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                                                      An exclusive newsletter from Mark J. Krygier, LL.B., CFP
                                                                 Vice President & Portfolio Manager

        December 2010
       Volume 13, Issue 4

     “If the U.S. government were a
                                             Investment lessons are not just for the wealthy!
     person and came to our branch           While the average Canadian has the financial challenge of balancing between
      for a debt consolidation loan,         mortgage commitments, lifestyle costs, children’s educations, insurance protection
        I’m sure we would decline            and retirement planning – there is another group of society that has a very different
                  them!”                     financial challenge. The phrase “high-net-worth” is an overused term with a
     Joel Caughell, Bank Manager             changing definition over time. Years ago, being a millionaire indicated one had
            TD Canada Trust
                                             considerable means. Today in Toronto, Vancouver and many other major cities,
                                             being a millionaire means owning a reasonably-sized home and not much more.
        Did you know?                        Whatever the definition, there are those in an even higher category - the ultra-high
                                             net worth category - who are often the backbone of most philanthropic endeavours.
     Canada has the highest commercial
      property rent taxes in the world, as   Despite the obvious differences, an interesting study by JP Morgan Private Bank
    commercial property owners here pay      about the ultra-wealthy has some excellent lessons for all of us to learn.
        tax of about 54% on their rental
    income, versus 23.5% for the average     This study on the ultra wealthy looked at The Forbes Wealthiest Top 400 list. It
       amongst 23 countries, as reported
      recently in the National Post. The     noted that from 1982 at the list’s inception to 2004, only 50 names remained on the
     U.S. has the second-highest tax rate    list. That means that the odds of sustaining relative wealth, across even one
     of about 41%, while Norway is third     generation, are “a mere 13%”. What was the “biggest landmine” to preserving
         with 36%. Almost 34% of the         wealth? Amongst those that lost wealth, overconcentration in a particular
     Canadian charges are accounted for
      by income tax and a real-estate tax.
                                             investment was the common factor, whether that investment was in oil, real estate or
                                             a single stock. Ironically, while it took concentrated risk to create excessive wealth,
             To reach me:                    this was the same risk that destroyed it. The challenge facing the ultra-wealthy is to
                                             preserve their lifestyle and to pass on their wealth intergenerationally. How was that
          T: 416-512-6441                    best accomplished? The study concluded simply that “diversification is the key to                  survival”, a lesson for all of us to heed. Other risks to wealth, from which we can
                                             also learn, included misuse of leverage, spending beyond one’s means, and as a
               Or call:                      cautionary note for those with an inherent mistrust of capital markets – being too
        Avital Pearlston, CFP                conservative with one’s investments.
    Associate Investment Advisor
          T: 416-512-6674                    Bottom line – investors in all walks of life have something to learn from the                successes and failures of the ultra-wealthy. While it takes some risk to make money,
         The Madison Centre
                                             common sense diversification is a better strategy for preserving one’s wealth. The
      4950 Yonge St., 16th Floor             life-long challenge then is to actively manage one’s risk and return opportunities.
      Toronto, Ontario M2N 6K1
                                             CAPITAL MARKET HIGHLIGHTS
      Canadian GDP has slowed to a 1.0% annualized gain, the weakest gain since the lows of the credit crunch.
      Canadian interest rates are not expected to rise until at least the second half of 2011.
      Ireland’s debt was bailed-out with $US 100 billion from the IMF and the EU. Could Portugal and Spain be next?
      The Bush tax cuts are set to expire in the U.S. unless Obama’s administration and a Republican led Congress can
       agree to an extension by year-end.
                                                      WHAT TO DO NOW?
      Evaluate your own financial strategy by putting it to a “stress test”. Are there any areas to improve? If so, act now!
      FINANCIAL SUCCESS SOLUTION$ - We’re preparing for your retirement – are you?
     In building a retirement plan it is important to first identify those areas which are most in need of review and planning.
     Therefore, when we meet with clients or potential clients, here are some of the questions we ask:
               Do you have clear, well-defined future goals?
               Do you have a written strategy to achieve your personal and financial goals?
               Is your investment portfolio consolidated, integrated and organized?
               Do you have a clear understanding of the amount of risk you are assuming in your portfolio?
               Have you implemented tax-saving strategies in your retirement and investment plan?
               When was the last time you reviewed your vision, plan and progress?
               Do you have a strong sense of confidence in your personal and financial future?

