Mark J. Krygier: T : 416-512-6441 E : mark.krygier@td.com Avital Pearlston: T : 416-512-6674 E: avital.pearlston@td.com

4950 Yonge St., 16th Floor, Toronto, ON M2N 6K1 Toll-Free 1-800-382-4964

September 2012Volume 15, Issue 3

“Accounting for differing tax treatments, the yield on stocks is currently about four times that of

10 year government bonds.”

David BaskinPortfolio Manager

Did you know?Before getting too bullish about

energy prices, consider that demand in the U.S. is falling, and

fuel economy is improving. In the mid-40s, 510 million barrels of gasoline were used. The trend was up until the late 70s, peaking

at 2.7 billion barrels. After dropping to 2.4 billion it rose to a peak of 3.4 billion in ’09 and is

back to 3.25 billion, despite many more cars being on the road.

Take the “Investment Challenge”!Historically, investors seeking a safe place to invest their money would look to those products which offered the highest amount of yield. Historically this made sense, as five to ten year safe government and high quality corporate bonds provided rich yields of 6-8%, so a retiree could expect income of $60-80,000 for every million invested, without fear and without the need to dip into his or hercapital. That was yesterday’s story. Today, and perhaps for the foreseeable future, those products which offer safety and protection from the increasingly volatile stock markets provide zero to negative yields, on an after-tax, and on an after-inflation basis. Yield and safety, once congruous goals, in today’s environment appear to be at complete odds with one another.

Cash, and other liquid products, yield close to zero as anyone with a savings account will attest. In contrast, in 1980 I remember investing my bar-mitzvah gift money in 90-day term deposits at 8%. What a shame I didn’t purchase 30-year Government of Canada (GOC) bonds which, by the mid-80s, were yielding close to 20%. Today’s 30-year GOC bonds yield a pitiful 2.37%! Overseas it is no better, as yields on the two-year German government bond recently sank to an all-time low of -0.012%. To add proverbial salt into the wound, the “safe” 30-year GOC bond yielding 2.37% is currently priced at $134 for every $100 of maturity value. Such pricing only guarantees today’s buyer of long-term GOC bonds a loss of $34 for every $100 of bond purchased.

Governments globally are taking note of this phenomenon, as is evident in ourfederal government’s current review of the CPP funding formula. As well, corporations globally are under pressure to keep their pensions fully funded. Employees are living longer and therefore need retirement income far longerthan initially expected. Exceedingly low interest rates have exacerbated thisproblem by lowering the returns on pension fund investments.

Bottom line – today’s “Investment Challenge” is undoubtedly the challenge of our generation. The first step we all need to take is to be realistic about our needs and about what we can expect. Are you ready to take the challenge?

KRYGIER WEALTH MANAGEMENTQUARTERLY

An exclusive newsletter from Mark J. Krygier, LL.B., CFPVice President & Portfolio Manager

CAPITAL MARKET HIGHLIGHTS The U.S. economy grew by more than originally forecast in Q2/12, helped by stronger export growth and

consumer spending. The U.S. Central Bank (Federal Reserve) anticipated that weak economic conditions will warrant exceptionally

low levels of interest rates for an extended period, to “at least through late 2014”. European Central Bank President Mario Draghi repeated that it may need to take “exceptional measures.”

WHAT TO DO NOW? Review your assumptions and consider solutions which you may not have thought reasonable in the past.

The information contained herein has been provided by TD Waterhouse Private Investment Advice and is for information purposes only. The information has been drawn from sources believed to be reliable. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, trading or tax strategies should be evaluated relative to each individual’s objectives and risk tolerance. TD Waterhouse Private Investment Advice, The Toronto-Dominion Bank and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered. Krygier Wealth Management consists of Mark J. Krygier, Vice President & Portfolio Manager and Avital Pearlston, Associate Investment Advisor. Krygier Wealth Management is part of TD Waterhouse Private Investment Advice.TD Waterhouse Private Investment Advice is a division of TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank. TD Waterhouse Canada Inc.– Member of the Canadian Investor Protection Fund ® / The TD logo and other trade-marks are the property of The Toronto-Dominion Bank or a wholly-owned subsidiary, in Canada and/or in other countries.

Asset Class YTD 3-Year

S&P 500 (USA) 9.6% 9.8%

NASDAQ 13.7% 11.2%

TSX 60 (Canada) 2.3% 4.3%

MSCI Europe 1.4% -3.9%

MSCI EAFE 0.7% -4.0%

China Shanghai -10.9% -9.4%

Brazil Bovespa -10.8% -5.6%

MSCI World 4.5% 2.0%

3-mo. CDN T-Bill 0.6% 0.7%

5-yr GOC Bonds 0.9% 5.0%

U.S.$/CDN$0.9862 (% change)

-3.4% -3.4%

FINANCIAL SUCCESS SOLUTION$ - Help save the trees! It’s really easy!In this era of electronic delivery capability of most documents, it is incredible how many trees are being destroyed, and how much money is being wasted regularly by large institutions, to print information, most of which we would frankly rather not receive. For instance, TD Waterhouse Private Investment Advice division alone spends approximately $4.2 million annually to print and mail client documents (e.g. trade confirmations, account statements and tax documents).

Therefore, to both provide our clients with a faster and secure way to access their account documents while at the same time helping our environment (and the unnecessary printing and mailing costs), I wanted to bring your attention to the ease of signing yourself up for our “eServices”. To save a tree you simply need to do the following:

You will need each of your investment account numbers – you will find these on the top of your statements. Call the TD Support Desk at 416-982-6000, press Option #1, and then press Option #2. After answering some questions for privacy protection purposes, your accounts will be listed on-line. You may then choose electronic delivery for some or all of your documents that are currently being mailed. If you would like assistance with this process, or more information, please call Avital at 416-512-6674.

WHAT AM I UP TO?

As a break from the concrete jungle, I recently took my two eldest children camping near Huntsville. We enjoyed some great canoeing and hiking as well as campfire time. While canoeing we saw a deer resting in the forest and in the water a large turtle swam right next to our canoe.

STOCK WATCH

CANADA

Brookfield Asset Management BAM.A (TSX) - $34.44

Year High: $35.25 Low: $25.91

BAM.A is a global asset manager focused on property, renewable power, infrastructure and private equity assets.

$150 billion of assets and highly competent management.

Risks: a challenging economy may impact its opportunities.

U.S./ INTERNATIONAL

Merck & Co. MRK (NYSE) - U.S. $43.12

Year High: $45.17 Low: $30.54

MRK is a global health care company.

Operations are in four segments: pharmaceutical, animal health, consumer care and alliances.

High dividend of 3.8%.

Risks: Generic competition remains a risk and it has few new products coming to market.

ETFs TO WATCH

I-Shares U.S.$ Advantaged Short Duration High Income Bond ETF-CSD.U (TSX):$19.54

In Brief: This ETF offers a low cost way of investing U.S. dollars into shorter term, but higher yielding corporate bonds, which offer compelling yields.

Some of the benefits of this ETF: Good way to hold a diversified

basket of bonds that are not investment grade to reduce individual security risk.

ETFs are bought like a stock so pricing is transparent.

Yield of 5.10% is attractive. In summary: This ETF is suitable for those seeking higher yields from their U.S.$ holdings.

MY THANKS:To Reanne P. and Ryan S. for referring my services. If you know someone - family, friends or colleagues - who may be able to use some assistance with their wealth management and you think that I can be of some help, contact me and I would be pleased to call and meet with them personally.

GLOBAL BENCHMARKS(In Canadian Dollars to August 31, 2012)