Assignment ­ Savings & Investment Website or Blog Create a Blog or Website to educate the public about the world of savings & investing. Choose one of the website tools below. You must create an account and choose the FREE no­cost option before you begin building your website:

http://www.weebly.com/ OR

http://www.wix.com/

Blog/Website Requirements: Homepage ­ with linking tabs to each Savings and Investment Option 1 separate web page for each savings and investment option (10 pages)

For each WEB page: provide a simple definition of the savings or investing option List key things to know about the savings or investing option List 2­3 advantages & disadvantages for each savings or investing option Research financial websites to find one actual example for each savings or investing option #1,2,3,8,9,10 only. Include some screenshots, images, and charts to make your web pages visually interesting Insert some Youtube clips to help educate the public about some of your savings/investments

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Savings Options Suggested websites

1) Savings bank account Choose one specific savings bank account product from the links below: List any terms & conditions for using your selected savings bank account Any minimum balance required? Interest rate offered? http://www.rbcroyalbank.com/products/deposits/savings­accounts.html http://www.rbcroyalbank.com/rates/persacct.html

Definition: A savings bank account provides principal security and a modest interest rate. Account holders may not be able to write checks from the account without paying extra feesor expenses. There may be limited about of transactions that you can make. A savings bank account is considered to be one of the most liquid investments. They are usually for money that you don’t depend on using everyday. Additionally, if you want to start a SavingsBank Account, you must go to your local bank with identification and they will open your account. You can put in money at any time you would like.

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What I Know: Pay lower interest rates than Treasury bills. Should not be there for long­term holding periods. Modern ones offer access to funds through visits at a local branch and on the internet.

Advantages:

Provides principal security and modest interest rates. Keeps your money liquid (ability to be turned into cash). You can get started with minimal cash.

Disadvantages:

Moderate returns, the returns are not too high. Some have withdrawal limitations, it is hard to make regular transactions. Some have minimum balance requirements, you must start with an initial deposit.

Similarly, you must pay $5 to $10 dollars as a monthly payment. Example: RBC Saving Account: RBC High Interest eSavings

1.050% interest on every dollar. No minimum balance and no monthly fee. Access your funds anytime for free. Canadian Currency only.

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2) CSB (Canada Savings Bond) or CPB (Canada Premium Bond)

Choose one specific CSB or CPB available for purchase from the links below: Minimum investment required? Interest rate offered? Maturity date? (What is the date the investment comes due?) http://www.csb.gc.ca/canada­savings­bonds­program/products/ http://www.csb.gc.ca/canada­savings­bonds­program/rates/

Definition: Canada Savings Bonds and Canada Premium Bonds are investments offered by the Government of Canada. They are on sale between early October and December once every year. They are debentures, meaning that they have a fixed rate of interest. Financial products are issued by the Bank of Canada and claims to offer a competitive rateof interest and has a guaranteed minimum interest rate.

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What I Know:

Bonds are cashable They are green, and the picture of the Peace Tower and the Parliament building of

Ottawa are on it. Now, there are pictures of the Cenotaph of Ottawa on it. CPBs are golden and have the Canadian War Museum on them.

Advantages:

Can be withdrawn at any time at most of the big banks. Good for people who depend on interest income for daily expenses. Good for people who trust Canadian companies only. If they encounter any problems,

they can go to a head office easily. Disadvantages:

Rates are determined by “prevailing market conditions”. If markets are doing well, you will not get high profit (low interest rates).

Fully taxed as income at the marginal tax rate. The higher the income, the more taxyou will have to pay.

Takes a while to earn interest. Some people want to start earning interest on day 1;however, this does not happen with Canadian Savings Bonds/Canadian Premium Bonds.

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3) GIC (Guaranteed InvestmentCertificate) or Term Deposits

Choose one specific GIC available for purchase from the links below: Minimum investment required? (ex. $1000­$4999) Interest rate offered? Length of Term? (how many months or years does the GIC last before it comes

due?) https://www.investorsedge.cibc.com/ie/education­centre/topics/fixed­income/gics­de

scription.html https://www.cibc.com/ca/rates/gic­rates.html

Definition: GICs or Term Deposits are a safe way to invest money because initial investments are protected. Canadian investment that provides a guaranteed rate of return over a period of time. Due to its low risk profile, return is generally less than other investments like stocks. What I Know:

Guaranteed Investment Plan ­­ you will be given a profit and are made with bank….. Pay a set rate of interest .

Advantages:

Safety and Security ­­ Original investments and interest payments are guaranteed. Flexible terms are available ­­ terms range from 30 days to 5 years. Eligible for non­registered and registered investment plans .

Disadvantages:

Often carry penalties if you cash them before the term ends. Require large minimum deposits.

