Key Market Facts

December 31, 2002

Level YTD Indices     S&P 500 879.82 -23.36% DJIA 8341.63 -16.76% S&P/TSX 6614.54 -13.97% Currencies / Commodities CAD / US 1.5737 -1.20% US / EURO 1.0487 16.99% Gold $US 348.20 24.80% Crude Oil $US 31.20 57.26% Natural Gas $US 4.789 86.34% Interest Rates Canadian Bank Rate 3.00% 33.33% Canadian Prime Rate 4.50% 20.00% Fed Funds Rate 1.25% -28.57% Us Prime Rate 4.25% -10.53%

2002 was a very difficult year for the equity markets and hence investors. The shadow cast by September 11th, 2001, coupled with a significant amount of corporate scandals and bankruptcies, made it difficult for even the strongest to have faith in an eventual recovery.

More recently the US market seems to have found a bottom and is trying to recover in an environment that is plagued with uncertainty due to the looming threat of a war with Iraq. All of these factors may be causing you to have some indecision as to what to do with your investment portfolio now that we are starting a new year. It is necessary that all individual investors be confident that their investment portfolio is structured to achieve both long and short-term goals and requirements.

I believe that it is important right now, given all the information that we already know, to focus on the future and what the next three to five years will bring. I believe that we will see slow positive growth in North America this year, with ultimately stronger growth in the years to follow. The current economic conditions are poised for this growth with interest rates very low and business investment starting to slowly recover.

To help answer any questions you may have regarding your individual investment strategy I have organized an Investment Strategy Seminar to be given by a senior member of RBC Dominion Securities. As well as attending this seminar, I would encourage you to book an appointment with me to do a review of your entire portfolio early in the year.

Our guest speaker for the seminar will be Jim Allworth who is a director of RBC Investments and also the Vice-Chair of the RBC Dominion Securities’ Investment Strategy Committee. This committee is responsible for giving direction on the outlook for financial markets to the rest of the firm and to the firm's clients. He is a graduate of Simon Fraser University (Economics).

Jim has been in the investment business for 34 years, as both a research analyst and portfolio strategist. In his presentation, entitled 'Where Do We Go From Here', he will speak about what changes we foresee in the economic, interest rate and investment environments over the next few years, and what shifts investors should make in their thinking to cope with the changing circumstances.

I encourage you to attend this event and to bring along a friend or family member. Please RSVP to either myself at 604 257-7055 or my associate Jas Salh at 604 257-7359 as seating is limited.

Thursday January 23rd at 5:00pm
Four Seasons Hotel - Vancouver
791 West Georgia Street
Refreshments will be served

Diversify to Reduce Risk

All investments have some degree of risk, even the most secure government guaranteed bonds. One way to reduce this risk is to diversify your portfolio.

There are a number of ways to reduce the risk in your portfolio by diversifying: by asset class; by issuer; and by geographic area.

Diversification by asset class involves ensuring you have a suitable balance between cash, bonds and equities. How you determine this balance is dependent upon your age, your risk tolerance and your current financial position.

Within asset classes you can further diversify by issuer. This is seen primarily in bond portfolios where you may stagger the terms of your investments as well as the credit quality and issuer of the bonds. This not only can reduce your overall risk but can also improve the liquidity within your portfolio.

By ensuring that your investments are exposed to the economic conditions of more than one geographic area, a poor performance within one country’s financial markets may be offset by a much better performance in another country.

These simple techniques can help to minimize your overall portfolio risk.

RSP Season is in Full Swing

2002 Contribution Deadline is March 1, 2003

It is time again to ensure that you have maximized your 2002 RSP contribution. Your RSP contribution for 2002 will be the lesser of 18% of your 2001 earned income or the annual maximum of $13,500. Your individual amount can be found on your tax assessment for 2001.

Foreign content limits remain unchanged at 30% of the book value of your total RSP portfolio. There are strategies that you can use to increase your global exposure even further to a maximum of 60%.

At this time you may wish to consider enhancing your RSP by doing any of the following:

1. contribute now for 2003,
2. catch up on any unused contribution room,
3. consolidate all your RSP investments into one wealth management plan,
4. consider starting a spousal RSP for a lower income earning spouse as a way to income split in your retirement.

Please give me a call at 604 257-7055 to discuss ways to get a jump on your RSP.

Did You Know?

With the RSP season in full swing I thought you may be interested in knowing that we wrote the “Books on RSPs!” New editions of the RBC Dominion Securities RSP guidebooks are now available. If you would like a complimentary copy of any of the following educational guides please give me a call directly at 604 257-7055. This year the deadline is March 1, 2003.

• Retirement Savings Plans
• Early Retirement and Your Options
• Locked-in RSPs and Your Options
• RSP Maturity Options
  
  

RBC Dominion Securities Inc. is a member company under RBC Investments. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. Investment Advisors are employees of RBC Dominion Securities Inc. Member CIPF. ?Trademark of Royal Bank of Canada. RBC Investments is a registered trademark of Royal Bank of Canada. Used under licence.©Copyright 2003. All rights reserved

RBC Dominion Securities Inc. and its affiliates may have an investment banking or other relationship with some or all of the issuers menioned herein and may trade in any of the securities mentioned herein either for their own account or the accounts of their customers. RBC Dominion Securities Inc. and its affiliates also may issue options on securities mentioned herein and may trade in options issued by others. Accordingly, RBC Dominion Securities Inc. or its affiliates may at any time have a long or short position in any such security or option thereon.

Insurance products are offered through RBC DS Financial Services Inc and RBC DS Financial Services (Ontario) Inc. (« companies ») The companies and RBC Dominion Securities Inc. are member companies under RBC Investments and are separate corporate entities which are affiliated. When discussing and selling life insurance products, Investment Advisors are acting as Insurance Representatives of RBC DS Financial Services Inc or RBC DS Financial Services (Ontario) Inc.