Mary Teresa Bitti, Women going it alone, Financial Post, Apr 7, 2012

Arlene Dickinson, CEO of Venture Communications and the only woman entrepreneur-investor on CBC’s hit Dragons’ Den, has just finished a speaking engagement in Barrie, Ont. and she’s en route to the airport, where she’ll catch a flight to Australia.

It’s her first visit and one that will be jam packed with engagements that will further build her brand and her business and her bank account. Ms. Dickinson’s life today as a successful entrepreneur is far removed from her days struggling to make ends meet as a young single mother.

Married at 19 and divorced at 28 after putting her former husband through university, she was the primary support of her four young children for many years. “One of the first jobs I ever did was collecting delinquent accounts from my kitchen table. It was a really hard job that taught me the value of managing your money with good intention. It also taught me to view money as an enabler — not the answer to all your problems,” Ms. Dickinson says.

“In my case, I never really had anyone to fall back on. I didn’t have family money. I was poor when I got married. I was poor when I got divorced. I had to work for whatever I had.”

The U.S.-based National Center for Women and Retirement says nine out 10 women will be solely responsible for their own finances at some point in their lifetime. They will stay single, marry and divorce or their spouse will predecease them. In fact, Census Canada reports the average age a woman is widowed is 56. What’s more, widows represent 45% of all women aged 65 and over.
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At the same time, a recent poll by Investors Group shows more than a quarter of Canadian working women in relationships are now the sole or primary income earners in their households and the overwhelming majority (86%) say their income is necessary to maintain the couple’s lifestyle.

While financial planning is not gender-based and the strategies are the same for men and women, there are unique financial circumstances women will face. “Women tend to live longer and that means you need more assets to sustain an income long term,” says Jane Olshewski, Financial Life Planning expert at Investors Group from her office in Winnipeg.

“At the same time, women continue to earn less money than men. So we earn less and need more to see us through retirement.” Women also tend to be the family caregiver, often taking time out of the workforce to care for children and in many cases, elderly parents.

For all these reasons, Ms. Olshewski says the first rule for women for financial planning should be to protect your most valuable asset: your ability to earn an income. “Disability insurance is critical. If something happens to you and you can no longer work, you have to be able to meet your financial responsibilities. Make sure you have the Cadillac version of disability insurance. Your income and your ability to earn income have to be protected.”
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This is a wakeup call, says Bev Moir, a senior wealth advisor at ScotiaMcLeod. “Major life events and transitions occur on a regular basis. Whether it’s divorce, widowhood or job loss, you have to anticipate that will be reality and you have to plan ahead and be proactive, as opposed to waiting and reacting. Women should understand what their financial situation is and establish a relationship with a trusted advisor so that if something happens, you’re not adrift.”

It’s that knowledge that will provide the confidence to pick up and move forward when life happens — and it will, says Ms. Moir whose own work with women is about empowering them. “I just spoke with a woman who was widowed at age 54,” Ms. Moir says. “Three years later she said she’s had to regain her self-confidence. She was used to joint decision making and now she had to make decisions on her own.”

In this particular case, the woman had enjoyed an affluent lifestyle and perhaps had a false sense of security for the future. “She had several million dollars of financial assets but was concerned about not having enough money to pay her bills. The reality is people have lifestyles that go along with that level of assets,” Ms. Moir says. “In the initial stages of her loss she wanted to be surrounded by close friends and took some trips with them and paid their way. All of a sudden she realize she couldn’t keep spending this way. Now she’s at a turning point and looking for more information.”

One of the first pieces of advice Ms. Moir shares with women coming to terms with becoming suddenly single is to develop a budget and if they don’t already have one, to create a financial plan. In fact, she says, any major life change is a good time to revisit a financial plan and make adjustments.

The first element is identifying what’s important to you, what you are concerned about, where you’re headed and what your goals are. “Then we develop a financial plan that attaches some dollars and cents to that,” Ms. Moir says. “I just met a woman who has separated from her husband and is headed for divorce. Her husband has been giving her a certain amount of money but she’s been spending double that amount. She realizes she needs to develop a financial plan and figure out not only what she can spend but how it’s going to provide income going forward.”

For her part, Arlene Dickinson says she’s always been confident when it comes to money matters largely because she always knew she could count on herself and her ability to put food on the table. That confidence allowed her to take the risks necessary to become an entrepreneur and build her business.

