Managing Your Money with John Scholl

Emotional investing – the road to ruin

It’s a fact: Emotional investing doesn’t pay, it costs. Market study after market study has clearly proved that when investors are driven by emotions – jumping into and out of stocks looking for the next winner, pouring money into mutual funds following a period of strong market growth, and then moving to the next ‘hot’ asset class during market troughs – they often lose, and sometimes lose big.

Here’s an example: In 1999, the Canadian equities market jumped a spectacular 31.7 per cent, prompting a lot of investors to hop on board in the year 2000. Over the next two years, the market went negative, declining by over 12% in each of those two years and many of those ‘heat seeking’ investors bailed out. So, not only did they miss the big jump of 1999, they also absorbed large losses when they cashed out. However, had those investors stayed invested for the entire 1999-2007 period they would have enjoyed overall returns of close to 30 per cent.*

And that brings us to one of the prime rules for investing success: Trying to time the market or a stock almost never works. But time in the market does by delivering better overall returns – especially when you couple your long-term stay the course strategy with:

· Effective asset allocation Markets are always volatile to some degree or another – it’s in their nature – but with a carefully selected and properly diversified ‘mix’ of assets, you can effectively reduce risk, and enhance your chances of achieving your long-term goals.

· Dollar cost averaging This is the strategy of buying a stock or fund on a regular basis, at an amount you can afford, regardless of the stock or fund price. It is a systematic buying approach that saves you from trying to time the market, averages out the price of your stock or mutual fund units, and ensures you are always participating in the market so you will never miss out on periods of excellent returns.

When you invest with reason instead of emotion and wrap other effective strategies around the ones introduced here – such as investing according to your tolerance for risk, achieving instant diversification through a portfolio mutual fund, and dollar cost averaging to eliminate any concerns you may have as to when the right time to invest is – you will be well on the road to financial success, regardless of short-term market or economic downturns. Your professional advisor can make sure your investing strategies are right for your personal needs, expectations and goals.

John Scholl B. Mathematics, CGA, Consultant - Investors Group Financial Services Inc.

Wealth Management & Financial Planning Phone: (905) 450-2891 X529 Toll Free: 1 (866) 799-2223 x529 Cell (416) 731-3660

Girls Just wanna have fun? or Security?

Home is where her heart is: 3rd annual TD Canada Trust Women and Home Ownership Poll reveals the growing importance of having a place to call your own

Although financial security continues to top the list of home ownership benefits, the comforts of home are increasingly important to Canadian women. According to the third annual TD Canada Trust Women and Home Ownership Poll, which surveyed women who have purchased a home independently, key features of home ownership, including being able to renovate to suit individual tastes and having a garden, are now more essential to Canadian women than they were in 2008.

When asked to describe the best things about home ownership, Canadian women said it is about making a house a home. Having a place of their own (34%), being able to decorate or renovate the way they want (34%) and having a backyard or garden (32%) were some of the responses that increased dramatically from the first survey conducted in 2008. Women had cited having a place of their own at 22%, being able to decorate or renovate the way they want at 14%, and having a backyard or garden at only 5% back in 2008.

"Even though the comforts of home have become increasingly important to women, the financial reasons for home ownership have also increased in importance," says Chris Wisniewski, Group Product Manager, Real Estate Secured Lending, TD Canada Trust. This year 44% of women ranked financial security as the best thing about home ownership compared to 23% of a similar sample of women in 2008. Second on the list of best things about owning a home was not having to pay rent or pay other people (38% versus 13% in 2008).

"It's not surprising that the financial reasons for ownership have increased in importance for people. People are looking for ways to feel financially stable again and see home ownership as a way to build equity and invest in their future."

The financial commitment of owning a home can be a double-edged sword; for many women home ownership offers a sense of financial security yet the financial responsibility can be a headache for others. Twenty-nine per cent of women say that the additional expenses and financial responsibility related to owning a home are their least favourite things about home ownership.

"With interests rates still fairly low, there are affordable financing options available for women considering purchasing a home," says Wisniewski. "However, as interest rates are expected to rise in the near future, it's important that home buyers consider their financial options carefully. We know home buyers have questions, especially those purchasing for the first time so we hope they will come to a branch for some great advice about the options available. For even greater convenience TD has mobile mortgage specialists who can work around their schedule to meet them anytime, anywhere."

In fact, getting more advice when talking to experts and asking even more questions is something most women surveyed wished they had considered when buying their first home. When asked which topics they wish they knew more about when they purchased their home, 40% of women wished they had more knowledge about the fees and costs associated with purchasing a home, 32% wanted more information about the expected annual expense of owning a property and 30% wanted more information about mortgage options.

To discuss financial options for buying, selling or renovating a home, including things like expected costs, Canadians can visit any TD Canada Trust branch or arrange to meet with its mobile mortgage specialists at a time and place that's convenient for them. For more information about mortgages and home equity lines of credit or TD Canada Trust Mobile Mortgage Specialists, visit www.tdcanadatrust.com/mortgages or call 416 629 5363 Denise Pisani.

About the TD Canada Trust Women and Home Ownership Poll

The TD Canada Trust Women and Home Ownership Poll surveyed women 18 years of age and older from across the country, to explore home ownership behaviour among women. The survey was conducted by Angus Reid Strategies with English and French speaking Canadians using the Angus Reid Forum. The sample size includes 1,000 women who have purchased a home independently. The answers from 361 women aged 20 to 45 were used to compare to the 2008 poll which surveyed this age group exclusively.