Invest to Achieve Your Goals

“Match your financial vision with the right investments.”

While there is a wide variety of investment options available, the two primary types of accounts in which they are held—registered and non-registered—can have implications for investors.

Registered:?Accounts and plans that are registered with the government for income tax purposes and that provide tax-deferral opportunities (e.g. RRSP, Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP), Registered Disability Savings Plan (RDSP), other pension plans) or are non-taxable (TFSA).

Non-registered:?Accounts that are not registered with the federal government, do not have limits, and earn income that must be included as taxable income each year (e.g. investment accounts with corporate stocks, bonds, mutual funds, exchange-traded funds (ETFs) or guaranteed income certificates, to name a few).

What’s the difference between an asset class and an investment vehicle?

An asset class is a broad category of investments (e.g. cash, bonds or stocks) that have a distinct risk/return relationship. An investment vehicle is the financial product that enables investors to buy and sell the underlying asset class (e.g. a mutual fund or an ETF).

Understanding the risk/return relationship

In the investing world, there is a strong relationship (correlation) between risk and return. Generally speaking, the higher the potential return, the more risk an investor should be willing to accept. Keep in mind, for most types of investments, returns are not guaranteed.

“Don’t put all your eggs in one basket.”

With investing, it’s important to diversify, which means finding the right balance of investments and creating a portfolio that includes different types of investments to reduce overall risk and volatility.

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What type of investor are you?

When building your investment portfolio, it’s important to first gauge your risk tolerance, which is the amount of market volatility, specifically the ups and downs that are reasonable to expect during your time horizon. Defining your risk tolerance will help you determine the type of portfolio that best suits your needs and also help you manage expectations during down markets. Once you have a sense of where you are on the risk tolerance spectrum (risk-averse versus risk-tolerant, or somewhere between), you are in a better position to invest in a portfolio that aligns with your overall goals and objectives as an investor.

Main components in determining risk tolerance and investor risk profile.

• Your investment time horizon
• Level of comfort with fluctuating markets
• Your other sources of income/overall financial situation
• Your liquidity or cash flow needs

When it comes to investing, what is your plan?

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