FALL 2013

Shannon B. Briske, B.Comm., CFPSenior Financial Planning Advisor

Byron T. Briske, B.Comm.Financial Advisor

Assante Financial Management Ltd. 500 Spadina Crescent East, Suite 301 Saskatoon, SK S7K 4H9 Telephone: (306) 665-3244 Fax: (306) 665-6691

211 Main St. / Box 1674 Kindersley, SK S0L 1S0 Telephone: (306) 463-6400 Fax: (306) 463-3966

Email: sbriske@assante.com Could this fall be the right time to turn a new leaf?

Some of the best “what if…?” conversations can start with a crazy idea or an unexpected opportunity to try something new. Or, another scenario might be to reach your current goals faster.

Whatever your “what if…?” is, let us position your financial resources to help take you there.

Please talk to us, and we can adjust your investment plan to help make your goals viable.

What we can learn from successful female investors

A report from a major North American financial institution suggests that women are not as

confident as men when making investment decisions.1 Half of the women surveyed said that they need “some help” with their investments and a third said they need “a lot of help.”

Despite this lack of confidence, there is increasing evidence that they may be better at investing. In a 2012 study by Rothstein Kass, female hedge fund managers outperformed their male counterparts.2

Women also appear to do better with their personal investments. A TD Ameritrade survey found that 81% of self-directed female investors feel that they were successful at closely matching or outperforming the markets over the last two years.3

Why do women do better? Prudence and openness to seeking advice appear to be key success factors. In addition, women

appear to be more cautious about trading. Even back in 2001, a study by Brad Barber and Terrance Odean of the University of California found that men traded stocks 45% more often than women but earned net returns almost a full percentage point lower.4 The results bolster proponents of “buy and hold” investment strategies, who believe that investing for the long term reduces expenses, increases returns and is more tax-efficient.

It is far from clear whether initial results of the surveys published will be confirmed in long-term studies of larger sample groups. Still, they do provide some intriguing food for thought. Give us a call if you’d like to discuss your investment portfolio and your own investment style. n

1 Prudential, Financial Experience & Behaviours Among Women2 On Wall Street, “Female Hedge Fund Managers Ruled the Markets in 2012”3 TD Ameritrade, Women Investors Perform Consistent with of Better than Markets, 20124 Brad M Barber and Terrance Odean, “Boys will be boys: Gender, overconfidence and common stock investment”

2

During the first six months of 2013, Japanese stocks gained more than 31.5%1 while

Canadian and U.S. equities lagged. Similarly, in 2012, the Nikkei 225 significantly outperformed the Toronto S&P/TSX. (See chart, below.)

Of course, past performance is no guarantee of future returns, but numbers like these certainly drive home the importance of international diversification in boosting the growth potential of your mutual fund portfolio.

Additional benefits Growth potential isn’t the only reason to go global. In fact, successful investors diversify into foreign markets for much the same reason that they diversify by asset class: to smooth out earnings and capital gain/loss fluctuations.

International diversification has another advantage for Canadian investors, in that it also increases their sector diversification opportunities. Canadian markets are blessed with huge natural resources and banking sectors. However, these make up an unduly large proportion of the S&P/TSX index, which in turn, is significantly weak in the manufacturing and technology areas. International diversification is the only way to gain exposure to these sectors.

These days, international diversification

Look abroad for growth potential and enhanced diversification

may make even more sense because of what Christine Lagarde, head of the International Monetary Fund, characterizes as a “three-speed” global economy.2

Global growth trendsEmerging nations, such as China and India, where many westerners have been slow to invest, are growing rapidly, as rural workers and their families move to the cities to take on urban, middle class lifestyles. This trend creates substantial opportunities for businesses that position themselves to supply the housing, appliances and services that this increasingly affluent population segment demands.

On the other hand, Europe and Japan, which are beset by demographic and other challenges, are struggling to stay out of recession. Families in those advanced economies tend to be older, generally well-established and cutting back on spending now that the kids have moved out (or are getting ready to do so) and the parents begin to focus on retirement. The United States and Canada are in between the two first groups — they are growing, but slowly.

Astute global funds managers are taking advantage of these “three speeds” by, for example, looking for opportunities in out-of-favour European stocks and lightening up on U.S. issues, many of which were

touching new highs at mid-year. Getting the right international asset

balance is not easy. Fast-growing markets (such as Japan during the 1980s) can be overvalued, and those that are struggling, such as the U.S. during its recent recession, can be undervalued.

