As we draw closer to year end, I would like to remind readers of a few important planning strategies and deadlines to keep in mind to finish 2021 in a strong financial position.
Budget your holiday spending: Halloween costumes and decorations. Food for the Thanksgiving table. Christmas presents and lights. Travel plans. Spending tends to transform into a real monster during the holidays. Create a budget to keep expenses down, and you’ll probably find yourself enjoying more treats and less tricks during the holidays.
Tax Loss Selling: This is the time of year when it’s good to review your portfolio for any investments with a negative return. There will likely always be some positions we own that have traded down throughout the year and are currently sitting in a negative position from where we bought them. But investments that do yield a loss don’t have to be scary monsters, because they can still serve as a tax shelter!
The basic idea is this: Capital gains taxes are paid on investments sold with a positive gain during the year. Investments sold at a loss, however, can be used to show reduced earnings on your portfolio. Reduced earnings often mean reduced taxes. There are some stipulations and regulations to consider, of course. Chief among these is time. In order for the tax reductions to apply to this calendar year, the sale of the investment needs to close before the last business day of the year. So, time is critical. We do this automatically each year within our portfolios on client’s behalf. However, if clients or readers have accounts outside Pathfinder, you may want to take a look at your holdings to gauge your taxable situation for 2021, before the end of the year. This process is known as tax loss selling. If you’d like to learn more, please feel free to contact me. I’d be happy to discuss your options with you.
Charitable contributions: There’s no rule that says you must contribute to charity. But if there are any charitable contributions you want to make, it’s best to do it before the end of the year if you want them to count on this year’s taxes. Before contributing, though, why not schedule a time to talk with me, first? That’s because there are a number of strategies for getting the most out of your charitable contributions. I’d love to review them with you!
“This means that” the strategies mentioned above are just a few examples that add real dollars to your bottom line. Please reach out to us any time if you would like to review your financial plan or start one. Pathfinder provides this as a complimentary service to our portfolio management and recommend Natasha Knox at Alaphia Financial Wellness, for those that just desire stand alone, financial planning without any investment management.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.