Loading...
HomeMy WebLinkAboutThe Citizen, 1997-07-16, Page 8PAGE 8. THE CITIZEN, WEDNESDAY, JULY 16,1997 Reviewing our Investment Portfolios How to make sense out of all those statements By Linda Henhoeffer Financial Advisor Mutual fund companies will soon be mailing out to us our June 30th statements. Beware all you postal delivery folks! But after we have opened all the bulging envelopes and we have a pile of statements, financial reports and brochures from a number of different financial institutions, then what? What does all this information mean to us? The mutual fund companies can relax after forwarding all this 'stuff to us because they have fulfilled the Ontario Securities Commission's requirements of 'disclosure' to their clients. But, what about us? Should we simply file our statements away and put the brochures on our 'to read later’ pile? or should we try and make some effort to evaluate what we have and whether or not it adds up to a good plan for us? Consider the following points when reviewing our investment portfolios: 1. Risk Level Mutual funds have no guaranteed rate of return. However, the risk/retum ratio is dependent on the type of investments held in each fund. For example, a government bond fund or mortgage fund has a lower risk level than a fund that invests in stocks of Canadian companies. In turn, a fund investing in stocks of companies in the developing countries of the world would likely have a higher risk level than a fund holding Canadian companies' stocks. This is where the 'sleep' factor comes into play. The 'sleep* factor is the following: what level of risk in our investment portfolio allows us to sleep at night without worrying about our savings? The most important investment rule is to put our savings only in those kinds of investments which are in our comfort zone. 2. Diversification Just as a farmer plants more than one crop in his fields to make sure that he will have feed for his animals in the winter, so too should investors put their savings in more than one kind of investment. A combination of guaranteed investments, such as savings bonds and GICs, will give our portfolios safety and stability. 'Equity' mutual funds will add growth to our investment portfolio. The other kind of diversification to consider is geography. The Canadian capital market makes up approximately three per cent of all the world's capital markets. So, if we insist on keeping our investments in Canada, we are missing out on 97 per cent of the action. The American economy continues to be the world's largest, but the Asian countries are starting to challenge the United States' economic power. Is it wise as an investor to be missing this global financial activity? 3. Income Tax Another important factor when assessing our investments is the income tax implications of our decisions. Investing in government bond funds and mortgage funds will likely produce interest income annually which is totally taxable. Of course, this is not a tax problem if we are holding these investments inside our RRSPs or RRIFs. Those funds investing in preferred shares of Canadian companies will likely produce dividend income annually which is taxed considerably less than interest income. These dividend producing funds can be an attractive investment to hold outside our RRSPs and RRIFs. Funds invested in common shares of companies, usually referred to as 'equity' mutual funds will usually have a 'capital gains' tax implication. The difference between the cost of the units of the fund when purchased and the sale price will be a 'capital gain'. However, only three-quarters of the capital gain is taxable. Taking time to analyze our financial statements is a demanding task. Hopefully, the time and energy required will pay off in dividends for us. County, council briefs Firm hired to study roads Accountant suggests advisor would help Continued from page 7 tion that was incomplete at the end of the previous year) can be made by mid-February. Some entries this year were still being made in June. The county was also late in com­ pleting its financial information return to the province due April 30, but municipalities are often late doing that, he said. Bender suggested some of the problem could be explained by the fact the position of financial advi­ sor in the treasurer’s office has been vacant since March. “Since March of this year we've had just two people trying to do the work," Bender said, pointing out there have been three people in the department for years. “If you need­ ed three people before, how can you get along with two now?” “We recommend that the position of financial advisor be made per­ manent to ensure adequate financial accounting in the future,” the man­ agement letter said. “If the position of financial advisor is not main­ tained, we suggest that a contingen­ cy plan be in place to provide adequate strength in the accounting department.” Noting that the county has adver­ tised for a financial advisor on a six-month contract, Bill Clifford, reeve of Goderich, wondered if a full-time advisor should be hired instead. “I really wonder if we’re kidding ourselves,” he said. “I think to hire someone for six months is not the answer. It may affect the quality of person we attract.” If a full-time advisor is needed, he asked, “Why wait to do it?” But Bill Mickle, reeve of Exeter, worried that the real weakness is in the departments where more authority is being shifted. “Are we heading towards the point where there will have to be financial expertise in every department? I’m of the opinion we could be slowly slipping into a position where we need a large bureaucracy. Maybe we're moving in the wrong direc­ tion,” (in decentralizing control to the departments). Despite the lengthy debate, no action was taken. Each committee will now deal with the problems within its own department. CSL Infrastructure Management Inc. has been hired to conduct a $18,700 study into options for more effective management of road systems in Huron County. The study, to be completed by Sept. 2, will collect information on whether roads could be more effi­ ciently maintained if all local and county roads were served by either municipal departments or the coun­ ty department. The Town of Exeter asked that a third option be looked at: that groups of municipalities could more efficiently do the job. This comment was noted, but not acted upon.