In depth financial wellness

Welcome to "Investing: a closer look" where we will be discussing the different types of risk that are associated with various asset classes. Understanding some of these will help you with your own investment strategy.

We all deal with different types of risk in our everyday lives. Investing involves taking risks as well, but understanding what these risks are is an important first step to managing them.

When it comes to investing, many people assume that economical and political risks are the main risk factors. Although they are very important there are other risks you need to consider as well. On this slide we note a variety of risks but there are others such as pandemics or natural disasters sadly that pop up unexpectedly and we have to consider their impact as well.

<On the slide:> A list of various types of risk:

• Economic/Political
• Inflation
• Sector
• Currency
• Interest rate <End slide>

One of the main risk factors associated with cash and fixed income investments is inflation, but what is inflation? Statistics Canada attempts to measure inflation using the Consumer Price Index – a calculation that involves the costs of approximately 600 different goods and services from an average household's annual expenditure on food, housing, transportation, furniture, clothing and recreation. Among other things, this calculation is used to calculate annual increases for the Canada Pension Plan and Old Age Security. As an investor we want to ensure that our returns at least outpace inflation in the long term so that we are truly growing our savings. Assuming a 2% inflation rate, groceries that cost you $100 in 2023 will cost $158 in 2046. That means $35,000 in today's dollars, will really be $55,000 if you plan to retire in 23 years.

<On the slide:>

A table chart showing how prices increase with 2% inflation over 23 years:

Year | Groceries | Daily coffee | Car | Home
2023 | $100 | $2.50 | $30,000 | $400,000
2046 | $158 | $3.90 | $47,000 | $631,000 <End chart>

Footnote: "Figures used for illustration purpose only. Future values assume 2% inflation rate" <End chart>

Think for a moment, if 'John” made a $100,000 investment, how much would it have to be worth ten years later just to keep in line with 2% annual inflation?

If inflation is higher or lower than 2% per year the $122,000 would fluctuate accordingly. The Bank of Canada doesn't want to see negative inflation, also known as deflation, as that discourages spending which has a negative effect on the economy. Japan has experienced this to a degree over the last 30 years and it has caused great issues while Venezuela has experienced hyperinflation where inflation has exceeded over 500 000% which creates even bigger issues as people can't afford basic staples.

<On the slide:> The slide reveals the answer to the previous question: "That's right. $122,000. Your investment would have had to grow by 22% over 10 years just to keep its real value or its purchasing power.

Footnote: Figures used for illustration purpose only and assume 2% inflation rate. <End slide>

Although the North American equity markets are very important, they're not the only markets. Europe and Asia have their own active equity markets, and your group plan may have funds that specialize in markets outside of North America.

Frequently investors have a domestic bias – that is, they're more likely to invest in their own market than other foreign markets. There are a number of reasons why a Canadian investor should consider other markets. The Canadian market (represented by the S&P/TSX) is less than one-tenth the size of the US market – or the S&P 500, who, in turn represent roughly one third of the overall world equity market. Investors would be remiss if they don't consider investing in foreign markets as not only does this provide diversification but could lead to improved returns. One of the challenges the Canadian and US markets have along with most of Europe and Japan is that we have an aging demographic who doesn't need to spend on goods in the same way as other countries whom have a much younger population.

Furthermore, different economies may have very different sector representation. The Canadian economy has a very strong focus in energy and materials.

The slide shows a comparison between markets using a visual that shows relative sizes:

S&P 500:

• US $34 trillion*
• Biggest sectors: IT, financials, health care

TSX:

• CDN $2.8 trillion**
• Biggest sectors: Financials, energy, Industrials, Materials

*As of February 26, 2021
**As of February 26, 2021 <End of slide>

The Canadian Equity market consists of many sectors but they are not equally represented or "weighted" in the index. Some sectors have a larger presence than others. The largest sector by far in the S&P / TSX Composite is the Financials sector which consists of roughly 30% of the index by market capitalization. But keep in mind this could change. At one point energy was the largest industry.

