Wednesday, September 9, 1998 — North Shore News ~ 15

Your lifestyle
should decide
stock strategy

Doug Smith and Teresa Pedersen
Contributing Writers

HE stock market’s dropped, interest rates
are down, the Canadian dollar has been in
a free fall and analysts predict continued

economic volatility.

Now what?

For most of us, the best strategy is to hold tight. At this point
our losses are on paper only. To sell would lock those losses in.

If we can hang on for six months, the cycle will likely swing
upward again. And if we have a solid long-term financial plan in
place, our portfolio is balanced to withstand the rocky times.

For those who have new money to invest, now is the time to
look for short term vehicles: term deposits, GICs, money marker
mutual funds.

These can give vou a return of 4 to 6% and buy you time to
watch the market.

Of course, if you are a more sophisticated investor, now is the
time to buy at bargain prices. Stocks in large financial institutions
and utilities, for example, have dropped 20%. ;

This kind of temporary market corcection can allow you to add
to your portfolio at a reduced rate.

This principle is familiar to investors who take advantage of
market fluctuations by purchasing a set amount of stock — usual-
ly through mutual finds — on a regular basis. .

If, for example, you buy $300 worth of mutual funds cach
month, and the price of that stack drops by 38%, you will be able
to purchase more stock at 3 lower price.

This is called “dollar-cost averaging” and can lower the overall
cost of your securities.

While a good starting point for the average investor is a bal-
anced portfolio of short-term cash-like investments, bonds and
equities, what that really looks like cnnot be effectively deter-
mined without a close-up look at you — your lifestyle’ and _vour -
prioritics.

Before you select investment vehicles you need to examine
your retirement, estate, tax and insurance needs and plan for
major life events such as the birth of a baby or the purchase of a
home.

In short, vou need to know where you want to go before you
can build a plan thar gets you there.

When you've answered these questions, and accurately deter-
mined how much cash you need to pay your monthly bills, sup-
port your.lifestyle and take care of unexpected expenses, you can
begin to build a balanced investment portfolio that meets you
long term financial goa!s no matter what the economic climate.

Ideally, this should contain a balance of investment vehicles
providing you with some exposure to all asset classes, and. be
diversified across industries and economies.

That way, Russian turmoil won’: upset your whole apple cart
and you’ll always have something to feel good about.

It’s always a good idea to seck independent financial advice
from a qualified fnancial advisor —- somcone who is trained to
ask the right questions, look for life events that will trigger
changes in your financial requirements, and provide you with
professional guidance, particularly through the tough times.

Financial institutions, including North Shore Credit Union,
have advisors to assist you through this process.

Doug Swith is vice-president of Investment and Insurance
Services, North Shore Credit Union. Teresa Pedersen is an invest-
ment advisor with Credential Securities, a subsidiary company of the
credit union industry and provider of full-time investment and bro-
kerage services. For more information call a N.S. Credit U Onion tele-
consultant at 713-3000.

Look through the following pages for move
advice and information from the experts on bow
to plan for your future »

Canadian Investment Consultants
(888) Inc.

Cordially invite you to atiend an Informational Night

FINANCIAL AND TK coe / MUTUAL FUND INVESTING

FRIDAY, SEPTEMBER 16
“TS PM

. RSVP to Ruby or Margaret at 436- 3556 ASAP to reserve seats
Soames (i> VE Rea Co-sponsored by: | _
Andrew W.S. Donald i - & : Pervez H. Patel
President ad on pi : ~ Investment manager