Investor Profile: Aggressive
After a long absence from investing in RSPs, I decided to get back in the game and start saving for my retirement.
What I conveniently forgot about was the hassles of determining how to allocate my contributions. Risk tolerance, investment horizon, outcome expectations and a few other variables make the process even more complicated.
I found that my financial advisor was reluctant to help me out, leaving me to ask all the questions, even though I had no idea what I was talking about most of the time. I finally got somewhere when I asked if there were any tools that could assist me in building an investor profile. After 12 questions, it turned out I was a "Growth Investor with Aggresive Risk Tolerance".
However, this didn't help clear the water for me. There were few answers on what funds made sense, how they fit my profile, or how to split up my contributions. I felt adrift. I decided that this was just the intial investment, so I simply chose a fund that seemed popular with the intention of going back in 6 months and reviewing my choice.
Had I not probed for answers, I think my meeting would have gone something like this:
Financial Advisor: So, those are some of the funds that are available. As you can see, some have more risk than others, and the percentage gains are variable.
Alistair: Oh. I see.
(Long Pause)
FA: So. (Looks at Alistair expectantly)
A: So. (Not sure what the next step is)
(Longer Pause)
A: So, uh... is there anything that you can suggest?
FA: For...?
A: For investing. Like, what kind of RSPs would be appropriate for me?
FA: Well, we have quite a few. (Pointing at list of about 100 selections)
A: I see that. It's quite a list. But I'm a novice investor and I have no idea what to base my decision on. So... do you have any suggestions?
FA: (Looking at me like I don't understand English) Well, this list is quite comprehensive. (Again, pointing at list)
A: Okay, let's say you were investing for the first time and had to choose one of these. Which would you choose?
FA: Well, our investor profiles are different.
A: Yeah, I - okay, I know that. I'm just asking you if you were me, which ones would you gravitate towards?
FA: Gravitate?
A: It means to move towa - nevermind. If you had the same investor profile and you were investing for the first time and you had to choose one of these options, which one would you likely select?
FA: (Looks at list like a menu in a French restaurant. He doesn't appear to understand French) This one? (He asks questioningly)
A: That one is good?
FA: It could be, let's take a look. (Pulls up a collection of graphs, pie charts and columns of numbers).
A: What can you tell me about this option?
FA: It looks pretty good.
A: That's the one you would choose if you were a first time investor with an investor profile like mine?
FA: Possibly.
What I conveniently forgot about was the hassles of determining how to allocate my contributions. Risk tolerance, investment horizon, outcome expectations and a few other variables make the process even more complicated.
I found that my financial advisor was reluctant to help me out, leaving me to ask all the questions, even though I had no idea what I was talking about most of the time. I finally got somewhere when I asked if there were any tools that could assist me in building an investor profile. After 12 questions, it turned out I was a "Growth Investor with Aggresive Risk Tolerance".
However, this didn't help clear the water for me. There were few answers on what funds made sense, how they fit my profile, or how to split up my contributions. I felt adrift. I decided that this was just the intial investment, so I simply chose a fund that seemed popular with the intention of going back in 6 months and reviewing my choice.
Had I not probed for answers, I think my meeting would have gone something like this:
Financial Advisor: So, those are some of the funds that are available. As you can see, some have more risk than others, and the percentage gains are variable.
Alistair: Oh. I see.
(Long Pause)
FA: So. (Looks at Alistair expectantly)
A: So. (Not sure what the next step is)
(Longer Pause)
A: So, uh... is there anything that you can suggest?
FA: For...?
A: For investing. Like, what kind of RSPs would be appropriate for me?
FA: Well, we have quite a few. (Pointing at list of about 100 selections)
A: I see that. It's quite a list. But I'm a novice investor and I have no idea what to base my decision on. So... do you have any suggestions?
FA: (Looking at me like I don't understand English) Well, this list is quite comprehensive. (Again, pointing at list)
A: Okay, let's say you were investing for the first time and had to choose one of these. Which would you choose?
FA: Well, our investor profiles are different.
A: Yeah, I - okay, I know that. I'm just asking you if you were me, which ones would you gravitate towards?
FA: Gravitate?
A: It means to move towa - nevermind. If you had the same investor profile and you were investing for the first time and you had to choose one of these options, which one would you likely select?
FA: (Looks at list like a menu in a French restaurant. He doesn't appear to understand French) This one? (He asks questioningly)
A: That one is good?
FA: It could be, let's take a look. (Pulls up a collection of graphs, pie charts and columns of numbers).
A: What can you tell me about this option?
FA: It looks pretty good.
A: That's the one you would choose if you were a first time investor with an investor profile like mine?
FA: Possibly.
5 Comments:
Was there a pay phone near this bank?
I used to play uber-safe and put all my RRSPs in the "guaranteed interest" fund that paid something like 2.5% annually... and I didn't have to pick anything. So easy.
Then, my workplace switched investment groups, and the new place didn't have that option. So, I chose a Canadian Diversified portfolio that has done about 20% or better for the last four years...
BUT, now that I no longer work there, and am able to move my investments elsewhere, I'm gonna be looking for an ethical fund with decent documentation so I know that they and I have the same idea of what "ethical" is...
.. cause it would suck to find out that, while I'm all bus-and-bike girl, that I own shares in some dirty nasty evil SUV manufacturer that uses child labour and beats their female employees.
X.
Invest in your brain development!!
I use to and still have a large portion of my portfolio in mutual funds. Recently I decided I wanted to have a more aggressive approach so I subscribed to an investment newsletter. The newsletter recommend two Canadian stocks per month and has a very good record over the last several years.
I decided on a simple strategy of investing a fixed amount of month each month in each of the two stocks and selling when they recommended. Since starting in September I am up over 40%.
This is a little more work and the news letter costs about $180/year, but considering the return this is cheap. I am now contemplating leaving mutual funds behind and strictly investing in growth equities and bond indexes inside my RSP. Once I have grown my portfolio enough to replace the bonds with my mortgage anyways.
The next step for me is to start investing outside my RSP and this will be in real estate.
I just follow my mom's advice!
Post a Comment
Links to this post:
Create a Link
<< Home