This year your RRSP portfolio might be facing more than a little challenge. The big banks made their money on us, then lost billions investing unwisely in the US. Not to pick on anyone, but as an example of how we are being fleeced by the powers that be, take a look. The largest mutual fund in the country invests $13 billion of Canadians' savings. It returned to them -3.23% for 2007!!. Investors Dividend Class A fund charged their investors 2.7% for losing 3.23% of their $13billion - a whopping $350 million management fees. They charged us more than $1 million in fees per day - to lose 3.23% of our money. Dundee Bank almost lost their shirt, fortunately Scotia desperately wants their sales force so they bailed them out and bought a chunck of Dundee. CIBC basically lost their (your) shirt on unwise US investments and RBC will suffer years of disrepute because they tried to hide their losses with false reports, and TD burned their fingers on some huge buyout deals. And that was only for November 2007. Early in 2008 Chinese money bailed out (for more than $1 billion) Merill Lynch and we see City Group again having to sell a major chunk to Mid-Eastern financiers to remain afloat. And that's the tip of the iceberg. 2008 will be a volatile year in the markets because of the credit crunch. What brought about the credit crunch? Greed and bad business judgement brought about the mess we're in. Banks started lending money to high risk borrowers, overshooting any commonsense and let caution fly in the wind. Such extreme willingness and competition to finance any type of property at any type of ratio inflated real estate prices beyond comprehension - and created a false sense of the 'health' of the economy. We saw 120% mortgages on highly inflated property prices in a country with dwindling manufacturing and slowing GDP - and even Canadian banks rushed in to grab a piece of that unrealistic pie. Now that millions of homeowners find they cannot pay their mortgages, and do the math, and realize with the severe drop in real estate prices they are better off simply walking away from their debt (since they have very little invested in the purchase) - there is an oversupply of real estate for sale and no money to fund new purchases and no buyers - the lending institutions ran out of cash and are not getting an income from their investments. Commercial loans, that drive the business economy, dried up. In an attempt to raise cash troubled lenders increased the rates of the few who still pay their loans - and this is hurting business and causing a fallout on the stock exchange. Greed is its own remedy. What does this have to do with your RRSP?Now, more than ever in the past 30 years we need to revaluate your portfolio strategy. The market is on the brink of a crash - or is it? It can crash and take 10 years to return our investments, or it may be highly volatile and uncertain - which will it be? Whichever way - there are investment companies, products, mutual funds and investment sectors that one must stay away from during these times. You need a solid investment strategy, especially now.
For a free opinion on your portfolio strategy contact us. We have extended hours (Jan to April) for your convenience. If you need to appoint another adviser to keep an eye on your investments, its easier than most people think. A one-page form gives the mutual fund company instruction to change the adviser of record overnight. IThere's no charges involved. Its your money - your future - come on in and lets see where we can help.
Almost every financial adviser today belongs to some huge corporation dictating product preferences and investment strategies. Who can you trust to give you a fair deal on your hard earned retirement savings - a deal not tainted by the politics of the financial world? Seek out one of the few independent finanacial advisors, someone who is not being told what to sell, what to push, and what to do with their clients' portfolios. Someone who can do your GICs, RRSPs, RRIFs , provide you with innovative banking products and european-style mortgages and untainted advise - someone like Duplessis Financial, for instance. Get an honest review of your RRSP portfolio. Did you know that 2007, in mutual funds alone made 60% in China funds, 35% in Emerging Markets and 13% in Canada, and 4.75% on guaranteed annuities and daily balances on banking products? Get an honest review, preferably before the end of February. |
