Retirement: the National Bank's 10 Golden Rules

As part of the RRSP season, the National Bank shares its 10 golden rules for maximizing your portfolio in preparation for retirement.

Are you wondering how to invest your next RRSP contribution? With interest rates so low, and investments just not producing the anticipated returns, you may be feeling confused, and your plan to retire at 55 may no longer seem possible. So what should you do?

"Make sure you do your homework before making an investment. Call on the services of an accredited investment professional who has the support of a recognized financial institution; draw up a plan based on realistic retirement goals that match your way of life. Ask yourself the right questions: When do you want to retire? What lifestyle would you like? How much income do you want at retirement? Together with your financial advisor, determine your level of tolerance to risk. Ask yourself how you react to market fluctuations. Do you have an investment strategy? If you don't, you'll be more easily tempted by the prospect of easy profits," explained Philippe Bouchard, Financial Planner and Manager – National Bank Wealth Management.

Once you have established your goals and your investor profile, follow the 10 golden rules of successful investing:

Contribute to your RRSP every year

Ideally, make your RRSP contribution at the beginning of the year so that you benefit from the accumulated interest, or opt for a periodic savings plan. Contribute to your spouse's RRSP, if applicable. That way, you will benefit from a family income that is split in two when you retire and you will also pay less income tax. Borrowing to contribute to your RRSP is another option to consider, in which case you can use your tax refund to pay off your loan.

Don't be dazzled by returns, opt for turnkey products

Past performance is no guarantee of future returns. That's why it is important to base your choice on the characteristics of a particular type of investment and not on its past performance.

Don't try to second-guess the market by buying at the best time

Even investment experts do not always succeed in predicting market movements and the best time to buy. More than 90% of your return comes from the diversification of your investments.

Invest regularly, for instance monthly

By investing a specific amount regularly, you will save more easily and at your own pace. By investing often during the year, you benefit from market highs and avoid being hit too hard by the lows.

Diversify your investments

To minimize your risks and boost your potential returns, invest according to your investor profile in different product types, geographic regions, asset classes and industry sectors.

If markets are volatile, be patient

When you're investing for the long term, stick with your investment strategy. Remember that, historically, a market upturn frequently follows a bear market.

Go for investments that offer tax benefits

Outside your RRSP, invest in products that offer advantageous tax treatment, like investments that generate capital gains and dividends (equities, equity funds and dividend funds).

Don't deprive yourself of the growth potential of stock markets

A portfolio that contains stocks as well as bonds is less risky than a portfolio containing only bonds. For winning results, include a percentage of equities in your portfolio that corresponds to your tolerance to risk.

Maximize the foreign content in your portfolio

Expand your investment horizons by investing outside Canada. International markets offer excellent return potential.

See your financial advisor for a portfolio check-up once a year

Your financial needs and situation are constantly changing, so it is essential to make sure that your portfolio always meets your needs. Discuss your portfolio with your financial advisor at least once a year or whenever an important event occurs in your life (buying a home, having a child, receiving an inheritance, losing your job, etc.).

The National Bank offers a comprehensive range of investment products designed to respond to different investor profiles. Take advantage of the expertise of its specialists to plan wisely for your retirement.

About the National Bank

National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its customers elsewhere in the world. The National Bank offers a full array of banking services, including corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management, as well as mutual fund and retirement plan management. The National Bank has approximately $75 billion in assets and, together with its subsidiaries, employs over 17,000 people. The Bank's securities are listed on the Toronto Stock Exchange (NA: TSX). For more information, visit the Bank's website at www.nbc.ca.

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Information (the telephone number and website address are provided exclusively for the use of journalists and other media representatives):

Denis Dubé
Manager, Public Relations Department
National Bank of Canada
Tel.: (514) 394-8644
E-mail: denis.dube@bnc.ca