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An early investing prediction for 2022: The worst investing sin will be complacency.

It’s possible we get another great year for investors, with major stock indexes punching out big gains and speculative stocks delivering as well. But with so many uncertainties about the pandemic, the economy, inflation, interest rates and more, it’s vital to prepare for adversity. Here are six ideas:

Mind your real returns: Inflation, for the first time in decades, is biting deeply into investment returns. Take your nominal return, the one reported by your broker, and subtract the inflation rate. For October and November, the cost of living was up 4.7 per cent over the same months in 2020. Here are some thoughts on what works and doesn’t work for hedging inflation from my colleague Ian McGugan. Conservative investors may find that it’s a struggle to generate a positive real rate of return in the near term.

Separate your short-term bets from the long-term holds in your portfolio: With your long-term holds, continuing attention is mainly about perhaps adding more when prices drop. Keep a close watch on your speculative holdings. When the overheated stock market eventually corrects, these positions will likely be hammered.

Check fees: Investors have been buying a lot of niche and sector exchange-traded funds with fees on the high side. Fees are inconsequential to investors booking double-digit returns, but they’re dead weight in more normal markets.

Tally up your recent dividend increases: Dividend growth is your best inflation hedge and it’s happening in the portfolios of investors who own a number of blue-chip stocks. The banks are again on this list after the recent go-ahead from regulators to resume dividend increases.

Make your peace with bonds: Bonds had a sour year in 2021 and it’s possible that 2022 will bring more of the same if interest rates rise as expected. We can argue whether the default portfolio mix should be 60-40 stocks-bonds, or 70-30. But the fact remains that bonds are the best cushion against a stock market crash. Also, remember that guaranteed investment certificates from alternative banks and credit unions offer a higher-yielding alternative to bonds, at the cost of liquidity.

Evaluate your online broker: Zero-commission stock trading has finally come to Canada through the trading app Wealthsimple Trade and a pair of brokers, National Bank Direct Brokerage and Desjardins Online Brokerage. It’s unlikely any of these three will be seen atop the next Globe and Mail online brokerage ranking (coming Feb. 4), but active traders should check out what they have to offer. The typical online broker charges $5 to $10 a trade – is there offsetting value for clients paying that cost?

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