Investment Advice / Suggestions

[drlove]

I'm meeting with my financial advisor on Thursday. I'm going to invest an additional $4000 so I can max out my RRSP contributions for the year. My question is, do you think it's prudent for someone in their early/mid thirties to invest the bulk of the money in more aggresive growth oriented funds??

I've already established a solid cushion, since my early investments were rather conservative. Right now I'm interested in maximizing my potential return, and willing to accept some degree of risk as a trade off. So, is this a good idea, and can anyone recommend anything?? I will discuss any suggestions I receive at the meeting.

Thanks.

 

[The Doctor]

If you pay an investment advisor, why do you second guess him/her? Let them do their job and if you ultimately don't agree with their suggestions, you should both agree that a new advisor would be a better way to proceed.

Although I'm in my mid-thirties, I'm not comfortable with the risk inherent in having the bulk of my portfolio in aggressive growth funds and would say no. If you prescribe to modern portfolio theory, proper asset allocation is the biggest decission you can make. The allocation should be based on your individual needs and expectations, however, you will be hard pressed to find an advisor who will condone investing the bulk of your portfolio in agreessive growth funds. At most they will say 15%-20% of your portfolio should be allocated to speculative investing, the rest will grow just fine if properly allocated and rebalanced annually. Pick an investment plan and stick to it and you will benefit in the long run.

 

[Cardinal Fang]

Although I'm in my mid-thirties.....

Falls on the floor laughing.

 

[Goober Mcfly]

Maybe he meant to say "was born in the mid-thirties" Fang.

 

[The Doctor]

Did I forget the winking smilie again...damn!



*Appologizes for any injuries incurred do to this oversight*

 

[drlove]

Good advice... I'm all for maintaining a balance as well. However, I don't want to be too conservative, either. IMO it's better to take risks now as opposed to later on in life, that's all.

 

[drlove]

Maybe he meant to say "was born in the mid-thirties" Fang.

LOL!!

Sorry, couldn't resist!

 

[The Doctor]

As I said in the other thread risk is a function of time and barring any unforeseen occurance, you have time before you retire and can accept a bit more risk now. A more aggressive position is not out of the question, however, let's not tacitly accept a TSX index fund as being a "safe" investment or without any real risks. I would say a more aggressive position for you would be an asset allocation mix more heavily weighted to equities than bonds...60/40 maybe. But within that equity allocation, I would have a mix of core value funds, growth funds and a small allocation to agreesive sectors (no more than 15% of the overall portfolio) such as the resource funds.

As you go through your life cycle you will need to adjust that equity/bond/cash mix so that it always reflects your financial position. It could turn out that you will be completely financially independent in 10 years and the need for RSP money will be irrelevant. If that's the case, blow your brains out with the growth stocks. You've started out on the right foot by having a retirement plan and investing in RSPs, you don't want to blow it by getting greedy.

 

[Cardinal Fang]

So then I made a mistake buying that BreX stock off of Goober?

Shit

 

[Goober Mcfly]

I find doggie to be a more aggressive position.

 

[The Doctor]

BreX taught a lot of us about the doggie position.

 

[mtl_guy]

You shouldnt go from one extreme to another. Don't try to catch up on lost returns from being too conservative by taking on a lot of risk now.
I wont give you any advice other than to talk it through with your advisor. You probably could take on some additional risk in a portion of your portfolio.

Another suggestion- you'd be better off to contribute to your rrsp monthly than waiting for the deadline. Taking your $4000 amount as a guideline, contribute $300 a month or a couple hundred dollars every pay period. Your money will be working for you all year this way.

I'm meeting with my financial advisor on Thursday. I'm going to invest an additional $4000 so I can max out my RRSP contributions for the year. My question is, do you think it's prudent for someone in their early/mid thirties to invest the bulk of the money in more aggresive growth oriented funds??

I've already established a solid cushion, since my early investments were rather conservative. Right now I'm interested in maximizing my potential return, and willing to accept some degree of risk as a trade off. So, is this a good idea, and can anyone recommend anything?? I will discuss any suggestions I receive at the meeting.

Thanks.

 

[drlove]

Re: Re: Investment Advice / Suggestions

You shouldnt go from one extreme to another. Don't try to catch up on lost returns from being too conservative by taking on a lot of risk now.
I wont give you any advice other than to talk it through with your advisor. You probably could take on some additional risk in a portion of your portfolio.

Another suggestion- you'd be better off to contribute to your rrsp monthly than waiting for the deadline. Taking your $4000 amount as a guideline, contribute $300 a month or a couple hundred dollars every pay period. Your money will be working for you all year this way.

I spoke with my advisor and he is thinking of giving me exposure to the European markets. As an aside, I have been contributing all of last year already. The $4000 is merely a top up.