BeyondFunds by Jeff Wareham

A first look at 2012

2012-01-16T08:29:00.000-08:00

This Week in Business ended with a thud, as S&P dropped the ratings of 9 European countries. France and Austria lost their AAA status, as the problems of the peripheral countries have now come squarely home to the core economies of the continent. Germany's top rating was reaffirmed, but Spain and Italy dropped 2 notches, and all of the downgraded countries remained on negative watch. This indicates significant risk of further downgrades. As Europe continues to struggle with its crisis, this is not good news, as these countries are likely to face higher interest rates in future. The Euro dropped dramatically as rumours hit the market prior to the announcement. The Euro fell to multi month lows against the US and Canadian dollars, while the loonie weakening only slightly against the greenback. Commodities and stocks also fell on the news. Tensions over Iranian nuclear ambitions continue to rise, much to the chagrin of oil consumers around the world.

Despite all these concerns, Toronto finished a fairly solid week at 12231, while the Dow ended at 12422. The Nasdaq finished at 2711, and the S&P finished at 1289. Oil fell to 98.30, gold finished at 1639, and the Canadian dollar fell to 97.70 Despite European weakness, early indications coming from multinational quarterly results are pretty positive.

In this week's Beyond Funds Market Weekly, I discussed income generating investment alternatives for 2012. Click here for the podcast. http://www.am980.ca/BeyondFundsPodcasting.aspx

This Week in Business

2011-02-08T19:08:00.001-08:00

This is Jeff Wareham, with This Week in Business. Another week, and more signs that the U.S. Federal Reserve is determined to add debt far into the ongoing U.S. recovery. Canadians need to pay attention to this for at least two reasons. First, it will continue to drive the surging loonie higher, or at least the greenback lower. Second, it will continue to impact the price of commodites, assets, food, and even bonds.

North American markets stretched higher this week. Toronto's TSX finished the week at 13792. The Dow in New York finished at 12092. The Standard and Poors index finished at 1311, and the Nasdaq finished at 2769. Asian and European markets joined the party, ending broadly higher. Oil fell through the week, ending at 89 dollars, Gold fell as investors seemed less concerned by uncertainty in Egypt well. The loonie recovered to 101.20 against the US greenback. Events in the Middle East dominated the news, leaving domestic economic news literally in the dust. Unemployment numbers in Canada were very positive, with a drop in local and national rates. In fact, the employment level exceeded the high point prior to the downturn. U.S. unemployment dropped dramatically, but over a million discouraged workers simply stopped looking, and only 36000 net new jobs were created. Further negative housing data broke, and 3 more U.S. banks failed. Visit my blog at www.am980.ca, follow @beyondfunds on twitter, or tune in to Beyond Funds Market Weekly, Saturdays at 12:30 for further information on the market.

This is Jeff Wareham, with This Week in Business. visit my blog at www.am980.ca, follow @beyondfunds on twitter, or tune in to Beyond Funds Market Weekly, Saturdays at 12:30 for further information on the market

This Week in Business

2011-01-21T19:38:00.000-08:00

This is Jeff Wareham, with This Week in Business. It was an up and down week for global markets, with investors obviously struggling to decide whether the bull market run will continue, or if it is time for a correction. Toronto’s TSX finished the week at 13289, down for the week, while the Dow in New York finished the week at 11871. The Nasdaq was down for the week, finishing at 2689. Oil finished a rough week at 89.14 per barrel, but the Canadian dollar held it’s own versus the US greenback, off slightly on a weekly basis, but still above par at 100.6 cents US. Gold got hammered, finishing the week at 1342 per ounce.

It was an interesting week for technology investors, with numerous changes, planned and unplanned, at the helm of major technology companies. Energy and mining stocks were hit by falling commodity prices. Canadian banks held their own in the face of changes to lending regulations. Global investors watched with interest the meeting between Presidents Obama and Hu Jintao of China. Tune in to Beyond Funds market weekly Saturday at 12:30, visit www.am980.ca for up to date business news, or follow @beyondfunds on twitter for further market information.

Tune in this week, as | discuss investing like a pension or a hedge fund.

New Time, and Some New Ideas for 2011

2011-01-12T16:32:00.000-08:00

Over the next few weeks, I will be reviewing eleven themes for 2011.

1) Yield matters. Look at dividends, corporate bonds, and trusts.

2) Think like a hedge fund or a pension.

3) Don't fight the Fed. Watch the impact of QE II on commodity and bond prices.

4) Avoid any actively managed Canadian Balanced fund. High fees, low returns.

5) Get a second opinion.

6) Consider flow through shares as a planning strategy.

7) Consider ETFs for diversification

8) Invest like a business owner. Buy great balance sheets and great income statements.

9) Use convertible debt in your portfolio.

10) Invest in assets that interest you.

11) Get out of wraps.

Tune in to AM980 Saturday at 12:30, and find out how these ideas can help you in 2011.

What is new at MGI?

2010-10-14T09:39:00.000-07:00

When spider webs unite they can tie up a lion.

-African Proverb

What is new at MGI?

Jeff Wareham and Anne Milne are teaming up together to create the Wareham Milne Group. Quite simply, we are both believers in the “team” approach, and our partnership offers the unique opportunity for us to focus on our unique skill sets. It will broaden and deepen the financial advisory experience of both of our clienteles.

As advisors we personally work with clients to provide financial and money management advice throughout their evolving life circumstances. Customized investment solutions are tailored for each family’s goals and needs.

Please allow us to introduce ourselves…

Anne Milne, BA, CIM, CFP

Anne has a unique and diverse career experience; she has been a social worker, a vocational counselor and an entrepreneur in women’s fashions. At the University of Western Ontario she studied sociology and has combined that background with economic studies to give her a unique perspective on the investment process. Her specialty is observing the ‘herd’ not only as it relates to stock market activity, but also how we as humans engage in herding behaviours for most social activities, including investing.

Jeff Wareham, BA, CLU, CFP

Jeff’s degree is in English and Economics. That means he can give you an economic forecast in language you can understand! Jeff focuses his time on helping investors achieve their financial goals using time-proven, “common sense” investment strategies. Jeff is also the host of Beyond Funds Weekly on AM980, a show dedicated to the needs of investors who may seek alternatives to traditional mutual funds. His show covers a wide range of current investment news and topics. He lives in London with his wife Ann Martin and their children. Ann joined his team in September 2008 as an Administrative Assistant.

Top five vacation destinations for your money

2010-07-09T09:35:00.000-07:00

Top five vacation destinations for your money

With the lazy, hazy days of summer upon us, it may be the ideal time to send your money on vacation. The summers of our childhood may have been filled with risky adventures, but as we age, a quiet lakeside cottage, or even a leisurely evening on our deck, may be the high point of the summer. Similarly, I believe this summer will be a wonderful time to seek a secure, comfortable, peaceful destination for our money. In fact, with the many unsettling issues and potential events around the world, it may be a great summer to consider a “staycation.” The turbulence of our daily lives, which makes the quiet vacation destination so attractive, is also a compelling argument for seeking a safe harbour for the summer. Let’s take a look at my five ideal vacation destinations for our money.

1) Consider a “Staycation”

In a volatile world, there may never be a better time to seek the safe haven of the Canadian Domestic economy. We have a great government balance sheet, relatively business friendly economic policy, and a wealth of resources unmatched in the western world. We are readily accessible to the booming economies of the Far East, and we still have the best trade relationship with the US of any country in the world. The market may be turbulent on the low volumes of summer, so the opportunity may emerge to pick away at great Canadian companies with solid balance sheets and growth in revenue.

Take a Staycation. Buy Canada.

2) Avoid the roller coasters

The Flash Crash of May 6th remains largely unexplained. Europe is essentially bankrupt. The states in our southern neighbour are worse off than the EU. Global markets have recovered about half of the losses they experienced through the catastrophe of 2008 and early 2009, but have broken many important technical trend lines over the last couple weeks. The market reminds me of Space Mountain, the great dark roller coaster. You really don’t know what is coming next, you can’t see it, but you know it is going to be wild. I love roller coasters, but I think money belongs on the sidelines when the ride looks wild. Ultimately, the majority of long term equity returns have come from dividends, so why not look for stability, with a steady pattern of dividend growth.

Avoid the roller coasters. Buy dividend growers and lower volatility stocks.

3) Go somewhere boring

In January of this year, I took a very strong stance in favour of corporate bond funds. Virtually every advisor I knew was bearish on bonds. I took some heat for this stance, but I was right, and I continue to think the broad based hatred of bonds is misplaced. There is a lot to be said for return of your money trumping return on your money. In fact, even government debt has rallied recently, but I prefer corporate bonds over government bonds. Corporate bonds pay better interest than government bonds. Most Corporate balance sheets are far superior to those of governments. If the economic recovery continues, corporate will benefit from upgrades, and may even earn capital gains despite the fact that global yields on government debt will rise. If the economy stumbles, corporate bonds are much more likely to hold their own than stocks. Get paid to sit on the sidelines, whichever way the economy goes.

Go somewhere boring. Buy corporate bonds

4) Go somewhere unloved

Halloween of 2006 may have been the last time you considered the great, unloved, and dying segment of the Canadian investment market, the income trust. In their glory days, they were the darling of Bay Street. The beneficial tax treatment is disappearing. Investment dealers provide little research. If you held them in O6, they hurt you. Many are busted businesses, with busted capital structures, yet I believe they deserve a second look. With this painful environment, it is tough to own the trusts, but there are some real gems among them, with eye popping, often double digit distributions. I love income payers, so these unloved companies are on my radar.

Go somewhere unloved. Buy income trusts.

5) Consider a seasonal retreat

One of the most impressive interviews I have conducted was of Brooke Thackray, the author of a number of books, including an excellent guide on seasonal investing. Brooke has brought out an Exchange Traded Fund (ETF) that tracks the seasonal nature of the market. This ETF has been outstanding so far. If you want a copy of his book on the subject, let me know. If you want to put your money on autopilot for the summer, why not consider his ETF?

Consider a seasonal retreat. Buy the seasonal ETF.

The Canadian Success Story to Watch

2010-05-12T19:40:00.000-07:00

Last week, I visited a wonderful, hospitable province, which, in my opinion, is the Canadian success story of the 21st century. It is almost hard to fathom that there is a province which;
-supplies 1/3 of the world’s potash
-supplies 1/4 of the world’s uranium
-is the 2nd largest oil producing province
-is the 3rd largest natural gas producing province
-is the 3rd largest coal producing province
-has significant oil sands potential
-has the world’s largest diamond exploration project (Shore Gold)
-has significant base and precious metal finds (zinc, copper, gold)
-has the largest rare earth minerals find in North America
-has significant potential for helium and associated gases
(Excerpted from “The World is Watching Saskatchewan” -49 North information brochure)
Few Canadians give much thought to Saskatchewan...but you should. After years of overtly anti-business sentiment, an entrepreneur friendly government has risen to power. Resource development is no longer a dirty word in Saskatchewan, and the result has been swift and dramatic. Major mining company regional head offices are scattered around downtown Saskatoon. The decades old population bleed has been stemmed, and the province grew by 30,000 last year. Graduates who fled their homeland to Alberta, BC, and Ontario, are returning. House prices have doubled. Investment dollars are flowing in, and opportunity abounds.
Over the next few weeks, my show will concentrate on this growing investment opportunity. Stay tuned...it really is an exciting opportunity.

The Greek Debt Crisis

2010-05-11T16:12:00.000-07:00

I have been struggling with the recent response to the Eurozone debt crisis. Quite simply, the EU has made it evident that they will print money to pay the debt of a member that is in trouble. Although this may seem reassuring in the short term, a basic problem exists. With much of the EU counties' debt denominated in Euros, this fundamentally ensures the devaluation of the Euro, to the detriment of global investors. By allowing debtor nations to pay back the debt with essentially devalued currency, the EU does little to ensure the fundamental economic reforms will happen in the weaker member nations, referred to as the PIGS (Portugal, Italy, Greece, and Spain, with honourable mention to Ireland).

We have seen how well received Greece's austerity measures have been. Less notice has been given to the electoral rebuff dealt to Angela Merckel on the weekend. Reforms will be unwelcome in both the weaker, and stronger states of the Euro.

If that is not troubling enough, read this Financial Post article (CLICK HERE) on the emerging sovereign debt crisis in the US.

Stay tuned. This story is far from over!

Seasonal Investing Interview

2010-05-01T06:28:00.000-07:00

This morning, I am interviewing Brooke Thackray, author of several books, about his work on seasonal investing. Tune in to hear his thoughts on the following;

What is seasonal investing?

What causes the seasonal fluctuations in the market place?
Does it always work?
Does seasonal investing only work in the stock market?
What are some of the seasonal trends at this time?
Are there any seasonal investments in the summer time?
How long does the average seasonal trade last?
How can an average investor profit from seasonal investing?

If you would like a copy of his book, I have a limited supply available...send me an email with your name and address!

Loonie Soars

2010-04-14T17:59:00.000-07:00

After flirting with parity for weeks, the Loonie closed the deal, ending above par with the greenback for the first time since 2008. This is another step in the apparently ineviitable march higher of our currency. In fact, the surging Loonie has meaningful implications for global investment choices by Canadian investors. Tune in this week, for Beyond Funds |Market Weekly, and I will discuss investment alternatives in a world where the strength of our currency may work against you

Why Bonds May Still Be Good For You

2010-04-06T18:30:00.000-07:00

The Current & Future Environment For Fixed Income Markets & Investors:

Most new investment dollars put into mutual funds last year went to bonds. Most bonds across the board (provincials, corporates, high-yields, short-term, long-term, real return) rallied to a significant degree during 2009 due to a lowering rate environment, a contraction in credit spreads and lower than anticipated bond defaults. The outlook for long-dated federal, provincial and high-quality corporate bonds will be poor if we experience rising interest rates The Bank of Canada overnight lending rate has been drawn down to 0.25% - most analysts are expecting the rate to be upwardly adjusted in small increments during the years to come beginning Q3 of this year. With interest rates due to rise, what should an investor do?

Short-Term bonds and bond funds that were widely sold as money market alternatives may be a liability since while their durations are short, the quality of the issues is extremely high and thus more liable to rate increases.

How Can We Make Money in the Bond Market this Year and Years to Come?

Interest rates will be adjusted upward when overall economic conditions improve and GDP growth is also on the rise. At 0.25 percent, there really is nowhere to go but up, once the economic recovery gains traction. As we experience better overall economic conditions and improved GDP growth, defaults within high-yield bonds will decline. In relation lower credit quality investment-grade bonds, improved GDP growth and better overall economic conditions will mean credit qualities improve.
This means that the potentially negative effect of rising interest rates may well be off-set by the positive effect lower default rates have on high-yield bonds and the progression in credit quality, lower quality investment-grade corporate bonds experience, spurred by improved economic conditions.

