-   Large caps will outperform small caps in challenging economic
        environment
    -   Typical Canadian bond returns will be in 4.0 - 4.5% range, same as
        2008
    -   Emerging markets will again require caution in 2009

    TORONTO, Nov. 27 /CNW/ - TD Waterhouse today released its 2009 Investment
Outlook, offering insight into future market trends and their impact on
investment portfolios. It predicts that while market volatility will continue
in the very near term, it will begin to decline from recent record levels and
market indices will rise in 2009.
    "Looking ahead to 2009, the key questions on the minds of investors are
when the heavy volatility will end, what the 'floor level' of the current bear
market will be, and when will stocks begin to recover," says Bob Gorman, Chief
Portfolio Strategist, TD Waterhouse.
    Gorman predicts the following six themes will dominate the markets in
2009:

    U.S. Market Outlook
    -------------------

    1. The U.S. stock market, after experiencing continuing pressure in the
    near term due to tax loss selling, and hedge fund and mutual fund
    redemptions, will rise in 2009. Factors contributing to this outlook
    include:

    -   Valuations are now depressed, with the S&P 500 trading at perhaps
        11.5 - 12 times forecast 2009 earnings.
    -   The bond market is supportive, with a wide gap between the U.S.
        10-year Treasury yield and stocks' earnings yield.
    -   Credit is beginning to loosen as LIBOR rates retreat and the TED
        Spread (i.e. the difference between the interest rates on interbank
        loans and short-term U.S. government debt) shrinks.
    -   Monetary and fiscal policies are accommodative and designed to
        stimulate the economy.
    -   There are high levels of cash on the sidelines relative to market
        capitalization.
    -   There are strong purchases by company officers and directors of their
        own company's shares. (This is often a positive indicator that shares
        have reached attractive valuations and represent good buying
        opportunities.)

    2. Large cap stocks are once again recommended in 2009: "Given their
    greater financial stability and low valuations, we feel that large caps
    offer the best prospective risk/reward relationship in 2009," says
    Gorman. "Small caps are more economically sensitive and respond more
    acutely to the ups and downs of the economy," continues Gorman. He points
    out that historically, they outperform large caps coming out of a
    recession, but the extremely low valuations attached to the highest
    quality large cap companies gives them the best potential returns
    relative to risk in 2009.

    Canadian Stock Market
    ---------------------

    3. After a decline of about 49% from its peak, Gorman says the TSX is
    bottoming in this range and will advance in 2009. "Factors contributing
    to this outlook are largely the same as those cited for the U.S. stock
    market. As in the U.S., large cap stocks will represent the best
    risk/reward relationship."

    Canadian Bond Market
    --------------------

    4. Typical bond returns are expected to be in the same 4.0 - 4.5% range
    in 2009 as in 2008. Investment grade corporate bonds will outperform
    government issues in 2009. This will reflect three factors:

    -   Corporate spreads will stop widening as credit markets stabilize.
    -   Corporate issues will offer a higher stream of income compared with
        government bonds.
    -   There will be some reversal of the flight to quality as government
        bond yields increase modestly.

    The Outlook also predicts a rally in high yield bonds in 2009. "High
    yield debt performed poorly in 2008, reflecting a dramatic widening of
    spreads due to concerns about rising default rates and forced liquidation
    by fund managers," says Gorman. "These same issues will weigh on high
    yield debt in the near term. However, high yield bonds are highly
    correlated with equities, and thus an equity rally in 2009 will lift high
    yield bonds as well."

    Major Foreign Stock Markets
    ---------------------------

    5. European and Japanese equities will record positive returns in 2009.
    While current economic weakness and its impact on corporate earnings is
    the major headwind for both markets, valuations are very low, especially
    in Europe where P/E multiples are in the 10-11 range and dividend yields
    approximate 4%.

