GUIDE TO MACKENZIE FUNDS

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GUIDE TO MACKENZIE FUNDS
 
Five Tips to Find the Right Balance for Your Investment
Successful investing is all about finding the right balance - between risk and reward, and between short-term and long-term performance. Mackenzie offers all the products and services that you and your financial advisor need to create and adapt a lasting plan for your future.

When speaking with your financial advisor discuss how you can balance your investments to meet your short- and long-term goals. Here are five tips you can discuss with your advisor:
 
1. Evaluate your risk tolerance
Your selection of investments will depend on your risk tolerance and the length of time you have to invest. Generally, a low-risk investment has lower potential for growth and a more volatile investment has a higher potential for growth. Only you and your advisor can decide what suits you best.

Did you know? No matter how risk averse you are, it's critical that your growth outpaces inflation. If it doesn't, the spending power of your savings will be eroded.
 
2. Reduce risk through diversification

Diversification reduces your risk by ensuring that even if one choice doesn't perform well, the rest of your investments - i.e., your portfolio - will likely soften the blow.

The vast array of Mackenzie products will allow you to diversify:

  • by asset class, combining cash, bond and equity holdings;
  • by geographic region, mixing securities from around the world;
  • by currency, balancing different currencies which shift in value over time; and,
  • by portfolio management style, including growth, value and sector rotation.
Did you know? Investment success is influenced by many factors, but research shows that balance among various asset classes accounts for more than 90% of investment returns.
 
3. Smooth out volatility by investing for the long term
One of the most often repeated truths about investing is that your equity holdings will fluctuate in value. Some days they'll go up and others they'll fall. Diversification is one way of reducing your risk. Holding onto your investments longer is another. Over time, daily fluctuations are smoothed out.

Did you know? If you look at returns for the Toronto Stock Exchange between 1957 and 1997, not one 10-year period had a negative return. (As reported by the Investment Funds Institute of Canada).

 
4. Grow your portfolio by choosing investments wisely
It's virtually impossible to guess when markets will get hot and no one ever knows when a particular security will reach its maximum value or when it will fall. The best strategy for long-term growth is to choose your portfolio investments carefully and then to hold onto them through the ups and downs. You'll save on transaction costs, and you'll avoid the high price of selling out of panic or paying top dollar for a holding that has hit a momentary peak.

Did you know? Between 1980 and 1995, the Standard & Poor's 500 index climbed an average of 15.8% a year. However, investors who attempted to time the market and missed the 20 best days each year earned just 10.7%. (As reported by the Investment Funds Institute of Canada).

 
5. Even out the ups and downs by investing regularly
One of the best ways to make sure you don't buy at the top of the market is to invest a set amount of money each month. By taking advantage of a technique known as "dollar cost averaging," you'll get into the market gradually, and the highs and lows of each purchase price will average out over time.

Did you know? Mackenzie offers a pre-authorized chequing (PAC) plan that makes regular investing easy and automatic. Ask your financial advisor about PACs.