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Expert tips for becoming a savvier investor

Angela Iermieri*
Financial Planner | Desjardins Group
May 2, 2016

No matter how much is in your portfolio, you want to get the most from your investments. But making the right decisions isn't always easy. A little knowledge goes a long way!

Wealth management advisors are here to help, but you should still have a basic grasp of different kinds of investments, so you can better understand what your advisor recommends. 

2 basic rules

1. Establish your profile

To better understand what kind of investor you are, be sure to ask yourself these questions:

Your investment objective: Why are you investing your money?

Are you taking a trip, buying a home, planning your retirement? 

Investment horizon: How long will you invest for?

Saving up for a trip and saving for retirement require different investment strategies.

Risk tolerance: How tolerant are you to stock market fluctuations?

Knowing yourself as an investor keeps you from being overly reactive to market fluctuations and making poor decisions.


Set clear objectives and be honest with yourself, so you can choose the products that are right for you, based on your goals and your profile.

2. Diversify your portfolio

To improve your long-term return potential, you should have a well-diversified portfolio made up of different kinds of investments. When you spread your money around, you reduce the effects of stock market fluctuations on the growth of your assets.


By investing in many asset classes, geographic areas and different sectors, based on your investor profile.

Types of investments you should know more about

Here are 3 ways to invest that might interest you. Depending on your investor profile, you can choose more than one, but be sure the level of diversification is still in line with your investor profile. 

Mutual funds

With mutual funds, you can: 

  • Invest in different asset classes : bonds or equities
  • Diversify your investments geographically. You can choose different types of fund :
    • Canadian equity 
    • American equity 
    • Emerging markets 

You should also diversify management style. When you choose particular funds, you also benefit from the expertise of portfolio managers with different management styles.

It's helpful to select funds that use diverse management styles, because a fund that uses a "value" style won't act the same as a "growth" fund, even if both portfolio managers focus on the same region and sectors, because they have different investment styles.

We often hear about "fund portfolios" or "funds of funds." These are good options, because they allow you to keep a well-diversified portfolio, adapted to your investor profile, and that's automatically rebalanced to always be in line with the asset allocation you've chosen. 

Focus on the medium- and long-term

Most funds are designed to meet medium- and long-term objectives, because funds tend to fluctuate in the short term--some more, some less. Investment growth can fluctuate based on various economic factors, which can pose a risk if you withdraw money in the short term and the market isn't as favourable.

Market-Linked Guaranteed Investments (MLGIs)

MLGIs have become very popular in recent years. They allow you to choose products that guarantee your capital for a fixed term (generally 3 or 5 years), while benefitting from the potential market growth. 

The target market varies from MLGI to MLGI. It may be in a particular region (e.g., Canadian or U.S.) or sector, like natural resources or healthcare.

 Protect your capital and enjoy good returns

MLGIs let you tap into the stock markets' growth potential without risking your capital. They offer security, returns and flexibility in one investment.

Invest in the markets on your own

For personalized market exposure, you can also choose self-directed investing and select stocks and bonds yourself. 

This option is for you if you're interested in the markets and financial analysis, and are prepared to put in the time. 

To help you choose the best solution or combination to help you reach your goals, talk to a wealth management advisor. They can help you develop an investment strategy and support you in reaching your objectives by creating a financial plan with you. Whether it's saving for your child's education or your retirement or planning your estate transfer, they can advise you in selecting the right investment solutions for you.

* Financial Planner and Mutual Fund Representative for Desjardins Financial Services Firm Inc.