11-FEB-1998
      Article by: David Philip Gladstone

    <> <> <> Consumer Protection / Consumer Advisory Article <> <> <>

    This Article has been written especially for 'GARY' -
    - a Victim of the Stated Interest Rate 'Shim' Game!*
    And subsequently, for all other consumers who unwittingly Succub!
    STRIP BONDS vs. GICs VS. FUNDS

      Strip Bonds:

    Strip Bonds are basically the Interest Coupons STRIPPED from Bonds.
    -They cannot be Deposit Insured.
    -There is no GUARANTEE of the Futurre Value of these STRIPS because it is
    subject to the market fluctuation for the desire of them, very much like selling
    a house sometimes in the future, and estimating value.
    -They are held in a Bank Vault and have no one's names on them.
    -They're vulnerable to theft & a Quick Turn-Over by theives due to this.
    -They represent an unpaid rate of return to be paid in the future.
    -They cannot be Deposit Insured. -They are sold using a 'Stated' Higher interest Rate than GICs.
    -They are sold by Investment Brokerage Firms and have a Commission taken.
    -They have a Projected Value of redemption for sometimes in the future.
    -They are sold by Investment Brokerage Firms & have a Commission taken.
    -They may be 'redeemed along the way,' but again subject, not to their Face
    or Stated Value, but to the Market-Attractiveness that they hold or do not hold,
    to those that would purchase them from the holder.
    - They can also be registered as RRSPs.

      GICs: Guaranteed Investment Certificate:

    GICs GUARANTEE what rate they will pay
    -They represent an stated rate of return to be paid in the future.
    -They are usually Deposit Insured, sometimes Provincially, sometimes
    Federally and Sometimes BOTH. (GICSs Almost never UN-insured.)
    - They paid an exact amount of Interest and return Capital, or the original
    investmen plus earnings, with a pre-Specified sum at a specific date.
    - GIC have become more sofisticated than first introduced. They can be
    Cashable, use Tiered Interest rates, use Simple or Compound interest.
    -They can also be registered as RRSPs.
    -Many Institutions offer GICs (aka: Term Deposits) but there
    are catches to watch out for, when comparing their Rate of Return.
    - GICs are Fully Guaranteed, and can be counted upon to deliver exactly what they promise.

      Current Example: Pure Interest rates - Compound Annual as of 11-FEV-1998

      Higher Deposits Can Earn Highere Rates. Minimum Deposit: $1,000
        << GUARANTEED - DEPOSIT INSURED! >>
      Annual Rates of Return:
      1yr:4.250%, 2yr: 4.625%, 3yr: 4.875%, 4yr:4.875%, 5yr:5.00%
      Average Annual Rate Rate of Return:
      1yr:4.250%, 2yr:4.732%, 3yr:5.117% 4yr:5.243% 5yr:5.526%
    Average Annual Rate of Return:
    -means: The Interest Rate,guaranteed, in a series of 1 year deposit, and for a
    specified number of 1 year deposits in a row, that you have to receive, in order
    to achieve the Stated Annual Compound Rate of Return.
    IE: In 5 years, at 5.00% Compund Annual Rate of Return, you would have to
    receive 5, 1 year deposits of 5.526%, each year, in order to achieve a 5.00%
    Compund Annual Rate of Return.
    This Numeric Game is where Banks, Trust Companies and Strip Bond sellers *'shim'
    sometimesvictims of the Rate-of-Return Compariuson Gate, into believing that their
    company's investment is better, to this concerned consumer.
    Also note-worthy is that Bank and Trust Company tellers, and even Bank Loan Officers
    & Bank RRSP Invetment Councillors are unwittingly giving incorrect information in these
    areas, repeating only what they've been told by their own coompany's Trainign Centre's,
    in in order to get new clients to come over to 'the winning side' much life those Life
    Insurance companies who, upon selling PROMISES OF (see small print) Amazing Cash
    Values sometime in the Future. Neither Agents nor Managers were capable nor qualified
    to figure this out to Not be the Case. Clients weren't either - tho I did warn may people.
    Results: Class Action Law Suits against Many major Life Insurance CO.s
    My WISHES: CLASS ACTION SUITS AGAINST MANY BANKS TOO!

        OK, David - Blah... Blah... Blah!

    Where are...
    THE FUNDS!???

