We would like to extend our best wishes to you and your family for a wonderful Christmas and a happy and healthy 2008. We would like to thank for your continued confidence in our services and advice and look forward to seeing you in the New Year.
Below you will find a timely article on end of the year tax planning.
All the best,
Kevin & Ellen
December tax-planning reminders
December 13, 2007 | Mark Noble
Prudent tax planning in December is key to creating a worry-free tax filing for April, according to a pair of tax experts.
The importance of tax planning in December is twofold. First, as the end of the year approaches, so do the deadlines that will determine the eligibility of expenditures and deductions to be included in your 2007 tax filing. Not making these deadlines could create an inefficient 2007 tax plan since clients will not be able to take advantage of deductions until their 2008 tax filing. Second, by December, advisors should have a clear picture of their clients' 2007 tax situation.
"December is the last chance for a number of planning initiatives. Not to say there is nothing you can do to be efficient at the time of filing, but for the most part, your opportunities are gone by the end of the calendar year," says John Waters, manager of tax planning at BMO Nesbitt Burns.
Waters notes that by December, advisors should have a very good sense of what their clients' income and capital gains for 2007. So in the last few days of the month, they should be looking to complete transactions, such as selling securities with capital losses, that can maximize the tax efficiency of their clients' April filing.
Gena Katz, executive director of Ernst and Young's tax group, says good record-keeping makes selling a security for a loss relatively straightforward.
"If people keep reasonable records, they'll know what they sold at the end of the year and what their position is right now, so they know if they're in a net loss or net gain position," she says. "Certainly they should have records from prior years, which allows them to determine what their gains were."
For investors who are planning to take advantage of capital losses, Waters suggests they sell those securities by December 21, 2007, as this gives at least three business days for the transaction to be completed before the New Year.
Clients can also donate publicly traded securities to charity, creating further tax deductions and offsetting capital gains taxes. Katz says there will generally be no income inclusion in respect to the accrued gain and the full value of the gifted securities will be eligible for a donation credit. This must be done by December 31 to be eligible for the 2007 tax return.
But there are some actions that should be put off. Wait until the new year to buy securities or funds that provide annual distributions, Katz says. Generally, distributions are made in December and must be included in that year's tax return. In effect, the investor would be paying tax on his or her original capital, since it's doubtful there would be much growth in the investment if it's only recently been purchased.
"If they purchase a fund just before the distribution, the price of the fund will go up because of the accrued income. They will then get a distribution, which is taxable immediately, on a portion of their capital," she says. "If they wait until after the distribution, the price will go down, so they'll pay less."
Another important thing for clients to remember is to pay expenses by the end of the calendar year to benefit from their deduction in the 2007 tax return. These may include items like tuition, medical expenses, alimony payments and childcare expenses.
For self-employed or non-incorporated business owners who are intending to purchase assets in the near future, Katz says they should consider shopping early to claim depreciation for 2007 (although it's only half of the regular depreciation amount).
Katz also notes December can be an ideal time to purchase tax shelters. Although, she warns, investors need to be careful since these are heavily scrutinized by the Canada Revenue Agency. She says to be on guard for any tax shelters that use charitable gifting arrangements.
"The Canada Revenue Agency will assess every single one of them," she says. "There are good tax shelters accepted by tax authorities. This would be something like flow-through shares. They can be risky since they are invested in the resource sector, but the benefit is that the investor will get a significant tax deduction up front. If it ends up being a good investment then there's money to be made down the way as well."
Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com
(12/13/07)
Monday, December 17, 2007
Friday, November 16, 2007
Do Your Investments Match Your Values
One of the fastest growing investment concepts to emerge in the last few years is the area of Socially Responsible Investing (SRI) which some people refer to as ethical investing. Recent studies show that this segment of the investment market is growing at twice the rate of the total investment market.
So, what is SRI? Simply put, it is the practice of incorporating a person’s beliefs and values into their investment portfolio. This can reflect someone’s wishes to exclude a particular industry from their portfolio (eg. tobacco manufacturers or military contractors) or to include only companies with excellent records on international human rights (eg. sweat shops) or environmental impact.
A person’s motivation for doing this may be purely personal or it may stem from a societal-impact view. On the personal side, someone who has witnessed the negative effects of gambling on another person or family may choose to exclude any companies that derive revenue from the gaming industry from their portfolio. From the societal impact side, an investor may want to look for companies which respect the diversity of our society as a whole and have programs in place to ensure that there is fair representation of all types of persons within the company. Still others may choose this approach because of their religious convictions and another group may be looking for ways to support only those companies that respect the natural environment wherever they operate.
Whatever your motivation, the number of mutual funds available for investors who wish to incorporate their social, ethical and environmental concerns into their investment decisions has never been larger than it is now and the diversity of concerns that one can incorporate into their portfolio continues to grow. What was once a niche movement is quickly becoming mainstream.
The number one question that most people ask about SRI is, “What effect will this have on my return?” Good news! There is a growing body of evidence that suggest that there will likely be no impact on your return; or, if there is an impact, it may be a positive one. Socially screened indices in the United States have consistently outperformed their non-screened comparative indices by significant margins. For example, the Domini Social Index in the United States is an index of 400 companies screened according to a number of social and environmental criteria. Over the ten year period ended October 31, 2006, this index averaged 9.02% per year while the Standard and Poor 500 averaged only 8.66%. (Source www.kld.com)
Could it be true that companies with better environmental policies and more effective employee programs have more efficient workforces and are less likely to be the subject of negative press and lawsuits and thus, generate higher returns for their shareholders. Whatever the future financial returns, many SRI investors appreciate that they are also able to get a good social return on their money. In effect, they have a triple bottom line when it comes to their investments: financial, environmental and social returns weigh into their investment decisions.
If you have never thought about this or have a current portfolio that you believe may be inconsistent with your views on a number of social, ethical or environmental issues, please feel free to contact me. Rest assured, you will not be alone in your efforts to use your investments to shape the future. Remember the old saying, “Money makes the world go around”. Well, some of that is your money, so you should be able to have some say in its impact on the world.
So, what is SRI? Simply put, it is the practice of incorporating a person’s beliefs and values into their investment portfolio. This can reflect someone’s wishes to exclude a particular industry from their portfolio (eg. tobacco manufacturers or military contractors) or to include only companies with excellent records on international human rights (eg. sweat shops) or environmental impact.
A person’s motivation for doing this may be purely personal or it may stem from a societal-impact view. On the personal side, someone who has witnessed the negative effects of gambling on another person or family may choose to exclude any companies that derive revenue from the gaming industry from their portfolio. From the societal impact side, an investor may want to look for companies which respect the diversity of our society as a whole and have programs in place to ensure that there is fair representation of all types of persons within the company. Still others may choose this approach because of their religious convictions and another group may be looking for ways to support only those companies that respect the natural environment wherever they operate.
