Welcome back to 2005. Many of you have had a chance to recharge your batteries and are gearing up for a busy year.

With the start of the year comes a time we refer to as �RRSP Season.� Generally speaking, it� results in a lot of last minute decisions based on deductibility amounts and available cash on hand. Very often, we will get a call on February 28th from a frantic client who wants to make a last minute contribution.

So, if you are Feeling the Pressure this RRSP Season, our suggestion is�relax and take a good look at your strategies.

In fact, there�s no Rush.

Despite the looming RRSP deadline, there is no need to make rash decisions, or potentially mistime the market. Instead, why not put your contribution in a stable investment such as a money market fund or daily interest account before the deadline? This way, you still get your tax-deductible contribution for 2004, and you are not pressured into making an investment decision that you are not comfortable with. This will give you time to consult with your financial advisor and do some further research before making a decision.

Additionally, most companies will allow you to invest a lump sum into a money market fund, and then use an automatic dollar cost averaging strategy to transfer set amounts from the money market fund into investments of your choice. This would reduce the risk of �buying high� and allow you to gradually invest at different prices without the worry of trying to time the markets.

Try a new tactic � consider investing monthly?

Investors have up until the first 60 days of 2005 to make eligible contributions to a Registered Retirement Savings Plan (RRSP) that is deductible in the 2004 taxation year. Many investors chose to contribute monthly, either through a Group RRSP plan set up by their employer, or through individual contributions. As a result, they accumulate the contributions all year long and avoid last minute financially straining RRSP deposits. As well, the monthly programs reduce market-timing risks through the concept of Dollar Cost Averaging.

New RRSP Rules for 2005.

In the 2003 federal budget, the government announced a series of increases to the annual Retirement Savings Plan (RSP) contribution maximums (see Table 1). These increases make it easier for you to take advantage of this tax-deferred savings plan. For the 2004 tax year, you may contribute up to a maximum of $15,500 to your RSP, depending on your earned income amount in 2003.

RSP Facts & Figures

For the 2003 tax year, 6 million Canadians contributed $27.6 billion to an RSP. These contributions represented only 9 percent of the total contribution room available to tax filers in 2003.1 Check your Notice of Assessment or Notice of Reassessment from the Canada Revenue Agency for the 2003 tax year to find out your personal RSP deduction limit for 2004.

� Contribution Limit for 2004: Your maximum contribution is based on any unused contribution room you�ve carried forward since 1991 plus 18 percent of your 2003 earned income (to a maximum of $15,500), less any Pension Adjustment.
� Deadline for Contributions: You have until Tuesday, March 1, 2005 to make a contribution for the 2004 taxation year.
� Foreign Content Limit: For the 2004 tax year, the foreign content limit is 30 percent of your RSP�s book value.
� Home Buyer�s Plan (HBP): Your HBP repayment for 2004 is due by March 1, 2005. If you borrowed from your plan in 2002, this will be the first repayment of at least one-fifteenth of the amount you withdrew from your RSP under the Home Buyer�s Plan.
� Lifelong Learning Plan (LLP): Your LLP repayment for 2004 is due by March 1, 2005. If you are due to begin repayment � in the fifth year after the year in which you first received the funds from your registered plan � you must contribute a minimum of one-tenth of the amount withdrawn under the program.
� Lifetime Over contribution Limit: You may over contribute a total of $2,000 (not tax deductible) in your lifetime without penalty. After that $2,000 limit, there is a penalty of one percent per month on the excess until the over contribution is corrected.
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Financialmentor.ca Interviews Ian Machin, Vice President, Tricycle Asset Management, regarding the The Canadian Wheat Board Managed Futures Notes, Series N-11

When it comes to investing, it�s hard to satisfy your important objectives in one single investment. You want to diversify your investments, so as not to have all your eggs in one basket. You want to protect your hard-earned capital. And, of course, you want to earn a profit.

We discussed this idea with Ian Machin, Vice President, Tricycle Asset Management, regarding the The Canadian Wheat Board Managed Futures Notes

Financialmentor.ca : When I think of futures investing, I typically think of a sophisticated, fairly aggressive trading arena � basically, a very volatile environment. Is that what we can expect from CWB Managed Futures Notes?

Ian Machin:

No. In fact, the impact of managed futures as a component of an individual�s investment portfolio can be quite the opposite. Over the past two decades, money managers and leading investment consultants have discovered that diversifying with a small portion -- say 10% -- of a portfolio in alternative assets such as managed futures, historically has had two positive effects on that portfolio. It tends to increase the overall return and reduce the risk or volatility. This phenomenon is known as �The Futures Paradox�.

FM: Let�s talk about the increased returns in a minute, but first I�d like to ask you more about reducing the risk. Given the market volatility that has become the norm over the past couple of years, we�re all interested in finding diversification investments that help to smooth the ride.

IM: Managed Futures are an �alternative� asset class. That is, historically they have had a performance profile that is not correlated in any way to the performance of traditional investments such as stocks or bonds. This means that regardless of which direction your traditional investments are headed, managed futures have the ability to deliver profits. So, a key benefit of adding managed futures to a portfolio is True Diversification.

FM: Please explain the term �correlation�?

IM: Correlation simply means the relationship between one asset class and another. Being non-correlated to stocks and bonds, managed futures have a performance profile that is independent of these traditional assets.

FM: It sounds like managed futures can be a good performer when stocks and bonds are not, but what about when the capital markets and the economy are doing well? Forgetting about diversification for a moment, what kind of returns can we expect from managed futures?

