THE MWM M

THE MWM MONITOR

WINTER 2017

Market Comment Realized Volatility is Sitting at the Low-end of Historical Range

We are going to look back on 2017 and remember a bull market in the stock markets outside of Canada with very, very low volatility. The current reading for realized volatility is currently at the lowest since the 1870s.

As Canadians chase cannabis stocks and the world chases bitcoin I will continue my discipline that has rewarded investors through the years and continue to take profits off the table and bank it to the "guaranteed" side of our portfolios. Please remember this is the "dry powder" we will utilize when markets inevitably correct.

Kevin Mullane, BComm Vice President Senior Investment Advisor Phone: (780) 412-6605 Toll-free: 1-800-253-9873 Email: kevin.mullane@nbc.ca

Chris Kothlow, BA, CIM, FMA Investment Advisor Phone: (780) 412-6637 Email: chris.kothlow@nbc.ca

Kyle Murphy, BSc, CFA, CIM, DMS Investment Advisor Phone: (780) 412-6636 Email: kyle.murphy@nbc.ca

Watch for Kevin regularly on:

Source: Oppenheimer Funds

By the way I am not adverse to gearing down the risk level (stock market exposure) of portfolios at these strong times in the market, for that is the time to do so. This is not to be confused with market timing which is a fool's game. We will only look to change the overall asset mix structure of a portfolio if it looks like there is enough money to fund our clients' retirement income going forward.

EEA Corner

Yellow Cab and Prestige Limousine

Take a local cab company home from holiday parties with Yellow Cab, (780) 462-3456. For limousine rentals for grads and weddings next year you can contact Prestige Limo at (780) 463-5000.

NBF makes no recommendation of the companies mentioned, and assumes no liability should their services be used.

Wealth Management Corner

Beneficiaries of RRSP/RRIF Accounts

It is possible to directly name a beneficiary for registered accounts, but we wanted to address a situation which can have unintended tax consequences.

Upon death, absent a qualified rollover to a surviving spouse or partner, the fair market value of an RRSP or RRIF is included in the deceased's estate as taxable income.

The issue can arise because if a non-spouse RRSP beneficiary is named (for example specifically naming a child as beneficiary) then upon death the RRSP will transfer directly to the beneficiary without withholding tax. However there is still a tax liability owing by the estate. This creates a potentially messy situation where the estate has a tax liability but it did not get the proceeds of the account to pay the tax (which can then further impact the distribution to the remaining beneficiaries of the estate, or make the estate insolvent).

Therefore we would encourage clients to be cautious when directly naming anyone other than a spouse or partner as beneficiary for registered accounts. It may be more beneficial to have the estate receive both the proceeds and associated tax liability, and then the net proceeds can be effectively distributed according to the will. We recommend seeking professional advice to address you particular circumstances.

What's New

Mullane Wealth Management Group Client Survey

Thanks to our clients for your valuable feedback in the survey. We are continually working to improve our service and the results from the survey helps us to focus our efforts.

Congrats to Tom and Betty G. who won the draw for Oilers tickets for completing the survey.

Congratulations

Congratulations to Vincent C., Alison M., and Lorna W. on their successful retirements!

Condolences

We were saddened by the passing of long-term client Irene M., and also Donna B.'s mother, Ron H.'s father, Howard S.'s father, Vincent C.'s mother, and Ken G.'s brother. Our condolences go out to their friends and families.

Electronic Statements

As most of you probably know NBF offers electronic delivery of your statements, trade confirmations, and tax slips. These documents are accessed through the Online Access portal.

You can adjust the delivery preferences online as well, so if for example you prefer electronic statements and trade confirmations but want paper tax slips, you can select this option.

If you have any questions about getting set up for Online Access or selecting your document delivery preferences you can give us a call and we will help you with the process.

Kevin's Keys to Success in the Financial Markets

Get a structure for your overall financial portfolio Adhering to an asset mix

structure with discipline is what enables my clients to survive and thrive in the financial markets Allows you to control the risk in the portfolio Helps keep emotions from getting in the way

Rebalance your portfolio on a regular basis Stick to the structure by

taking profits when times are good, and adding to the growth side when markets are weak

Consider taxes It is ultimately your after-

tax profit that matters Take advantage of tax-

sheltered accounts and use them to hold the least tax-efficient securities when possible

Avoid the herd It is very difficult to make

money buying what is popular Many of the best investment opportunities are found by thinking "outside the box"

Food for Thought...

Be fearful when others are greedy and greedy when

others are fearful.

Warren Buffett

Top Picks

It is interesting to note that the GSCI Commodity Index relative to the stock market (S&P 500) is at long-term lows. We continue to accumulate oil & gas and mining names at this time in the cycle.

Individual Stocks

Enbridge (ENB)

2017 has been a difficult year for Enbridge and the stock price fell over 20% from its highs to lows of $45 in November. I like accumulating quality companies like Enbridge when they are less "loved" by the market following a period of weakness. Enbridge has unveiled a new strategic plan to move the business mix to a pure regulated pipeline and utility company over the next 3 years. Our analyst looks favorably on the outlook for the shares with a $60 price target and a 5.4% dividend yield while you wait.

Source: NBF Analyst Patrick Kenny, "Investors Day highlights" report December 13, 2017

Kevin's Personal Notes

Sandi and I are happy to announce our daughter Mandy is engaged to be married. The party will be next August, very exciting!

As mentioned in an earlier email Kyle's wife Nikki gave birth to Cara Laine Murphy on October 29. We are pleased to report all are doing well.

On behalf of my team at NBF, Merry Christmas and Happy New Year to you all! We appreciate your trust and we look forward to continue working with you in 2018! In lieu of Christmas Cards, once again I have made a donation to Catholic Social Services. CSS is a great organization that helps over 60,000 individuals of all faiths and cultures on an annual basis.

Sincerely,

Kevin Mullane, m Vice President Senior Investment Advisor

Kyle Murphy, B.Sc, CFA, CIM, DMS Investment Advisor

Chris Kothlow, B.A, CIM, FMA Investment Advisor

If you would like a no-obligation review of your portfolio or financial plan, please do not hesitate to give me a call directly at (780) 412-6605 or 1-800-253-9873.

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

EEA Corner ? Kevin Mullane is a member of the Edmonton Executive Association. Please note that National Bank Financial makes no recommendation of the companies mentioned, and assumes no liability should their services be used.

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