Let's take this idea a step further… During this period of time over 30% of the TSX belongs to the Financials sector, followed by Industrials, Materials & Energy. In comparison, in the S&P 500, Information Technology is first weighting at more than 25%, followed by health care and consumer discretionary. Although the United States are our closest neighbour and biggest trading partner, you can see when we break down our economies by sector, our economies are very different, as they are more influenced by information technology and that has only been increasing over the last several years.

Think for a moment. Which equity market performed better in the three year period ending in December 2022? The Canadian equity market (as represented by the S&P/TSX) or the US market and the S&P 500?

In the three-year period ending December 31st 2022 the returns of the Canadian market slightly outperformed the US market.

<On the slide:> TSX: 7.54%;

S&P: 6.92%.

Footnote: Reference: Morningstar report extracted from Plan sponsor site <End slide>

Currency differences impact the everyday lives of Canadians as we import so many products. Dramatic changes in currencies could affect your overall returns with funds that are invested in foreign countries. Some plans offer hedged funds that mitigate that risk so you are only affected by the returns in their respective market and not by changes in their currency. But appreciate that sometimes those currency moves could help your overall returns so you may not want that hedge. Here you can see in the three year period ending December 31, 2022 an investment in the S&P 500 Index over that time would have yielded an average return of roughly 6.92%. annually. In Canadian dollars however, an unhedged investment in the S&P 500 would have returned approximately 8.72% annually based on the fact that the Canadian dollar weakened against the US over that time. It's important to be aware that the exchange rate movements can have just as much impact as the performance of the market that we're investing in.

<On the slide:> A bar chart that shows how currency exchange affects returns:

S&P 500 Index Fund: 6.92% (in USD) and 8.72% (in CDN $) (per year)

Footnote: 3-year annualized return as at Dec 31, 2022. Reference: Morningstar report extracted from Plan sponsor site. <End slide>

Let's take a look at two comparable funds – a Global Equity Fund and an International Fund. The Global fund has over 50% in the North America market whereas the International fund has only about 9% in North America, as international funds in Canada must have less than 10% exposure to Canada and the US. If you truly want exposure away from North America, then the international fund will give that to you. If however, you want a substantial part of your fund to have North American assets as a bedrock, then the Global fund is your answer.

Different companies are obviously sized differently – and you can divide them up into three broad categories – Small, Medium and Large capitalization which measures them based on their total market value. Some funds will only specialize in companies in just one of these categories and other funds invest across the board. For example, on the Sun Life platform, there are funds that only invest in "small cap" companies and the fund manager is looking for those undiscovered opportunities that are set to grow... At various times during economic cycles, different sized companies may outperform. For instance historically, coming out of a recession, small cap often outperform as they can be more agile and reactive than larger companies, while large cap funds typically do better during recessions as larger companies are typically able to handle debt load better.

<On the slide:> A visual representation of company size categories, shown in circles:

Large: +$10B (biggest size circle)
Medium: $2-10B (medium size circle)
Small: <$2B (smallest circle) <End slide>

Okay, we've talked a lot about equities. But bonds play an important part in your investment mix. What are some of the key factors that affect your bond values?

It is a common misconception among the average investor that bonds and bond funds are risk free. They are not. Investors need to be aware of two main risks that can affect a bond's investment value: credit risk (or the ability of the issuer of the bond to repay the debt) and interest rate risk which speaks to the risk associated with changes in interest rates. (tied into monetary policy where the Central Bank may decide to increase or decrease interest rates).

One of the key factors affecting bond prices and therefore Fixed Income funds is credit quality – which is the ability of the issuer of the bond to repay the debt. For example, let's say the issue is the Canadian government – you have good reason to feel confident about their ability to meet their debt obligations and not default of their debts, which is why their bonds are considered high quality in terms of credit risk. But if instead the bonds have been issued by Jonny's Hardware Store, you may feel a little more uncertain and possibly consider his bonds a low or medium quality in regards to credit risk. In practice, there are three categories of credit qualities: Low, Medium and High and you can find out how your fixed income fund invests across these three types from the Morningstar page. Some bonds do not have their credit quality rated by an official ratings agency and they fall under the "Not rated" category. This does not mean they are low quality. It just means that the fund manager has yet to make a judgement as to their quality.