    Emerging Stock Markets
    ----------------------

    6. Caution regarding this asset class is warranted in 2009. While there
    will likely be a superb buying opportunity for emerging markets in the
    not-too-distant future, caution is recommended for the present and
    avoidance of direct exposure. Factors contributing to this outlook
    include:

    -   While economic growth rates will remain well above those in the
        developed countries, adaptation to lower growth will likely prove
        difficult for many of these countries and their companies.
    -   There is over $110 billion in emerging market corporate debt which
        will have to be re-financed in a difficult environment in 2009.
    -   There may be some difficulties in Chinese real estate, which could
        spill over into their banking system.

    2008 Predictions and Results

    The Outlook also examines its 2008 predictions and finds that four out of
seven were accurate.
    "A year ago, we predicted that strong fundamentals would outweigh the
impact of the sub-prime lending crisis, the economy would stay out of
recession, and markets would stay out of bear territory," says Gorman. "This
prediction was overturned by the unprecedented decline in global financial
markets and commodity prices."

    Here is how TD Waterhouse's themes for 2008 played out:

    Prediction No. 1: The U.S. stock market would rise for the sixth
                      consecutive year.

    Outcome:          This has proven incorrect. A year ago, the Outlook
                      forecast that a declining Canadian dollar would boost
                      the value of U.S. holdings for Canadian investors,
                      thereby producing positive single-digit returns in U.S.
                      equities. While the Loonie has fallen about 21%
                      year-to-date and has indeed cushioned the decline in
                      the U.S. market for Canadians, total returns have still
                      been negative.

    Prediction No. 2: U.S. large cap companies would outperform their smaller
                      counterparts in 2008.

    Outcome:          This forecast has proved accurate to date. The DJ30 has
                      outperformed the S&P 100, which has outperformed the
                      S&P 500, which has narrowly outperformed the Russell
                      2000.

    Prediction No. 3: The Canadian stock market would rise for a sixth
                      consecutive year in 2008, recording a single-digit
                      advance.

    Outcome:          This has proven incorrect.

    Prediction No. 4: A rotation would begin to be seen from the cyclical
                      sectors (focussed on commodities) to the less cyclical
                      sectors as commodity prices fell in response to a
                      slowing global economy.

    Outcome:          This has occurred in the second half of 2008; however,
                      there were no offsetting gains in the more defensive
                      sectors due to the worsening credit crisis.

    Prediction No. 5: Bond investors would earn total returns of between
                      4.0 - 4.5% in 2008.

    Outcome:          This has proven correct, especially in the short- and
                      mid-term segments of the market.

    Prediction No. 6: Europe would out-perform Japan in 2008 generating
                      positive, single-digit returns.

    Outcome:          While this has been true to date in terms of local
                      currency, it has not been the case when expressed in
                      Canadian dollars given the strengthening of the yen and
                      the weakening of the euro due to declining interest
                      rates and economic weakness. The Outlook's forecast of
                      modest but positive European equity returns in 2008 was
                      incorrect.

    Prediction No. 7: We recommended caution for emerging markets in 2008.

    Outcome:          This has proven accurate. The Shanghai Composite Index
                      has fallen over 60% in the year to date, with other
                      BRIC countries recording similar losses.

    About TD Bank Financial Group

    The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Financial Group. TD Bank Financial Group is the seventh largest bank
in North America by branches and serves approximately 17 million customers in
four key businesses operating in a number of locations in key financial
centres around the globe: Canadian Personal and Commercial Banking, including
TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse
and an investment in TD Ameritrade; U.S. Personal and Commercial Banking
through TD Banknorth and TD Bank, America's Most Convenient Bank; and
Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks
among the world's leading on-line financial services firms, with more than 5.5
million on-line customers. TD Bank Financial Group had CDN$509 billion in
assets as of July 31, 2008. The Toronto-Dominion Bank trades under the symbol
"TD" on the Toronto Stock Exchange and New York Stock Exchange.

    Visit the Fall Investment Newsroom for information and materials that can
assist you with your stories: http://www.td.com/mediaroom/FIC/

For further information: to receive a copy of the 2009 Investment
Outlook, or to schedule an interview with Bob Gorman, please contact: Stephen
Ledgley, NATIONAL Public Relations, (416) 848-1376, sledgley@national.ca