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Me and My Money

Accountant’s portfolio is virtually risk-free Add to ...

David Trahair


Chartered accountant and author

The portfolio

High-interest savings account (HISA) and guaranteed investment certificates (GICs)

The investor

David Trahair, 57, operates his own accounting firm. He is also the author of five personal-finance books, the latest being The Procrastinator’s Guide to Retirement: How You Can Retire in 10 Years or Less (2015).

Mr. Trahair was featured in Me and My Money in August of 2009. His portfolio then was allocated 57 per cent to GICs, 34 per cent to bonds and 9 per cent to equities. It is now 52 per cent in a HISA (Manulife Trust Investment Savings Account) and 48 per cent in GICs paying more than 2 per cent, compounded annually.

How he invests

Mr. Trahair is happy to hold only HISAs and GICs in his registered retirement savings plan. For one thing, they don’t come with stomach-churning plunges. And the Canada Deposit Insurance Corp. insures up to $100,000 held at each financial institution. Moreover, HISAs and GICs are “actually quite good at fighting inflation,” Mr. Trahair argues. That’s because interest rates go up when inflation rises.

HISAs adjust quickly. Fixed-rate GICs require more time, so they may trail inflation. But there are also periods when inflation sinks below GIC rates: For example, five-year GICs were 15.3 per cent in 1981 when inflation was 12.5 per cent.

He personally owns two- and three-year GICs. His average return over time will be somewhat less than five-year GICs but it will adjust sooner and more smoothly to market rates

Mr. Trahair does not categorically reject stocks. He is okay with gaining exposure when risk is low – that is, when optimism is at an ebb.

“I have positioned my portfolio so that more than half is in cash,” he remarks. “When there is another crash, I’ll have a decision to make with my adviser whether to get back into equities.”

Best move

Aligning investments to his risk preferences.

Worst move

Critics may say staying out of the stock market is a bad move, Mr. Trahair notes. But he finds they often have an association with the financial industry and “make their living selling stocks and mutual funds.”


If you have exposure to stocks, the percentage in your portfolio should be “no more than 100 minus your age.”

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his website


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