[IN THE NEWS] Don’t Panic but Understand How Risky Your Holdings Are


In this Financial Post news article, I spoke to Jon Chevreau about how important it is for investors’ to understand the risk they really hold, while focusing on capital preservation. Keith Richards, portfolio manager with Worldsource Securities Inc. and indexing guru Larry Swedroe were also featured in the article:


“Today’s blog headline comes from financial planner Ted Rechtshaffen, president of Toronto-based Tridelta Financial. I’d contacted him for the article in today’s paper headlined “Better to hedge than time market.”

Our chat came too late in the day for that piece but he made some excellent points. “I think the issue is always looking at what is the risk you’re really holding,” he told me. Investors need to understand what they own and assess what really may be at risk. Back in 2008, while investors may not have realized how bad it could get, someone with a portfolio 40% in bonds, 25% in utility and consumer staples stocks and 10% in precious metals might still have been down 10 or 15% but withstood a terrible time, he says.” READ  MORE AT SOURCE…

The Benefits of Working with a Life Insurance Broker


There are many ways a Life Insurance broker can add value in helping to determine your insurance needs and finding the right product for you.  One of the main benefits of working with a broker rather than an agent from one specific company is that a broker will examine the market to find the best overall solution to meet your needs.  This may include searching the market for desirable product features and including policies from different insurers, usually resulting in cost savings.

Jonathan Weinstein, one of our Insurance Advisors at TriDelta Financial, gives a good example of how one can benefit by working with a life insurance broker:

“I worked on a solution for a client recently – the client was a 35 year old female who was looking for permanent life insurance and critical illness (CI) insurance (CI is a plan that pays a tax free lump sum living benefit in the event of certain catastrophic health issues – e.g. heart attack, stroke).  She was interested in paying off her premiums during her working years with coverage in force for life, so I looked into some 20-pay plans for her (i.e. policies with a level premium cost for a 20 year period at which time no further payments are required and the policyholder remains covered).  Based on a needs analysis I determined she required $300,000 in life insurance and $100,000 in Critical Illness insurance.


For the life policy I found a 20-pay Universal Life plan with a cost of $160/month.  For the Critical Illness policy I looked at 20-pay plans that included a Return of Premium (ROP) on Death rider.  This is a policy that is paid up after 20 years, with CI protection for life, and with this rider if a claim is never made the insurance company will return all premiums paid to the insured’s estate (after 20 years the insurer will also return all premiums paid upon surrender of the policy; if surrender is exercised coverage is no longer in force).  The total monthly premium cost for this plan was $128, or about $30,000 over 20 years (so in essence, in addition to the CI protection, given that all premiums will be returned upon death with the ROP feature, the client was purchasing an additional $30,000 in Life Insurance).  The total monthly premiums for the two policies were $288.

I then however, looked at one company’s CI plan which included a great feature – rather than choosing the ROP rider, this insurer offers a life insurance rider – in the event of death with no CI claim having been made, they will pay the full face value of the policy (in this case $100,000) rather than just returning the premiums ($30,000 as noted above).  So I calculated the premiums by choosing this rider and reducing the Universal Life Insurance plan to $230,000 from $300,000 (as the new CI plan chosen was providing an additional $70,000 in life insurance).

The resulting total monthly premium costs were $273!  The client is saving $180/year – $3,600 over the 20 year payment period and is getting the same total coverage (with the only caveat being she needs to keep both policies in force).  The client was happy with this solution and appreciated the cost savings by structuring it this way.

As a broker I was able to mix and match products from different companies and find unique product features to provide a solution that met the client’s needs and saved her money.  If you would like an assessment of your insurance needs to see if you are properly set up or would like to find out about different alternatives please contact us here at TriDelta.”


When To Review Your Insurance Policy


When was the last time you reviewed your insurance policies? Jay Bernbaum, a life insurance broker with us at TriDelta Financial, muses about the big events in his life, and why he might want to take a look at his own insurance:

“Next year is a big year.  Next year I will be turning a corner in my life.  Next year…I will be 40 (It’s in April so feel free to put it in your calendar).  For most, 40 is a tough year;  For some, it’s just a number.

