As of December 31, 2012

1 2 As of December 31, 2012. 3 How Much Is This? US$5.9 5,900,000,000,000 US$5.9 Trillion Trillion 4 5 What Does This Number Represent? ...
Author: Logan Gilbert
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As of December 31, 2012.

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How Much Is This?

US$5.9 5,900,000,000,000 US$5.9 Trillion Trillion

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What Does This Number Represent?

US$5.9 Trillion In Money Market Accounts & CDs

Source: Money Market Accounts and CDs (Time Deposits at FDIC-insured commercial banks and savings institutions): FDIC. As of 12/31/12.

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A Similar Story in Canada

C$975 Billion In Money Market Funds & GICs

Source: Investor Economics, Household Balanced Sheet, as of December 31, 2012.

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The Problem?

0.40% Average Money Market Fund Yield As of December 31, 2012

Source: Morningstar Research Inc., as of December 31, 2012. Canadian Money Market Fund Yield of 0.40% is based on the Morningstar Money Market CAD Peer Group Average which contained 176 funds.

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It Won’t Buy You Much After one year, a $10,000 investment would yield:

MONEY MARKET FUNDS

1-YEAR GICs

10-YEAR GOVERNMENT BONDS

$40

$78

$172

0.40%

0.78%

1.72%

Yields as of December 31, 2012

Source: As at December 31, 2012. Money Market Funds: Morningstar Research Inc., Canadian Money Market Funds are represented by the Morningstar Money Market CAD Peer Group Average which contained 176 funds.1-Year GICs: Bank of Canada. 10-Year Government Bonds: Bloomberg.

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The Dilemma Facing Many Investors Their investments are at a standstill

MONEY MARKET FUNDS

1-YEAR GICs

10-YEAR GOVERNMENT BONDS

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The Dilemma Facing Many Investors Their investments are at a standstill

BUYING A HOME MONEY MARKET FUNDS

10-YEAR GOVERNMENT UNIVERSITY RETIREMENT BONDS 1-YEAREDUCATION GICs

Their investment goals remain the same

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Today’s Discussion • How We Got Here • What Most Investors Are Missing • Taking the Next Step

How We Got Here

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Seeing Is Believing

Availability Bias Our thinking is strongly influenced by what is personally most relevant, recent or dramatic. Simply put—we remember the PAIN.

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The Building Blocks for a Wall of Worry

1. Source: Bloomberg LP. 2. Source: Bureau of Labor Statistics. 3. Source: RealtyTrac.

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The Result: Prolonged Pessimism and Skepticism

Source: Kauffman Economic Outlook: A Quarterly Survey of Leading Economic Bloggers, fourth quarter 2011.

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How Did the Market Perform? S&P 500 Annual Returns1 and Franklin Templeton Annual U.S. Investor Sentiment Survey Results

1. Source: © 2013 Morningstar. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Indexes are unmanaged and one cannot invest directly in an index. 2. Source: 2010 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 1,010 telephone responses from participants age 18 and older in the U.S. from March 25, 2010 to March 28, 2010. 3. Source: 2011 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC

International. Included 1,049 online responses from participants age 18 and older in the U.S. from January 6, 2011 to January 7, 2011. 4. Source: 2012 Franklin Templeton Global Investor Sentiment Survey designed in partnership with Duke University professor Dan Ariely and Qualtrics. Included 1,142 online responses from participants age 18 and older in the U.S. from January 30, 2012 to February 13, 2012. 5. Source: 2013 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 501 telephone respondents from participants aged 25 years and older in the U.S. with investable assets of $25,000 or greater from January 14 to January 25, 2013.

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Pessimism Continues to Guide U.S. Investor Decisions Equity Fund Net Flows in the U.S.

Source: Investment Company Institute as of December 31, 2012.

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Pessimism Has Ruled Canadian Investor Decisions As Well Equity Fund Flows in Canada

Source: Investment Economics as of December 31, 2012.

Loss Aversion Studies have shown that the pain of a loss is almost twice as strong as the reward felt from a gain.

