Michel A. Saleh

Financial security advisor   *
Mutual funds representative   **
514 282-3276 1 866 665-0500, 23276

My financial chronicle

What is your investor profile?

Before obtaining any investment advice, you first need to determine your investor profile. But what exactly does that mean? In investing, what’s important is not whether an investment is good, but whether it’s good for you! An investor profile is actually composed of a number of elements that, when looked at individually, make the overall concept quite clear. Here are the main points.

The most important point by far is your personal risk tolerance. Naturally, this tolerance is just that—personal. It is a reflection of you, so it’s important you respect it. Non-guaranteed or socalled “high-risk” investments are not for everyone. Or rather, not everyone is made for this type of investment. To ascertain your level of risk tolerance, ask yourself the following questions: “How would I feel if I was to see the value of my investment portfolio fall? How confident am I that my investments would eventually recover their value?”

The second point to consider is your investment horizon. In the world of securities, it is generally agreed that non-guaranteed investments (mutual funds, stocks, bonds, etc.) are designed to be held long-term. The reason for this is simple: if they decline in value, the financial markets need enough time to recover. If your investment horizon is under four years, you should purchase guaranteed investments (GICs, savings bonds, treasury bills).

A third point to consider is your age, as this is tied to your investment horizon: the older you get, the less time you have to “wait” for the markets to recover after a sharp decline.

A fourth point to consider is your investment goal. Generally speaking, there are five main categories of investment goals: security (you are aiming to secure your capital); income (you wish to gain an income from your investments or be able to withdraw certain sums at various times); balance (you are aiming for a balance between the income and growth of your investment); growth (you want your capital to grow); and speculation (you wish to use your investments to speculate).

Lastly, you must take into account your financial situation. Do you have any debts? Have you maxed out your RRSPs? Do you have any non-registered investments (not RRSPs)? When choosing investment vehicles, you should definitely take these questions into account, as some investments have more advantages than others, particularly from a tax perspective.

For more information about planning for retirement, contact me today. As a financial security advisor, I can help you define your investor profile.

Make an appointment today!