Financial Freedom: Loonie reaches highest level since November

Financial Freedom: Loonie reaches highest level since November: TORONTO (Reuters) - The Canadian dollar reached parity with its U.S. counterpart for the first time in nearly three months on Thursday as ...

Loonie reaches highest level since November

TORONTO (Reuters) - The Canadian dollar reached parity with its U.S. counterpart for the first time in nearly three months on Thursday as new U.S. jobless data and Wednesday's move by the U.S. Federal Reserve to keep rates low until 2014 signaled the U.S. economic recovery may be faltering.
The Canadian currency breached parity after the U.S. central bank said it would likely keep interest rates near zero until at least late 2014 and Fed Chairman Ben Bernanke pledged to embark on a further round of so-called quantitative easing, or QE3, if warranted by economic conditions.
Thursday's U.S. jobless data added to the doubt, as weekly claims rose to 377,000, above a consensus forecast for 370,000.
"Canada is definitely feeling the positive effects of a weaker U.S. dollar," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets. "This will continue assuming that story continues."
At 10:25 a.m. (1525 GMT), the Canadian currency stood almost even with the U.S. dollar after hitting a session high at C$0.9990, its strongest level since November 1.
On Wednesday, the currency finished at C$1.0035 to the U.S. dollar, or 99.65 U.S. cents.
The dollar's rally to parity is not good news for the Canadian exporters as it makes their goods less competitive in the U.S. market.
Gavsie said Canadian dollar rally has sparked increased buying of the greenback and selling of Canadian dollars by the Canadian business sector. He added that Canadian exports to the United States have been strongest when the currency is in the C$1.02 to C$1.04 range.
Gavsie said the Canadian dollar will likely trade around parity over the next week or two, but said pressures from Europe may then halt its momentum.
"As we do see some concern over the rest of Europe, outside of the Greek story, some of the risk-off aspects will come back into play and we will see some U.S. dollar strength," Gavsie said.
Market focus stayed on Greek debt on Thursday. Talks on a debt swap deal with the country's private creditors were set to resume as the clock ticks down to a March deadline, when Greece faces major bond redemptions.
Canadian government bond prices were mixed, with the one-year bond up 1 Canadian cent to yield 0.970 percent. The 10-year bond was unchanged at a yield of 2.044 percent.

About Fixed Income Investments

Protect your principal and generate interest income. If you're looking for a secure long-term investment that will generate interest income, take a look at fixed income investments. We can help you choose from a wide range of options to build a well-balanced investment plan and, if held to maturity, a guaranteed return. Canadian investors in the know understand that fixed income investments are an integral part of every well-balanced portfolio. They provide safety of principal, regular interest income, and the potential to generate capital gains whenever interest rates move lower. Fixed income investments also help to reduce the overall risk of your investment portfolio. Depending on the issuer, they can provide a guaranteed fixed return when held to maturity and are a source of stable cash flow. If you are an active investor who currently owns stocks or equity mutual funds, fixed income investments can add stability to the value of your portfolio because of the potential return they provide. There is a wide variety of fixed income investments includingGovernment of Canada and Provincial Bonds, Federal Crown Corporation Bonds, corporate bonds, stripped bonds ("strips")and mortgage-backed securities. All are fully marketable and can be sold at market value at any time, should you need access to your funds. Fixed income investments can be purchased from your local TD Canada Trust Branch, throughTD Waterhouse, or from TD Evergreen Investment Services. Term Deposits and Guaranteed Investment Certificates (GICs) are another form of fixed term investment. They offer a specific rate for a pre-determined period of time. Government-Issued Fixed Income Investments Government-Issued Fixed Income Investments are fully guaranteed by the issuer for both principal and interest--no matter how much you invest. They are essentially risk-free if held to maturity and also provide the flexibility of being marketable, so that you can sell your investment before maturity if you need to. You have a wide choice of investment terms, ranging from one year to 30 years. Each of Canada's ten provinces issues their own bonds. While provincial bonds carry a greater credit risk than Government of Canada and Federal Crown Corporation Bonds, they represent some of the safest investments available.Provincial bonds  also provide the flexibility of being marketable securities, which can be sold prior to maturity at prevailing market prices. Many government bonds can be purchased in either U.S. or Canadian denominations, and are considered Canadian content in your RSP or RRIF. The yields on these issues are typically expressed as a spread over Government of Canada benchmark bond yields.

