Stop Investing and start planning

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Is it time for you to stop just investing?

Investing can easily become a way of life. Every year certain investments get made on what seems like an automatic basis.

Don’t forget to contribute to your Registered Retirement Savings Plan. And then there is your Tax Free Savings Account.

If there is extra cash you can invest in your non-registered Investment Account.

With so many alternatives to choose from, deciding which investments to purchase can be confusing. Hot investments come and go.

When the stock market is performing well you might feel confident to purchase stocks directly, or mutual funds that own stocks. During times of uncertainty, you might decide to buy something more conservative like a bond or a Guaranteed Investment Certificate.

After several years your investment portfolio can look like a random collection of everything. No real direction, just a whole lot of different stuff.

In my opinion, investing without planning is a significant mistake that is all too easy to make.

The purpose of investing is to allow you to reach your financial goals. Until you establish those goals it’s impossible to have an investment strategy that makes sense for you.

If you hope to purchase your first house in the next year, it may not be prudent to invest heavily in the stock market. Stock markets can be very volatile and if there is a sudden decline in the value of your investments that will affect your ability to purchase your house.

For parents with young children, money can be invested on their behalf to assist with post-secondary education. Because there is a relatively long period of time before the funds are needed, there is a strong case for investing at least part of those funds in stocks.

If your goal is to achieve your financial objectives then the starting point is to carefully articulate those objectives.

All investing should start with the plan.

 

 

Peter Watson is an agent of, and securities products are provided by, Aligned Capital Partners Inc. (ACPI).  ACPI is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF).  The opinions expressed are those of the author and not necessarily those of ACPI. Peter Watson provides wealth management services through Peter Watson Investments