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Investors often leave RRSPs in cash in financial institutions through procrastination or laziness, says Scott Plaskett, a certified financial analyst who is CEO of Ironshield Financial Planning in Toronto. “They haven’t got a plan in place.”

It's been a scary few years for investors, with the 2008 stock market correction, the U.S. housing free-fall and the European debt crisis taking a toll on portfolios – and psyches.

Even more recently, the threatening fiscal cliff and Greece's simmering economic woes have kept volatility worries percolating, while artificially low interest rates have made returns in so-called "safe" investments troublingly minuscule.

Given the prospect of continued fluctuations in the market and poor yields in fixed-income products, what's an RRSP investor with holdings languishing in cash to do? It's a place where many people with registered investments find themselves, advisers say, with bonds having come due and looking for reasonably lucrative places to next put their funds.

"Everything's low right now; it's hard to find anything on the savings side," says Scott Plaskett, a certified financial analyst who is CEO of Ironshield Financial Planning in Toronto. "People are impatient."

Mr. Plaskett advises those who are sitting on the sidelines to take a step back and return to basics, putting together a comprehensive financial plan that outlines what they want their money to accomplish and implementing it in a disciplined, rational approach.

"It's an educational process," Mr. Plaskett says, noting that emotions and fear play heavily on investors.

He worries that people focused solely on their rate of return may take on too much risk. "It's a vicious cycle," he says, while others may take it too safe, because they are more concerned about preserving money than earning it.

"If you let your emotions dictate your investment decisions, you'll be wrong every time. … Knowledge is the only thing that will eliminate fear."

Investors often leave RRSPs in cash in financial institutions through procrastination or laziness, he says. "They haven't got a plan in place."

An RRSP "by its sheer long-term nature" is not something to look at for quick gains, he points out, although sitting in low-interest bonds when rates are expected to rise could ultimately mean "a guaranteed loss."

A financial plan that sets out your required rate of return "can be a tool to help people keep their emotions in check," he says, suggesting that investors ask themselves: "What are my objectives for this pool of capital?"

For many, this is a good time to put their RRSPs into the stock market, although it's important to look for solid equities that have good growth potential.

"The formula for making money has always been to buy low and sell high," he says. "The problem is that it is such a difficult formula to implement."

Charles Wilton, a portfolio manager at Raymond James Ltd. in Toronto, says that given the uncertainty in the economy, it's important for investors to seek out experienced, competent financial advisers for guidance. He suggests that the best strategy, depending on investors' asset allocation, is to put RRSPs in short-term, fixed-income products as well as equities in high-dividend-paying, blue-chip corporations.

Investments in bond funds "have to stay very, very short-term," he says, suggesting that terms not go beyond three years, given that the economy is expected to improve and normal business cycles should return.

"We have the lowest interest rates in 50, 60, even 80 years," he says. "As interest rates move up, the value of your assets moves down. There's a negative yield."

He suggests that exchange-traded funds (ETFs), such as BlackRock's iShares DEX Short Term Bond Index Fund are a good option, paying about 3 per cent for a three-year term. These ETFs combine a number of different bonds and are traded like stocks, albeit with low volatility and coming at a low cost.

Those investors looking for higher yields who are planning to buy equities, meanwhile, should understand and evaluate the assets they are buying, he says, investigating the individual companies themselves.

"People have a tendency to take on more risk when they think they want more money," Mr. Wilton says, which means they invest in companies without knowing that they have underlying quality.

"It's human nature. …You make decisions consciously, but you act emotionally," he says. "You have to deal with the reality."

There are many good-quality stocks available in companies that are undervalued, especially in the United States, he says. But it's important to go through the process of determining whether they are worth investing in.

"I have to seek out opportunities that give me the best chance and the lowest risk," he says.

Mr. Plaskett notes, meanwhile, that continued news about the fiscal cliff and the European debt crisis is hard to ignore. "That can't not affect you emotionally, when there's information floating around," he says, cautioning that when people with RRSPs hear such news it "holds them back from being able to do the right thing at the right time."

Those who are farther from retirement, with additional time on their hands, can reduce their expectations when it comes to their rate of return, he notes. But earning minimal interest by keeping registered funds in cash is rarely an option, because investments need to grow at least beyond the rate of inflation.

"Your risk in a cash account is higher than your risk in a well-diversified portfolio," he adds.