Mid-Year Check Up

Dave Harris • July 31, 2025

As we pass the mid point of 2025 I think it is not a stretch to say the markets have been on quite a ride this year. Early optimism turned to sharp pullbacks as the “Liberation Day” tariff announcement on April 2^nd sparked widespread pullbacks in Markets across the globe. The S&P 500 officially entered “bear market” territory on April 3^rd before making a low on April 7^th. This was a 21% drop from the previous all-time high on Feb. 19^th. The recovery from this point has been phenomenal. According to Charlie Bilello this is the second fastest recovery since the 1950’s. Only the 1982 drop reached new All-time highs faster which was within 2 months.

What about the future? As you can see in the chart below, many times in history the markets have continued to rally to new highs once the recovery is complete. The momentum tends to carry on over the following 6 months for the strongest rebounds.

What Are We Watching?

As the market continues to perform well even without interest rate cuts, FOMO (Fear of Missing Out) begins to take hold. A recent report shows US Margin Debt at an all-time high. Margin Debt represents money borrowed against stocks to purchase additional stocks. This makes the stock market particularly vulnerable to negative news. If the stock market falls slightly it could cause margin loans to be called which would result in more stocks being sold and a sharp correction could ensue.

As we move into the late stages of summer and early fall there is a high likelihood of a pull back and an opportunity to purchase stocks at lower prices.

On July 29^th the Watermark Portfolio Team reduced equity exposure by 5% selling the Fidelity All In One Equity ETF in our accounts over $150,000 and put the proceeds into a short-term bond fund to wait for a pullback. This is one of a few tactical changes they have made to our client portfolios this year. Historically this has lowered volatility while still achieving our long term return goals.

The Takeaway?

Over the long term the stock markets in the US and Canada have been the best place for most people to grow their wealth. The long-term numbers are very impressive but often it is short-term thinking that leads people into underperforming the markets by a wide margin. Chasing performance, selling at the wrong time and trading without a sell discipline are a few things we see individual investors do. By working with a team including a Financial Planner and Portfolio Manager you can benefit from full-time oversight of your investments and tactical adjustments that take advantage of market opportunities whenever they occur.

DISCLAIMER

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 Harbourfront Wealth Management. 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 Harbourfront Wealth Management Inc. This presentation/commentary does not constitute an offer to buy or sell any securities mentioned herein or solicitation to purchase these investment products, please seek advice from a professional when considering these products, including but not limited to a tax, legal and/or investment professional. All expressions of interest must be directed to Willoughby Asset Management Inc.(“WAM”) or a Harbourfront Wealth Management Inc.(“HWM”) Investment Advisor. WAM and HWM are both wholly owned subsidiaries of the same parent company, Harbourfront Wealth Holdings Inc. HWM has exclusive rights to sell WAM products. There are several risks associated with these product, including but not limited to liquidity risk, the risks are set out in greater detail in the Offering Memorandums for these products. Before investing please read the Offering Memorandums for these products. The advisor providing this presentation/commentary receives a financial benefit from selling WAM products, for more information on the fees and compensation related to the product please contact a HWM Investment Advisor for more details and read the Offering Memorandums for each product you are interested in.

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First Home Savings Account

By Brad Winlaw • October 22, 2025

The New First Home Savings Account (FHSA): A Powerful Tool for First-Time Homebuyers Buying your first home is exciting — but saving for a down payment can feel daunting. To help Canadians reach that goal faster, the government introduced the First Home Savings Account (FHSA) — a new plan that blends the best features of an RRSP and a TFSA. What Is an FHSA? The FHSA is a registered account that allows eligible Canadians to save up to $40,000 toward their first home, with some major tax advantages: Tax-deductible contributions: Just like an RRSP, contributions reduce your taxable income. Tax-free growth: Any investment earnings inside the account are tax-free. Tax-free withdrawals: When you use the funds to buy your first home, both your contributions and investment gains come out completely tax-free. Key Rules and Limits Eligibility: You must be a Canadian resident, at least 18, and a first-time homebuyer — meaning you haven’t lived in a home you (or your spouse) owned in the past four years. Contribution limits: Up to $8,000 per year, with a $40,000 lifetime maximum. Unused room carries forward (up to $8,000). Account lifespan: You can keep an FHSA open for up to 15 years, or until the end of the year you turn 71, whichever comes first. If you decide not to buy a home, you can transfer the balance to your RRSP or RRIF without affecting your RRSP contribution room -keeping your savings tax-deferred. FHSA vs. Other Savings Options Feature FHSA RRSP (Home Buyers’ Plan) TFSA Tax deduction. Yes Yes No Tax-free withdrawals For first home Must be repaid Yes Repayment required No Yes, over 15 years No Unlike the RRSP Homebuyers Plan, the FHSA has no repayment plan but still receives the same tax deduction benefit. Who Benefits Most The FHSA can be an incredible opportunity for a wide range of Canadians: Young professionals and new graduates who plan to buy their first home in the next several years can start building savings early while reducing their taxable income each year. Couples saving together can each open an FHSA, doubling their potential combined tax-free savings to $80,000. High-income earners benefit from the immediate tax deduction, lowering their taxable income while still keeping flexibility for future home purchases. Renters who are unsure of their timeline can still take advantage of the FHSA. If they don’t end up buying, funds can be rolled into an RRSP or RRIF with no tax consequences — so there’s virtually no downside to opening one. Parents looking to help their adult children might also consider gifting FHSA contributions as part of a longer-term strategy to support homeownership. The Bottom Line The First Home Savings Account is one of the most effective new savings tools available to Canadians. It combines the immediate tax benefit of an RRSP with the flexibility and tax-free growth of a TFSA — all designed to make homeownership more achievable. If you’re thinking about buying your first home or want to explore how the FHSA fits into your financial plan, let’s connect. Together, we can build a savings strategy that helps you move closer to your first set of house keys — and your long-term financial goals. Brad Winlaw Investment Advisor Green Private Wealth

Understanding the Difference Between Tax Deductions and Tax Credits

By Alex Gilmour • July 3, 2025

Learn the key differences between tax deductions and tax credits. Discover how each can impact your tax return and which might offer greater savings.