About five years ago, she started thinking seriously about the investments that will see her through retirement. Her recent engagement has not changed her approach to money.

“I will always manage my own finances. My father taught me you never want to rely on any one person to take care of you. Rely on yourself and take care of yourself.”

The recent federal budget, presented by a debt-laden government with an aging population, sends a message – individuals young and older must take responsibility for their retirement savings.

Canada’s retirement system consists of three pillars: Old Age Security (OAS), Canada Pension Plan (CPP), and voluntary tax assisted savings, such as RRSPs, TFSAs and the recently proposed Pooled Registered Pension Plans (PRPPs). Changes were made to the CPP recently and to the OAS program in this budget. It’s in the area of voluntary, tax-assisted savings where we as individuals can act. Getting a Financial Plan will tell you if you’re on track, and if not, what action is required to fill the gaps.

Here are two budget summaries:
Federal Budget 2012, Special Report, “How the budget affects you”, Jamie Golombek (pdf)
Peter Drake, Fidelity Vice-President, Retirement and Economic Research provides his perspectives on this year’s budgets and how they may affect markets and investors. 2012 Federal Budget Summary (pdf)

Some Compelling Statistics:
* 9 out of 10 women will be responsible for their own finances – they will never marry, will marry & divorce, or their spouse will predecease them. (Deborah Owens – A Purse of Your Own)
* 70% of new businesses are started by women & 85% of all brand purchases are made by women. (MsCareerGirl.com )
* The average age a woman is widowed is 56. (Census Canada )
* Widows account for 45% of all women aged 65+. (Statistics Canada )
* More than 75% of long-term care home beds are occupied by women. (Canadian Women’s Health Network )

In my role working with women, one of my goals is to empower my clients to achieve their financial goals in part by making informed decisions/choices.
• Women face several realities that have financial repercussions: divorce, widowhood, longer lives, lower earnings, more conservative investors.
• Know what’s going on with your finances – make the effort to learn.
• Establish a relationship with a trusted advisor and work with that person to advance your financial knowledge and to move forward on your financial goals.
• Get a Financial Plan to assess if your goals for saving, debt reduction, and risk mitigation are on track.
• Few think they will ever face critical illness, disability or chronic illness, premature death, or long-term care. Protect against these risks.

From Investment Executive By Jade Hemeon

A growing number of Canadians are crossing the threshold into retirement, signalling the end of their saving days and the beginning of living off pension income and retirement nest eggs. The challenge faced by aging baby boomers and their financial advisors is to create a reliable, life-long income stream and preserve capital in the face of zigzagging financial markets, unpredictable health and increasing longevity.

“Clients have had years of experience accumulating assets but are not so used to de-accumulating,” says Bev Moir, senior investment advisor with ScotiaMcLeod Inc. in Toronto.

“It’s a different focus than asset building. There’s a shift in mindset to preservation of assets and income creation, but they still need some growth to preserve the purchasing power of their savings,” says Moir. “Because there is no longer a regular paycheque, savings must last a lifetime, and there’s uncertainty as to how long that lifetime will be.”

There’s no ideal investment that offers both complete security, growth potential and a high level of return. Most advisors are finding an effective approach is to spread client assets among a variety of securities that includes both equities and fixed-income, with some focus on growth and some on interest and dividends.

The gap between retirement and end of life is growing, and many clients want products that will ensure they never run out of money.

The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.

