About 73% of Canadians in the Scotiabank survey said the recession hadn’t affected retirement plans. The number of Canadians who don’t fully plan to retire has dropped by half to 5% in 2009 from 10% in 2008, it found.

“To achieve their retirement goals, Canadian investors need to ensure they have a balanced portfolio,” said Beverley Moir, ScotiaMcLeod senior wealth advisor. “Many investors are sitting on the sidelines in cash, bonds or GICs, however the current historic low interest rates will not provide the growth needed for many to reach their set retirement goals.”

Listen to Bev Moir speak about the suvey on Toronto radio 680 news.

Inside This Issue
Team Update ………………….page 1
A Quick Recap of 2009 … ..…page 1
Outlook for 2010……………. page 2
Quotes for Thought………… page 3

The Moir Team Rosedale Group Newsletter January 2010 Outlook

Living Benefits
Critical Illness Insurance
One of the great advantages of modern technology is that it’s allowing more people to survive once fatal medical conditions. However, the unfortunate reality is that many survivors must bear a heavy financial burden for things like medical treatment outside Canada, or ongoing care at home or in a facility. What can prevent depletion of your savings if you should fall ill? Critical Illness (CI) insurance can stop loss and protect your assets. Critical Illness Insurance (pdf)

Living Care
You work hard, save and invest to reach your financial goals. You want to retire without financial worries, control your own future and never burden your loved ones. Maybe take a dream trip. Spend more time with family and friends. A summer home. An inheritance for your loved ones … But life is unpredictable. Some of those dreams may have to change if you develop serious health concerns. Manulife’s LivingCare long term care insurance can help you prepare for the unexpected. LivingCare helps preserve your savings and investments and gives you choice about the type of care you receive. It lets you live all of your life your way. Living Care Guide (pdf)

Long-Term Care Insurance
The good news you ask? Positive lifestyle changes and medical advances over the last few decades have resulted in people living longer. The bad news? Living longer increases the chances of developing chronic medical conditions and the costs associated with caring for these conditions can be astronomical. Fortunately, an insurance product exists that can provide financial support required, should there be a need for long-term care in the future. Long-Term Care Insurance Overview (pdf)

Estate Planning
Estate Bond
Would you like to give more to your family and less to the government? If your answer is “yes,” you might want to consider an Estate Bond®.
Estate Bond (pdf)

The Estate Reallocation Strategy
The key to effective estate planning is to minimize estate tax and maximize the amount of wealth that is transferred to the next generation. But how? Life insurance offers a unique strategy. The Estate Reallocation Strategy (pdf)

A Quick Recap of our 2009 Strategy
Although global markets were falling into the abyss a year ago, we adopted a glass-half-full strategy for 2009, as we felt markets were pricing apocalyptic scenarios. With risk premia near record highs, the equity risk reward outlook was indeed very compelling a year ago. Getting confidence from our ISM model, we recommended investors add risky assets (equities, emerging markets, corporate bonds) and overweight cyclical sectors as ISM indices and employment data went from worse to bad. The worst of the global recession came in the first quarter of 2009 and economic activity has been improving since then. Our cyclical bias was maximized in June following the S&P 500 “golden cross” (50-day MA crossing the 200-day line). 2009 was a horrible year for the global economy, but equity markets managed to post solid performances, further illustrating how markets feed off anticipation, not what is written in the daily newspapers.

Read the full research report outlining portfolio strategy for 2010

This article appeared in the Fall 2009 Registered Nurses’ Foundation of Ontario Newsletter
Charitable giving is a growing priority for many Canadians. We see this in recent statistics showing a substantial increase in donations. This kind of support for charity is unprecedented in our history. While generosity and belief in community are primary motivators, the greatest enabler is a series of new tax incentives that began in 1996.

Introduction of Federal Tax Incentives
In introducing these charitable giving incentives, the Federal government has given taxpayers a choice. It’s a choice about how individuals wish to support society and the amount of tax they wish to pay. With these new tax incentives, it’s now possible to eliminate tax on 75% of income, except in the year of death and the year prior to death, when this figure jumps to 100%. Everyone must contribute to society via the tax system, but the decision about where the contribution goes can now be directed by the individual taxpayer.

What makes the tax incentives distinct is that they focus on gifts of assets (stocks, bonds, mutual funds, real estate, RRSPs/RRIFs) and business interests. These aren’t the gifts we typically make. Most are familiar with annual gifts by cheque to our favourite charities. The Federal tax incentives enable exceptional gifts that stand out for their size and level of commitment. These are gifts that are planned ahead of time and often realized through estate plans.

Meaningful Charitable Planning
A good financial and estate plan that includes charitable giving can be difficult to implement on its own and professional advice is recommended. Personal and family needs are at the centre of the planning process, and then charitable giving is considered. The goal is to integrate charitable giving into your financial and estate plan in a way that reflects both your values and your desire to minimize taxes.