The other important factor impacting bond values are interest rates. Pause for a moment and think… when interest rates rise, what typically happens to bond values?

Typically, when interest rates rise, bond values drop and vice versa. Some investors are confused by the inverse relationship between bonds and interest rates - that is, the fact that bonds are worth less when interest rates rise and vice versa. But the explanation is essentially quite straightforward: When interest rates rise, new bond issues come to market with higher yields than older securities, making those older ones less attractive. Hence, their prices go down. When interest rates decline, new issues come to market with lower yields than older securities, making those older, higher-yielding ones worth more. Hence, their prices go up. As a result, if you have to sell your bond before maturity, it may be worth more or less than you paid for it. To reduce the overall risk of interest rate volatility, the bond manager will typically invest in a well-diversified portfolio made up of government and corporate debt instruments, with various maturities. You can view the breakdown between various types of bonds, as well as the top 10 holdings, by going to your Morningstar fund reports available online within your account.

<On the slide:> 

(1) Up and down arrows showing the inverse relationship between Interest rates and bond values.  (2) Up and down arrows showing how shorter- term bonds have less risk than longer term bonds.  <End slide>

Let's try to break down market performance in light if some of the concepts we just discussed…

Although we should always monitor market performance regularly, inevitably in any given year some asset classes will outperform others. As you can see, in the twelve month period ending in December 2022 each metric has had their own unique performance. Inflation was higher at 6.8%. If you had invested solely in Canadian Treasury bills they only had a 1.8% return and you wouldn't have kept pace with inflation. As interest rates rose significantly in 2022, bonds performed poorly with a negative 11.7% return. Equities also underperformed. The Canadian market was down negative 5.8%, the US market was down negative 12.6% and international equities posted a negative 8.2% return. The returns for a single year can be dramatically impacted by world events – like the war between Russia and Ukraine and monetary policy like rising interest rates. Your retirement investment allocation should always have a long term focus.

<On the slide:> A bar chart titled "12 month market performance* (%)" displaying returns for different asset classes for the 12-month period ending December 31, 2022. <End slide>

This chart shows the relationship and performance of different asset classes over a seven year period from 2016 to 2022. The point of this is to simply illustrate that no asset class consistently outperforms another year after year. In fact, sometimes, last year's best performer may be one of the worst performers this year. This is why it is important to not 'chase returns'. A better strategy is to come up with an appropriate asset mix or allocation that corresponds to your risk tolerance. By coming up with an asset allocation and regularly rebalancing your investments, you can capture gains when one asset class outperforms another. An appropriate mix of asset classes can also help even out your investment returns over the long term.

Here we can see the Growth of $10,000 in the fifteen year period ending in December 2022.

The maroon line along the bottom represents inflation. The dark blue line that almost overlaps the maroon line represents government treasury bills – what you would have if you invested in something like a money market fund or savings account. As we can see, the value of your savings would have eroded over that time due to inflation. The yellow line represents the Canadian bond market. As we mentioned earlier, bonds are sensitive to interest rates. There will be fluctuation when interest rates go up or down. The best performers historically have been the equity markets. As shown in this chart, stock markets typically go up in the long term, but no one knows how they will perform in the short term. When we are investing, we should be considering when we will need the money. If we don't plan on withdrawing funds in the near future we may be comfortable investing in the equity markets, but if we think we will need money soon, we should probably be more conservative with those funds. As you can imagine, it's very challenging to time the markets… and attempting to move from one asset class to another. It's all about coming up with an appropriate asset allocation that balances our tolerance for risk with our investment time horizon.

