A Good First Quarter
Markets were positive during this period, as your portfolio statement will attest.Canada’s S&P/TSX Index increased by 3.74% while to the south of us the S&P 500 increased by 12.0%. The MSCI World Index rose by 10.4%, demonstrating that the market surge was broadly based. At home, foreign returns were somewhat muted by the strengthening Canadian dollar that increased in value by 2.4% during this time.
The Quarter was notable for things that did not become full-blown issues:
There is still an excessive level of consumer and government debt in the developed world, which will slow GDP growth during the next several years. Even so, corporations are doing well in this environment, and world stock markets are expected to reflect this. There is growing optimism that better times are ahead for investors.
2012 Federal Budget Proposal
Included within the March 29 budget proposal is a change to the Old Age Security (OAS) program, increasing the eligibility age from 65 to 67. The goal is to keep the OAS program on a sound economic footing, given the changing demographics of the country.
This is a significant change, and fortunately the government is providing time for pre-retirees to get used to the idea and to make adjustments to their retirement plans.
The change will be phased in starting April 2023, eleven years from now. This means that people who are 54 years of age or older as of March 31, 2012 will not be affected by this measure.
Additionally, the phase-in period is a full six years. This means that only those people born after February 1, 1962, will experience the full effect.
Also contemplated is proactive automatic enrollment for both OAS and Guaranteed Income Supplement (GIS) recipients, which should eliminate the need for having to complete application forms for these benefits in the future. Proactive enrollment will be phased in from 2013 to 2015.