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2018 Investment Expectations

Understandably, double digit returns are desirable, but the most important principle in investing is to achieve balanced growth while still conserving your Capital. 

 

Momentum in the USA continues on unabated and Global Stocks are on an upward trend mainly due to the accommodating stance of the Federal Bank. However, interest rates continue to increase albeit at a tempered pace because inflation remains low and under control.

With interest rates on the rise historical returns from Bonds may be diminished so I am recommending Credit Union GICs to my retired clients. At this time it is possible to receive a one year GIC rate of 2.25% which keeps up with inflation and has no inherent risk as compared to Bonds.

On the Market front I am still recommending that clients consider Global Funds with European and USA content. Fourty percent of USA Blue Chip stock's revenues are derived from European and Global sources so even though USA markets are rich they will benefit from synchronized Global growth.

The Canadian Markets under achieved in 2017 compared to the USA Markets but hopefully will rebound with Canadian Banks benefiting from higher interest rates and with the oil markets finally stabilizing

There does not appear to be a Recession on the immediate horizon but Market Volatility is certainly expected to return which could include the first Correction in many many months.

Recommended

2018 Asset Allocations For Retired Clients

Investment Vehicle    % Holdings      Strategy/Approach

Credit Union GICs              65%              Very Conservative

Global Equities                   20%                      Moderate

(European and USA Bluechips) 

Canadian Equities              10%                      Moderate

Asian Equity                         5%                        Growth

Total Asset Allocatio        100%          Conservative/Moderate

Allocation formula using age 100 minus your current age is a simple but effective formula for many of my clients:  i.e.

Age 100 minus current age 50 equals 50% allocation to stocks.

Age 100 minus current age 65 equals 35% allocation to stocks

Age 100 minus current age 75 equals 25% allocation to stocks

 

Segfunds which have a 75% Guarantee at Maturity have lower Management Fees compared to Segunds offering a 100% Maturity and Death Guarantee. It is important that each client has their Asset Allocation designed to match their individual Risk Tolerance i.e. Conservative, Moderate, Aggressive.

 

Sample Fee Structure for Retired Client Above

Portfolio                                                                        Sample Annual Fees

$100,000.00     

 

$65,000.00  Credit Union GICs                                                 0%          Management Fee

 

$35,000.00  Segfund Investment Plans                              $980.00      Management Fee

 

Total Fees                                                                                $980.00      Management Fee

 

Based on this retired client's portfolio, the overall fees amount to less than 1% annually.

 

Rick Reynolds CLU CH.F.C.

Contact Us:

Please contact us if you have questions

or would like us to prepare a custom service

package based on your needs.

 

 

Tel : (250) 595-2419        Fax : (250) 592-4953

email: info@rerinvest.ca

Victoria Office, #206 - 2187 Oak Bay Avenue

Victoria, B.C. V8R 1G1

 

North island Office, 3713 Shoreline Drive,

Campbell River, B.C. V9H 1L8

R. E. Reynolds Investments

& INSURANCE SERVICES LTD.

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