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Financial Freedom: TOP 10 STOCKS FOR 2012

Financial Freedom: TOP 10 STOCKS FOR 2012: Warren Buffett just bought 9.3 million shares of one of our 10 favorite stocks for 2012. Watch the 2 minute video below for more on Buffett'...

TOP 10 STOCKS FOR 2012

Warren Buffett just bought 9.3 million shares
of one of our 10 favorite stocks for 2012.

Watch the 2 minute video below for more on
Buffett's new holding... plus nine other stocks
set to crush the market in 2012.

Click and paste this link to view video:

http://web.streetauthority.com/land/best-stocks/top10-2012-gc-np2.asp?ref=gaw

Financial Freedom: Boomers' $3 Trillion Nest Egg

Financial Freedom: Boomers' $3 Trillion Nest Egg: Americans aged 62 and older had accumulated $3.19 trillion in home equity by the end of the third quarter of 2011, according to data r...

Boomers' $3 Trillion Nest Egg

Americans aged 62 and older had accumulated $3.19 trillion in home equity by the end of the third quarter of 2011, according to data recently released by the National Reverse Mortgage Lenders Association (NRMLA). During the same quarter, home equity increased by $46 billion, reflecting stabilization and improvement in home prices. The $3.19 trillion is the net result of a $4.2 trillion increase in aggregate senior housing values and a mortgage debt of $1.02 trillion.

This is good news for us older folks, as home equity often represents seniors' largest financial asset, frequently surpassing the value of 401(k), IRA and retirement savings combined. As a result, one of the most important issues facing aging boomers will be if -- and how -- to use their home equity to help secure their retirement.

Reverse mortgages are one way to use your home equity in retirement. You can borrow against the equity in your home without having to make monthly payments as required when you have a traditional mortgage or home equity loan. Under a reverse mortgage, funds are advanced to you, and interest accrues on this balance. The outstanding balance isn't repaid until you leave the home, sell it or pass away. You can take loan proceeds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as you continue to live in your home.

According to the NRMLA, 99 percent of the reverse mortgages offered in America are home equity conversion mortgages (HECM) that are insured by the U.S. Department of Housing and Urban Development (HUD). To date, more than 725,000 senior households have utilized an HECM. 

Possible uses of a reverse mortgage include:

-- To pay for high medical or long-term care bills
-- To pay for needed repairs on your home
-- To provide a monthly payment to supplement your retirement income
-- To buy a new home

As with conventional mortgages, you can get a reverse mortgage with a fixed or variable interest rate. Bear in mind: No matter what type of reverse mortgage you get, interest rates are generally higher than conventional mortgage rates. For example, one proprietary calculator shows a fixed reverse mortgage rate with an annual percentage rate (APR) of 5.95 percent, while conventional 30-year fixed mortgages are in the 4 percent territory right now.

Here's one example of how a reverse mortgage might work, according to an online calculator offered by the NRMLA. A 70-year-old couple with a paid-for home worth $300,000 could get a monthly payment of $986 for as long as they live in the home or a single sum payment of $172,564. The calculator shows a variable interest rate of 4.11 percent; at that rate, the outstanding loan balance would grow to $211,037 in five years and $258,086 in 10 years. These amounts would be repaid to the bank if the house were to be sold or the owners pass away.

The monthly income shown by this example would certainly help supplement Social Security and other retirement income, but most likely it won't compensate for not having any other retirement savings. I'd not count on using a reverse mortgage as an excuse not to save as much as possible for your retirement years.

Before you snap up a reverse mortgage to secure your retirement, learn all you can about its terms and conditions. HUD, the NRMLA and the Federal Trade Commission (FTC) all offer excellent educational websites on the topic. In particular, make sure you understand the important conditions, such as upfront fees and insurance premiums, which can range from two to five percent or more of your loan amount.

You should also consider other ways to use your home equity to secure your retirement, including:

-- Renting your house and using the monthly income to cover rent on a smaller, cheaper place,
--  Selling your house and investing the proceeds, or
-- Taking on a roommate by renting a room or two to realize some income.

If you aren't purchasing long-term care insurance, then I'd seriously consider holding your home equity in reserve for the day when you might incur high bills for long-term care. At that time, you can take out a reverse mortgage or home equity loan. If you don't ever need long-term care, then the home equity will provide a legacy to your children. 

As always, take the time to investigate all of your options. You'll sleep better at night, knowing that you're making informed decisions.