Yet another consideration is that under these circumstances: It is anticipated that many high-yield bonds will become investment-grade (going from BB to BBB ratings) and become eligible for purchase by a variety of institutional purchasers (Pensions, Endowment Funds, Corporations etc...) increasing demand volume.

In other words, corporate and high yield bonds may be the ideal fixed income alternative in an improving economic environment.

Building a New Strategy

2010-03-21T20:38:00.000-07:00

Tune in this Saturday, to Beyond Funds Market Weekly, as I wrap up my ten themes for rebuilding your portfolio after the lost decade. Learn how you can strategize, with an advisor, to implement new and fresh ideas after the devastating markets of the first decade of this century. Your investment strategy may need to change after the lessons we have learned from the two major market meltdowns of the last ten years. Tune in next week to determine if you can benefit from a new and different approach to your financial future.

Learn how these 10 key themes matter to you;

1) Diversification means more than just stocks from around the world
2) Move up the balance sheet…consider bonds
3) Learn about convertible debentures as a stock alternative
4) Seg funds make sense to keep you in the market and secure your retirement income
5) Guarantee your principal with a strip bond
6) Look at ETFs as a mutual fund alternative
7) Buy at least one fun or interesting stock this year
8) Use covered calls to generate income
9) Look at a hedge fund for diversification
10) Take a serious look at the cost and performance of your mutual funds

Today's show

2010-03-13T07:24:00.000-08:00

Key topics from today's show

I discussed the subject "What is a Hedge Fund?" and "Why Invest in Hedge Funds?"

Hedge funds can increase portfolio diversification and provide some protection against market downturns. A hedge fund is a private pool of assets with an investment objective to generate positive returns under all market conditions. It employs a wide range of financial instruments and alternative investment strategies. The fund depends less on market direction and more on the skill of the fund manager than long-only portfolios.

I then covered the defining characteristics of a hedge fund. A hedge fund tends to display a low correlation to traditional markt indices. It has an absolute return objective with no benchmark considerations. Typically, it pays a performance-related incentive fee to the fund manager in addition to a management fee. The manager pursues a wide variety of strategies such as concentrated positions, leverage, arbitrage, and stock shorting. These strategies are not for everyone, but are the principal reason hedge funds are able to minimize their correlation to the market.

Typically hedge funds are structured as a limited partnership. Since most hedge funds are privately placed, provincial investment minimums apply. This should be discussed with an advisor. If you wish to discuss one on one, visit http://www.jeffwareham.ca/, or email me at jwareham@mgisecurities.com

Next Saturday's Show

2010-03-06T06:22:00.000-08:00

Thanks for tuning in to Beyond Funds Market Weekly.

Tune in Saturday at 9:30 A.M., for Beyond Funds Market Weekly. I will be continuing my discussion on lessons investors may learn from major pension plans. Many of the most important principles of investing are followed by pension plan administrators, and most traditional mutual fund strategies miss some, if not many, of these principles. Real estate, options, managed futures, commodities, and hedge funds are all financial instruments that may improve the overall risk adjusted return of your portfolio. Pension managers understand these principals, but I rarely see individual investors taking advantage of this opportunity to diversify. Tune in this Saturday, and learn how you, as an investor, may improve your returns, and reduce your risks, by following these basic principles..

Investing Like a Pension Fund

2010-02-28T19:29:00.000-08:00

Thanks for tuning in to Saturday's show.

Tune in this Saturday for Beyond Funds Market Weekly, as I discuss investing like a pension fund. Most major pension funds move beyond traditional bond and stock investments, and include alternative investments. Alternative investment classes increase the expected return of a portfolio, while reducing volatility. Do alternative investment classes fit in your portfolio?

Tune in Saturday at 9:30, and find out.

Next Saturday's Show

2010-02-20T06:13:00.000-08:00

Thanks for tuning in to this week's show. Next Saturday, I will be reviewing another strategy for rebuilding your portfolio after the lost decade. I will be discussing the use of covered call writing as a way to keep your portfolio growing through challenging market conditions. Learn how covered call writing is an easy and disciplined way to buy low and sell high. Very few advisors are talking to their clients about this innovative strategy, so tune in Saturday at 9:30, and find out if it is right for you.

Saturday Morning on AM 980

2010-02-19T19:23:00.000-08:00

Tune in to Cheryl Weedmark's show tomorrow AM, and you will hear us discuss my thoughts on Finance Minister Flaherty's announcement regarding changes to mortgage rules in Canada. At 9:30, tune in to my show, as I discuss the value of having one fun or interesting stock in your portfolio. Should be an interesting morning!

Add an interesting stock to your portfolio

2010-02-17T04:38:00.001-08:00

Tune in this Saturday morning, for Beyond Funds Market Weekly. I have been reviewing ideas for rebuilding your portfolio after the lost decade. Many Canadians own individual stocks in the same major Canadian companies, and there is nothing wrong with that. Your portfolio should likely consist primarily of high quality blue chip equities and bonds. However, I believe it is important to add one or two interesting holdings to your portfolio. By investing in unique companies with significant growth prospects, you may increase your returns, and add excitement to your strategy. Tune in Saturday at 9:30, as I discuss working with an advisor to identify unique growth opportunities.

Today's show

2010-02-13T09:56:00.000-08:00

This week, I focused on using ETFs to rebuild your portfolio after the "lost decade." Just because we have seen dreadful ten year results for equity markets, we should not give up on stocks as a meaningful component of a long term investment strategy. In fact, equities have outperformed all other major asset classes, over the long term. For this reason, I feel it is important to disscuss the options available for investing in equity markets. Larger portfolios have more options; individual stocks and bond positions may be used to achieve proper diversification. For smaller, or even moderate sized portfolios, diversification is more difficult. This may drive you to mutual funds. As I frequently discuss on the show, most mutual funds fail to beat the index against which they are measured. In fact, much of the excess returns associated with equities over other assets is chewed up by the 2.5% management expense typical of a Canadian mutual fund.

Exchange traded funds typically track an index, and have much lower management costs than an equity mutual fund. They give diversification at a much lower cost than a mutual fund. Further, there are many new, specialized funds that offer you exposure to individual sectors,or even bearish feelings about a sector, or the whole market..

Unfortunately, many investors do not get exposed to these alternatives, either because their advisor does not recommend them, or is not licensed to sell them. If you are looking to discuss your options, visit http://www.jeffwareham.ca/, send me an email, or call me at (519) 963-8019.

ETFs and rebuilding your portfolio

2010-02-08T05:39:00.000-08:00

This week, on Beyond Funds Market Weekly, I continue with my series on rebuilding your portfolio after the lost decade. Traditional mutual funds have rarely beaten the return of the market. For that reason, many investors are choosing a low cost alternative, the exchange traded fund, or ETF. ETFs are a great way to get exposure to the market, but not all are created equal. Tune in Saturday at 9:30, as I discuss ETFs as a part of your long term strategy

2010-02-01T06:24:00.001-08:00

adding strip bonds to your portfolio

2010-02-01T06:22:00.001-08:00

This week on Beyond Funds Market Weekly, I continue my series on rebuilding your portfolio after the lost decade. If you want to invest for the long term, but have an absolute minimum dollar amount you must have at retirement, you should consider adding strip bonds to your portfolio. Buying a strip bond maturing at your retirement target date may be the simplest way to guarantee you meet your goal. Government strip bonds offer a unique combination of security and yield, and you, as an investor, should sit down with an advisor, and explore how you may use them to guarantee the growth of your portfolio. Tune in Saturday at 9:30, and learn more about using strip bonds as a cornerstone of your portfolio.

Anti Bank Sentiment a Little Frightening

2010-01-31T08:27:00.000-08:00

I have spent a number of years working within the frequently difficult and stifling environment of the Canadian banks. I am no great fan of them as employers, but I must say that I am stunned at the animosity toward banks that is currently pervading political elites around the world. President Obama has them in his gun sights, and is whipping up political fury. Apparently the international conference in Davos, Switzerland, has featured similar sentiment (CLICK HERE). No question that bankers share some of the blame for the recent meltdown, but should they have to hunker down and prepare for a global political assault (CLICK HERE). Most global politicians likely should revisit their first year economics courses...banks actually work with central banks to create money, and it is a very dangerous game to constrain their capital. Love them or not, banks have the ability to support economic growth and stability, in the right regulatory environment. Let's hope global regulators are able, and willing, to temper the fervor of populism.

rebuilding your portfolio after the lost decade

2010-01-27T08:37:00.001-08:00

Many investors are looking for away to invest in the market with reduced risk to their principal. This has led to a surge in guaranteed withdrawal benefit plans and segregated funds. Tune in Saturday morning at 9:30, for Beyond Funds Market Weekly. I will continue my series on rebuilding your portfolio after the lost decade. This week, I will discuss the role that segregated funds may play, particularly if you wish to invest in equities, but are worried about losing your principal, .Segregated funds are not for everyone, but they may have a place in your portfolio

Segregated Funds

2010-01-25T11:14:00.000-08:00

Tune in Saturday morning at 9:30, for Beyond Funds Market Weekly. I will continue my series on rebuilding your portfolio after the lost decade. This week, I will discuss the role that segregated funds may play, particularly if you wish to invest in equities, but are worried about losing your principal.Segregated funds are not for everyone, but they may have a place in your portfolio.

Another Portfolio Rebuilding Strategy

2010-01-23T07:24:00.000-08:00

As I mentioned on today's radio segment, I believe convertible debentures are an excellent component of a portfolio damaged by the weakness of the past decade. Wikipedia does a great job of describing these vehicles (Wikipedia article), so if you want a quick lesson, read the article. I think they are a great way to get back "in the market," while increasing the3 yield in your portfolio.

Utilizing Convertible Debentures

2010-01-22T06:37:00.001-08:00

This week, on Beyond Funds Market Weekly, I am continuing with my series on rebuilding your portfolio after the lost decade. Last week I discussed bonds, and their important role they play in protecting your portfolio from market volatility. Unfortunately, many bonds are offering yields barely above inflation. One bond alternative I like is utilizing convertible debentures. Tune in tomorrow,and I will explain how these may give you the upside of bonds,and protect you from the downside of stocks

Convertible Debentures

2010-01-20T06:51:00.001-08:00

Over the past few weeks, I have been discussing rebuilding your portfolio after the lost decade. This week, I will be discussing convertible debentures as a way to grow your wealth. When stocks go up, debentures benefit from their conversion priviledge. When stocks go down, debentures may retain value better, because they earn interest, and are ahead of stocks on a company's balance sheet. Despite the advantages, few investors take advantage of the opportunity they present, Tune in Saturday to learn more.

Bonds Play a Critical Role

2010-01-18T07:32:00.001-08:00

On Saturday, I discussed the critical role that bonds play in a well constructed investment portfolio. Strip bonds and corporate bonds can both significantly enhance the return you earn, while protecting you from the volatility of the stock market. If you have not looked at the value of adding bonds to your portfolio, why not give me a call, and get a decond opinion?

Bonds

2010-01-15T06:16:00.001-08:00

This week I have been talking about the benefit of diversification. Tomorrow, I will discuss a second key theme for rebuilding your portfolio after the lost decade. Bonds are a key element of a properly diversified portfolio, and I believe that their role is often misunderstood. Bonds may significantly reduce your risk, and provide income during difficult times. Tune in tomorrow at 930, and I will iscuss how bonds fit into your long term strategy.

"Diversification is more than buying a bunch of global mutual funds"

2010-01-13T07:27:00.000-08:00

Conventional investment wisdom is frequently flawed. Over the past decade, we have seen the Canadian dollar strengthen, and stocks around the world floundering. Global equity mutual funds have been hit hard by this double negative. As a result,you may have lost money, especially if you followed the traditional approach of buying a number of global equity funds for diversification. Quite simply, the time has come to recognize that diversification is more than buying a bunch of global mutual funds. If you are wondering if you need a second opinion, give me a call.

The Important Role of Diversification

2010-01-11T05:09:00.000-08:00

On Saturday, i discussed the important role of diversification in rebuilding your portfolio. Diversification allows your portfolio to grow through difficult market conditions, and can protect you from the wild swings in equity markets. Many portfolios I review are made up of several equity oriented mutual funds. This is not diversification. Bonds, cash, preferred shares, real estate, and even options all have their place in a well constucted portfolio. If you think that your portfolio needs a second opinion, give me a call.

Time to Rebuild

2010-01-03T18:39:00.000-08:00

2009 is over, and with it's end, we have seen the conclusion of one of the worst decades in stock market history. The lost decade has damaged many retirement plans, but there are real, meaningful steps you can take to rebuild your portfolio. I have prepared a series of strategies that are designed to help you get back on track after the gruelling bear markets of the past decades. If you would like to review these unique ideas, give me a call at 519 963 8019.

10 themes for 2010-recovering from the lost decade

2010-01-02T19:22:00.000-08:00

Over the next few weeks,I will be sharing a number of ideas for rebuilding after the last ten years:

1) Diversification means more than just stocks from around the world
2) Move up the balance sheet…consider bonds
3) Learn about convertible debentures as a stock alternative
4) Seg funds make sense to keep you in the market and secure your retirement income
5) Guarantee your principal with a strip bond
6) Look at ETFs as a mutual fund alternative
7) Buy at least one fun or interesting stock this year
8) Use covered calls to generate income
9) Look at a hedge fund for diversification
10) Take a serious look at the cost and performance of your mutual funds

Stay tuned...

A solid end to a dreadful decade

2009-12-23T05:43:00.001-08:00

Stock markets around the world have continued to rally overnight. The traditional Santa Claus rally is well underway. Even with this rally, which has lasted for nine months, few investors will miss this decade. The new decade may be the perfect opportunity to explore a new approach with your nmoney. As Christmas of 2009 approaches, may you and you family have a safe and healthy holiday season, and a prosperous New Year.

New Approach in the New Year

2009-12-21T05:51:00.000-08:00

Markets around the world look set to move higher, as the traditional Santa Claus rally may be ready to begin. Markets are likey to be pretty quiet over the next few weeks, but the holidays are a great time to prepare for next year. Be sure you have done any tax loss selling you might need completed by year end, then relax and enjoy the holidays. As the new year begins, resolve to take a new approach with your money, and see if therer are better alternatives for you than traditional mutual funds. A new year and a new decade are the perfect opportunity to review your investment strategy.

pay attention to today's Fed announcement

2009-12-16T09:54:00.000-08:00

After a pretty weak day yesterday on North American markets, European markets have started this morning broadly higher. North American markets look poised to rise when they open. Investors should be watching carefully as the US Federal Reserve releases its decision on interest rates. Everyone recognizes that interest rates must eventually turn higher, but today's meeting may give us a sense if the rate increases will occur quickly, or off in the distant future. This could have a meaningful impact on your portfolio, so pay attention to today's Fed announcement.

