retirement wiew from our front window

I know it is still summer here, but this is what it will look like in a few short months

High Gas Prices

High gas prices are just another reason to re-think your wheels.



The thing about environmental issues is this: no amount of nagging, bullying or guilt will move the dial in the end.
People have to get there on their own – and a big kick in the wallet is usually the turning point.

That said, the recent spikes in gasoline prices, the seasonal consumer tendency to buy new vehicles in spring and tweaks in the 2007 federal budget means that when it comes to demand for fuel-efficient cars and trucks, the rubber may finally be about to hit the road.

Awareness of new technology and new gas-saving models has been on the rise - as have the range of choices on offer. With critical mass building, there's finally some buzz about the difference between hybrids (which use both electric power cells and internal combustion engines). And that includes their cost which typically runs at least $5,000 more than the same model with a combustion engine.

Still, there are some financial offsets in addition to reduced gasoline use.
Stung by their early failure to grasp the resonance of environmental issues and the demise of their first effort to design a national environmental policy, the Conservative government introduced a vehicle efficiency inventive of up to $2,000 on the purchase of a greener car or truck and a new Green Levy on imported gas guzzlers in the latest budget.
(Five provinces including Ontario, Quebec, B.C., Manitoba and Prince Edward Island also offer a rebate on the cost of a hybrid or other more efficient cars.)

Although insurance companies are still collecting data, their psychological profiling has led them to conclude that drivers of fuel efficient cars are conservative and responsible. And premiums have been designed to reflect that.

Furthermore, to dispel consumer concerns that hybrids can be more costly to maintain – and to be fair, there isn't a long record on this score since they've only been around since 2000 – hybrid manufacturers often offer more comprehensive and longer-term warranties. (Toyota, for example, offers an eight-year or 160,000 km coverage on the hybrid components of the Prius and Highlander models.)

But the desire – and even the incentive – to save money and ozone with a more ecologically-friendly car isn't all that's required. It helps to have a good grasp of the issues and options as well.

After all, for most people their ride is their second-largest purchase.

Start by asking yourself a few fundamental questions: how much driving do you do in a week? How many people of what size do you need to transport regularly?
It's also important to acknowledge that you need to feel even a little emotional pull towards your prospective purchase.

If you don't like the car, you'll only end up trading it sooner than later – and that's never a sound financial strategy. Green or otherwise. (In fact, the fuel-efficiency of some models has been diminished in recent years because those that achieved optimal savings were so unappealing to drive.
)
Doing your online consumer research is critical and be prepared to wait. The popularity of some of the new hybrid vehicles often means getting on a waiting list. The days of driving it off the lot aren't over, but it doesn't hurt to adjust your expectations.

Because of that supply/demand equation, try not to get into bidding wars or to capitulate to high-pressure sales tactics. Your savings on gas will take a whole lot longer to achieve if you end up paying a premium price to get rolling.

Of course, even if you decide against a hybrid, electric or natural-gas powered car or SUV there's the issue – as with any vehicle purchase – of the various options.
When it comes to engine size, smaller isn't always better.

The weight and size of the car should be matched to engine output to avoid overworking or excess capacity. When you research the mileage and the road tests, also be on the look out for any report comments about the sufficiency or lack of power.

Consider that some axle ratios are more economical than others and if you have a choice, go with the lower numbers. An economical axle has a ration below 3:1 while the high-performance axles that offer fast acceleration or the power to tow trailers are more likely to be in the 4:1 ballpark
.
Depending on the kind of driving you do (city versus highway) the choice of manual or automatic transmission may affect fuel efficiency as well. Not only can manual shifts be more fuel friendly, they cost about $1,000 less.

It's important to be weight conscious in the extreme.

All-wheel drive systems tend to consume more fuel than two-wheel drive.
Weight is the big issue here, adding as much as 200 pounds to the total tally for a car or truck – a trade-off if you drive in severe winter conditions.

Likewise, the weight of air conditioning units also makes a car less fuel-efficient and heavy use of it can take up about 10 per cent of gas consumption. Sunroofs with their extra motor, tracks, glass and reinforcements also contribute to vehicle weight and energy drain, as do power windows, power seats and power locks. Roof racks diminish aerodynamics.

A black car may look cool, but in reality it's anything but.
Light-colored cars and trucks reflect rather than absorb sunlight, the reverse of darker tones.