<On the slide:> A line graph tracking the performance of $10,000 invested in different investments from December 2007 to December 2022.  The graph shows five lines:

• Consumer Price Index (inflation measure)
• FTSE TMX Canada 91-Day T-Bill Index (cash equivalent)
• FTSE Canada Universe Bond (bonds)
• S&P/TSX Composite Index (Canadian stocks)
• MSCI World (Gross) CAD (global stocks)

The final values at 2022 are shown for each:

• MSCI World: $29,717
• S&P/TSX: $23,816
• FTSE Canada Universe Bond: $16,607
• FTSE TMX Canada 91-Day T-Bill: $14,070
• Consumer Price Index: $12,193

<End slide>

In the financial press you may often see an ongoing debate about active versus passive investing. It is important to understand the difference…

Many investors like the idea of passive or index investing. With a passive approach you're typically trying to track or replicate some sort of market benchmark or indices. The benefits of investing in an index fund are that you simply follow the performance of that particular market. If the market goes up, so does your fund. Also the fees for index funds are generally lower than actively managed funds. With actively managed funds, the fund manager is using their research and analysis to attempt to outperform some sort of market benchmark or indices. As a result of the additional research and analysis involved in actively managing a fund, the fees associated with these funds are generally higher. As an investor, you need to ask yourself, do you want to passively follow a market (and pay lower fees) or do you believe that an active manager will be able to outperform the markets over the long term even with the higher fees?

It's important to know the different types of fees that you may be paying. In the retail world, mutual funds may charge front-end loads or deferred sales charges on their investment funds. These are fees paid either in advance of purchase or upon selling and would be in addition to the Management Expense Ratio (or MER) that everyone must pay annually on their funds. In your Sun Life group plan, the Sun Life funds are 'no load' funds. You would be responsible for paying the annual Fund Management Fee which is equivalent to the Management Expense Ratio, although in group plans, the FMF is typically much lower than the retail world as you're part of a group plan. One other fee that that you need to be aware of is Sun Life's 30-day short term trading policy. If you transfer into a fund, then back out of a fund within 30 calendar days or one month there could be a 2% penalty based on the amount that you transferred. If it has been more than thirty days then you don't need to worry about this. The short term trading policy isn't meant to discourage members from trading in their accounts. We encourage it. It is simply meant to discourage people from day-trading or market-timing in their accounts. Remember, in a retirement plan, if you can balance your risk tolerance with your time-horizon, you should be able to select investments that will allow you to ride any market ups and downs without too much panic.

In order to understand market volatility, it's important to keep abreast of current economic conditions, both here in Canada and around the world.

Sun Life Global Investments publishes regular market commentaries and insights on their website. These may range from analysis of world political and economic events to Sun Life Global Investments strategies for dealing with current risks in the market. The more you learn about some of these concepts, the easier they should become.

<On the slide:> sunlifeglobalinvestments.com

• Publishes regular market commentaries and insights.
• Analysis of world political and economic events.
• Sun Life Global Investments strategies for dealing with current risks in the market. <End slide>

Remember, good investing is built on a solid foundation. You have to have an asset allocation that you understand and that ties in with your comfort level of risk. This could be through a Help me do it approach, such as a Target Date or Target Risk fund, or you could be selecting your funds in different proportions from the Let me do it options. Either way, this first step of correct asset allocation is going to have the biggest impact on how your investments perform.

And remember your fees – use your group plan as a way to get lower fees on your investments. The Morningstar pages in your mysunlife.ca account will give you a wealth of information about the funds you have available. You can find out information such as how they're managed, their top holdings and in which sectors and countries they hold their investments.

<On the slide:> A list of available resources:

•  Asset allocation tool
• Fund and fees
• Morningstar®
• Ask an expert

Below these bullet points are key investment questions to consider:

• What is your comfort with risk?
• What are your short, medium and long-term goals?
• When will you need to draw on your savings?
• Is my investment portfolio well diversified? <End slide>

Investing with confidence doesn't have to be difficult. Remember in a retirement plan you should focus on your time horizon and tolerance for risk when selecting investments. The other thing to recall is that time typically helps mitigate risk – and most of us, at least initially have time on our side when it comes to saving for retirement.