Diversification and our Loonie

2009-11-17T11:51:00.001-08:00

After months of watching a surging loonie, many investors have asked me if the Canadian dollar is finished its rally. In the short term, we may see dollar volatility, but I believe the long term trend still favors the loonie. Canada features a good balance sheet, abundant energy and resources, and stable financial markets. This is likely to attract global investment for years to come, and should keep wind in the loonies' sails. As a Canadian investor, this has a dramatic impact on diversification. For years, our currency's devaluation has significantly boosted foreign market returns in Canadian dollar terms. Global investment returns are likely to be dragged lower by the strengthening dollar, so you may wish to discuss investment alternatives that hedge out this currency risk with your advisor. Diversification is still very important, but you need to adjust for the new, robust Canadian currency.

Diversification

2009-11-14T18:33:00.001-08:00

Over the past few days, we have seen many global markets reaching new 12 month highs. With markets clearly in recovery mode, it is interesting to note that bond funds continue to attract a significant percentage of the new assets being invested in mutual funds. Many experts argue that this indicates that investors are missing the recovery in the stock market. I disagree, and believe it is a healthy sign, as investors actually appear to be getting the message of diversification. Buying bonds, real estate, and even gold, can significantly reduce the overall risk for investors. The massive flow to bonds may not be an intentional move toward diversification, but regardless of the reasons, I believe it is a sign of a healthy recovery in the overall investment world. Tune in tomorrow at 9:30 for Beyond Funds Market Weekly, and I will discuss how you can benefit from diversification.

Wareham Weekly Insights

2009-11-09T07:38:00.000-08:00

The big picture
U.S. manufacturing grows amid rising unemployment

Showing unexpected strength, the U.S. manufacturing sector grew in October at its fastest pace since April 2006, suggesting U.S. gross domestic product is growing at an annualized rate of 4.5% in the fourth quarter. The manufacturing index rose for the third consecutive month in October after 18 consecutive months of contractions. The services sector grew for a second straight month in October, but at a slower pace than in September. Despite this growth, the unemployment rate rose to 10.2% in October, the highest since April 1983, with the largest job losses in construction, manufacturing and retail.

The Bank of Canada (BoC) is still predicting growth in the second half of 2009, even though recent GDP data indicated that the economy contracted in the third quarter. The BoC predicts the economy will grow 3.0% in 2010 and 3.3% in 2011. Finance Minister Jim Flaherty said on Monday that Canadians should not expect the employment market to recover as quickly as the general economy. “The recovery in jobs will lag recovery of the economy. That is to be expected. That is the lesson of past recessions. It takes time for businesses to regain confidence, to reinvest in their businesses and thereby create jobs.” Canada's unemployment rate rose to 8.6% in October from 8.4% a month earlier as the economy shed 60,000 part-time jobs. Full-time employment increased slightly.

Markets
Stocks rally; GM does a U-turn

The TSX surged this week as gold prices reached a record US$1,101 after a pledge from the Federal Reserve to keep interest rates low weakened the U.S. dollar, and billionaire Warren Buffett bet big on the U.S economic recovery. North American markets also rallied on strong U.S. manufacturing data and better-than-expected earnings by technology bellwether Cisco, although the TSX was hit by surprise losses from Sun Life and Manulife.

General Motors did a U-turn, scrapping plans to sell Opel to Canadian auto parts supplier Magna. Unions are seething as GM Europe will now revert to a reorganization plan that chops fixed costs at Opel by 30%. Enbridge reported third-quarter profit more than doubled to $300 million versus one year ago. Warren Buffett will make his biggest ever investment, buying Burlington Northern Santa Fe Railway for US$44 billion in what the billionaire described as “an all-in wager on the economic future of the United States.” BlackBerry maker Research In Motion fell more than 6% on Monday after an analyst told investors to sell the stock because of mounting competition and an influx of new phones and applications.

Our recommendation
Favour equities over bonds
· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the current pullback in equity markets is one of what will likely be a series of retracements in the coming months, but which will likely be shallow and short-lived, thus creating a buying opportunity for investors who have not yet made their full equity allocation. Buy the dips.
· Fixed income. Anthony Mentor, Associate, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – recent weakness in the Canadian dollar means little upside to foreign currency trades. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.
· Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “Based on our 2010 forecasts, equities (10%-12%) should outperform government bonds (0%) and high yield (4%-6%) over the next 12 months. We are sticking to our equity overweight bias, but our current asset mix recommendation is as cyclical as it will get.”

The month in review
October: Surges and setbacks on climb to recovery
Facing mixed economic data, investors were sometimes unsure which way the economy was headed in October. While the U.S. economy showed surprising GDP growth, unemployment continued to climb. In Canada, where jobs were growing, GDP contracted. In the U.S., high unemployment continues to hamper consumer spending, which accounts for 70% of U.S. economic activity, and Americans will need to cut back after years of accumulating too much debt, according to U.S. Treasury Secretary Timothy Geithner, who warned that the whole world will need to reduce their dependence on U.S. consumption.

U.S. GDP grows while Canada contracts
The Commerce Department reported that U.S. GDP expanded at an annual rate of 3.5%, an unexpected surge after the economy had contracted 0.7% and 6.4% in the second and first quarters, respectively. Robust government spending, exports, and consumer spending – lifted by auto purchases under the cash-for-clunkers program – pushed the measure into positive territory. In contrast, Canada’s GDP shrank 0.1% in August despite signs that the country is climbing out of recession.

Jobless rate falls in Canada, climbs in U.S.
Canada’s unemployment rate fell to 8.4% from 8.7% in September, the first monthly decline since the fall of 2008. Employment increased for the second consecutive month, up 31,000. In the U.S., unemployment is at a 26-year high of 9.8% and still climbing.

Australia and Norway increase rates; Canada and U.S. on hold
Australia became the first among the Group of 20 countries to increase borrowing costs since the start of the global financial crisis, and Norway the first country to raise rates in Europe. The Bank of Canada announced it would keep its key rate unchanged at a record low of 0.25% and U.S. policymakers agreed that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

Rollercoaster month for Canadian dollar
The Canadian dollar was volatile, fluctuating over a five-cent range during October. The loonie approached parity, topping 97 cents U.S. mid-month before falling back. Prime Minister Stephen Harper warned that too rapid a rise could damage the country’s economic recovery, but said some of the Canadian dollar’s sharp climb is justified by fundamentals. The central bank has said it will not counteract rises in the dollar due to fundamental factors.

Oil and gold reach highs
In mid-October, gold hit a record US$1,070 and its popularity has risen to the point where shoppers can now buy gold bars at Harrods department store. In the third week of October, oil reached a fresh 2009 high of US$81.36 a barrel.

Dow breaks 10,000 and falls back
The blue-chip Dow index broke through the psychologically important 10,000 mark, up 52% up from its March low but still 29% below its peak in October 2007. Despite a strong start, North American markets ended the month down as commodity prices weakened and bleak U.S. home sales data caused stocks to slide.

Smart phone wars rage on
Nokia filed a lawsuit claiming the iPhone infringes 10 of its patents and Research In Motion rolled out an updated BlackBerry Bold in an effort to fend off Apple’s gains in the cellphone market. Bell and Telus will break Rogers’ monopoly and begin selling iPhones in November as their new iPhone-compatible network comes online. Verizon will offer phones with Google’s Android operating system, while Microsoft unveiled its own new mobile operating system, available on 30 phones.

Privacy Policy and Legal DisclaimerTM Trademarks used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPFThis publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Income Alternatives

2009-11-09T04:51:00.001-08:00

Global interest rates remain near record lows. Investors seeking income are being forced to consider investments alternatives beyond the safe harbour of GICs and bonds. This is particularly true for many of last year's GICs and maturing government savings bonds. With global central banks signalling that interest rates will stay low for an extended period of time, many investors seeking income will either have to tap into their principal, move into stocks with dividends, or buy riskier bonds, to generate the cashflow they need to live. I believe one of the best alternatives out there is using preferred shares, which offer significantly higher yields than most bonds, better tax treatment in non registered accounts, and generally lower risk than common stocks. Unfortunately, it is almost impossible to get these through a mutual fund, so you need to work with an advisor that has access to these investment alternatives. If you are looking for options, give me a call.

Lost Decade

2009-11-08T16:20:00.001-08:00

The enthusiastic rally of the last couple of days has pushed the Dow in New York back above the 10000 level. This is positive news, of course, but it is important to remember that this level was first reached in the spring of 1999. In other words, all of the positive results since spring have really only brought the world's dominant market back near break even on the last ten years. Tune in tomorrow at 930 for ideas on rebuilding after the lost decade.

Funds Fail to Beat Index

2009-11-08T16:18:00.000-08:00

The latest numbers are in, and Eric Lam of the National Post reports that two thirds of Canadian mutual funds failed to beat the index over the last quarter. This isn't very good, but the longer term numbers are even worse. Over the last 5 years, only around 5 percent of Canadian funds, and eight percent with foreign content were able to beat the index. Factor in that this has been a lost decade, with virtually no return from these equity indices, and it is no wonder investors are disheartened! The data tells us that the index has made you almost no money, and that almost all funds have been worse. You really should consider your alternatives.

2009-10-28T14:22:00.000-07:00

"Enthusiasm definitely seems to have replaced fear with many investors. However after a significant rally over the last few months, we have seen a pretty negative move in the market over the past few days. The next few weeks could easily see a return to some of the volatility of last year. What does this mean to you? It makes sense to rebalance your portfolio after the significant drop of 2008, and rally of 2009. As year end approaches, it would make sense to meet with your advisor, and make sure that your asset allocation makes sense. This means that you may want to be a buyer on weakness if you have too much cash, or a seller of stocks if you have too much equity. The nearer you are to retirement, the more important this is. Last year really damaged many retirement plans, and it makes sense to protect against further damage. If you are looking for a second opinion, why not give me a call."

The HST and Your Investments, part 2

2009-10-26T16:42:00.000-07:00

If you caught my show on saturday, you heard me speak on the issue of
mutual fund companies protesting about the impact of the new
Harmonized Sales Tax on fund investors. This issue is valid, but I
think it is a red herring. The fund companies kick up a huge fuss
about the impact of the tax on investors' savings, but do nothing
about the fact that an investor could conceivably pay hundreds of
thousands of dollars in management fees over a lifetime. The HST only
increases the already dramatic impact of the Canadian mutual fund
company management expenses, which are the highest in the world. I
doubt we will see any great movement to see fees come down due to the
tax. It really does support my stance that investors with larger
portfolios should explore their options. Less expensive and more
customized alternatives exist if you have outgrown your mutual funds.

Wareham Weekly Insights

2009-10-23T13:12:00.000-07:00

Market Watch

The big picture

U.S. recovery slow and fragile

Housing and manufacturing are driving the early stages of an economic recovery in the U.S., however the most recent Federal Reserve survey pointed to a slow and fragile turnaround. Some economists fear the fledgling housing revival could be derailed when the first-time home buyers credit expires on November 30. The survey reported that the weakest links in the recovery were consumer spending, which accounts for 70% of economic activity, and commercial real estate.

Prime Minister Stephen Harper said his biggest concern is how the recovery plays out in the U.S., and he cautioned that, despite Canada’s strength, spillover effects could cause a double-dip recession. The Bank of Canada (BoC) announced it would keep its key rate unchanged at a record low of 0.25% and BoC Governor Mark Carney gave his clearest warning yet that he will take steps to stop the dollar’s rise if it continues at the current pace, warning that the strong dollar was hampering Canada’s recovery. Mr. Carney is also monitoring the surge in Canada’s housing market, with average house prices up 13.6% in one year. A top adviser to French President Nicolas Sarkozy complained that the euro’s strength, at US$1.50, was a disaster for European industry, and could lead to printing euros and inflation.

Markets

Ups and downs

Markets were volatile this week as investors reacted to the Fed survey results, Canada’s interest rate announcement and earnings news. The Canadian dollar slid almost two cents when the Bank of Canada announced its key rate would remain at 0.25%. However, on Wednesday, U.S. dollar weakness sent the loonie back up. Oil reached a fresh 2009 high of US$81.36 a barrel as U.S. gasoline inventories fell by 2.3 million barrels last week.

Apple posted record quarterly sales, pushing its stock to all-time highs. Meanwhile, Nokia filed a lawsuit claiming the iPhone infringes 10 of its patents. Research In Motion rolled out an updated BlackBerry Bold and Microsoft launched its new Windows 7 operating system in efforts to fend off Apple’s gains in the cellphone and PC markets. Microsoft announced Bing will search Twitter and Facebook for up-to-the-minute content. Within hours, Google announced a similar deal with Twitter. Caterpillar posted stronger-than-expected earnings and raised its full-year forecast. Hit by the sharpest drop in potash demand on record, Potash Corp. reported its quarterly profit fell 80% from a year ago. Cadbury posted strong sales, fueling speculation that Kraft will have to raise its bid. McDonald's profit climbed almost 6% on the success of its expensive new Angus burger.

Our recommendation
Add cyclical holdings on market pullbacks

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward heading into the end of the year despite economic risks on the horizon. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – generally favour the C$ against most majors; however, with the recent weakness in the British pound, it is now expected to outperform the C$ over the next year. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.
Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “On the equity side, our global bias remains unchanged: Overweight Americas and Emerging markets, underweight Europe and Japan. From a sector standpoint, U.S. Energy, Materials, Discretionary, Financials, and Technology are posting superior relative earnings momentum. Our Sector Strategy continues to be geared towards Cyclical sectors.”

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Carney Warns Low Rates Can't Last

2009-10-23T04:43:00.000-07:00

After years of falling interest rates, Bank of Canada governor Mark
Carney warned home owners not to count on continuing record low rates
forever. This seems obvious, especially when you consider that there
really is nowhere to go but up, but we may be a while before we see
significantly higher rates. Our loonie contines to surge, in spite of
both low rates and burgeoning government deficits. As we saw with
Ontario's budget shortfall, corporate taxes have been plummeting this
year. Raising interest rates would put upward pressure on our
currency, and that would have a pretty negative impact on our
manufacturing sector. Throw in increased business lending rates, and
governments have compelling reasons to remain committed to low
interest rates. As an investor, you need to ensure you are taking
advantage of low borrowing rates, and finding alternatives to the
nearly non existent yield from GICs, money markets, and government
bonds. Tune in to Beyond Funds Market Weekly, tomorrow at 9:30 and I
will discuss this issue in more depth.