Whatever your motivation, the number of mutual funds available for investors who wish to incorporate their social, ethical and environmental concerns into their investment decisions has never been larger than it is now and the diversity of concerns that one can incorporate into their portfolio continues to grow. What was once a niche movement is quickly becoming mainstream.
The number one question that most people ask about SRI is, “What effect will this have on my return?” Good news! There is a growing body of evidence that suggest that there will likely be no impact on your return; or, if there is an impact, it may be a positive one. Socially screened indices in the United States have consistently outperformed their non-screened comparative indices by significant margins. For example, the Domini Social Index in the United States is an index of 400 companies screened according to a number of social and environmental criteria. Over the ten year period ended October 31, 2006, this index averaged 9.02% per year while the Standard and Poor 500 averaged only 8.66%. (Source www.kld.com)
Could it be true that companies with better environmental policies and more effective employee programs have more efficient workforces and are less likely to be the subject of negative press and lawsuits and thus, generate higher returns for their shareholders. Whatever the future financial returns, many SRI investors appreciate that they are also able to get a good social return on their money. In effect, they have a triple bottom line when it comes to their investments: financial, environmental and social returns weigh into their investment decisions.
If you have never thought about this or have a current portfolio that you believe may be inconsistent with your views on a number of social, ethical or environmental issues, please feel free to contact me. Rest assured, you will not be alone in your efforts to use your investments to shape the future. Remember the old saying, “Money makes the world go around”. Well, some of that is your money, so you should be able to have some say in its impact on the world.
Wednesday, October 31, 2007
Dealing With Divorce
After all the attention on rising divorce rates over the last few years, you may be surprised to learn that fewer Canadian couples are getting divorced. Even more surprising is that one-third of Canadians will still divorce, but do it later on in life.
The age factor is especially significant if you are in your mid-30s to mid-50s, since these are the years when you're building and amassing your financial worth. When divorce happens, finances are one of the biggest considerations. It's a good idea to educate yourself about your finances now, and stave off any financial surprises down the road.
Prepare for financial security
Each divorce is different. Some are amicable and an opportunity for growth and new beginnings. Others are devastating to every aspect of a spouse's life.
But divorce later on in life has its own unique financial ramifications. And it's untying those financial binds that can be the biggest hurdle. The key to financial security is to prepare for any eventuality that can dramatically impact your life and your finances, before it happens.
Finances during marriage
Any major event, including divorce, can change your situation unexpectedly. To ensure your financial security, educate yourself to ensure that you're not caught unaware.
While married, it's critical for spouses to work together on the many financial dimensions of their household. This includes both spouses being involved in everyday financial decisions and transactions, as well as working toward a financial future together.
If you're already managing the finances in your marriage, then you probably have a good idea of what it takes to keep the household afloat.
But, if you're the marriage partner who relies on your spouse to handle the finances, understanding your finances now will put you many steps ahead of financial disaster should the unforeseen happen. The following may help:
* Make a comprehensive list of money in and money out as well as investment funds, retirement accounts, and any other financial aspects of your relationship
* Make a list of your regular expenses. These expenses should include monthly expenses for home, children, automobile, food, medical, personal, and essentials
Separating the finances
If you or your spouse do decide to end the marriage, it's important to understand that separation and divorce are more than just a physical and emotional division; it's a financial one as well.
Knowing how your finances are separated, and being prepared for it, can take some of the anxiety out of an already emotional time.
When a marriage breaks down, there are two ways in which finances are generally divided:
1. division of property acquired during the marriage, and
2. support
Upon separation, it may be a wise choice to draw up a separation agreement – an agreement that outlines the division of family assets, the payment of child or spousal support, and the care of the children, including custody and access.
This separation agreement provides the basis for the divorce settlement once the marriage is dissolved.
The separation agreement is an important step for those with an estate.
In some provinces, divorce voids any estate share bequeathed in a Will to a former spouse. But if you die while separated the provisions of the Will stand – and if you had left everything to your spouse, that's how the estate will be dispersed.
Upon divorce, spouses may receive or have to make a special "equalization payment" based upon an equal division of their wealth acquired during the marriage or other "matrimonial property".1
Taxes2
It has been said that there are three parties in a divorce: the husband, the wife and the taxman. Unfortunately, that could very well be the case if you are caught unprepared.
Listed below are some of the most common taxation issues:
Equalization payments and investments
If you earned more money than your spouse during the marriage, you may have to make an equalization payment. As part or all of your equalization payment you can transfer non-registered investments to your spouse without tax consequences. Provided you and your spouse are living separate and apart because of a marriage breakdown, any interest and dividends earned by the investment would be taxable in the hands of your spouse.
However, if you made the transfer before the divorce was finalized, and your spouse sold the investment and triggered capital gains, then you would be taxed (unless a joint election providing otherwise has been filed with the Canada Revenue Agency "CRA").
You can also transfer your registered investments (i.e. RRSPs, RRIFs or RPPs) to your spouse as part of the equalization payment without it being taxed in your hands, provided the transfer is made pursuant to a court order or separation agreement relating to a division of property arising out of the marriage breakdown.
Equivalent to spouse credit
If you were the lower-income-earning partner during marriage, your spouse, the higher-income-earner, may have claimed a spousal tax credit for you.
However, if after separation you have custody of a child, you can claim an equivalent to spouse tax credit for the child if you do not pay support, and you are the only parent claiming the equivalent to spouse credit for the child.
To claim this credit you must not claim the spousal tax credit and you must be separated.
Be careful in situations of joint or shared custody – if both parents claim the equivalent to spouse credit, both claims will be denied. Consider negotiating the right to claim the credit, for example, each parent can claim the credit in alternating years.
Spousal and child support payments
Spousal support payments are tax-deductible to the person who pays it, and counted as taxable income for the person who receives it.
Child support, by contrast, is not tax-deductible for the person who pays it, and not taxable for the person who receives it, if paid pursuant to a court order or agreement made after April 30, 1997.
Child support
The provinces have developed child support guidelines that apply during separation agreements, and federal legislation deals with child support on divorce.
The Federal Child Support Guidelines have a detailed set of rules dealing with child-care costs, additional expenses that may be ordered, and how to deal with issues such as shared or split custody. It may be difficult to get the court to order an amount different than as provided in the guidelines, although parties may still make their own agreements for different amounts.3
The guidelines are not applicable in Quebec, however, since that province has its own model to determine child support payments.
