The David Miner Communiqué—Spring 2008

Spring Is Finally Here !
It has been one of the more brutal winters in memory. Dorinda and I did manage a ski break in early March. This year we went to Silver Star in the British Columbia interior, as always in the company of good friends. We celebrated Saint Patrick's Day by doing the Achilles 5 K run in Toronto, a charity fund raiser for the disabled.

I am training for the Mississauga Marathon in mid-May and we started our annual dragon boat practices on the water in mid-April with the major competition scheduled for June at the Toronto Islands.

Straight talk about insurance .

I know you're thinking "I hate to talk about insurance". Let me offer my understanding. Insurance is something that I personally put money into regularly for life, auto, home, and business coverage. Despite my "investment" in various types of insurance, I hope that I shall never have to make a claim. My investment return is in the form of financial security and peace of mind.

I have been licensed for life and accident and sickness insurance for years. Many clients do not even realize it. We do mention it when we definitely recognize a need.

I often call myself "the world's worst insurance salesman". Here's what it takes to be the very worst:

1. I think about life insurance first, last, and always for risk management. How do we prevent economic loss in the event of death of a key family member or business associate? All of the tax and other features of many insurance products are very secondary and often oversold.
2. When it comes to insurance, it is wise to be thrifty. Is the coverage offered the best value available? Many insurance salesmen are for certain reasons biased to a specific insurance company, which may not offer the best deal for you.
3. I have a general preference to the cheapest term available and only occasionally mention Universal or Whole Life. There is sometimes a place for Universal or Whole Life, but these policies are often oversold at high cost to the buyer and high commission to the seller.

While several newsletters could be devoted to insurance strategies and what makes the most sense in the long-term, here are a few IMPORTANT facts to know:

1. Mortgage or credit insurance through a bank or other lender- a generally bad deal. Here's why.
   a) It is "usually" (in my experience "always") more expensive than a renewable term policy.
   b) It is underwritten at claim, which means you may not have coverage when you make a claim. The slightest excuse may be used to deny payment. So a person pays for coverage that may not exist! The CBC has devoted television and radio time to this very poor practice, which is illegal in some parts of the world. I expect that it will eventually become illegal here too. In the mean time - BEWARE!
2. Universal Life ("UL") and whole life have a place. Often term is cheaper and better. Commissions on UL and whole life are higher than term, which unfortunately motivates many insurance reps to sell, sell, sell. BE CAREFUL!
3. Think before you buy Accidental Death insurance. It is usually better to simply buy the right amount of basic life insurance. Remember, insurance is a risk management tool to protect against economic loss. The cause of death (accident, heart attack, or otherwise) has no bearing on the economic loss to family members or business partners.

Hopefully, I have now at least somewhat convinced you that I am the world's worst insurance "salesman". We encourage you to call us if you have:

1. A mortgage or line of credit.
2. Dependents and not enough net worth otherwise to look after them if the bread winner or a key person passes on.
3. Illiquid assets such as cottage or family business that you wish to keep in the family after death, but need to worry about deemed capital gain and taxes at death.

The above list is short. There may be other reasons for us to review your situation. You may be uncomfortable with an insurance policy that was "sold" to you earlier. Feel free to call us should you like an opinion or possibly a review. We look forward to hearing from you.

Markets - A Soft First Quarter in 2008

The sub-prime issues of 2007 spilled into 2008 with markets generally weak in the first quarter. The major world index (M.S.C.I. World) was down 5.3% in Canadian dollar terms. The S&P/ TSX Composite Total Return Index was down 2.8% and the Dow Jones Industrial Average Total Return was off 3.3%. It is interesting to note that the U.S. Dollar actually strengthened against the Canadian dollar by 4.0%, (despite losing 10.8% overall in the 12 months ending March 31).

What does all of this mean?

Frankly, it means very little. Our objective is to achieve superior long-term performance while mitigating volatility in the short-term. We do not react to financial markets. Several studies have shown that reacting to markets only costs you money in the long-term.

Our philosophy is to hire good managers with broad mandates and let them do their jobs. And the very best active managers will sometimes produce below median performance. Babe Ruth is not only the best known home run hitter in baseball, but he sometimes held the record for the most strike outs! Can you imagine if his bosses fired him after he had a bad inning? The odds of achieving superior investment performance are greatly increased when we hire the best managers available and give them the time frame to let you win in the long-term.

Financial markets usually climb the proverbial "Wall of Worry". I believe that the emotional side to investing is a direct result of the speed and ease of information that we have at our finger tips. We can check our portfolios daily and watch them go up or down. That rapid information can create an emotional reaction.

If you own a house, imagine now if you could check the real estate market through your computer and find out exactly what your house is worth at any instant. You might be checking the value of your house several times a day! You may find yourself reacting emotionally to the day -to-day price swings - possibly thousands of dollars up or down in any given day. I often recommend that the same calm we have in owning a home is best applied to owning an investment portfolio. Historically, equities have generated higher returns than real estate over time, so we might as well relax and ignore the "noise".

TD Mutual Funds - An Excellent Team of Professionals

It is timely to highlight TD Mutual Funds, with whom we have now enjoyed a working relationship for a few years. I was initially attracted to TD Mutual Funds because of the strong third party managers whom they have engaged; including -- Jarislowsky Fraser Limited, McLean Budden, and Oppenheimer Funds. I have also been impressed for years with their in-house fixed income team led by Satish Rai, Vice Chair, TD Asset Management Inc. & Senior Vice President, TD Bank Financial Group. I have since appreciated TD Mutual Funds for a strong in-house Canadian equity group and their attractive wrap program (the TD Managed Asset Program). And not least important, I am in strong agreement with TD Mutual Funds' corporate investment philosophy of global diversification, an often repeated theme for readers of this newsletter and often overlooked given the relative strength of the Canadian stock market in the last few years.

TD Mutual Funds has produced one of the best graphical demonstrations of "Why Go Global?" In the chart enclosed with this newsletter "Why Diversify Globally?," TD Mutual Funds shows clearly how global equity markets have outperformed domestic markets 70% of the time over the last 25 years on a 5-year rolling average basis.

In most instances, Canadian markets outperform during a commodities boom. (Yes, we are in a commodities boom now. But will it last forever? Thus far, history shows that booms never do.) The rationale is simple - Canada makes up only a tiny fraction of world equity markets and is highly concentrated. Global equities offer greater diversification and greater opportunity over time. TD Mutual Funds has been strong in their conviction about adequate global equity exposure.

TD Managed Assets Program has an excellent team of professionals who work to optimize return at a conservative level of risk. They have an in-depth program for portfolio manager evaluation and review. They make qualified asset allocation decisions. Confidence in the quality of the TD Managed Assets Program is high.

FOR MORE INFORMATION CONTACT US TODAY!

Mutual fund performances changes in share value and reinvestment of all dividends but do not take into account sales, redemption, distribution of optional charges or income taxes which may have reduced returns. Fees and expenses are associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual funds are not insured by the Canada Deposit Insurance Corporation or any other deposit insurer and are not guaranteed.