When it comes to driving, most cars (depending on load factor) are most efficient when traveling at 40 to 60 MPH.

It's also critical to ensure that your tires are adequately inflated because failure to keep them pumped up can take as much as 15 per cent off a car's fuel mileage.

Regular maintenance is also key to saving on gas costs: a misfiring spark plug can reduce fuel efficiency by as much as 30 per cent and replacing clogged air filters can improve gas mileage by 10 per cent.

As always, you have to spend some money to save – and that now includes the environment.


By Deirdre McMurdy

Market Jitters

Controlling your investment risk


Article By: Gordon Pape


The stock market dive that ushered in March should be treated as a wake-up call. It's time to take a fresh look at your portfolio and see how you can reduce risk.


March came in like a lion as far as the stock markets were concerned. In five trading sessions from Feb. 27 to March 5, the S&P/TSX Composite Index lost almost 700 points or more than 5 per cent of its value. The sharp drop frightened many people and raised concerns about the possibility of a new bear market. If you were among them, it may be time to revisit your portfolio. It probably contains too much risk for your temperament.

Actually, a 5 per cent drop is rather modest by historical standards. But it should serve as a wake-up call to all investors. Stock prices don't go to the moon. Sooner or later, the markets will retreat and consolidate before starting to move higher again.

The current bull market began in late October 2002 so we've enjoyed over four years of steady profits. People tend to become complacent in that kind of situation. While that's understandable, it is also dangerous. Bull markets don't last forever. No one can predict exactly when the next downturn will come but the smart investor is prepared for any eventuality.

How do you do that? By paying close attention to your asset allocation. Most investors are more concerned with trying to pick individual securities than they are with ensuring that their asset mix is right for their goals and temperament. That's putting the cart before the horse. Asset allocation should be the first step. Once you know how you want to structure your portfolio, you can concentrate on selecting the best securities. But put first things first.

I know that to many people this sounds very basic. I make no apologies for that – it is. But asset allocation is the cornerstone of smart investing. Repeated studies have shown that having the right mix is more important to your total return than the individual securities you choose. Yet even seasoned investors lose track of their portfolio balance from time to time, especially when markets are volatile.

When markets are performing well there is a natural tendency to direct more of your money towards equities. Steady profits produce a sort of investor euphoria, a state which leads to impaired judgement. That lasts until the moment the market turns around. Then people rush to make changes – perhaps too late, depending on the speed and severity of the slide.

Remember 2000? At the start of the year, investors were giddy. The high-tech boom was making instant millionaires out of thousands of people, the Dow was setting new records, and many pundits were telling us that we were experiencing a new paradigm which would see stocks continue to rise for the next decade. By Easter, the markets were in full retreat and we all know what came next.

So don't procrastinate any longer. If you've been telling yourself for some time that you really need to sit down and review your portfolio, then do it now. Perhaps the next bear market is many months away. But maybe it is only days away. Be prepared!

The best way to do that is through proper diversification. For most people, that will mean reducing stock market exposure and increasing bond exposure. Using a computer program developed by Ativa Interactive of Hamilton, Ontario, I looked at the impact of different asset mixes on a portfolio during the period from August 2000 to September 2002, when the bear market was in full control. A portfolio that was 80 per cent in equities and 20 per cent in bonds would have lost 30.7 per cent during that period. A portfolio with a 50-50 weighting would have been down 11.7 per cent. With a 60-40 weighting in favour of bonds, the loss was trimmed to 5.6 per cent. At a 30-70 stocks to bonds ratio, the portfolio actually turned a small profit over that period. That's the power of asset allocation at work!

I do not mean to sound like a Cassandra. I am not suggesting that you convert all your assets to gold and cash and head for the hills. What I am advising is a healthy dose of prudence, reality, and common sense so that when the next big dip comes (which it will) you can rest more comfortably.


© March 2007 Gordon Pape Enterprises Ltd.

PENSION

Only in Canada.

OLD AGE PENSION

Do not apply for your old age pension. Apply to be a refugee.

A single Refugee can get a monthly allowance of $1,890.00 and each
can Get an additional $580.00 in social assistance for a
total of $2,470.00.

