It has been said that \u201cthere are decades where nothing seems to happen, and there are weeks where decades happen.\u201d The sweeping global tariffs, announced by the U.S. on April\u2019s \u201cLiberation Day,\u201d caught the world off guard\u2014disrupting long-held norms in global trade and world order. This may signal the beginning of a new chapter\u2014one where political disruption, rapidly shifting policies and the velocity of digital information collide.<\/p>\n
We\u2019ve seen a wave of financial market volatility triggered by how rapidly these changes were communicated\u2014and perceived. In today\u2019s hyper-connected world, the pace of modern life has never been faster. That same urgency has seeped into the way we make decisions.<\/p>\n
Technology underpins this behavioural shift. The average investor now holds a stock for just months\u2014down dramatically from the multi-year horizons of previous generations.1<\/sup> A recent study found that many retail investors spend less time researching a stock than they do reading a restaurant menu.2<\/sup> The result? Decisions are driven more by momentum and emotion than thoughtful, long-term planning. Similarly, the U.S. administration\u2019s approach has been characterized by rapid disruption, with some describing it as a \u201cmove fast and break things\u201d approach.3<\/sup> The speed at which new policies are introduced amplifies the perception of urgency\u2014even when outcomes remain uncertain, or when policies may later be changed\u2014or even reversed.<\/p>\n Yet amid this policy whiplash, a shift may be taking place: a move away from globalization toward greater national protectionism, security and economic self-sufficiency. This pivot has raised deeper questions about the role of the U.S. as the dominant superpower. During April\u2019s volatility, a sharp selloff in U.S. Treasurys raised concerns\u2014particularly as China, which holds about one-sixth of all foreign-owned U.S. Treasurys, has been increasing its gold reserves. Subdued demand for the U.S. dollar\u2014once the default safe haven\u2014has prompted questions about its future as the global reserve currency. Since the start of the year, its value has fallen by around 9 percent4<\/sup>\u2014a rare and significant drop. Questions about waning confidence in U.S. global leadership have emerged. To paraphrase one analyst: \u201cYou can\u2019t antagonize and influence at the same time.\u201d<\/p>\n This environment should serve as a reminder: speed does not always equate to change. The illusion of speed\u2014fueled by technology and policy turbulence\u2014can distort our sense of urgency and lead us to chase headlines rather than stay grounded in fundamentals. It\u2019s a dynamic that can leave investors vulnerable to short-term noise. Investing, at its core, rewards patience.<\/p>\n While the events of April may already feel like a distant memory, it\u2019s understandable that the market movements were unsettling for many. If you have friends or family who could benefit from our approach, we would be happy to offer support. We\u2019ve navigated these challenging times before and continue to provide value through a disciplined process.<\/p>\n After a spring marked by \u2018weeks where decades seemed to happen,\u2019 may your summer days be filled with many slow and relaxing moments.<\/p>\n 1. https:\/\/www.visualcapitalist.com\/the-decline-of-long-term-investing\/; 2. https:\/\/www.wsj.com\/finance\/investing\/buying-stocks-research-study-2a839a4a; 3. A term coined in the tech industry; 4. To end of May, per ICE U.S. Dollar Index.<\/p>\n Without a doubt, home ownership has become increasingly out of reach for younger generations (chart, bottom right). Canadian home prices have risen faster than in any other G7 country\u2014nearly quadrupling over 40 years (graph, top). As such, many families are stepping in to help.<\/p>\n Beyond easing financial stress, this support can have added benefits. Many high-net-worth individuals value the opportunity to see their wealth in action during their lifetime. Lifetime gifting can also simplify estate administration and, depending on province, may reduce probate fees.