Common Investment Myths – And How to Break Them

 

 

Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it,  maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.

 

Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.

 

The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.

Here are the real answers to three common investment myths:

 

I can’t afford to invest

 

Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.

 

I don’t need professional advice

 

Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.

 

The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”

 

On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.

 

I shouldn’t have to pay fees

 

Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.

 

Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.

 

I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

It’s RRSP season! Do you know how much you can contribute this year?

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Happy New Year!  Another year, another RRSP contribution deadline.

 

This year, you have until March 1 to make RRSP contributions that can count as a deduction against your income in 2016. If you know the basic formula to calculate RRSP contribution room, you probably also know that it can make your head spin. It’s 18 percent of your 2015 year’s income, plus any unused room from previous years, less any pension adjustment from 2015.

 

Fortunately, there’s an easy way to take the guesswork out of this calculation. The Canada Revenue Agency (CRA) offers a tool called “My Account” and you can find it on their website at http://www.cra-arc.gc.ca/myaccount/. By registering for My Account, you’ll be able to see exactly how much you can contribute to your RRSP this season. There are a few other things you can do there as well, but at this time of year the RRSP contribution room feature is probably the most relevant.

 

Whether you register for My Account or not, now is a perfect time to get together and discuss any plans you have for contributing to your RRSP this year. And if you’re not doing this already, we can talk about the idea of making regular monthly contributions to your plan throughout the year, which is sometimes easier than making a larger contribution at the deadline.

 

Feel free to give me a call at my direct number 416 571 0369 if you’ve got any questions about investment options, strategies, or if you’d simply like to go over your portfolio. Or if you don’t have an RRSP yet, we can talk about how to get you started. Building your retirement savings with an RRSP can be a very effective way to prepare you for your life after work.

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