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We Learn the Pain of Loss Early

Used with permission.

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Perceived Safety May Come at a Cost Money Market Funds’ Average Yield Before and After Inflation 10-Year Period Ended December 31, 2012

Source: Morningstar Research Inc., as of December 31, 2012. Canadian Money Market Fund Yield of 0.40% is based on the Morningstar Money Market CAD Peer Group Average which contained 176 funds.

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Can You Afford to Wait? Number of Years to Double Your Money

Bloomberg, as of December 31, 2012. Canadian Money Market Funds are represented by the Morningstar Money Market CAD Fund Category which contained 176 funds. 1-Year GICs yield data is obtained from the Bank of Canada's website. 10-Year Canadian Government Bonds yield is obtained from Bloomberg. Average Time to Double Investment is calculated using the following formula: (Natural Log (2) / Natural Log (1+Yield)), Formula for Natural Log is LN. Amount earned on a 1-Year $10,000 investment assumes the investment is made on the as of December 31, 2012.

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What Do Investors Believe Over the Long Term?

Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Source: Source: 2013 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 501 telephone respondents from participants aged 25 years and older in the U.S. with investable assets of $25,000 or greater from January 14 to January 25, 2013. Stocks represented 32% of responses.

Herding We are programmed to feel that the consensus view must be the correct one.

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It’s Hard to Go Against the Crowd

Used with permission from Candid Camera.

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The Problem of Going with the Flow S&P 500 Performance vs. Equity and Bond Fund Net New Flows

This chart is for illustrative purposes only and does not reflect the performance of any Franklin, Templeton, Mutual Series or Bissett fund. Past performance does not guarantee future results. Sources: © 2013 Morningstar as of December 31, 2012; Equity and Bond Fund Flows: ICI. Flows are represented by monthly rolling 12-month net new cash flows. Indexes are unmanaged and one cannot invest directly in an index.

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The Benefits of Staying Invested S&P/TSX Composite TRI Returns 20-Year Period Ended December 31, 2012

Source: Bloomberg, as of December 31, 2012. Indexes are unmanaged, one cannot invest directly in an index.

What Most Investors Are Missing

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U.S. Household Debt Service Has Been Decreasing Ratio of Debt Payments to Disposable Personal Income

Source: Federal Reserve. Most recent data available. Based on the ratio of debt payments to disposable personal income.

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U.S. Unemployment Has Declined From Its Peak

Source: U.S. Bureau of Labor Statistics.

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The World’s Middle Class Is Growing Percentage and Size of the Middle Class Population in the World

Source: United Nations, World Bank, Surjit S. Bhalla, Second Among Equals: The Middle Class Kingdoms of India and China, May 2007 and oxusinvestments.com.

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Global Consumption Is Increasing Automobile Sales—China vs. U.S. (6-Month Rolling Average)

Sources: China Automobile Sales: China Automotive Information Net; U.S. Automobile Sales: Bloomberg. As of 12/31/2012. Based on a six-month rolling average.

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U.S. Corporate Cash Near All-Time High S&P 500 Companies’ Total Cash as a Percentage of Total Assets

Source: Ned Davis Research Group, Inc. Based on historical data since 1977. The historical average cash level for 3/31/77–12/31/2012 was 9.67%. As of 12/31/2012 it was 13.33%.

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Payout Potential Appears Strong S&P 500 Index Dividend Payout Ratio

Source: Compustat via FactSet. © 2013 FactSet Research Systems Inc., all rights reserved. The information contained herein: (1) is proprietary to FactSet Research Systems Inc. and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither FactSet Research Systems Inc. nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Indexes are unmanaged, and one cannot invest directly in an index.

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U.S. Equity Valuations Are Below Long-Term Averages S&P 500 Index 1-Year Forward P/E Ratio 15-Year Period Ended December 31, 2012

Source: © 2013 FactSet Research Systems Inc.