<On the slide:> Thank you! The information provided is of a general nature and can not be construed as personal financial or legal advice. Neither Sun Life or its affiliates guarantees the accuracy or completeness of any such information. This information should not be acted on without obtaining counsel from your professional advisors, including a lawyer, notary, tax professional, or financial advisor (registered as Financial Security Advisors in Quebec) as may be applicable to your individual situation.

Group Retirement Services are provided by Sun Life Assurance Company of Canada, a member of the Sun Life group of companies. <End slide>

On behalf of Sun Life, welcome, and thank you for joining.

Since our Mother's and Grandmother's day, the financial picture for women in Canada has changed. But, by how much? A 2019 study shows 70% of Canadian women aged 25-34 were university graduates. BUT only 62% of Canadian women over 18 were employed. Women influenced 55% of Canadian investable assets. By 2028 they'll control $3.8 trillion of wealth. Women are earning more money than ever before in history. They're becoming better educated, and living longer than men. These things are challenging the status quo. But, women have three strikes against them. The fact that they live longer. The fact that they earn less. And, the fact that they have more time out of the workforce. So, if you feel like you're falling behind. If the financial information you're receiving isn't resonating with you. If the glass ceiling feels firmly still in place. You're not alone. People's experience will vary of course. Some will have late entry into the workforce because of staying home to raise a family. Others are childless by choice. Some are comfortable with financial decisions. Others are at the beginning stages of the money journey. We're all unique and life is a personalized experience. But the society we live in and the financial systems in place aren't yet fully aligned with women's lived experience. There are unique challenges a woman faces when saving to fund her own retirement.

<On the slide:> Source citations:

1. OECD, "Country Note: Canada," Education at a Glance 2019, 2019
2. Statistics Canada, "Table 14-10-0327-01: Labour Force Characteristics by Sex and Detailed Age Group, Annual," 2020
3. CIBC Economics, The Changing Landscape of Women's Wealth, March 2019 <End slide>

Women have made great strides in the last half century. We're better educated, have greater responsibility in the corporate world, and are leaders in many professions. Despite these successes, women still face gender-related obstacles to wealth creation.

<On the slide:> TITLE: Women's unique financial challenges.  There is a list of five key challenges:

• Earnings gap
• Work interruption
• Longevity
• Suddenly single
• Confidence gap

<End slide>

Women still earn, on average 84 cents on the dollar as compared to men. That means that for a man's $70,000 salary, a woman earns just $58,800. The gender pay gap is worse for those who face multiple barriers. This includes racialized women, Indigenous women, and women with disabilities. Though it differs by age group, the gap starts from a young age and carries into the senior years. According to a 2018 Girl Guides of Canada report, girls aged 12 to 18 experience a summer job gender pay gap of almost $3.00 per hour. And a recent Canadian women's foundation study finds college-educated women make about 90 per cent as much as men at age 25, but only about 55 per cent at age 45. The earnings gap contributes to a gendered pension gap. Women retire with only about 80% of the pension that men retire with according to a 2021 Mercer CFA Institute report. Unfortunately, women also have a higher cost of living, known as the "pink tax." The 'pink tax' refers to the extra amount charged to women for certain products or services. According to a 2021 analysis by ParseHub, overall, women in Canada pay upwards of 50% per cent more on average than men for items like body wash, deodorant, and razors.

<On the slide:> Source citations:

1. Canadian women's foundation, sourced June 2024
2. Mercer CFA Institute, 2021
3. 2021 analysis ParseHub  <End slide>

Women also have more demands on their time than ever before. We're juggling career, caring for a family, and managing a house-hold, on top of "everything else". Because of the demands on women's time, women typically leave the workforce more often than men. This is typically for extended periods of time to care for children or other family members. These are of course very important and necessary tasks, but they're also tasks that come at a financial cost.

