Key Market Facts

September 30, 2003

Level YTD Indices     S&P 500 995.97 13.20% DJIA 9275.05 11.19% S&P/TSX 7421.13 12.19% Currencies / Commodities CAD / US 1.3481 -14.34% US / EURO 1.1658 11.17% Gold $US 386.10 10.88% Crude Oil $US 29.20 -6.41% Natural Gas $US 4.83 0.86% Interest Rates Canadian Bank Rate 3.00% 0.00% Canadian Prime Rate 4.50% 0.00% Fed Funds Rate 1.00% -0.25% Us Prime Rate 4.00% -0.25%

Regardless of the complexity of your financial situation there are four basic steps all investors should follow to invest successfully. They are:

1. Determine Your Needs and Goals
2. Create an Investment Policy Statement
3. Build Your Portfolio
4. Manage the Process

By following this disciplined, four-step approach you can achieve the results you need while managing the risks involved with investing in the financial markets.

Determine Your Needs and Goals - Your first step is to clarify your reason for investing. What are your current and future financial needs? Are you saving for retirement, your children’s education or to create a legacy for your family? Your personal investment goals will directly impact your investment actions and choices.

Once you have determined what you want to achieve you must then evaluate your investment time horizon, rate of return requirements, risk tolerance and income needs.

Create an Investment Policy Statement (IPS) – Your IPS is designed to provide you with a written framework for managing your assets. This document will vary from very simple to extremely complex depending on your own financial situation. It will help you keep your investment needs and preferences in clear focus. It should be reviewed annually or as your personal situation changes, to ensure that your goals and objectives still being met. An IPS will outline the required asset allocation between stocks, bonds and cash in each of your portfolios. These percentages will vary depending on whether your focus is income, growth, pre-retirement or retirement. The set of standards against which you measure your progress against are outlined in this document

Build Your Portfolio – Based on your IPS you now choose the appropriate investments. At this point the theory that you have written in your IPS now becomes practice. In general the best way to achieve strong returns over the long run is to select well-managed businesses with strong financial positions when choosing your stocks. This will include strong positive cash-flow, zero to low debt levels, consistently strong returns on equity and operating margins and a dividend that has consistently increased over time. All fixed income and cash investments should be of good credit quality with an A rating or better.

Manage the Process – Clients should sit down with their Investment Advisor at least once every year to review their portfolios and their progress. Some portfolios may require a semi-annual or quarterly review depending on the complexity. You should compare your progress against the goals set out in your IPS.

To develop an IPS, book a portfolio review or to receive recommendations for individual investment choices most suitable for you please contact me directly 604 257-7055.

Variable BC Savings Bonds New Rate Set at 2.35%

The province reset the coupon rate on all outstanding variable BC Savings Bond issues to 2.35% from 3.1% for the period of October 15, 2003 to April 15, 2004.

I recommended that all clients still holding the redeemable, variable BC Savings Bonds redeem them on October 15, 2003 and reinvest the funds into an alternative income generating investment.

In the June issue of “Markets @ A Glance” I discussed some of these alternatives such as either a fixed rate bond, units of an income trust, a diversified income fund or a liquid money market security. As the choice will be unique to each investor I will speak to each of you individually to see what would be most suitable for you.

The deadline for submitting your redemption orders is October 8, 2003 if you wish to have your cash available on the 15th. You can still redeem your bonds up to October 15, 2003 however your funds will not be available until October 21st for these late redemptions.

If you have not yet spoken to me about your BC Savings bonds please call me directly at 604 257-7055.

Living Benefits Part II - Disability Insurance

There are three types of Living Benefits: Critical Illness, Disability and Long Term Care. In last month’s issue I wrote about the first of these three products, critical illness insurance. In this issue we will look at disability insurance.

Disability insurance replaces a portion of your income if sickness or injury keeps you at home for a sustained period of time and you are unable to work at your own occupation. Many employer group plans have a disability component but they often have conditions that limit the amount of time you can be on a claim. Also, if you leave your employer you will lose your coverage. Tragically, 48% of mortgage foreclosures are as a result of disability compared to 4% as a result of death.

Personal disability insurance will protect you for many years (usually to age 65) and will not be altered if your occupation changes to a riskier one, or if your salary decreases. Disability insurance usually replaces as much as 55% of your income. If you pay the premiums yourself with after-tax dollars, the benefit will be tax-free. It is important to understand the definitions that exist in your plan. Any occupation versus regular occupation for example means can you work in any job versus can you do your current job. This is a critical difference for many professionals.

The need for protection is universal, however the cost of the insurance depends on your occupation, the more risk involved, the higher the premium. You can add a rider to most policies to get back a large portion of your premiums should you never incur a disability. Please contact me directly at 604 257-7055 if you have any interest in this product or would like additional information.

Did You Know?

I am sad to say that Meenal has moved over to our West Vancouver
branch to take a receptionist position. I have worked with Meenal for five years and I am sorry to see her go however we all wish her the best of luck in her new position. On a much brighter note, I am pleased to introduce you all to my new Associate, Iashi Holder. Iashi (pronounced yashi) has come to Dominion Securities from the Royal Bank where she worked as a Financial Planner. She has six years of experience in the financial sector. She started on the banking and customer service side of the industry and then moved on to financial planning. Iashi received her BA from Dalhousie University and subsequently received her Certified Financial Planner designation.
I believe Iashi to be an excellent addition to my team.

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.