Dear Nancy Woods,
I am trying to build a portfolio of a variety of funds and having a difficult time narrowing down all the different choices. There are so many different options. Each company has their own precious metals fund, Canadian equity, Canadian bonds etc., etc. Trying to decipher through all the information is very difficult. I was just wondering if you had any particular funds or advice that could help in this situation. Thank you, Mark
Dear Mark,
Not only can investing in mutual funds be confusing, so can any investment. There are so many options, such as equity stocks, bonds, preferred shares, exchange traded funds, closed end funds, structure products, notes -- just to name a few. If you are just starting out I would suggest you go to your local bank and look at their proprietary balanced fund. This will give you a chance to invest in a diversified portfolio of stocks and bonds. As you build up assets you can then look to sector specific funds and/or exchange traded funds (ETFs). I have a preference for ETFs because they mimic the market index(es), and that means low management costs. Owning the index provides a diversification across all sectors and a good foundation for any portfolio. The index is used as a benchmark to which funds and portfolios are measured against. My thought is that if it is worthy enough to be the benchmark, why not own it?
Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment advisor with RBC Dominion Securities Inc. To ask her a question, send an e-mail to asknancy@rbc.com
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