To make things even more confusing, there really isn’t any one investment that is better than the next one. It depends on your investing goals, objectives, and personal risk factors. Are you ok with the markets dipping and rising dramatically? Or do you want your investments to rise slowly and steadily? As a general rule, the lower the risk, the lower the potential rate of return. Conversely, the higher the risk, the higher the potential rate of return. Age is also a factor you need to consider. As you age and get closer to retirement, your risk factor should not be as high. You’ll want your principal to be secure and grow at a slow, steady pace.
You may want to do some research online and learn more about each investment. Write down questions as they arise. Find an investment adviser that is local to you, and meet for a coffee. Get them to explain the different investment vehicles and answer all of your questions. Let them know what your personal situation is and what you’d like to accomplish with your investments. They will be able to recommend some strategies that you can put in place that will have you retiring comfortably and with peace of mind. Listen to their recommendations, and then make a decision based on trust. Do you feel they are really working for you? Or are they just looking for that commission? Keep in mind that once you have your investments in place, and in the future you want to change advisers; it is easy enough to do. It is your money, and you have every right to decide who has access to it.
Assuming your adviser and you have a long relationship, they will be a key partner in your retirement planning process. They will be able to recommend other products for you as well, like life insurance Canada offers, which is just as important to have in place as your investments. You are never too young to think about life insurance. In fact, the younger you secure a policy, the less monthly rate you will pay.
When your investments are in place, no matter what vehicle you’ve chosen, know that they will fluctuate. That is perfectly normal and for the most part, nothing to get too nervous about. Part of your advisor’s job is to monitor your investments and if they feel they are not doing well, will move them around to a better one (with your permission of course.) it’s a good idea to set aside as much as you can every month to contribute, instead of doing lump sums every few months.
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