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World Equity Valuations Are Below Historical Averages World Markets 1-Year Forward P/E Ratio 5-Year Period Ended December 31, 2012

Source: Bloomberg as of December 31, 2012

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Investors Still Not Convinced S&P 500 Index Performance vs. Bloomberg U.S. Weekly Consumer Comfort Index (January 2000–December 2012)

Sources: S&P 500: © 2013 Morningstar; Bloomberg U.S. Weekly Consumer Comfort Index: Bloomberg. Indexes are unmanaged and one cannot invest directly in an index.

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“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” — SIR JOHN TEMPLETON Templeton Funds Founder and Former Chairman

Taking the Next Step

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How to Step Back into the Stock Market

Earn Income

Build a Position

Capitalize on Opportunity

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Earn Income Re-Entering the Stock Market with Bissett Strategic Income Fund–Series A

Source: Morningstar Research Inc., as of December 31, 2012. Canadian Money Market Fund Yield of 0.40% is based on the Morningstar Money Market CAD Peer Group Average which contained 176 funds.

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Earn Income Take Action with Bissett Strategic Income Fund–Series A

High-Yield Equities The tax efficiency and growth potential of a multi-sector, multi-cap portfolio of Canadian dividend-paying shares

Multi-Sector Fixed Income

Bissett Strategic Income Fund

The stability of Canadian bonds combined with the yield opportunity of global multi-sector fixed income

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Build a Position Scaling In with a Globally Diversified Combination

The portfolio assumes 33.33% in Bissett Canadian Equity Fund, 33.33% in Franklin U.S. Rising Dividends Fund and 33.33% in Mutual Global Discovery Fund.

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Build a Position Scaling In with a Globally Diversified Combination

Growth of Monthly $1,000 Investments (Rebalanced Annually) vs. $60,000 Lump Sum Investment in Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012.* The hypothetical combined portfolio assumes 33.33% in Bissett Canadian Equity Fund, 33.33% in Franklin U.S. Rising Dividends Fund and 33.33% in Mutual Global Discovery Fund. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with a Globally Diversified Combination

The portfolio assumes 33.33% in Bissett Canadian Dividend Fund, 33.33% in Franklin US Rising Dividends Fund and 33.33% in Mutual Global Discovery Fund.

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Build a Position Scaling In with a Globally Diversified Combination

Growth of Monthly $1,000 Investments (Rebalanced Annually) vs. $60,000 Lump Sum Investment in Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012.* The portfolio assumes 33.33% in Bissett Canadian Dividend Fund, 33.33% in Franklin US Rising Dividends Fund and 33.33% in Mutual Global Discovery Fund. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with Bissett Canadian Dividend Fund–Series A

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Build a Position Scaling In with Bissett Canadian Dividend Fund–Series A Growth of Monthly $1,000 Investments vs. $60,000 Lump Sum Investment in Canadian Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with Bissett Dividend Income Fund–Series A

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Build a Position Scaling In with Bissett Dividend Income Fund–Series A Growth of Monthly $1,000 Investments vs. $60,000 Lump Sum Investment in Canadian Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with Bissett Canadian Equity Fund–Series A

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Build a Position Scaling In with Bissett Canadian Equity Fund–Series A Growth of Monthly $1,000 Investments vs. $60,000 Lump Sum Investment in Canadian Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with Franklin U.S. Rising Dividends Fund–Series A

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Build a Position Scaling In with Franklin U.S. Rising Dividends Fund–Series A Growth of Monthly $1,000 Investments vs. $60,000 Lump Sum Investment in U.S. Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Build a Position Scaling In with Mutual Global Discovery Fund–Series A

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Build a Position Scaling In with Mutual Global Discovery Fund–Series A Growth of Monthly $1,000 Investments vs. $60,000 Lump Sum Investment in Global Equities 5-Year Period Ended December 31, 2012

Source: Morningstar Research Inc. as of December 31, 2012. For illustrative purposes only. Indexes are unmanaged and one cannot invest directly in an index. The growth of the $1,000 monthly investment begins December 31, 2007 and ends December 31, 2012. Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total return. No investment strategy, including dollar cost averaging, can guarantee a profit or protect against a loss in a declining market. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

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Capitalize on Opportunity Buying an Attractive Value with Templeton International Stock Fund–Series A Geographic Weighting (As of December 31, 2012)

As of December 31, 2012. Holdings are subject to change. For updated information, please call Franklin Templeton Investments at 1.800.387.0830 or visit www.franklintempleton.ca. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings.

