DONALD…..J…..TRUMP.
Do I have your attention?

This man's name is mentioned in 99% of my client meetings. Does The Donald have profound and insightful things to say? Is he a warm and charismatic candidate? Not in the least, but when he speaks, people are paying attention. With the election 3 weeks away, I think the general masses are concerned about market reaction.

I have always had the same view on election results impacting the long-term market performance. My response has typically been: "short term volatility with minimal, to no long term negative effect". Our belief is that the market is priced accurately given all public information available. Therefore, the market has already priced in the eventual outcome of this presidential race.

It is no surprise that every 4 years there is a US federal election. The two main parties are Democrats and Republicans. One of these parties' candidate will win and affect change or influence on policy. Regardless of the candidates, the market knows this and will continue to price accordingly.

The following chart shows data from the last 15 election years (1960 - 2012). In that period of time, there have each been 5 Democratic and 5 Republican presidents. Excluding 2008 (the global financial crisis), the average return for the election years was 9.1% and for all years (1960 – 2012) was 8.8% (0.3% difference). In election years, how stocks perform has less to do with the actual candidates/presidents and more to do with the current economic conditions.

Regardless of their policies, or lack there of, the most responsible action to take now, and in future election years, is to stay invested.

Please be in touch to learn more.

Carlo Cansino
Senior Financial Advisor

The McClelland Financial Group of Assante Capital Ltd.
Tel. 905-771-5200

The New Housing Rules and the
Potential Effects

The new housing rules that just came into effect on October 17 may shut the door on would-be first-time home buyers – at least those who can't afford a 20 percent or more down payment. The new rules require first-time buyers to undergo a "stress test" when applying for a mortgage that is CMHC-insured against default. The interest rate that will qualify such buyers for a mortgage will now be based on the five-year Bank of Canada rate, which is close to twice the amount of the five-year discounted rate that used to apply.

In effect, the new rule reduces the purchasing power for first-time home buyers who require mortgage insurance.

The purpose of these new rules is to try to cool down the rapidly rising prices in the housing market. Among the consequences of the act, first-time home buyers may postpone their house hunting until there is a correction, which may in itself accelerate its arrival.

What does this mean to you and any housing purchase you have in mind? Even if a correction occurs, nobody can predict exactly when it will arrive or how much prices may (or may not) change. The Globe and Mail personal finance columnist Rob Carrick cites a mortgage planner who says, "it's pointless to try and time the market, so let's say the answer is to buy when you're financially ready."

We agree with that sentiment. Trying to time the housing market is just as risky as trying to time the stock market. When making major financial decisions, we recommend tying the timing to your own goals and circumstances instead of trying to speculate on wider forces that are beyond your control.

If the new rules have left you in a lurch, we recommend that you continue saving your housing funds in a Registered Retirement Savings Plan (RRSP) or a Tax Free Savings Account (TFSA), and look to buy when the time is right – for you. Especially if you don't have to buy a house right now, you can extend your time horizon, increase your monthly savings or do both, until you have enough to make that 20 percent down payment and achieve more favorable lending rates.

Whether your goal is to buy a cottage, a home or a mansion, the first step to success is to have a clear plan to get you there, with solid milestones for tracking your progress. If you're not sure where to start or you're unsure whether you should be saving in an RRSP or TFSA, come talk to us at The McClelland Financial Group. Our door is always open.

Chelsey Chartren
Financial Advisor

The McClelland Financial Group of Assante Capital Management Ltd.

Making Billions With One Belief:
The Markets Can't Be Beat

Mutual-fund company DFA has drawn nearly $2 billion in net assets per month at a time when investors are fleeing many other firms

Mutual-fund company DFA has drawn nearly $2 billion in net assets per month at a time when investors are fleeing many other firms.

The fastest-growing major mutual-fund company in the U.S. isn't strictly an active or passive investor. It's both.

Dimensional Fund Advisors L.P., or DFA, is the sixth-largest mutual-fund manager, up from eighth a year ago, according to Morningstar Inc., adding nearly $2 billion in net assets per month at a time when investors are fleeing many other firms.

READ MORE HERE

The McClelland Financial Group of Assante Capital Management Ltd.

Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

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