Sam's Free Financial Digest

Focus on Dividend Growth, Not Just Yield, in 2012

2012-01-11T14:01:00.001-08:00

Companies with high dividend yielding stocks and payout ratios are trading at their historically highest premium, leaving very little margin for error, writes Vadim Zlotnikov, chief market strategist at AllianceBernstein, who says that an emphasis on free cash flow yield, with an eye on rising payouts, provides a superior risk/reward profile.
Given the uncertain growth environment, return of corporate cash is valued far more than generation of cash, Zlotnikov says. While he finds high yield/high payout stocks to be a very crowded trade, he says the same cannot be said about dividend growth, as companies delivering strong dividend and payout increases through 2011 appear to trade at the same multiple as those not raising the payouts.
Zlotnikov says that a simple focus on highest dividend yield and payout would have served investors well in 2011, but that given the unprecedented valuation gap, a focus on the growth in dividends and payouts, rather than absolute yield and payout, offers a better risk/reward balance today. Zlotnikov writes:

Appeal of dividend strategies is self-evident given absence of consensus on future sources of growth, high corporate profitability, and negative real rates. However, the obvious bets on stable companies with high yield and payout ratios have played out and a more nuanced approach is warranted. In the US, focus on high cash flow yields with potential to increase payouts should yield strong performance. Those opportunities are highest in healthcare, financials, technology, and consumer discretionary sectors.
Zlotnikov adds that dividend yield opportunities may be better outside of the U.S. at this point:

For investors able to source opportunities on global basis, there are still areas with high current yield and relatively attractive valuations. These broadly include financials in most regions, capital equipment and healthcare in Japan, telecom/consumer services in Asia, and energy/utilities in Europe.

The cost of life insurance is set to jump

2011-12-15T13:19:00.000-08:00

The cost of life insurance in Canada is set to jump so if you are at all considering getting some, now is the time to act, says one certified financial planner.

“Rates will never again be this low for permanent life insurance,” says Mark Halpern, a Markham, Ont.-based CFP and president.

He acknowledges that coming from him, it sounds like a sales pitch. “Of course people are going to say: Here is an insurance guy who wants us to buy insurance. But the reality is that this is really happening. And it is the big companies that are leading the way.”

Mr. Halpern is referring to Canadian insurance giant Manulife Financial, whose rates for universal life insurance will surge by as much as 12 per cent as of Oct. 15, 2011.

Steve Parker, Manulife’s assistant vice-president of product and marketing, says the company needs to rebalance the pendulum between the premium it charges the client and the risk it is taking.

“This is our second round of repricing in 12 months. We also led the market with a round of repricing in December, 2010,” he said in an interview. He says the company is increasing rates for universal life insurance between 9 and 12 per cent, depending on the product.

Mr. Parker insists that even with this second round of increases, permanent life insurance remains a great deal that delivers “excellent value” for Canadians.

In an environment where bond yields have dropped sharply and interest rates are sitting at rock-bottom lows, insurance companies are struggling to fund the guaranteed payout promised in their universal policies. The pricing for their insurance products was based on much higher interest rates.

Canadian insurance companies will also soon have to align themselves with international financial reporting standards, which will cost money. “Since they need to put more into reserves, so the cost of insurance has to go up,” Mr. Halpern said.

Unlike term insurance, which provides a benefit for a set period of time and can expire before the person dies, universal or permanent life insurance provides coverage for life. The sentiment in the insurance industry is that current prices for permanent life insurance are unsustainable in today’s market environment and that more increases are in the cards.

Mr. Halpern says the rest of the insurance companies are expected to mirror Manulife’s increases. “All the top insurance carriers followed suit last time, and will almost certainly do so again.”

He does not believe this is the end of the rise. “We have seen an almost 25-per-cent increase in the last year. It won’t stop there, you will see rates that will keep going up in the short-term.”

Mr. Halpern's advice for people who are considering buying permanent life insurance? Sit down with a professional, preferably a certified financial planner, and look at what your needs are. Even people who already have life insurance should think about revisiting the subject, to make sure their needs have not changed. For our recent Home Cents post on who needs life insurance, click here.

“If you do nothing, you miss an opportunity that will not come back again in our time,” Mr. Halpern said.

Chartered accountant and certified financial planner Suzanne Schultz, an estate planning specialist with RBC Wealth Management Financial Services Inc., agrees that the rest of the insurers are likely to follow Manulife's lead, although the actual level of the increase will depend on the individual's age and health status.

