10 Golden Rules for Successful Investing

Do what successful investors do and apply the following rules:

1. Don't be dazzled by returns: choose investments that meet your needs.

   Past performance is no guarantee of future returns. That's why it's important to base your choice on the characteristics of the investment solution, not its past performance.

2. Don't try to second-guess the market.

   Even investment experts have a hard time predicting market movements and the best time to buy.

3. Invest on a regular basis.

   Save at your own pace by investing a specific amount on a regular basis. Small amounts invested at regular intervals allow you get the most out of market highs and avoid being hit too hard by the lows.

4. Diversify your investments.

   To minimize risk and boost potential returns, act according to your investor profile and invest in different product types, geographical regions, asset classes and industry sectors.

5. When markets are volatile, be patient.

   When you're investing for the long term, stick with your investment strategy. Remember that historically, a market slowdown is often followed by a recovery.

6. Go for investments that provide tax benefits.

   Outside your RRSP, take advantage of the Tax Free Savings Account (TFSA) or invest in products that offer tax benefits, like investments that generate capital gains and dividends (equities, equity funds and dividend funds) rather than in products that generate interest income (guaranteed investment certificates, bonds, strip coupons and bond funds).

7. Don't deprive yourself of the growth potential of stock markets.

   A portfolio that contains stocks as well as bonds is less risky than a bonds-only portfolio. To produce winning results, include equities in your portfolio corresponding to your risk tolerance.

8. Maximize the foreign content in your portfolio.

   Expand your investment horizons and invest outside Canada. International markets offer excellent potential returns.

9. Contribute to your RRSP every year.

   Instead of not contributing to your RRSP one year and thus depriving yourself of thousands of dollars of retirement income, think about borrowing the money you need. You can then use the tax refund to pay off part or even all the loan.

10. See your financial adviser for a portfolio check-up once a year. 

    Your financial needs and situation are constantly changing, so it is essential to make sure your portfolio always meets your needs. Discuss your portfolio with your financial adviser at least once a year or whenever an important event has occurred in your life (buying a home, having a child, receiving an inheritance, losing a job, etc.).