Our superstar currency

2009-10-21T04:48:00.000-07:00

After years of seeming pathetic, our dollar really is becoming a
global superstar. Yesterday, the Bank of Canada indicated that we
will see a significant drag on our ecocnomic recovery as the loonie
continues to strengthen. This will effect all investment classes;
keeping your bond yields low, reducing the return on your foreign
investments, and affecting our domestic industries. This may sound
negative, but I believe it is a great environment for long term
investors. The biggest challenge , in my opinion, will be finding
yield in an environment with very low interest rates for an extended
period of time. If you are looking for ideas in this market, why not
give me a call.

A Sobering Statement from the Bank of Canada

2009-10-20T18:57:00.000-07:00

Tuesday morning's statement by the Bank of Canada indicated that the Canadian economy was clearly recovering, but painted the troubling spectre of the surging Loonie raining on the parade. Most major bank economists agree that the record low rates will continue, but the powerful dollar appears a looming economic risk. The traditional solution to a surging currency is cutting interest rates...tough to do at a quarter of one percent! It will be interesting to see how the BOC responds to this unique challenge.

A new tax on your savings

2009-10-19T05:02:00.000-07:00

As 2010 approaches, another issue is emerging that should cause you to
consider your investment product choices. Canadians already pay the
highest mutual fund management fees in the world. Now, the proposed
Harmonized Sales Tax will be applied to these already lofty fees.
This is essentially a tax on savings. This issue is likely to become
highly political. Ultimately, it is one more reason for you to
consider if you are well served by paying these fees, or if you should
much more cost efficient solutions? If you are wondering if you have
outgrown your mutual funds, give me a call.

Wareham Weekly Insights

2009-10-16T09:42:00.000-07:00

Market Watch

The big picture
Canadian economy shows strength

The Canadian dollar neared parity with the U.S. dollar after six straight days of gains, topping 97 cents on Wednesday before pausing ahead of the Bank of Canada's interest rate announcement next week. Prime Minister Stephen Harper warned that too rapid a rise could damage the country's economic recovery, but said some of the Canadian dollar's sharp climb is justified by fundamentals. "We know that Canada's economy is relatively stronger than certainly virtually any other developed country." The central bank has said it would not counteract rises in the dollar due to fundamental factors.

Unemployment in Britain is still rising, but the monthly increase has slowed, signalling the worst may be over. The Bank of Japan held rates while raising its economic assessment for the second month, and refrained from ending its liquidity-boosting measures. U.S. retail sales were better than expected in September - up 0.5% excluding autos. Overall retail sales dropped 1.5%, as auto sales plummeted 10% after the Cash for Clunkers program ended. Federal Reserve policymakers agreed that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." Fed Vice Chairman Donald Kohn said that a subdued U.S. economic recovery with sluggish growth would keep inflation at bay.

Markets
Dow breaks 10,000 barrier; oil hits one-year high

The blue-chip Dow index passed the 10,000 mark fuelled by results from Intel and JPMorgan Chase and September retail data that beat expectations. Up 52% from its March low, the Dow remains 29% below its peak in October 2007. The TSX was also fuelled by the energy sector as oil hit a one-year high of US$78 on an unexpected drop in U.S. gasoline inventories. Gold hit a record $1,070 and its popularity has risen to the point where shoppers can now buy gold bars at Harrods department store in London.

In third-quarter earnings announcements, Google shone with net income up 27% over last year; Intel posted results and a fourth-quarter outlook that exceeded Wall Street expectations; Johnson & Johnson saw revenue fall 5% as generic competition caused prescription sales to plunge 14% from a year ago; and railroad operator CSX reported an earnings decline that was not as bad as feared. In the financials sector, JPMorgan reported a ninefold increase in profits over a year ago. Goldman Sachs profits more than tripled and the firm faces criticism for $20 billion in planned year-end bonuses. Citigroup posted a loss, suffering $8 billion of credit losses. In the smartphone wars, Research In Motion released Storm 2 to challenge the iPhone.

Our recommendation
Add cyclical holdings on market pullbacks
* Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward heading into the end of the year despite economic risks on the horizon. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.
* Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call - below benchmark duration. Sector Call - underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call - generally favour the C$ against most majors; however, with the recent weakness in the British pound, it is now expected to outperform the C$ over the next year. Alternative Strategies - overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.
* Portfolio strategy. Vincent Delisle, Scotia Capital's Portfolio Strategist, writes, "On the equity side, our global bias remains unchanged: Overweight Americas and Emerging markets, underweight Europe and Japan. From a sector standpoint, U.S. Energy, Materials, Discretionary, Financials, and Technology are posting superior relative earnings momentum. Our Sector Strategy continues to be geared towards Cyclical sectors."

Privacy Policy and Legal Disclaimer
TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF
This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Investing for the powerful Loonie

2009-10-16T05:05:00.000-07:00

This is Jeff Wareham, ScotiaMcLeod Wealth Advisor, with some thoughts
for investors outgrowing their mutual funds.

It has been a fascinating week, with the Dow breaking through 10,000,
the Loonie back near par with the US dollar, gold at record highs, and
oil surging. As time goes by, Canadian investors have to consider the
strength of our dollar. First, it has a significant impact on our
domestic industries. Second, global investment returns may be dragged
lower by currency appreciation. This is most obvious with investments
in the US, where most of this year's gains have been lost to Canadian
currency appreciation. If our dollar remains strong, you need to have
a strategy to manage this risk. Tune in to AM 980 tomorrow morning, for
Beyond Funds Market Weekly, as I offer some ideas to protect your
portfolio from the risks posed by the powerful loonie.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Surging Loonie

2009-10-15T12:30:00.001-07:00

In my continuing theme of the surging Loonie, I read some excellent commentary from commodity guru Dennis Gartman. Gartman sees the Loonie surging well past parity with the greenback, as investors express a preference for our commodities, our financial system, and even our adherence to global trade agreements. With global currency traders bullish on our dollar, and interest rates at all time lows, it may be very difficult for the Bank of Canada to slow down the flight of the Loonie.

This is for information purposes only. Views expressed are those of the author, not Scotia Capital

The Dow is only back to its levels of 1999...in essence, investors have lost a decade

2009-10-14T07:03:00.000-07:00

A few days ago, i mentioned the beginning of US earnings season, and
how important the numbers reported over the next few weeks would be.
So far, both US and global companies have been posting pretty
impressive numbers, and that trend continued overnight, with
spectacular numbers from Intel, from China, and JP Morgan. We may see
the Dow jump over 10,000 today. All of this is great news, but some
perspective is required. The Dow is only back to its levels of
1999...in essence, investors have lost a decade. Tune in this
Saturday for ideas on rebuilding your portfolio after this lost
decade.

For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Lost Decade

2009-10-14T04:33:00.000-07:00

This is Jeff Wareham, ScotiaMcLeod Wealth Advisor, with some thoughts
for investors outgrowing their mutual funds.

A few days ago, i mentioned the beginning of US earnings season, and
how important the numbers reported over the next few weeks would be.
So far, both US and global companies have been posting pretty
impressive numbers, and that trend continued overnight, with
spectacular numbers from Intel, from China, and JP Morgan. We may see
the Dow jump over 10,000 today. All of this is great news, but some
perspective is required. The Dow is only back to its levels of
1999...in essence, investors have lost a decade. Tune in this
Saturday for ideas on rebuilding your portfolio after this lost
decade.

For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Canadian fund MERs

2009-10-11T19:15:00.000-07:00

On Saturday, I enjoyed Jon Chevreau's article regarding the relative costs of Canadian mutual funds, versus the Vanguard funds in the US. Chevreau points out the massive gulf between typical Canadian and American management expense ratios. Regular listeners will recognize this is a pet peeve of mine. The significant drag on an investor's portfolio caused by management expense ratios should not be forgotten, especially as time passes.

The web site that illustrates this best is www.investored.ca, which has a great calculator, indicating the long term costs of buying traditional retail mutual funds. Alternatively, you canfind the calculator and read my commentary on my blog. Over the long term, an investor could pay more in fees than their inital investment. Spound preposterous? Take your current portfolio, and calculate the fees at 2.5%, over 25 years, using an eight percent return. The results may shock you.

If you are interested in finding out your alternatives, speak with your advisor, or give me a call.

The Weakening US Dollar

2009-10-10T09:47:00.000-07:00

For anyone who listened to my radio show this morning, this blog post reinforces my concern about the massive, debt driven stimulus spending in the US. This thought provoking article from the Financial Post paints a bleak picture, but it is pretty hard to argue with any of the concerns raised by author Edward Hadas.

As I have frequently noted, this may make it tough to invest in US equities over the long term. The Dow is essentially flat over the last decade, so an American invested in her native market has essentially broken even, but the massive revaluation of the US currency leaves a Canadian with a loss of over thirty percent on a currency adjusted basis.

This may not preclude investing in the US market, but it sure makes sense to consider hedging your US denominated positions.

This is for information purposes only. Views expressed are those of the author, not Scotia Capital.

Wareham Weekly Insights

2009-10-09T12:30:00.000-07:00

Market Watch

The big picture

Australian rate hike sparks optimism

Australia surprised markets Tuesday by increasing interest rates, setting off a wave of optimism about the global economic recovery. The Reserve Bank of Australia raised its benchmark interest rate to 3.25% from 3.00%, becoming the first among the Group of 20 countries to increase borrowing costs since the start of the global financial crisis. In Canada, Prime Minister Stephen Harper reiterated that the global recovery will remain fragile until jobless rates start to fall. Canada’s unemployment rate fell to 8.4% from 8.7% in September, the first monthly decline since the fall of 2008. Employment increased for the second consecutive month, up 31,000. In the U.S., the unemployment rate is at a 26-year high of 9.8% and still climbing.

Americans will have to save more in the future after years of accumulating too much debt, according to U.S. Treasury Secretary Timothy Geithner. He predicts that this change will transform the whole world’s economic reality. “Everyone is going to have to come to terms with the fact that we are going to save more in the United States.” He called on Europeans and Japanese to work at boosting domestic demand, and credited China for being at the forefront of thinking about new ways to reduce the dependence of its economy on U.S. exports and investments.

Markets

Stocks ride wave; wealthy tighten their Gucci belts

Optimism sparked by Australia’s rate hike sent stocks rising around the world on Tuesday. The TSX also was buoyed by strong commodity prices as gold topped $1,050 and oil hit $71. The Canadian dollar surged above 95 cents while U.S. Aluminum producer Alcoa posted a surprise profit and Costco beat analysts’ estimates despite a drop in quarterly profits. In Canada, Jean Coutu reported quarterly revenues up 7.3% versus a year ago, while Canwest sought court protection from its creditors, with $4 billion of debt. As the rich tighten their belts, luxury retailer Neiman Marcus has priced 40% of its new catalogue at just US$250 or less.

In the smartphone wars, Bell and Telus will break Rogers’ monopoly and begin selling iPhones next month as their new iPhone-compatible network comes online. Verizon will offer phones with Google’s Android operating system, while Microsoft unveiled its own new mobile operating system, available on 30 phones. The battery-powered LEAF car will hit British Columbia in 2011, as a result of a partnership between the Renault-Nissan Alliance, the province, the city of Vancouver and BC Hydro. The U.S. government is lending $1 billion to two new green automakers – Tesla Motors and Fisker Automotive.

Our recommendation
Buy the dips, don’t sell the rallies

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call –generally favour the C$ against most majors, however with the recent weakness in the British Pound, it is now expected to outperform the C$ over the next year. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.
Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “On the equity side, our global bias remains unchanged: Overweight Americas and Emerging markets, underweight Europe and Japan. From a sector standpoint, U.S. Energy, Materials, Discretionary, Financials, and Technology are posting superior relative earnings momentum. Our Sector Strategy continues to be geared towards Cyclical sectors.”

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

review your asset mix, and see if you should rebalance your investments to protect your gains

2009-10-09T08:11:00.000-07:00

The recent rally in the equity market has been pretty spectacular. As
the markets rebound, one key problem is reemerging. As stock prices
rise, the relative value in in your portfolio is also surging.
Ultimately, the growth in value in your equity portfolio increases
your risk, and it may be appropriate to review your asset mix, and see
if you should rebalance your investments to protect your gains. If
you are looking to review your situation, give me a call.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

this may be one of the most important earnings seasons in years

2009-10-07T08:03:00.000-07:00

US earnings season begins today, and we will start to get an idea of
the financial state of many multinational companies. Ultimately,
equity investing is about business ownership, and the next few weeks
should give us a sense if the recent rally in the global market is
actually supported by results. If earnings are strong, then the rally
makes sense, but if we see weakness, the recent rally may be at risk.
Stay tuned through the next few weeks, as this may be one of the most
important earnings seasons in years. If you want to discuss your
portfolio, give me a call.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

there may be enormous volatility as the

2009-10-05T08:12:00.000-07:00

There is certainly more optimism in the market today, but perspective
is important. In spite of the recent rally in global markets, it is
important to realize that we have essentially experienced a lost
decade. The ten year return for the Dow has been negative. History
tells us that such long term bear markets are rare, and frequently
preceed massive rallies...but there may be enormous volatility as the
market recovers. The good news is, there are options today that allow
you to preserve capital, while remaining in the market. If you are
looking for ideas, why not give me a call?

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Wareham Weekly Insights

2009-10-02T13:55:00.000-07:00

The big picture

Canada’s GDP growth stalls

The latest reports on the Canadian economy unexpectedly showed no GDP growth in July, throwing into question the strength of the country’s recovery. Wednesday’s report from Statistics Canada dashed economists’ expectations of a 0.5% increase, blaming shutdowns at mines, lower oil-and-gas extraction, civic strikes and poor weather. On the bright side, employers added 27,000 jobs in August, and new applications for employment insurance fell. Prime Minister Stephen Harper reported that 90% of the economic stimulus funding has been allocated and that the money will create or support 200,000 jobs over two years by funding 7,500 infrastructure projects, training for 44,000 Canadians, $5.8 billion in added EI benefits and $131 billion in business financing.

Bank of Canada Governor Mark Carney said, “A powerful and sustained restructuring of the global economy has begun, but the efforts required of us will be historic,” as he called on consumers and businesses to spend and hire. Consumer confidence in Canada rose for the seventh month in September, but fell unexpectedly in the U.S. on job security worries. U.S. home prices rose for the third month in July, but still are down 32.6% from their 2006 peak. In Germany, stocks surged as Chancellor Angela Merkel was re-elected and pledged to form a centre-right coalition.

