2007 in Review

As we begin a New Year, we would like to thank you for choosing us as your financial planning firm. We appreciate your trust and the business that comes with it. This time of year is a good opportunity to look back and put things into context. Here's a quick review of the more important financial events that occurred in 2007:

The Markets

At the beginning of 2007, the S&P/TSX Composite Index was sitting at around 12,923 points. For the first seven months of the year, the index was, for the most part, climbing and even broke the 14,000 barrier for the first time on Friday, May 11.

The strong performance was halted at the end of July, when the credit crisis first began to make itself known. Soon America's sub-prime woes, coupled with asset-backed commercial paper problems, sent markets around the world into turmoil. By August 8, just two weeks after the TSX dropped below 14,000 for the first time in weeks, it had lost nearly 600 points.

Since then, the index has been extremely volatile, dropping below 13,000 in mid-August, climbing back up to almost 14,600 at the end of October and landing at 13,467 on November 23. How the index — and world markets for that matter — will fare in the next month and through next year is anyone's guess, but investors can expect a bumpy ride to say the least.

Budget 2007

In March, the Conservative government presented its 2007 budget. For the most part, Finance Minister Jim Flaherty introduced a number of tax savings for families, including removing the Registered Education Savings Plan's annual contribution limit and introducing a new Registered Disability Savings Plan.

The government also implemented a child tax credit of $2,000 per child under 18, and the spousal penalty was phased out.

While there were a number of other tax savings in March, the government revealed even more tax relief in an October mini-budget, including a further 1% GST cut to come into effect January 1, 2008. As well, the government upped the basic personal amount to $9,600, effective January 1, and the lowest personal income tax rate was reduced from 15.5% to 15%.

Should you have any questions about how these or other recent events might affect you, I'd be happy to schedule a time to either speak with you on the telephone or sit down with you in person. If you have friends or colleagues who you think might benefit from my advice, I would also be pleased to meet with them. A referral is a wonderful present, and I'd like to thank everyone who gave me one over the past twelve months.

Best wishes for health, happiness and continued financial success in the New Year!

Kevin Lamour & Ellen MacDougall