As an investor, reviewing your investments and opportunities regularly is always important. This is especially true at year-end.  

With the increased volatility currently and only a few weeks before the holidays, here are 5 key financial actions to take; 

1. Review and Rebalance Portfolio:

  • Assess your current investment portfolio’s asset allocation to ensure it aligns with your financial goals and risk tolerance.
  • Consider rebalancing by selling overperforming assets and reinvesting in underperforming ones to maintain your desired asset mix.
  • Consider what assets, like real estate, might not currently be a good investment but could bounce back next year. Should you be getting in earlier? 

2. Tax-Loss Harvesting:

  • Identify investments with capital losses. Selling these investments can help offset capital gains and reduce your overall tax liability.
  • Remember the superficial loss rule, which restricts repurchasing the same or similar securities within 30 days before or after the sale to claim the loss.

3. Maximize Retirement Contributions:

  • Before the year-end deadline, contribute the maximum allowable amount to your registered retirement accounts, such as RRSP (Registered Retirement Savings Plan). This contributes to immediate tax benefits and long-term financial security.
  • Were you aware that registered savings can be used to invest in real estate? 

4. Evaluate Tax-Efficient Strategies:

  • Explore tax-efficient investment strategies, such as investing in Canadian dividend-paying stocks or prioritizing tax-advantaged accounts like TFSA (Tax-Free Savings Account).
  • Consider potential tax implications before major investment decisions, considering capital gains, dividends, and interest income.
  • If you happen to be renting your home versus owning and have been for a few years, look into the new FHSA (First Time Homebuyers Saving Account), which has the combined benefits of a TFSA and RRSP.

5. Stay Informed About Changes in Tax Laws:

  • Stay updated on any changes in Canadian tax laws that may impact your investments. Understanding the tax implications of your decisions can help you make informed choices and minimize your tax burden.
  • Consult with a tax professional or financial advisor to ensure you’re taking advantage of all available tax-saving opportunities, considering the nuances of the Canadian tax system.
  • Get to understand the Underused Housing Tax (UHT) to see if it applies to your investments.

As always, it’s crucial to adapt these recommendations to your specific financial situation and seek advice from a professional who understands the Canadian tax and investment landscape.