Uncertainty hangs in the air as Canadians fret over their retirement portfolios this year.
No wonder, what with Europe’s unresolved turmoil, sluggish American growth and reduced forecasts for Canada’s economy.
The same uncertainty holds for financial planners helping their clients navigate turbulent waters. So what do the pros have in mind for their own registered retirement savings plan portfolios? The Globe and Mail asked four certified financial planners to share their game plans.
An important caution: The strategies reflect each adviser’s personal circumstances and are not recommendations for others.
Mark Ting
Position: Mutual fund investment specialist, Vancity Credit Union, Vancouver.
RRSP profile: 70 per cent mutual funds and precious metals, 25 per cent stocks, 5 per cent cash.
Personal investing philosophy: High-risk tolerant
Entrepreneurial by nature, Mark Ting has been buying and selling houses since his late teens. Now 38, the married father of two children, 4 and 6, applies that self-starter thinking to his retirement investments.
About 70 per cent of his portfolio is in a long-term “core position” of mutual funds in Canadian and global stocks, bonds and precious metals.
One staple is IA Clarington Inhance Monthly Income Fund, known for socially responsible investing. Mr. Ting says the fund is defensive when necessary but offensive when the market is oversold, noting the fund bounced back after a hit in 2008. About 20 per cent of his long-term investments are held in precious metals, with a preference for Central Fund of Canada, which holds physical (not paper) gold and silver.
His entrepreneurial side comes alive with the 20 per cent to 25 per cent of his portfolio in “play money.” Here, he looks for stocks, especially in renewable energy, agriculture and precious metals, that can return 25 per cent or so a year. He has a strong stomach for the inevitable roller-coaster ride.
Mr. Ting makes a big distinction in how he handles the two sides of his portfolio. “For my core position, I am a big believer in time in the market as opposed to timing the market, and in my ‘play’ section it is all about hoping to time the market.”
Tina Tehranchian
Position: Branch manager and senior financial planner, Assante Capital Management Ltd., Richmond Hill, Ont.
RRSP profile: 100 per cent mutual fund equities
Personal investing philosophy: High-risk tolerant
Unlike some who reach the age of 50, Tina Tehranchian has no aspirations to retire early.
“If my health allows, I would love it if I did not have to draw my portfolio until I am in my 80s,” says the married mother of a 24-year-old son.
Given her long-term horizon, Ms. Tehranchian accepts market fluctuations in an uncertain economy. “I see volatility as an opportunity,” she says, warning her attitude is “not for everyone.”
She is broadly diversified in her equity holdings.
Canadian mutual fund stocks make up about 26 per cent of her portfolio, slightly reduced from several years ago. That change allowed her to add some emerging market funds, now about 12 per cent of her holdings. The remainder is divided among global equities (43 per cent), precious metals (16 per cent) and labour funds (4 per cent).
This year, she plans slight adjustments to her Canadian funds to add dividend-paying equities and income trusts. “I think yield is going to be very much in demand over the next five to 10 years,” she says. Similarly, she may rejig her mix of global equity funds to snap up bargains in mid-cap stocks.
In general, her goal is to generate a return of 4 per cent annually after inflation.
Brian Wood
Position: Investment sales manager, Nova Scotia district of the Bank of Montreal, Halifax.
Portfolio profile: 100 per cent equities
Personal investing philosophy: Patient, long-term focused
With two pre-teen children playing football, Brian Wood knows the value of keeping one’s eye on the ball. The same holds for his personal portfolio.
