Investing tips for a smarter portfolio

Melding macroeconomic trends with the everyday workings of your portfolio can be difficult. That’s why MoneySense hosted an event called Invest For Success last weekend, in partnership with BlackRock. The conference included speakers who understand what’s coming down the pipeline in terms of the broader economy alongside the MoneySense experts who can take a look at the bigger picture and apply it to your investing habits. Attendees walked away with a greater understanding of how they can construct smart portfolios. Here are six investing tips we learned from Invest for Success.

1. Turn to emerging markets

Bonds are no longer the safe, yield generators of portfolios past, said Kurt Reiman of BlackRock Canada. The only way to generate the bond market returns of previous years is if interest rates fall big-time. In the meantime, big bargains can be found in emerging markets in Europe and other places. Ditch the home bias! But remember, there are still risks.

2. The weaker the U.S. dollar, the better

A weaker greenback could actually ease financial conditions and lessen deflation concerns, according to Stephen Lingard of Franklin Templeton Investments. In fact, it’s already helped boost resource-based sectors. A stronger U.S. dollar, meanwhile, could have the opposite effect, so keep an eye on it because it’ll definitely affect your portfolio.

3. S.A.M. is your friend

That’s the friendly acronym Tom Bradley, of Steadyhand Investment Funds, has coined for Strategic Asset Mix. It refers to the long-term mix of investments that will best help you reach their goals. Your personal road map, so to speak. If you’re looking for an alternative to low bond rates, you must also weigh any potential for higher returns with how that particular asset will help you achieve your long-term portfolio objectives. Try to find a balance between returns, diversification and safety. His advice: Best not to alter your S.A.M. unless you undergo a big personal change that affects your risk tolerance or long-term goals.

4. You’ll probably have to work longer

Some studies state that the average Canadian 30-year-old needs to increase her savings by 80% and work an extra seven years to save for retirement. Reiman says, well, yeah—you’re going to have to work longer or increase the risk you’re willing to take in order to retire with enough to get by.

5. Have an emergency fund before you start investing

The key is to start simple, says MoneySense columnist Norm Rothery. Make sure you’re financially stable before stepping into the stock market. And then, when you’re there, stick with an investment strategy you’re comfortable with.

6. Ask yourself the right questions

Make sure you have goals in place before you start investing. Then, ask yourself these questions, says Rona Birenbaum, MoneySense Approved Financial Planner and founder of Caring for Clients. What rate of return do I need to meet each goal? How much should I save/spend? What is the optimal mix between RRSPs, TFSAs and other registered accounts? Should I be paying debt more aggressively or investing more? All of these questions will inform your investing strategy. Have Canadian stocks really become less risky? » What kind of stock picker are you? » The new rules of bond investing » The biggest mistake investors make »