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.*

Less than one month to go!

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Tick, tock.

 

It’s February and we’re in Canada, which means two things. One, it’s really, really cold. And two, you’ve got less than a month to make contributions to your RRSP that will count for tax year 2016.

 

This year, the actual deadline to contribute is Wednesday, March 1, 2017.

  1. There are lots of good reasons to invest in an RRSP, some of which you may know already:
  2. Enjoying the tax-free growth of your retirement savings (until you withdraw the funds).
  3.  If you have a spouse, contributing to a spousal RRSP in the name of the lower-income-earner can also offer tax advantages in retirement.
  4.  First-time home buyers can use a portion of their RRSP to help finance their purchase.

 

Generally speaking, you are able to contribute 18% of your 2015 earned income to your RRSP. But there’s a bit more to it than that; determining exactly how much you can contribute can sometimes get complicated. A lot depends on what’s happened already. For example, how much room you have saved up from previous years, or whether you contributed to a pension plan the year before.

 

To make things simple, refer to your most recent Notice of Assessment (received after you filed your last tax return). Or do a Google search for “CRA My Account For Individuals,” which is administered by the Canada Revenue Agency. Both of those tools will show you exactly how much you can contribute to your RRSP this year – right down to the dollar!

 

So if you’re ready to top up your contributions for 2016, feel free to give me a call at my direct line 416 571 0369. I’ll be happy to walk you through the investment options available, and to discuss which ones might make the most sense for you. 

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