Markets

A bumpy road to recovery

Early gains in the week were erased on Thursday as weak U.S. manufacturing and jobless data sent stocks lower. It was one year ago that the Dow Jones Industrial Average suffered its biggest point drop ever – but also its largest gain soon after. In the fourth quarter of 2008, the S&P 500 moved 3% in one day a stunning 29 times. The extreme market volatility seen last year has abated, but stocks are expected to remain in a volatile environment as the recovery picks up.

On Monday, Bombardier shares surged when its joint venture in China won a US$4-billion contract to build 80 high-speed trains. Apple’s iPhone will go on sale in China in October for about US$700. The iPhone App Store hit 2 billion downloads, with users buying 6 million apps per day. Mergers and acquisitions continued with Xerox buying Affiliated Computer Services, while Abbott Laboratories will acquire a division of Solvay. Meanwhile, British regulators gave Kraft a November 9th deadline to make a formal bid for Cadbury. In the lead-up to the holiday season, Wal-Mart unveiled a list of 100 toys for $10 each, and Toys “R” Us is hiring 35,000 seasonal employees.

Our recommendation
Buy the dips, don’t sell the rallies

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.

· Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “we are in a higher-highs/higher-lows environment and recommend buying the dips, not selling the rallies. Our longer term stance remains positive and we expect equities and corporate bonds to outperform Treasuries over the next 12-18 months.”

The month in review
September: One year later, recovery intact but fragile

September 15th marked one year since Lehman Brothers declared bankruptcy, setting off the worst financial crisis since the Great Depression. Canada’s economy is recovering faster than previously thought. Nonetheless, the Bank of Canada kept its lending rate at an all-time low of 0.25%, and renewed its pledge to hold rates until mid-2010. Canada’s banks were ranked the soundest in the world for the second year in a row by the World Economic Forum, while U.S. banks were ranked 108th. Prime Minister Stephen Harper cautioned that while the recession technically may be over, the recovery is extremely fragile. Finance Minister Jim Flaherty insists that it would be a major mistake for developed economies not to continue stimulus.

Federal Reserve Chairman Ben Bernanke said the U.S. recession is technically over, with growth expected to show in the third quarter. The Federal Reserve kept interest rates unchanged at 0.25%, while giving its most upbeat assessment of the U.S. economy in 18 months and voting to end its US$1.45-trillion program for buying mortgage debt three months early.

G20 leads economic cooperation

At London’s G20 meeting, finance ministers agreed the world economy is stabilizing, but recovery is not established enough to start unwinding stimulus programs. Bankers’ pay is at the centre of discussions; Britain’s finance minister says “the party is over” for bankers who were at the heart of “this almighty car crash.” Bank of England Governor Mervyn King revealed that the Royal Bank of Scotland and HBOS had been just hours away from collapsing last October.

Loonie shows strength; gold tops US$1,000

As the Canadian dollar approached 94 cents U.S., the Bank of Canada repeated warnings that economic recovery may be hampered by the strength of the currency, but said it would ignore short-term volatility in its exchange rate. Gold climbed above US$1,000 an ounce as investors sought a hedge against a falling U.S. currency.

Canadian stocks regain October 2008 levels

Markets advanced in September, reaching levels last seen in October 2008. The TSX has gained 50% since its March 2009 low.

Mergers and acquisitions marry superheroes with princesses

Disney will buy Marvel Entertainment for $4 billion in its biggest deal since buying Pixar in 2006, T-Mobile and Orange will merge to create the U.K.’s biggest wireless operator, and Swedish sports car maker Koenigsegg has teamed up with a Chinese company to buy Saab from General Motors. Magna plans to buy a stake in Opel, GM’s European car division, but risks alienating customers VW and BMW. Canada’s biggest IT services player, CGI, surged on takeover speculation after Dell bid US$3.9 billion for Perot Systems, a 68% premium.

Smart phone wars

In technology news, new hardware and an alliance with Facebook could see Nokia catching up with rivals such as Apple and Research In Motion. Apple unveiled an updated line of iPods this month, while RIM’s quarterly profit and outlook fell short of analyst expectations, sending its shares down sharply. Google’s new Internet phone service, Google Voice, is expected to draw scrutiny from regulators.

Alternative energy: changing the tide

Nova Scotia was given the green light to test turbines in the Bay of Fundy. If viable, sea power could meet 10% of the province’s energy needs. First Solar struck a 10-year deal with the Chinese government to build the world’s largest solar field. Solar panels will blanket a desert area larger than Manhattan and generate enough energy to light 3 million homes. A123 Systems, a U.S.-based battery maker for electric cars, jumped 43% in one day after raising US$380 million through an initial public offering.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

October got off to a rough start

2009-10-02T10:29:00.000-07:00

October got off to a rough start yesterday, with a significant sell
off. This should not be surprising after the dramatic rally we have
seen over the past few months. The possibility of a significant
downward move in the market has been widely expected, but it has not
happened yet. Many investors have been sitting on the sidelines,
waiting for a chance to get back in the market. In fact, this cash on
the sidelines may be the reason any downward move may not be too
dramatic. Rather than rush back in all at once, I believe investors
should plan their strategy. If you are looking at getting back into
the market, why not get a second opinion before you make your move.
Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

North American Markets - 7th consecutive positive month

2009-09-30T08:31:00.000-07:00

September 2009 is coming to an end, and it appears North American
markets will experience their seventh consecutive positive month.
This is a spectacular winning streak, after the grisly bear market of
2008. This change in market sentiment may make you more comfortable
with your portfolio, but it also should inspire you to look at your
long term strategy. Through the downturn, most mutual funds fell more
than the index, and most are struggling to beat the index as the
market recovers. If you are comfortable investing for the long term,
but are looking for a fresh approach, give me a call.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?
For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Wareham Weekly Insights

2009-09-29T09:58:00.001-07:00

Market Watch

The big picture

U.S. economy picking up steam

The Federal Reserve kept interest rates unchanged at 0.25%, while giving its most upbeat assessment of the U.S. economy in 18 months and voting to end its US$1.45-trillion program for buying mortgage debt three months early. G20 world leaders are holding talks on the global financial crisis today, where bankers’ pay will be at the centre of discussions. Britain’s finance minister says “the party is over” for bankers who were at the heart of “this almighty car crash.” Bank of England Governor Mervyn King revealed that the Royal Bank of Scotland and HBOS had been just hours away from collapsing last October.

In Canada, Prime Minister Stephen Harper cautioned that while the recession technically may be over, the recovery is extremely fragile, particularly in the automotive and forestry industries. Retail sales fell 0.6% to $34.2 billion in July, mainly because of lower gas prices. The Bank of Canada said it would ignore short-term volatility in its exchange rate but warned again that a strong Canadian dollar could curb growth. A rate increase could come after the middle of 2010.

The Markets

Stocks slide on falling oil prices and home sales

North American stock indices retreated broadly on Thursday as a slide in oil prices knocked energy shares lower and weak U.S. home sales data hit other shares. With supplies on the rise, oil prices dropped more than 4% to less than $66 a barrel. Research In Motion’s quarterly profit and outlook fell short of analyst expectations on Thursday, sending its shares down sharply. Canada’s biggest IT services player, CGI, surged nearly 6% Monday on takeover speculation, following Dell’s proposed acquisition of Perot Systems for US$3.9 billion, which represents a 68% premium.

Canadian auto supplier Magna said it will appease Volkswagen, which has threatened to pull business from Magna if it buys a stake in Opel, a competing car company. After rejecting an initial offer of US$16 billion, Cadbury has asked Kraft to submit another bid. A123 Systems, a U.S.-based battery maker for electric cars, jumped 43% in one day after raising US$380 million through an initial public offering. Google re-touched the US$500 level, after hitting a low of US$250 in the past year. Google’s new Internet phone service, Google Voice, is expected to draw scrutiny from regulators.

Our recommendation
Favour equities to outperform

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.

· Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “we are in a higher-highs/higher-lows environment and recommend buying the dips, not selling the rallies. Our longer term stance remains positive and we expect equities and corporate bonds to outperform Treasuries over the next 12-18 months.”

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Wareham Weekly Insights

2009-09-21T11:30:00.000-07:00

Market Watch

The big picture

One year later: Growth emerges

Tuesday marked one year since Lehman Brothers declared bankruptcy, setting off the worst financial crisis since the Great Depression. U.S. President Barack Obama spoke to a Wall Street audience, lauding his administration’s moves to prevent future financial calamities and warning that further bailouts are unlikely. Legendary investor Warren Buffett also praised the U.S. government for its efforts to heal the economy. Federal Reserve Chairman Ben Bernanke said the U.S. recession is technically over, with growth expected to show in the third quarter, but warned the economy may remain weak for some time.

In Canada, Finance Minister Jim Flaherty insisted that it would be a major mistake for developed economies not to continue stimulus, and the Bank of Canada repeated warnings that economic recovery may be hampered by the strong loonie. Inflation was negative for the third straight month, but economists said it’s not deflation – taking energy out of the calculation, inflation would have been a healthy 1.4%. The Bank of England may reduce the Bank’s deposit rate to discourage banks from hoarding reserves and encourage them to buy more assets. Beijing filed a complaint with the World Trade Organization as the U.S. raised tariffs on Chinese-made tires, which have cost 5,000 U.S. jobs since 2004.

Markets

Stocks rally and book sellers rejoice

The TSX index had a three-day run-up, hitting its highest level in almost a year on Wednesday as commodities and financial shares rallied. But on Thursday, stocks in Canada and the U.S. slipped on concerns whether recent market gains were justified, despite the latest round of solid economic data. The benchmark S&P 500 is now up 58% since its early March lows.

Magna’s second-largest customer, BMW, warned that their relationship could be in jeopardy if the parts supplier turns into a competitor. Magna plans to buy a stake in Opel, GM’s European car division. Nova Scotia was given the green light to test turbines in the Bay of Fundy. If viable, sea power could meet 10% of the province’s energy needs. Suncor is making deep cuts after its $22.7-billion takeover of Petro-Canada, eliminating 1,000 jobs, selling properties and reducing natural gas production. Booksellers are rejoicing as bestselling author Dan Brown’s new book, The Lost Symbol, sold over a million copies in the first 24 hours of its release; however, Amazon reported the e-book edition for its Kindle reader had actually outsold the hardcover version.

Our recommendation
Expect equities and corporate bonds to outperform

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the following recommendations: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – overweight high yield, overweight Emerging Markets Debt, underweight inflation protected bonds.
Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “we are in a higher-highs/higher-lows environment and recommend buying the dips, not selling the rallies. Our longer term stance remains positive and we expect equities and corporate bonds to outperform Treasuries over the next 12-18 months.”

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

seek other alternatives to traditional fund investments

2009-09-21T11:23:00.000-07:00

Many mutual fund investors have seen the recovery of global markets, but have yet to see their investments following suit. I have frequently discussed the impact of high management fees on mutual fund investors, and this is part of the story. Another major drag on many fund companies is the redemptions they have suffered through the downturn. In other words, when investors want out of their fund holdings, the manager is forced to sell, regardless of whether it is the right time to do so. and I believe many fund families will continue to suffer from this as investors seek other alternatives to traditional fund investments.

reason for optimism this week

2009-09-16T08:50:00.001-07:00

There is reason for optimism this week, as we have seen most global
markets reaching new highs for the year. It is important to keep
things in perspective. The Dow in New York is currently approaching
the level it reached a decade ago. The Nasdaq is still sixty percent
below its all time high. The long term returns of many international
markets are even worse. As the market recovers, it may be tempting to
simply let things stay the same, believing this is following the
conventional wisdom of buying and holding. In fact, this approach has
not worked for at least a decade, and I believe you should discuss
your long term strategy with your advisor. If you are looking for a
second opinion, why not give me a call.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

consider a short term bond fund

2009-09-14T07:15:00.000-07:00

On Saturday, I discussed te fact that money market funds and cashable
GICs have reached a point where they are paying essentially no yield.
This is definitely motivating investors to seek alternatives for their
short term, secure money. In essence, the returns are the equivalent
of putting your cash under your mattress. One interesting alternative
that you may consider is a short term bond fund. There are several
funds that are focused on high quality investment grade bonds, which
offer significantly better returns than a money market fund, with very
little extra risk. If you are looking for a home for your "safe"
money, you may want to consider a short term bond fund i n your
portfolio. Are you looking for a second opinion?

Wareham Weekly Insights

2009-09-11T13:41:00.000-07:00

The big picture

Canada bouncing back, but rates stay on hold

Canada’s economy is recovering faster than previously thought, the Bank of Canada (BoC) said Thursday. Nonetheless, the BoC kept its lending rate at an all-time low of 0.25%, and renewed its pledge to hold rates until mid-2010. Canada’s banks were ranked the soundest in the world for the second year in a row by the World Economic Forum, while U.S. banks were ranked 108th.

At London’s G20 meeting, finance ministers agreed the world economy is stabilizing, but recovery is not established enough to start unwinding stimulus programs. Finance Minister Jim Flaherty said, “We agreed that we are not out of the woods . . . We must all remain focused on fully implementing our stimulus packages.” The International Monetary Fund called Canada’s economic strategy “large, timely, well-diversified and structured for maximum effectiveness.” The IMF raised its estimate for global economic growth in 2010 to 2.5%, from 1.9%. Rating agency Moody’s said on Tuesday that the U.S. government’s triple-A credit rating was safe and that the U.K. and Spain are unlikely to lose their top credit ratings.

Markets

Stocks rise as oil and metals rally; gold breaks $1,000

Rising prices for oil and metals helped push the TSX index to an 11-month high this week and the S&P index extended its gain to five straight days, its longest winning streak since November. Oil prices rose 6% since last Thursday and gold rallied above $1,000 an ounce for only the third time in history. The Canadian dollar surged as high as 93.56 cents, but fell back as investors weighed the risk of central bank intervention.

First Solar struck a 10-year deal with the Chinese government to build the world’s largest solar field. Solar panels will blanket a desert area larger than Manhattan and generate enough energy to light three million homes. Apple chief executive Steve Jobs unveiled a new iPod Nano equipped with a video camera and announced price cuts. In merger and acquisition activity, Telus bought Black’s Photo, adding 113 stores to its retail base; Cadbury rejected Kraft’s merger offer of US$16.7 billion; T-Mobile and Orange will merge to create the U.K.’s biggest wireless operator; and Swedish sports car maker Koenigsegg has teamed up with Beijing Automotive Industry Holding Co. (BAIC) to buy Saab from General Motors.