A lot of women will hold lower paying or part-time jobs that offer more flexibility. Often these jobs don't offer retirement plans. The "motherhood penalty" is the financial penalty that women may experience for having children. It ranges from seeing their income dip, to being sidelined for promotions and being viewed as less committed to their job.

As cited by Xuelin Zhang in "Can Motherhood Earnings Losses Be Ever Regained?" employment and earnings conditional on being employed, fall sharply around the time a woman gives birth. It may also remain permanently lower well after. There's a dynamic that perpetuates itself. If a is child is sick and someone needs to take time out of their workday, it's likely going to be the woman. Because they're paid less, it makes more economic sense. And, thus, it's a self-fulfilling prophecy.

Unfortunately, the motherhood "penalty" isn't the only one. Another is the 'good daughter' penalty. This is where women take time off work to look after elderly parents or other family members. According to Stats Canada, in 2022, 52% of women aged 15 and older (or almost 8.4 million women) provided some form of care. This was to children and care-dependent adults, whether paid or unpaid.

Women were much more likely than men (at 42%) to provide care. 7% of these women are considered dual caregivers. They're caring for both children and care-dependent adults at the same time. Even menopause can have a detrimental effect on women's financial well-being. It's often cited on income protection claims as a factor forcing women to take time out of the workplace.

There is a 14% drop in the number of working women in Canada between age 45 and age 59. This compares to a 10% drop for working men. While everyone's menopause journey is unique, 95% of women in a recent survey by the Menopause Foundation of Canada reported that they experience symptoms. An average of seven symptoms were reported. Common symptoms are hot flashes, sleep disturbances and mood swings. Lesser known symptoms are anxiety, urinary incontinence and heart palpitations. For too many women, it becomes too much. An estimated 1 in 10 will leave the workforce due to unmanaged symptoms. Could menopause be the missing link to explain why more women aren't breaking through the glass ceiling? The age range impacted by menopause intersects with a time of life when women are in, or poised for, increasingly senior leadership roles.

Why, at the peak of their earning potential, are women opting to take a pay cut or leave paid work entirely? Let's link together the facts. Women earn less over their careers, experience work interruption, and leave the workforce earlier than men. It's clear to see how we're financially affected in the workforce. Next, let's take a look at some other financial effects of being a woman.

<On the slide:>

• "5% - 40%" - "The motherhood penalty" - "Impact on employment earnings due to becoming a mother¹"
• "52%" - "The good daughter penalty" - "Almost 8.4 million women in Canada provide some form of care²"
• "14%" - "Between ages 45 and 59" - "Drop in the number of working women in Canada³"

Source citations:

1. Zhang, "Can Motherhood"; "Can Motherhood" 1678.
2. Stats Canada, 2022
3. Menopause Foundation of Canada, 2023  <End slide>

Women have longer life spans than men. This isn't new information. It is; however, very important information. It means women need more money over the course of a lifetime. We also need to make our savings last longer than men do. Medical and public health advances have brought about dramatic improvements in life expectancy over the last decades. The current average life expectancy for a Canadian female is 84 years. This is the "from birth" expectancy. A woman retiring at age 65, can expect on average, to live to age 89. It's no wonder a recent study showed that 80% of women are concerned about outliving their money!

<On the slide:>

• Average life expectancy for Canadian women: 84 years
• 81% of centenarians are women¹
• At age 65: A woman in Canada can expect to live another 24 years!
• 80% are concerned about outliving their money²

Sources:

1. Canada Protection Plan, What is the Life Expectancy In Canada?, April 2020
2. Real Simple, Why Women Need to Be Financially Planning for a 100-Year Life, June 2021

<End slide>

When you think widow, you may be picturing a woman in her 80s or 90s. The reality is that the average age for widowhood in Canada is 56. Financially, widowhood can be devastating. There is often not enough time to rebuild assets, and they can expect to live many more years. 76% of widows wish they'd been more involved in making financial decisions when their spouse was alive. 53% of widows said they didn't have a plan for what would happen if one of them died. And in 2019, close to 28% of baby boomers had reportedly saved less than $10,000 for retirement. This will leave them open to major financial hardships during their final years.

