“Our parents just passed. What do we do about their estate?” + MORE Apr 22nd

“As goes January, so goes the year”—also known as the January Barometer—is a market theory that states returns in January predict those for the rest of the year. It first appeared in the 1970s and remains popular among some traders. If true, it looks like 2024 is going to be a good one for investors in Canada. Current market conditions likewise seem to be making the case to “sell in May and go away.” 

While I personally do not follow or recommend this well-worn saying, its staying power is undeniable. With May within sight, Canadian investors should know what it’s all about and whether it should influence their tactics. (Read about tax-loss harvesting, too.)

What is “Sell in May and go away”?

The saying refers to a seasonal investment strategy that has investors selling their equities on or around May 1, holding those proceeds in cash, and then using this cash to buy back the same stocks after Halloween. 

Why? Historically the markets tend to underperform from May to September and outperform from October to April…

Ask MoneySense
My mom passed away a number of years ago and sadly we just lost our dad. My brother and I are wondering about taxes owing, the timing of distributions, and if we should move all of the investments to cash. My brother and I are beneficiaries of the RRIF and TFSA, and the grandkids will also inherit money. A long time ago my parents did an estate freeze on their holding company with me and my brother, and they have a second will. There is about $200,000 in the TFSA, $450,000 RRIF, $400,000 non-registered with a $200,000 gain, and $1,000,000 in the holding company with a $250,000 gain. There is also a $1,000,000 insurance policy in the holding company.

Our parents have passed, and we are not sure what to do or expect with our parents’ investments between now and when they are distributed. Is there anything we should be aware of?

—Marina and Jody in Ontario

I am sorry to hear about your mom and dad. I will say, from a tax perspective, they did some really good things to transfer their wealth to you and your children, although it may not appear that way because there is still going to be a lot of tax…