Bennett Financial Services

A good investment plan will review a variety of investments to ensure that you get the most appropriate mix of assets that will consider your personal risk tolerance profile, your age, your salaried income, and your net worth.  It will also diversify your portfolio to spread the investment risk over different economic sectors, industries and regions.  It will also reflect your consideration of a variety of evaluative factors such as the investment’s degree of liquidity, its safety of principal, it ability to hedge against inflation, its income potential, its growth potential, the ease of managing the investment, and tax considerations for that particular investment.

When constructing your investment portfolio, it is important to look at the various types of investments including cash and its equivalents, fixed income instruments, and equities.  Within each of these groups are a wide variety of choices.  In making those choices, it is critical to understand the nature of a variety of factors that must be considered when evaluating which investments should be included in your portfolio.  Although we do not make any attempt to evaluate the more esoteric investments like art, antiques, or coins, we recommend that you look at the complete list of ‘main stream’ investments and not just publicly traded securities.

Cash and its equivalents include such things as saving accounts, tax-free savings accounts, Canada Savings Bonds, and Treasury Bills.  Fixed income investments include such things as Guaranteed Investment Certificates, Term Deposits, Government Bonds, Corporate Bonds, Private Mortgages, and Discounted Mortgages.  Equity investments include blue chip common shares, blue chip preferred shares, mutual funds, residential real estate, rental real estate, raw land, and precious metals.  You will note that we do not deal with speculative common shares as we do not consider them as one’s best choice when building a portfolio to secure your retirement.

Remember that there are good investments and there are long term investments, but there are no good long term investments.  As a consequence your portfolio must be evaluated and re-adjusted at least on an annual basis.

For a clear understanding of the terms being used, the issues involved, the necessary steps to be taken and for a step by step check-list procedure of how to set up a productive investment plan, read the chapter on ‘Investment Planning’ in Bennett Financial’s ‘Checklist Guide to Financial Independence’.  To get a copy, click here.