<On the slide:>

• 1.5 million widows in Canada¹
• The average age for widowhood is 56¹
• 76% of widows wish they had been more involved in making financial decisions when their spouse was alive²
• 53% of widows said they did not have a plan for what would happen if one of them died³
• 16% of elderly women on their own live below the poverty line⁴

Sources:

1. Statistics Canada, CANSIM, table 0051-0042 (2020)
2. Wealth Professional, Wealthy women let their spouses make key financial decisions, March 2019
3. Merrill Lynch/Age Wave study, Widowhood and Money: Resiliency, Responsibility and Empowerment, February 2018
4. Canadian Women's Foundation, The Facts about Women and Poverty in Canada, 2022

<End slide>

Evidence shows that women are less self-assured than men when it comes to financial decision-making. 46% of women say they lack sufficient knowledge about how much retirement income they need. 35% of women say they lack sufficient knowledge about how to select investments, and 32% of women say they lack sufficient knowledge about government retirement income programs. This lack of confidence often means women tend to take less risks in their financial decision- making. This can lead to lower returns on investments. Or, so we've been told. But, what's actually the truth?

<On the slide:> Source: Advisors Edge, Helping women reach their retirement goals, November 2019 <End slide>

The truth is, in spite of the challenges we face, and in spite of the industry not being fully aligned to our needs, women often make great investors. We're 'risk-aware', less impulsive, and tend to make fewer trades than men do.

According to a 2022 report from Wells Fargo, women on average take on about 82% of the risk that men do. But their portfolios performed better when adjusting for the levels of risk. High-risk investments that promise huge potential gains can be alluring. More often than not, they don't deliver. Women tend to avoid high-risk trends. They make investments that are more likely to deliver gradual, long-term growth over the years. This is often proving to be more lucrative in the long run. In a 2017 survey by Fidelity Investments, only 9% of women thought they could do better at investing than men. However, research consistently shows that this isn't the case.

According to an analysis from Fidelity in 2021, women saw returns that were 0.4% higher over a 10-year period. While 0.4% doesn't sound like much, even slightly higher returns can mean tens of thousands of dollars more money in the long run. Women tend to have a measured, cautious approach to investing and personal financial planning. Research has found that women tend to make investment decisions in a less impulsive manner than men. According to a 2022 survey from Nationwide, only 8% of women withdrew money from their retirement accounts during periods of market fluctuation. This compares to 15% of men. It's difficult to remain calm when the financial markets are unstable. But doing so can lead to greater investment success. People sometimes think that the more active you are at trading stocks, the more money you'll make. One of the best ways to actually build wealth in the stock market is to invest in good companies and hold them for a long time. While it's possible to sometimes make money from short-term trading, it's riskier and usually doesn't pay off as well.

A study from UC Berkeley found that men trade about 45% more often than women. And that extra trading lowered their returns. The higher-frequency trading shown by men in the UC Berkley report was attributed to overconfidence. This can lead to impulsively taking greater risks, without looking at the bigger picture. Women, on the other hand, are more likely to deliberate before placing a trade. Generally, the report showed that they don't take sub-optimal setups as often as men do. So they tend to have a higher winning percentage. In summary, while women may lack confidence in themselves as investors, hopefully we can change that narrative. The numbers just aren't backing it up.

<On the slide:> Sources:

1. 2021 Wells Fargo report;
2. 2021 Fidelity report;
3. 2022 survey from Nationwide.
4. University of California Berkley

<End slide>

The key risks we've covered demonstrate how important it is to take charge of your financial future. You wouldn't remodel your house or apartment without giving it a lot of thought and making SPECIFIC design choices. The same thing applies to financial and retirement planning. You need to know what you're really looking to accomplish. What kind of life do you really want to lead? Then align your budget with that. Align your financial plan with that. Align your Investing with that. It all links together.