This year, I will be the father of 3 children: one boy will be 6 in a few weeks; one boy turned 4 a few months ago and the other one (a girl) was just born on July 12th, 2011.  Going away with my wife for my 40th would have been nice (sigh).

Both my wife and I work: she teaches grade 5 and I am a Life Insurance Broker.  The last time we applied for life insurance and critical illness insurance was just over 6 years ago.  At that time, our incomes funded date nights, rent and road trips.  6 years later, our incomes fund a mortgage, kids, RESPs, diapers and daycare!  A lot has changed…except our insurance; it’s stayed the same.

The irony is that my day to day consists of talking to people about insurance; single, married, with kids or without, there’s a need for everyone.  If someone has kids and passes away prematurely with no insurance…what does the significant other do to keep the lights on?

•       Take time off from work?
•       Sell their home and move?
•       Cash out investments and possibly get hit with a heavy tax bill?

How will the mortgage or rent get paid?  Who will pay for the groceries? Daycare? Car insurance?

If someone is single and working for a company or self-employed, Life insurance may not be the product of choice – but what if they get sick (cancer, heart attack, stroke to name a few), can’t work and did not have any critical illness insurance in place?  The mortgage or rent still needs to be paid.  How will the utility bills be paid?  The groceries?  The parking lot at the hospital?  These are just some of the things that I discuss during a meeting.

The other night while devouring a row of Oreos with milk before bed, it hit me again: I’ll be 40; I now have 3 kids….so…..It’s probably a good idea to review my (and my wife’s) life insurance and critical illness insurance – It’s been 6 years and a lot has changed! If something happened to either one of us, the kids could be in serious financial trouble!

Since I’m reviewing my insurance, perhaps you should review yours?  I invite you to give me a call at (416) 887-7800 or send me an email

Remember, Life is always changing….your insurance should keep up!”

July: Canadian Investment Review


Many strategists are calling for a bullish trend in the second half of this year once we get through a few more tough economic reports in the weeks to come. Our “Silver lining” comes in the form of expected incoming data to begin surprising to the upside through July as we ‘climb the wall of worry’ and hope to see good stock market returns once again.

From a technical perspective, the immediate environment however continues to suggest caution until present uncertainties are resolved. The markets also remain in the seasonally volatile summer period that often leads to lower-lows in August through September, implying that equity benchmarks may remain below the year-to-date highs charted in April.

The June trading month proved to be a volatile end to the second quarter. Year-to-date the TSX is down only 142pts (1.1%) or flat if you incorporate dividends – the volatility makes it seem like the market is down more.

This year is characterized by a number of uncertain events both globally and in the U.S. They have contributed to the volatility, but one by one they are finally getting resolved. Global issues include:

  • – The Japan quake and the associated disruption. There was an all time record 15% drop in Japanese exports following the quake, which had a large effect on the entire global economy. Since then exports and demand are rebounding, which supports the argument for a second half (2011) rebound.
  • – The Greece situation needed a resolution, which has been achieved and the Greek Parliament recently survived a vote of no confidence and then passed a five-year austerity package.
  • – The debt crisis in Europe seems to be spreading with sudden concerns about Italy’s creditworthiness. The government debt of Europe’s 3rd largest economy (Italy) equals 120% of it’s GDP dwarfing the debt burdens of Greece, Portugal and Ireland. It seems that much will depend on these countries to grow more rapidly than they have in the past. The outlook remains bleak.
  • – The much anticipated Euro-zone banking stress tests revealed that 8 of 90 European banks failed. This news failed to provide much relief and considerable pessimism reigns and will do so at least until policy makers establish credibility and agree on a long-term strategy.
  • – New IMF head. France’s Finance Minister Christine Lagarde has been named the first woman to head the International Monetary Fund (IMF) after the abrupt resignation of Mr Strauss-Kahn after being arrested in New York for an alleged sexual assault. The process of unifying staff, economists and the restoring of confidence in the organisation is underway.
  • – The unresolved US Debt Ceiling. Negotiations continue in Washington with Obama now getting more actively involved. It will be politics as usual before a likely resolution prior to the drop-dead date of August 2nd.
  • – The end of the Federal Reserve’s second round of money-printing, or quantitative easing (QE2), with the Fed ending its $600 billion bond-buying program. It is likely that there will be a QE3 but it will be disguised as a different name … ‘Tax Repatriation Holiday’ would be as good a name as any.
  • – Monetary policy. We see the Fed leaving rates unchanged for the foreseeable future. The ongoing weakness in US employment growth rule out tightening of any form.
  • Canadian-Invesments-July-2011

So net net, we remain cautiously optimistic and expect positive economic news to gradually dominate as we move into the second half of the year. Should this trend emerge we will look to reinstate equity exposure to target weights. If not, we will implement further capital protection measures.

