Monthly Archives: March 2011

Odette Morin

Prepare for a Natural Disaster

The earthquake and tsunami in Japan is a raw reminder that we need to prepare for natural disaster. No matter where we live, an earthquake, hurricane, tornado, fire, flood or terrorist act can happen sooner than you think. Here is a list of what you can do to be prepared and protect your financial information and assets. 

In addition to a first aid kit, a water supply, flashlights, battery-operated radio, protective clothing, and so on, you should also have a grab bag ready at your door with the following information: 

  • Your wallet or purse that contains your picture ID, cash, credit cards, and medical insurance cards. Have a routine place where these items are stored so you can grab them quickly and go. If you have a passport, know where it is so you can grab that quickly as well.
  • A few blank cheques and a stash of cash. Put this in your grab bag, and don’t touch it for day-to-day spending. The reason: The amount of cash you normally carry probably gets low now and then, and you can’t count on being able to get to an ATM, and, even if you could, it might not work if the power is down.
  • Your cell phone, smart phone, and tablet device, such as an iPad. Include the charger, but it’s also smart to have a hand-cranked or solar powered battery charger. As a matter of routine, always plug these devices into their chargers before going to bed at night, so they’re always fully charged in the morning.
  • A list of account numbers and contact information for all your insurance policies, such as homeowners, automobile, earthquake, health, disability and life insurance.  Put this information on both a physical piece of paper and in an electronic device such as a smart phone. You may even give me a copy to keep in your file. The reason to have it on a piece of paper? It’s quite possible that you might not have power for several days, and your cell phone battery could get used up. 
  • A list of account numbers and contact information for all regular payment obligations that you have, including your mortgage, rent, car, insurance, and utilities. Ideally you’d want payments to continue during the emergency, and automatic payments from your checking account are a big help. In many cases, you might get forgiveness during an emergency, but you probably shouldn’t count on it.  
  • Copies of medical directives and your power of attorney.

Here are a few, other, non-grab bag steps to take:

  • Make sure all important documents, such as your will, deeds, insurance policies, etc., are stored in a safe place, such as a water-proof and fire-proof box or a safe deposit box. 
  • Now might be a good time to review your insurance policies. Determine exactly what your coverage would be in the event of possible disasters, and make changes if you find that the coverage falls short.  
  • Be aware of whether your income would stop during a disaster. This might not be a problem for many people who rely on a salary, pension, annuity, or  government benefits. But many other people are self-employed or are paid by the hour, and income could come to a halt. Make sure you have an adequate emergency cash fund that could cover your obligations if your income was stopped for a few months.  
  • Keep “buffers” on your credit cards — don’t ever charge them to their maximum limit, so you’ll have funds available should you need them.  
  • Similarly, make it a habit to always have at least a quarter tank of gas in your car — and preferably more. Think about what would happen if you couldn’t fill up your car for several days.

Putting this all together may sound like a pain, but think about how much easier it would be if you had all of this ready if and when a natural disaster occured.

Odette Morin

Economic Impact of Japan’s Natural disaster

The devastating earthquake and tsunami that hit Japan last week is tragic.  It is  shoking and sad to see the pictures reported in the news everyday.  The Japanese people have a long way to recover from losing loved ones and rebuilding their homes and lives.  And  now, the news of radiation leaks only add to the horror and worry.

I can’t help but feeling strange to be writing about the economical impact of these events after such tragedy but it is my job to report on events which may affect your money. 

Anthony, Terry and I have read a number of opinions and have been briefed by several analysts and managers. Here is a summary of several opinions on the situation:

 Chuk Wong, BBA, MSc, CGA, CFA Manager of Dynamic Global Value funds

  • “First and foremost, investors with exposure to Japan should avoid knee-jerk reactions. History suggests that financial markets tend to revert to prevailing cyclical and structural trends much sooner than expected.” The Nikkei index lost 11% in one day on Monday to rebound by 5% the next.  It is best to avoid making moves during periods of high volatility. 
  • “Any direct impact on the global economy and Japan neighbouring countries including China and South Korea should be limited.”
  • “Damage to nuclear power pants will likely delay expansion of that energy resource.  Liquid gas is   on line to take up the slack.”
  • “Efforts by the Japanese government to rebuild…will likely cause the country’s structural fiscal deficit to deteriorate in the mid-term.”
  • “Japan is supplier to approximately 40% of the globe’s electronic components.  The disaster will likely cause hiccups in the supply chain. Taiwan and South Korea stand to benefit.”
  • Chuk’s fund is currently underweighted in Japan because of the country’s less attractive fundamentals. He intends to keep it this way for now.

 By The Canadian Press – Monday March 14, 2011

  • analysts say the devastating earthquake and tsunami that hit Japan will likely have little impact on the global and Canadian economies. 
  • Despite the inter-connectedness of the global economy, analysts believe that most of the short-term economic impact will be confined to Japan. 
  • And longer-term, the perversity of economics suggests both global and Japanese gross domestic product will likely get a boost from the massive rebuilding effort that will be required.  That means Canadian exporters of copper, oil, lumber and other materials may benefit from Japan’s reconstruction.
  • The real danger, say economists, is that the Japanese disaster, on top of the debt crisis in Europe and turmoil in the Middle East will be the last straw that snaps global confidence.  But they say that danger appears slim at the moment.

 TD Economics

  •  Japan’s earthquake and tsunami is an enormous human tragedy.  However, the economic impact is more limited.
  • The disaster has led TD to cut Japan’s economic forecast for 2011 from 1.9% to 1.4%. 
  • However, rebuilding will add to economic growth, lifting the real GDP forecast for 2012 to 1.6% to 2.0%.
  • The fiscal cost of rebuilding will not create a sovereign debt problem for Japan.
  • he near-term weakness in Japan will have limited impact on the world economy or the economies of Canada and the United States.

Stay tuned as we will be bringing you updates via blog posts as the event develops.  Please make sure to read my week next blog post on how to financially  prepare for natural disaster.

In the meantime, please do make a tax deductible donation, if you can, to organizations who provide help and assistance to those who lost everything and need our help in Japan.