You may not like PM Stephen Harper’s politics but you should love his new policy on increasing TFSAs. Yes the Liberals and NDP say it makes the rich richer, but in fact it also helps the middle class dramatically.

The fact is this new policy provides a better return on your investment (after tax) than sinking money into your RRSPs. In fact, if you only have the ability to choose between one or the other, you should seriously choose TFSAs. With the new increase from $5,500 to $10,000 per year (to a max of $41,000), this allows you to start to put aside some serious money for you and your spouse. The Liberals say it will cost billions to government coffers which means they are upset that you get to keep more of your money instead of giving it to them to manage.

If you read this recent article in the Financial Post by Ted Rechtshaffen (CLICK HERE), you’ll see the benefit of adding more of your money into TFSAs.

Increase your wealth by placing Private Equity into your TFSAs

So what should you invest in your TFSA? If you’re not investing in private and alternative (P&A) investments, you are missing the boat. It’s that simple. The P&A market is hitting record highs. According to McKinsey & Co, it’s more than doubled since 2005 – hitting a record high of $7.2 TRILLION! The problem is most Canadians are unaware of this new sector and continue to miss out on opportunity to grow their wealth and provide non correlating assets into their portfolio. If you only use the stock market, you have to buy stocks that do not correlate with each other. For example, buying energy stocks and buying airline stock to hedge on the price of oil. By adding private equity and alternative investments to your portfolio, you don’t have to add the known losers to hedge your bet. You can buy something that does not care what the price of oil is nor if people will fly this year.

Heck, even our CPP (Canada Pension Plan) almost contains 20% of non-traditional assets. As a general rule of thumb, we recommend the new 80 / 20 Rule for investing. Gone are the days of the old 60 / 40 standard of equity and bonds. The new standard should be 80 / 20 of public / private asset mix. The National Post has a great article on alternative investments by John Shmuel (CLICK HERE).

At TriView, we’re private equity specialists that promote the idea of a diversified portfolio has private and alternative investments. We want to educate our clients on how to maximize the diversity in their portfolios while making capital preservation our main goal. We can provide yield and capital growth through private real estate opportunities and alternative investments. To learn more, visit our website at www.triviewcapital.com.

Craig Burrows