FOCUS ON MUTUAL FUNDS
Is getting more exercise one of your New Year’s Resolutions? It’s a perennial favourite, and a good idea. While you’re at it, here are three exercises to help ensure your mutual fund portfolio is in top shape.
Balance. The key to good physical fitness is balance. The same is true for your fiscal fitness. The New Year is a great time to rebalance your portfolio because your mutual funds’ year-end distributions and profit taking may have shifted their relative weightings.
We can start by reviewing your investor profile. Have there been any changes in your life that could affect your investment objectives or time horizon?
Then, we’ll look at your current holdings and fine-tune them to reflect any changes in their value . For example, if your equity funds have outperformed, your portfolio may be subject to more volatility than you are comfortable with.
Reduce. Rest assured, this kind of reducing doesn’t involve any hard-to-keep resolutions. Rather, as part of the balancing process we may want to prune back funds that no longer fit your investor profile or crystalize gains from any that may have outperformed.
Strengthen. An ideal way to strengthen your portfolio is by beefing up (or setting up) pre-authorized contributions. We can then look at how best to deploy this year’s contributions and any excess cash balances.
One place to consider is your existing funds. Adding new cash to funds in asset classes that are under-represented in your portfolio is an easy, effective way to get back to your target asset allocation.
Larry Kleinmintz, R.H.U., T.O.T., M.D.R.T.
This newsletter is sponsored in part by Dynamic Funds. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performances may not be repeated. Dynamic Funds® is a registered trademark of its owner, used under license, and a division of 1832 Asset Management L.P.
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