
DAVID PAGE,
CFP. CSA. CDFA.
Sr. Exec.Financial Consultant
For Any Investor, There’s Equity In Equities
If you’re feeling a little uncertain about what’s best for your money these days, it’s not surprising. Well intentioned advice is everywhere, whether or not you ask for it. On the radio, in the newspaper, from your co-workers, and colleagues. Perhaps from even your parents or grandparents.
Are they right? Who knows? But, regardless of what you hear, there are two undeniable facts. First, one of the most important aspects that must be taken into account when deciding where to put your money is you – your circumstances, goals, personal preferences and the amount of time you have to invest.
Second, for even the most risk-averse investor, there is a place for at least some equity investments in their portfolio. Why? Because compared to fixed income investments, equities have greater potential to produce growth in your portfolio over the long-term, and they can do more to protect against inflation eroding your purchasing power so the value of your money will be maintained.
The chart illustrates this point. Looking back at $1 invested in numerous asset classes over 200 years ago, the trend shows that despite events such as wars, recessions, and numerous periods of financial turmoil, markets have continued to grow.
The chart also shows that equities by far have the biggest growth trajectory of any other asset, and represent the best option for preserving your purchasing power over time. The real return on that dollar, that is the return in excess of inflation, is close to $700,000.
Keep in mind that equity investments come in all different forms. Not all will be suitable for you, so careful selection to ensure your portfolio aligns with your time horizon and comfort level with risk is key. Armed with information about you, your Consultant can recommend options that will help you achieve your goals without compromising your comfort level with risk.
Equities: They’re not just for the young
For those heading into retirement or already there, having a suitable equity component, even during periods of volatility in the equity markets, continues to be very important. That’s because over the length of a typical retirement, fixed income investments alone will produce little in terms of growth. Investors who include equities in their portfolio can use the additional growth to produce a higher level of income through retirement. Without equities, investors will need to make significant withdrawals from their savings to produce an adequate level of income and run the risk of depleting their investments prematurely.
Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.
David W. Page is a Kamloops rider who is very active in his community and is a member of the RFBA
Phone: (250) 372-2955
Toll Free: 1-800-897-9559
Fax: (250) 372-1567
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