Planning Counsel Inc. and licensed to its subsidiary corporations. Mutual funds available through IPC Investment Corporation and IPC Securities Corporation.


The content of this video (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.