      Now take a look at these up-to-the-date FUND Returns -

        We can suffice it to say that FUNDS Can Make you
        a Lot of Money, and they can loose a Lot of Money!
          - BUT: There ARE safer, lower-cost Funds that offer
          GUARANTEES, and Resetting of the Earnings they
          make to start New Guaranteed Levels all over again.
          And some ARE decent.
      However... Many are in fact, what I would call RAPIST Funds, even if
      they are the Most Popular, as seen on TV, everyone has them, etc.
      - Funds CAN be set up from Very Concervative to Very Risky and
      they can have every shade of whatever, in-between.
      - First we look for LOW management Fees
      - Then we look for a LOW MER / Management Expense Ratio
      - We Look for NO COST Guarantees! (WOW! Only 21 company does that!)
      - We then look for No Dividend ReINvestment Charges!
      - And now we look for Flexability without Cost! - such as change among the Funds
      in the Group ( Must be a Good Group too!) upto 4 times a year for FREE!!
      -And we Want a Very large Company who is RESPONSIVE to SERVICE & NOT just to SALES!
      - Then we Look at YOU,the Investor:
        - Will you Participate? I HOPE SO!
        - Will you Action a timely Fashion when so advised?
        - Will you take on a little learning in order to Earn More!??
        ( More than GICs, More than Bankers' Acceptance Notes, more)
        ( than Strip Bonds, more than Shadey or Shadely Sold OFF-Shores)
      - NOW, and ONLY NOW, do we look at the performance of the FUND GROUP!

      Here are the returns of MY FAVORITE FUND GROUP, as @: 11-FEV-1998:

      The Asset Allocation - a Bond & CDN Blue Chiper 3.97% in 30 days!
      The Dividend Fund, a standard Steady earner: 4:11% in 30 days!
      The CDN-Growth Fund, Very respectably - at: 8.13% in 30 days!
      The Can-EURO / Watch for the Euro-Dollar, Eh? 8.80% in 30 days!
      The Can-Emerge, who dropped similar to ASIAN: 13.43% in 30 days!
      The CDN-35 Index/a TSE-300 Index fund, did: 10.20% in 30 days!
      The Can-AM: an S&P/Standard&Poors Index Fund: 10.26% in 30 days!
      The Can-ASIAN / a Far-East Fund : VERY STRONG: 19.91% in 30 days!
      The Can-DAQ-100/a NASDAQ(technologies) Indexer: 19.03% in 30 days!
        The Bond Fund and Global-Bond were basically flat, standard right now, while the T-Bill & Money-Market Funds are not of interest at this time, other than to hold money in a very short term SAFE place, almost soley based on currect interest rates. The Elite Fund is also flat.
        NOTE: This was an excellent month for their performances as they,
        like all other Fund Groups this year, though somewhat less so,
        DID have a Rocky Bear/Bull kind of Market.
      -Clients' earning depending on their Asset Allocations (Mixtures of
      theirFunds inthe Group, ranged from -12% to +20%!)

      NOTE: Those in the -12% were holding only a small Portion of their Total Asset Allocations in Higher Risk funds, and have also done EXTREMELY WELL just the year beofre, with the HI-Riskers well still doing very respectfully with rest of their portfolio , generally speaking.

      NB: I personally am Risk Adverse, but I did put a little bit myself, into the Higher Risk allocations, having just dumped $5,000 as@# NOV-26-1997, 5 separate entities, including the ASIAN Fund, which was in Several Turmoil and, as we say in the Technical Expert Jargon on investment Broker and Consulting Service: Going Down the Tube Fast!

      - I was 'guessing' we were near a Bottom in Asian, and just LOOK at the returns Both thios month, to date, the Last 30 days (as per Above) and the Fact that as@ January 31st, 1998 - 70% of all TOP PERFOEMING Funds in ALL of CANADA, were in the Japanese / Eastern Markets!

        - And YES! I <DID> eMail this Advisory Notice to EVERYONE on my client and friends' list!

      Didn't Listen? Didn't Make those Gains!

    That's It for Now

      - Have a Great February1998, and remember...

        If you didn't do YOUR RRSP yet -
          Call ME!
            Call SOMEONE as good as ME!
              CALL NOW!
        DAVID PHILIP GLADSTONE
        - President of IFIS©
        Independent Financial & Insurance Services©
        Montreal Offices: (514) 484·7586
        Brokerage Services since 1979 - IFIS©
        eMail: dpd@oath.com
        Web Page: http://www.theoffice.net/dpg