Know yourself Think about the money that you are investing and its intended use. Think about your financial situation, stability in your job, your debt level, whether your spouse or partner intends to stop working soon, the ability to properly assess these areas will make you a better investor as you think about your range of options. Even if your time horizon is sufficiently long to have an aggressive growth portfolio, you need to make sure you re comfortable with the short-term fluctuations you ll encounter. If it is too uncomfortable for you to watch these assets fluctuate, think about a portfolio that feels right. Diversify, diversify, diversify One way to protect yourself from unpredictable downturns in markets is to diversify your holdings.
Most investors use asset allocation as a strategic part of designing their portfolio.
Decide in advance which portions of your assets you want to place in short-term investments, which you want in bonds, and which you want in stocks. By dividing up your total portfolio among the three main asset classes, you can lower your exposure to the risks involved with having all your investments in one class. The average annual return column shows performance through the whole period while the next four columns show gains or losses for specified periods. Members include mutual fund management companies, retail distributors, and affiliates who provide legal, accounting and other services to the industry. IFIC represents the interests of all its members, seeking improvements and changes, with the ultimate goal of enhancing the integrity of the Canadian mutual fund industry.