January 7th, 2013


The U.S. Fiscal Cliff has come and gone, but will come again as will the need to raise the debt ceiling in 2013.

Drama, political posturing and volatility will continue to characterize markets this year.

In 2012 the S&P TSX Index rose 3%.  We did better!

We plan on doing the same in 2013 by continuing to focus on investments that pay income, and who are likely to increase their dividends and distributions during the year.  As income rises the share price should rise also.

Government Bonds are providing little if no return, although the spread on many high quality Corporate Bonds makes them attractive.  As the corporations do better, their profitability increases and credit rating of their bonds improve, the value of our bonds should also go up.

We will continue to be defensive and get paid to wait.

There are many reasons to be optimistic about what 2013 will bring to investors, such as:

- S&P 500 Corporations have $1.5 Trillion in cash on their balance sheets, while TSX Corporations have $600 Billion in cash.  This cash earns them nothing, so it has to be put to work. 
- Bond investors are earning next to nothing, so this money should flow to equities.
- The economy is doing better and unemployment is decreasing.

And for a contrarian perspective:

“The fact that almost everyone is bearish is one big reason to be positive.  If no one expects anything, then maybe stocks are very cheap.  Some stocks are almost being given away, because they have underperformed for 10 years." Peter Hodson, CEO, 5i Research

Our expertise as your Investment Advisor is in 3 main areas:

- Investing your long term capital, where the objective is to not lose the money and make a reasonable annual rate of return.  We do this by hiring the best money managers we have been able to find over the past 20 years.
- Save you money in Income Taxes through the use of Flow Through Shares.  We can reduce your annual income taxes, reduce taxes owing on a bonus or withdrawals from registered investments, recover income taxes paid in the previous 3 years and take advantage of capital losses.
- Increase your Retirement Assets through the use of our “Platinum Investment Program”.

More money to retire on, pay off your non tax deductible debt faster, and reducing your income taxes are 3 of the benefits.

We are also able to provide Insurance based solutions to your financial planning requirements.  Often these solutions feature guaranteed returns, and will not require the investor to take a medical.

Here are some of the projects we implemented recently:

- Husband and wife to receive $3,400 per month additional income.
- Self funding Pension Plan to provide $700,000 addition investments for retirement in 9 years.
- Expedited paydown of home mortgage.
- Invested proceeds from sale of business in four different income producing investments, with expected annual return in range of 6% to 8% per year.
- Investment of RRSP portfolio in an Insurance based product to provide guaranteed annual return of 5% per year until converted to a RRIF.
- Purchased Flow Through Share Limited Partnership to offset significant one-time additional income that would otherwise be fully taxable.
- Implemented Family RESP’s that Grandparents can contribute to.

If any of these projects are of interest to you, please call us for details.

We appreciate the opportunity and privilege to work with you and help with your financial affairs.  Thank you.

Please call or email us if you have any questions or need more information.  We would also welcome any suggestions on how we could improve what we are doing for you.


Wishing you a Healthy, Happy and Prosperous 2013.

Best Regards,


Fred Banwell