How to hold your own
Ten Rules of Successful Investing
You have precise needs; we have the solutions!
Turnkey investment solutions from the National Bank Financial Group offer you diversification among different asset classes. These solutions are correlated with different investor profiles which respond to your investment horizon and your risk tolerance.
They are ideal if you don’t have the time to spend on your finances. We also offer an "à la carte" menu that includes a complete family of mutual funds which make use of a wide variety of investment strategies. Consult your advisor. He will be able to show you investment solutions that are uniquely adapted to your needs; this way, you can rest easy and not have to worry about the diversification of your portfolio.
- Don't be dazzled by returns; choose investments that meet your needs. Past performance is no guarantee of future returns. That's why it's important to base your choice on the characteristics of the investment, not past performance.
- Don't try to second-guess the market. Even investment experts are often unsuccessful at predicting market movements.
- Invest regularly. Save by investing at regular intervals. When you invest throughout the year, you will buy more units when the market is declining, albeit less when the market is rising.
Hypothesis: $500 investment at the end of every month in a registered account, with no withdrawals, at an annual interest rate of 6%.
- Diversify your investments. To minimize risk and boost potential returns, invest in different asset classes, geographic regions and sectors according to your investor profile (investment objectives, risk tolerance, and time horizon).
- If markets are volatile, be patient. When you're investing for the long term, stick with your investment strategy. Historically, a market slowdown has been followed by a recovery.
- Consider investments that offer tax benefits. Outside your RRSP, invest in products that offer tax benefits, such as investments that generate capital gains and dividends (e.g. equity funds and dividend funds) rather than in products that generate interest income (e.g. bond and money market funds). Remember that equity funds are subject to a greater degree of volatility than bond funds and are therefore typically recommended for investors with a longer time horizon (5 years or more.)
- Don't deprive yourself of the growth potential of the stock market. Over the long run, stocks have outperformed both bonds and cash. The proportion of equities in your portfolio should be in keeping with your investment objectives, risk tolerance and time horizon.
- Look beyond Canada's borders. Expand your investment horizons and invest outside Canada. International markets offer excellent return potential and diversification benefits.
- Contribute to your RRSP every year. Instead of skipping your RRSP contribution this year, and depriving yourself of potentially thousands of dollars of retirement income, think about borrowing the money you need. You can then use the tax refund to pay down the loan.
- Consult an National Bank Investment Specialist for a portfolio check-up at least once a year. It's important to revisit your investments as your fianacial situation changes. Discuss your portfolio with an Investment Specialist at least once a year or whenever an important event occurrs in your life (e.g. buying a home, promotion at work, or receiving an inheritance).