. YOU don’t have to be a sophisticat- ed investor or financial wizard to take advantage of one of the most important rules in investing: diversi- fy. The concept behind diversification is simpic. By spreading your investments over a range of investment types and risk and reward groups, you are better protected against downturns in a particular sector. While the strength of one sector is in decline, another may well be on the rise. You simply can’t afford to pin all your hopes — and your money — on onc product or sector. Take the example of the 45-year-old man who bought gold at $800 an ounce only to wateh it fall to $300. Afraid of losing even more he sold at $300 and tried revenue property — only to have the tenants trash the place. Finally, after a failed business venture, he set- tled on stucks and mutual funds where, thanks to the diversity he now has, he’s done very well. Or there’s the 51-ycar-old woman who just coukin’t seem to get her timing right on the stock market and found herself repeatedly buy- ing stock just before the price dropped. Luckily she was doing well with 2 portfolio of first and second mortgages where, despite being fully taxed on interest, she was earning, more than double the going rates for GICs and term deposits. Mutual funds make it easy not only to diver- sify within a sector, but also across sectors and internationally. An investor could easily hold mutual fund units in an Asian Pacific fund, a Canadian busi- ness fund, and a specialty fund invested in min- ing exploration. Or, the same level of diversifi- MEMBER "_.. a Trusted Tradition" Wednesday, F HOW TO MAKE SENSE OF YOUR DOLLARS | several baskets cation could be obtained within a single fund. On an even larger scale, ¢ diverse investment portfolio can hold elements from each of the types of investments noted above, including GICs, real estate, individual stocks and mutual funds. Depending on your investment personality and risk tolerance you might put 75% to 80% of your money into interest-bearing instruments and the balance in an equity fund, or batanced fund, even though these latter funds are for longterm investing. Or you might start with a money market fund and then gradually move into equity funds. If these growth funds do well you'll be able to go on a fancier holiday, but if they don’t do well, at least in the short term you may just have co scale down your plans. The next year you can re-evaluate your investment situation and try to climinate the weaker links in your financial plan. It's impor- tant to review your asset allocation every year. You will probably want to change the way you invest your moncy as your age and situation change. As retirement approaches, when you're in your 50s and 60s, you will want to ensure your moncy continucs to grow, but avoid risks that could leave you unprepared for the retirement years ahead. Remember, the amount of risk you're will- ing to take will change as your age and situation changes — it’s an individual thing. You can afford to take greater risks while you"re young and perhaps don’t have a family to support. But everyone’s situation is different: you might choose GICs as you save for your first home, and equities after you retire — to help ensure your moncy fasts as long as you do! Virginia Lange Notary Public Have You Made Out Your Will? Making a Will can give Peace of Mind. Legal services available: © Power of Attomey © Codicil ° Will Preparation © Certified True Copies ° Affidavits * Conveyancing of Property ° Mortgage Documentation e Builder's Liens Parkgate Village Shopping Centre #206 3650 Mt Seymour Parkway North Vancouver, B.C. 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