The Terrace Standard, Wednesday, February § 9, 2000 - BS Risk tolerance - How do you feel about risk? | (NC)-When it comes to investing, some peo- ple can ignore risk and focus on long-term goals while others lose sleep when the market: drops a point. Risk plays a role in all investment decisions, including RRSP’s, but knowing your tolerance for risk means you can build a portfolio that meets your needs, When building an appropriate portfolio, you should consider two factors: the level of risk you’re comfortable with and your invest- ment horizon. Answers to. easy questions about investment goals, when you plan to use your savings and expectations for annual returns will help identify your optimum investment portfolio. Personal Comfort Level: How do you feel about risk? Consider the follow- ing statements about investment risk and select the one that most closely matches how you feel about investing. Based on your tolerance for risk, First Canadian Funds Inc, recommends the following investment portfolios: 1. “| cannot afford to lose any of my money. lam not interested in higher returns if | could possibly lose some of the money.” These security-conscious investors should have most of their portfolio invested -in low-risk cash assets or money markets and fixed income with a small amount in equities. - 2. “| recognize that to keep ahead of infla- tion and have the opportunity to get higher returns I'll need to invest some of my money in the stock market or stock mutual funds.” These bal- anced investors should have a majority of their money in equities and fixed income products. 3. “To get a superior return on my money, | need to invest a signifi- cant portion of my money in the stock market or stock mutual funds, | expect that my returns wil go up and down, but that over the long term | will make a significant gain.” These growth-oriented inves- tors should have port- folios that favour equities. One of the easiest ways to determine exactly how you feel about investment risk, is to use an asset allo- cation service such as Matchmaker available through Bank of Montreal. MatchMaker asks ten questions about investment goals, investment time horizon and risk toler- ance. Based on your answers, you are linked to a diversified portfolio of mutual funds ideally suited to your needs. Time Horizon: How much time do you have to invest? The other factor in determining your risk tolerance is to con- sider how much time you have before you plan to use your money. In general, the longer you have to invest, the more risk you are able to accept. For example, if you are saving fora retirement that is more than ten years away, you could have Fred Lindsay” Frank Donahue* Frank Donahue Insurance Agency Ltd. Successful ne biggest... Contribution to any RRSP ts good advice. RRSP planning depends making choices that match your long term goals. As a Clarica agent, I'll talk about your retirement goals, and then help you put together an RRSP strategy that helps you achieve them. 114-4741 Lakelse Ave. Terrace, BC V8G 4R9 (250) 635-2387 ™ A trademark of Clarica Life Insurance Compan Representing Clarica Life Insurance Company and “C) CLARICA’ investment and Insurance Solutions. Since 1870, on ita Investco Inc. . Of cantaer ts at www, edb, calves, Y 782 call 1-800-STD-DANK, or visit airy branch, 2 For more informarion, call or vlvit: 4633 Lakelse Avenue, Terrace, BC (250), 635. 8900. oe 1° Trade-mach ef TO Mak, OWE'RESHERE TO HELP MAKE TP EASIER Ab SUPE MO ay ms a portfolio that is heav- ily invested in equities because you have the time to ride out market ups and downs for the opportunity for higher returns. As you get closer to retirement, however, you'll want to reduce investment risks. Information provided by First Canadian Funds, Inc.- dedicated to making your mutual fund investing less complicated. 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