For those of you looking to contribute to your Registered Retirement Savings Plan (RRSP) for the 2014 tax year, the deadline unfortunately came and went on March 2nd. But fret not…although the RRSP can be an excellent tool for generating investment returns in a tax advantaged manner, the TFSA, or Tax Free Savings Account provides an attractive, and potentially even better, alternative.

The answer as to why the TFSA can be better comes down to flexibility and simplicity. With TFSAs, you have the flexibility to make deposits and withdrawals throughout the year without tax consequences. The only caveat here is that capital withdrawn cannot be recontributed until the next calendar year. But perhaps more importantly is how withdrawals from RRSPs and TFSAs are accounted for. Withdrawals from an RRSP are considered income for tax purposes. Withdrawals from TFSAs are not. So in the event that you have to make a large, emergency withdrawal from your TFSA you don’t have to worry about the tax consequences. That is certainly not the case with RRSPs where you would be taxed on the whole amount as if it were regular income. Even if you wait until retirement to withdraw funds from your RRSP there could be some implications as RRSP withdrawals are also considered income when the government assesses eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit. This means that your right to these benefits may be reduced simply because you saved capital in your working years and wisely invested it in an RRSP. However, TFSA withdrawals are not considered income in this case either and theoretically you could make and withdrawal millions of dollars from your TFSA with no impact to these benefits. This may be the single biggest advantage that the TFSA has over the RRSP.

The TSFA is truly one of the best tax free structures for Canadian investors – ever! Now you just have to fugure out what to put in it.

3/27/2015
SPECIALTY PHARMACEUTICAL POSTS STRONG 2014, BUILDS CASH POSITION WITH ZERO DEBT, LEAD PRODUCTS POWERS GAINS, BUT ALL PRODUCTS SHOW GROWTH – RECENT WEAKNESS IS LONG-TERM OPPORTUNITY

3/23/2015
OIL & GAS SERVICES COMPANY REPORTS CONTINUED GROWTH AND CASH ACCUMULATION IN 2014 – STOCK REMAINS A SOLID GROWTH AND INCOME INVESTMENT IN THE ENERGY SECTOR OVER THE NEXT 1 TO 3 YEARS

3/9/2015
CASH RICH ON-DEMAND TV SOFTWARE AND SOLUTIONS SMALL-CAP REPORTS SOLID 2014 RESULTS, OUTLOOK REMAINS DECIDEDLY POSITIVE

3/3/2015
IP COMPANY REPORTS SOLID 2014 EARNINGS, WEAKER OUTLOOK FOR Q1 2015 – RATING DOWNGRADED

2/26/2015
UNKNOWN SPECIALTY FINANCIAL LENDER POSTS EMERGING TRACK RECORD OF GROWTH, PE OF UNDER 10 AND SOLID GROWTH PROSPECTS – INITIATE BUY RATING

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Stock Trading Alert originally published on March 26, 2015, 7:30 AM:

Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is now neutral, and our short-term outlook is neutral:

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes lost between 1.6% and 2.3% on Wednesday, retracing last week’s move up, as investors intensified their selloff. The S&P 500 index broke below support level of 2,080-2,090, as it got further away from late February all-time high at 2,119.59. The nearest important support level is at 2,040-2,050, marked by early March local lows, among others. for now, it looks like some further medium-term consolidation following October-November rally:

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Expectations before the opening of today’s trading session are negative, with index futures currently down 0.6- 1.0%. The European stock market indexes have lost 1.2-1.5% so far. Investors will now wait for the Initial Claims number release at 7:30 a.m. The S&P 500 futures contract (CFD) is within an intraday downtrend as it trades below yesterday’s low. The nearest important level of resistance is at around 2,050. On the other hand, potential support level is at 2,030, as the 15-minute chart shows:

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The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades within an intraday downtrend, following a breakout below the level of 4,300. The nearest important level of resistance is at 4,300-4,320, and support level is at 4,250-4,260, as we can see on the 15-minute chart:

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Concluding, the broad stock market accelerated its short-term decline yesterday, as it retraced most of last week’s move up. For now, it looks like some further medium-term consolidation, following last year’s October-November rally. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Thank you.

#10. First National Financial Corp (TSE:FN.CA) — 7.2% YIELD

At #10, First National Financial is a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-family) and commercial mortgages.

Bad Weather To Blame?

Recent economic numbers and earnings projections have come in on the soft side. If the rationale below holds water, we have nothing to worry about. From MarketWatch:

Once again, the U.S. economy appears to have slowed in the first quarter. And once again the fault has fallen on several major snowstorms and periods of frigid temperatures that afflicted much of the country in late January and February. That kept consumers away from retail stores during typically busy shopping hours and prevented builders from starting new construction projects, among other things.

Objective View Of Market Risk

There are many ways to attempt to quantify risk in the stock market. Regardless of whether or not you believe in technical analysis, we know one thing with 100% certainty…we cannot start a new bear market until stocks make a lower high and a lower low. For example, the weekly moving averages shown below made a discernible lower high (near point A) followed by a discernible lower low (near point B) when the S&P 500 was still trading over 1,400 (it eventually fell to 666).

How Does The Same Chart Look Today?

Instead of making a lower low, the same moving averages recently broke above a downward-sloping trendline (near point A below), made a higher high (point B), and last week posted another higher high (point C). Recent market action tells us the aggregate opinion of all market participants is much more favorable today than it was in late 2007.

A More Detailed Look

This week’s video looks at the stock market from numerous perspectives to assess risk and potential reward.

http://youtu.be/79imejjyPGc

Investment Implications – The Weight Of The Evidence

Our market model will begin to reduce equity exposure when the hard data and observable evidence begins to deteriorate. The lower low in December 2007 is an example of observable bearish evidence. Based on the evidence in hand, we continue to hold an equity-heavy allocation. With inflation data, durable goods, and GDP coming later this week, we will observe with a flexible and open mind.