So I am currently reading a lot about the usage of tax safe havens (i.e. tax sheltered) accounts by many Canadians outside Canada, and the media is trying to portray it as a no-no. Let me ask them this – if you made $500k+ would you want to be taxed 100-200k of your income? No, right? Why not? Because it is your hard earned money and it is simply not fair to be taxed a greater percentage than the people in the tax bracket below you, as you have the know-how of how to make money.
In the process, what the media should in fact encourage is taking another look at the tax structure. Currently, as it stands, Canada as a country would be unable to generate enough tax revenues to meet its obligation(s) once the baby boomers retire. Firstly, we simply do not have many people to replace the retirees. Secondly, the people are not qualified enough to move onto such roles. This means we would have to open our immigration policies such that WE ACTUALLY DO RECOGNIZE THE EDUCATION of the skilled immigrants. This presents us with a huge opportunities!!! In fact the health sector would probably get bigger.
In the process, while I appreciate the acts of kindness for Syrian refugees, and increasing the child tax benefits, the long term economics of this country at present levels, would be severely affected as the cash levels are dwindling. The fact the government plans to run a deficit does not help much. If the government believes the economy is performing better why keep up the government spending? Why not just let that economic growth work itself out without lending a helping hand?
Now, on to stocks.
I have been bearish in my outlook or very careful about the direction of the economy. With that being said, I am really looking at opportunities elsewhere. For instance, Deutsche Bank is one such holding I am very interested in. Why? Simply because I see the same story of the American markets playing out in Europe – stopping the fiscal spending would ultimately lead to a raise in interest rates which in turn would lead to higher stock prices for financial institutions. Again, this is very general idea and the underlying business factors must be considered.
Also, I would love to find some quality stocks in Asian markets – where the next growth is actually going to be coming from. For instance, credit card usage is very limited in South East Asia, mix that with some opportunities in Indian markets, etc.