The Importance of Financial Planning

[Upbeat music]

[Sylvia Ellis

Senior Estate Planning Advisor

CIBC Private Wealth – Wood Gundy]

People make plans for vacation travel. They also make plans for home renovations,

weddings and even shopping trips. Why is it then, that many people don’t have a plan

for their most important long term financial decisions?

[The Importance of Financial Planning

(and Why It Doesn’t Have to Be Complicated)]

Hi, my name is Sylvia Ellis. I’d like to talk to you about the importance of financial

planning and why it doesn’t have to be complicated.

Financial planning can seem daunting. You have to integrate so many factors: income,

spending, savings, assets, liabilities, risk tolerance, family situation, goals, the list is

long indeed! All of these need to fit and be coordinated with each other for your

financial plan to work. It is worth the effort.

[A good plan will help you -

x save enough money to invest so you reach your goals

x eliminate, reduce, and defer income taxes

x invest your money properly

x protect your family against financial losses from death, disability or serious

illness and other risks, and

x make sure your estate is distributed according to your wishes.]

A good plan will help you:

x save enough money to invest so you reach your goals

x eliminate, reduce, and defer income taxes

x invest your money properly

x protect your family against financial losses from death, disability or serious

illness and other risks, and

x make sure your estate is distributed according to your wishes.

As a client, you will know from Stan’s monthly Perspectives articles on Behavioral

Finance, that a good plan can help you avoid serious mistakes in your finances and

investing.

Because financial planning can be complicated, it’s human nature that people don’t

even get started.

[Image of a man behind a computer with his hands on his head in frustration]

Or if they create a plan, they get overwhelmed putting it into effect, and let it become

outdated. Meanwhile, taxes, inflation and the wrong investments limit or diminish their

wealth.

We’ve found the easiest way to avoid being overwhelmed with planning is to break it

down into manageable, bite-sized pieces. Don’t try to do everything at once; focus on

what’s important and urgent. And treat it as an on-going process rather than a one-time

event. That way, you can always make solid progress on a schedule and time-frame

you can work with.

At The Stan Clark Financial Team we use a simple and logical four-step cycle:

[ Stet 1:

Clarify Your Situation and Your Goals]

Step one, clarify your situation and your goals.

This is where we take the time to discover, and rediscover, what you are about: your

family, your work, your needs, goals and dreams. Like a trip, you need to know where

you are and where want to go to figure out how to get there.

[ Stet 2:

Create a Personal Financial Plan]

Step two, create a personal financial plan.

Once we clearly understand your situation and goals, the next step is to put numbers to

everything. We then run it through our customized Personal Financial Planning

program, which was developed by, and is unique to, our team. This will help you answer

important questions such as: When can I retire? How much retirement income will I

need and where will it come from? How much should I be saving and investing? What

size estate will I leave my family? From here, we review all of your financial affairs and

identify the top priorities for you and us to act on.

[ Stet 3:

Customize Your Investments to Fit Your Plan]

Step three, customize your investments to fit your plan.

Your investments are an important tool to help you achieve your life goals, so we need

to get these on the right track as soon as possible. Together we review your financial

plan and

determine the strategies and guidelines we will use to best manage your investment

portfolio. We then monitor your portfolio, make necessary changes and report to you

regularly.

[ Stet 4:

Complete Your Financial Action Plans]

Step four complete your financial action plans.

We then work through the priorities identified in your financial plan on a schedule

suitable to you.

Once we’re finished, we go back to Step 1 where we review your situation and goals

and how they have progressed relative to your last plan and start the process over

again. We recommend doing this every year and at least once every two years – or

whenever your personal circumstances change significantly.

We’ll reach out to you when it’s time to schedule a review but are happy to update your

plan any time you’d like.

Planning helps avoid rushed, ill-considered and emotional decisions. Anything that’s

important to you deserves to be well-planned, including your finances!

I invite you to learn more about our unique financial planning process, and also about

our team uses behavioral finance, asset allocation and our exclusive rules-based

investing strategies to help grow and protect your wealth.

You can find more about all of these, including summary videos on each by Stan, Tom

and Mike under the “Our Perspectives” section of our team’s website. And please

contact us by phone or email if you have would like to discuss how any of this applies

to your specific situation.

[CIBC Logo]

[CIBC Private Wealth

The Stan Clark Financial Team]

[CIBC Private Wealth consists of services provided by CIBC and certain of its

subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc.