Example: CIBC Long­Term GIC

$1 000­$99 999 initial payment. Interest rates are offered.

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84 months before the last GIC is due.

Savings Plans Suggested Websites

4) RRSP Describe the RRSP account. How does it work? List 2­3 advantages; 2­3 disadvantages http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/rrsps­for­retirem

ent/Pages/default.aspx#.U5Bhs_ldWSo http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/rrsps­for­retirem

ent/Pages/How­RRSPs­work.aspx#.U5BhlvldWSo Look for graphs that show the “benefits of investing in RRSP’s” as early as possible. No specific example of an actual RRSP account is required!

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Definition: Registered Retirement Savings Plan is a Canadian account that holds savings and investment assets. There are taxes involved. It was introduced in 1957 to promote savings forretirement and self­employed people. What I Know:

You set up an RRSP with a bank. Afterwards, you can choose between a common­law partner RRSP or a self directed RRSP.

71 years is that last year to make contribution to an RRSP. You transfer money in and out.

Advantages:

There are tax­deductible contributions. ­­ you get tax relief from deducting RRSP contribution to your income each year.

Tax­sheltered earnings ­­ The money you make on an RRSP investment is not taxed as long as it stays on the plan.

Tax deferrals ­­ You pay tax when you withdraw from an RRSP. This includes investmentearnings and contributions.

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Disadvantages:

Retirees can pay more tax ­­ Taxable income includes RIF withdrawals and employer/government pensions.

If owner of the account passes away, taxes are paid by the estate prior to the RRSP proceeds of the account dies.

5) RESP Describe the RESP account. How does it work? List 2­3 advantages; 2­3 disadvantages http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/resps­for­educati

on/Pages/default.aspx#.U5BiLfldWSo https://www.cibc.com/ca/education/ https://www.cibc.com/ca/education/benefits­of­an­resp.html No specific example of an actual RESP account is required!

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Definition: RESPs (Registered Education Savings Plan) is opened for kids, but they can also beopened for parents and other adults. When a child is put into post­secondary education, they can start taking educational assistance payments (EAPs) from the RESP. What I Know:

Person who opens the account is called a “subscriber”. The person who receives the EAPs is called the beneficiary.

Advantages:

Savings grow tax free. There is no tax on investment earnings, as long as they stay in theplan.

You can put in money wherever you would like. Can stay open up to 36 years, gives kids time to establish where they want to go;

therefore, they will not spend money on an education that they did not want.

Disadvantages:

Income earned is not allowed to grow on a tax­deferred basis. Income earned or realised capital gains will be capitalised the year they are earned.

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Investment Options Suggested Websites

6) Government bond Describe what a Government bond is. List any key features List 2­3 advantages; 2­3 disadvantages https://www.investorsedge.cibc.com/ie/education­centre/topics/fixed­income/bonds­des

cription.html (scroll down to Government of Canada Bonds) How Bonds work

http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/bonds/Pages/How­bonds­work.aspx#.U5DL7fldWSo

No specific example of an actual Government Bond product is required!

Definition: Government bonds are debt securities that support government spending and theyare mostly issued in the country’s currency. Government debt is owned by any level of government and is payed by the government. People invest into government bonds in order tohelp federal crown corporations like Canadian Wheat Board. What I Know:

Issued in Canadian Currency. Most liquid sector of the Canadian Bonds.

Advantages:

Most conservative type of bond. Have the highest credit rating available.

Disadvantages:

Market dealing with investors managers are dealers only; therefore, it can not be madeonline.

Dealing spreads according to economic factors. If economy is not doing well, dealing will not occur at the time you want.

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Dealing is dependant on the term­to­maturity on the individual bond. If you have no maturity with your individual bond, the dealing will not happen at the time you want.

How do they Work?

Interest Payments: You will get regular interest payments when you have the bond. Some have fixed interest rates; however, some have floating rates that go up and downtime to time.

Selling a Bond for More Money That You Payed: When interest rates go down, bond prices go up. You can make money off of it before if matures. You can get more than you payed for it and keep the interest that you made until the time you sell it.

7) Corporate bond Describe what a Corporate bond is. List any key features List 2­3 advantages; 2­3 disadvantages https://www.investorsedge.cibc.com/ie/education­centre/topics/fixed­income/bonds­des

cription.html (scroll down to corporate bonds) http://www.investorwords.com/1131/corporate_bond.html No specific example of an actual Corporate Bond product is required!

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Definition: Many businesses rely on people to raise funds for them in order to complete their operations and financial projects. Businesses borrow money from banks, issue common or preferred stocks, and issue debt. People can invest into companies in order to help them out and then you will slowly get back the money that you put in. What I Know:

Corporate Bonds have been used by businesses before World War 1. How it Works:

In order to get interest and the principal due to them in case of default, corporate bondholders have prior legal claim.