Spousal support
Spousal support is designed to provide the lower-income spouse with money for living expenses, not including child support. However, where child support is decided according to federal guidelines, unless an agreement has been reached between the parties involved, spousal support is at the discretion of the judge (also in Quebec).
Spousal support payments are usually determined by factors such as the spouse's ability to earn money, both now and in the future, their age and health, the length of the marriage, and the properties involved.
Surviving divorce
For some, divorce can mean an opportunity to grow; for others it is like a death in the family. Many emotions rise to the surface: anger, frustration, fear, sorrow, anguish, bitterness, hatred, and regret. Divorce can destroy self-esteem, and cause depression and guilt.
Instead of trying to deny or suppress your emotions, it's usually best to accept them and understand that all of your feelings are normal.
If you have reached the point where you feel divorce is imminent, remember that you will need to push your emotions aside and look at practical issues.
The way you handle all aspects of your divorce could affect you for the rest of your life.
Ask for help
Divorce can be a tumultuous time. During the divorce process, many go to therapists or support groups to help alleviate emotional strain.
But financial uncertainty can also be a cause of great stress. Seeking out the advice of your financial advisor can give you peace of mind. You may find that, by working to ensure your financial security, you minimize emotional cost.
References
1 The rules governing the division of property upon a marriage breakdown vary by province.
2 Taxation issues are complex and should be discussed with your lawyer and financial advisor. For more information on your personal
situation contact the Canada Revenue Agency.
3 For more information on the Federal Child Support Guidelines, contact the Department of Justice Canada.
The age factor is especially significant if you are in your mid-30s to mid-50s, since these are the years when you're building and amassing your financial worth. When divorce happens, finances are one of the biggest considerations. It's a good idea to educate yourself about your finances now, and stave off any financial surprises down the road.
Prepare for financial security
Each divorce is different. Some are amicable and an opportunity for growth and new beginnings. Others are devastating to every aspect of a spouse's life.
But divorce later on in life has its own unique financial ramifications. And it's untying those financial binds that can be the biggest hurdle. The key to financial security is to prepare for any eventuality that can dramatically impact your life and your finances, before it happens.
Finances during marriage
Any major event, including divorce, can change your situation unexpectedly. To ensure your financial security, educate yourself to ensure that you're not caught unaware.
While married, it's critical for spouses to work together on the many financial dimensions of their household. This includes both spouses being involved in everyday financial decisions and transactions, as well as working toward a financial future together.
If you're already managing the finances in your marriage, then you probably have a good idea of what it takes to keep the household afloat.
But, if you're the marriage partner who relies on your spouse to handle the finances, understanding your finances now will put you many steps ahead of financial disaster should the unforeseen happen. The following may help:
* Make a comprehensive list of money in and money out as well as investment funds, retirement accounts, and any other financial aspects of your relationship
* Make a list of your regular expenses. These expenses should include monthly expenses for home, children, automobile, food, medical, personal, and essentials
Separating the finances
If you or your spouse do decide to end the marriage, it's important to understand that separation and divorce are more than just a physical and emotional division; it's a financial one as well.
Knowing how your finances are separated, and being prepared for it, can take some of the anxiety out of an already emotional time.
When a marriage breaks down, there are two ways in which finances are generally divided:
1. division of property acquired during the marriage, and
2. support
Upon separation, it may be a wise choice to draw up a separation agreement – an agreement that outlines the division of family assets, the payment of child or spousal support, and the care of the children, including custody and access.
This separation agreement provides the basis for the divorce settlement once the marriage is dissolved.
The separation agreement is an important step for those with an estate.
In some provinces, divorce voids any estate share bequeathed in a Will to a former spouse. But if you die while separated the provisions of the Will stand – and if you had left everything to your spouse, that's how the estate will be dispersed.
Upon divorce, spouses may receive or have to make a special "equalization payment" based upon an equal division of their wealth acquired during the marriage or other "matrimonial property".1
Taxes2
It has been said that there are three parties in a divorce: the husband, the wife and the taxman. Unfortunately, that could very well be the case if you are caught unprepared.
Listed below are some of the most common taxation issues:
Equalization payments and investments
If you earned more money than your spouse during the marriage, you may have to make an equalization payment. As part or all of your equalization payment you can transfer non-registered investments to your spouse without tax consequences. Provided you and your spouse are living separate and apart because of a marriage breakdown, any interest and dividends earned by the investment would be taxable in the hands of your spouse.
However, if you made the transfer before the divorce was finalized, and your spouse sold the investment and triggered capital gains, then you would be taxed (unless a joint election providing otherwise has been filed with the Canada Revenue Agency "CRA").
You can also transfer your registered investments (i.e. RRSPs, RRIFs or RPPs) to your spouse as part of the equalization payment without it being taxed in your hands, provided the transfer is made pursuant to a court order or separation agreement relating to a division of property arising out of the marriage breakdown.
Equivalent to spouse credit
If you were the lower-income-earning partner during marriage, your spouse, the higher-income-earner, may have claimed a spousal tax credit for you.
However, if after separation you have custody of a child, you can claim an equivalent to spouse tax credit for the child if you do not pay support, and you are the only parent claiming the equivalent to spouse credit for the child.
To claim this credit you must not claim the spousal tax credit and you must be separated.
Be careful in situations of joint or shared custody – if both parents claim the equivalent to spouse credit, both claims will be denied. Consider negotiating the right to claim the credit, for example, each parent can claim the credit in alternating years.
Spousal and child support payments
Spousal support payments are tax-deductible to the person who pays it, and counted as taxable income for the person who receives it.
Child support, by contrast, is not tax-deductible for the person who pays it, and not taxable for the person who receives it, if paid pursuant to a court order or agreement made after April 30, 1997.
Child support
The provinces have developed child support guidelines that apply during separation agreements, and federal legislation deals with child support on divorce.
The Federal Child Support Guidelines have a detailed set of rules dealing with child-care costs, additional expenses that may be ordered, and how to deal with issues such as shared or split custody. It may be difficult to get the court to order an amount different than as provided in the guidelines, although parties may still make their own agreements for different amounts.3
The guidelines are not applicable in Quebec, however, since that province has its own model to determine child support payments.
Spousal support
Spousal support is designed to provide the lower-income spouse with money for living expenses, not including child support. However, where child support is decided according to federal guidelines, unless an agreement has been reached between the parties involved, spousal support is at the discretion of the judge (also in Quebec).
Spousal support payments are usually determined by factors such as the spouse's ability to earn money, both now and in the future, their age and health, the length of the marriage, and the properties involved.
Surviving divorce
For some, divorce can mean an opportunity to grow; for others it is like a death in the family. Many emotions rise to the surface: anger, frustration, fear, sorrow, anguish, bitterness, hatred, and regret. Divorce can destroy self-esteem, and cause depression and guilt.
