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me and my money

Kim Petch

Kim Petch, 40

Occupation: Personal-finance blogger, living in Windsor, Ont.

Portfolio: Cash, GICs

Investing background
Kim Petch became interested in financial markets about 10 years ago when her husband wanted to sell some company stock and she began monitoring the markets for a good selling price.

"I found a whole world that I never knew existed before," Ms. Petch says. "In the years that followed, I learned a lot about markets, finance and economics."

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She now writes a blog called Balance Junkie (balancejunkie.com). "The idea of the blog is that if you can achieve balance in your financial life, those good habits will spread to other areas like career, family and health."

Investing approach
"Right now, I am too cautious on the macroeconomic picture to venture into equities or bonds. Global debt levels are too high and I don't believe the financial crisis will be over until we undergo a massive deleveraging process."

Ms. Petch is thus happy to be in cash at this time, with most of it in a 90-day ING Direct guaranteed investment certificate (GIC) paying 3 per cent.

Once the deleveraging process is over, she may get back into the markets with a portfolio of exchange-traded funds (ETFs) tracking equities (40 per cent), bonds (30 per cent) and cash (30 per cent).

She would likely invest the equity portion in an ETF covering Canadian energy stocks and another ETF covering Canadian financial stocks.

"Why split up financials and energy? They represent a huge chunk of the Canadian market, but don't always move in tandem. I would like to trade them separately to take advantage of that rather than simply investing in something like the composite index."

Worst move
"Labour-sponsored investment funds. We just recently got out of them. The tax breaks really weren't worth it."

Best move
It was getting out of the stock market in 2006 and 2007 because she felt like the U.S. housing market was an accident waiting to happen. She "missed a lot of gains for a while" but was "happy to be on the sidelines when the crash hit."

Advice
"I realize my current view falls near the extreme end of the investing spectrum. But it seems to me risk levels are higher than normal. If you would like to reduce your risk, you can accomplish that by simply raising your cash allocation to a level that lets you sleep at night."

Special to The Globe and Mail

Want to share your strategies? E-mail mccolumn@yahoo.com



New to direct investing? The series

  • Part 1: Park your cash here while you learn the ropes - What you need to know before you get started
  • Part 2: - For rookie investors, one product may be all that's needed to meet investing needs
  • Part 3: - Choosing mutual funds isn't so hard with a little research
  • Part 4: ETFs: easy, tax-efficient funds<b> </b> - A cheap, simple way to diversify your portfolio
  • Part 5: Take stock-buying into your own hands - Don't be overwhelmed -- with a bit of research, you can manage your own equity portfolio
  • Part 6: Building a solid base with fixed income - Tthe financial Rock of Gibraltar of investment portfolios - an unadorned, indestructible mass that provides stability through the good times and the bad times
  • Part 7: Tips for building a portfolio - How to figure out your investing goals. Plus: sample portfolios
  • Part 8: Lessons from the Investing School of Hard Knocks
  • Part 9: Ways to invest in mortgages
  • Part 10: Annuities: An option for any retiree
  • Part 11: Is it inflation or deflation that investors need to worry about?
  • Part 12: Boost your investment returns, courtesy of the government

Also with Gail Bebee:



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