BMO InvestorLine: Beware of Inflation's Potential Effect on

BMO InvestorLine: Beware of Inflation's Potential Effect on Long-Term
TORONTO, ONTARIO -- (Marketwire) -- 12/11/12 -- BMO InvestorLine
reminds Canadians of the importance of monitoring inflation rates to
ensure that fluctuations do not adversely impact long-term savings
and investments.  
"Inflation, whether high or low, can affect investors' long-term
savings and permanently alter their lifestyle," said Viki Lazaris,
President & CEO, BMO InvestorLine. "Fortunately, there are many ways
investors can ensure inflation does not jeopardize their long-term
To maximize savings, Ms. Lazaris notes that investors should be aware
of the following: 

--  Assess exposure: Inflation consumes the purchasing power of an
    investor's money. If you have money set aside for long-term goals - such
    as retirement or a child's post-secondary education - it may not meet
    your objectives if its growth rate doesn't keep up with the rate of
--  Invest for growth: Instead of setting aside savings in a low interest
    account that may not keep pace with inflation, consider alternative
    investments that have the potential to grow faster than the inflation
    rate. For example, by investing the same $50,000 in stocks that earns an
    average annual total return of eight per cent, the investment may grow
    to $233,048 in 20 years. Assuming annual inflation averages four per
    cent, this will yield $106,360 in purchasing power in today's dollars.
--  Weigh the risks: While investments such as stocks and equity based
    exchange traded funds (ETFs) have the potential to earn a higher rate of
    return than the rate of inflation, this often means they are more
    susceptible to short-term market volatility. If an investor is not
    comfortable with market swings or anticipates needing the savings
    relatively soon, more appropriate investment choices exist; however,
    they may not earn the same rate of return. Over the long term, a
    diversified mix of stocks, bonds, and money market investments offers
    the potential for earning inflation-beating returns without creating
    undue risks.

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About BMO InvestorLine 
BMO InvestorLine is an online investing service that provides clients
with two ways to invest online. Clients can choose from BMO
InvestorLine's top ranked Self-Directed service that provides tools
to help investors make independent decisions on how to invest. BMO
InvestorLine's other service, adviceDirect(TM) provides investors
with online advice and investment recommendations for their
portfolios. Clients have access to trading, quotes and account
information 24 hours a day through a website or Automated Telephone
Trading. BMO InvestorLine also provides users with third party
research, along with leading edge tools that are informative and easy
to use. As an all-in-one investment source, it is a constantly
evolving, cost-efficient platform that is fully compatible with
BMO InvestorLine Inc. and BMO Ligne D'action Inc. provide this
commentary to clients for informational purposes only. The
information contained herein is based on sources that we believe to
be reliable, but is not guaranteed by us, may be incomplete or may
change without notice. The comments included in this document are
general in nature, and professional advice regarding an individual's
particular position should be obtained.  
An adviceDirect account is a non-discretionary fee based account
which offers investment recommendations. adviceDirect does not
provide portfolio management by a portfolio manager. The client makes
their own investment decisions and manages their own investment
portfolio. adviceDirect does not offer discretionary, managed
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BMO InvestorLine Inc. is a wholly owned subsidiary of Bank of
Montreal Holdings Inc. Member - Canadian Investor Protection Fund and
Media Contacts:
Rachael McKay, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver
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