• Major equity benchmarks around the globe ended the year deep in the red, although losses vary widely from region to region. On a relative basis, the U.S. was an outperformer as the Dow Jones Industrial Average generated a total return of 8.4% and 10.8% in Canadian dollar terms. The broader benchmark S&P500 Index advanced a more modest 2.1% including dividends, (4.4% in Canadian dollars). The commodity-heavy TSX Composite finished the year with a loss of 8.7%.
• Canadian bonds were a clear winner in 2011. The DEX Universe Total Return Index gained 9.7%, while the DEX Long Canada Total Return Index posted an impressive 19.8% return! Provincial and municipal bonds outperformed corporates. The long end of the curve benefited from generally weaker growth expectations, and “operation twist”, a move by the U.S. Federal Reserve to drive down long-term interest rates and reinvigorate their economy.
• With a rather volatile and challenging 2011 behind us, we look ahead to 2012 with slightly more optimistic lenses as valuations look compelling, corporate balance sheets are strong, and dividend yields are attractive in this low interest rate environment.
• There are certainly a number of risks to consider over the foreseeable future, but at the same time, we observe a reasonable number of catalysts which offset these concerns, thereby allowing us to remain cautiously optimistic.
• Among the risks in the current environment, we caution that volatility could be here to stay as concerns over sovereign debt remain an overhang. As well, in both Europe and the U.S., bringing outsized fiscal deficits under control and restoring balance sheets in the public sector is a difficult and lengthy process.
• Also carrying possibly negative implications for markets are this year’s elections in the U.S., France, and Germany, and the risk that political aspirations impede decisive action.
• Cognizant of the aforementioned risks, there are a number of supportive factors for stocks in 2012 that are worth highlighting:
  • We continue to operate in a low interest rate environment which should help to underpin stock markets as alternative asset classes become less attractive.
  • Many corporations currently boast strong balance sheets which can support business investment, M&A activity, and aggressive share buybacks.
  • Particularly over the past several months, U.S. economic data has been stabilizing and in fact suggests the economy is more resilient than originally thought, and barring another global credit crunch, should avoid a recession in 2012.
  • The debt issues facing Europe are undeniably complex. As a mild positive, however, we believe that the recent leadership changes in Europe and at the ECB are encouraging; bringing in world-class financiers as well as fresh views can hopefully help to expedite a swift and effective resolution with regards to the European debt situation.
  • We are committed to the view European politicians and regulators will ultimately put forth a credible solution to deal with these issues
  • From our perspective, fears of a hard-landing in emerging markets appear overdone. Recent economic data in China suggests economic growth has been decelerating (slower growth, not zero or negative growth), and as such, the central bank recently lowered reserve requirement ratios.
  • In our opinion, this is a signal that China will now adopt a more dovish stance and gradually prioritize economic growth over inflationary concerns. This change in policy would be positive for commodities. Longer-term, we believe that continued urbanization and general domestic growth in China and India is a secular theme that should continue to fuel commodity demand.
  • In light of the weakness throughout the second half of 2011, valuations look attractive at the moment. The S&P/TSX Composite currently trading at 11.6x forward earnings versus the long term average of 15.1x while the S&P 500 Index is also valued at 11.6x versus the long term average of 14.6x.
• Over the near term, stocks look cheap but the macro environment is still hampered by concerns over sovereign debt issues in Europe. Persistently low bond yields will continue to lead income-oriented investors into defensive, dividend-paying stocks. While valuations of utility and telecommunication stocks appear stretched by historical standards, this new paradigm – higher prices/lower yields – are a reflection of investors’ quest for yield.
• Looking ahead, the current low rate environment offers little value in the mid-to-long end of the curve and we recommend investors remain short duration at this time. From a sector weighting perspective, investors should be underweight Canada’s and overweight provincials, municipals and corporates. The recent narrowing of high yield spreads leaves us at a point of indifference on these credits. With the Canadian dollar expected to outperform most major currencies over the coming year, we recommend Canadian investors remain in Canadian dollars for their fixed income holdings.
• Austerity measures in Europe and the U.S. will ensure growth in developed economies remains slow in 2012, offset by comparatively stronger growth in emerging markets which argues for the continued need for global diversification. Over the longer term, however, valuation and fundamentals will return to the forefront.
• Equity markets are likely to remain range bound with the occasional cyclical rally within what appears to be a secular bear market for stocks. We believe there are a number of attractive investment opportunities at present but macro risks lead us to advocate a balanced portfolio, a focus on enhancing returns via dividends, and a need to be more tactical in this volatile market.

For more information on how these ideas pertain to your investment portfolio, please contact Bev Moir.

Summarized from commentaries by Geoff Ho and Paul Danesi – Portfolio Advisory Group

Copyright 2010 Scotia Capital Inc. All rights reserved.
This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. ® Registered trademark of The Bank of Nova Scotia, used by ScotiaMcLeod under license.

ScotiaMcLeod is a division of Scotia Capital Inc. Scotia Capital Inc. is a member of Canadian Investor Protection Fund.

The General Rate Income Pool (or GRIP) is a corporate tax concept that tracks corporate income that has been taxed at high corporate tax rates, and any eligible dividends received from other sources, such as subsidiaries or public companies. Your corporation may have some built up GRIP that should be addressed before the end of the year. Here’s why.

When GRIP is paid out, that amount is considered an eligible dividend, taxed at a preferred dividend rate. Due to the continually decreasing corporate tax rates, the eligible dividend rate is continuously increasing. The difference between 2011 and 2012 is about 1.4%.