Instead of trying to deny or suppress your emotions, it's usually best to accept them and understand that all of your feelings are normal.
If you have reached the point where you feel divorce is imminent, remember that you will need to push your emotions aside and look at practical issues.
The way you handle all aspects of your divorce could affect you for the rest of your life.
Ask for help
Divorce can be a tumultuous time. During the divorce process, many go to therapists or support groups to help alleviate emotional strain.
But financial uncertainty can also be a cause of great stress. Seeking out the advice of your financial advisor can give you peace of mind. You may find that, by working to ensure your financial security, you minimize emotional cost.
References
1 The rules governing the division of property upon a marriage breakdown vary by province.
2 Taxation issues are complex and should be discussed with your lawyer and financial advisor. For more information on your personal
situation contact the Canada Revenue Agency.
3 For more information on the Federal Child Support Guidelines, contact the Department of Justice Canada.
Thursday, August 16, 2007
A 10-step recovery plan for panicked investors - From the Globe and Mail
Below you will find an interesting article from Globe Investor regarding the recent volatility in the markets to help keep things in perspective. If you are concerned about your current investments, I invite to to give us a call to review your portfolio, your risk tolerance and time horizon, and to see if your investment strategy still meets your investment goals.
Regular reviews are the best way to stay on track when it comes to financial planning. Reacting to the financial news, whether good or bad, has been proven to be a deterrence to financial success.
It's during times like this that we all need to keep things into perspective. The markets have dropped before. It’s only natural and they have always returned to new highs.
During the stock market crash of 1987, the Dow Jones industrial average plunged 22 per cent in one day. Less than two years later, it had recouped all of its losses. Five years later, it was up 41 per cent from its level before the crash. And 10 years later, it was up 253 per cent.
The worst thing that investors can do is sell their investments and get back into the markets at some point in the future.
This is called Market Timing and it is usually a losing strategy.
Do you think you can time the stock markets? (i.e. know when to buy and when to sell)
If you could have earned the return of the S&P/TSX Composite Index from Dec. 31, 1995 through Dec. 31, 2005, you would have compounded your money at an average annualized rate of 10.96%.
But…..if you had missed the 10 best days of stock market returns- only 10 days out of 2,510 days the market was open- your average return would have dropped to 6.69%.
If you missed the 40 best days, you would have lost money over the entire 10 years!
The best advice - Stay invested!
Last year (2006) Dalbar, a Boston based financial market research firm, released a report to an ongoing study that measures the effects of investor decisions to buy, sell and switch into and out of mutual funds since 1984.
The report looked at real investor returns from Jan. 1986 through Dec. 2005 and found that the average investor earned significantly less than mutual fund performance reports- a consequence of their buying and selling behaviour.
According to Dalbar, real returns for equity investors over those 20 years averaged 3.9%, while the average return for the S&P 500 over the same period was 11.9%.
The study's conclusion-"investment return is far more dependent on investor behaviour, than on fund performance. Mutual fund investors who hold their investments are more successful than those that time the market."
Anyway, the overall message is- focus on the long term - don't get caught up in the news headlines.
A 10-step recovery plan for panicked investors
John Heinzl
Thursday, August 16, 2007
Overcome by subprime sadness? Crying about the credit crunch?
You've come to the right place.
As a service to readers, the in-house therapeutic staff at Market Moves has designed a 10-step program to help you cope with the market mayhem.
Followed diligently, particularly when supplemented with a program of moderate alcohol consumption, these steps will allow you to ride out the current discombobulations with a smile on your face.
Look at our picture. We're smiling. And our portfolio is going down the tubes!
Step 1. Admit you're powerless over the stock market. Ever since man invented markets - it started with goats and cows and morphed into credit-default swaps and hybrid collateralized debt obligations - one thing has been constant: Prices go up, and they go down. Sometimes they go down hard. This short-term volatility is the price you pay for the long-term gains the stock market delivers. It's entirely normal.
Step 2. Stick with quality. Financial stocks have been getting creamed as investors worry about the fallout from the credit squeeze. But any losses our banks incur would be mere paper cuts compared with the billions in profit they pull down annually. "We continue to remind investors that Canadian banks have extremely strong capital ratios," said analyst Ian de Verteuill at BMO Nesbitt Burns.
Step 3. Buy stocks with rising dividends. When markets are going to hell, there's nothing like a dividend cheque to cheer you up - especially when the cheques gets bigger every year. Banks, insurers, pipelines and some REITs are examples of companies that excel in this respect.
Step 4. Double-up on your mortgage payment. If buying stocks makes you nervous right now, take the money you would have otherwise invested and pay down the mortgage. You'll generate an after-tax return equal to the interest rate on your home loan. And, unlike asset-backed commercial paper, it's guaranteed.
Step 5. Make an RRSP contribution. By putting money into your RRSP now, you'll avoid the February rush and prevent yourself from squandering the cash on a 51-inch LCD TV. That's what the tax refund is for.
Step 6. Stay positive. Yes, it's scary out there. Ooooo, scary! But it's not all doom and gloom, folks. Yesterday, H.J. Heinz and Deere & Co. both posted profits that topped estimates, giving their stocks a boost. In another positive sign, U.S. consumer prices rose just 0.1 per cent in July - the smallest increase in a year.
Step 7. Remember that this, too, shall pass. During the stock market crash of 1987, the Dow Jones industrial average plunged 22 per cent in one day. Less than two years later, it had recouped all of its losses. Five years later, it was up 41 per cent from its level before the crash. And 10 years later, it was up 253 per cent.
Step 8. Focus on the long term. Check out the chart of Royal Bank. Do you think folks who bought 10 years ago are worried about the latest hiccup? No, they're too busy picking out a fall wardrobe at Holt's.
Step 9. Resist the urge to check share prices every 30 seconds. If you invest in solid businesses, just hold them and forget about it. Checking prices will only give you an ulcer. Okay, just one more time.
Step 10. Give yourself a break. Go for a walk. Listen to Hall and Oates on your iPod. Make a new friend on Facebook. Anything to get your mind off the market.
Everything's gonna be okay, really. But you have to follow the program.
jheinzl@globeandmail.com
© The Globe and Mail
Regular reviews are the best way to stay on track when it comes to financial planning. Reacting to the financial news, whether good or bad, has been proven to be a deterrence to financial success.
It's during times like this that we all need to keep things into perspective. The markets have dropped before. It’s only natural and they have always returned to new highs.
During the stock market crash of 1987, the Dow Jones industrial average plunged 22 per cent in one day. Less than two years later, it had recouped all of its losses. Five years later, it was up 41 per cent from its level before the crash. And 10 years later, it was up 253 per cent.
