Have questions about investment tools and returns? Maybe you'll find the answers here!
Below are the some of the questions (classified according to subject) submitted by visitors to our site, as well as our experts' replies.
Diversifying my portfolio
I'm looking to diversify my portfolio. I've invested $5000 in mutual funds but was wondering about stocks and bonds. I have $20,000 in savings at 3.50%. Any advice?
The type of investment you should make depends on a number of factors. One is your objectives and your horizon. If you are saving for retirement (which is usually the case with RRSPs), your horizon is long since your retirement may be more than 20 years away. In this case, you can afford to invest in riskier assets such as stocks, mutual funds, etc. Your risk tolerance is also a factor. Are you able to take the daily fluctuations in the value of your assets in stride? One alternative to mutual funds could be segregated funds as Guaranteed Investment Funds - Helios Contract, which offer principal guarantees and the possibility of investing in the stock market.
A good technique is also to diversify investments among various instruments. A portion can be placed in stocks, another in bonds, another in GICs, etc.
A financial advisor can help you determine the strategy and the savings rate that will enable you to meet your financial objectives. If you don't already have a financial advisor and would like more details or a quotation, I suggest you contact an associate of our Desjardins Financial Security Independent Network.
Drawing a monthly income
I would love to know the best bet for a secure investment of a large amount of money that you could draw a monthly income off of.
There is a product called "immediate annuity". For a single deposit, the insurance companies provide you with an income (annual or monthly). The income can be paid as long as you live or for a guaranteed number of years. The income level is totally guaranteed by the insurance company and will not vary with future interest rates.
If you are interested in such a product, you can call one of our on-line advisors or contact a sales representative from our Desjardins Financial Security Independent Network.
Évolu-Rente
A friend told me about your Évolu-Rente product, but I didn't really understand much about it. Could you tell me more about this product, and whether it is cashable, transferable (with fees), etc?
Desjardins Financial Security's Évolu-Rente is a long-term savings contract (e.g., for an RRSP). It offers a choice of investment options, including guaranteed investments, segregated funds, and index-linked investments.
If you would like more information on this product, contact a Desjardins Financial Security Independent Network advisor.
Multistrategy Investments
What are the returns on your multistrategy investments? I'm presently torn between investment bonds and GICs, and the description of multistrategy investments sounds interesting.
The multiple strategy investment options are indeed a good alternative to investment bonds. They are designed to maximize return potential and minimize risk. Furthermore, they have low market correlation, which means that their returns are affected very little by market direction or trends. Lastly, our Strategic Index Plus product offers a 100% capital guarantee on terms of over five years.
For information on Strategic Index Plus (SIP) and Index Plus Tactic (IPT) returns, contact a Desjardins Financial Security Independent Network advisor.
Strategic Index Plus
I'd like more information on your Strategic Index Plus product. It provides access to hedge funds, which are usually only available to institutions and the wealthy.
The Strategic Index Plus product does indeed put hedge fund returns within your reach. It also offers a capital guarantee of between 80% and 100%, depending on the term you choose.
In fact, for a minimum deposit of $500, Desjardins Financial Security invests in hedge funds on your behalf so that you can reap the returns. Another attractive feature is that Strategic Index Plus, like other hedge funds, has low market correlation. In other words, even if stock markets trend down, these funds can generate positive returns. Moreover, because Strategic Index Plus was designed to be less volatile, its returns are more stable.
If you are interested in this product, contact a financial security advisor from our Desjardins Financial Security Independent Network. He or she will be happy to help you.
What's the best investment apart from RRSPs?
Since rates are really low right now, what is the best investment I can make apart from RRSPs? I am retired and don't want to lock in my money for several years since I don't know when I going to need it. Thank you!
As a general rule, the higher the return on an investment, the greater the risk. Since you are now retired, you need cash on hand and the preservation of your capital is certainly preferable to looking for better rates.
However, without locking in all of your money, asset allocation could be advantageous for you. In fact, for all types of investments, there are three factors that should be kept in mind: risk, return and volatility.
By combining various investments (funds, guaranteed investment certificates, annuities, etc.) based on these factors and your financial needs, allocating your assets will let you strike the best compromise possible without having to lock in all of your money by minimizing the risk to which you are exposed and by improving your return while respecting your cash flow needs.
For help in this matter, please contact your financial advisor.