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Either you’re terrified of today’s stock market conditions or raring to go.

Regardless, here’s the best strategy for registered retirement savings plans in the pandemic winter of 2021: Pick a balanced exchange-traded fund with a mix of stocks and bonds that makes sense for you and start making biweekly contributions.

So boring, I know. But stocks today are excessively exciting and excitable, and there’s the risk of a sharp pullback. A balanced ETF won’t completely protect you if stocks plunge, but the bond component will at least provide a little cushion. You’ll almost certainly do better than if you bought a bunch of today’s hot stocks. And for nervous investors, a conservative, balanced ETF helps ensure you’re not shut out of stock market gains ahead, so you get a taste of the upside.

March 1 is the deadline for contributions to an RRSP for the 2020 tax year. In a recent survey issued by Bank of Nova Scotia, 70 per cent of respondents said they found it hard to know what to do with their investments in the current environment.

Frankly, I worry about the investors who are not uncertain. Stocks have powered ahead since last spring for a variety of valid reasons: low interest rates on bonds, government support for the economy and the expectation of an economic rebound once the pandemic is under control. But there’s a growing sense that stocks are getting ahead of reality. Speculative stocks are flying, and the demand for online brokerage accounts to trade stocks keeps spiking.

You could keep this year’s RRSP contribution in cash and wait for a market crash, then buy, but what if stocks keep rising for a while yet? You could go all in with your RRSP contribution in hopes of catching the next leg of market gains, but what if stocks crash on March 2?

The easy compromise is to take your RRSP contribution and feed it into the market in regular increments. Biweekly is one option, but you could also go monthly or just sporadically. This approach is called dollar-cost averaging and is a proven way to manage your emotions as an investor. In down markets, you’ll invest regardless of your trepidation; in soaring markets, you’re protected from your own exuberance.

You’ll find an overview of balanced ETFs in the latest Globe and Mail ETF Buyer’s Guide. There are conservative versions with a 50-50 mix of stocks and bonds, middle-of-the-road versions with 60-40 or 70-30 mixes and growth variants with an 80-20 mix. Beyond bonds, these ETFs diversify your stock holdings with exposure to Canadian, U.S. and international markets.

Do not buy balanced ETFs or anything else with exposure to stocks if you plan to judge your success by what happens in a few months or even a year. It may take years for the investments you make in balanced ETFs in 2021 to ripen.

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