The worst thing that investors can do is sell their investments and get back into the markets at some point in the future.
This is called Market Timing and it is usually a losing strategy.
Do you think you can time the stock markets? (i.e. know when to buy and when to sell)
If you could have earned the return of the S&P/TSX Composite Index from Dec. 31, 1995 through Dec. 31, 2005, you would have compounded your money at an average annualized rate of 10.96%.
But…..if you had missed the 10 best days of stock market returns- only 10 days out of 2,510 days the market was open- your average return would have dropped to 6.69%.
If you missed the 40 best days, you would have lost money over the entire 10 years!
The best advice - Stay invested!
Last year (2006) Dalbar, a Boston based financial market research firm, released a report to an ongoing study that measures the effects of investor decisions to buy, sell and switch into and out of mutual funds since 1984.
The report looked at real investor returns from Jan. 1986 through Dec. 2005 and found that the average investor earned significantly less than mutual fund performance reports- a consequence of their buying and selling behaviour.
According to Dalbar, real returns for equity investors over those 20 years averaged 3.9%, while the average return for the S&P 500 over the same period was 11.9%.
The study's conclusion-"investment return is far more dependent on investor behaviour, than on fund performance. Mutual fund investors who hold their investments are more successful than those that time the market."
Anyway, the overall message is- focus on the long term - don't get caught up in the news headlines.
A 10-step recovery plan for panicked investors
John Heinzl
Thursday, August 16, 2007
Overcome by subprime sadness? Crying about the credit crunch?
You've come to the right place.
As a service to readers, the in-house therapeutic staff at Market Moves has designed a 10-step program to help you cope with the market mayhem.
Followed diligently, particularly when supplemented with a program of moderate alcohol consumption, these steps will allow you to ride out the current discombobulations with a smile on your face.
Look at our picture. We're smiling. And our portfolio is going down the tubes!
Step 1. Admit you're powerless over the stock market. Ever since man invented markets - it started with goats and cows and morphed into credit-default swaps and hybrid collateralized debt obligations - one thing has been constant: Prices go up, and they go down. Sometimes they go down hard. This short-term volatility is the price you pay for the long-term gains the stock market delivers. It's entirely normal.
Step 2. Stick with quality. Financial stocks have been getting creamed as investors worry about the fallout from the credit squeeze. But any losses our banks incur would be mere paper cuts compared with the billions in profit they pull down annually. "We continue to remind investors that Canadian banks have extremely strong capital ratios," said analyst Ian de Verteuill at BMO Nesbitt Burns.
Step 3. Buy stocks with rising dividends. When markets are going to hell, there's nothing like a dividend cheque to cheer you up - especially when the cheques gets bigger every year. Banks, insurers, pipelines and some REITs are examples of companies that excel in this respect.
Step 4. Double-up on your mortgage payment. If buying stocks makes you nervous right now, take the money you would have otherwise invested and pay down the mortgage. You'll generate an after-tax return equal to the interest rate on your home loan. And, unlike asset-backed commercial paper, it's guaranteed.
Step 5. Make an RRSP contribution. By putting money into your RRSP now, you'll avoid the February rush and prevent yourself from squandering the cash on a 51-inch LCD TV. That's what the tax refund is for.
Step 6. Stay positive. Yes, it's scary out there. Ooooo, scary! But it's not all doom and gloom, folks. Yesterday, H.J. Heinz and Deere & Co. both posted profits that topped estimates, giving their stocks a boost. In another positive sign, U.S. consumer prices rose just 0.1 per cent in July - the smallest increase in a year.
Step 7. Remember that this, too, shall pass. During the stock market crash of 1987, the Dow Jones industrial average plunged 22 per cent in one day. Less than two years later, it had recouped all of its losses. Five years later, it was up 41 per cent from its level before the crash. And 10 years later, it was up 253 per cent.
Step 8. Focus on the long term. Check out the chart of Royal Bank. Do you think folks who bought 10 years ago are worried about the latest hiccup? No, they're too busy picking out a fall wardrobe at Holt's.
Step 9. Resist the urge to check share prices every 30 seconds. If you invest in solid businesses, just hold them and forget about it. Checking prices will only give you an ulcer. Okay, just one more time.
Step 10. Give yourself a break. Go for a walk. Listen to Hall and Oates on your iPod. Make a new friend on Facebook. Anything to get your mind off the market.
Everything's gonna be okay, really. But you have to follow the program.
jheinzl@globeandmail.com
© The Globe and Mail
Monday, July 30, 2007
Dow Freak Out - reprinted from CNNmoney.com
A triple-digit change in the Dow means... almost nothing. Fortune's Allan Sloan explains the math, and why you shouldn't panic in tough times.
FORTUNE Magazine
By Allan Sloan, Fortune senior editor-at-large
July 30 2007: 9:56 AM EDT
NEW YORK (Fortune) -- You've got to love the stock market. Just about 10 days ago - on July 19, to be exact - the Dow Jones industrials closed above 14,000 for the first (and so far only) time and the financial world was full of happy chatter.
Then, almost before you could catch your breath (or cash in your profits), we had last week, with the Dow dropping 585 points and the total stock market (as measured by the Dow Jones Wilshire 5000) losing a cool $1 trillion in value. One day, the sky's the limit. The next day, the sky is falling.
How is a retail investor - which most of us are - supposed to think about this? I've been writing about markets and playing around with stocks for close to 40 years, but I have no clue where the market will go next.
I do know two things, however. First, that the worst way to invest is to buy when optimism fills the air like it did two weeks ago, and to sell out when everyone's predicting the end of the world, like last week. If you do that, you get whipsawed by buying dear and selling cheap.
The second thing I know is that you shouldn't freak out when you see triple-digit moves in the Dow, either up or down. As the market has climbed over the past 20 years - the first triple-digit Dow move came in October, 1987 - a 100-point move has become less and less significant because the overall market is so much higher than it was.
Consider, if you will, the table at the bottom of this page, whipped up for me by the folks at Aronson+Johnson+Ortiz, a Philadelphia money management firm. As you can see, three-digit moves, once rarities, have become relatively common. You can also see that 100 points means progressively less in percentage terms - and to be an intelligent investor you need to think in percentage terms, not react viscerally to triple-digit Dow moves.
Let me show you how little 100 Dow points mean, by explaining how Dow Jones determines the Dow number. The Dow's an arithmetic average, which you calculate by adding up the prices of the 30 Dow stocks and dividing the sum by the "Dow divisor." As of Friday, that wonderfully-precise number, which changes frequently, was 0.123017848. (Some day, I'll tell you how Dow Jones determines the divisor, which changes frequently. But this isn't the day.)