If you have a corporation with a GRIP account, you may consider paying a dividend in 2011 to save this additional tax. If your corporation also has Refundable Dividend Tax on Hand (RDTOH), the dividend payment will also generate a dividend refund with the filing of your corporate tax return.

Speak to your accountant to see how this tax tip applies to you.

This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.

The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.

• Equities traded lower again last week on sustained concerns regarding Europe and German Chancellor Merkel’s continued opposition to increasing bailout funds or allowing the ECB (European Central Bank) to increase purchases of European bonds.
• Although we had no expectations in this regard, investors were also apparently disappointed when the Fed did not suggest any plans to invoke another round of Quantitative Easing (QE3).
• On the positive side, jobless claims in the U.S. were the lowest reported since May, 2008, both the U.S. and Spain held successful bond auctions, and this morning US housing starts for November came in at their highest level since April 2010 on improving homebuilder confidence.
• Weak Industrial Production numbers from India, PMI (Purchasing Managers Index) data in Europe, and more importantly China had a negative impact on the economic outlook, which when combined with U.S. dollar strength led to commodity price weakness across the board. We expect further evidence of a slowdown in China will lead authorities there to act quickly on growth oriented policy initiatives.
• Yesterday afternoon, European Union Finance ministers eventually agreed to increase loans to the IMF (International Monetary Fund) by an additional 150 billion euros; they will seek further funding from other G20 members. Importantly, these enhanced IMF resources are meant “to fill global financing gaps”, they are not exclusively for bailing out weak eurozone members.
• We continue to believe the situation in Europe will ultimately be resolved. Between the EU leadership, the ECB, and the IMF, an appropriate resolution will be achieved and they will not allow a Lehman-like collapse of the banking system; however, Germany in particular will not feel compelled to act until there is a bank requiring a bailout and Germany is then able to maximize concessions.
• As we are at somewhat of an inflection point in terms of the global economy and stock market sentiment, we expect stock market volatility to continue, resulting in equities trading in a range for the foreseeable future.
• Our investment outlook remains the same as equities are our preferred asset class as we look out toward 2012; North American bond yields are at all-time lows making higher dividend yielding equities a far more attractive investment alternative.
• For fixed income exposure, the current low rate environment offers little value in the mid to long end of the curve and we recommend investors remain short duration at this time. From a sector weighting perspective, investors should be underweight Canada’s and overweight provincials, municipals and corporates. The recent narrowing of high yield spreads leaves us at a point of indifference on these credits. With the Canadian dollar expected to outperform most major currencies over the coming year, we recommend Canadian investors remain in Canadian dollars for their fixed income holdings.
• Despite recent market declines, U.S. equities are still trading at the top end of the narrow range established since early August. We anticipate a further market pullback, but downside might be limited until the New Year due to the expected slowdown in market activity leading into the holidays.
• For trading oriented investors we recommend selective profit taking as certain stocks have demonstrated significant outperformance recently.
• Fundamentals will matter again at some point and prospects for more economically sensitive sectors, particularly for copper and energy, are brighter and not fully reflected in current valuations.
• Commodity cyclicals and industrial stocks offer the most upside potential in the event equities rally again, but they also will likely continue to exhibit the greatest volatility.
• Gold’s multi-year rally has paused of late but we recommend adding exposure on further weakness; gold bullion and gold equities should perform better in the current environment.

For more information on how these ideas pertain to your investment portfolio, please contact Bev Moir.

Summarized by Steve Uzielli – Director, Portfolio Advisory Group

Copyright 2010 Scotia Capital Inc. All rights reserved. This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. ® Registered trademark of The Bank of Nova Scotia, used by ScotiaMcLeod under license. ScotiaMcLeod is a division of Scotia Capital Inc. Scotia Capital Inc. is a member of Canadian Investor Protection Fund.

Many university students, particularly those studying for a profession, are graduating from university with a great deal of debt. This was highlighted in a recent issue of the Globe and Mail, where the financial situation of a young professional couple was featured in the Financial Facelift column written by Dianne Maley.

Both are in their mid-twenties, she a recent law graduate, he a dental student, they will graduate with a huge financial burden – student debt of $330,000. Based on the financial projections in the article they would take 10 years to ‘retire’ their student debt. Their own retirement, over thirty years away in 2045, was projected to be “compromised” by the delay in making RRSP contributions while focusing on paying off their student loans.