<\/p>\n Still, meaningful support requires thoughtful planning to avoid unintended consequences. Here are five key questions to consider:<\/p>\n <\/p>\n In May, Moody\u2019s downgraded the U.S. credit rating from the top Aaa to Aa1. This move by one of the major credit rating agencies\u2014S&P and Fitch are the other two\u2014raised the question: Does a downgrade matter?<\/p>\n First, what is a rating?<\/strong> A credit rating assesses a borrower\u2019s ability and willingness to repay debt. Unlike personal credit scores, which typically range from 300 to 900, government credit ratings are expressed as letter grades, with AAA representing the highest quality and lowest risk. A downgrade implies an increasing likelihood that a government may default on its bonds.<\/p>\n Why does this matter?<\/strong> A downgrade generally means investors demand higher interest rates to compensate for added risk. Higher interest payments raise the cost of government borrowing. To sustain spending, more bonds must be issued\u2014further increasing the debt burden. In the U.S., interest payments have become the second-largest federal expense, surpassing defence spending in 2024.<\/p>\n While credit downgrades can shake investor confidence, equity markets had a muted response, briefly jittering. This was partly because the move wasn\u2019t a surprise, lagging similar downgrades by Fitch in 2023 and S&P in 2011. However, bond prices have come under pressure, sending yields higher, with the 30-year rate surpassing 5 percent in May. It comes at a time when a Republican tax bill rekindled debate about the sustainability of the U.S. deficit and spending.<\/p>\n There are likely to be ripple effects. A surge in U.S. mortgage rates may dampen consumer spending. Credit card and auto loan rates are less likely to be affected, as they tend to follow the federal funds rate more directly.<\/p>\n Why is this significant for Canada?<\/strong> Canada is among the few nations still holding the top credit rating from at least two major agencies. Fitch downgraded Canada in 2020 due to pandemic-related spending. While Canada\u2019s credit outlook remains stable, a downgrade would be unwelcome. Net debt is not out of step with other AAA-rated economies, but gross debt levels are high, and rising interest rates would raise debt-servicing costs\u2014straining future budgets. The heightened focus on global debt may help explain why Prime Minister Carney has opted to delay the release of the federal budget, usually delivered in the spring. Credit agencies continue to evaluate sovereign debt positions, and the U.S. downgrade follows a move by Moody\u2019s to downgrade France at the end of 2024.<\/p>\n \u201cA dollar\u2019s value depends on the tax trail it travels.\u201d<\/strong><\/em><\/p>\n How and when you access your income sources can influence the taxes you pay, your eligibility for government benefits and your long-term financial health. Whether you\u2019re accumulating wealth, transitioning between career stages or planning for retirement, a tax-efficient withdrawal strategy can make a meaningful difference. Here is a brief look at common income sources and ideas to help you optimize withdrawals or manage income streams more effectively:<\/p>\n Non-Registered Accounts<\/strong> \u2014 Tax treatment depends on the type of income: interest (fully taxable), dividends (eligible for a dividend tax credit) or capital gains (50 percent is taxable). Tax-loss harvesting can offset capital gains to reduce your overall tax bill.<\/p>\n Registered Retirement Savings Plan (RRSP)<\/strong> \u2014 Withdrawals are fully taxable and subject to withholding tax. Importantly, once funds are withdrawn, contribution room is permanently lost.<\/p>\n TFSA<\/strong> \u2014 Offers significant benefits as growth is tax free and withdrawals are not taxed. This means withdrawals do not affect income-tested government benefits. Any amount withdrawn can be recontributed in the following calendar year.<\/p>\n Employment Income<\/strong> \u2014 If you continue to work while drawing income from other sources, consider how employment income will stack with taxable withdrawals. In high-income years, deferring benefits (if possible) or adjusting other withdrawals may help reduce the overall tax burden.