This means that a $1 change in any Dow stock moves the average by about 8.13 points (that's 1 divided by the divisor). So if the average price of all 30 issues changes by 42 cents - which isn't much - you get a three-digit move in the Dow. (Want to verify that? Multiply 0.42 by 30, then divide the product, 12.6, by the Dow divisor. Isn't this fun?)
To give you another example of how drops that are big in absolute terms aren't all that big in relative terms, consider the Dow Jones Wilshire 5000. The 5K, the most accurate measure of the overall U.S. stock market, includes all U.S. stocks, rather than just the 30 Dow industrials or the 500 in the Standard & Poor's 500 index.
On Wednesday, when the Dow dropped a sickening 311 points (its 16th-biggest one-day point drop ever,) the Wilshire racked up its 18th biggest one-day drop in points - but only the 90th biggest drop in percentage terms.
One way to protect yourself against Dow Freakout is to have assets other than stocks in your investment portfolio. During rapidly-rising stock markets, like the bull market that started in October of 2002 and that I think ended last week, money funds and high-quality bonds drag down your overall performance because they return much less than stocks do. But they protect you during a declining market.
If you bail out of stocks entirely because of the Dow's down days, you run the risk of missing the next bull market. Which will come sooner or later. So when will I be writing a piece warning you not to get carried away by the Dow's triple-digit gains? Beats me. If I knew that, I'd be a professional investor, not a professional writer. Top of page
Year Up 100's Down 100's Total Value of 100 Point Move**
2007* 15 14 29 0.8%
2006 19 14 33 0.9%
2005 15 20 35 0.9%
2004 22 24 46 1.0%
2003 38 27 65 1.1%
2002 51 67 118 1.1%
2001 49 50 99 1.0%
2000 53 53 106 0.9%
1999 52 36 88 1.0%
1998 37 25 62 1.2%
1997 27 25 52 1.3%
1996 2 4 6 1.7%
1995 0 1 1 2.2%
1994 0 0 0 2.6%
1993 0 0 0 2.8%
1992 0 0 0 3.0%
1991 1 1 2 3.4%
1990 0 0 0 3.7%
1989 0 1 1 4.0%
1988 0 2 2 4.9%
1987 2 3 5 4.4%
Source: Aronson+Johnson+Ortiz
*Through July 27
**Based on average close for a calendar year
Find this article at:
http://money.cnn.com/2007/07/30/markets/sloan_drop.fortune/index.htm?cnn=yes
FORTUNE Magazine
By Allan Sloan, Fortune senior editor-at-large
July 30 2007: 9:56 AM EDT
NEW YORK (Fortune) -- You've got to love the stock market. Just about 10 days ago - on July 19, to be exact - the Dow Jones industrials closed above 14,000 for the first (and so far only) time and the financial world was full of happy chatter.
Then, almost before you could catch your breath (or cash in your profits), we had last week, with the Dow dropping 585 points and the total stock market (as measured by the Dow Jones Wilshire 5000) losing a cool $1 trillion in value. One day, the sky's the limit. The next day, the sky is falling.
How is a retail investor - which most of us are - supposed to think about this? I've been writing about markets and playing around with stocks for close to 40 years, but I have no clue where the market will go next.
I do know two things, however. First, that the worst way to invest is to buy when optimism fills the air like it did two weeks ago, and to sell out when everyone's predicting the end of the world, like last week. If you do that, you get whipsawed by buying dear and selling cheap.
The second thing I know is that you shouldn't freak out when you see triple-digit moves in the Dow, either up or down. As the market has climbed over the past 20 years - the first triple-digit Dow move came in October, 1987 - a 100-point move has become less and less significant because the overall market is so much higher than it was.
Consider, if you will, the table at the bottom of this page, whipped up for me by the folks at Aronson+Johnson+Ortiz, a Philadelphia money management firm. As you can see, three-digit moves, once rarities, have become relatively common. You can also see that 100 points means progressively less in percentage terms - and to be an intelligent investor you need to think in percentage terms, not react viscerally to triple-digit Dow moves.
Let me show you how little 100 Dow points mean, by explaining how Dow Jones determines the Dow number. The Dow's an arithmetic average, which you calculate by adding up the prices of the 30 Dow stocks and dividing the sum by the "Dow divisor." As of Friday, that wonderfully-precise number, which changes frequently, was 0.123017848. (Some day, I'll tell you how Dow Jones determines the divisor, which changes frequently. But this isn't the day.)
This means that a $1 change in any Dow stock moves the average by about 8.13 points (that's 1 divided by the divisor). So if the average price of all 30 issues changes by 42 cents - which isn't much - you get a three-digit move in the Dow. (Want to verify that? Multiply 0.42 by 30, then divide the product, 12.6, by the Dow divisor. Isn't this fun?)
To give you another example of how drops that are big in absolute terms aren't all that big in relative terms, consider the Dow Jones Wilshire 5000. The 5K, the most accurate measure of the overall U.S. stock market, includes all U.S. stocks, rather than just the 30 Dow industrials or the 500 in the Standard & Poor's 500 index.
On Wednesday, when the Dow dropped a sickening 311 points (its 16th-biggest one-day point drop ever,) the Wilshire racked up its 18th biggest one-day drop in points - but only the 90th biggest drop in percentage terms.
One way to protect yourself against Dow Freakout is to have assets other than stocks in your investment portfolio. During rapidly-rising stock markets, like the bull market that started in October of 2002 and that I think ended last week, money funds and high-quality bonds drag down your overall performance because they return much less than stocks do. But they protect you during a declining market.
If you bail out of stocks entirely because of the Dow's down days, you run the risk of missing the next bull market. Which will come sooner or later. So when will I be writing a piece warning you not to get carried away by the Dow's triple-digit gains? Beats me. If I knew that, I'd be a professional investor, not a professional writer. Top of page
Year Up 100's Down 100's Total Value of 100 Point Move**
2007* 15 14 29 0.8%
2006 19 14 33 0.9%
2005 15 20 35 0.9%
2004 22 24 46 1.0%
2003 38 27 65 1.1%
2002 51 67 118 1.1%
2001 49 50 99 1.0%
2000 53 53 106 0.9%
1999 52 36 88 1.0%
1998 37 25 62 1.2%
1997 27 25 52 1.3%
1996 2 4 6 1.7%
1995 0 1 1 2.2%
1994 0 0 0 2.6%
1993 0 0 0 2.8%
1992 0 0 0 3.0%
1991 1 1 2 3.4%
1990 0 0 0 3.7%
1989 0 1 1 4.0%
1988 0 2 2 4.9%
1987 2 3 5 4.4%
Source: Aronson+Johnson+Ortiz
*Through July 27
**Based on average close for a calendar year
Find this article at:
http://money.cnn.com/2007/07/30/markets/sloan_drop.fortune/index.htm?cnn=yes
Thursday, July 26, 2007
Dow Jones Reaches 14,000 | The Onion - America's Finest News Source
A little humour regarding the record stock market levels courtesy of The Onion.
