Managed Money Reporter Newsletter — Issue 276, September/October 2013

Editors: Carl Spiess & Allan McGlade

Featured Articles

5 Years after the Financial Crisis

Carl Spiess

By Carl Spiess, CFP, CIM, FMA, FCSI, MBA

Five years ago, the world was facing the steepest decline in market confidence since the great depression of the 1930s.  It is always interesting to look back at our newsletter from years ago to see what we were saying during times of extreme crisis and pessimism. See:

and then the follow up newsletter:

Of course, as we head into the debt ceiling debate in the United States again (as we did in the summer of 2011), and with the US government shut down, it is worth having some concern about whether policy makers can make the right decisions. Here is some good reading from Dynamic Investment Management about the current situation:

And we also found a good piece from Fidelity looking back 5 years:

Please contact us if you have any questions on your accounts.


Recommended Viewing - 5 best movies about the financial crisis

So 5 years after the financial crisis, I thought - What are some of the best movies to understand what was going on and what were the decisions that were being made? Here are my picks:

  • Too Big to Fail. This great movie from HBO with lots of stars really explains what happened in 2008. Much easier to watch than Inside Job (see below).
  • Margin Call. My favorite movie about the crisis is smart, fast and reasonably realistic. And it stars Kevin Spacey who improves any movie he's in. I think I enjoy watching it because life for traders on Wall Street is a world of difference to our lives as financial planners on Bay St.
  • Hank. Netflix just released this documentary which is an extended interview with Henry (Hank) Paulson, the 74th US Secretary of the Treasury. His description of the days during the financial crisis in 2008 along with his life story is fascinating.
  • Inside Job. A critically acclaimed documentary that will leave you angry (and happy you live in Canada).
  • Wall Street 2 - Money never Sleeps. This Oliver Stone film with Michael Douglas as Gordon Gecko had the biggest box office success. It came out quickly, well before there was much resolution on the horizon to the crisis. Despite being fictitious, it gives some insight into how the Fed's meetings about what firms were left to fail and which ones found buyers might have played out.

I attended a luncheon speech given by former federal reserve governor, Randall Kroszner, earlier this year. It was interesting, although not particularly graphic or attention-grabbing:

So after the speech I asked Governor Kroszner what it was like to be in the meeting rooms of the Federal Reserve in the fall of 2008 and to be making those difficult decisions about whether to let firms like Lehman Brothers fail. I asked "Was it anything like in the movies?" and he said to me that he hadn't actually watched the movies listed above - living through it the first time was enough.


Canada Savings Bonds

CSB are on sale again until November 1st. As always, we can invest in CSBs in your ScotiaMcLeod investment account – but as your personal advisors, we may recommend you look elsewhere based on your individual needs.

The Savings bond rate is .5%, and the premium bond 3 year compound rate is 1.19%. With rates being offered by the government that are this anemic, we are pleased to have Guaranteed Investment Certificates from 10 different issuers as an alternative. Current rates (subject to change) are yielding 1.6% for a cashable GIC, 2.35% for a 3 year and 2.9% for a 5 year. Call us for a rate quote today.


Retirement Announcements - Sharon Calvert & Rick Waugh


Sharon Calvert has worked for ScotiaMcLeod for 27 years and will be retiring on November 1st. We would like to sincerely thank Sharon for her many years of service to our clients. We welcome Sharon and her husband Fred now to our roster of clients and look forward to helping them through their transition to retirement.

With daughter-in-law, Christina Calvert, due to return to the team early in the new year after her maternity leave, we will be keeping in close contact with Sharon and Fred on their adventures.







Rick Waugh began his career with Scotiabank in Winnipeg in 1970 as a branch employee and will retire this November. He rose through the ranks and even worked in New York. In 2003, he was appointed President and CEO. He holds many board memberships and directorships. Rick has been a key leader in the United Way and many other philanthropic organizations. He has been awarded many honorary chairs and titles and in 2012, Rick was appointed an Officer of the Order of Canada for his contributions to strengthening the financial services industry in Canada and abroad. Most importantly, under his stewardship, shares of Bank of Nova Scotia have risen from $30 to $60 and have paid increasing dividends.

For more details see:

We've been happy to know and work with Rick and wish him all the best in retirement.


CI Harbour funds - Gerry Coleman Retires

Retirement notices seem to be on an uptrend. CI Investments and Harbour Advisors announced in September that after 16 years as the Head of the Harbour team, Gerry Coleman has made the decision to retire. Along with that announcement, CI plans to implement the following:

  • Roger Mortimer will join the Harbour team and will be managing the balanced mandates, the Harbour Growth and Income and the Harbour Global Growth and Income, effective October 1, 2013. Mr. Mortimer has 18 years of investment experience including managing Canadian and global equity and income portfolios at Capital Group and Invesco.
  • Stephen Jenkins will assume responsibility for the Harbour team’s equity mandates. He will continue as Lead Portfolio Manager of the Harbour Fund and effective October 1, 2013, he will assume the role of Lead Portfolio Manager of the Harbour Global Equity mandate from Gerry Coleman.

We will be putting the CI Harbour funds on an automatic performance watch while we meet with the fund managers to review the transition. We will follow up with clients directly if changes are recommended as a result.


Risk and return - the efficient frontier

We have updated the chart we have on our page about foreign investing. It suggests that the lowest risk equity portfolio will have 25% Canadian stocks, and 75% International stocks for the optimal blend of risk and return.

For more on the benefits of global investing, see our recommended funds:

Our recommended global funds

If you would like a review of your overall exposure to Canadian and global securities, please contact us. We would be pleased to prepare a detailed asset allocation report.


Recommended Link of the Month

Since we've had a number of retirement announcements in this article, how about a great online tool to see how ready you are for retirement:

Fidelity has an animated tool that is fun to use - with video...
(Note - The reality is that we do also like our own at just because the name is fun, too. Maybe use both and compare the results, or just ask us to prepare a detailed retirement plan for you.)



Contact Us

T.  416.863.RRSP (7777)
F.  416.863.7479

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