The right choices for you Ironically, investors are often tempted to buy when they should be selling and sell when they should be buying. Establishing a diversification target and sticking to it by rebalancing when necessary helps restrain buying and selling based on those impulses.

Mutual funds also make the “balancing act” a little easier for the average investor. They have the research capacity, resources, and external connections to operate efficiently anywhere in the world, despite differences in culture, regulations and tax law.

How much international diversification is appropriate and what is the right way to get it? The answer to that question will be different for every investor, because it depends on your investment objectives, need for liquidity, and comfort level with volatility.

With a wide range of funds to choose from, we can find the fund or funds that are right for your portfolio.

1 Addenda Capital, Financial Indicators2 IMF blog, Olivier Blanchard, “The World’s Three-Speed Economic Recovery,” posted April 16, 2013

Comparing international market performance

Investment markets around the world typically turn in very different annual performances from one another, as this chart shows. Diversifying globally helps to capture the growth potential of the world’s outperformers while reducing portfolio volatility.

-20%2011 2012 2013 (Jan 1 - Jun 30)

-10%

0%

10%

20%

30%

40% Canada (S&P/TSX Composite)U.S. (S&P 500)

Japan (Nikkei 225)U.K. (FTSE 100)

Results in local currency terms, excluding dividends. Source: Addenda Capital

MUTUAL FUND INVESTING

3

INSURANCE

Canadians are increasingly realizing that lengthening life spans mean that they may need to save more

for retirement than they had previously thought. However, many are still not taking the necessary steps to meet their long-term care needs. A recent report by the Canadian Life and Health Insurance Association (CLHIA) indicates that there will be a $640 billion gap in the funding Canadians will need to finance their long-term care requirements.1

Much of that gap stems from the fact that while baby boomers (the first of whom turned 65 in 2010 and who are now retiring in droves) are increasingly preparing for their golden years, many do not yet recognize that those years might not all be healthy ones.

In fact, according to Statistics Canada, the healthy life expectancy of Canadians is considerably shorter than their actual life expectancy. Women and men can expect to live on average 83.6 and 78.9 years, respectively. However, their Health Adjusted Life Expectancy (HALE) is just 72.1 and 69.6 years.2 That means, on average, Canadian men and women will live between nine and 11 years with compromised health and may need assistance with the activities of daily living, such as bathing, getting dressed, and eating.

The high cost of careLong-term care insurance is designed to address services that they will need during that time. These can range from assistance in the home to round-the-clock care in an institution for those who become disabled by Alzheimer’s and other diseases. These expenses can add up. For example, the average costs of a daily hospital bed, a long-term care bed and home care are $842, $126 and $42, respectively.1

The need for solutions to address these issues is increasing. The federal and provincial governments, both of which provide healthcare funding (although

health is a provincial jurisdiction), cover only a few such services. Furthermore, budgets at both levels of government are tightening.

The CLHIA notes that in 2011, 7,550 hospital beds, or roughly 7% of the Canadian total, were already occupied by long-term care patients. Retiring boomers threaten to cause that number to spike in coming years, giving governments a strong incentive to “pass the buck” to consumers.

The federal government may be tempted during coming years to limit the growth in health-related transfer payments to the provinces. Cash-strapped provinces in turn may reduce the number of hospital beds that they make available for long-term care patients. These trends imply that Canadians will be increasingly called upon to look after themselves.

Sadly, most seem ill-informed about the implications. A poll of Canadians aged 60 years and over conducted on behalf of the CLHIA found that 67% of those surveyed had no financial plans to cover long-term care expenses. More than half had no idea of the costs involved.

Balancing prioritiesWith many demands on your cash flow, it can be difficult to juggle priorities. One thing is certain: The sooner you start to plan, the easier it is to prepare for your future needs.

Whatever your situation, please remember that we’re here to help. If you’re younger, we can help you explore cost-effective ways to ensure you will get the care you need when you’re older. If you’re not so young, we can help you review your resources and options and

help you make the decisions that are best for you. n

Is long-term care insurance a good choice for you?