IM: First, because managed futures are non-correlated to stocks and bonds, there is just as much chance of profiting in an up market as in a down market. In terms of performance, for long-term investors managed futures have provided attractive, equity-like returns. Since 1980, the key managed futures benchmark index (which is the CISDM Fund/Pool Qualified Index) has had an average annual return of 12.62% after all fees and costs1. Like most equity investments, the best way to achieve these healthy returns has been to buy and hold the product, and that�s why we�ve structured this product to be held for approximately seven and a half years. Investors do have the option of selling prior to that, but those who hold to maturity are guaranteed to receive their original investment plus any net profits from the program.

In our capacity as managers, we are always looking for ways of improving the scope of the investment. In addition to the principal guarantee, we offer a Guaranteed Minimum Yield2. So, for every $100 invested and held to maturity, investors receive back at least $103, guaranteed.

FM: How have managed futures performed over the past year?

IM: This has been a difficult year for the managed futures industry so far, primarily due to the choppy, trendless behaviour of the markets in which we invest. Every asset class has its difficult periods, and we�re not seeing anything here that we have not seen before. On that basis, we�re optimistic about the future.

FM. Earlier, we mentioned principal protection by the Government of Canada, which is one of the most compelling aspects of this investment.

IM: As an alternative asset, it was important to provide an extra level of comfort in terms of the downside, and so the CWB Notes are guaranteed by the full faith and credit of the Government of Canada, when purchased at issue price and held to maturity2. The CWB is AAA-rated3, which is the highest credit rating possible in Canada.

FM: Now, I know in managing these programs you use professional futures trading firms all over the world. Is this investment then considered foreign content? p> IM: No. It is Canadian content and is 100% RRSP and RRIF eligible. These Notes are suitable for both RRSP and non-registered investment portfolios and are offered as a no-charge stand-alone RRSP, as well.

FM: So, global exposure within your RRSP is another benefit to consider. Well, we�ve got a pretty good handle on the benefits of this investment, but maybe we should take a step back here. What exactly are �Managed Futures�?

IM: Managed futures are the investing in futures contracts by professional managers who trade in the global futures markets, as either buyers or sellers of real assets such as gold, silver, grains, crude oil and natural gas, as well as financial assets such as government bonds and currencies. Since commodity prices are always fluctuating, our traders have a constant opportunity to profit regardless of the economy and the ups and downs of stocks and bonds.

FM: Any final advice for a listener who is interested in CWB Managed Futures Notes, Series N-11?

IM: First, we recommend that you check with your financial advisor to discuss an appropriate allocation that suits your investment needs. We believe that over the long term, you will experience enhanced returns and reduced volatility in your overall portfolio, with the added assurance that � if held to maturity � your original investment and the Guaranteed Minimum Yield is protected by the full faith and credit of the Government of Canada2.

FM: Thanks for your time, Ian.

Please note that the views shared by Ian Machin are simply his opinion. We are not endorsing this product nor do we recieve a compensation for placing this article about the CWB product. This interview was strictly informational. ______________________________________________________________________________

Economic Outlook for 2005

Last year turned out to be another good year for Canadian equity investors as the S&P/TSX Composite Index ended the year up a healthy 14.5% with nine out of 10 sectors finishing in positive territory. The energy sector, driven by rising prices for oil and gas, led the index, followed by financials and telecommunications services. Among income markets, the income trust segment was one of the strongest performing sectors, with energy trusts posting the greatest gains.

For Canadian investors though, this pretty picture was marred by the continued rise in the Canadian dollar against the U.S. dollar, which offset some otherwise solid returns among global markets. In Canadian dollar terms, the MSCI World Index posted a modest gain of 6.9% for the year while the MSCI EAFE Index (Europe, Australia and the Far East) posted a respectable 12.0% return. The strongest region was the Pacific area excluding Japan, while emerging markets also provided solid returns.

With the higher Canadian dollar and soaring energy prices acting as brakes on the economy, the Bank of Canada decided against raising interest rates in early December. As a result, short and longer-term interest rates in Canada have remained stable, supporting bond prices. Meanwhile, the spread, or the difference in yield, between corporate bonds and government issues continued to tighten, reflecting the fact that continued economic growth is benefiting corporate issuers.

Looking ahead, the key for equity markets will be for investors to get comfortable with the idea that global expansion could turn out to relatively long-lived as was the case in the 1990s. Other major central banks like the European Central Bank and the Bank of Japan are not likely to follow U.S. Federal Reserve rate hikes in 2005 because their economies have been more sluggish and they probably do not wish to encourage further gains in their currencies. Therefore, overall monetary policy should tighten somewhat in 2005, but not enough to trigger recession concerns or major market dislocations.

The U.S. dollar will continue to be an important concern for investors. It is possible that 2005 will finally see some significant adjustment in the Chinese yuan and other Asian currencies. That could take some of the pressure off the euro and other freely floating currencies like the Canadian dollar, which have so far taken the brunt of the trade adjustment process.

Overall, the investment climate remains positive for moderate equity growth through 2005.

, If we\\\\'ve made you think, or you have any questions, email us

Sincerely,

=jk=

John Klotz,BA,CFP,CLU,CH.F.C, RHU, TEP
Vice President - Financial Services
LMS Prolink Ltd.
Phone (416)-644-7700
Toll Free 1-800-663-6828 ext. 7700
Email: john@financialmentor.ca