Insurance services are available through CIBC Wood Gundy Financial Services Inc. In

Quebec, insurance services are available through CIBC Wood Gundy Financial

Services (Quebec) Inc. The CIBC logo and “CIBC Private Wealth” are trademarks of

CIBC, used under license. “Wood Gundy” is a registered trademark of CIBC World

Markets Inc.

This information, including any opinion, is based on various sources believed to be

reliable, but its accuracy cannot be guaranteed and is subject to change.

Sylvia Ellis is a Senior Estate Planning Advisor with CIBC Wood Gundy in Vancouver.

The views of Sylvia Ellis do not necessarily reflect those of CIBC World Markets Inc.

Clients are advised to seek advice regarding their particular circumstances from their

personal tax and legal advisors

If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.]

Asset Allocation – Your Most Important Investment Decision

[Upbeat music]

[Tom Cowans

Portfolio Manager & Wealth Advisor

CIBC Private Wealth – Wood Gundy]

With investing, your first and most important decision is how to divide your money into

different types of assets.

Hello, my name is Tom Cowans, and I’d like to talk about Asset Allocation – your most

important investment decision.

[Asset Allocation:

Your Most Important Investment Decision]

Most investments can be considered one of two basic asset classes: equities or fixed

income.

[Graphic of a balanced seesaw, with the titles Equities (Stocks) and Fixed Income

(Bonds) on opposite sides.]

These are also called stocks and bonds, different words for essentially the same thing.

Equities and fixed income differ greatly. The balance greatly affects the risk and

return of your portfolio so you need to focus on this first. With fixed income you are

usually paid a fixed rate of interest with the principal to be repaid at maturity. Fixed

income varies by who is guaranteeing the payments and also by the term, the length of

time your money is tied up. Fixed-income investments include things like Savings

accounts, GICs, bonds and preferred shares.

The main benefit of fixed income is your return is more certain and known in advance.

The main drawback is it’s often not that high and is eroded by inflation. So, your “real”

return, after inflation, is uncertain and could be much lower than you expected.

[Image of a business meeting with 5 individuals at a table, 2 of them are shaking hands]

[For any one company, future profits are uncertain.]

[Graphic of 10 unidentified companies with different line graphs showing their

unidentified profits and losses]

[If you look at all companies together, profits are more stable]

Equities represent ownership in businesses. Owners of stocks own a share of the profits

of companies; which ultimately determine their value. For any one company, future

profits are uncertain - every company faces competition. However, if you look at all

companies together, profits are more stable.

[Animation showing profits of one company’s line graph cancelling out the loss of

another company line graph, leaving 6 line graphs remaining, all with profit line graphs

ascending.]

[One line graph ascending showing overall profits increasing]

One company's decline is usually offset by another company's gain.

[A column graph with the heading ‘The U.S. S&P 500 group of companies have never

experienced a negative year of aggregate earnings”.

The Y-axis has dollar values from $0 ranging to $250 at the top. The X-axis shows

years in 10-year increments from 1871 to 2021. The column graph depicts the slight ups

and downs but is consistently trending upwards. From 1871 to 1961, the columns are in

the range of$0-$50. From 1961-2001 the columns are in the range of $50-$100. From

2001-2011, the columns are in the $100-$150 range. From 2011-2021, the columns are

range from $100 to just over $200 at the peak.]

In fact, as shown by research from the economist Robert Shiller, since good data

became available the largest 500 public companies in the U.S. have never had a

negative year of earnings.

Aggregate earnings fluctuate due to the business cycle. But declines typically recover

quickly as companies adjust their businesses.

Over the longer term, earnings on equities are usually higher than the interest on fixed

income and provide a long-term hedge against inflation.

They also benefit from improvements in productivity as is shown by the upward trend in

their “real” earnings.

[A chart with two-line graphs with the heading “Real Growth from $1000 – 1871-2023”

On the Y-axis, the dollar value ranges from $100 to $100,000,000. The X-axis shows years,

ranging from 1870-2023, increasing by 8 years each increment. The stock line graph shows

a steady increase from $1,000 in 1870 to nearly $100,000,000 in 2023. Along the stock line

graph, diƯerent events are marked throughout the years – “The end of WWI, Spanish Flu”,

“Great Depression”, “U.S. Enters WWII”, “End of WWII”, “OPEC Oil Crisis”, “Dot Com

Boom”, “Dot Com Bust”, “Global Financial crisis”.

The bonds line graph shows less of an increase, from $1,000 in 1870 to approximately

$15,000 in 2023.]

When we look at how stock returns have compared to bonds in the past, we see that stocks

are the clear winner over the long run.

Over the past 150+ years, after inflation, stocks have returned over 1000 times as much as

bonds.