<\/p>\n Here are additional considerations for those nearing retirement:<\/strong><\/em><\/p>\n Canada\/Quebec Pension Plan (CPP\/QPP)<\/strong> \u2014 CPP\/QPP benefits are taxable income. Timing matters:<\/p>\n Starting early reduces benefits by 7.2 percent per year before age 65. Delaying increases payments by 8.4 percent per year after age 65, to a maximum of 42 percent by 70. The total benefit received can impact income level and tax situation.<\/p>\n Old Age Security (OAS)<\/strong> \u2014 OAS is a taxable benefit starting at age 65. If you expect higher income later in life, here are two considerations: i) Clawback\u2014If net income exceeds $93,454 (2025), OAS is reduced by 15 percent of the excess. At $151,668 (ages 65 to 74), it is fully clawed back; and ii) Delaying OAS\u2014 Registered Retirement Income Fund (RRIF)<\/strong> \u2014 Mandatory RRIF withdrawals begin the year after the RRIF is opened, increasing taxable income. Some choose to begin RRSP withdrawals earlier to manage future tax exposure or reduce the risk of triggering the OAS clawback.<\/p>\n Company Pension<\/strong> \u2014 Pension income is taxable. After age 65, the pension tax credit may help offset the tax liability. Consider timing your pension\u2019s start with other sources of income to manage your tax liability. Building a tax-efficient income plan involves many moving parts. Knowing how and when to draw income may help reduce taxes and preserve benefits. Alongside tax advisors, we can help develop a strategy that balances cash flow needs, tax implications and government benefits to support your long-term financial goals.<\/p>\n It\u2019s been a wild ride this year\u2014and we\u2019re only halfway through.<\/p>\n If April\u2019s market movements felt unsettling, you weren\u2019t mistaken. While volatility is a natural part of equity markets, the magnitude of April\u2019s decline was unusual. A two-day drop of more than 10 percent in the S&P 500, seen over April 3 and 4, is rare and has occurred only four times since 1980: on Black Monday in 1987, twice during the 2008 Global Financial Crisis (GFC) and in the early days of the 2020 pandemic. While markets don\u2019t always rebound immediately, time has a powerful way of smoothing even the sharpest declines. In the year following the worst two-day drops, the S&P 500 posted an average gain of 36.3 percent. Similarly, after the largest one-day declines in the S&P\/TSX, the average one-year forward return was +34.6 percent.<\/p>\n One of the benefits of navigating through challenging markets like the GFC and the pandemic is Even the darkest nights eventually give way to dawn\u2014and patience remains one of an investor\u2019s 1. BMO Capital Markets, U.S. Strategy Report, April 6, 2025. 2. BMO Capital Markets, Canadian Strategy Report, April 6, 2025. Calculations based on BMO Capital Markets Investment Strategy Group calculations, Factset, Compustat, IBES.<\/p>\n The double-edged sword of the information age is that it often feels as though the world is getting worse, even as many things have been gradually improving. While access to information has never been greater, the headlines are driven by negativity and sensationalism, rarely highlighting the progress being made.<\/p>\n Yet, we\u2019re living in one of the most remarkable periods in human history. Life expectancy and wealth are at record highs; poverty, child mortality and violence are at multi-decade lows. Innovation continues to shape a world with more opportunities than ever. But progress rarely makes front-page news\u2014it happens quietly, gradually and often goes unnoticed.<\/p>\n This summer, perhaps it\u2019s time to take a break from the headlines. Here are seven reasons why our hyperconnected world may be impacting our investing focus\u2014and why unplugging might be more beneficial than you\u2019d expect:<\/p>\n In a world that is constantly connected, why not consider unplugging?