Each issue has its own ranking with respect to priorities. Bonds can be classified as senior debts (ranks ahead of debenture).

Advantages:

Less risky than stocks. Fixed maturity date (1­30 yrs). Wide range of ratings and yields because financial health of the issuers can vary. You can invest in “Blue Chip” companies that have bond ratings like AA.

Disadvantages:

Corporate bonds often pay higher rates than government or municipal bonds. Changes in interest rates reflect bond prices. Corporate bonds are major exchanges and are taxable.

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8) Common shares How Stocks work http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/stocks/Pages/How­stocks­work.aspx#.U5DKb_ldWSo

Choose one Canadian or US corporation that offers common shares (ex. Apple Inc., Google, Walmart, Nike, Lululemon, TD Canada Trust, Abercrombie &

Fitch, Ford, Coca­Cola). Use the link below to help you research one stock from any corporation:

http://www.theglobeandmail.com/globe­investor/markets/stocks/

(type the company name into the search box at top of page)

What is the stock symbol? Name of stock exchange it trades on (TSX, NYSE, NASDAQ) Latest share price? (CAD or USD) 52 week highest price? 52 week lowest price?

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Dividend? (what is the annual dollar amount paid to shareholders of your stock?)

Definition: Common shares offer potential of growth through rising share prices and increasingdividends. Prices of common shares tend to be more volatile than the prices of a preferred stock. What I Know:

Dividend Payments: There are dividend payments but there is no guaruntee that you will receive dividends and the amount if you do.

There are votes at shareholders meetings. You have a claim on company’s assets.

Advantages:

Potential for delivering very large gains. Potential loss from stock purchased with cash is limited to the total amount of the initial

investment. This is better than some leveraged transactions where maximum loss canexceed the total of the funds invested.

Offer limited legal liability. Passive stockholders are protected against any liabilities from the company’s actions beyonds their financial investment in the company.

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Disadvantages: Stockholders are the last to get payed. Companies first pay employees, suppliers, etc.

before they can pay stockholders. Do not get to enjoy all of the privileges that the owners of the privately held owners do. Investors may not know everything about the company. Limited information can cause

investment decision making difficult. Example: Telus Corp.

Stock Exchange it Trades on: TSX Latest Share Price: CAD 52 Week Highest Price: 42.20 52 Week Lowest Price: 29.52 Dividend: 1.52

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9) Preferred shares Preferred shares vs. Common shares ­ comparison http://www.dummies.com/how­to/content/how­to­know­the­difference­between­common­and­pref.html

Understanding Preferred Shares

http://www.bmo.com/pdf/Understanding%20Preferred%20Shares_E_FINAL.pdf

Nervous about investing in common shares? Try Preferreds! http://www.thestar.com/business/personal_finance/2012/12/14/nervous_about_stocks_try_preferreds.html

Choose one of the following preferred shares below and research: a) Royal Bank Preferred Share ­ series D

http://www.theglobeandmail.com/globe­investor/markets/stocks/summary/?q=RY.PR.D­T

b) Bell Canada Enterprises Preferred Share ­ series A

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http://www.theglobeandmail.com/globe­investor/markets/stocks/summary/?q=BCE.PR.A­T

c) Loblaw Companies Preferred Share ­ Series A http://www.theglobeandmail.com/globe­investor/markets/stocks/summary/?q=L.PR.A­T

What is the stock symbol? Name of stock exchange it trades on (TSX, NYSE, NASDAQ) Latest share price? (CAD or USD) 52 week highest price? 52 week lowest price? Annual Dividend? (The dollar amount paid to shareholders x number of shares

owned)

Definition: They are hybrid securities with both equity and fixed income characteristics. Preferred share generally carries no voting rights, as per value, and pays a fixed distribution rate that is determined at issuance. Preferred shares have less rights than the bonds of a company but carry rights above those granted to common equity holders. What I Know:

There are main preferred shares in Canada: Perpetuals, floating rates, rate resets, and

retractables.

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Effective portfolio construction tool for investors given their low correlation to both

common stocks and fixed income. Lending interest rate risk will be important when investing in preferred shares. Investors can benefit from diversification properties and the tax efficient yield or

preferred shares. Advantages:

Fixed dividends Payment priority ­ holders of preferred stocks are first to get payed. Greater claim to any of the company’s assets.

Disadvantages:

Dividends do not rise when the company makes high profits. Les share price appreciation. Price of preferred shares is based on the yield they offer.

Preferred shares trade more like bond than a stick. No voting rights ­­ holders of preferred shares have less say than common stock holders

in how the company is managed. Example: Royal Bank Preferred Shares

What is the stock symbol?

