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Wednesdsay May 26, 1999 THE OAKVILLE BEAVER B7 Business GIC refugees need more advice Successful Investing with Patrick McKeough PETER WATSON Dollars & Sense In this era of information overload, investors need more advice now than ever before. The current trend of shifting from short-term to long-term investments supports this need for additional advice. During the 1980's, the investment of choice for many investors was a Guaranteed Investment Certificate (GIC) pur- ________________ chased from their bank or trust com­ pany. The rate of inflation was high and, therefore, interest rates were also high. Not many people needed the assis­ tance of a qualified investment advi­ sor to purchase a GIC. All you need­ ed to do was check the rates at com­ peting institutions and make the investment. When the GIC matured, you just repeated this process. However, inflation and interest rates have since decreased to the low­ est levels in decades. Investors are being forced to flee from the low- paying fixed income investments | ------------------------- such as GIC's and alternatively choose investments that have good long-term growth poten­ tial. Many of these "GIC refugees" are purchasing stocks and equity-based mutual funds. This shift in investment trends has exposed investors to a higher market risk than what they are used to. However, over a century of history supports the notion that long-term equity investing does work, so the failure of good long-term returns is not the main concern. The culprit is short-term risk - better known as market volatility. Sudden market declines can put the stomach, of even the most seasoned, in an agonizing knot. That is the reason why investment advice is so crucial now. The difficult task of investing is often improved by retaining the services of a knowledgeable investment advisor. When everything runs smoothly, even a novice investor does not require much help. But during the periodic sharp market declines, the added guidance and opinions can be of Round-Up at Sears benefits Children's Aid Foundation "Help Us Help Kids" is what associates in the Sears Oakville store will be asking customers during Sears RoundUp Days, through May 28th. Sears' customers will be invited to RoundUp their total purchase to the nearest dollar. For every customer that does, Sears will match the amount. All the proceeds will be donat­ ed to the Halton Children's Aid Foundation. The Halton Children's Aid Foundation is a great charity! Shoppers who participate in the RoundUp Days will be doing something wonderful - contributing to providing chil­ dren with the resources required for their ongoing develop­ ment. Sears' Young Futures Program is dedicated to supporting groups within communities where Sears associates and cus­ tomers live, that promote the healthy development of chil­ dren and youth in Canada through essential resources includ­ ing food, clothing, and social interaction. Over the past several years, Sears Canada has donated more than $ 1-million for children's charities nationwide through Sears' RoundUp Days. Sears Oakville Place donat­ ed over $2,500 to the Halton Children's Aid Foundation dur­ ing the April and October 1998 RoundUp Days. Petro-Can open house The Petro-Canada refinery in Bronte is holding its annual open house on Wed. June 2nd. The open house is from 5:30 p.m. to 8:30 p.m. In past years, the open house was held in April, but was set for June this year to allow the refinery bus tours to continue later in the evening. Besides the bus tour, the open house features dis­ plays and opportunities for the public to speak with m em bers o f the re fin e ry 's C om m unity A dvisory Committee. For more inform ation about the hotline or the open house, call C olleen S tevenson, Site leader, Environm ent, health and Safety for Petro-Canada at 825-1762. tremendous value. Depending on your financial objectives and personal pref­ erences, you might seek out a stockbroker, financial planner or a professional money manager that will actively manage your investments. The key to long-term investment success is to seek out this advice. Investing is often better with a financial coach to help you stick to your long-term strategy, when the markets are unstable. Your task is to decide if you need or can benefit from hav­ ing an advisor. Peter Watson, MBA, CFP, RFP, is the president of Peter Watson Investments - an Oakville firm specializing in retirement planning, RRSPs, and investment planning. He can be reached at 842-2100. T IP O F T H E W E E K : "Cut turnover costs and expand profit with investments you want to hold on to.' How to manage portfolio turnover Many investors wonder how often they should sell investments they own and buy new ones. The answ er A s rarely a s possible. That's because portfolio turnover cuts into your profit. COSTS OF TURNOVER • Brokerage commissions. Every transaction involves brokerage commissions or similar costs, even if these costs are hidden or built into the price you pay or receive. e Losses to the bid-ask spread. If you want to carry out a transaction right away, you have to accept the highest available "bier, or pay the lowest "offer.