The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

Understand your risk level and objectives to know where to invest 9 · Thursday, January 17, 2013 OAKVILLE BEAVER · www.insideHALTON.com H ow to invest is a difficult question. The correct decision is often determined by how you frame that question and what your objectives and risk levels are. Life is a balancing act with different choices that have conflicting tradeoffs. Consider this very relatable example for many readers. Should you go on a family vacation or use those funds to improve your house? If you approach this from the perspective of what will leave the most lasting and precious memories, then a family vacation will likely be your decision. However, if you make a practical decision about what would give you more lasting tangible satisfaction, it will likely be the home improvement because that you will enjoy every day for years to come. Every time you make an investment decision, you go through a similar process. There are competing priorities. How you decide to weigh those priorities will most likely determine your action. If the question of how to invest is framed by your interest in preserving your capital, then you will be more comfortable investing in Kitchen& Bath We're more than just plumbing. Treasury Bills that pay a low interest rate but are backed by the Canadian government. If your perspective is towards preserving your purchasing power during retirement then that is an entirely different question. The longer term focus coupled with avoiding the eroding effect of inflation on your purchasing power will likely cause you to lean towards investing in equities. The strategy you select is most likely influenced by communication. What conversation are you having with your investment advisor? How do you balance the shortterm and long-term investment objectives? If you invest on your own, what is your time frame? Avoiding volatility and trying to protect the purchasing power of retirement income are two completely different issues. Investing in one-month Canadian treasury bills since 1974 would have given predictable and steady annual returns. Your principal would have been protected against normal stock market volatility. After you consider inflation, $1 would have grown to $2.58 by the end of 2011. That was the risk free Dollars & Sense By Peter Watson investment. We have figures from a comparable but slightly different time period that shows the total after inflation return for volatile equities -- measured red Cove ur by the after-inflao by y th tion return of a He l ce the S&P/TSX ran Insu efits Composite n Be Index. The risky investment option saw $1 in 1970 grow to $7.21 by the end of 2011. Which option had more risk? That depends on how you frame the question. Someone preparing for retirement investing in risk-free treasury bills with enough assets to live comfortably during retirement would have made the best choice investing in treasury bills. Someone planning for retirement, who more typically needed their assets to grow enough to protect their purchasing power, would find this risk-free approach to be highly risky because of the possibility of out-living their capital. What is considered risk-free for one person may entail a great deal of risk for someone else. What can investors learn from this discussion on risk? How does this benefit us? The most important point for all investors is to have a clear understanding of your specific investment objectives. Only through the filter of your objectives will you be able to clearly see what risks apply to you. Understand your investment objectives and understand your risk. Then use that information to make intelligent investment decisions. -- Submitted by Peter Watson, MBA, CFP, R.F.P., CIM, FCSI. balance health fitness Design Boutique Pilates and Therapeutic Exercise is a gentle and effective way to develop proper alignment, balance, and muscle recruitment for optimum health and performance throughout life. Re/Active programs are beneficial for the following: At Re/Active, we work closely with you to design a program for your specific Complete design. Full product selection. Renovation services. www. "Building in Trust since 1959" needs and goals, whether for pain management, or overall health and fitness. Chronic neck and back pain Hip and knee injuries/replacement Rheumatoid Arthritis Spinal Stenosis and Spondylolisthesis Osteoarthritis and Osteopenia Fibromyalgia Scoliosis Sport-specific training (golf, running, etc.) Overall Health and Fitness Individual and group sessions available. .ca C A L L U S T O D AY T O G E T S TA R T E D ! Book Your FREE In-Home Consultation Today! Burlington / Oakville / Mississauga 1235 Trafalgar Road, Suite 401 905-845-0161 | info@reactivemovement.com 905.639.7106 905.275.0574 w w w. re a c t i v e m o v e m e n t . c o m