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Capitalize on Opportunity Increase Your Growth Potential with Templeton International Stock Fund–Series A Growth of $10,000* January 3, 1989 to December 31, 2012 Over 45% More Growth

$37,800

$26,087

Templeton International Stock Fund–Series A

International Equity Category Average

$24,471

MSCI EAFE GR Index (CAD$)

* Since inception (January 3, 1989). Source: Morningstar Research Inc. as of December 31, 2012. The growth of $10,000 begins at the date of the fund's inception (January 3, 1989). Figures include reinvestment of income, capital gains, return of capital and dividends, but the performance does not include the effect of any direct fees described in the fund's prospectus (e.g. advisory fee or income taxes payable) which, if applicable, would lower your total returns.

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Capitalize on Opportunity Buying an Attractive Value with Templeton Emerging Markets Fund–Series A Higher Projected Growth Rates for Emerging Economies Are Driving Changes in Global Markets and Consumption

Source: International Monetary Fund October 2012 *Includes Indonesia, Malaysia, Philippines, Thailand and Vietnam

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Capitalize on Opportunity Buying an Attractive Value with Templeton Emerging Markets Fund–Series A Emerging vs. Developed Markets: Public Debt % of GDP

Emerging vs. Developed Markets: Government Debt Per Capita 2011 U.S. Dollars

Source: International Monetary Fund, World Economic Outlook Database, 2012. G7. Emerging Markets : 87 non-OECD Countries. Total domestic, external and IMF government debt, as a % of nominal GDP. Usually but not exclusively central government

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Today’s Discussion • How We Got Here • What Most Investors Are Missing • Taking the Next Step

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The Importance of Working with Your Financial Advisor

• Keeps emotions out of investing • Builds a long-term investment strategy that is appropriate for your risk tolerance and goals

• Ensures you stay on course with regular reviews and adjustments to your investment strategy

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Important Legal Information The historical annual compounded rates of return as of January 31, 2013 are: Bissett Strategic Income Fund– Series A units 7.6% 1-year and 9.7% since inception (December 29, 2011); Bissett Canadian Dividend Fund– Series A units 1 year 11.3%, 3 years 10.5%, 5 years 6.4% and 7.9% since inception (December 22, 2003); Bissett Dividend Income Fund–Series A units 1 year 10.5%, 3 years 9.8%, 5 years 5.2%, 10 years 6.2% and 5.8% since inception (November 24, 2000); Bissett Canadian Equity Fund–Series A units 1 year 15.3%, 3 years 10.1%, 5 years 5.0%, 10 years 7.7%, and 5.7% since inception (November 24, 2000); Franklin U.S. Rising Dividends Fund–Series A units 1 year 10.1%, 3 years 9.2%, 5 years 3.2%, 10 years 0.3%, and -3.2% since inception (November 24, 2000); Mutual Global Discovery Fund–Series A units 1 year 16.1%, 3 years 7.6%, 5 years 2.4% and 6.2% since inception (February 17, 2003); Templeton Emerging Markets Fund–Series A units 1 year 4.7%, 3 years 3.2%, 5 years 0.5%, 10 years 9.2% and 6.3% since inception (September 20, 1991); Templeton International Stock Fund–Series A units 1 year 14.0%, 3 years 3.0%, 5 years -2.1%, 10 years 4.1%, and 5.9% since inception (January 3, 1989). These include changes in unit value and reinvestment of all distributions but do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder which may have reduced returns. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded returns, including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Franklin Templeton Investments Corp. 5000 Yonge Street, Suite 900 Toronto, Ontario M2N 0A7 Toll-free: 1-800-387-0830 franklintempleton.ca

© 2013 Franklin Templeton Investments Corp. All rights reserved.

TSCA PPT 02/13

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