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
Thursday, August 16, 2007
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.
Subscribe to:
Posts (Atom)