"Life insurance is one of those things that once you need it, you wished you bought before," she said. "Because rates increase as we age, we experience health issues that can affect our rates and insurability, and because the insurers may have to increase their rates so we can't know with certainty the cost of waiting to put the policy into place. In other words, waiting can always be a risk."

Sam's Free Financial Digest: LIFE INSURANCE SOLUTIONS

2011-12-14T09:56:00.000-08:00

Sam's Free Financial Digest: LIFE INSURANCE SOLUTIONS: Life insurance is the foundation of a sound financial security plan. Transamerica offers life insurance solutions to protect your family and...

LIFE INSURANCE SOLUTIONS

2011-12-14T09:54:00.000-08:00

Life insurance is the foundation of a sound financial security plan. Transamerica offers life insurance solutions to protect your family and business against the uncertainties of life. Our life insurance solutions are designed for a variety of needs including helping you protect your financial resources, such as your present and future income, preserving your estate for your heirs, supplementing your retirement income and helping you meet other financial planning needs. The proceeds from a life insurance policy could mean that your family or business would not have to sell assets to pay outstanding debts or taxes. What's more, the death benefit, or proceeds from a life insurance policy, paid tax-free to the named beneficiary of your policy. We invite you to explore the possibilities and, together with your insurance advisor, build a financial security plan to help you reach your goals.
Call for a free quote at 647-881-7674.

Creating assets for your children

The assets you've built up over your lifetime – such as a home, cottage, investment portfolio, business or farm – mean a lot to you, and to your family. However, when you and your spouse pass away, virtually all of these assets will be subject to tax.

Enhance your retirement

Everyone has dreams of what their retirement years will be like. Will you be hiking in the Himalayas or sunning down south? Where will the money come from to fulfill these retirement dreams?

Small business solutions

At Transamerica we realize that small business owners have specific needs. Our goal is to help you meet those needs by providing you with effective life insurance solutions

If you're sick...

The death benefit of a life insurance policy is there to protect the people you love, after you are gone. In the event of a premature death, it will undeniably make a difference for your family, ensuring they are able to maintain their current lifestyle and are financially protected.

But what about while you are living?

Insure your mortgage

Your lending institution offers mortgage insurance. But why settle for an insurance product that does just one thing? When it comes to protecting your mortgage, there’s another option to consider.

Sam's Free Financial Digest: How about a UL policy that protects you while you...

2011-12-14T09:49:00.000-08:00

Sam's Free Financial Digest: How about a UL policy that protects you while you...: The disability rate among Canadians ages 45-64 is 16.7%. This rate dramatically increases with age, with 40% of those over 64 and 53% of ...

How about a UL policy that protects you while you’re living?

2011-12-14T09:43:00.000-08:00

The disability rate among Canadians ages 45-64 is 16.7%. This rate dramatically increases with age, with 40% of those over 64 and 53% of those over 75 experiencing a disability. ¹
Nine in 10 Canadians (90%) have at least one risk factor for heart disease or stroke. ²

Life is full of the unexpected, and an unexpected disability can interrupt even the best-laid financial plans.

A disability can require major lifestyle changes and present serious financial challenges if you are not prepared. Transamerica’s Waiver of Planned Premiums Rider and Living Benefits are two features available through our universal life plans that help ensure that you are prepared. These features add flexibility into your policy and provide peace of mind for you and your family.

A Person With Savings Can Walk Tall

2011-12-08T10:29:00.000-08:00

The state of your savings does have a lot to do with how tall you walk. Your savings affect
the way you stand, the way you walk, the tone of your voice, your physical well-being and
your self-confidence.
A person without savings is always running. He or she must. He must take the first job
offered, or nearly so. She sits nervously on life’s chairs because any small emergency throws her
into the hands of others.
Without savings, a person must be too grateful. Gratitude is a fine thing in its place. But a
constant state of gratitude is a horrible place in which to live.
A person with savings can walk tall.
He may appraise opportunities in a relaxed way, have
time for judicious estimates and not be rushed by
economic necessity. A person with savings can afford
to resign from her job if her principles so dictate. And
for this reason, she will never need to do so. A person
who can afford to quit is much more useful to his
company, and therefore more readily promoted. He
can afford to give his company the benefit of his most
candid judgments.
A person with savings can afford the wonderful privilege of
being generous in family and neighborhood emergencies.
He can take the level stare of any man … friend, stranger
or enemy. That ability shapes her personality
and her character.
The ability to save has nothing to do with the size of
income. Many high-income people spend it all, darting
through life like minnows. But as the dean of American
bankers, J.P. Morgan, once advised a young broker:
“Take waste out of your spending; you’ll drive the haste
out of your life.”
If you don’t need money for college, a home or retirement,
then save for self-confidence. And with the self-esteem
and peace of mind that comes from having savings, walk

2011-12-06T12:46:00.000-08:00

WE ARE CHANGING THE LIVES OF PEOPLE ALL OVER THE WORLD BY HELPING THEM ACHIEVE FINANCIAL FREEDOM!

