When constructing a portfolio of securities to fulfill your financial objectives, very often there are a number of competing investment criteria at play. As important as choosing the correct investment solution for your goals, so too is maintaining realistic expectations given your risk tolerance and time horizon ahead. Ideally the investment solutions you choose should serve to minimize related transaction fees and/or management costs and provide for ease of portfolio management. Liquidity may also be an important consideration, as are any potential tax consequences.
Though by no means an exhaustive survey, outlined below are several alternatives which may be considered individually or as part of an overall portfolio solution – generally investments can be categorized into various asset classes including cash, fixed income, equities and real estate; among others...
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Fixed Income
Fixed income investments including money market instruments, annuities, GICs, government and corporate bonds, mortgage-backed securities and others may be considered alongside equities and real estate as part of a balanced and diversified investment solution. Generally income-oriented securities are considered to be of lower risk than equity-growth investments, but may offer correspondingly lower fixed returns...more -
Equity Ownership
The opportunity to earn favorable returns from real estate or common stock suggests that equity ownership has the potential to be more lucrative over time than a renter’s interest in a fixed income alternative. Though often more rewarding, equity returns are rarely steady, nor predictable. Choosing equities as part of your overall investment solution must therefore be framed upon an understanding that portfolio risks diminish over time, and that price variability may be moderated through diversification and objective portfolio management...more -
Guaranteed Minimum Withdrawal Benefits (GMWB)
Asset allocation, diversification and rebalancing are just a few of the risk management tools available to investors as they grow their nest-egg. To work effectively however, you must have the virtue of time on your side. As an investor nears retirement, potential market variability may negatively impact (future) retirement income. Investing too aggressively could make the portfolio vulnerable to losses at a time when you can least afford, while investing too conservatively can result in a rate of return insufficient to fund a lifetime of retirement income...more
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Real Estate
Real Estate ownership continues to be one of the most lucrative ways of building wealth over time. As with any other form of equity ownership however, its return is variable and as such it is is time-in and not necessarily timing which builds wealth. From an investment management perspective, real estate ownership may be considered an alternative to other marketable investment solutions; including stocks and bonds...more -
Structured Products
Structured Products including Principal Protected Notes, Split Shares, Exchange Traded Funds and Closed-end Funds are solutions designed to provide risk, return, tax and diversification characteristics not necessarily available from traditional securities. These investment alternatives generally derive their returns from baskets of underlying securities...more
