Insured annuity strategy for income and estate planning

Q – I am a 60 year old man, and I need income. I am not getting what I require to live off of from my investments, and even more frustrating, I am depleting all my assets at a rapid rate. I need a steady stream of income and want to leave something behind for my children. Do you have any suggestions? – Daryl T., Simcoe, Ontario


Bonds vs. bond funds

Q – I am a fixed-income investor, and I require income from my investments. I have been looking to invest directly in bonds vs. bonds funds. What are the risks of investing in a bond? – Robin S., Forest, Ontario


Who makes the call on your portfolio trades?

Q – My financial advisor calls me quite often and asks for my permission to sell one fund for another, stating that the market conditions warrant a change. I am pleased that my advisor is in contact with me, but frankly, I don’t know if I should be saying yes or no. If I knew the answer, I would manage my investments on my own! What is your advice? – Gerard S., Oakville, Ontario


Where to withdraw retirement income first

Q – My husband and I are both 45 and set to retire in 15 years. We have the majority of our money invested in mutual funds divided between RRSPs and cash accounts. We are looking to do some planning and wonder where we should be withdrawing money from first in retirement? – Tammy S., Toronto, Ontario


Understand annuities before signing

Q – I would like a guaranteed income stream from my investments, but the return on GICs and T-bills is very little these days. A friend of mine just purchased an annuity and highly recommends it. What is an annuity, and will it provide guaranteed income? – Melissa T., Fort Erie, Ontario


Wise beyond her years

Q – I am a 25-year-old single female, and I just started my first job. I have put together a savings program for major purchases like a home and hopefully one day a wedding and children, but I have not saved a cent for my retirement. What is the best way to go about starting to plan for my retirement when most of my resources are being used to manage my day-to-day expenses and major purchases? – Samantha H., Calgary, Alberta


Tired of volatility

Q – I am a self-directed investor, and I am growing very tired of the huge swings in the market. Can you please give me your opinion on the latest market downturn?
James R., Victoria, British Columbia


Insurance and retirement planning

Q – My wife and I put all of our savings into our mutual fund portfolio. We are doing okay but fear that we may not have enough money to retire while supporting our growing family and taking care of our aging parents. Do you have any advice for people like us? – Tom N., Surrey, BC


Getting the low-down on fees

Q – How much should I be paying my financial advisor in fees? I invest primarily in mutual funds, and the costs are all embedded, so it is difficult to tell if I am overpaying. — Diane B., North York, Ontario


Combatting doubt, fear, and panic selling

Q – Should I be redeeming my mutual funds to protect my investments in this volatile time? – Jim B., Strathroy, Ontario

A – Not necessarily. First of all, don’t panic! Markets fluctuate and regularly experience periods of volatility. During especially uncertain periods, as we’ve seen recently, it’s best first of all to review your financial plan and revisit your investment objectives to ensure your investment portfolio is still in line with your goals. If it is, then ride out the storm.

In periods of strong volatility and economic uncertainty, it may be difficult emotionally to stick to your plan and stay invested. But remember, panic selling will only leave you with more doubt and fear – doubt that you’ve done the right thing when markets take off again (and they will), and fear that you’ll lose out on the biggest gains, which typically occur early in a rally. Buying and selling when markets gyrate wildly only incurs extra trading costs, creates possible tax issues, and dampens your overall longer-term returns. But if you have a solid investment strategy and a good advisor, trust them to do their job.

If you are a self directed investor, you will need to keep your wits about you and stay focused on the long term. Investing is a lifelong process, and if you were to sell every time the markets corrected, the chances of getting back in just before a rally, recovery, or bull market are slim.

Investing takes knowledge and patience. Be calm, stay educated, and make decisions only when you have weighed the pros and cons and are ready to be accountable for the outcome. If you are not sure you are holding the right asset mix and feel that you are overexposed to equities, consult and qualified advisor. – R.T.

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