[A chart with two-line graphs with the heading “Real Returns for 1 Year – 1871 to 2023” The

Y-axis has values beginning at -40 and increasing by 20 each increment to 100. The X-axis

shows years, beginning in 1871 increasing by 5-year increments ending in 2021.

A formula to the side shows:

Real growth from $100,000

Stocks show an average of $7,416. The best at $79,780. The worst at $35,025 and a

negative of 31%

Bonds show an average of $2,400. The best at $23,764. The worst at $13,636 and a negative

of 29%]

However, if you look at annual returns we see stocks are more volatile. If you need money

for spending in a year’s time, stocks would clearly be riskier than bonds. But what about

the money you aren’t planning to spend in the next year?

[A chart with two-line graphs with the heading “Average Annual Real Returns for 10 Years –

1871 to 2023” The Y-axis has values beginning at -40 and increasing by 20 each increment

to 100. The X-axis shows years, beginning in 1881 increasing by 5-year increments ending in

2021.

A formula to the side shows:

Real growth from $100,000

Stocks show a median of $112,165. The best at $397,063. The worst at $33,289 and a

negative of 6%

Bonds show a median of $19,953. The best at $119,849. The worst at $30,164 and a

negative of 25%]

As you look at longer and longer time horizons and consider the eƯects of inflation, stocks

look better because returns compound faster and risk falls relative to fixed income.

If you can invest for 10 or more years, the chances of a negative real return are considerably

lower than that of bonds. Bonds turn out to be riskier than stocks in the long run once you

take inflation into account.

[A chart with two-line graphs with the heading “Average Annual Real Returns for 20

Years – 1871 to 2023” The Y-axis has values beginning at -40 and increasing by 20

each increment to 100. The X-axis shows years, beginning in 1881 increasing by 5-year

increments ending in 2021.

A formula to the side shows:

Real growth from $100,000

Stocks show a median of $308,811. The best at $1,092,667. The worst at $13,418 and

a negative of 0%

Bonds show a median of $49,129. The best at $295,415. The worst at $29,995 and a

negative of 15%]

And when you look at 15 or 20 years or longer, stocks look better yet. Over 20 year

periods, the worst return for stocks was a profit of $13,000 above inflation, compared to

a nearly

$30,000 loss for bonds.

[The time horizon of your money is critical in determining the right asset allocation.]

So, the time horizon of your money is critical in determining the right asset allocation.

Short term needs should be mostly in fixed income but money for longer-term needs

can have more invested in equities.

[A chart with six-line graphs with the heading “Best Mix Equities Percentages” The Yaxis has values beginning at 0.0% and increasing by 10.0% each increment to 100.0%.

The X-axis values is the “Holding Period (years), starting at 1 increasing by 2 year

increments to 17.

The line graphs are labelled, “Aggressive”, “Tolerant”, “Moderate”, “Prudent”,

“Conservative”, and “Minimum Risk”.

Aggressive begins at 30.0% at year 1 and increases to 100.0% between years 3 and 5.

Tolerant begins at 10.0% at year 1 and increases to 100.0% between years 5 and 7.

Moderate begins at 10.0% at year 1 and increases to 100.0% between years 5 and 7.

Prudent begins at 10.0% at year 1 and increases to 100.0% by year 9.

Conservative begins at 10.0% at year 1 and increases to 100.0% between years 11 and

13. Minimum Risk begins at 5.0% at year 1 and increases to 100.0% by year 17.]

Our team thoroughly analyzed risk and return since 1871 and determined the Best Mix

Equities Percentages for six different levels of risk and for holding periods ranging from

1 to 30 years.

We then built into our Personal Financial Plan, unique to our team, a process to

determine an overall asset mix that is ideal for you, based on your specific future plans.

We also consider your comfort level with volatility to ensure your equities target is

properly customized to you.

Do you remember your last review meeting and all the time we spent discussing your

goals and vision for the future? Well, that was important work and time well spent

because we need to clarify these in order to get your asset allocation right.

Sylvia has a video titled “The Importance of Financial Planning” that explains how it all

ties together. If you haven’t done so already, be sure to check it out.

Once your asset allocation mix is determined the key is to then stick closely to the

chosen target. As shown by research in Behavioral Finance, this helps us avoid the

mistakes and losses that come from trying to time the market’s ups and downs.

Hopefully you’ve been reading Stan’s Perspectives articles or even seen his video on

behavioral finance and how it is at the core of the work we do together.