Click to view this video presentation:
http://www.wfg-online.com/nonssl/SellingBuilding/advertising/client-introduction/Client-Intro-New.html

Retirement Planning

2011-12-06T09:47:00.000-08:00

Canadians are living longer and healthier lives which is great news. Longevity, however, can also increase retirement-related anxiety. Wouldn’t it be great to look forward to your retirement rather than worry about how you are going to manage financially when you are no longer working? The key to this security is having a well-planned retirement strategy and sticking to it. Through the planning process you will determine, with the help of your advisor, how much income you will need to have the retirement you want. Once you understand your needs you can implement a strategy.
We offer various investment products, solutions and plan types designed to carry you through your investment life – from saving to receiving a regular retirement income – and all the goals in between. Whether you are starting out or closing in on retirement, I can help you find the solutions that meet your needs.

Canadians are living longer and healthier lives which is great news.
Longevity, however, can also increase retirement-related anxiety.
Wouldn’t it be great to look forward to your retirement rather than
worry about how you are going to manage financially when you are no longer working?
The key to this security is having a well-planned retirement strategy and sticking to it.
Through the planning process you will determine,
with the help of your advisor,
how much income you will need to have the retirement you want.
Once you understand your needs you can implement a strategy.

We offer various investment products,
solutions and plan types designed to carry you through your investment life –
from saving to receiving a regular retirement income –
and all the goals in between.
Whether you are starting out or closing in on retirement,
I can help you find the solutions that meet your needs.

Is your life going according to plan?

2011-12-05T13:42:00.000-08:00

Most people plan what they’re going to have for dinner tomorrow night and what they’ll wear to their friend’s backyard barbecue next weekend but Canadians are notorious for not planning for their future! Sure…they want a comfortable retirement and lots of money to enjoy it but quite often they have no plan in place on how to actually achieve these goals. A recent article on advisor.ca clearly illustrated this by quoting some interesting statistics from an HSBC Bank Canada Study entitled, “Tomorrow, Today”. While most Canadians express a desire for financial security, they are not willing to give up a balanced life or personal passions such as travel, to achieve it.

If you are like the majority of Canadians surveyed in the study, then you would acknowledge that ensuring your family is well taken care of is high on your priority list. However, only 25% of people are confident that they can achieve their “ideal tomorrow” – are you? This is the perfect time for you to schedule a meeting with your financial advisor to begin to discuss your needs and your plans for retirement.

An advisor’s role is to help you plan for, and achieve, your financial goals. I can help by providing products and tools that will make it easier for you to realize your dreams.

Are you ready to take the first step in planning your financial future? Call me at 647-881-7674 or email me at spfinancialservice@gmail.com.

Sam's Free Financial Digest: Insure your mortgage

2011-12-05T12:11:00.000-08:00

Sam's Free Financial Digest: Insure your mortgage: Your lending institution offers mortgage insurance. But why settle for an insurance product that does just one thing? When it comes to prote...

Insure your mortgage

2011-12-05T11:51:00.000-08:00

Your lending institution offers mortgage insurance. But why settle for an insurance product that does just one thing? When it comes to protecting your mortgage, there’s another option to consider.
Term insurance from Transamerica Life Canada is an innovative solution that protects your family’s future as well as your home. Term insurance can offer more protection, more flexibility and more value than traditional mortgage insurance, often at a better price.

Sam's Free Financial Digest

Focus on Dividend Growth, Not Just Yield, in 2012

The cost of life insurance is set to jump

Sam's Free Financial Digest: LIFE INSURANCE SOLUTIONS

LIFE INSURANCE SOLUTIONS

Creating assets for your children

Enhance your retirement

Small business solutions

If you're sick...

Insure your mortgage

Sam's Free Financial Digest: ​How about a UL policy that protects you while you...

​How about a UL policy that protects you while you’re living?

A Person With Savings Can Walk Tall

Retirement Planning

Is your life going according to plan?

Sam's Free Financial Digest: Insure your mortgage

Insure your mortgage

Sam's Free Financial Digest: How about a UL policy that protects you while you...

How about a UL policy that protects you while you’re living?