This and That: Market Rally & UFile Giveaway
February 18, 2011 by Laura Reveley · Leave a Comment
Since the RRSP season is about to hit the home stretch, this week’s video is topical. In it, kids talk about what retirement means to them.
In the news this week
The stock markets hit some significant milestones this week. The S&P 500 has doubled from the market low of March 2009 . The TSX crossed the 14,000 mark. What does this mean for investors? Other than the fact that stock portfolios are looking much healthier, not much. Just over two years ago, the pundits getting the most air time were those making dire forecasts . Investors who listened to these gurus and hid under their beds missed out on one of the most spectacular rallies. W
Central bankers on the catwalk in Paris
February 17, 2011 by Charlie Stedman · Leave a Comment
PARIS, more used to staging fashion shows, put on a celebrity catwalk of central bankers today. The line-up of big names at a glitzy hotel in the heart of the French capital stretched from Ben Bernanke of the Fed to Zhou Xiaochuan of China, with Mervyn King of the Bank of England, Masaaki Shirakawa of the Bank of Japan and Jean-Claude Trichet of the European Central Bank. Hosting the event—on global imbalances and financial stability—was Christian Noyer of the Bank of France.
That theme goes to the heart of what went wrong in the financial crisis and what should go right in its aftermath. One view is that the imbalances—notably the big current-account surplus chalked up by China and the huge deficit in America—were part of the madness of America’s subprime lending boom, and that a greater willingness on the part of surplus countries to allow their exchange rates to rise and to promote more domestic demand is vital now to sustain a healthy global recovery. Another i
Spanish sales increase for the first time since 2007
February 15, 2011 by Charlie Stedman · Leave a Comment
Homes sales in Spain have increased for the first time since 2007, according to figures released by the National Statistics Institute (NSI). NSI revealed that the number of transactions taking place in the country climbed by 6.8 per cent in 2010, marking a potential turnaround in fortunes for the struggling sector. However, the transaction levels were still significantly down on those seen at the height of the market in 2007. Property sales reached 441,386 in Spain last year, compared to 775,300 at the market’s peak. When the financial crisis, combined with a glut in supply caused by overdevelopment of many tourist areas, caused the property bubble in the country to burst, sales began to decrease rapidly. And as unemployment continues to rise in Spain, demand for property is expected to be stifled. Concerns surrounding the state of the national economy are also weighing heavy on buyers minds and causing many individuals to hold off buying property in Spain, Fitch Ratings has forecast.
Publicly-Traded Mortgage Investment Corporations (MICs)
February 13, 2011 by Laura Reveley · Leave a Comment
I’ve looked briefly at Mortgage Investment Corporations [MICs are essentially mortgage funds] before but the accredited investor requirement or high minimum investments deterred me from investigating them any further. The High Net Worth section in today’s Globe and Mail included a column on MICs that pointed out that the existence of publicly-traded MICs. Publicly-traded MICs have several advantages: No minimum investment or accredited investor requirements Better liquidity and Better disclosure by virtue of being a listed company. All the MICs listed here are qualified investments in a RRSP, RRIF, RDSP, TFSA and RESP. Since, MIC distributions are mostly classified as income, it is best to hold these investments in a tax-deferred account.
Timbercreek Mortgage Investment Corporation
Primarily residential and retail mortgages in Ontario, Alberta and Quebec. Current yield of 7.79%. Distributions paid monthly. No leverage. Fees: Management Fee of 1.2% per annum. Performance fee of 20% over hurdle rate .
Firm Capital Mortgage Investment Corporation
Mostly conventional first mortgages in Ontario. Cur
National Economic Outlook (February 2011)
February 13, 2011 by Hudson Watts · Leave a Comment
Although the economy has officially been out of recession for quite some time, those aspects of economic behavior most important to the real estate markets, namely, jobs and borrowing, have remained stuck in the ditch. The latest data suggest, however, that consumers will soon be spending more. Jobs are growing at a faster clip, and consumers have done much repair to their personal finances.
Since the end of 2008, consumers have cut 10 percent off their credit card debt, a very large amount that gets them back to where they were before the real estate boom. With finances at pre-boom levels, consumers will be buying things again, although more cautiously this time around.
Renewed spending is showing up in the retail sector, where jobs at clothing stores were up 4 percent over last year, and jobs at restaurants were up 2 percent.
Job gains also continued in manufacturing, health care, and business services, with jobs at temp agencies up a very strong 16 percent. Overall job gains in the past year were almost 1 percent, despite the fact that local governments, with lower tax revenues, cut more positions. If we see total job gains around 1.5 percent in the next few months, home sales will pick up rather smartly.
After falling steadily since 2007, home prices have bottomed out in many local markets. On average, prices were down just 1 percent in the past year. With prices low, mortgage rates low, and consumer finances largely repaired, a much better real estate market can be expected this year.