Rational Advisor

Just arrived back from Niagara, and am off to Winnipeg today, to see my good friends ABe, Todd and his group. While there, I will be doing a couple of presentations.

But, I wanted to share key notes from the Niagara conference

From the Tax talk

- Amazing the top tax bracket is now around $120K, just ten years ago it was $61K.
- Dividends will overtake capital gains as the most efficient route to earn income. It will be better than Capital Gains, so we can expect a lot of interest in dividend bearing investments

- Lots of confusions around Corporate classes investments and the new T-class investments - mainly smoke and mirrors. What investors fail to recognize or comment on, is the tax legislation changes in proposal. Once the Conservatives come out with the elimination of capital gains if reinvested in 6 months, then the advantage of Corporate classes is non-existant. Corporate class structures are also not fiar on all unit holders as the activity and cost generated from one investor affects others.

- Dividends have to be paid out in corporate classes, so there is no tax avoidance.

- Don’t think the government doesn’t know about all the games being played on corporate class structures, eventually, if not sooner they will get to them as well

- T-swps are essentially, different ways of getting your own money back. There are some good uses, as long as they are disclosed.

- Advisors are even more important, because the system is so complex, and the products so numerous. As the general population ages, it is even more imperative to understand allthe different choices, legislation and taxation changes. Anyone who thinks it is simple and are doing it themselves, are deluding themselves.

Economic commentary notes from different speakers

- last 2 years were the 2nd lowest volatility periods, all we are getting is a return to more normal volatility levels
- The credit crunch is good as it brings risk back into view, investors were deluding themselves that everything is great. They are also deluding themselves in Canada, that everything here is great, and nothing can touch them.
- Inflation is not a risk for the US
- There are tremendous attractive valuations, companies have great balance sheets - some of the strongest ever.

- Dividend companies usually take leadership of the markets at these times - times of volatility.
- out of the last 11 bull markets, for 9 of them there was greater than 20% increases over the following 12 months after the first interest rate drop.
- The Ed Hyman model, has been good at predicting the economy for 100 years, it nows shows US GDP growth at 2%, which is good for equities.
- Canada is not a great place to be in, during times of corrections - it is too cyclical and worst than most other countries, so be careful of an exposure to Canadian cyclical stocks.

From W. Mitchell author of “It’s not what happens to you, it’s what you do about it” - a great book to read.

This was an amazing talk, from someone who has had two life threatening accidents. Has a quilt work patched up face, his body was 60% burned in an auto accident. Who ten after recovery learned to fly a plane, and then it stalled, leaving him without hands and feet, paralyzed from the waist down. All things that happened without notice.

He took all of that, and did not let it affect him mentally. He became the CEO of Vermont casting, which was sold to Teachers Pension Fund - he became a very wealthy person. Despite people saying he looked like a monster, and avoiding looking at him. Most people would have wanted to die.

- “Has anyone been to prison, well I have lived in one, and I escaped, the prison was my own handicaps, and thoughts of what people thought of me. The prison was my own physical limitations.”

- The Power is when one person decides to take action Now!, not wait for the right time, or when everyone else wants to step in. His life was saved, because one car salesman ran out with a fire extinguisher and saved his life while others just watched the ball of fire that he was - too afraid to go in to save him.

- There is no passenger on the spaceship earth, we are all the crew. We all have to do our piece.

- When you row a boat all of the oars have to be in the water, so work as a team.

- Everyone says “take it easy”, but did anybody get ahead by ever “taking it easy” life is hard, but taking it on head on is worth it.

- It is your life, your choice - take responsibility for yourself, it is not someone else’s job.

- We spend a lot of time in our life looking at the rear view mirror, if only I did this, if only I had married that person, if only I had studied that, if only….

- In car,s the windshield is bigger than the rear view mirror - why? it should be the same with your lives.

- The truly successful person is the one who enjoys the scenery on a detour - life gives us lots of detours, enjoy them. My life gave me lots of detours, I enjoyed them.

- I don’t know how to change yesterday, forget it, let it go. Concentrate on today and tomorrow

- The more time I spend thinking about yesterday, in the less time I look through the windshield.

- When you have a result that you did not want, you have a choice, to get grumpy or to do something. Think about how you can salvage the lesson from the catastrophe.

- Too many times we look at failures and build our prisons - escape from the prisons.

- Life has given you a toolbox, what are you doing with it.

- Never say Why me! God Why me!, I could have said the same, I could have said, why burn my face, why take my hands, why take my legs. I had a choice, and I choose to win.

- What are you putting off? Why not do it now.

- Remember to keep you aors in the water all the time.

Thanks

Rational

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