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Name of stock exchange it trades on (TSX, NYSE, NASDAQ)

TSX Latest share price? (CAD or USD)

CAD 52 week highest price? 52 week lowest price?

25.93 & 23.34 Annual Dividend? (The dollar amount paid to shareholders x number of shares

owned) 1.13

10) Equity mutual funds (also called stock funds, dividend funds, growth funds)

Understanding Mutual Funds http://www.osc.gov.on.ca/documents/en/Investors/res_mutual­funds_en.pdf

How mutual funds work

http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/mutual­funds­and­segregated­funds/Pages/How­mutual­funds­work.aspx#.U5CI7_ldWSo

4 reasons to buy mutual funds

http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/mutual­funds­and­segregated­funds/Pages/four­reasons­to­buy­mutual­funds.aspx#.U5CJC_ldWSo

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7 common types of mutual funds (scroll down to “equity funds”)

http://www.getsmarteraboutmoney.ca/en/managing­your­money/investing/mutual­funds­and­segregated­funds/Pages/eight­common­types­of­mutual­funds.aspx#.U5BpUfldWSo

Choose one of the following Equity mutual funds below and research: a) CIBC US Equity Fund

http://www.theglobeandmail.com/globe­investor/funds­and­etfs/funds/summary/?id=63950 b) CIBC NASDAQ Index Fund

http://www.theglobeandmail.com/globe­investor/funds­and­etfs/funds/summary/?id=53511

c) TD US Blue Chip Equity Fund http://www.theglobeandmail.com/globe­investor/funds­and­etfs/funds/summary/?id=25996

d) TD Science & Technology Fund

http://www.theglobeandmail.com/globe­investor/funds­and­etfs/funds/summary/?id=18358&cid=TD%20Asset%20Management%20Inc.

Fund Performance ­ list fund returns % for 1 yr, 3yr, 5yr, 10 yrs.

Fund objective ­ what financial goals is the mutual fund trying to accomplish?

Fund sponsor ­ name of bank or mutual fund company managing your money

Asset class ­ which category of mutual fund is it? (cash, equity, bonds)

Total Assets ­ what is the total value of client money managed by the fund manager?

Management fee ­ how much does the fund manager charge you per year to manage

your mutual fund investment? (ex. 1.50% ­ means your fee is 1.5% x amount invested)

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“Asset Allocation” and “Top Holdings”. Try to “screenshot” these charts and paste onto

your webpage (see example below)

If the “screenshot” option is not easy for you, just explain what the Asset Allocation pie

chart means, and list a few of the top stock/bond holdings chosen by the fund manager.

Definition: It is type of investment fund. They are “open ended”, which means as more people

invest, the fund issues new units or shares. Mutual fund typically focuses on specific types of

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investments. For instance, a fund may invest mainly in government bonds, stocks from large

companies, or stocks from certain countries.

What I Know:

Risk depends on the funds you invest in.

Mutual funds are not guaranteed or insured by the CDIC.

Past performances can help tell how your funds will do in the future.

Mutual funds are taxed.

When you purchase or redeem securities of a mutual fund, you pay or receive what is

known as the net asset value (NAV) of the security at the time of purchase, switch, or

redemption.

Advantages:

Built in diversification ­­ Money is combined with other investors and it allows you to buy

a pool of investments.

Professional Management ­­ Leave your decision to investment managers.

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Disadvantages:

High expense ratios and sales charges.

Management abuses ­­ Turnover can be used if your manager is using their authority to

their advantage.

Tax efficiency ­­ Investors have the choice of capital gain payouts in mutual funds.

Poor trade execution ­­ If you place your mutual fund trade anytime before the cut­off

time for the same day NAV, you will receive the same closing price NAV for your buy or

sell on the mutual fund.

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Example: CIBC US Equity Fund

Fund Performance ­ list fund returns % for 1 yr, 3yr, 5yr, 10 yrs.

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Fund objective ­ what financial goals is the mutual fund trying to accomplish?

Seek long­term capital growth by investing in a diversified portfolio consisting

primarily of equity securities of companies domiciled primarily in the United States.

Fund sponsor ­ name of bank or mutual fund company managing your money

CIBC Securities Inc.

Asset class ­ which category of mutual fund is it? (cash, equity, bonds)

U.S. Equity

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Total Assets ­ what is the total value of client money managed by the fund manager?

$54.9 million

Management fee ­ how much does the fund manager charge you per year to manage

your mutual fund investment? (ex. 1.50% ­ means your fee is 1.5% x amount invested)

1.75%

“Asset Allocation” and “Top Holdings”. Try to “screenshot” these charts and paste onto

your webpage (see example below)

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The End! “Publish” your website and share your website URL with your teacher.

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