Saturday, March 23rd, 2019

5 Things to Know About Your Investment Portfolio

By Tracy Theemes and Kamal Basra on Sep 20 2010 • Filed under Women and the Power of Money

The future does not have a ‘hold button’ when it comes to your investment portfolio. And today’s markets – which have left many investors uncertain and on the sidelines – are no exception. How the future and your portfolio unfolds depends on what you do right now. Waiting for an all clear signal in today’s market can be time wasted and opportunity lost. It’s in times like these that investors should focus on what they know and let investment knowledge bring some certainty back to investment decision-making.

Developing a knowledge-based approach to investing can build confidence and momentum.

1. Know Yourself

Markets aren’t the only things that change, investors do too. Not only do you experience major lifestyle changes, such as marriage, births and job changes, over the years, but your attitudes and investment outlook change too. When this happens, it’s time for a portfolio review and a reconsideration of your portfolio’s asset allocation. Your investment decisions should be consistent with personal comfort levels.

2. Know Your Investments

Market trends and averages are good to watch, but in an unpredictable market, stay focused on the things you know – specific stocks, asset classes, and investment products. Understand what you’re invested in and, just as importantly, why you’re invested in it. This knowledge is the essence of strategic thinking and the foundation for an investor’s peace-of-mind.

3. Know Your Limits

Safety and preservation of capital have become very important considerations for many investors recently. And rightly so. However, a portfolio designed to be risk free may let you sleep better at night right now, but it might not generate the long-term returns you’ll need to sleep soundly in the future. Safety must be tempered with an eye toward the future spending power that your investments today will generate. Rising inflation can erode the returns of low yielding securities, making them riskier than you think as long-term investments. Be careful about the limits you set on your investment. They may be riskier that you think.

4. Know Your RRSP Better

A Registered Retirement Savings Plan is much more than a place to visit every February with a last-minute contribution. Yes, it provides a tax-sheltered home for your savings to grow. But it is also an investment portfolio and a financial planning tool. Treat your RRSP with respect, as an asset to be managed strategically and nurtured with regular contributions throughout the year.

5. Know Your Investment Team

As your financial circumstances change and become more complex, professional accounting and legal advice can make a valuable contribution to investment decision-making. Put your Financial Advisor at the centre of your team to work directly with your accountant and your lawyer so you receive the best advice on the strategic direction of your financial affairs.


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