Asset Location & Uncertainty

December 13, 2017

By: Benjamin Felix

Asset allocation requires investors to determine the appropriate allocation of each asset class – Canadian equities, US equities, International equities, fixed income – in their portfolio.  Asset location is the decision about which accounts – RRSP, TFSA, taxable – these asset classes should be located in order to maximize after-tax wealth. 

The Retiree’s Dilemma: The Deckards

September 30, 2017

By: Graham Westmacott

We introduce the Deckards who are just starting their retirement. Like many retirees, they are concerned about how best to structure withdrawals from their investments to fund their retirement. Step by step, we move away from a risky and unstainable initial strategy to one that has a greater chance of success. The key change is to allow both the withdrawals and the portfolio asset allocation to adapt according to changing market conditions, while ensuring that income does not fall below a minimum level.

The Retiree’s Dilemma: Live Long & Prosper

August 1, 2017

By: Graham Westmacott

The key challenge for most retirees is to create a stable income for their lifetime from investment capital that fluctuates in value. We identify the shortcomings of constant spending rules and introduce a dynamic spending rule that can boost total retirement income by 25-40%. Coupling the dynamic spending rule with asset liability management assures the retiree of less income volatility and reduces the risk income falls below a specified level. This approach allows a dialogue with retirees and near retirees that is more meaningful, because it is based on required and desired income rather than a probability of running out of money that most people find hard to comprehend.

A Taxing Decision

July 21, 2017

Determining the worth of registered accounts for owners of small business corporations

Please feel free to download our PWL_2016_Corp_RRSP_TFSA_Calculator.

Please feel free to download our PWL_2017_Corp_RRSP_TFSA_Calculator.

The Case for Renting

July 7, 2017

By: Benjamin Felix

This paper explores Canada’s culture of home ownership, and offers financial analysis to support renting a place to live as a viable alternative for building long-term wealth. Choosing where we live and how we pay for housing is an extremely important decision; it is often influenced by the perception that renting is a waste of money. Renting has benefits over owning which must be considered. The people promoting home ownership as the only smart decision may not be doing so based on logic. In a side-by-side comparison of a renter and an owner, using a reasonable set of assumptions, we see that a comparable financial outcome can be achieved. All things considered, renting your housing is not a waste of money, and it can even result in a greater accumulation of wealth over the long-term compared to owning.

Target Wealth: The Evolution of Target Date Funds

June 8, 2017

By: Peter A. Forsyth, Kenneth R. Vetzal, Graham Westmacott

Target Date Funds have become very popular with investors saving for retirement. The main feature of these funds is that investors are automatically switched from high risk to low risk assets as retirement approaches. However, our analysis brings into question the rationale behind these funds...

The Passive vs. Active Fund Monitor

April 13, 2017

By: Raymond Kerzérho

This report describes the competitive landscape for passively and actively managed funds over the last eleven years in Canada and the United States.