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i Capitalist system still works

Pervez H. Pate!
Contributing Writer

CONVENTIONAL
wisdom always come to
the fore at times like
this — when we have
15 to 25% moves to the
downside in equity mar-
kets

First you have the doomsay-
ers who carn their living trying
to be prescient in predicting

calamities.

Then you have the “flavor
of the month” type advisors
who change their forecasts with
a weathervane type of regulari-

ty.

And finally you have the
dyed in the wool GIC proto-
types: “I told you it was foolish
to, go ahead with anything
other than fixed income in your

portfolio”-zypes who come out

, er their years of hibernation at
imes like this.

. ormy part, I try to analyze
: ala causes the underlying

of equity markets It’s
bly the third time in

, Pirlve months that he has spo-

ken out in a similar vein; cach
time the marker has been hit.

~ ‘with jitters exacerbated by mar-
. ket, . ., chartists/technicians.

ly, cach time. this: has
the-market has. gone
é focus to:

itly in better eco-
¢ than it has proba-
the | last 30 years.
T

sé. to" reflect on today’s

t economy — the U.S.

—'to figure out the rationale
Eighty-rwo percent. of

NEWS photo

THE key to hanging on to your hard-earned invest-
ment dollars during market corrections like the cur-

rent one is to stay calm.

the U: S. gro.s domestic prod-
uct (GDP) is made up of
domestic demand, only 18% is
export driven. Of this 18%,
only 14% is made up of exports
to Asia.

Stated differently, the direct
impact on U.S. GDP due to
the Asian crisis is about 2%.

’ Even Russia, Venezuela and

Brazil (the current trouble
spots) account for only 4% of
USS. exports. This is not to
detvact from the fact that cer-
taip export oriented companics
are affected, but merely to state
that at least in the US., a
strong domestic economy
would probably far outweigh

“external negatives.

Event No. 3: The
Zippergate Affair. This one
takes the cake. It is hard

to imagine anything that politi-

cians will do in office or in their
spare time that would affect the
Microsofts, Intels, Cokes and
Mercks of che world.

I guess the most important

part of these corrections we
face is that they serve as a time-
ly reminder of the fundamental
reason why we invest in equi-
ties in the first place. In the last
75 years of its history the Dow
Jones index has averaged about
a 10% return (in real dollars).

History shows that buying
the equity of the worlds great-
est companies when they are on
a fire-sale, proves extremely
rewarding over the long haul.

Please do not read my arti-
cle as an endorsement to go
and buy everything that is beat-
en down. I well and truly
believe that some stocks which
are beaten down because of
their “Asian problem” or
because of their “resource”
link, deserve to be down.

On the other hand if the
market is going to punish a

‘ock like Pfizer (with sales of

its Viagra about to take off in
Europe}, just because market
sentiment is adversely affected I
feel it’s time to load up.

Seniors find cash for
home improvements

Above all, | believe dimes of
adversity are meant to test our
souls. This is the time of our
lives, when we focus on what
truly counts to us in terms of
our goals and objectives.

[ff I am retiring in a few
years time, and going to live of F
my meoncy for potentially
another 25 years then clearly
whether the market is up or
down 25% in the near term
scarcely matters.

My own belief in the great
capitalist system which rewards
human innovation and spawns
the market leaders of tomor-
row in a “politician-proof” sort
of way is what I am counting
on for the long haul. it is after
all a system that has worked
over great depressions, world
wars, cold wars, droughts,
famines, revolutions, rcferen-
dums et all.

Pervez: H. Patel is an invest-
ment manager with Canadian
Investment Consultants (888)
Inc. Contact him at 436-3556.
The views expressed in this article
are those of the author, and not
CIC (888) Ine.

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Make a start on
will preparation

PREPARING a will is
an important part of
planning for your
future.

The Canadian Will Society
continues to offer its wial pro-
gram of will preparation for
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Since it began, the response
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Instructions for, reviewing
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society with the assistance of
qualified volunteers who pre-
pare the wills.

If you do not have minor-
aged children the society can

° Wills & Estates
e Conveyancing

stil prepare your will for you

for $60 per will. For informa-

tion contact the Canadian Will

Society at 1-604-588-8853.
tet

A seminar dealing with will
preparation and estate planning
is to take place on Tuesday ,
Sept. 30 at the Park Royal
Hotel in West Vancouver.

The Seniors’ Foundation of |
British Columbia, ‘a not’ for
profit organization, is thoes,
ing the seminar, free o!
for people interested: in ae :
ing how to prepare their wills’.
and how to plan’ to maximize”
the assets in’ their estates and

on own doorstep

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