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www.oakvillebeaver.com The Oakville Beaver Weekend, Saturday March 1, 2008 - 29 Bruce Mowat, Investment Advisor Tel: 905.849.2851 Toll free: 1.888.778.3956 Email: bmowat@wellwest.ca www.MowatFinancial.com Q. How important is compounding of interest and dividends to an investment portfolio? A. Extremely important! The compounding of interest and dividends is what can provide the most benefit to your investment success. As Warren Buffet often says, it's a matter of time in the market, not timing the market. Corporations often pay dividends to shareholders from after tax profits. Dividends are often expressed as a yield which is a measure of the dividend amount relative to the current share price of the stock. For example, a company which pays a $1.00 annual dividend and has a current stock price of $25.00 would have a 4% yield. Since Companies frequently increase dividends over time, your yield, relative to the price you paid for the shares, will increase also. So, if you use the example above and the company increased it's dividend by 5% a year, in simple terms, in 20 years you would be receiving a dividend of $2.00 and your yield (if you only held the original shares purchased at $25) would be 8%. Another benefit of dividends is when investors choose to reinvest them back into the company through a dividend reinvestment plan. The dividends are used to buy additional shares of the company, avoiding transaction fees and adding to the benefit of compounding. Let's use a reinvestment example where an investor purchased 400 shares of a stock at $25 and the stock had a current dividend yield of 4%. The investor holds the shares for 25 years, the company increases the annual dividend by 5% and the share price has an 8% compound annual growth rate. Below is the result for an investor who didn't reinvest dividends versus one who did. (example: Based on initial investment of $10,000.00 (400 shares at $25.00) No Reinvestment Reinvested TRAVEL CLINIC 2983 Westoak Trails Blvd, at Bronte Rd 481 North Service Rd. W. A4, Oakville, ON Ashley Johnson 905-901-1217 Q: I am planning a vacation to the Caribbean with my family. Do we need travel vaccines? A: It s important to take control of your family s health, especially when travelling. You spend a lot of money on your vacation, so why spend it in the bathroom or trying to find a doctor? Travel vaccines help protect adults and children against a host of illnesses. The most common is Traveller s Diarrhea, caused by food or liquid contaminated with the e-coli bacteria. Toronto General Hospital s Centre for Travel Medicine says that as many as 15% to 20% of travellers to the Caribbean may develop Traveller s Diarrhea, and the rate is even higher for vacationers in Mexico. Other diseases prevalent in the Caribbean and Mexico include cholera, hepatitis A and typhoid fever. Even malaria is having a resurgence in some rural parts. Vaccines can help protect you and your family against Traveller s Diarrhea and other diseases. In fact, the Public Health Agency of Canada strongly recommends that your travel plans include visiting a Travel Clinic before you leave for your vacation. It s also a good opportunity for adults to make sure your routine immunizations (diphtheria, tetanus, polio) are up to date. When you book a travel consultation at HealthSense Medical, we provide you and your family with country-specific travel health reports, pre-travel advice and travel vaccinations. With a little forethought and planning, getting vaccinated can ensure you protect your family s health and your travel investment. Call HealthSense Medical today at 905-901-1217 to book your appointment. 905-847-2210 way to remove Q: What s the best carpets? pet hair from upholstery and remove per hair from fabric or upholstery, tray rake A: Tobrush with crimped nylon bristles), velour brush,a tape (a roller or even tape wrapped around your hand. Use light, even strokes to remove the hair. Another option is to try the rubber bottom on a clean tennis shoe or a slightly dampened sponge (as long as the dampness won t harm the upholstery). To remove pet hair from carpet, use a vacuum with a good beater brush or brush roll. Plain vacuums don t generate enough lift to remove all the pat hair from the floor. Another option for both upholstery and carpets ­ especially at the edges where pet hair tends to collect and vacuums have a hard time reaching ­ is a "pet sponge". These sponges, which are used dry, are very effective and readily available at pet supply stores. Remember: vacuuming and cleaning regularly makes pet hair removal a lot more manageable. Total Values Shares Owned Dividends Paid Annualized Return $90,133.76 400 $21,649.01 9.19% $142,299.88 831.13 $35,633.18 11.21% If you are interested in knowing more about dividends and how I incorporate them into a portfolio, please call me. I'd be pleased to discuss it with you. For informational purposes only. This material does not constitute an offer to sell or a solicitation to buy any security. Wellington West Capital Inc., member CIPF C1333 For more information please contact merry maids of Oakville at 905-847-2210. SPRIGGS INSURANCE BROKERS LIMITED 159 CHURCH ST., OAKVILLE, ON L6J 1N1 Oakville (905) 844-9232 Burlington (905) 681-4035 Mississauga (905) 798-7527 Fax (905) 845-1634 Web: www.spriggs.ca p gg E-mail: info@spriggs.ca p gg THANK YOU FOR MAKING GOLD BOOK #1 Q: Why does my neighbour pay less than I'm paying? are on A: Insurance premiums basedbased you, two main factors. The first is on your age, driving and insurance experience, where you live and how you use your vehicle. The second is based on the actual vehicle make model and year. Vehicles have rate groups for Collision (the cost of repairs), Comprehensive (the frequency of theft, vandalism and fire damage) and Accident Benefits (the construction of the vehicle for your safety in the event of a collision). These rates are set by a governing body and are accepted by all insurance companies. In addition, you may qualify for further discounts if you have your home insured with the same insurance company. "For past questions and answers in Ask the Professionals, please contact us." Video Commercials Talking Characters Phone Book Online Business Search Local Sales & Specials Celebrating 10 years of innovation If you have any questions these professionals can answer, please write to: "Ask the Professionals" c/o The Oakville Beaver, 467 Speers Road, Oakville L6K 3S4 or fax to: 905-337-5568