Our recommendation
Buying the dips, not selling the rallies

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.
Portfolio strategy. Vincent Delisle, Scotia Capital’s Portfolio Strategist, writes, “we are in a higher-highs/higher-lows environment and recommend buying the dips, not selling the rallies. Our longer term stance remains positive and we expect equities and corporate bonds to outperform Treasuries over the next 12-18 months.”

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

investors requiring secure income should look further

2009-09-11T08:28:00.000-07:00

Yesterday, the Bank Of Canada reaffirmed its commitment to maintaining
record low interest rates well into next year. This is great news for
consumers and homeowners, but leaves investors facing the potential of
near zero interest on their secure investments. In this environment,
investors counting on stable income may find it difficult to generate
cashflow. I believe investors requiring secure income should look
further, and consider three options. First, they should look at good
quality corporate bonds. Second, the preferred shares issued by major
financial firms offer attractive yield. Finally, guaranteed
withdrawal benefit products like Income Plus give stable income, with
exposure to the equity markets. Ultimately, security concious
investors have options, but low interest rates really do complicate
things.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

Planning For Retirement

2009-09-09T07:11:00.000-07:00

US President Obama will be addressing his nation this evening,
concentrating on their healthcare crisis. Although the Canadian
system is much different, we have our own problems. Retirees are
facing spiraling costs for services not covered by the Canadian
system. This is one of the more difficult elements of planning for
retirement, as it is tough to estimate the impact these expenses will
have over a lengthy retirement. The greatest financial impact is
likely to come from the growing cost of nursing home care. A
relatively new solution is the emergence of insurance solutions that
may help offset the cost of in home or nursing home care. Although
these insurance plans will not work for everyone, I believe they will
form an important part of financial plans moving forward.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit,
www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This
program is for information purposes only. Fees, management fees and
commissions may be associated with mutual fund investing. Investors
should consult their prospectus before investing. Views expressed are
those of the author, not Scotia Capital. ScotiaMcLeod is a division of
Scotia Capital, member CIPF

Wareham Weekly Insights

2009-09-04T10:22:00.000-07:00

The big picture

Global recovery slowly takes root

“It is a sign that we are on the path to economic recovery,” said U.S. President Obama, after a survey showed the U.S. manufacturing sector grew in August following 18 consecutive monthly declines. Nevertheless, the U.S. jobless rate in

August climbed to 9.7%, the highest since 1983, and employers cut another 216,000 jobs, although fewer than in July.

Australia’s economy grew strongly, expanding 0.6% in the second quarter – the best result among developed countries. However, this did not prompt the Reserve Bank of Australia to change its key interest rate. The European Central Bank also left interest rates at a record low and signalled it’s in no rush to withdraw emergency stimulus measures. Finance ministers from the Group of 20 meet in London on the weekend to draft a strategy to keep the economic momentum going. The IMF increased its estimate for global economic growth to slightly less than 3% in 2010, up from 2.5% in July. Two million buyers took advantage of Germany’s car scrapping rebate, which expired on Wednesday, driving the country’s auto sales up 28% in August. Some worry that 2010 sales could slump as many drivers rushed to take advantage of 2009 sales incentives. In the U.S., lacklustre back-to-school sales hinted that retailers may be facing another tough holiday season.

Markets

Markets tumble, then climb – gold closes in on $1,000

China’s key stock index fell 6.7% early in the week knocking European and North American stock markets lower along with the price of oil. Stocks rose again on Thursday, as U.S. chain stores reported surprising sales that topped projections, spurring the S&P past the 1,000 mark. Meanwhile, the price of gold jumped to a six-month high of $999.50/ounce.

Bombardier saw its second-quarter profit decline by $100 million – less than analysts had expected – as its aerospace division delivered fewer planes than a year ago. In technology news, new hardware and an alliance with Facebook could see Nokia catching up with rivals such as Apple and RIM. Apple is expected to unveil an updated line of iPods next week. Sony says it will introduce a 3-D television by the end of 2010; its TV division has lost money for five straight years. Disney will buy Marvel Entertainment for $4 billion, marrying princesses with superheroes in its biggest deal since buying Pixar in 2006 for $7.4 billion in stock.

Our recommendation
Rebalance portfolios to buy low, sell high

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. The market is not overpriced, just overbought in the short term; we would be adding weight in cyclical holdings on any market pullback.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals and Provincials, neutral on Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.

Portfolio strategy. Vincent Delisle, Scotia Capital's Portfolio Strategist, writes "we are in higher high/higher lows environment and recommend buying the dips, not selling the rallies. Our longer term stance remains positive and we expect equities and corporate bonds to outperform Treasuries over the next 12-18 months."

The month in review
August: Major economies continue to stabilize as rates stay on hold

The U.S. Federal Reserve declared that U.S. economic activity is “levelling out.” The central bank held its key lending rate at a record low, and signalled it would end one of its stimulus programs (buying U.S. Treasury securities) at the end of October. Federal Reserve Chairman Ben Bernanke declared that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression. Bernanke was re-appointed for a second term.

In Europe, Germany and France unexpectedly returned to growth in the second quarter. Good news also came out of the U.K. – data showed house prices stabilized, and the Royal Institution of Chartered Surveyors now predicts the average house price will rise by the end of the year, reversing its forecast of a 10% to 15% decline. In Canada, retail sales jumped 1% from May to June, but remain 4.4% lower than a year ago. With inflation at a 56-year low, consumer spending remains weak, and some economists say it could be years before companies begin to raise prices.

Canadian banks shine

In August, the Royal Bank reported record profits while earnings from the Bank of Montreal, TD Bank and the Bank of Nova Scotia also beat expectations. Financials were the largest contributor to the TSX Index last month and account for 51% of the gains year-to-date.

Loonie strength prompts Bank of Canada warning

As the Canadian dollar hit a 10-month high versus the U.S., the Bank of Canada (BoC) warned again that it is prepared to intervene to stop the sharp rise of the loonie from derailing the economic recovery. The BoC has not intervened in foreign exchange markets in more than 10 years.

TSX up for the sixth straight month

In August, the TSX broke through 11,000 to a 10-month high, and the S&P 500 rose above 1,000 for the first time in nine months. Both indices fell back, but still finished the month slightly up. The Canadian index is up 20.9% year-to-date with the top 10 contributors accounting for 64% of the gains (Royal Bank, TD Bank, Research In Motion, Bank of Nova Scotia, Bank of Montreal, Teck Resources, Suncor, Petro-Canada, Canadian Natural Resources and Talisman).

Auto industry soldiers on

The U.S. government’s $3-billion “cash for clunkers” program drove 700,000 auto sales, prompting Ford to hike factory output. Toyota will slash production by 580,000 vehicles – 6% of global capacity – despite capturing 19% of the sales from the program. General Motors claims its new electric car, the Chevy Volt, will get an unprecedented 230 miles per gallon (100 km/l), four times the mileage of Toyota’s Prius. It will go on sale in late 2010 for US$40,000. Meanwhile, Volkswagen announced that it will pay US$4.7 billion for a 42% stake in Porsche as it executes a gradual merger.

Apple heats up

As the iPhone prepares for its debut in China – the world’s largest cell phone market – Apple is investigating reports from France of iPhone screens exploding, apparently because of overheated lithium ion batteries. Meanwhile, analysts speculate that Apple is working on a new multimedia tablet that will let people access movies and TV, games, the Internet and books.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Review your portfolio

2009-09-04T10:21:00.000-07:00

The last long weekend of the summer is upon us. With children back to school, and vacations done, this is a good time to be reviewing your portfolio. If you are ready to review your situation, here are are few key considerations. First, are you really comfortable with your level of risk. Second, have you accumulated enough wealth to be on track for your long term goals. Finally, are you sure that you are in the right type of investment to best suit your needs. If you have sev Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

September is off to its typical start

2009-09-02T08:25:00.000-07:00

September is off to its typical start, with significant losses in most global markets. Improving economic news has been offset by profit taking, and it may be tempting to worry about your portfolio if we get the sell off I expect. In fact, the positive economic signs support buying investments for the long term. I believe September and October will be an excellent opportunity to rebalance your portfolio,especially if you have cash on the sidelines. Ideally, you should sit down with your advisor, and prepare for the opportunity that may arise if we get continued weakness over the next couple of months. If you feel you need help preparing for the future, why not give me a call. Do you want to discuss your alternatives? Have you outgrown your mutual funds? For a review your portfolio, or a complimentary copy of my CD, visit,www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260.

This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed arethose of the author, not Scotia Capital. ScotiaMcLeod is a division ofScotia Capital, member CIPF

Wareham Weekly Insights

2009-08-29T12:36:00.000-07:00

The big picture

U.S. deficit looms as recovery takes hold

U.S. President Barack Obama nominated Ben Bernanke for a second term as Federal Reserve (the Fed) Chairman, praising him for leading the Fed through “one of the worst financial crises that this nation and this world has ever faced." The same day, a grim U.S. budget forecast US$9 trillion in additional debt over the next decade, up $2 trillion since the last forecast, because of plunging tax receipts, soaring spending and a sluggish recovery. U.S. consumer confidence rose unexpectedly in August after two consecutive months of declines. Consumer expectations of where the economy will be in six months rose to its highest level since the recession began in December 2007.

In Canada, retail sales jumped 1% from May to June, but remain 4.4% lower than a year ago. The Bank of Canada (the BoC) warned again that it is prepared to intervene to stop the sharp rise of the loonie from derailing the economic recovery. The BoC has not intervened in foreign exchange markets in more than 10 years.

All eyes will be on Japan this Sunday as voters take to the polls. Expectations are for the opposition Democratic Party to oust the ruling conservative Liberal Democratic Party for only the second time in its 54-year history.

Markets

Investors weigh issues

Markets were choppy as U.S. bank concerns undermined improving consumer confidence, jobless and housing data. In Canada, the Royal Bank reported record profits while earnings from the Bank of Montreal, TD Bank and the Bank of Nova Scotia also beat expectations.

As the iPhone prepares for its debut in China – the world’s largest cell phone market – Apple is investigating reports from France of iPhone screens exploding, apparently because of overheated lithium ion batteries. Meanwhile, analysts speculate that Apple is working on a new multimedia tablet that will let people access movies and TV, games, the Internet and books. Toyota will slash production by 580,000 vehicles – 6% of global capacity – despite capturing 19% of the 700,000 U.S. auto sales generated by the “cash for clunkers” program.

Our recommendation
Rebalance portfolios to buy low, sell high

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although the market may be overbought in the short term and subject to profit taking, we do not believe markets are overpriced. A period of consolidation or a range bound market allowing time for fundamentals to catch up with share prices is likely to occur over the coming months. Recall that September, on average, is historically the worst month for equity investors.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Municipals, neutral on Provincials and Corporates. Currency Call – favour the C$, as well as the A$, which is expected to outperform. Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.

· Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

look at all of your options if you are returning to the market

2009-08-29T12:33:00.000-07:00

With August drawing to a close, markets continue to show remarkable resilience. The Dow has been up for eight straight days. Many investors still have a lot of cash on the sidelines, and cash is essentially earning nothing. In this environment, it may be very tempting to wade back in to the equity market. Despite the temptation, it makes sense to look at all of your options if you are returning to the market. Instead of rushing out and simply buying an equity mutual fund, why not consider some other alternatives, like bonds or preferred shares, as a complement to buying stocks. Before you get back in, give me a call.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Bank of Canada and the Soaring Loonie

2009-08-26T13:02:00.000-07:00

Late yesterday, the Bank of Canada indicated it was ready to try to deal with a soaring loonie, which has surged both through the year, and through this decade. This likely means a lengthy period of low interest rates for Canadians. This should benefit both investors and Canadian businesses.. It also highlights one of the key risks to Canadian investors. A strengthening loonie really hurts Canadians who invest globally. When your stocks and bonds are denominated in a foreign currency, a rising loonie costs you money. If you are concerned about protecting your portfolio from a strengthening loonie, why not give me a call?

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Impact of fund management fees

2009-08-24T17:18:00.000-07:00

Mutual funds remain one of the most popular investment vehicles for Canadians. With investors regaining confidence, money is likely to start flowing back into funds. If you have over 100,000 invested, and are considering adding to your mutual funds, remember that Canadians pay the highest fund management fees in the world, It is easy to overlook the impact of fund management fees in a rising market, but these fees have a dramatic impact on your long term investment return. Over the long term, management fees may cost you hundreds of thousands of dollars, and significantly reduce your rate of return. Why not get a second opinion?

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-08-21T11:45:00.000-07:00

The big picture
China key to global recovery

The global economic recovery has begun, but sustaining it will require stepping up U.S. exports
to Asia, says the International Monetary Fund’s chief economist. In an IMF report, Olivier
Blanchard predicted that consumer spending, which accounts for 70% of the U.S. economy,
will not return to pre-crisis strength quickly. He called on China to reduce the trade imbalance
and import more goods from the U.S.

Federal Reserve Chairman Ben Bernanke declared Friday that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression. The U.S. housing market showed encouraging signs in July. Although new-home construction and permits fell, single-family-home starts remained strong, rising 1.7% in July after a 17.8% surge in June. Sales of U.S. existing homes rose to their highest level in nearly two years as cheaper prices and the availability of tax credits continued to entice buyers. In Canada, inflation is at a 56-year low, with declines in the price of gas, cars and shelter partly offset by higher food costs. With consumer spending remaining weak, some economists say it could take two years of recovery before companies begin to raise prices.

Markets
Stocks tumble, then rebound

World markets rallied following steep losses on Monday, when fresh concerns about a U.S.
economic recovery sent indexes around the world tumbling. Stocks rose after a rebound in Chinese equities and an uptick in U.S. manufacturing offset a disappointing weekly jobs report.

Canada is not likely to block sale of Nortel, says the Globe and Mail, since the government is
only required to review foreign takeovers for businesses over $312 million – Nortel’s balance
sheet assets are $149 million. Oil is on track for a strong gain this week as the price per barrel approaches the highest levels since October 2008 when it closed at $75.22. The $US 3 billion
cash-for-clunkers program will shut down on Monday, the government said Thursday. As of Thursday, the program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates. Meanwhile, Hyundai Canada will offer up to $1,000 on clunkers traded in for new
vehicles. Ten months after its initial rescue deal with UBS, Switzerland sold its 9% stake in its
largest bank for US$5.1 billion, making a profit of US$ 1.1 billion on its investment.

