In volatile markets and when investment portfolio returns are lower, it’s not uncommon for investors to question the wisdom of past investment choices. Some investors might be tempted to pull out of long-term strategies or to invest too conservatively by shifting their portfolio towards guaranteed products such as GIC’s. While there is a place for lower risk investments in a well-diversified portfolio, there is a danger of being too conservatively invested and missing the growth potential of the markets. Reduced real spending power during ones’ retirement years and the possibility of re-investment risk in a declining interest rate environment are two concerns. If you would like more information, email me for a copy of “Overly Conservative Portfolios do not Guarantee Investment Success” by Russell Investments.
The credit turmoil in the U.S. financials and the Bear Stearns situation specifically prompted questions about Canadian investors’ protection in the case of investment dealer bankruptcy. ScotiaMcLeod is a member of the IDA (Investment Dealers Association of Canada) and a member of the Canadian Investor Protection Fund (CIPF) that provides investor protection for investment dealer bankruptcy. Each unregistered and registered account held by an investor is protected up to a limit of C$1 million for any combination of cash and securities. The limit applies to any shortfall and CIFP does not cover losses from market fluctuations or losses from the bankruptcy of an issuer. Please go to cipf.ca for more information.
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