This compares very well to a single pensioner who, after
Contributing to the growth and development of Canada for
40 or 50 years, can only receive a monthly maximum of $1,012.00
In old age pension and Guaranteed Income Supplement.

Maybe our pensioners should apply as refugees!

Let's send this thought to as many Canadians as we can and
Maybe we can get the refugees cut back to $1,012.00 and the
Pensioners up to $2,470.00 , so they can enjoy the money they
Were forced to submit to the Canadian government for those 40
To 50 years.

Please forward this to every Canadian you know

Income Trusts

Ottawa cracks down on Canada's favourite financial toy
Posted 11/1/2006
By Deirdre McMurdy

First and foremost remember this: don't panic.

The absolutely worst thing for any investor to do is to react to quickly to the news instead of sticking with your (You do have a Big Plan, don't you?

That means that if you owned income trusts last week, you probably still want to own them this week. And next week.

By all means review them in the context of the recent news about changes in their treatment by the federal ('Finance'); Department.

Frankly, if you own anything for tax purposes solely, it may not be such a hot idea anyway. But if you decide that you can live through the turmoil of the next few weeks, there may even be some cherry-picking to be done at a time when value isn't all that easy to find in the market.

Ottawa stuns market with pledge on income trusts

But we're getting ahead of the story here. So let's begin at the beginning.

It was quiet in the Ottawa press gallery around 4:30 on Halloween eve.

Most reporters had ducked out early to take their kids around the block or to meet for drinks, when the announcement came that Finance Minister Jim Flaherty was holding a press conference in half an hour in the theatre of the National Press Building

Given that markets had just closed when the press corps was summoned, the consensus was that Mr. Flaherty was about to say something about the long-simmering issue of income trusts. Nevertheless, the timing and the content of his remarks took everyone – from the oil patch to Bay Street to Parliament Hill by surprise.

Even Finance Department insiders knew nothing of the pending remarks and said that the income trust file was the most closely guarded of the many sensitive issues they deal with.

Trusts have a structure that encourages a large portion of revenues to flow directly to investors in the form of regular distributions, avoiding most corporate taxes. Investors can defer the income taxes they pay by holding the units of trusts in registered retirement plans.

Mr. Flaherty announced a package of measures that will tax distributions by income trusts while also cutting corporate taxes by half a percentage point and changing tax policy for pensioners. He claims these moves will ease the tax burden by C$1 billion a year.

Trusts that begin trading from now on would be subject to his new measures in the 2007 tax year, while existing trusts would have a four-year transition period.

That's all well and good except for the fact that the one thing financial markets will absolutely not tolerate is a surprise.

Over the years, that reality has entirely re-shaped the federal budget process, turning it into an elaborate, drawn-out process of consultation and directions that are clearly flagged well in advance of their ultimate announcement.

Corporations too, have learned to "manage expectations" to the last penny. They provide quarterly "guidance" to investment analysts and shareholders on their financial performance, and are exceedingly careful to forewarn of any anomalies on either the positive or negative side.

That – along with various political considerations – made the sudden directive from the federal government all the more surprising. After all, we're talking about a $200 billion dollar sector of the investment sector, a financial product that millions of Canadians own directly in their portfolios or indirectly through their pension funds.

Given investor demand for these high-yield vehicles at a time when interest rates are historically low, income trusts have also come to represent a huge chunk of the volume of business on the Toronto Stock Exchange (220 are listed), because so many of the energy companies that now dominate the index are income trusts.

Given how high these stakes have become as some of Canada's largest companies (namely BCE and Telus) adopted the income trust format, it's not altogether surprising that there has been – and will continue to be – so much complaining about the Finance Minister's rather unilateral, arbitrary move. Investment bankers, lawyers, securities dealers and brokers, in short, a lot of highly-priced, highly verbal talent just got a major hair cut.

On the government side (and yes, there is one) is an equally urgent and highly-priced agenda.

Forget all the platitudes about productivity and competitiveness in a global economy, bottom line is the income trust dudes were driving trucks through loopholes that allowed them to undermine Ottawa tax revenue flow, diverting hundreds of millions of dollars.

(BCE for example, was especially eager to transform itself into a trust to minimize an $800 million tax bill upcoming in 2008 after a series of existing shelters expires next year.

It's going to take some time for all the dust to settle on this subject in both practical and political terms.