Our recommendation
Rebalance portfolios to buy low, sell high

Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. A period of consolidation or a range bound market allowing time for fundamentals to catch up with share prices is likely to occur over the coming months. Profit taking also would not be unexpected; recall that September, on average, is historically the worst month for equity investors.
Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommen-dations as follows: Term Call – below benchmark duration.
Sector Call – underweight Canadas, overweight Municiaps, neutral on Provincials and
Corporates. Currency Call – favour the C$, as well as the A$, which is expected to
outperform. Alternative Strategies – underweight high yield, overweight Emerging Markets
Debt, neutral on inflation protected bonds.
Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed.

Privacy Policy and Legal Disclaimer
TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF
This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

September & October = difficult months for the market

2009-08-21T11:43:00.000-07:00

I dont want to be the bearer of bad news, but summer vacation season is quickly coming to an end. Traditionally, September and october are very difficult months for the market. Significant volatility is common during these months, even during normal years. With the dramatic movement of the market over the past few months, I believe that it could be a challenging period. On the positive side, it is a great time to revamp your portfolio, and protect it from further market volatility. If you have been considering a change with your portfolio, or you are looking for a second opinion, why not give me a call? Do you want to discuss your alternatives? Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

you need to be prepared for strong fiscal policy response if deflation continues

2009-08-20T06:02:00.000-07:00

Yesterday morning, Statistics Canada reported that we still see signs of deflation. If deflation remains an issue, it will definitely affect investors, as it has a negative impact on consumer behaviour, and therefore on most stock prices. On the positive side, it makes it likely that the Bank of Canada will remain committed to low interest rates, in the interest of spurring growth. Regardless, deflation is much more problematic for global central banks than mild inflation, so you need to be prepared for strong fiscal policy response if deflation continues. If you are unsure if your portfolio is prepared for a deflationary environment, perhaps it is time for a second opinion

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

not surprising to see some profit taking

2009-08-17T17:01:00.000-07:00

Global markets have been down dramatically overnight. North American markets look set to follow suit. After several months of significant improvement, it is not surprising to see some profit taking. It will be important to see if buyers wade back in to the market if prices pull back, and the next few days may tell us the direction the market will be headed over the next few months. Stay tuned to www,am980.ca to follow the market news, and feel free to call me if you need a second opinion.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-08-14T08:29:00.000-07:00

The big picture

On the road to recovery

The U.S. Federal Reserve delivered a vote of confidence on Wednesday, declaring that U.S. economic activity is “levelling out.” The central bank held its key lending rate at a record low, and signalled it would end one of its stimulus programs (buying U.S. Treasury securities) at the end of October. In Europe, Germany and France unexpectedly returned to growth in the second quarter. Good news also came out of the U.K. – data showed house prices stabilized, and the Royal Institution of Chartered Surveyors now predicts the average house price will rise by the end of the year, reversing its forecast of a 10% to 15% decline.

Global policy makers must secure a rock-solid economic recovery before they turn their attention to exit strategies from stimulus policies, says Canadian Finance Minister Jim Flaherty. “What positive signs we have seen are encouraging, but they are tentative,” he said, referring to car sales, consumer confidence and housing as sources of optimism, versus continued worries about global financial institutions and weakness in the United States, Canada’s biggest trading partner.

Markets

A bumpy ride and the car of the future

Markets were volatile early in the week, and then strengthened on the Federal Reserve’s optimism and a boost in the forecasted demand for global crude oil. The Canadian dollar halted a four-day slide on Wednesday, as stocks and oil prices rose. The U.S. government’s $3-billion “cash for clunkers” program drove 270,000 vehicle sales in two weeks, prompting Ford to hike factory output. General Motors claims its new electric car, the Chevy Volt, will get an unprecedented 230 miles per gallon (100 km/l), four times the mileage of Toyota’s Prius. It will go on sale in late 2010 for US$40,000. Meanwhile Volkswagen announced that it will pay US$4.7 billion for a 42% stake in Porsche as it executes a gradual merger.

Ottawa will not block the sale of Nortel’s wireless assets to Ericsson, but left open the prospect of a review under the Investment Canada Act. Critics argue the sale would put cutting-edge technology in the hands of foreigners. Toronto-based Brookfield Asset Management launched a US$4-billion real estate turnaround fund, which will buy distressed houses and office towers around the globe. In contrast, Canada’s largest pension fund manager, the Caisse de dépôt, announced a $5.7-billion writedown on its property holdings this week. Despite the recession, McDonald’s sales rose 4.3% in July thanks to its new McCafé line and Walmart beat expectations with profits of US$3.44 billion for the quarter, roughly equal to a year ago.

Our recommendation
Rebalance portfolios to buy low, sell high

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the market trend remains upward in the short term despite economic risks on the horizon. Although market valuations are not excessive at current levels, they are already pricing in a significant rebound in earnings in 2010. A period of consolidation or a range bound market allowing time for fundamentals to catch up with share prices is likely to occur over the coming months. Profit taking would also not be unexpected; recall that September, on average, is the worst month for equity investors historically.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Provincials and Municipals, neutral on Corporates. Currency Call – favour the C$, exception being A$ which is expected to outperform; Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.
Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

tune in tomorrow, as I discuss using covered calls as another way to generate income

2009-08-14T08:25:00.000-07:00

Over the last few months, I have frequently discussed the value of earning income from your portfolio. Interest and dividend income are both important, especially in difficult market conditions. I continue to emphasize the importance of investing for income, and I invite you to tune in tomorrow, as I discuss using covered calls as another way to generate income, and create a sell discipline for your portfolio. This strategy is a bit more complicated, but may add several percent to your portfolio's return, so it really is worth considering. Tune in tomorrow at 9:30 AM, for Beyond Funds Market Weekly, and learn about this innovative idea.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

The Options Market

2009-08-12T14:38:00.000-07:00

One of the most misunderstood areas of the investment world is the options market. Many investors think of options as a risky, speculative investment. In general, options are bought by people who expect dramatic, short term moves in stocks, and this is definitely the realm of speculators. However, one of the most successful strategies for earning extra income for a long term investor is covered call writing. This iinvolves selling an option on a stock you own. It sounds complicated, but tune in Saturday morning, and I will explain how this may help increase your returns.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Economic recovery: pressure for central banks raise rates

2009-08-10T11:57:00.000-07:00

Global interest rates remain at record lows, and this has an impact on many areas of your financial plan. Bond prices, mortgage rates, and even the price of preferred shares and common stocks are directly impacted by the policies of our global central banks. As the economy recovers, pressure will eventually build for central banks to start raising rates, and this will dramatically impact your investments. Although the equity market has experienced a dramatic recovery, it makes sense to look at your plan, and ensure that you are prepared for changing fiscal policy. If you are looking for a second opinion, why not give me a call, nad we can ensure you are prepared for a recovering economy.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-08-10T11:56:00.000-07:00

The big picture

Australia and Europe next in line for recovery

The European Central Bank left interest rates at record lows as the European economy showed signs of recovery and may even return to growth this quarter. But in Britain, while interest rates were unchanged, the Bank of England expanded its quantitative easing program by £50 billion ($US 84 billion), saying the U.K.’s recession is deeper than policy makers expected.

In the U.S., the pace of job losses slowed and the unemployment rate dropped for the first time since April 2008, the clearest sign yet that the recession is easing. Payrolls fell by 247,000 in July, after a 443,000 loss in June, and the jobless rate dropped to 9.4% from 9.5%. Small business employment, a closely watched indicator, declined for the 18th straight month. Small businesses are typically the first to hire again after a recession. U.S. retailers saw their 11th straight month of sales declines, with sales down 5.1% from a year ago. In contrast, Australia defied expectations with a rise in employment of 32,200, keeping the jobless rate steady at 5.8%, in a show of strength that could make it the first developed country to tighten its fiscal policy.

The markets

Stocks rally, then fall back

After a three-day weekend, Canadian stocks took off on Tuesday, breaking through the 11,000 barrier to a 10-month high. U.S. stocks started strong on Monday with the S&P 500 rising above 1,000 for the first time in nine months. As the Canadian dollar hit a 10-month high versus the U.S. currency on Tuesday, Finance Minister Jim Flaherty warned of taking measures if a strong currency threatens economic recovery. U.S. oil prices fell back slightly from a six-week high on Thursday, settling at $72.

Agrium posted a better-than-expected quarterly profit and predicts improving demand in the fall as farmers have delayed purchases because of the credit crunch and high fertilizer prices. Organic food retailer Whole Foods Market, criticized for its high prices, surprised analysts with a slight profit increase versus the expected 13% decline in earnings, causing the stock to soar 15%. Despite McDonald’s aggressive coffee promotion, Tim Hortons increased sales amidst a weak economy with profits rising 3.7% in the second quarter.

Our recommendation
Favour shorter-maturity bonds as rates set to rise

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the group believes that equity markets will endure a pullback or period of consolidation over the coming weeks, while seeking greater fundamental evidence and support for a sustained bull market. Although stocks advanced dramatically since the March lows, Q2 earnings results in the U.S. came in better than forecast, providing support for recent strength before equities resume a sideways trend.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Provincials and Municipals, neutral on Corporates. Currency Call – generally favour the C$ against most majors, exception being A$ which is expected to outperform;
Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.
·Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Invest in companies that fit with your long term goals

2009-08-05T05:54:00.001-07:00

Several remarkable benchmarks have been reached this week, as the TSX has burst through 11000, a day after the Nasdaq broke 2000 and the S&P through 1000. This represents a 40 to 50 percent rally for these markets from their bottom in March, and you may be tempted to chase the rally, and buy stocks. It may make sense to invest in companies that fit with your long term goals, but the rally has made many equities relatively expensive. If you are looking to add to your equity holdings, why not look for a second opinion Do you want to discuss your alternatives? Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-08-04T10:11:00.001-07:00

The big picture

Nurturing a recovery

While the Bank of Canada updated their forecast last week to include expectations for the recession to end in Canada in the third quarter of 2009, Finance Minister Jim Flaherty’s view was more cautious, saying that stimulus spending would continue until a recovery takes firm hold. Flaherty cautioned that unemployment would persist as firms are typically slow to hire after a recession. Unemployment climbed sharply in May, up 9.2% from April, to 778,700. The federal government is being pressed to block the US$1.13-billion sale of Nortel’s wireless division, including 125 patents, to Swedish firm Ericsson. Ontario Finance Minister Dwight Duncan joined federal opposition leaders, saying, “We just think every step should be taken to try to keep these patents in Canadian hands so that the industry can continue to develop here in Canada.”

In the U.S., new home sales rose by 11% in June, the biggest rise in more than eight years – more evidence that the housing market is finally bouncing back. As well, home prices rose on a month-to-month basis for the first time since July 2006, up 0.5% in May versus a decline of 0.6% in April. In other positive news, the rate that banks charge each other to borrow for three months fell below 0.5% for the first time, another signal that confidence is returning to credit markets.

Markets

U.S. and Europe make gains

U.S. stocks surged this week on improved U.S. jobless data and solid corporate profit reports. The S&P 500 reached its highest level in nine months, just points from the psychologically important 1,000 level. The TSX and the Canadian dollar swayed with oil prices, which fell in the first half of the week, then recovered on Thursday. Rising economic sentiment drove European equities to their highest close in nearly nine months.

In market news, Microsoft and Yahoo! will combine forces to take on the number one search engine, Google. The deal is a

10-year revenue sharing scheme, which utilizes Microsoft’s new Bing search engine. Rogers Communications earnings beat analysts’ expectations, but shares fell 5% as the firm lowered its revenue targets to 4%, from 9%, for 2009. Private-equity giant KKR will underwrite its first IPO, alongside Goldman Sachs and Citigroup, issuing shares of U.S. budget retailer Dollar General. U.S. computer giant IBM will buy business analytics software firm SPSS for US$1.2-billion.

Our recommendation
Favour shorter-maturity bonds as rates set to rise

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the group believes that equity markets will endure a pullback or period of consolidation over the coming weeks, while seeking greater fundamental evidence and support for a sustained bull market. Although stocks advanced dramatically since the March lows, Q2 earnings results in the U.S. are coming in ahead of expectations, which may prompt a brief rally before equities resume a sideways trend.

Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk’s current recommendations as follows: Term Call – below benchmark duration. Sector Call – underweight Canadas, overweight Provincial and Municipals, neutral on Corporates. Currency Call – favour the C$, so no tactical FX calls at this time. Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.
Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Recreational Property and capital gains

2009-07-29T15:46:00.000-07:00

Another summer long weekend is approaching, and cottage season really is in full swing If your summer revolves around your beautiful recreational property, you may want to consider the impact of capital gains tax on your piece of paradise. Cottages are frequently great investments, but the growth in their value may make it difficult to pass them on to the next generation. If you are concerned about passing on your cottage, without passing on a major tax burden, give me a call. There are simple, and often inexpensive, strategies to avoid this risk

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-07-24T09:07:00.000-07:00

The big picture

Bank of Canada declares recession over

On Thursday, the Bank of Canada joined the central banks of the U.S., Japan and Australia, declaring the recession over in their respective countries. Earlier in the week, U.S. and Canadian central banks promised to keep borrowing rates at record lows well into next year to nurture a recovery. “We have a very long haul here,” cautioned Fed chairman Bernanke. “It’s not going to feel like a very strong economy.” America’s climb out of the recession is being slowed by rising unemployment; however, the U.S. index of leading economic indicators rose 0.7% in June, the third straight monthly gain, pointing to solid GDP growth by the fourth quarter of 2009.

The Bank of Canada projects the Canadian economy will bounce back at least twice as strongly as the U.S., advancing by 1.3% during July to September, and 3% in the fourth quarter (annualized rates). Canadian retail sales rose more than expected in May, posting the fourth gain in five months, led by auto sales. Spending also jumped for building and home supplies, as consumers took advantage of tax incentives on home renovations.

The markets

Markets rally and consumers go to the movies

The Dow Jones Industrials Index rose above the key 9,000 mark for the first time since January, and the S&P 500 rose to its highest close since November on strong corporate profits and economic data. The TSX came close to breaking through its June high and reaching levels last seen in October. Apple reported its best-ever revenue and earnings in a non-holiday quarter, and will market a special iPhone for the Chinese market that could sell 14-million units in the first year.

At Starbucks, cost cuts boosted profits and store traffic is improving. Starbucks will close 40 more stores, for a total of 805 closures worldwide since July 2008. Moviegoers flocked to the sixth Harry Potter film, setting a new worldwide box office record of US$104-million for opening day. Cineplex in Canada launched a trial of D-Box, a new technology using special chairs that move to mimic the screen action. In car news, Porsche’s CEO was ousted as Volkswagen continues to position itself in what has been an epic struggle between the two carmakers. According to German reports, both firms have now agreed to settle their differences and get on with a merger.

