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As well, deregulation in the financial sector has injected new capital into the securities business. As an example witness, the net profit of TSE (Toronto Stock Exchange) films, as reported by the Financial Times, as reported by the Financial Times. An increase of 61% from 1986 with only 7 of 72 member firms incurring losses (versus nine in 1987). Aiready the Dow Jones Industria!l Average, the New York Stock Index of 30 stocks, has regained half of its oneâ€"day 508 point drop. Dorothyâ€"Anna Orser Chronicle Special So what does this mean to the investor? All indications point to a more competitive environment. An investor must be cautious. He or she must stick to quality . Just as a quality life requires reviewing, so does quality investing. The past year carries a memory of the worst stock market crash in history. On a positive note, an environment of mergers and acquisitions created many businesses with strengthened bailance sheets. The Department of Regional Industrial Expansion recently reported major Canadian companies are in a mood for expansion with expectations of 14% growth, versus 8% in 1987. As individuals we have to also maintain a similar investment posture. In what is perceived as a ‘‘difficult‘‘ market, we DO NOT STOP INVESTING, but rather we must consider, WHERE do we invest. Typically a sharp market correction results in a preference for a defensive position. This holds true if we assume there has been a protecting and building of purchasing power. If so, we would simply move our investments into stacks or fixed income vehicles which have greater immunity to market conditions . If we have not been base building, the investment picture differs. Hence we assume that we all have the same goal as investors â€" that is to get the best possible return on our money with the least possible risk. Douglas J % McDowell, Lorene P Welcb and Peter 1) Snyder wish to announce that their practice of law formerly carried on under the name of McDowell & Hafemann , will continue under the firm name of McDOWELL, WELCH & SNYDER Effective February 1. 1988 Continuing with this assumption let‘s look at three differing profiles. At the early stages of wealth creation we would be most considerate of financial security as opposed to aggressive investments. In addition, if we want to maximize both longâ€"term growth and liquidity we must recognize that it is just not possible in one investment. In this case an investment to consider may be Mortgage Backed Securities (MBS). Following the Ginnie Maes of the United States, our ‘‘Cannie Maes‘, or MBS, if held to maturity provide Waterloon City Centre 100 Regina StreetSouth,. Suite 290 WATERLOCO, Ontario N2J 4P9 McDOWELL, WELCH & SNYDER Telephbone: (519) 74~7â€"45(M4 Fax«( 31 After the crash Business and Corporate lauy ____ Personal injury and other court proctedings, Family law, Real Estate, Wills and Estates stCE In McDOWELL, WELCH & SNYDER Offices now located in the Financial Planner Ama<r_ Aep _ .Ei‘alfi‘io'!f‘ist attractive yields (comparable to five year GIC yields), reliable monthly income and safety. They are guaranteed by both the Government of Canada and CMHC. If early sale is required, they provide both good liquidity and marketability. They are bought and sold by large investment houses everyday. Why lock your money up when it is not necessary? Investors unknowingly seem to associate lack of flexibility with safety. Such is not the case. _ . So the beginning stages of a successful investment portfolio require safety of capital with a fixed rate of return. Although modifications of riskâ€"reward limitaâ€" tions need to be assessed on a separate case basis, we have achieved a workable base. Now let‘s address investments that exceed inflation, rather than just keeping pace with it. Here again, if you are approaching retirement, or widowed, as an example, you may still opt for incomeâ€"producing investments. Yet, if you are at a stage of middle earning years, your best bet to hedge inflation is to invest for growth. When seeking growth you are anticipating an increase in the market value of the investment once sold. This may include any number of stocks, otherwise referred to as equities, mutual fund units, warrants, certain types of bonds, real estate, art, gold, commodities or other collectibles. Each of these Fax (§19) 747â€"4829 ‘‘real assets‘© enableâ€"the investor a different riskâ€" reward situation, and within each group the risk~ reward ratio can be altered. Withess shares in a company such as the Royal Bank or Bell where there is a modest potential for appreciation due to the regulation and monopoly positions they hold. Yet, a share in a more speculative highâ€"tech company with few assets but great potential, provides a possible greater gain or a more significant loss. Similarly with mutual funds, an investor can choose between a very conservative balanced fund or a more dynamic equityâ€"base mutual fund. Overail you must ensure you understand the concept behind your investment and assess if it fits with your future growth needs. Invest your time before your money. Only you as an investor, and consumer, can critique your needs and goals. Together with this information you will be prepared to work with someone knowledgeable in investments. Out of this will develop YOUR strategy for quality. A wise investor also is aware of the tax implications of each and every investment. This leads us to our last category, those investments seeking income with preservation of erpl @Gp@nuoue CTojmPfoimielas _ ADBDUpT IBM"*"COMPATIBLES 950 KING ST. W. KITCHENER ON TARGET wWITH YOUR MARKET ® computerized typesetting *® informal ow cost classes noon till 10:00 p.m. _ SPECIAL SECTIONS 886â€"2830 principal ahead of capital gains. Income can be generated either as dividends or interest. Dividends are payments made to stockholders on a per share basis and provide more favorable treatment than interest income. For instance, every $1 ot dividend yield is equivalent to $1.27 interest yield. Therefore you require a higher return on interest investments to reap the same after tax benefit. Bonds and moneyâ€"market investments, being debt responsibilities of the borrower, provide interest on a regular consistent basis. Dividends, in the case of common stock, can vary from year to year. Preferred sharehoiders, however, generally are paid a fixed rate of return. So, if you are investing for income assess these alternatives. Seek investments with a proven track record WATERLOO CHRONICLE, WEDNESDAY FEBAUARY 3, 1988 â€" PAGE 13 1988 HONDA Prelude ‘S‘ p;J;‘fitVOninno Sales Tax *Based on 60 month lease with $1000 cash or trade down payment, o aAC 545 King St. N., Waterloo 746â€"4 120 Cimestogs man You too can drive a Other models available at similar savings!!! Finally, human nature seems to often work against diversification. In an economy where many variables are working to decide which direction we will take, we must assume an investment posture of selectiviâ€" ty. Again, it is not a message to not invest, but rather to seek investments that offer a proven track record with the financial strength to prevail in any economic scenario. There is a time and place for everything, including speculation. in times as uncertain as these emphasis of capital Dorothyâ€"Anana Orser is an account executive with Wood Gundy, Inc. in Kitchener. WATERLOO HONDA should be on consevatism and preservation SPECIAL