The government has taken a political risk in aggravating several core constituencies in one smooth move: the business/financial community, western Canadian oil interests and investors. In the aftermath of the policy announcement, there's going to be plenty of lobbying to tweak the new rules as they are refined.

Forget jumping jacks and treadmills

No need for the elderly to pump iron to stay fit

Associated Press

CHICAGO — Forget jumping jacks and treadmills. Just doing household chores and other mundane activities of daily living is enough to help older adults live longer, new research suggests.

Elderly couch potatoes were much more likely to die within about six years than those whose lives included regular activity no more strenuous than washing dishes, vacuuming, gardening and climbing stairs, according to the study of adults aged 72 to 80.

About 12 per cent of people with the highest amount of daily activity died during the six-year follow-up, compared with nearly 25 per cent of the least active participants. The government-funded study appears in Wednesday's Journal of the American Medical Association.

“This is a monumental study,” said Dr. Andrew Goldberg, a geriatrics expert who was not involved in the research. “They used state-of-the-art methodology to answer a very important question, which is how important is it to remain physically active.”

The highest activity level studied “translates into a 50 per cent reduction in mortality. That's really big,” said Dr. Goldberg, a University of Maryland professor and director of geriatric research at the Baltimore Veterans Affairs Medical Centre.

The most active among the 302 adults studied didn't even do much, if any, rigorous exercise. But they did burn about 1,000 calories daily through activity, or about 600 more than the least active.

For someone weighing 170 pounds, roughly the study's average body weight, that would equal about 3½ hours of daily activity including yard work and household chores, versus less than two hours of similar activity for the least active.

The groups had similar amounts of age-related illness including diabetes, arthritis and cardiovascular disease, which affected more than half the study participants.

The most active were more likely to work for pay and to climb two or more flights of stairs daily, but surprisingly didn't do higher amounts of traditional exercise, said lead author Todd Manini, a scientist at the National Institute on Aging.

Jean Serpico, 75, of Arlington Heights, Ill., wasn't part of the research but has habits similar to the most active participants in the study. She climbs stairs daily to her second-floor condo, does frequent volunteer work, enjoys household chores, baking, shopping and helping her elderly neighbours.

“I do all that to keep busy. I just can't sit and look out the window,” Mr. Serpico said. “I just keep active. I think it keeps me going.”

The study results don't mean that older adults who engage in a more intense fitness regimen should stop, or that they won't gain perhaps even greater health benefits from it, the researchers said. Rather, they said, the study should be encouraging for those intimidated by traditional exercise, illustrating that activity doesn't have to be strenuous to be beneficial.

Mr. Manini said it is uncertain whether the results would apply to younger people.

The researchers used a laboratory technique that some consider the gold standard of measuring expended energy and more reliable than self-reported activity levels, although they also questioned participants about their habits.

Participants drank specially formulated water that is expelled from the body as carbon dioxide, which is a direct measure of energy use. For the next two weeks, they went about their usual activities. Fourteen days later, researchers measured the amount of special water remaining in the body. The difference between the levels on the first and 14th day, factoring in resting metabolic rate, determined how much energy had been expended through activity.

Participants were then followed for up to about eight years.

Improved activity-related cardiac fitness and well-being from feeling socially connected through work or volunteering might explain why active people lived longer, although the study didn't measure those effects, said co-author Dr. James Everhart of the National Institute of Diabetes and Digestive and Kidney Diseases.

Dr. Sandra Selikson, a geriatrics specialist at Montefiore Medical Centre in New York, said the results would help her encourage her older patients.

“You don't have to be motivated to do a mini-triathalon or a 10K. Just being active ... even benefited people who had medical problems,” Dr. Selikson said. “Even doing something is better than nothing.”

Herbal Supplement , Metatonin

Melatonin is a widely used over-the-counter supplement that's marketed as a way to help you overcome insomnia, prevent jet lag, battle cancer, rejuvenate your sex life and slow aging.

To find out if you can benefit from melatonin, try it for two weeks, comparing your sleep with the prior two weeks without melatonin.

However, the benefits of melatonin are often exaggerated.

Your body already produces melatonin, releasing it into your bloodstream in increasing amounts starting at dusk and tapering off toward the morning.

More research is needed to help evaluate how melatonin works and its potential long-term risks. Talk with your doctor before taking any herbal supplements.