Investment Philosophy

It is important for the clients of Manulife Securities Incorporated (MSI) and Manulife Securities Insurance Inc. (MSII) to understand the basic investment philosophy that we believe in, as this philosophy is what guides us in selecting investments for your portfolio. It also helps to understand the basics of this philosophy to maintain our course during the inevitable ups and downs in your investments.

• The biggest threat to financial security is not losing one’s money, but outliving it. Life has changed and the financial risks associated with retirement (both in good or poor health) have changed as well.

• The best way to protect your lifestyle is to own investments that will increase in value, thereby increasing your future purchasing power.

• The biggest danger in owning equities (individual stocks or stock based managed money), is not owning them. There have always been reasons at any particular time not to own equities, however over the long term, equities have always proven to be the winning solution.

• Creating and maintaining wealth depends upon an individual recipe. This recipe is based on your investment time frame, risk tolerance, and financial goals. This is how we base our recommendation for the correct asset mix annually to ensure that it is still the correct “recipe” for you.

• We need a wealth creation role model. We all have role models for various aspects of our lives (parenting abilities, spiritual leadership, community involvement, etc.), but who of us has a wealth creation role model? If we were to source out individuals who are truly successful in the creation and maintenance of wealth, would it not be useful to emulate their behavior? These are the type of qualities that we should look for in the individuals who both manage our pooled investments, and those who run the underlying companies in which we are investing.

• The truth about investing in the equity markets is that the downs have shown over time to be temporary, while the ups usually prove to be permanent over the long term. Losses come from investors who panic and turn a temporary decline into a permanent loss. Since the long term investor who has bought a portfolio of great businesses understands that markets fluctuate but have historically shown to not create losses, over the long term the variability seems insignificant. Having discipline and faith in the system makes me and my clients avoid panic and act like any owner of great businesses - hold as long as the business is still great, regardless of what the price of the share might be.

• Market depressions are really just purchase opportunities. These are the times when misguided investors and advisors sell when they should really buy.

• Managed portfolios (mutual funds, segregated funds, wrap accounts) comprised of great businesses provide diversification and ongoing professional monitoring. The key is to find the managers whose philosophy is most reasonable and with whom an investor can be comfortable through bad and good times. This means being critical with the management style of the horde of 2800 mutual and segregated funds in Canada. My job is to identify those managers.

• Using the dollar cost averaging method will make every investor look like a genius over the long term. While the long term view of owning great businesses is inevitably positive, the short term outlook is always uncertain. Therefore, the risks of market fluctuations testing the patience and fortitude of the investor can be offset by consistently averaging in a fixed amount, regardless of where the “market” is.

• Variability is the best friend of the long term investor. We should welcome volatility, not fear it. Owning more great businesses when they go on sale, can only improve your long term wealth creation. Wait anxiously for “corrections” and be prepared for new purchase opportunities.

We cannot time the market. Most other advisors would agree with this statement. However, we do know a way of assuring our clients will take advantage of the next great increase in stock values – stay invested at all times! The risk of missing future growth is eliminated if we do not sell investments when we do not require the money.

If you are open to the advice that stems from this investment philosophy, we will be able to work together for the long term. We will provide you with the service necessary to monitor your portfolio in an excellent manner, as well as provide you with conceptual tax and estate planning advice along with financial planning expertise in other financial planning matters.