Don’t let investments take a vacation
INVESTING
It’s summer again — time for many of us to take a break and possibly hit the open road. But even if you go on vacation, you won’t want your investments to do the same – in summertime or any other season. How can you help make sure your portfolio continues to work hard for you all year long?
Here are a few suggestions. Avoid owning too many “low growth” investments. As you know, different investments have different characteristics and can help you in different ways. For example, you typically own stocks because you want the potential for growth. Other investments, such as guaranteed investment certificates (GICs), provide you with a regular source of income and stability of principal – two valuable contributions to your portfolio. However, investments like GICs don’t offer much in the way of growth potential.
You can maximize the productivity of your portfolio by owning a variety of investments – domestic stocks, international stocks, corporate bonds, GICs and more. How much of each investment should you own? The answer depends on a variety of factors, including your age, income, risk tolerance, family situation and specific objectives. Over time, your ideal investment mix may change, but you’ll likely need at least some growth potential at every stage of your life.
Don’t let your portfolio go “unsupervised.” Your investment portfolio can be subject to “drift” if left alone for extended time periods. In fact, without your making any moves at all, your portfolio can move in directions that may not be favourable to you.
Don’t stop at the nearest “resting place.” Some people hope that if they can get that one “winner,” they will triumph in the investment arena. But the ability to “get rich quick” is much more of a myth than a reality.
In other words, investing is a long-term endeavour, and you need a portfolio that reflects this reality. You need to establish your goals and keep them constantly in mind as you invest. And you will never really reach the end of your investment journey, because you’ll need to make choices and manage your portfolio throughout your retirement years.
Hopefully, you will enjoy a pleasant vacation sometime this summer. But your investment portfolio shouldn’t take time off.