              To begin a pre-retirement investment plan: Call my Associate Advisor Avital Pearlston directly at 416-512-6674.

               STOCK WATCH                                                                                                  GLOBAL BENCHMARKS
                                                                     ETFs TO WATCH                                     (In Canadian $ to November 30, 2010)
         TransCanada Corp - TRP                              CDN Advantaged High Yield
                                                             Bond ETF – CHB (TSX) -                                       Asset Class                YTD          3-Year
               (TSX) - $36.48
       Year High: $39.28 Low:$30.01                                                                                  S&P 500 (USA)                      5.1%         -4.3%
                                                             In Brief: This ETF offers a low                         NASDAQ                             7.3%         -1.2%
      Owns a network of natural                             cost and liquid way of accessing
       gas pipelines across North                                                                                    TSX 60 (Canada)                   9.5%          0.3%
                                                             high yield corporate bonds which
       America extending more than                           offer compelling returns in this                        MSCI Europe                       -9.1%       -13.8%
       59,000 km.                                            low yield environment                                   MSCI EAFE                         -5.4%       -11.9%
      It owns, or has interests in,
                                                             Some of the benefits of this ETF:                       China Shanghai                  -14.3%        -13.0%
       over 10,900 MW of power
       generation.                                            Bonds are not investment                              Brazil Bovespa                    -2.1%          5.0%
      Very attractive dividend of                             grade so it makes sense to                            MSCI World                       -0.5%         -8.7%
       4.38%                                                   hold them in a diversified mix                        3-mo. CDN T-Bill                   0.4%          1.4%
                                                              The ETF is traded like a
     Risks: Changes in the                                                                                           5-yr GOC Bonds                     5.7%          5.8%
                                                               stock vis-à-vis transparency.
     regulatory environment could                             Yield of 7.4% is very high and                        U.S.$/CDN$@1.0264                 -2.6%          0.9%
     negatively impact profits.                                the risk is well diversified                          (% change)

              U.S./ INTERNATIONAL                            In summary: This ETF is suitable                          Diversifying asset classes is the
                                                             for those seeking higher yields.                             first step in managing risk!
            Emerson Electric
        EMR (NYSE) U.S. $55.12
      Year High: $57.29 Low: $40.52
      Designs and manufacturers                                        MY THANKS:                                            WHAT AM I UP TO?
       array of electrical and                               To Rahim M., Galina U., Amin C.,                        Recently I read a finance book entitled,
       electronic products and                               Deepika J. and Daniel M. for                            “The Big Short – Inside The Doomsday
       systems.                                              referring my services. If you know                      Machine” by Michael Lewis. The
      Recently completed $1.5                               someone - family, friends or                            author takes the reader through a
       billion acquisition of Chloride,                      colleagues - who may be able to                         fascinating look behind the scenes at
       a U.K. power system                                   use some assistance with their                          the U.S. subprime mortgage market
       provider.                                             investment planning and you think                       and the players involved. The book is
                                                             that I can be of some help, contact                     an excellent read and reinforces my
     Risks: With the stock price                             me and I would be pleased to call                       view that keeping investment
     high, wait to commit new money.                         and meet with them personally.                          strategies simple helps avoid risk.

The statements and statistics contained herein are based on material believed to be reliable, but are not guaranteed to be accurate or complete. This newsletter was prepared
by Mark Krygier who is a TD Waterhouse Investment Advisor and is for informational purposes only. It is not an offer or solicitation with respect to the purchase and sale of
any investment fund, security or other product and does not provide individual, financial, legal, investment or tax advice. Please consult your own legal and tax advisor.
Particular investments or trading strategies should be evaluated relative to each individual's objectives in consultation with the Investment Advisor. Equity prices and yields
quoted are as of the first day of the month of the newsletter’s publication. TD Waterhouse Canada Inc. and its affiliates and related entities are not liable for any errors or
omissions in the information or for any loss or damage suffered. TD Waterhouse Private Investment Advice is a division of TD Waterhouse Canada Inc, a subsidiary of The
Toronto-Dominion Bank. TD Waterhouse Canada Inc. - Member CIPF. TD Waterhouse is a trade-mark of The Toronto-Dominion Bank, used under license.

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