At lower amounts, the individual’s will typically designates one or more charities to receive specific amounts or a percentage of the final estate value. At higher levels of gifting, an intermediary charitable entity – either a donor-advised fund, which is a charitable giving vehicle administered by a third party such as a mutual fund company and created to manage charitable donations on behalf of an organization, family, or individual, or a private family foundation – is set up to receive assets over a number of years. The intermediary “container” can be filled at your own pace, in increments or in one large instalment, often when a business is sold or at the time of death. This “container” represents a piece of your legacy, an ongoing entity in your family’s name.

Typically, these larger gifted assets are endowed, which means the capital is invested and only the income is gifted annually. Both advised funds and private foundations give ongoing control to the donors and their families to choose the charitable recipient annually. It’s a vehicle that allows donors and their families to be involved over time in enacting your legacy.

Example 1
Mary, a 70 year old retired nurse, is an example of someone who wants to donate to the RNFOO. She arranges to contribute $50,000 over five years to a donor-advised fund available from a mutual fund company. Working with her advisor, she invests the money conservatively to ensure that the principal remains intact and the annual income of about 3% to 5% is donated to the RNFOO each year into perpetuity.

Example 2
In another example, Joanna, a Registered Nurse, and her spouse John want to make significant contributions to several charities. On their passing, their son will inherit sufficient assets to enable his career and lifestyle while simultaneously keeping him motivated to continue working. Joanna and John want to impart their charitable values to their son, his children and grandchildren. To do so, they set up a private family foundation with an initial investment of $250,000. On their passing, they have designated their private foundation as the beneficiary of a $500,000 joint, last-to-die life insurance policy. With the investment strategy designed to preserve the capital, the annual income can be distributed to their charities of choice.

The approach to planning described above separates the process of planning the gift from the support of individual charities. You can plan to give a large amount to charity over a number of years as part of an integrated plan. The contributions happen on your timetable and not when fundraisers come calling. Gifts to individual charities occur as part of a controlled, thoughtful process that preserves maximum flexibility and allows ones’ philanthropic values to be implemented over time. If you would like to learn more about this planning opportunity, please contact the RNFOO office.

Bev is a Senior Investment Executive and Financial Planner with ScotiaMcLeod and highly respected in her industry. She is a Certified Investment Management Analyst and a Fellow of the Canadian Securities Institute. Bev has served as Gala Fundraising Chair, and from October 1998 to October 2004 she served on the Executive Team of RNFOO. At the Gala in May 2006, Beverley Moir was presented with an Honourary Life Membership in recognition of her leadership and commitment to the Registered Nurses Foundation of Ontario.

® Registered trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF. This article is for information purposes only. All performance data represents past performance and is not indicative of future performance. It is recommended that individuals consult with their Wealth Advisor before acting on any information contained in this article. ScotiaMcLeod does not offer tax advice, but working with our team of experts we are able to provide a suite of financial services for clients. The opinions stated are not necessarily those of Scotia Capital Inc. or The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF. All insurance products are sold through ScotiaMcLeod Financial Services Inc., the insurance subsidiary of Scotia Capital Inc., a member of the Scotiabank Group. When discussing life insurance products, ScotiaMcLeod advisors are acting as Life Underwriters (Financial Security Advisors in Quebec) representing ScotiaMcLeod Financial Services Inc.

Emily Chiu, Bev Moir and Ingrid Sojka consult in the Moir Team office

“In the business world, the rearview mirror is always clearer than the windshield.”
Warren Buffett

Help me Invest

As investors search for higher yields in this extremely low interest rate environment, they are wise to consider the opportunities offered by dividend paying securities. Dividend income is an important component of total investment return. Returns are even better when the companies have a track record of increasing their dividends.

Read about dividend growth stories

The Rosedale Group Fall 2009 Newsletter
Inside:

Market Outlook
Although the global economic news flow continues to improve, the equity market’s reaction was muted in August. Performances ranged from 4 % in the U.S. to 1.7% in Canada to –16% in China. Nonetheless, the S&P 500 is up 11.9% since the start of Q3. Scotia Capital believes the lack of momentum in August, and the potential for a pullback in September/October, have more to do with the current overbought situation and seasonality than overpriced equity markets. On that basis, our outlook over the longer term for the US markets remains positive. We expect equities and corporate bonds to outperform US treasuries over the next 12-18 months. The S&P 500’s fair value should hit 1,025 in December 2009 and 1,200 in December 1010.

Also:

• The September Effect
• Client Questions are always welcome
• Cyclical vs Defensive Stocks? Which should Investors select?
• Ideas to Help You Rebuild Your Portfolio

Investment Insights Fall 2009 (pdf)