Diversity in Portfolios

This is Jeff Wareham, ScotiaMcLeod wealth advisor, with some thoughts for investors outgrowing their mutual funds…



Yesterday was a perfect example of why I have been discussing the need for investors to diversify their portfolios…Canada and the US moved in opposite directions, driven by inflation of material and energy prices. With the move in the Canadian markets over the last few years, about half of our market’s value comes from material and energy stocks…investing in our index amounts to a pretty risky bet on the long term price of commodities, especially for more conservative investors. Although commodities may benefit in a rapidly growing global economy, an economic slowdown will dramatically impact their value. Many equity funds will want to keep up with the index’ return, so they are likely to focus in the material and energy sector, and as a result, portfolios focused on Canadian equity may become riskier as fund managers mirror the index.



Now is the time to ensure you are properly diversified.



Have you outgrown your mutual funds?



For a review your portfolio, or a complimentary copy of my CD, visit www.beyondfunds.ca or call me, Jeff Wareham, at 519 660 3260.

This program is for information purposes only. Fees, management fees, and commissions may be associated with mutual fund investing Investors should consult their prospectus before investing. Views expressed are those of the author, not Scotia Capital. ScotiaMcLeod is a division of Scotia Capital Inc, member CIPF.