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Section Two The Canadian Statesman, Bowmanville, Wednesday, August 31, 1994 11 Business and Finance PROTECT YOURSELF WITH A RECESSION PROOF BUSINESS! Consider a unique opportunity with a Money Concepts Financial Planning Centre. We offer you: an effective system for attracting new clients, ongoing training and support, computerized financial planning programs, low start up and overhead costs, unlimited income potential and a full spectrum of competitive products and services. Plan to attend our Special Information Seminar at Bowmanville High School, 49 Liberty St. N., Rm. 149, Sept. 28/94 at 7:00pm. and find out why over 75 Money Concepts franchises have opened across Canada. Call Lynn Reid for reservations (613) 968-6751. TBMONEY hi 1 CONCEPTS ImyJ FINANCIAL PLANNING CENTRES 1 Catharine Street, Suite 100, Belleville, Ontario K8P 1K8 DISCOUNT BROKERS TAKE THE SALES PRESSURE OUT OF INVESTING By Dennis Deere Manager, Bowmanville Branch Toronto Dominion Bank We thrifty, conservative Canadians have a long tradition as "savers" who work hard for what we earn, and take pride in conserving what we manage to put aside. Many of today's investors continue that saving tradition by choosing a discount broker so that they can pay lower commissions when they want to buy or sell a wide variety of investments, from government bonds or GICs to Canadian and International equities. Discount brokerage firms were founded to serve the varying needs of independent investors by providing efficient and convenient order execution without sales pressure - and with commissions that can be as much as 84% lower than those charged by leading full-commission brokers. When discount brokers were established over ten years ago, independent investors who did their own analysis and research wanted an alternative to full- commission brokers because they saw no benefit in paying for research services and advice that they simply didn't need. The discount brokers offered a wide variety of investment alternatives, efficient trades at lower commissions, and convenient services that, in some cases, included 24-hour access by telephone. This new approach to brokerage met many investors' needs then, and continues to meet them today. Now the discount brokers' approach to investing serves a large new group of investors; those who, like many of us, were among those traditional "savers". Today, as more and more Canadians look beyond what simple savings can do for them and their financial future,, they discover the advantages of using lower- cost discount broker to consolidate their investments - including mutual funds, self-directed RRSPs or RRIFs, bonds, Canadian and foreign equities, mortgage- backed securities, GICs and more-often with one phone call and one easy-to- read statement. The discount brokers continue to expand their services as investors' needs grow and change. For example, clients of one discount broker can now get market quotes and portfolio details, and enter their own orders, on-line and in real time, by personal computer or telephone. Information about the no-pressure, cost-saving approach that discount brokers bring to investing is readily available from anywhere in Canada - one broker even offers a 1-800 service for their "Snowbird" clients who are temporarily out of the country. If you would like more information about Green Line Investor Services, the discount broker that is a wholly-owned subsidiary of TD Bank, please call TD's Green Infoline at 1-800-387-2092. The Toronto-Dominion Bank 39 Temperance Street Bowmanville, Ontario L1C 3K9 Tel: (905) 623-2514 TD BANK Your Bank. Your Way. @ Joint Venture Produces '95 CAMI Vehicles Three all new economy cars - 1995 models of the Geo Metro, the Pontiac Firefly ànd the Suzuki Swift - were introduced August 16th to enthusiastic enthusiastic applause from the people who build them, the 2,700 "team members" at CAMI Automotive Inc., in Ingersoll. CAMI Automotive Inc. is a joint venture company formed by General Motors of Canada Limited and Suzuki Suzuki Motor Corporation of Japan which began production in April, 1989. By November, 1993, 500,000 vehicles had been produced there. In addition to the new products seen today, CAMI also builds two and four- wheel drive Geo Tracker and Pontiac Sunrunner convertibles and hardtops and Suzuki Sidekick convertibles and hardtops. The new four door-sedans and three-door hatchback models, the only true economy cars built anywhere anywhere in North America, "represent high standards of value in economy products," said Tom Mason, vice president, marketing, at GM of Canada, Canada, and will "generate tremendous customer interest and demand." He said the introduction "comes at a time when GM is recapturing domestic domestic market share through a combination combination of factors, including product value, improved productivity and quality. In Canada, the 1995 Geo Metro Metro and Pontiac Firefly four-door sedan sedan will sell for $10,995 and the three-door hatchback coupe in each car line for $9,995." • "Traditionally the fuel economy leaders in both the United States and Canada, the all-new cars, in addition to offering a choice of fuel-efficient three and four-cylinder engines, dual air bags as standard equipment and optional anti-lock brakes, while maintaining low cost, also include such safety and security features as side-impact protection and steel- reinforced passenger compartment safety cages," said Mason. J.C. (Jim) Perkins, GM Vice President President and General Manager, Chevrolet Chevrolet Division, told the CAMI team members that "your commitment to bringing a first class quality product off the line is very evident in everything everything you do. I am extremely impressed impressed with the dedication of the people in this facility." In promising to continue to pursue "our high quality, high value strategy," strategy," he also said: "we have very educated educated consumers out there, and do you know what they expect from us? It's one word - perfection. Do you think quality matters to buyers? You bet it does." Masao Toda, Senior Managing Director of Suzuki Motor Corporation, Corporation, said the cars were developec "with the combined engineering efforts efforts of Suzuki, GM and CAMI," anc that "we have gone through a challenging challenging time to satisfy the marketing and enairieerine objectives, including