Dow Jones Reaches 14,000 | The Onion - America's Finest News Source
Dow Jones Reaches 14,000 | The Onion - America's Finest News Source
Thursday, July 5, 2007
Family fun - Finding a vacation that fits your budget
| Just as you do when you’re working on a plan to meet your financial objectives, put your travel goals and priorities in writing. Warmer days are here again and that means many families are starting to plan their summer vacations. But, a holiday can be a significant expense, whether you’re staying in Canada or going abroad, so it’s important to think about some of the same things you consider when you build an investment portfolio:
ON A BUDGET Less than $1,500 The Robsons in Ottawa spent a week over the December holiday season at a Caribbean resort, so they’re looking for something lower key – and less expensive – to do with their kids this summer. Nine-year-old Josie has been studying hydroelectric power at school and has been talking enthusiastically at the dinner table about green electricity, so the Robsons decide to take her and 11-year old Eric to one of the sources. They seize the moment – before the summer rush and before Josie’s attention shifts to another interest – and book train tickets to Niagara Falls, with a hotel room overlooking this natural wonder. The price? Just over $1,000 (including taxes) for the four of them – leaving them with enough money for meals and a few souvenirs. Across the country in Vancouver, the Frasers are looking for something a bit more adventurous. Their son, Brad, is 14 and fascinated with boats of all shapes and sizes. He has been bugging his parents to take him and 12-year-old Lucy on a cruise for months, and they finally relent. But instead of booking in peak season, they decide to save money by taking an October berth. Their fournight Pacific coastal cruise, round trip from Seattle, in an inside stateroom will cost them about the same amount as the Robsons’ vacation – just over $1,000 (including taxes) for the entire family. READY TO GO $1,500 to $3,000 The Everest family in Halifax has a bit more room in their budget, thanks to careful saving throughout the year. They book a spring holiday at Disney World®, keeping a promise to take their two kids there when the older one, Derrick, turned 10. He’ll get to spend his birthday racing from ride to ride and singing “It’s a small world” at the top of his lungs. The Everests’ flight to Orlando, rental car and six nights’ accommodation will set them back about $2,800 (including taxes). Passes to Disney World will put them a little over budget – but it’s worth it for the excited gleam in their childrens’ eyes. In Edmonton, the Abbots have something similar in mind, but their kids have already been to Disney World so they decide to try out Disneyland® in California. Even mid-summer, in July, they are able to arrange roundtrip airfare to Los Angeles and three nights’ accommodation at a hotel right across the street from Disneyland’s main gate for just under $2,000. Airport transfers and a three-day pass to the park will cost them another $800. And they’ll have a few hours to explore the stars on Hollywood Boulevard in L.A., so there’s something in the trip for the parents and the kids. LIVING IT UP More than $3,000 The Masons in Toronto want to give their children a taste of Europe. They book a flight and six nights in London at a hotel across the River Thames from the Houses of Parliament and Westminster Abbey. Their 15-year-old daughter, Angela, can’t wait to visit Madame Tussaud’s famous wax museum and their 13-year-old son, Colin, is a big Harry Potter fan who is thrilled at the prospect of setting foot in England. Their airfare and accommodations will cost them about $4,000 – but the memories will be priceless. The Lavoie family in Montreal, including six-year-old Hélène and eight-year-old Marc, are ready to splurge as well. Their priority is spending a longer time away together and they decide the best way to do that is to rent a cottage in the Laurentians. They fall in love with a four-bedroom chalet on a lake with a dock and a canoe and spring for the $1,850 per week cost for two splendid weeks in August. The location, about an hour and a quarter away from home, means the drive there will be relatively inexpensive and they can cook their own meals in the well-equipped kitchen. NOW IT’S YOUR TURN! Of course, vacation possibilities are endless, so now that you’re inspired, it’s time to work out what your family wants to do. Sit everyone down and do some brainstorming. Talk about your interests and hobbies. Then get creative. If your family likes professional sports, consider a trip that takes in a few different cities. New York, Philadelphia and Washington are all within driving distance of each other and each host a professional sports team. If you enjoy the outdoors, think about planning a camping expedition in a national park – there are many in both Canada and the United States. If your family is keen on city-based museums and theatre, pick a big urban centre – perhaps even the city where you live – and explore it head to toe. Just as you do when you’re working on a plan to meet your financial objectives, put your travel goals and priorities in writing. That way, you’ll know exactly what to trim if you run out of time or money. For example, your primary goal may be to go bird-watching in a nature reserve, but a secondary goal could be to go whitewater rafting. If you can’t find a location that allows you to do both, prepare your entire family for the idea that you may have to go on a separate trip, maybe next year, to accomplish the second goal. Once you’ve determined your goals, you need to work out a budget that you can afford while you continue to save for other important objectives such as your childrens’ education and your own retirement. Keep in mind that transportation and accommodations are generally the biggest expenses, so start your calculations there. Remember to build in a contingency budget for the costs you can’t accurately predict, such as restaurant bills and cab fares. You may want to do some preliminary destination research and costing online, but you’re now at the stage when a travel agent can be tremendously helpful. Choose one who is a specialist in the geographic region that interests you and you’ll get plenty of insider tips that can help you plan a more satisfying trip and save you money. After you’ve made your booking, take the opportunity to teach your children a valuable financial lesson by encouraging them to save up for the trip too. Start piggy banks or, if your kids are older, open a bank account dedicated to your holiday. Tell them that you will convert everything they save from their allowance into the appropriate currency so they can bring it with them on the trip. Explain that they can use the money to buy souvenirs that will help them remember the experience once you’re all at home again. Help them understand that your vacation isn’t free and that by setting aside some money of their own, they’ll enjoy more flexibility to make purchases while you’re away. The bottom line for you and your kids is that when you plan well in advance, you can achieve your goals. That’s true when you’re building a financial plan, and it’s equally true when you’re developing the itinerary for your dream vacation. In both cases, it helps to consult the experts – a financial advisor and a travel agent – to help you realize your vision. Their expertise can help you determine what you can afford, present you with a range of options that meet your requirements and offer guidance as you make choices that get you where you – and your family – want to go. Happy travels!