**♦ The county hopes to use the Canada-Ontario Infrastructure Works Program to do repairs to the former Highway 83 between Exeter and Grand Bend. The highway is the busiest in the county, with up to 8,000 vehicles a day using it in summer. The county hopes to make bridge repairs in the spring of 1998 fol­ lowed by road resurfacing in the summer. The cost to the county would be $96,216, taken from highway reserves.*** The county has agreed to enter into an agreement with Canadian TODS to erect directional signs for tourism attractions. TODS (stand­ ing for Tourism Oriented Direc­ tional Signage) will manufacture, install and maintain the signs and pay a fee of $150 a year to the county. Tourism outlets will pay the company to provide standard­ ized directional signs which use an icon or symbol and logo.*♦* The amalgamation between the County gets to pay, Jan, 1, Say on spending comes later Huron County will take over financial responsibility for the Huron County Housing Authority on Jan. 1, but it may be longer before it has the administrative control to decide how money is spent. County Clerk-Administrator Lynn Murray told councillors at their July 3 meeting that the announcement by the province was that the province is only going to devolve responsibility administer­ ing the housing authority when it felt the local level could handle it, but is going to hand over financial responsibility Jan. 1. There is very little information being made available on this and other government transfers, she told councillors. In a report to the Administration, Multiple sclerosis can cause loss of balance, impaired speech, extreme fatigue and double vision. Multiple Sclerosis Society of Canada 1-800-268-7582 Huron and Perth Health Units remains on hold. Jack Coleman, chair of the board of health, told the council that all health unit amalga­ mations across the province seem to be on hold after a senior manag­ er with the Ministry of Health left his position. The board of health has asked the Ministry of Environment, ROMA and BOMA to carry out an investi­ gation of how to combine require­ ments for human and animal waste in new bams being constructed. The Huron County Health Unit sent a letter to building inspectors across the county telling them it is no longer acceptable for human wastes to be disposed of in liquid manure holding tanks. Provincial legislation requires a separate dis­ posal system for human waste: either a municipal sanitary sewer system or a septic tank system. Noting the high cost of such an option, board of health asked that something be done to reduce the need for two separate systems.♦** Since there are times (such as vacation) when Dr. Susan Tam- blyn, acting medical officer of health, cannot provide service to Huron County, the board of health voted to hire Dr. Beth Henning as temporary MOH. Since Huron pur­ chases the services of Dr. Tamblyn from Perth County, Huron will adjust its payment accordingly.*** Huronview and Huronlea will enter into an agreement with Sodexho to provide management of housekeeping, laundry, tuck shop and food services to the homes for the aged for the next five years. The cost, will be $132,700 per year. Finance and Personnel Committee, it was noted that the county doesn’t know the current staff complement of the authority, the current finan­ cial status of the authority, the con­ dition of buildings, the role of the Ministry of Housing and Ontario Housing Corporation, present and future subsidies, programs avail­ able for tenants, and much more. It had been recommended that the province be advised that Huron was prepared to assume the admin­ istrative responsibility at the same time it took over financial responsi­ bility but this was deferred until more information was available from the province. PORTFOLIO ASSESSMENT * Risk Tolerance * Diversification * Income Tax Planning For more information, call Linda Henhoeffer 335-3887 or 1-800-667-3887 ^noestmenf (fatfre The company has been providing such services since mid-1995. Prior to that the county had its own man­ agement staff. *** A breakdown of the aircondition­ ing system at Huronview during the hot last weekend in June caused questions for Cathie Brown, man­ ager of the homes for the aged. Tom Cunningham, reeve of Hul- lett, said he had talked to Johnston Controls which has the manage­ ment contract for the aircondition­ ing system and been told the wOrk had been delayed because the con­ tract had not be renewed. County council had authorized signing that contract at its April meeting and Cunningham wondered why the delay. Elderly residents were dis­ comforted by the delay, he said. Brown said the previous contract was in effect until late in June. The company had identified the prob­ lem during their spring inspection but were waiting for parts, she said. But Bill Mickle, reeve of Exeter said it was incumbent on adminis­ tration to act when county council has directed. He asked if the renewed contract had been signed, and when. County Clerk-Adminis­ trator Lynn Murray said she would have to get back to Mickle with that information. *** Huron County Planning and Development Department will con­ tract out the service of senior plan­ ner Scott Tousaw two day a week for four to six months to the Perth County planning department. That county needs an experienced plan­ ner to cover regular work while staff works on the new county plan. Perth will pick up the cost for Tou­ saw’s services. Meanwhile Huron will hire a student for the summer to do some research. Thank You The Grey Township Firemen would like to thank the following businesses and individuals for donations to our breakfast on July 6th: Dean Bentley Carpentry, Stan Bentley Auto Shop, Frank Workman Electric, Helen Hetherington • Associated Financial Planners, Molesworth Farm Supply, Stewart Huehn, Dauphin Feed & Supply, McGavin Farm Equipment, Cashway Lumber, Molesworth Convenience, Master Feeds - Brussels, Gay Lea, Joe & Kathleen Semple, Larry Hudson Pontiac-Buick, Cooks - Walton, Chester & Ruth Earl, Kathy Stephenson, Yvonne Knight Insurance, KMM Drainage, Central Door Systems, MDL Doors and Stewart Steiss. We also thank the public for coming out and supporting the department.