When reading this, I couldn’t help but be sad for two obviously smart and motivated professionals who are being told at an early stage in their careers they face a big financial burden for many years. In this scenario what would I recommend to this professional couple?

The rising cost of university tuition is certainly a contributing factor. Reining in these costs will be of help to all students. There are other steps they can take to improve their situation.

1. Pay off their student loans as fast as possible; don’t wait ten years as proposed in the column. Not only will this reduce and eliminate the burden much faster, they will be less exposed to rising interest rates which will make their student debt even more costly to carry.

2. As their professional incomes rise, it’s not uncommon for recent graduates to want to enjoy the fruits of their hard work. This couple should resist the temptation to significantly increase their lifestyle expenses until their student debt is much lower. Presumably accustomed to a student’s modest lifestyle, if they can maintain it longer they will make a serious dent in their loans by deploying ‘extra’ cash to their debt.

3. Lastly, they should contribute annually to their RRSP. This will do two things: decrease the amount of income taxes payable and perhaps result in a tax refund which can be applied to the debt. A win:win situation! I recommend setting up a monthly pre-authorized contribution to their RRSP to make finding the money easier. An earlier start to their retirement savings will give them time for growth over many years and will get them into the savings habit.

Is student debt too high? It is, but it can be managed.

Copyright 2010 Scotia Capital Inc. All rights reserved.
This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.

The Investment Committee of the Portfolio Advisory Group meets weekly to formally discuss markets, sector allocation and investment recommendations. Below is a brief synopsis of our current market view.

• Equity markets were fairly quiet last week as participants awaited the outcome of the European leaders’ summit in Brussels on Friday, December 9.
• On Thursday the ECB (European Central Bank) cut rates by 25bp to 1.00% as expected; however, Mario Draghi, ECB President made comments confirming the ECB’s position that they are not going to be an aggressive buyer of Eurozone bonds, which disappointed the market.
• Although there was an agreement reached at Friday’s summit, the outcome will not be nearly as impactful as hoped. Germany continues to take an understandably hard line with its partners, reducing the likelihood further of a more substantive bailout plan.
• 26 of the 27 European Union leaders (excluding the U.K.) agreed to strict budget rules imposing a maximum deficit to GDP ratio of 3% and debt to GDP of 60%, levels to be achieved over the next 20 years; however, the penalty for non-compliance is not clear. The agreement is ultimately subject to a vote which will not be concluded until March 2012.
• As one strategist commented, the measures agreed to at the summit may help prevent the next crisis in Europe, but won’t do much to solve the current one.
• Perhaps more importantly, euro zone states and others will provide up to 200 billion euros in bilateral loans to the IMF (International Monetary Fund) who will use the funding to prop up weaker members.
• Markets were somewhat “euro-phoric” on Friday in response to the accord, but rolled over in disappointment in yesterday’s trading upon further reflection over the weekend. The agreement did not live up to the market’s expectations and the outlook remains far from certain. What is known for sure, as has been anticipated, is that austerity measures necessary for all eurozone members to comply with debt and deficit requirements will weigh on economic growth for the next several years.
• Although the euro question is not yet fully resolved, the capital markets will likely now shift focus to China and the U.S. economy.
• The policy shift two weeks ago in China to be more accommodating and less concerned with fighting inflation is positive for commodities, yet reflects a slowing, while still growing economic outlook for China.
• Meanwhile U.S. economic data over the last several weeks has been improving, and the prospect of recession is dissipating.
• As we are at somewhat of an inflection point in terms of the global economy and stock market sentiment, we expect stock market volatility to continue, resulting in equities trading in a range for the foreseeable future.
• Interestingly, a survey released this morning suggests German investor confidence rose for the first time in 10 months.
• Last week’s events do not change our investment outlook as equities remain our preferred asset class as we look out toward 2012.
• For fixed income exposure, the current low rate environment offers little value in the mid to long end of the curve and we recommend investors remain short duration at this time. From a sector weighting perspective, investors should be underweight Canada’s and overweight provincials, municipals and corporates. The recent narrowing of high yield spreads leaves us at a point of indifference on these credits. With the Canadian dollar expected to outperform most major currencies over the coming year, we recommend Canadian investors remain in Canadian dollars for their fixed income holdings.
• As U.S. equities are now trading at the top end of the narrow range established since early August, so do anticipate a market pullback, but downside might be mitigated by the anticipated holiday season slowdown in market activity.
• For trading oriented investors we recommend selective profit taking as certain stocks have demonstrated significant outperformance recently.
• Many high quality dividend paying stocks at current levels do not offer much capital appreciation potential but will provide investors with the most downside protection if the market retreats, and investors are “paid to wait” in the interim.
• Fundamentals will matter again at some point and prospects for more economically sensitive sectors, particularly for copper and energy, are brighter and not fully reflected in current valuations.
• Crude oil prices (WTI and Brent) remain elevated due to rising tensions in the Middle East.
• Commodity cyclicals and industrial stocks offer the most upside potential in the event equities rally again, but they also will likely continue to exhibit the greatest volatility.
• Gold’s multi-year rally has paused of late but we recommend adding exposure on further weakness; gold bullion and gold equities should perform well in the current environment.

