Investment Management Planning Advisors

Investment Planning

Important factors to consider when investing:

Your dreams and desires
How much risk you feel comfortable with
Your thoughts regarding owning versus loaning
Age

Keys to investing:

More growth after inflation is the key to building wealth
The biggest risk is not to invest at all
Diversification decreases the risk (not all in one basket)
Start as early as possible

Before we set up an investment plan, we talk about all of these things and then decide on a plan you are comfortable with.

To give you an idea of the type of investments available, and how time frames and level of risk affect the rate of return, we are going to explain it by using the following examples.

Bike
Bus
Car
Jet
Super Jet

Bike

These investments are like short trips (0-5 years).

Benefits:

Your full investment is guaranteed, meaning whatever money you put into it you get it all back plus interest.

Risks:

Any interest earned is 100% taxable (unless put into a Tax Free Savings Account)
The risk is lower but your money may not grow to the level to meet your requirements

Types of Investments Include:

money market fund
guaranteed investment certificate
savings account
Canada savings bond
term deposit

Bus

These investments are like mid-length trips. Like a bus, if something breaks down someone else fixes it, and it can go short or long distances, but you can't change the direction - less flexibility, less risk (min. 5 years)

Benefits:

Less risk than some other investments

Risks:

Any interest earned is 100% taxable (unless you put it into a Tax Free Savings Account)
Less flexibility and the rate of return is lower because it involved less risk

Types of Investments Include:

bonds
mortgage
(bonds and mortgages work well together depending on where interest rates are)

Car

These investments are also mid-length (min. 5 years). Like a car, if it breaks down you fix it, but you have the flexibility to change direction - more flexibility, little more risk.

Benefits:

More flexibility and ability to change course
It helps enhance your net rate of return because you don't pay as much tax on dividends and capital gains

Risks:

More potential risk

Types of Investments Include:

dividend stock
real estate

Jet

These investments are long-term (7+ years). Like a jet, you can go farther and faster.

Benefits:

Lots of choice in what you invest in
Higher rate of return

Risks:

Higher level of risk
Funds need to be left in longer-term to experience higher rates in return (investment markets take higher swings in gains and losses)

Types of Investments Include:

Canadian equity
US equity
European equity

Super Jet

These investments are longer-term (7+ years) and the highest potential risk.

Benefits:

Lots of choice in what you invest in
Potential higher rate of return

Risks:

Potentially higher level of risk
Funds need to be left in longer-term to experience higher rates in return (investment markets swing between gains and losses)

Types of Investments Include:

oil and gas fund
China fund
India fund
Gold fund
Emerging markets (typically invests in one market)

RRSP's are a great tool to shelter money from taxes that are earned on investments

There are also ways to take money out of RRSP's tax free. Financial planners know these methods and can help you save money and increase your financial wealth by utilizing these techniques.

Not sure how you feel about investing?

There are many emotions involved in investment planning. We are here to explain the best options for you and when is the best time to invest money and when is the best time to take it out.