Diversification

Eliminate the fear of the where is the "best" place to invest at any given time through diversification

This site is based on you meeting your unique financial goals by taking a Successful Wealth Approach. The tools that you might use to reach those goals can range from term deposits to GICs or Stocks and mutual funds.

Whatever the investment you choose, it's very important that you don't put all of your hopes and dreams into one vehicle. Economic trends can be irregular, and that can affect your bottom line. This is the only real investment strategy thawill give you safety in numbers.

Think of diversification as if you have the opportunity to invest in companies that make money only in the summer.

When the value of your sunshine investment increases due to long, hot days, you've got investment growth. If you find yourself inside during the summer watching the raindrops, it will not bode well for your sunshine investment but look at this as an opportunity to buy more shares.

Make your decisions based on real trends in the marketplace. Don't become a speculator. You'll notice that all good investments fluctuate over any given time. That is why it's important to hold onto investments in different economic sectors.

Bonds and equities (also known as stocks) in domestic and foreign companies are just some choices you have to make for a well-rounded blend of good quality investments. Diversify for safety.

To be successful at diversifying also means to identify which are the profitable investments. Now, if that were easy to do, most investors would always be making money, which you know isn't the case; however, as you'll discover good investments are very profitable if given the time to grow.

As an investor, you probably will fall into one of three categories: conservative, conventional, or speculative. (It should be noted that these categories have nothing to do with age or sex.

I have a client who is a 70-year old female a speculative investor who understands better than her grandsons that the more they diversify into growth investments the better their purchasing power.)

What you must realize is that, while you might have to diversify your investments, over time your personal financial goals will also have to change. Someone with a family to support might go for conventional investments now but, when the children are independant, can afford to speculate.

While diversification is the key to good growth, a mist that you don't want to make is to over-diversify. Over diversification can occur if you buy a small number of units in many mutual funds for example, investing so little in each fund that no one investment, no matter how well it did, could give you significant gain in your portfolio - Here is an example of a couple who came to meet with me.

They invested $25,000 in 10 different funds. It also makes no sense to invest in several funds of the same type-for example, three Canadian equity funds.

Chances are that the different managers might invest in the same companies in varying degrees. If your main concern is a managed diversified portfolio, then that can easily be met by having fewer and larger investments in several funds that are themselves diversifed. But the key is diversification