Our final point on Asset Allocation and how we work with you to get it right is to

remember your situation changes over time, and your ideal Equities Target can also

change. That's why it's important we do regular reviews of your financial plan to make

sure you stay on track. We’ll usually reach out to you when we think it’s time to

schedule a review, but we are happy to update your plan any time you’d like.

I also invite you to learn more about Asset Allocation and how our team incorporates

behavioral finance and our unique financial planning and rules-based investing

strategies to grow and protect your wealth. You can find more about all of these,

including summary videos on each by Stan, Sylvia and Mike, on the “Our Perspectives”

section of our team’s website.

And please contact us by phone or email if you would like to discuss how any of this

applies to your specific situation.

[CIBC Logo

CIBC Private Wealth

The Stan Clark Financial Team]

[Best Mix Equities Percentages are based on the calculations of the Stan Clark

Financial Team.

CIBC Private Wealth consists of services provided by CIBC and certain of its

subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc. The

CIBC logo and “CIBC Private Wealth” are trademarks of CIBC, used under license.

“Wood Gundy” is a registered trademark of CIBC World Markets Inc.

This information, including any opinion, is based on various sources believed to be

reliable, but its accuracy cannot be guaranteed and is subject to change. CIBC and

CIBC World Markets Inc., their affiliates, directors, officers and employees may buy,

sell, or hold a position in securities of a company mentioned herein, its affiliates or

subsidiaries, and may also perform financial advisory services, investment banking or

other services for, or have lending or other credit relationships with the same. CIBC

World Markets Inc. and its representatives will receive sales commissions and/or a

spread between bid and ask prices if you purchase, sell or hold the securities referred to

above. © CIBC World Markets Inc. 2025.

The contents of this video are for informational purposes only and are not being

provided in the context of an offering of a security, sector, or financial instrument, and is

not an endorsement, recommendation, or solicitation to buy, hold or sell any security.

Commissions, trailing commissions, management fees and expenses all may be

associated with mutual fund investments and the use of an asset allocation service.

Please read the prospectus of the mutual funds in which investment may be made

under the asset allocation service before investing. Mutual funds are not guaranteed,

their values change frequently and past performance may not be repeated.

Tom Cowans is a Portfolio Manager and Wealth Advisor with CIBC Wood Gundy in

Vancouver. The views of Tom Cowans do not necessarily reflect those of CIBC World

Markets Inc.

GIC - For more information about this product, please contact your Investment Advisor.

If you are currently a CIBC Wood Gundy client, please contact your Investment

Advisor.]

Why We Use Rules-Based Strategies to Invest in Equities

[Upbeat music]

[Michael Chu

Portfolio Manager & Senior Wealth Advisor

CIBC Private Wealth – Wood Gundy]

Investors who disengage their emotions when they make their investment decisions stand a much

better chance of building wealth with returns that outperform both inflation and the market

averages.

[Why We Use Rules-Based Strategies to

Invest in Equities]

Hello, I’m Michael Chu and I’d like to talk about why our team uses rules-based strategies to

invest directly in individual stocks.

Historically, the stock market has generated a better return than almost any other investment,

providing opportunities for individuals to participate in the profits of a wide range of businesses.

[Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation.]

Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation. But many investors have not achieved these returns.

One of the main reasons is that investors generally use a subjective approach to investing. As our

client you’re familiar with Stan’s monthly Perspectives articles on Behavior Finance where he

emphasizes research that behavioral finance has taught us about the drawbacks of using a

subjective approach. A subjective approach is susceptible to emotions and biases, which can

lead to traps like relying on “gut feelings”, “hot tips” and following the crowd. This results in lower

returns over the long term.

Stan has also created a video on this – if you haven’t seen it be sure to check it out.

[In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.]

In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.

[There are three main types of objective factors:

VALUE

MOMENTUM

QUALITY]

There are three main types of objective factors: value, momentum and quality.

[In the graphic, VALUE is highlighted with the bullet points:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend]

Stocks with good value are generally those which have low prices compared to underlying

company fundamentals such as:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend

[In the graphic, MOMENTUM is highlighted with the bullet points:

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.]

Stocks with good momentum are generally those that have surprised by doing better than

expected. For example,

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.

Stocks with good quality are generally those with strong profitability, growth and safety.

[In the graphic, QUALITY is highlighted, with the bullet points:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.]

Examples of quality measures are:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.

Research has shown that stocks with good value, momentum or quality tend to produce returns

averaging several percent above the market average. And if you combine various factors, the

results are even better.

[The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.]

The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.

