Everyone is talking RRSP (or was that TFSA?).

Well it’s that time of year again when out of the blue everyone is talking RRSP (or was that TFSA?). From the local bank teller, to the sophisticated stock ‘jock’ broker, to the barber, to the soccer coach! Everywhere you turn someone has an opinion as to where YOU should be investing your hard earned money. Someone is always ready to tell you about the next big opportunity… a “flavour of the month” IPO or sector specific stock, or gold and dividends, or stable low yielding GIC’s…and don’t forget about under the mattress!

For whatever reason, February seems to be that time of the year when everyone is an expert. So with that being said, here are my top 10 questions to ask yourself before you hand over your hard earned cash, or take the advice of your best friend’s cousin’s brother (the landscape architect living on Salt Spring Island). Not that there is anything wrong with living there. Or being a landscape architect.

1. Do you have a clear understanding of your current financial situation?

2. What are your short term, medium term and long term goals?

3. What is your tolerance for risk (the V-word… volatility)?

4. What types of investments are best suited to help achieve your goals?

5. How will you monitor your investments as well as the managers who are managing your money?

6. How much should you be investing every month / year?

7. Do you have an investment process/strategy to stay on track when the markets go off track?

8. What type of investor are you? Are you a Buy & Hold or Market Timer?

9. How will you follow the markets and keep track of where the opportunities are?

10. Are you a DIY investor, or would you be better off working with an experience and qualified investment advisor?

From my experience of 18 (soon to be 19) years in this wonderful industry, the one common theme among the most successful investors is that they all stick to a process. Sophisticated investors – institutional investors, pension plans and clients of discretionary portfolio management services – all use an IPS. What is an IPS? An Investment Policy Statement is a written document that outlines the general rules for the management of an investment portfolio. It sets out the investment goals and objectives of the investor and describes the investment strategies that are suitable to meet those objectives. In my opinion, you are traveling without a road map, on cruise control to somewhere you may not want to get to IF you do not have a disciplined investment process in place.

So back to the time of year. Enjoy all of the RRSP/TFSA noise that seems to get louder at this time of year, and if you need any help/clarification in answering any of the above top 10 questions, you know where to reach me!

Until next time, continue to live for today, but be sure to plan for tomorrow!



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Aaron Fransen   CFP® , CHS, CPCA   |   CERTIFIED FINANCIAL PLANNER®, Investment Advisor   |   Suite 203 - 15350 34th Avenue, South Surrey, BC V3S 0X7   |   Tel: 604.531.0022