December 2008: by Jos Herman

How to sleep at night in this market

I truly believe that in this market this is a time to look under your "financial bed" rather than hide under it. Currently, everyone is grappling with the sub-prime mortgage crisis in the US and its ramifications on the stock markets and the global economy.

Clarity is always needed in such times of confusion. So, my advice is to get advice... to get informed in order to make long-term strategic decisions from a personal and business standpoint.

As a business owner, you rely on those around you to provide reliable sources of information about your competitors, your industry and how you performed on an overall basis. You ask if efficiencies can be had. You go through the logical steps to ask the right questions to make the most informed decisions. Business owners are continually assessing and strategizing to enhance performance in their companies. On average, these are the ones that thrive and prosper.

Money managers operate in the same manner. Many of the money managers are relying on their first hand discussions with companies, market research and financial analyses to invest in companies that have the potential to perform well in the long term, despite short term market fluctuations. They compile information and strategize to see if there is an opportunity to add undervalued securities into their portfolios. They know that what the market does hour by hour does not reflect the fundamentals of these very companies.

They did their research and gathered as much information as possible to make the most informed strategic decisions. In essence, they are undergoing the same strategic decision making process as the business owner. At the end of the day, both filter through the hoards of information in order to thrive and prosper in the market.

Do you know?
It certainly can be difficult to filter through it all to even make an informed decision, especially in this dynamic market. This is the opportunity to talk to your advisors and get insight. Look to get clarity in a time when it is most needed. Get the advice that you are looking for to make informed long-term investment decisions together. In your investment portfolio, do you know:

• What you own and why you own it?
• What type of investment style your money managers undertake (i.e. value, growth)?
• What your long-term investment strategy is?

Perhaps there are opportunities to evaluate alternatives that were not considered previously, such as:

• Are you aware of new programs like the "Tax Free Savings Account"?
• How can Corporate Class investments be used to bring tax efficiency?
• Could you be eligible for a Retiring Allowance when you leave the business?

Seek advisors that take the time to understand the complexity of owning a business and managing personal objectives. Do you know:

• What sources of income are available once you are out of the business?
• What new tax incentives and programs are available?
• What tax-efficient alternatives are there for your non-registered monies?

This is a time to look at your "financial bed" and consider if you have all of the necessary components to make you sleep easier at night when everyone else is tossing and turning. Do you have pillows, a comforter, sheets, mattress... all the components that make up a good night sleep? When the pillow cases are missing, you know that something is wrong and you will not have the same sleep as your neighbour.

Believe me, this does not mean that you have to buy the most expensive Cadillac of mattresses or Egyptian cotton sheets because that is what everyone is saying you must have. Instead, you want to ensure that you have created a financial bed that has solid fundamental investment and planning principles that allows for a good night sleep for you to get up in the morning to tackle the day at the office.

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About the author
Jos Herman, CA, Financial Advisor, is part of the advisor team with
Regency Advisory Corporation. She can be reached at 665-3377 or 1-877-837-3377.

Disclaimer
Please contact a professional advisor to discuss your particular circumstances prior to acting on the information above. The opinions expressed are those of the author and not necessarily those of Assante Financial Management Ltd.

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