TOP 10 TRAVEL TIPS
All travel cost examples except the Laurentian cottage were provided by Flight Centre and are accurate as of February 8, 2007. The Laurentian cottage cost was provided by www.atthecottage.com and was accurate as of the same date. All examples cover major vacation costs (travel, accommodations, rental cars and park passes) and do not include variable expenses including meals, attraction fees and souvenirs. |
© Copyright of this article is held by The Manufacturers Life Insurance Company (Manulife Financial).
Wednesday, June 20, 2007
Strong Loonie creates bargains in foreign equity
June 06, 2007 | for advisor.ca
 |
Sal Guatieri, senior economist with BMO Capital Markets, says that if a high dollar persists over the long term, it's bad news for most Canadian businesses because of their reliance on exports. Even for commodity producers, who have been on a roll, the high dollar means increased operating costs and reduced value for sales made in foreign currency.
On the flipside of this, Guatieri says, Canadians have a window of opportunity to go cross-border shopping. "That's the positive of a rising currency; we can buy more of what the world is offering. Everything in the world is on sale right now. Your purchasing power and living standard have gone up."
Guatieri says this window is conditional upon whether the Bank of Canada will raise interest rates in July. If it does — and recent comments suggest it is certainly being considered — Canada's purchasing power will continue to rise. If the Bank does not raise rates, Gautieri expects the dollar to drop considerably.
In the meantime, fund managers are looking at this as an opportunity to stock up on international equity.
"You can argue that foreign stocks are on sale right now with the strong Canadian dollar," says Steve Way, senior vice-president at AGF and portfolio manager of AGF Global Equity Class Fund and AGF World Companies Fund.
Way says that Canadians should already be investing in international equity to diversify their portfolios against the narrow offerings of the Canadian market, but the strong dollar makes global investing even more appealing. "Whether you're a tourist or whether you're an investor, your dollar goes further than it has for many years."
Bargain-hunting should still be tempered, Way says, because the greatest price reductions don't necessarily correspond with quality investments. Much of the increased purchasing power of the loonie is due to the comparable weakness of the U.S. greenback. This can deceptively inflate the value of the loonie.
Canadians are not the only investors with increased currency leverage in the global market. Australia, which Way says is already a much larger consumer of foreign equity than Canada, has seen a similar trajectory in its currency which is at an 18-year high against the U.S. dollar at $84.34.
Way says the devaluation of the U.S. dollar is well deserved. He is intentionally avoiding bulking up on U.S. equities and focusing instead on markets where the proportional rise of the loonie has been much lower, but where the longer-term investment prospects are much better.
"The global strategy that I'm implementing in the funds I look after is that we are more optimistic on Europe and emerging markets than we are on the United States," Way says.
Way also highlights that while his stock in trade is global equity, Canadian investors who reside in Canada, need to maintain some Canadian investments. "Their liabilities will be priced in Canadian dollars. When they retire, their food and rental costs are going to be in Canadian dollars. To account for this, a certain proportion of your money should always be invested in Canada."
Those who deal in Canadian equity are also recommending a balanced approach. James Cole is the senior vice-president of AIC and portfolio manager for the AIC Canadian Focus Fund, which recently raised the cap on its foreign equity holdings from 30% to 49%. Cole says a push to increase foreign holdings in Canadian-focused funds is an industry-wide trend, and regardless of the loonie's value, he likes the flexibility it allows.
"Having flexibility is definitely a good thing. Over time, my expectation is that our foreign content is likely to go higher than the 30% that it had been capped at," he says. "This is an excellent time for Canadians to increase their non-Canadian investments."
Even in a high-dollar environment, there are still some Canadian companies that will thrive. "In terms of companies that will be positively affected by a high dollar, certainly [domestic] retailers will do well," he says.
He expects these companies will have higher profit margins, since they are effectively buying for less and selling for more.
Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com
(06/06/07)
Copyright: "Copyright 2007. Advisor.ca All Rights Reserved"
Wednesday, June 13, 2007
Have You Considered Canada's Best Mortgage Program?
Save thousands with Manulife One and win $500 from Home Depot
Simply by running your numbers on the Manulife One calculator and looking into your financial future, you can enter the "Spend 5 minutes -- Save thousands" contest to win one of three $500 gift certificates from Home Depot.
Use the calculator right now and discover the incredible potential savings you could realize with Manulife One. When you get to the end of the calculator, you will have an opportunity to enter the contest.
The contest runs from May 15 to July 31, 2007. Learn more about the rules and regulations by reading the contest details (PDF).
Contact us today and ask about Manulife One or visit www.manulifeone.ca
Simply by running your numbers on the Manulife One calculator and looking into your financial future, you can enter the "Spend 5 minutes -- Save thousands" contest to win one of three $500 gift certificates from Home Depot.
Use the calculator right now and discover the incredible potential savings you could realize with Manulife One. When you get to the end of the calculator, you will have an opportunity to enter the contest.
The contest runs from May 15 to July 31, 2007. Learn more about the rules and regulations by reading the contest details (PDF).
Contact us today and ask about Manulife One or visit www.manulifeone.ca
Monday, June 4, 2007
Get Mortgage Insurance Working for You, Not Your Bank
Are you paying too much for your mortgage insurance?
You may have taken out the insurance that your bank or credit union offered you when you applied for a mortgage. If you did, that was good thinking. What you owe on your home is probably the single biggest debt you'll ever incur, so it makes sense to have it fully insured.
But, like many other people, you may not have known that you can obtain better coverage at a lower rate by buying your own individual insurance policy!
• Generally speaking, the insurance offered by the bank is a "one size fits all" product. Individual insurance, on the other hand, is based on your own medical condition. If you're in good heath, why would you want to pay the same rate as someone who smokes a pack a day?
• Should you change banks when your mortgage renews, you may lose your bank insurance coverage and have to reapply at your new lender. With an individual policy, you're free to shop the market for the best rate at renewal — you can take your insurance coverage with you without ever having to submit new medical information.
• The financial institution is named as beneficiary on insurance from the bank. You pay the premiums, but they'll get the money should something happen to you. An individual policy, however, allows you to name your own beneficiary — meaning your loved ones can decide when (or if) they want to pay off the mortgage or if they'd rather invest the proceeds instead.
If you're interested in getting a comparison quote or learning more about how an individual mortgage insurance policy could work for you, please don't hesitate to contact me.
Wednesday, May 16, 2007
Money Talks launches just a few days
In keeping up with our commitment to bring you up-to-date news and information about investing and financial planning, Money Talks - The Blog Edition will launch on June 1st. Please visit this site and subscribe to our blog for commentary on the news that affects all of our financial plans.
See you soon,
Kevin Lamour
See you soon,
Kevin Lamour
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