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$40 billion in cash on the sidelines and low interest rates to fuel increased RRSPs

Chris

Well-Known TRIBEr
Good news for us in the wealth management sector


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$40 billion in cash on the sidelines and low interest rates to fuel increased RRSP contributions, says CIBC - Cumulative Unused RRSP Contribution Room Totals $367 Billion or
$19,000 per Canadian with RRSP Room

Jan. 23 /CNW/ - Canadians are expected to increase their RRSP contributions this year according to the CIBC economic study RRSPs: Are Canadians Saving Enough? released today. The study predicts that the cash on the sidelines available for RRSP investments and low interest rates boosting RRSP borrowing will fuel increased contributions this year.

"During the stock market correction, Canadians have retreated from the market and renewed their love affair with their chequing accounts," said Benjamin Tal, Senior Economist, CIBC World Markets. "With non-registered cash holdings about $40 billion above normal levels, some of these funds will likely be invested during RRSP season."

Although this extra cash is available in chequing and demand deposits, money market mutual funds and cash positions in brokerage accounts, many people are expected to turn to credit to make their RRSP contributions this year. This is primarily due to weak income growth, extremely low interest rates and an increased inclination towards debt financing.

"We expect that 40 per cent of contributors will borrow to finance all or part of their RRSP contributions for the 2003 tax year and estimated borrowing will total more than $2.5 billion," said Tal.
While making RRSP contributions evenly throughout the year is often recommended, most investors are still waiting until the last minute to make their RRSP contributions. In the past six years, one-third of the cumulated inflows into mutual funds occurred in January and February.

"For most people coming into the branch these days, RRSPs are top of mind," said Jeannie Stamkos, a CIBC Branch Manager. "We are all concerned about whether we will have enough money to retire comfortably and RRSPs are an important vehicle to make sure that happens."

"Are Canadians saving enough in their RRSPs? Considering the extent to which Canadians utilize their RRSP investment room, the answer is probably not," according to Tal.

The study found that Canadians are not currently maximizing their RRSP contributions. In 2002, almost 80 per cent of tax filers had RRSP contribution room. Since 1999, cumulative unused RRSP contribution room has increased by 34 per cent to reach $367 billion. This is more than $19,000 on average in cumulative unused contribution room for each of the 19 million Canadians that have RRSP room, up from 13,800 in 1999.
 

labRat

TRIBE Member
speaking with my financial person, they still aren't seeing people moving back to rrsps after losing a good chunk of their savings over the past few years (2000-2003).

i'll be maxing out tho', dollar cost averaging ahoY!
 

Katman

TRIBE Member
So any finace gurus out there who want to give some suggestions on equities to pick up?? I'm looking for either some growth potential or high yeild equities.
 

labRat

TRIBE Member
martin2.gif

SOY!
 
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AdRiaN

TRIBE Member
Originally posted by Katman
So any finace gurus out there who want to give some suggestions on equities to pick up?? I'm looking for either some growth potential or high yeild equities.
I hear the old Molson brewery in Barrie had a lot of growth potential and high yields.
 

Chris

Well-Known TRIBEr
My two cents? People lost out because they were not diversified and chased returns as they always do during a bull market. If you ever hear the words, its a new era, etc, run away as fast as you can. My financial guru's are Nick Murray, buy/hold guru's.

I would suggest you talk to a Financial Advisor, put some money away in some wealth management vehicles, tell them you want a comprehensive financial plan for your retirement, that should get the ball rolling. It also depends if you want to manage your own portfolio or to leave that up to your FA? Are you a do-it-yourselfer, or not?

As for people pouring back into RRSP's? Still lots of time for them to come back before the deadline. Remember still that quite a few Canadian households have signed on to PAC's for automatic deductions from their accounts/paychecks to their RRSP portfolio's that way they don't get dinged before the deadline.

As for equities, I have three words, earnings, earnings, earnings.
 

Subsonic Chronic

TRIBE Member
Originally posted by ChrisD
Remember still that quite a few Canadian households have signed on to PAC's for automatic deductions from their accounts/paychecks to their RRSP portfolio's that way they don't get dinged before the deadline.

Like me! :D

$85 from every paycheque goes into my RRSP's, although I think I'll up it to $100 soon.
 
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LivingRoomPornstar

TRIBE Member
Originally posted by ChrisD
My two cents? People lost out because they were not diversified and chased returns as they always do during a bull market. If you ever hear the words, its a new era, etc, run away as fast as you can. My financial guru's are Nick Murray, buy/hold guru's.

I would suggest you talk to a Financial Advisor, put some money away in some wealth management vehicles, tell them you want a comprehensive financial plan for your retirement, that should get the ball rolling. It also depends if you want to manage your own portfolio or to leave that up to your FA? Are you a do-it-yourselfer, or not?

As for people pouring back into RRSP's? Still lots of time for them to come back before the deadline. Remember still that quite a few Canadian households have signed on to PAC's for automatic deductions from their accounts/paychecks to their RRSP portfolio's that way they don't get dinged before the deadline.

As for equities, I have three words, earnings, earnings, earnings.

All true.

I'm quite optimistic about this year. I've seen more in the first two weeks of january than the first five weeks of last year.

Dan
 

OTIS

TRIBE Member
Originally posted by AdRiaN
Yes. It's all part of a kit that comes with white running shoes and a sport coat. :)

Don't forget the minisnare drummer with the crash cymbal!
 

chipotle

Well-Known TRIBEr
how about diamond companies?

lot's of diamonds up there in NWT... and still need to find some more.. haven't found all of it yet.. and they need cash to find them....so something tied into that sector??
 
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