A Letter to Our Clients

We are currently experiencing an unprecedented financial crisis, with several prominent U.S. and European financial institutions going insolvent or being taken over. The crisis has adversely affected stock markets around the world, making this a very challenging time for all of us as investors.

It is not always easy, but during times like this, it is more important than ever to stick to your long-term investment plan. At RBC Dominion Securities, we have experienced market downturns before and know that the best way to get through them is by sticking to your investment strategy.

Here are three things to keep in mind during this financial crisis:

1. Don’t panic. Stock markets have declined and it is understandable to be concerned. But all too often, investors panic as stock markets bottom out and sell high-quality investments, which are typically the top performers when the markets rally.

I also want to assure you that RBC Dominion Securities has several safeguards in place to protect your investments. As a member of Investment Industry Regulatory Organization of Canada (IIROC), we must maintain minimum capital ratios to protect against insolvency and ensure sufficient liquidity. We are also part of the Canadian Investor Protection Fund (CIPF), which protects your investments within certain limits.

Furthermore, as a fully owned subsidiary of Royal Bank of Canada, Canada’s largest financial institution, we offer peace of mind that other investment firms simply can’t. Royal Bank continues to boast a very strong financial profile, its senior debt ratings are among the highest of any financial institution worldwide, and it takes a very disciplined approach to managing risk.

2. Let history be your guide. Historically, stock markets tend to go up. There may be bumps along the way, but the overall trend is up. After major declines in 1929, 1973/74, 1987, and 2001/2002, stock markets recovered and climbed to new highs. In North America, stock market declines have always been followed by stock market gains.

3. Stay diversified. Your portfolio is specifically diversified between different types of investments to reduce the impact of stock market volatility. How we diversify your portfolio is based on current market conditions, as well as your investment objectives, time horizons and risk tolerance. You may wish to review these factors given the current market volatility, especially your risk tolerance, which may have drifted upwards with the markets over the last five or six years.

Times like this can be very stressful as an investor, but I want you to know that we are here for you. We are continually monitoring your investments, staying up-to-date on the latest market developments, and will contact you immediately if you need to take any action.

If you have any questions about what’s happening in the markets, or any concerns about your investments, please do not hesitate to call us. We would also be pleased to speak with anyone you know who may be concerned about their investments.

Thank you for your continued trust and confidence.

Sincerely,

The Alan Rae Wealth Management Team