[Canadian Strategies

- High Yield (HY)

- Income (In)

- Value (VL)

- Multi-Screens (MS)

- Predictable Growth (PG)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

U.S. Strategies

- High Yield (HY)

- Asset Value (AV)

- Value (VL)

- Earnings Value (EV)

- Multi-Screens (MS)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

International Strategies

- Developed Markets

- Emerging Markets]

We created eight separate strategies for Canadian stocks, eight specifically for US stocks and two

for international stocks.

Each strategy uses a different combination of factors.

[In the graphic, Income (In), Predictable Growth (GP) and Multi-Screens (MS) are highlighted]

For example, our Income Strategy focuses on dividend yield, our Predictable Growth Strategy

focuses on price-to- earnings ratios, while our Multi-Screen Strategy combines a wide range of

factors.

Using 18 strategies is like having 18 money managers to choose from, each having a good longterm track record, and each having a different approach for evaluating stocks. Diversifying by

strategy, helps produce more consistent results and reduces risk.

Each strategy provides us daily with its ranking of stocks and which ones it recommends to buy,

hold or sell. When we put together your portfolio, with 18 strategies to choose from, we are able to

create a well-diversified portfolio for you while choosing the top rated companies from any

strategy.

[Animation showing 3 folders in a line that have the titles, U.S. Strategies, Canadian Strategies

and International Strategies. A fourth folder below these is labelled “YOUR PORTFOLIO”]

For example, we could create a 40 stock Canadian portfolio by picking 5 top rated stocks from

each of our 8 Canadian strategies.

[Animation shows cursor selecting the ‘Canadian Strategy’ folder which duplicated into 8 other

folders, with the labels, HY, In, VL, MS, PG, SY, QL, Mo. The cursor selects the HY folder, pages

appear from the folder with the title “5 TOP-RATED STOCKS’. The pages then move across the

animation into the ‘YOUR PORTFOLIO’ folder]

[In the same animation, pages then appear out of the 7 remaining folders and are moved into the

‘YOUR PORTFOLIO” folder.]

[40 TOP-RANED WELL-DIVERSIFIED STOCKS IN YOUR PORTFOLIO]

If we had only one strategy, we’d need to go down to the 40th ranked stock to get the same

diversification. We would call that de-worsification. Stocks are also replaced according to

specific rules. When a stock is no longer well-rated, perhaps its price has risen or its

fundamentals have deteriorated, it’s replaced with a top-ranked stock from one of our strategies.

The important thing is to buy and sell according to the rules after verifying that the signals make

sense

[This aligns with our core principles of behavioral finance and not be swayed by our all-too-human

biases.]

Again, this aligns with our core principles of behavioral finance and not be swayed by our all-toohuman biases.

Our strategies back tested average compound growth over the past 30 years surpassed

comparable market indexes by over 3% per year. The strategies back tested returns have also

consistently beaten their benchmarks over most rolling three-, five- and ten-year periods. They

have also had considerably fewer losing periods – in keeping with our goal to deliver exceptional

growth to our investors during up markets, while softening the blows and easing the stresses of

down markets.

[In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.]

In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.

I invite you to learn more about these strategies and how we incorporate our unique pillars of

Financial Planning, Asset Allocation and Behavioral Finance to grow and protect your wealth. You

can find more on all of these, including summary videos on each by Sylvia, Tom and Stan on the

“Our Perspectives” section of our team’s website.

And please contact us by phone or email if you have would like to discuss how any of this applies

to your specific situation

[CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries,

including CIBC Wood Gundy, a division of CIBC World Markets Inc. The CIBC logo and “CIBC

Private Wealth” are trademarks of CIBC, used under license. “Wood Gundy” is a registered

trademark of CIBC World Markets Inc.

This information, including any opinion, is based on various sources believed to be reliable, but its

accuracy cannot be guaranteed and is subject to change. CIBC and CIBC World Markets Inc.,

their affiliates, directors, officers and employees may buy, sell, or hold a position in securities of a

company mentioned herein, its affiliates or subsidiaries, and may also perform financial advisory

services, investment banking or other services for, or have lending or other credit relationships

with the same. CIBC World Markets Inc. and its representatives will receive sales commissions

and/or a spread between bid and ask prices if you purchase, sell or hold the securities referred to

above. © CIBC World Markets Inc. 2025.

The contents of this video are for informational purposes only and are not being provided in the

context of an offering of a security, sector, or financial instrument, and is not an endorsement,

recommendation, or solicitation to buy, hold or sell any security.

Michael Chu is a Portfolio Manager and Senior Wealth Advisor with CIBC Wood Gundy in

Vancouver. The views of Michael Chu do not necessarily reflect those of CIBC World Markets

Inc.

If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.]