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Disciplined investor takes 'marathon' approach

Stephanie Kotsopoulos, 28

Occupation

Financial adviser

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The portfolio

Includes CI Signature High Income Fund, Harbour Fund, Advantage Fund, CI Signature Diversified Yield Fund and Cambridge Asset Allocation Fund.

The investor

Stephanie Kotsopoulos works as a financial adviser for a major financial institution. Her own portfolio follows the advice she dispenses to her clients, especially when it comes to diversification and sticking to a long-term investment plan. She also practises what she preaches and allocates her savings to the investment vehicles that she recommends to clients.

Her approach

"My investment approach is balanced, but leaning slightly toward conservative," Ms. Kotsopoulos says. "I use a lot of fixed-income securities, such as REITs, preferred shares, and corporate bonds as a core – and then build around them by adding equities." Her asset allocation is 60-per-cent fixed-income securities and 40-per-cent equities.

Although safety of capital is a priority, she does seek moderate growth. And she has found that low-risk investments don't always entail low returns. "Many of my fixed-income funds have provided significant returns over the past year," she observes.

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"I maintain a balanced approach through diversification, such as holding award-winning mutual funds instead of stocks," Ms. Kotsopoulos adds. "Currently, I use some high-quality corporate-bond funds in my core holdings, along with some high-income funds that contain bonds, REITs, royalty trusts and preferred shares."

Worst move

"In the summer of 2011, the debt-ceiling issue facing the U.S. government was adversely affecting the markets, and it seemed they would take quite a while to recover. However, U.S. equities recovered quite strongly and opportunities for additional growth were missed."

Best move

"In April, 2011, it appeared that Canadian equities had reached the peak of their bull run and I therefore focused more on fixed income. Afterward, they went on a steady decline but my fixed-income investments provided outstanding returns during the run. I ended with a gain of 12 per cent for the year, while the [S&P/]SX composite index was down 11 per cent."

Advice

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"Discipline is the most important aspect. Don't get distracted by external noise and more importantly, don't get distracted from your long-term goals, objectives and strategies by fear and emotion. Set yourself a watermark, that is, an investment return goal, and aim for that. Don't seek higher returns by assuming unnecessary risk, and don't panic if the investment plan underperforms temporarily. Investing is a marathon, not a sprint."



Special to The Globe and Mail

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