For more information on how these ideas pertain to your investment portfolio, please contact Bev Moir.

Summarized by Steve Uzielli – Director, Portfolio Advisory Group
Copyright 2010 Scotia Capital Inc. All rights reserved.
This report has been prepared by Scotia Capital Inc. as a resource for its clients and may not be redistributed. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management’s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.

It’s an attainable goal, with three smart strategies
When I was younger, the notion of having financial freedom at age 55 sounded fantastic. With the passage of time, however, I’ve come to realize it was only an idea. It never did become one of my concrete financial goals, with associated plans and action strategies. In my work preparing clients for their retirement, I’ve learned firsthand that Freedom 55 is a figment of many people’s imaginations. Now our retirement can last up to a third of our lives. That’s a long time to support one’s lifestyle on accumulated savings, especially when so many cannot count on attractive pensions that previous generations relied upon. Not only were specific saving strategies not implemented early enough, but life experiences and associated expenses interfered with our plans, and the extreme market volatility we’ve experienced over the past several years has also taken its toll on our nest eggs.

Here are three strategies for preparing for your retirement, whether your goal is Freedom 55 or Freedom 75.

What is your vision?
The first: Spend the necessary time developing your vision of your retirement years. What will you do? Where will you live? Will you retire fully at age 60 or work part-time to age 70? We’re fortunate to be living longer, healthier lives than previous generations, with many options to choose from.

Your vision should anticipate negative realities too. What will your older years look like if you become disabled or challenged by chronic medical conditions? Will you or your spouse have costly medications or assisted living expenses? What will happen to you as your mobility and mental capacity diminish?

Other considerations include your wishes and desire to leave an estate and possibly an enduring legacy. Who and what are important to you and how do you want to pass along your estate assets? The answers to these questions and considerations are all part of your vision for your life plan.

The financial reality
Armed with this information, the next step is to get a financial plan that puts dollars and cents around your vision. This is the point where you clarify if your retirement savings, and sources of retirement income, are sufficient to support your desired lifestyle, and if they’re capable of lasting over your anticipated lifespan.

The financial plan will show the effect of various scenarios such as modelling the drawdown of assets to meet retirement expenses, and selling real estate to meet advanced-age expenses. If a shortfall is anticipated, the financial planning process can model the impact of various trade-offs such as foregoing an expensive annual holiday in favour of less frequent trips or delaying retirement by a few years.

Get professional help
Lastly, work with a trusted and experienced financial advisor to assist you in confirming your retirement readiness and to partner with you in making the transition from full employment to retirement. After years of accumulating savings, I’ve learned there are many questions about the most efficient and effective way to move to the next life stage of living off those savings.

The “best” retirement outcome from a financial perspective is where one’s savings are withdrawn and consumed at a sustainable rate; there is sufficient retirement income to fund one’s desired lifestyle; and the savings last over your entire lifespan. Working with professionals will go a long way toward keeping you on track with these components.

Is Freedom 55 passé? I believe one can make Freedom 55 an attainable goal. If you follow the strategies outlined above and start early enough, Freedom 55 can come to fruition.

Bev Moir, MHSA, FCSI, senior wealth advisor, ScotiaMcLeod, can be reached at bev_moir@scotiamcleod.com or bevmoir.com. This article is for information purposes only. The author is an employee of ScotiaMcLeod, a division of Scotia Capital Inc. (“SCI”), but the data selection, analysis and views expressed herein are solely those of the author and not those of SCI. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Written for Lifestyler Magazine, December 2011, insert in Globe and Mail