* You can enter your own bid or offer. But this means you have to wait for another investor who is willing to do business at your price. Meanwhile, prices could move against you. e Taxes. If you sell at a profit in your taxable account (outside your RRSP), you usually have to pay capital gains taxes. CALCULATING THE COST 1. Add the value of all investments bought during the year and all investments sold. 2. Add the beginning and year-end portfolio values. 3. Divide the first number by the second. EXAMPLE - You sold $20,000 shares and mutual funds from your $50,000 portfolio. You held on to $3,000 to pay capital- gains taxes and bought shares and mutual funds worth $17,000. Total, $37,000. - Your portfolio is worth $50,000 at the beginning of the year and $57,000 at year's end. Total $107,000. - Portfolio turnover: $37,000 divided by $107,000, or 34.6%. You replaced an average of 34.6% of your portfolio during the year. That's on the high side. Portfolio turnover of 25% a year or less is preferable. Cut turnover, raise profit Seek out stocks you might want to hold on to indefinitely. You'll change your mind on some of them, of course, but you'll hold others for decades. These will give you your biggest profits. 0 1998 ArtPra« International GRAPHICS SYNDICATE 20Z9 FOR MORE INFORMATION CALL US AT 1 -888-ONT-VOTE (1 -8 8 8 -6 6 8 -8 6 8 3 ) OR TTY 1 -8 8 8 -2 9 2 -2 3 1 2 VISIT OUR WEBSITE AT www.electionsontario.on.ca £ l e c A '0 ' O NTARIO PR O VIN C IA L ELE C TIO N Be Sure You Can Vote! To vote on June 3rd, your name must be on the List of Voters. O N C N « \ If you are qualified to vote and have NOT received your Notice of Registration card for your current address, you should obtain a Certificate to Vote by 8 p.m. on June 2nd, the day before election day. If you have recendy moved and Canada Post has forwarded your card from your previous address, please note that you should register and vote in the electoral district where you will be residing on election day, June 3rd. You can also be added to the Voters List on election day if you make a statutory declaration and show the following documents to the poll official: •one identification document with your name, address and signature (such as a driver's licence), or •two identification documents: one with your name and signature and one with your name and address. Some examples would be a health card, hospital card, citizenship card, passport, utility bill, credit card, etc. e f t S3 S PHONE FOR FURTHER INFORMATION The phone numbers for electoral district returning offices are available from Directory Assistance. If you require information specific to your electoral district, ask for "Elections Ontario" and then the electoral district by name. Returning office phone numbers can also be found on our website at www.electionsontario.on.ca IF YOU DON'T KNOW THE NAME OF YOUR ELECTORAL DISTRICT, CALL US AT: l-888-0N T -V 0T E ( 1 -8 8 8 -6 6 8 -8 6 8 3 ) OR TTY 1 -8 8 8 -2 9 2 -2 3 1 2 NEW ELECTORAL DISTRICTS The boundaries for electoral districts in Ontario provincial elections have changed. The number of electoral districts has gone from 130 to 103 and boundaries are now the same as those for federal elections. You may confirm your electoral district by calling Elections Ontario or by visiting our website. QUALIFICATIONS TO VOTE To be eligible to vote, on polling day a person must be: • 18 years of age, • a Canadian citizen, and • a resident of the electoral district. Persons who ceased to live in Ontario within the two years before polling day may be entitled to vote under certain conditions. Call us for further information. If you have friends or relatives who have difficulty reading, please make them aware of the information in this notice. © Elections © Ontario A non-partisan Agency of the Legislative Assembly. Keeping you informed. B/37 Has An Oakville Business Impressed You Lately? We want to know! Starting June 27th, Avalon Securities Corp. and The Oakville Beaver will be saluting those local Oakville businesses that demonstrate exemplary service. The "Above & Beyond" award will be presented to one business each month who provides exceptional service, product and/or effort to assist their customers. You, the customer, will be the judge! Fill out the nomination form below and tell us about an experience you had with a local restaurant, retail store, service industry, or business partner. You have a chance to win a $25 dining certificate just for nominat­ ing a business. The winning business will receive a plaque, dining certificate courtesy of Avalon Securities Corp. and an editorial profile in the "Above & Beyond - Profiles In Business" feature to appear the last Sunday of each month. The award p re s e n te d by Ava lon S e c u r i t i e s and The O a k v i l l e Beaver hopes to encourage O akv i l le bus iness ow ners to rec ogn iz e tha t o u ts ta n d in g c u s to m e r s e rv ice pays o f f . you haC, Above fif Beyond Profiles In Business I Nominator: Nominee: Name Name Address Address Phone P h o n e Please describe why you are nominating this business. w i n 1 > N,NG r r DT._ Business name (attach additional pages(s) if necessary) S p o n s o re d b y The Olkville Beaver L ^ a5 I ai i ° i A ttn : K' Monta9ue, The Oakville Beaver, 467 Speers Rd., Oakville, OM L6K 3S4 Fax 3 3 7 -5 5 6 8 A v a l o n 0 http://www.electionsontario.on.ca http://www.electionsontario.on.ca