The second quarter earnings season is just beginning and we expect most of the softness has already been built in to equity prices. So far earnings have been reasonable; Alcoa profit more than doubled, Google net income surged 37% and J.P. Morgan Chase continues to deliver strong results although challenges in mortgage costs continue to weigh on the company. The next two weeks will be crucial.

Normally, the Bank of Canada would be tightening now, but if they did it would likely push the CAD even higher, putting pressure on an already weak manufacturing sector. As long as inflation data remain benign, we think the BoC will not increase interest rates in the short term.

Global Equity Markets: With growth in developed economies tracking below typical recoveries, China holds the key to stronger global growth. We believe the Chinese tightening cycle is coming to a close, growth is moderating, and inflation is peaking. Watch for improving loan growth as a signal of policy easing in China. This too should drive a second half rally in global emerging markets, led by Asia, and commodities.


[VIDEO] The U.S. Debt Crisis Explained Simply


Having trouble understanding the complicated U.S. Debt Crisis? Watch the video below, where I compare the US Debt Crisis to a spoiled child of a rich family. The problem adult child is the U.S economy, and the U.S. government and global lenders are like the parents that continue to fund the irresponsible financial habits of their child.

To learn more, make sure to also read my Globe and Mail article about how the U.S. Debt Ceiling is similar to a dysfunctional family.

If you liked this video, visit our YouTube channel for more financial planning videos from TriDelta Financial.

What If I Have to Manage My Parents’ Finances?


A concern many of us have is, “What if I have to manage my parents’ finances?” As children and parents both get older, this scenario becomes more and more likely.

Here is an example:

When Bob passed away, Mary (who was 82 and definitely slowing down) was suddenly for the first time in her life, responsible for all things financial.  She was not only unprepared, but would clearly need significant help to fill the void left by Bob in this area. Mary turned to her 56 year old son Steven, who had maintained a careful distance from his Dad when it came to personal finances.  All of a sudden, Steven had to help his mother get a hold on a number of financial issues ranging from how to pay the bills, getting bank accounts changed to how should the investments be handled?

To get started, the most pressing issue was: “Where is the world were all the papers, accounts, files, contracts and passwords?”

Steven and Mary tried to connect the dots on various conversations, go through papers, make calls to an investment person, an insurance person, a banker, and an old friend that had convinced Dad to make a loan on some business.  What was nagging at Steven and Mary was the fact that they were sure they were missing some things, but couldn’t be certain.

The whole process was very stressful for Mary and Steven and one they had both secretly dreaded.


This story raises a few issues that you and/or your parents need to consider

  • If something happens to my Dad, etc., how do we know where everything is, and who to call? To assist with this process, download a free copy of the “All in One Place- Financial Guide” and take a moment to fill it out with your parents. It allows easy track down of important documents, investments accounts, names of advisors, passwords etc.  This Guide can save immeasurable time, minimize stress and legal costs.
  • If something happens to my Dad, etc., is there a financial planner who is truly our ‘go to’ person, who we trust, and who has an overall picture of their financial world?
  • As we age, often our advisors (who we have known for years) are the same age as us.  Does it still make sense to have “Abe” as our parents’ financial advisor when he is also 70?
  • Somehow their financial lives got complicated along the way.  All of their good advice led to multiple accounts, a holding company, a trust, 2 properties.  Can it be simplified and co-ordinated?

If your parents are now 65 plus, it is a good time to have a discussion about their finances with them. It is always better to be prepared for the future, and have a comprehensive financial plan in order.

You might find this article about Tips for Managing your Parent’s Money helpful.