Every day, more Canadian investors are choosing to manage all or a portion of their investments themselves.
"Five years ago, our clients were looking specifically for a platform that would give them cheap stock trades, but that's no longer the case," says Jason Storsley, CEO, RBC Direct Investing. "Today, our clients are far more likely to want a retirement plan that meets their investment objectives."
While the Internet has revolutionized every aspect of consumer life, the primary driver of online investing is the growing ease and wealth of cost-effective products available. "We make it easy for our clients to be successful in achieving their long-term goals and objectives," says Mr. Storsley.
Michael MacDonald, head, Business Strategies, RBC Direct Investing, says, "Our mandate is to continue to provide self-managed investors with a growing inventory of leading-edge products, and innovative resources and tools to help them make confident investing decisions. We've identified the primary six steps of successful investing, and have created tools and resources to help our clients implement those steps effectively."
Once investors have set their goals and objectives, determined their investor profile and asset mix, and decided which type of investment account best suits their investment goals, filters and screening tools make it easy to build portfolios using stocks, mutual funds, ETFs and bonds.
"While our clients want to do their own investing, they may not want to put hours and hours into determining which securities to purchase," says Mr. MacDonald. "They can use the basket approach to ETFs or mutual fund
to reach their target asset allocation, and then call our investment representatives or place the transactions online."
New to RBC Direct Investing's online service is an individualized rate of return, updated monthly, so that investors can compare their own returns to an appropriate benchmark to ensure they're on track with their goals.
"If I've identified myself as an aggressive growth investor, the utility compares my rate of return with the rate of return for a benchmark aggressive growth portfolio for the time period selected," he says.
By setting clear goals and monitoring the portfolio on a regular basis against those goals, investors have a directional compass that will keep them on track, says Mr. MacDonald, noting that investors tend to neglect regular monitoring. "They'll build a great portfolio, right on target, and leave it for three years until they realize they're out of alignment with their allocation. Goal setting and regular monitoring - at least once a year - serve as anchors and keep you informed and disciplined."
Creating a plan - and sticking with it - provides the discipline required for success, especially in volatile times, he says. "Successful investors are risk managers first," agrees Mr. Storsley. "Understanding your risk tolerance and your investor profile - and reviewing it regularly and when your situation changes - will help you stick with and succeed with your investment strategy."
Online resources to get you started
RBC Direct Investing has identified the six steps essential to investment success and developed tools to help online investors apply them.
- Setting goals and objectives is the most important step in self-directed investing. In order to reach your goals, you need to determine your risk tolerance and time horizon.
- Determine your investor profile and asset mix. Understanding your investor profile and tolerance for risk are paramount to developing an investment strategy that's right for you.
- Understand the different investment choices available to you - what are the key product features to consider? With this information you are better able to make decisions and achieve the diversification that will help you to achieve your goals.
- Build your portfolio. Online tools and research can help you identify investments to suit your goals and objectives.
- Take action.
- Monitor your investments on a regular basis.