<\/p>\n 1. https:\/\/www.visualcapitalist.com\/the-decline-of-long-term-investing\/; 2. https:\/\/www. cfainstitute.org\/-\/media\/documents\/support\/future-finance\/avoiding-common-investor-mistakes.pdf; 3. https:\/\/www.wsj.com\/finance\/investing\/buying-stocks-research-study-2a839a4a; 4. https:\/\/www.forbes.com\/sites\/steveolenski\/2016\/11\/10\/why-brands-are-fighting-over-milliseconds\/; 5. https:\/\/www.asurion.com\/connect\/news\/tech-usage\/; 6. Based on S&P\/TSX Composite changes in daily and annual performance for the past 40 years; 7. https:\/\/www.bbc.com\/future\/article\/20200512-how-the-news-changes-the-way-we-think-and-behave; 8. https:\/\/bmcmedicine.biomedcentral.com\/articles\/10.1186\/s12916-025-03944-z; https:\/\/www.researchprotocols.org\/2024\/1\/e53756\/; 9. https:\/\/www. sciencedirect.com\/science\/article\/abs\/pii\/S1059056023001326; 10. https:\/\/www.statista. com\/statistics\/1045353\/mobile-device-daily-usage-time-in-the-us\/<\/p>\n","protected":false},"excerpt":{"rendered":" It has been said that \u201cthere are decades where nothing seems to happen, and there are weeks where decades happen.\u201d The sweeping global tariffs, announced by the U.S. on April\u2019s \u201cLiberation Day,\u201d caught the world off guard\u2014disrupting long-held norms in global trade and world order. This may signal the beginning of a new chapter\u2014one where political disruption, rapidly shifting policies and the velocity of digital information collide.<\/p>\n","protected":false},"author":193,"featured_media":1059,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-quarterly-commentary"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/posts\/1052","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/users\/193"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/comments?post=1052"}],"version-history":[{"count":5,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/posts\/1052\/revisions"}],"predecessor-version":[{"id":1060,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/posts\/1052\/revisions\/1060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/media\/1059"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/media?parent=1052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/categories?post=1052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-json\/wp\/v2\/tags?post=1052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nMarkets, too, have become increasingly reflexive. April\u2019s rapid selloff, followed by the swift recovery in May, shows how quickly sentiment can shift.<\/p>\nBRIDGING THE HOUSING AFFORDABILITY GAP
\nSupporting a Home Purchase? Five Questions to Ask<\/h3>\n\n
\n*Consult legal and tax professionals to understand the implications of any strategy.<\/li>\n<\/ol>\n![\"Housing](\"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-content\/uploads\/sites\/109\/2025\/06\/Housing-Prices-G7-Countries-1984-to-2024-Inflation-Adjusted.jpg\")
<\/p>\n![\"Housing](\"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-content\/uploads\/sites\/109\/2025\/06\/Housing-Costs-Over-40-Years-Kids-Today-May-Have-It-Harder.jpg\")
<\/p>\nMACROECONOMIC PERSPECTIVES
\nA Credit Downgrade: What\u2019s in a Rating?<\/h3>\nTHINKING AHEAD:
\nPlanning a Tax-Efficient Withdrawal Strategy<\/h3>\n
\nThis increases the benefit up to 36 percent by age 70.<\/p>\n
\nDon\u2019t Forget: Income Splitting \u2014 Couples can sometimes lower their combined tax burden by splitting certain types of income, especially when one has significantly higher income. For retirees, shifting eligible pension income may reduce taxes or the OAS clawback. In cases of continued employment, coordinating taxable income (particularly after 65) may yield tax savings over time. Planning together can lead to better outcomes.<\/p>\nPERSPECTIVES ON MARKET VOLATILITY
\nThe Merits of Hanging in (& Why April Felt So Bad)<\/h3>\n
\nIt\u2019s worth repeating: while it might feel tempting to exit the markets during turbulent periods, doing so can come at a cost. One reason is that some of the best-performing days often follow the worst. Exiting the markets after a decline may mean missing out on these gains, which can then make re-entering even more difficult. We saw this play out in the spring when April\u2019s sharp drop was followed by a swift recovery in May.<\/p>\n
\nthat we have accumulated invaluable experience. Time and again, we are reminded that you can\u2019t keep the markets\u2014or the economy\u2014 down for long.<\/p>\n
\ngreat virtues.<\/p>\n![\"S&P](\"https:\/\/advisor.wellington-altus.ca\/melnykwealthmanagement\/wp-content\/uploads\/sites\/109\/2025\/06\/SP-500-Two-Day-Declines-One.jpg\")
<\/p>\nSummer Vacation Time:
\nSeven Reasons to Unplug (From Your Smartphone)<\/h3>\n\n