The reality of aging in Canada

• On average, Canadian men will spend nine years of their lives with compromised health; for women, the figure is 11 years past the time when they are healthy.2

• 67% of Canadians have no financial plans to cover long-term care expenses.1

• The average cost of a daily hospital bed, long-term care bed and home care are $842, $126 and $42, respectively.1

1 Canadian Life and Health Insurance Association, Report on Long-Term Care Policy, June 2012 2 Statistics Canada: Health Adjusted Life Expectancy

This material was prepared for and published on behalf of the representative named herein and is intended only for clients resident in the jurisdiction(s) where their representative is registered. This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with applicable insurance regulators. Individual equities are available only through representatives of Assante Capital Management Ltd. In considering any particular investment, please remember that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided herein are subject to change without notice. Neither Assante Financial Management Ltd. or Assante Capital Management Ltd. nor their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever in respect of the use of this material. Certain names, logos or graphics herein may constitute trade names, trade-marks or service marks (“Trade-marks”) of CI Investments Inc. and/or its affiliates or of third parties. The display of Trade-marks herein does not imply any licence has been granted to any third party. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Copyright © 2013 Assante Wealth Management (Canada) Ltd. All rights reserved.

Transitioning the family business As baby boomers head toward retirement, many will be faced with the prospect of selling or transferring a family business. If you’re a business owner in this situation, here are five key issues to keep in mind.

1. Plan well in advanceSelling a business is not just a financial decision; it is also a lifestyle change. Make sure that you prepare not just for the financial consequences, but also for the personal ones for a successful transition.

2. Beef up the financial statementsBusinesses often sell for a multiple of their most recent year’s net income or gross profit. As a result, any increases that you record in your final year — for example, from cutting unnecessary expenses or increasing billings — could pay off exponentially.

3. Consider a gradual transitionAssess the possibility of remaining active for a year or two in the business, after you sell it, so that the new owner can better leverage the goodwill that you have built up. This may increase the selling price and help you ease into retirement.

4. Should you sell to your kids?A business in your kids’ hands could well retain all of its goodwill value. However, it’s important to make sure that your kids are willing to take on the responsibilities and have the necessary skills.

5. Invest the proceeds graduallyWhether you sell to your kids or a third party, remember to take your time with the proceeds. Gradually averaging into an appropriate mix of fixed-income and equity securities can help avoid buying at a market peak.

We can help you review your options as a business owner and make sure your financial plan, retirement plan and business succession plan are in harmony. n

Global central banks have been maintaining exceptionally low short-term interest rates ever

since the U.S. housing crisis of 2008 and ensuing recession. Furthermore, there are indications that rates may remain low for an extended period of time.

This presents investors with considerable challenges that public policy makers are reluctant to acknowledge. In particular, lower interest rates could mean that Canadians will need to save more to maintain their desired retirement lifestyles.

Challenges for regulatorsThe U.S. Federal Reserve and the Bank of Canada have both kept their highly influential policy rates at near negative real yields for the past several years. However, in a June 19, 2013 press conference summarizing the meeting of the Federal Open Market Committee, U.S. central bank chairman Ben Bernanke stated that he planned to gradually “taper,” and then end, the bank’s bond-buying program, which had been keeping down longer-term interest rates.

The announcement was accompanied by a series of caveats relating to inflation and employment targets that gave him the flexibility to change his mind if circumstances warranted. However, equities markets reacted by falling sharply, firming up only after Fed officials provided reassurance, reiterating the many conditions that would have to apply before the strategy could be implemented.

The incident indicates how hard it will be for the U.S. Federal Reserve to raise real interest rates. The upshot is that investors need to prepare for the fact that even if the Fed does begin to

gradually tighten its monetary policy, rates may remain low for quite some time.

Implications for investorsThis has important portfolio management implications. For one, it could have a major long-term effect on retirement plans. Many investors balance their allocations between equities and fixed-income securities. However, if one part of the mix (bonds) is not performing, the other half has to work at double speed.

With fixed-income yields expected to remain low, many investors are turning to equities, particularly dividend-paying stocks. However, higher equity valuations, particularly in the U.S., imply that future returns could be lower. Prudent investors may want to adjust their expectations accordingly.

Making up the differenceBased on lower earnings expectations, you may want to consider setting aside more for your long-term objectives than you had previously planned. Many Canadians have already tacitly acknowledged this: Data from the Organisation for Economic Co-operation and Development (OECD) show that savings rates in Canada have been gradually rising and are projected to continue rising in coming years.1

In these uncertain times, it pays to be prudent. We can review your long-term portfolio based on more than one scenario, to ensure that you can stay on track to reach your goals regardless of fluctuations in interest rates and market returns. n

1 Organisation for Economic Co-operation and Development, Economic Analysis, Outlook and Forecasts, Annex Table 23

Safeguarding your financial plan from protracted low interest rates