Monday, November 23rd, 2009
For the past several years, only Nova Scotia, Newfoundland & Labrador and New Brunswick have operated under the HST. Quebec introduced the Quebec Sales Tax (QST) in 1992, which quite closely resembles the HST. In 2009, both Ontario and British Columbia introduced plans to harmonize their respective provincial sales taxes with the federal GST to create an HST, effective July 1, 2010. In Ontario, the new HST would have a combined tax rate of 13 percent and would include the current general Ontario RST rate of 8 percent and the federal GST rate, currently set at 5 percent.* As a result, a greater proportion of Canadians will be subject to HST. This paper will discuss what harmonization means to consumers and more specifically, how HST will affect your mutual fund investments.
Tags: HST, Investments, Mutual Funds
Posted in Investments, Mutual Funds | 1 Comment »
Monday, November 2nd, 2009
Now that you’re in your 50s you’ve probably asked yourself this question a number of times:
How much do I need to retire?
The answer to that question depends very much on the lifestyle you envision in retirement.
Perhaps you want to travel the world or trade your expensive house in the city for a smaller one in the country, and just enjoy yourself. But no matter what your goals are in retirement, financial planning at this stage forces you to admit that your retirement is almost here and you have to make some critical decisions. (more…)
Tags: Investments, Mutual Funds, Retirement Planning, RRSP
Posted in Investments, Mutual Funds, RRSP, Retirement Planning | No Comments »
Friday, October 30th, 2009
If you’re like many investors, you’ve considered allocating at least a portion of your portfolio into a Guaranteed Investment Certificate (GIC). Why not? After all, GICs are secure investments that are guaranteed to pay back your money. On the other hand, many investors view mutual funds as being too risky, and so avoid them. But is this the whole story? (more…)
Tags: Investments, Mutual Funds
Posted in Investments, Mutual Funds | 1 Comment »
Thursday, October 22nd, 2009
A mutual fund is a professionally managed pool of money invested by people like you. There are many different types of mutual funds, each designed for a different type of investor with a different financial profile. When you buy a mutual fund, you are pooling your money with other investors who share your investment profile and your objectives.
There is strength in numbers. By pooling your money with other investors who have similar objectives, you can enjoy increased purchasing power and reduce your investment costs. Professional mutual fund managers trade securities at discounted institutional rates. Consequently, the savings they realize are passed along to you.
Keep your options open. A key benefit available through mutual fund ownership is diversification. The range of security types and asset classes offered in mutual funds can help to shield your investments from market fluctuations. If the value of one security held in a fund falls, the loss may well be offset by a rise in the price of another security. By investing in a variety of asset classes, you can profit from the growth of one type of security, while shielding your portfolio from potential losses in another. Whether it is by security, company, industry, or country, mutual funds offer investors a level of diversification that would be difficult to achieve on their own.
Mutual funds come in a variety of shapes and sizes. The most familiar mutual funds are equity funds, bond or fixed-income funds, money market funds, and balanced funds. A basic equity fund invests in the shares of various corporations. Equity funds differ in their selections of individual company characteristics, industries, or geographic locations. Bond funds offer investors the benefits of steady interest income and the opportunity to realize capital gains over the long term. For the interim investor, money market funds provide the chance to insulate capital while receiving returns superior to those offered by a bank savings account. Finally, balanced funds (or asset allocation funds) exist for those investors who want the benefits of greater diversification along with the convenience of owning bonds, money market instruments, and equities in one mutual fund.
Do you need ready access to your capital? Mutual funds are structured in such a way that accessing your money is as simple as calling your Investment Professional. As your investment needs change, your personal financial plan can also be easily changed. Your Investment Professional can move money from one fund to another or cash in all, or part, of your investment at any time. To help build assets over the long term, you can institute a plan of regular investment contributions or, conversely, a plan of regular systematic withdrawals.
Mutual funds give every investor the advantage of continual professional money management. These mutual fund experts have access to some of the best quality investment research in the world monitoring both domestic and foreign markets around the clock. The knowledge, experience, and resources available to these professionals ensures that your investments will keep pace with today’s ever-changing markets.
When selecting a mutual fund, remember to choose a fund that matches your personal objectives. Look for consistency in the long-term performance of the fund and the professional who manages it. Try to select a mutual fund that invests in securities you understand and that has a portfolio manager whose style you are comfortable with. Your Investment Professional, who has reviewed your unique investment objectives and understands your concerns is positioned to provide you with information on mutual funds and help you select mutual funds that add value to your portfolio.