the regulatory requirements of both U.S. and Canada." Effective September 6th, 1994 our new branch hours will be: Monday - Wednesday 9:00 a.m. - 6:00 p.m. Thursday and Friday 9:00 a.m. - 8:00 p.m. Saturday 9:00 a.m. -1:00 p.m. Thank you for your continued patronage. National Trust © 68 King St., E. Bowmanville, Ontario, 905-623-2504 Durham Trade Fair Promotes Business For those wanting a taste of what business in Durham Region has to offer, offer, the event to be at will be the Durham Durham Real Estate Board's Trade Fair, September 8 at the Pickering Recreation Recreation Complex. The afternoon will have a unique format with a carnival atmosphere. Unlike in past years, each booth will feature a game, and all afternoon there will be draws, including including one for a major door prize. This will be an excellent opportunity for people to see local businesses exhibit exhibit their latest products and services. services. The event will also kick off the Ontario Home Week "Open House Sweepstakes" during which Durham realtors will host open houses each Sunday in September. Potential purchasers purchasers attending will be eligible to win a cash prize towards the down payment of a home, as well as many other prizes, including a reduced mortgage interest rate, free home appraisal, appraisal, and a moving company certificate. certificate. Prospective home buyers won't want to miss this opportunity. No one will want to miss one of the biggest exhibitions of local business business at the Durham Region Real Estate Estate Board's Trade Fair, September 8 from 4 to 7 p.m. For more information, information, call (905) 723-8184. by Brian Costello FEDERAL RESERVE BOARD WRONG How long will it be before Federal Reserve Board Chairman Alan Greenspan realizes the serious mistake he has made and scrambles to correct it? How many smart investors recognize the window of opportunity and the potential profits that are waiting? The big fear in the United States is that their economy is running at too rapid a pace. If it is will it create higher inflation? If we have higher inflation, interest rates will move higher. To be ahead of the game Mr. Greenspan pushed interest rates higher on five separate occasions this year. His rationale was that increasing interest rates ahead of time would scare investors, consumers and business into cooling it a bit. If we had a steady economic recovery rather than a hot one there would be no major runup in inflation and no need to bring on a recession in a couple of years to beat inflation. So, how is he doing? I think terribly. And, I think investors and businesspeople and especially consumers can make a ton of money because of it. To show you what I mean look at the most recent numbers. The American economy grew at a 3.3% rate in the first quarter of the year. It perked up to 3.8% in the second quarter an apparent sign that Mr. Greenspan was correct. Things are getting better. However, before we make a final decision let's look at a few other things. In the first quarter consumer spending grew by 4.7%. In the second quarter it slumped to only 1.4%. Obviously, the increase in interest rates sent purchasers running, in the opposite direction,, slashing consumer spending to its lowest level in two and a half years. If you run a business though you probably planned on the consumer dipping into his or her products for the rest of the year. Wrong. So wrong, in fact, that unsold inventories jumped to their highest levels in six and a half years. In fact, about two thirds of all the activity in the second quarter was to fund inventory that wasn't sold. The way I see it there are very few things that can happen. The merchants can slash prices in the next few months to unload inventories. Production can slow down until inventories are wound down or the Fed can eventually realize its mistake and cut interest rates later this fall. At the least, it will realize that there's no need to increase interest rates for most or all of the rest of the year. If we have large sales there will be no fear of inflation. If production slows there will be no fear that the economy is running at too rapid a pace. Either of these developments would remove any pressure for interest rates to rise. Then we have durable goods orders. These are big ticket items like stoves, fridges and tanks. In July they collapsed by 4. 2%. Some of this has to do with shutdowns in the auto industry so. they can get ready for new model lines. However, it's still a sign that the economy is doing nicely but at no time is out of control. This interest rate thing is being overdone. In Canada we have our own individual circumstances. Our huge government deficits scared foreign investors away until interest rates rose so far that we looked like a good buy. Foreign money is once again flooding back into Canada. That helps support our dollar and can allow interest rates to fall further. We do, of course, have some political unrest in Canada. Any surprises will hurt the dollar which, in turn, will force the government to increase interest rates temporarily to support the buck. But, the key word is "temporarily." We can't afford high interest rates. Commodity prices actually fell in Canada last month. And, of course, our higher interest rates will have an even more dramatic impact on consumer spending habits. So how can we benefit? Well, there should be lots of goods on sale. So, don't chase the items you want. You'll be able to get a bargain. For businesses lower interest rates mean they can last longer even with inventories. In fact, corporate profits are cooking along nicely and will continue to do so for the next couple of years. For investors this is a fantastic opportunity. They don't really have any worries about interest rates rising. And, they know they have a reasonable expectation for them to fall. As a result, if you buy investments that are interest sensitive but are also in a position to benefit from higher profits you will have a fantastic two years ahead of you. While mortgage funds have disappointed this year they are recovering nicely now and will continue to do so. However, bond funds will do even better. And, equity funds are the place to be for the next two years. Historically, the fall is bad for stock markets (remember Black October). However, this fall I think the bargains that are snapped up on any corrections are going to pay off , handsomely.