<On the slide:> TITLE: Take control.  There are 5 key action steps:

• Identify and prioritize your goals
• Start with a budget and develop a plan
• Learn the fundamentals of investing
• Talk to a trusted financial professional
• Review, reassess, and rebalance <End of slide>

Only you can identify your goals, no one else. After you've identified your goals, you'll need to prioritize them. Think about where you are in life. Consider which goals to tackle first. And which goals may impact others. Are there any special concerns you might have?

<On the slide:> TITLE: Identify and prioritize your goals. 

There is a list of 5 common financial goals:

• Education
• Housing
• Business
• Retirement
• Passing on wealth

<End of slide>

Once your goals and priorities are identified, the next step is to link it with your money. Develop, or revisit your budget and financial plan. A key to money management is to know how you spend your money. When you have that information, you can plan a budget that works for you. Compare your needs and wants, and control and monitor your spending regularly. Whenever your income changes, it's a good time to reassess your budget.

<On the slide:> TITLE: How to create a budget.  The slide shows a simple four-step process:

• List all sources of income
• List all monthly expenses
• Look at needs versus wants
• Control and monitor spending <End slide>

A basic understanding of how inflation, taxes and diversification can affect your investing strategy is needed. It'll help you make better-informed investment choices.

In addition to growing your money, you may wish to consider protecting it. According to 2021 Canadian Cancer statistics, breast cancer is the most common cancer in Canadian women, with the exception of non-melanoma skin cancer. 1 in 8 women are expected to develop breast cancer during her lifetime. 1 in 34 will die of it. But the #1 cause of premature death of women in Canada is actually heart disease and stroke. Estrogen's protective effect on women's heart and brain health fluctuates at different life stages. This results in unique risk factors for women. There is good news though! Medical advances mean we're surviving more and more critical illnesses. The bad news is the healthcare system doesn't cover all the costs associated with getting sick and surviving.

Protecting your income and savings is an important part of your plan. There are different insurance options to consider. For example, life insurance, health insurance, critical illness insurance and long-term care insurance. During your working years, it's important to focus on protecting your income. As you move toward retirement, it becomes more important to protect your assets.

<On the slide:> 3 sections:

(1)    Financial protection – Life insurance

Term – protection for short-term needs

Permanent – protection for long-term needs

(2)   Financial protection – Health insurance

Long-term care

Critical illness

Disability

Health & Dental

Accidental death & dismemberment

(3)   Financial protection – Other

Property insurance (house, condo, apartment)

Vehicle insurance

Emergency account

CPP/QPP disability benefit

Workplace coverage <End slide>

We've covered a number of gender-specific obstacles and barriers that women face when reaching financial goals. Recognizing the hurdles and building a plan around them can help. So can speaking to professionals for guidance.

<On the slide:>  A chart:

Earnings gap: Try to start saving early. Do your research. Negotiate your salary.

Work interruption: Maximize your retirement benefits.  Talk about flexible workplace options.

Suddenly single: Be actively involved in making financial decisions. Build a plan that works for a couple or as individuals.

Confidence gap: Learn the basics of investing. Consider working with an advisor.

Longevity: Long-term care insurance policies.  Consider diversification of products.

Source: www.Kiplinger.com/slideshow/retirement/T047-S001-reasons-women-will-never-retire/index.html  <End Slide>

<On the slide:>

Thank you! The information provided is of a general nature and can not be construed as personal financial or legal advice. Neither Sun Life or its affiliates guarantees the accuracy or completeness of any such information. This information should not be acted on without obtaining counsel from your professional advisors, including a lawyer, notary, tax professional, or financial advisor (registered as Financial Security Advisors in Quebec) as may be applicable to your individual situation.

Group Retirement Services are provided by Sun Life Assurance Company of Canada, a member of the Sun Life group of companies. <End slide>