Our recommendation
Favour shorter-maturity bonds as rates set to rise

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says the group believes that equity markets will endure a pullback or period of consolidation over the coming weeks, while seeking greater fundamental evidence and support for a sustained bull market. Although stocks advanced dramatically since the March lows, Q2 earnings results in the U.S. are coming in ahead of expectations, which may prompt a brief rally before equities resume a sideways trend.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights the desk's current recommendations as follows: Term Call – below benchmark duration. Sector Call – Underweight Canadas, overweight Provincial and Municipals; neutral on corporates. Currency Call – favour the C$, so no tactical FX calls at this time. Alternative Strategies – underweight high yield, overweight Emerging Markets Debt, neutral on inflation protected bonds.

· Portfolio strategy. When market volatility leads to large shifts in the weights of individual holdings, we recommend clients rebalance portfolios to maintain a discipline that encourages profit taking on strength, while adding on weakness in other positions that may have underperformed.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Health Care Costs

2009-07-24T09:06:00.000-07:00

Health care reform is a huge issue in the media these days, with the US government struggling to deal with Medicare, Medicaid, and health care for all. Canadians face their own funding crisis. Although we have universal health care, many health costs are passed on to retirees, and these costs may present real hardship in your later years. The greatest risk comes from a prolonged stay in a nursing home for one spouse, as the other struggles to maintain the home. New alternatives exist which may significantly reduce this risk, and I rarely see these options used when I review financial plans.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

build a portfolio that protects you from a downturn, but prepares you if the market continues to surge

2009-07-22T07:32:00.000-07:00

Yesterday, the Bank of Canada came out with what must be considered a pretty optimistic outlook on the state of the economy. This morning, the Bank of England struck a similarly optimistic tone. With major central banks seeing the recession nearing its close, and signs that stability is returning to global investment markets, what should you do? Ideally, you should build a portfolio that protects you from a downturn, but prepares you if the market continues to surge.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

you should consider alternatives.........

2009-07-21T06:27:00.000-07:00

Last week, we saw a major market rally, but I think it is important to keep short term equity market performance in context. If this first decade of the millenium were to end today, the entire gain of the TSX over this decade would be fairly close to our gain last week. On the American side, the story is much worse, with equity returns for the decade deep in negative territory, and the picture is even more bleak if adjusted for Canadian currency, This does not mean you should avoid equities, but it does mean you should consider alternatives like bonds, preferred shares, and even GICs to diversify away from equity mutual funds, since this decade proves that equity investing really does require long term patience.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-07-17T13:12:00.000-07:00

The big picture

Confidence continues to build on the back of stability

“The good news is things are stabilizing, there are encouraging signs, there is a brighter future ahead,” federal Finance Minister Jim Flaherty said, but he cautioned recovery will be gradual. President Barack Obama urged Americans to be patient with his economic recovery plan. The plan “was not designed to work in four months,” Obama said. “It was designed to work over two years.” U.S. Treasury Secretary Timothy Geithner said he sees signs of confidence returning to the U.S. financial sector and feels the economy has improved faster than expected. Industrial production in June shrank less than forecast, signalling the sector is on the verge of stabilizing. Meanwhile, new construction of homes and apartments picked up to the fastest pace in seven months in June, another indication that the U.S. housing slump may be levelling out.

China’s economy grew by a surprisingly strong 7.9% in the second quarter, fuelled by a massive economic stimulus package and aggressive bank lending. Japan’s central bank held its key interest rate steady at 0.1% and extended its emergency measures to the end of 2009, as it downgraded its 12-month outlook to 1.0% growth from 1.2%.

The markets

Stocks rally on earnings optimism and donuts take Manhattan

Stock markets rallied this week on the back of better-than-expected earnings from U.S. firms such as Intel and Goldman Sachs. JPMorgan Chase also beat analysts’ estimates with a $2.7-billion second-quarter profit, 36% higher than a year ago. General Electric, a bellwether of the world economy, beat Wall Street’s earnings expectations but posted a 17% drop in revenues. In addition, the Canadian dollar shot up to 89 cents U.S., drawing strength from the improved earnings outlook and rising gold prices.

Tim Hortons is opening 12 stores in New York City, and is on track to turn a profit at its 500+ U.S. stores this year, even as it goes head-to-head against McDonald’s new McCafé beverage line. Meanwhile, with retail sales down 9.4% in June versus last year, stores in the U.S. are taking novel approaches to drive sales – Sears Holding Corp., which runs both Sears and Kmart, has already launched an online Christmas promotion. Japanese beverage leaders Kirin Holdings Co. and Suntory Holdings are in merger talks; combined, the companies would control 50% of the Japanese beer market. Bailout talks between the U.S. Treasury and major business lender CIT Group have collapsed, potentially driving the company into bankruptcy.

Our recommendation
Rising yields will favour shorter-maturity bonds

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says their continuing conviction is that equity markets will endure a pullback or period of consolidation over the coming weeks, while seeking greater fundamental evidence and support for a sustained bull market. Although stocks moved too far too fast since the March lows, early indications are that Q2 earnings results in the U.S. are coming in ahead of expectations which may prompt a brief rally before equities resume a sideways trend.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights that with Scotia Economics recently changing its forecast, calling for rising yields across the entire maturity curve in 12 months time, active traders should remain in shorter-maturity bonds. Municipal debt appears to show relative value, with yields higher than Canadian bank deposit notes in the five-year and greater maturity range. For passive buy-and-hold investors, the safety you receive from Municipals presents this as a decent opportunity to diversify from the corporate sector and continue to pick up decent yield.

· Portfolio strategy. With significant volatility still a factor in the markets, it’s important to review the impact on your portfolio allocations and ensure that your holdings remain appropriate for your goals and risk tolerance.

TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

it really is important to revamp your portfolio

2009-07-17T13:09:00.000-07:00

Canadian investors pay the highest management fees in the world. Over the last ten years, North American markets have experienced essentially no growth. As a result, many listeners may have mutual funds that have been around for years, with little or no growth, and frequently with significant losses. Over the past few years, I have spoken frequently about the impact of management fees on the long term growth of mutual fund portfolios. It is highly unliikely that we will see another 10 years of zero growth, but it really is important to revamp your portfolio, and ensure you have your costs under control. Tune in tomorrow at 9:30, for Beyond Funds Market Weekly, and I will give you some ideas on rebuilding your portfolio, and controlling your costs, in this difficult market environment.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Signs of recovery may drive the market higher

2009-07-15T05:56:00.000-07:00

Last week was pretty negative for North American markets. This week, US earnings reports will give us a sense of the state of the economy. Signs of recovery may drive the market higher, but negative news might accelerate the recent sell off. So far, the earnings have been encouraging, but over the next few months, we are likely to see ongoing uncertainty, as the market seeks direction. On Saturday, I discussed positioning your portfolio for the current market volatility. I focused on choosing investments with income, like dividends or interest, as the core for surviving these dangerous times. If you missed my show, visit www.am980.ca, or give me a call, and we may discuss it one on one.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Signs of recovery may drive the market higher

2009-07-13T07:42:00.000-07:00

Last week was pretty negative for North American markets. This week, US earnings reports will give us a sense of the state of the economy. Signs of recovery may drive the market higher, but negative news might
accelerate the recent sell off. Over the next few months, we are
likely to see ongoing uncertainty, as the market seeks direction. On Saturday, I discussed positioning your portfolio for the current market volatility. I focused on choosing investments with income, like dividends or interest, as the core for surviving these dangerous times. If you missed my show, visit www.am980.ca, or give me a call, and we may discuss it one on one.

Do you want to discuss your alternatives?
Have you outgrown your mutual funds?

For a review your portfolio, or a complimentary copy of my CD, visit, www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260. This program is for information purposes only. Fees, management fees and commissions may be associated with mutual fund investing. Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital, member CIPF

Wareham Weekly Insights

2009-07-13T07:41:00.001-07:00

The big picture

Economies edge towards recovery

Leaders of the world’s biggest developed and emerging nations met in Italy this week for a three-day summit on issues ranging from the economic crisis and international trade to gas prices and climate change. Leaders have agreed to avoid devaluing their currencies to promote their exports, but struggled to reach consensus on a proposal to cut greenhouse gas emissions by half by 2050.

Australia’s central bank held its interest rate unchanged for the third month, citing a stabilizing global situation and a stronger-than-expected domestic economy. The Bank of England will pump extra new money into markets and keep its key interest rate at a record-low 0.5% in a bid to kick-start lending. British Chamber of Commerce chief economist David Kern said, “The worst phase of the recession is over, but serious downward pressures persist.”

Canada was at the back of the class in an annual report card issued Monday by the Conference Board, ranking 11th for economic performance in 2008 among 17 peer countries. On a bright note, analysts were surprised as the value of building permits leapt 14.8% in May from April, to $5 billion, versus an expected gain of 0.7%. Statistics Canada said net job losses in June totaled 7,400 and the unemployment rate rose to 8.6 percent from 8.4 percent in May. Overall, fewer Canadians lost their jobs in June than expected even as the unemployment rate hit an 11-year high, adding credence to the view that the economy is stabilizing.

Oil creates slippery slope for markets

World stock markets slipped as oil prices took a six-day slide, after a bleak U.S. jobs report last week and a bigger-than-expected increase in U.S. gasoline reserves. Prices stabilized at US$60, boosted by news that this week’s jobless numbers were down sharply and by better-than-expected quarterly results posted by aluminum company Alcoa.

Google announced it will offer its own operating system in the second half of 2010, a direct challenge to Microsoft Windows, the most widely used operating system in the world. The Jean Coutu Group, Quebec’s leading pharmacy chain, said it plans to grow by one-third to 400 stores within five to seven years, capitalizing on the province’s aging population. A judge approved General Motors’ restructuring plan, allowing the company to emerge from bankruptcy and leave behind much of its costs and liabilities. The U.S. government will own about 61% of the “new GM” and the Canadian government will control an 11.7% share.

Our recommendation
Favour shorter-maturity bonds as rates set to rise

· Equities. Stephen Uzielli, Portfolio Manager, Portfolio Advisory Group, says their continuing conviction is that equity markets will endure a pullback or period of consolidation over the coming weeks, while seeking greater fundamental evidence and support for a sustained bull market. Investors may be motivated to take profits based on the conclusion that stocks have in fact moved too far too fast and have few pending catalysts to generate further gains until the Q2 earnings season commences in late July.

· Fixed income. Chris Kennedy, Associate Director, Portfolio Advisory Group, highlights that with Scotia Economics recently changing its forecast, calling for rising yields across the entire maturity curve in 12 months time, active traders should remain in shorter-maturity bonds. Municipal debt appears to show relative value with yields higher than Canadian bank deposit notes in the five-year and greater maturity range. For passive buy-and-hold investors, the safety you receive from Municipals presents this as a decent opportunity to diversify from the corporate sector and continue to pick up decent yield.

· Portfolio strategy. With significant volatility still a factor in the markets, it’s important to review the impact on your portfolio allocations and ensure that your holdings remain appropriate for your goals and risk tolerance.

The month in review

June: Global economy reaching a turning point

In June, there were encouraging signs that the global economy is stabilizing, but markets were volatile as weak commodity prices and mixed economic data gave investors doubts on the strength and speed of an economic recovery. Leaders around the world expressed cautious optimism that the recession was slowing and the general consensus is that the worst-case scenario has been avoided. Ten U.S. banks repaid $68 billion of bailout money and U.S. President Barack Obama unveiled a proposal for sweeping reforms to bank and market regulation.

Market rally falters

In June, markets continued the rally that started in March, but then stalled as oil and commodity prices softened mid-month. Despite the pullback, March 1 to June 30 marked the best quarterly gain for North American markets in a decade. Oil prices in June peaked at US$73 per barrel compared to US$145.29 per barrel price nearly a year ago.

Canadian dollar pulls back with commodities

The Canadian dollar gained 9.4% in May, passing the $0.90 cents U.S. mark, then fell in late June as the price of oil and metals weakened. The Canadian dollar ended the month in the area of $0.85 cents U.S.

Global central banks hold rates

Central banks in the U.S., Canada, England, Europe, Australia and Japan put interest rate cuts on hold this month, satisfied that their policies are working, with growing signs that economic contraction is slowing.

Global economies continue to stabilize

While it may be too early to call it a recovery, statistics are indicating that the rate of decline is slowing, suggesting a bottom to the recession. In the U.S., there were positive signs of stabilization in the manufacturing and housing sectors – orders for U.S. manufactured durable goods rose by 1.8% in May, the strongest increase since December 2007. As well, U.S. mortgage applications climbed. However, at the same time, a far bigger-than-expected rise in unemployment for June brought the unemployment rate up to 9.5%.

Canada’s report on April economic growth was released, showing the pace of economic contraction is slowing, as the economy inched down just 0.1% from March, one of the smaller declines since the recession began. China reported a strong recovery in industrial production and Japan saw rising exports and output, while European economies were mixed.

Auto restructuring

General Motors filed for bankruptcy protection on June 1 and the Canadian and U.S. governments became reluctant shareholders to aid in the transformation of the 100-year-old automaker. GM was given a July 10 deadline to get court approval for a restructuring plan and bankruptcy sale, which will result in a “new GM” with a smaller workforce and fewer factories and dealerships. Debt-mired Porsche is looking for a “white knight” and seems to be pinning its hopes on the Gulf state of Qatar, after rebuffing an offer from VW and being rejected for financing by Germany’s state bank.

Ins and outs

Research In Motion will launch a new Blackberry in July to rival Apple’s June launch of the new iPhone 3G S, which sold 1 million units during its first weekend in market. In other news, after 127 years, Nortel is being wound down, with its wireless network business being sold to Nokia Siemens.

·

Jeff Wareham
Wealth Advisor

ScotiaMcLeod
148 Fullarton Street,
Suite 1801
London, ON
N6A 5P3

Tel: (519) 660-3260
Toll Free: (800) 265-1242
Fax: (519) 660-3208
Email Jeff
Visit my website

Greg Holland
Tel: (519) 660-3239
Email Greg

Ann Martin
Tel: (519) 660-3260
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TM Trademarks used under authorization and control of The Bank of Nova Scotia.
ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF

This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. 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. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor SCI can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your investment advisor, who can assess all relevant particulars of any proposed investment or transaction. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice. All performance data represents past performance and is not indicative of future performance. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of Royal Bank. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to Royal Bank. TM Trademark used under authorization and control of The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.