Investing 101

Posted 06 Jun 2014 by Rick Irwin, CFP, CLU


Investment management is one of the most important elements of financial planning. Successful investors incorporate many strategies to maximize their returns over time, in a risk-controlled way. Some of these include:

  • Having a disciplined approach to investing
  • Dollar cost averaging
  • Choosing a growth-oriented investment approach in the early years and shifting to a more defensive, income-oriented approach over time
  • Using an appropriate mix of investments to reach goals (asset allocation)

Some of the areas a financial planner can help in this process are:

  • Explaining the difference between mutual funds and segregated fund policies and which product is more appropriate for your circumstances
  • Looking at other guaranteed options instead of low-interest GICs
  • The pros and cons of RRSPs vs. Tax-Free Savings Accounts
  • Designing an Investment Policy Statement to keep you on track with your investment goals
  • Setting an appropriate asset allocation and monitoring & rebalancing as required
Mutual Funds

A mutual fund is a means by which an individual can gain access to the return potential of a diverse range of securities, by pooling their money with thousands of other investors within a fund that is managed on their behalf by a professional money manager. While investors delegate decision-making authority over to the fund manager with respect to choice of investments, the manager is constrained by the objectives of the mutual fund as stated in its prospectus. This gives investors the freedom to choose a fund which is consistent with their personal goals.

Professional fund managers use the pooled investors money to buy different types of securities (generally stocks and bonds). Due to the large size of mutual funds, managers have access to securities not available to individual investors. Size also allows for greater diversification of securities an important benefit to the investors. Mutual funds allow investors to invest in the world security markets without the day to day need to manage their own investments this is the job of the fund manager.

Mutual funds offer:

  • Professional money management
  • Diversification
  • Flexibility
  • Growth potential
  • Choice
  • Liquidity


Rick Irwin, Investment Representative, is registered to sell mutual funds in Nova Scotia, New Brunswick, Newfoundland, Prince Edward Island, Ontario, Alberta and British Columbia.

 

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.