Mutual funds are an excellent way to protect and build your capital. As you go through life, your financial goals change, and so too should your portfolio. Your Investment Professional is there to monitor your investments and help you modify your portfolio on a regular basis to ensure long-term, consistent growth.
Tags: Investments, Mutual Funds
Posted in Investments, Mutual Funds | No Comments »
Wednesday, October 21st, 2009
The temptation, of course, is to sell-off a portion of their funds, wait on the sidelines until the market has bottomed out, and then go back in when it’s safe. This anxiety is especially pronounced for newer investors who have less experience with market cycles, and how it can impact their mutual funds.
Although market volatility may be unnerving to novice and experienced investors alike, these kinds of corrections are nothing new, and are a common market phenomenon. The best approach to handling these worrisome periods is to arm yourself with proven historical investment information, and seek professional advice from an Investment Professional.
So let’s begin by taking a closer look at what causes market volatility. There are several factors that can impact market movement, and subsequently, the rise and fall in the value of the various types of mutual funds. Among the most common factors are corporate profitability, inflation and large scale events such as political and economic factors. Corporate profitability is the most obvious. When profits go up, the market goes up, and most types of mutual funds tend to benefit with corresponding growth. When profits decline, the market drops and the repercussion is felt on certain types of equity based mutual funds as well. Corporate profits are in turn impacted by global economic conditions which go through natural cycles of growth and recession. Also, equity mutual fund performance historically weakens during times of rapidly rising inflation, which drives up interest rates thereby making fixed-income mutual funds more attractive. Thirdly, unanticipated political occurrences such the 1990 Kuwait crisis can have a significant impact on world market. In that instance the Toronto Stock Exchange dropped rapidly from 3,000 to 2,200 points, effectively ending eight years of recovery from the 1981-82 recession.
Although these ups and downs can create tension and uneasiness among investors, when viewed from a long term perspective, their detriment to mutual funds is less dramatic than often feared. Historically, rises have followed shortly after steep falls in the market, and mutual funds resume an overall upward trend.
One thing is certain, trying to time the market by getting in and out during these periods does not make sense. This practice is termed “lightening up” but is rarely successful because no one can predict exactly when the drop will occur. And if investors sell, there is always the danger that they will miss out on any subsequent rise in the market. If investors had tried to time the ups and downs of the market, they would have risked missing out on days that registered some of the biggest gains. The smarter way to view volatile periods is to think of them as opportunities to review your exposure to risk, discussing it if necessary with your Investment Professional.
Smart Investment Professionals and investors select their mutual funds based on fundamental financial indicators rather than on short-term industry or market trends. A mutual fund manager is focused on balance sheets, cash flows, and earnings to reveal a company’s true potential for long-term growth. Your focus should be on the same indicators. Solid performance and corporate profits drive market performance in the long run.
The world is an ever-changing place, and volatility along with the potential for higher returns is the nature of equity markets. Investors who maintain a long-term outlook for their investments have an advantage over those who do not. Successful long-term investors understand that the market will always experience periods of decline, and that although stock investments are considered riskier, history has shown that stocks have a record of outperforming more conservative investments over longer time periods. In the past, equity investments have offered the highest returns. The key to surviving market volatility is a long-term approach, diversification, and a comfort level with your exposure to risk. Talk to your Investment Professional to set your mind at ease if you find yourself worrying too much about your investments.
Tags: asset allocation, Investments, Mutual Funds
Posted in Investments, Market Commentary, Mutual Funds | No Comments »
Monday, October 19th, 2009
In the world of mutual funds, the key to success involves a few simple principles: Planning. Patience. Long-term thinking. While it seems like common sense, these virtues can make a big difference in achieving lasting and consistent investment growth.
That said, let’s examine some steps to follow when reviewing and planning your mutual fund portfolio and your overall financial or retirement goals. (more…)
Tags: asset allocation, dollar-cost averaging, Investments, Mutual Funds, RRSP
Posted in Investments, Mutual Funds | 2 Comments »
Friday, October 16th, 2009
Canadians are taking increasing control of their financial futures, especially when it comes to retirement planning. Gone are the days when employees could rely entirely on corporations or government to provide for their retirement income. And with today’s longer life expectancies, it becomes even more critical to plan for the future, simply because there’s going to be so much of it! (more…)
Tags: Mutual Funds, Retirement Planning
Posted in Investments, Mutual Funds | No Comments »
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