Turner Quarterly Report

Q1 2011
2011 has fared well to date for North American equity markets in general. The Mid East conflicts and continued
Quantitative Easing in the US have significantly contributed to pushing oil over the $100 p/barrel mark again and gold
to new highs. With that, it’s little wonder we have seen the TSX rise above the 14,000 mark which has not been seen
in almost 3 years. The devastating earthquake in Japan has caused significant grief to say the least, though the Nikkei
225 has shown somewhat of a minimal correction; declining less than 5% since the start of the year. I read a great
article days after the 9.0 quake/tsunami that was titled “Earthquakes don’t shake the markets” that I found very
informative.

Canadian bonds have risen somewhat this past quarter but the Bank of Canada has not changed the overnight rate
so far this year. However, economists predict the BoC to raise the overnight lending rate at least another ¼ to ½ of a
percent before the end of the year and Prime rate will more than likely follow. Here is a brief market report below.

Dec 31st 2010 Mar 31st 2011 Change

TSX Composite 13443.22 14116.10 +5.1%
S&P 500 1257.64 1325.83 +5.42%
Dow Jones IA 11577.51 12319.73 +6.41%
Nikkei 225 10228.92 9755.10 -4.63%

Gold (USD) $1421.40 $1438.80 +$17.4 USD

Oil WTI (USD) $91.40 $106.70 +$15.3 USD
USD/CAD $1.0026 CAD $1.0311 CAD +$0.0285 CAD
CAD 10 yr. Bond 3.122% 3.35% +0.228%
CAD Prime Rate 3% 3% n/a

Company Update

On March 15th, it was officially one full year since I moved offices and started my own company. To say the least,
it has been a great learning curve and am very excited in the direction we are heading. The office is a lot less lonely
since Chris joined me at the end of the year; Chris assists me on the administration and marketing side of the
business.

Chris also studied political science at UBC and has made some of his own comments about the upcoming election
which I have included in the Newsletter. I still continue to look for another licensed advisor to join us and Industrial
Alliance Securities but at this time I have not found the perfect fit.

Our greatest compliment is the kind mention of our services to others. As we are still building our business and
accepting new clients, your referrals are greatly appreciated. I would also like to again thank all existing clients who
have contributed to the growth in our company thus far and thank everyone for your continued support.
Federal Election 2011
- C. Scott Turner CFP
Canada returns to the polls in one of the strangest election calls in Canadian history. It makes one wonder why an
election was called when there seem to be no real major issues and the economy is still in recovery. The outcome is
looking like more of the same or a possible Conservative majority. The budget of 2011 could be revamped to add
more tax breaks for Canadian businesses and families or it could stay mostly the same as what was proposed.

- Christopher J. Tomlinson

Financial Planning Tip: TFSA’s Vs. RRSP’s

The question looms… which is best?  The simple answer… It depends.

Tax Free Savings Accounts (TFSA’s) were introduced in the 2008 Federal Budget and have become an important tool
when planning finances.  Unfortunately, everything that is contributed to the TFSA is not tax deductible; with that
however, everything that is withdrawn is not taxable.  This is a mirror image to the RRSP where contributions are tax
deductible but then fully taxable when withdrawn.

Before making a contribution to either, the first thing to consider is the objectives of the contributor.

Here’s something to consider:

When income tax brackets will be the same in the contribution year as they would be in retirement, the math tells us
that there will be no monetary difference between the two as you can see in the graph below.

TFSA RRSP
Contribution 10,000 10,000
Marginal Tax Rate @ 30% 3,000 0
Net Contribution 7,000 10,000
Total in 25 years @ 6% return 30,043 42,918
Marginal Tax Rate @ 30% 0 12,875
Net Proceeds 30,043 30,043
 Where the TFSA may be a better solution, is when income tested government benefits are factored into the equation. 
As withdrawals from a TFSA are not added on to income, like RRSP or RRIF’s, withdrawing funds from a TFSA in
retirement will not negatively affect government benefits such as Old Age Security clawbacks, Guaranteed Income
Supplement, HST rebates, MSP Premiums, Fair pharmacare, and others which are income tested.  These Government
benefits can add up to thousands of dollars every year for retired Canadians and we would hate to miss out on them
due to poor planning.

If you’d like a more in depth analysis tailored to your specific needs and goals, please contact me and I’d be glad to
help.

Scott Turner is a Certified Financial Planner who resides in Kelowna, BC and has over 10 years of experience offering financial advice
to families, individuals, corporations and trusts. Scott is a licensed investment advisor with Industrial Alliance Securities Inc. and he
encourages you to contact him for a free consultation.