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Looking ahead to 2023, after a volatile 2022.

2022 was a headline-making year for Canada’s economy. Interest rates increased to heights not seen since the 80’s and prime rates were raised a staggering seven times over the year. In an effort to make sense of the volatility we’ve seen throughout the year, and offer advice on how to set yourself on the right track for what’s expected in 2023, we’ve put together a recap of how markets performed this year, how that may impact your year-end planning, and how to approach the year ahead.

The return of volatility.

Volatility is back in a big way, with fears surrounding surging inflation and repeated interest rate hikes leading to market declines for the first 11 months of 2022. You can see for yourself how all sorts of investments have been affected, especially in equities like stocks and mutual funds. The Canadian stock market, as of December 1, is down 3.47%. Meanwhile, in the United States, the S&P500 is down 14.57% and the NASDAQ is down 26.74%. Generally safer investments have also taken hits. The Canadian Bonds Index has fallen 7.56%, bringing more balanced portfolios down 10% or more, year-to-date.

The fall of tech and the rise of interest rates.

While the market declines have been widespread, even cutting-edge alternative investments have been affected by market downturns. Since May, the whole industry has lost about $2 trillion in value during a crash. The industry leader and cryptocurrency exchange, FTX, helped stabilize the situation throughout the summer and keep other companies in the industry from shuttering – until it went bankrupt in November.

Big name brands in the world of tech have also taken on staggering losses. Consider the case of Meta, owners of Facebook and Instagram. Their superstar CEO, Mark Zuckerberg, has tried to turn his company into an early leader in a new field called “the metaverse,” without investors fully grasping the concept’s meaning or relevance. The results have been disastrous. Worth close to $1 trillion just 12 months ago, the company has since suffered a 75% drop in value, with more losses possible in 2023.

There are many reasons why disruptive investments like cryptocurrencies and tech companies, and even more traditional investments like real estate, are having such a bad – inflation, the general increase in the price of everything from gas to groceries to a night out at the movies. Pent up in their homes for almost 2 whole years, Canadians and Americans and just about everyone else came into 2022 ready to spend and return life to normal. All the money we pumped into the economy caused prices to surge. Governments around the world responded by increasing interest rates, hoping the rise in borrowing costs would compel people to hold off on more spending and start saving instead. And a lot of people did just that. But increases in interest rates made it difficult for investors to predict how much a company might be valued in the future. This led many to ditch risky tech stocks for more stable alternatives. Interest rate hikes also millions of everyday people to sell risky investments, like cryptocurrencies and tech stocks, to cover debts, like mortgages, which have gotten more expensive in the past year.

Now, you might be wondering what you can do to stay on track with your long-term financial goals, in the face of all this volatility. To put it simply, the best thing you can do is to stay invested. Not that you have to put all your money into the riskiest assets, either. A well-diversified portfolio can help you stay balanced and even growing while markets undergo big swings. And the best way to build a well-diversified portfolio is with the help of a trusted financial advisor. Find out more about how you can achieve this here.

How to approach year-end planning during a market downturn.

2022 has been unpredictable, to say the least. Unfortunately, the year has taken its toll on some more than others, which leaves those more affected with limited planning options for year-end. To ensure you’re doing the most within your means, we recommend checking in with your advisor for a year-end review. Walking through your financial situation with an advisor is a great opportunity to touch base on your goals, and ensure you’re on track to achieve them.

The opportunities for year-end adjustments that remain are time sensitive, so it’s important to be proactive in the coming weeks. A few things to consider as we move towards 2023 include:

RRSP and TFSA contributions

  • The RRSP deadline for 2022 tax year is March 1st 2023
  • Contribution limit for 2022 is 18% of earned income or $29,210, whichever is less. For 2023 the RSP limit will increase to $30,780.
  • The TFSA deadline for 2022 tax year is December 31, 2022
  • Annual limit for 2022 is $6,000 with a lifetime contribution of $81,500 (assuming you born in 1991). Limits for 2023 will increase to $6,500 for annual contribution.

Income tax planning

  • If you have capital gains from selling non-personal resident real estate, or gains from the sale of investments outside of your registered plan , you should check with your advisor to see if there are opportunities to reduce your overall tax bill through harvesting losses, tax loss selling, RRSPs contributions or charitable giving.

Review RESP contributions

  • If you have a child that turned 15 this year, this is the last year you can open an RESP for them and expect to receive any grants. You’ll need to contribute at least $2,000, or have contributed at least $100 in at 4 separate years in order for your child to be eligible for grants in the years they turn 16 and 17.
  • If you’re a BC resident and have a child that’s 6 – 8 years old, ask about the British Columbia Training and Education Savings Grant which is $1,200. You must apply prior to your child’s 9th
  • For information visit the Government of Canada’s website, or read more on our blog.

Stay invested, with long term goals in mind

As always, we continue to encourage members to keep their focus on the long term. Whether you’re investing through a down turn or an upswing, you should always stay focused on your goals and consult with a professional if you’re feeling uncertain. If we’ve learned anything from this year, it’s that while volatility is not our friend on the down side, extreme market movements tend to recover and favour those who stay invested.

We are here for you

No matter what your current situation looks like, our planners are here to help you weather the storm and come out the other side in the strongest financial situation possible. Our commitment is to meet you where you are in this moment and provide trusted advice that you can rely on at every stage of life.

If you have any questions, concerns or would like to review your investment strategy, reach out to your planner or our Advice Centre team who is available Monday through Friday, 8 am to 8 pm and Saturday, 8 am to 5 pm at 1.888.517.7000 and selecting option 4.



The stuff we have to say.
Coast Capital Savings Federal Credit Union provides advice and service related to deposit, loan and mortgage products. Coast Capital Wealth Management Ltd provides investment and financial planning services. Worldsource Financial Management Inc. provides advice and service relating to mutual funds.

The views expressed here are those of the authors and writers only and not necessarily those of Worldsource Financial Management Inc. The information is for general information purposes only and is believed to be accurate, however, no warranty can be made as to its accuracy or completeness. This information is not intended to provide specific personalized investment, financial, legal, accounting or tax advice. Please contact us to discuss your particular circumstances It may also include forward looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward looking statements will not prove to be accurate.


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