1) Which of the following type of investment accounts do you own?
[x] Tax-Advantaged (TFSA, RESP, RDSP)
[x] Taxable (Non-registered)
[x] Tax-Deferred (RRSP, RRIF, LIRA, etc.)
[x] Corporate / Other

One of the biggest misconceptions about investing today is that you need a lot of money to have a diversified portfolio. The reality is anyone can open a diversified investment portfolio online using a digital investment platform (robo-advisor) with as little as a few hundred dollars. A well-constructed investment portfolio will align with your goals, tolerance for risk, and will determine your ability to meet future capital requirements.

Planning Tip:
The sooner you begin saving and investing for retirement, the greater the impact compound interest will have, use this RRSP Savings Calculator to see what a delay of even a few years will have.

1a) If you answered Yes, do you have a documented Risk Profile?
[x] Yes
[x] No

Having an investment portfolio without a documented risk profile means the investment you have may or may not be the most appropriate for you. If you have a relationship with an investment advisor, arrange to meet with them to formally document a risk profile that is appropriate for you. This will help to ensure the allocation of your investments are in-line with the risks you are willing to accept.

Planning Tip:
Use this Risk Tolerance assessment to determine how comfortable you are with not knowing what you will make from your investments, and how well you can live with losses if your investments go down in value.

1b) If you answered Yes, do you have a formal Investment Policy Statement (IPS)?
[x] Yes
[x] No or Unsure

Having an investment portfolio without a documented IPS means that your investment advisor may not be aware of your goals and preferences for how your money is to be managed. An essential document for anyone that engages the services of an investment advisor, the IPS is just as important if you self-manage your investment as it serves as a reminder of your investment goals in good and bad times.

Planning Tip:
This IPS Worksheet will help you create a set of general rules for how your investments should be managed, and communicate them to ensure they are followed.

2) Does your employer offer stock options as part of your compensation?
[x] Yes
[x] No

Understanding how your stock options are structured is vital to maximizing the potential value they offer. When do your options mature, how long do you have to exercise them, what is the cost of each option compared to the estimated value of the company stock, are all vital questions that need to be answered.

Planning Tip:
Having employee stock options in a public company is a lot different than stock options in a private company that has no liquidity. If the stock options you own are in a private company, and you resign, the money you pay for your stock may not be liquid for years to come.

3) Which statement best describes your relationship with professional investment advice?
[x] I manage all investment decisions
[x] I share investment decisions with an advisor
[x] I leave all investment decisions to an advisor

Researching and managing your investments without the help of professional advice may be a lot of work, but the savings in management fees can offer additional rewards in terms of higher growth and greater asset value when you retire. Many people, however, prefer to engage the services of an investment advisor or an online robo-advisor to share some or all the investment decisions to off-load much of the research and work associated with maintaining the right asset allocation.

Planning Tip:
If you are looking for help in managing your investment, this Website will help you learn more about what advisors do and how to get the help you need to reach your financial goals.

4) Which statement best describes your investment knowledge?
[x] I have a very limited to basic understanding
[x] I have an average understanding
[x] I have considerable to extensive knowledge

When dealing with an investment advisor, make sure they fully understand the level of your knowledge, so there are no misunderstandings related to any advice they provide. You should carefully consider the need for any complex investment strategy and the risks associated with it. Should you not fully understand why a given recommendation was made, request additional clarification.

Planning Tip:
Regardless of their level of investment knowledge, everyone needs to protect themselves from bad advice, frauds, and scams. This Website will help you learn what you can do to protect your money.

5) How often do you review the return performance of your investments?
[x] Weekly or Monthly
[x] Quarterly or Annually

People who frequently review the return on their investments may be more likely to overreact to short-term periods of negative return and to avoid further losses try to time the market. People who “set then forget” their investments tend to have better long-term investment performance.

Planning Tip:
Getting out of the market after a few negative return days is likely to result in missing the positive return days that follow. J.P. Morgan’s Guide to Retirement, analyzed the S&P 500 and determined that 7 of the best 10 days occurred within 2 weeks of the 10 worst days (see page 44 for full results).

6) How often do you review the allocation of your investments?
[x] Weekly or Monthly
[x] Quarterly or Annually

People who frequently review the allocation of their investments may be more likely to overreact to short-term fluctuations and make changes that can negatively impact returns, while people who “set then forget” their investment allocation tend to have better long-term investment performance.

Planning Tip:
The right investment allocation that reflects your Risk Tolerance and Investment Policy Statement, should not need to be modified more than once or twice each year unless there are major changes to your personal situation that impacts your financial goals.

7) On a scale of 1 to 5, how well do you understand the taxation of your investments?
[x] 1
[x] 2 to 3
[x] 4 to 5

Understanding the taxation of your investments is an important part of an investment plan. Even with a good understanding, it is important to consult with a knowledgeable advisor before liquidating any investment that is registered or has increased considerably in value. Your investment advisor should also fully explain all tax implications before you agree to implement any recommendation involving the repositioning of your investments.

Planning Tip:
If you are considering a withdrawal from your RRSP, before doing so, use this Income Tax Calculator to estimate the taxes that will be payable to avoid any unpleasant surprises when filing your tax return.

8) On a scale of 1 to 5, how well do you understand the fees on your investments?
[x] 1
[x] 2 to 3
[x] 4 to 5

Investments can have multiple layers of fees, and you should understand how they can impact the long-term growth of your investments. If you have not already done so, review the fee schedule of your investments to calculate what you are paying each year for trading and advice fees. Both must provide value for the services you are receiving.

Planning Tip:
Use Morningstar to get insights and review the fees on your Mutual Funds, Stocks and ETFs by searching the name/symbol of the investment in the field provided.

9) Have you ever borrowed to make an investment?
[x] Yes
[x] No

Borrowing to invest, or leverage, is a strategy that not only increases potential returns, it also increases potential losses. Unless you have considerable investment knowledge (see question #4) and fully understand the risks involved, you may want to avoid using leverage as a strategy.

Planning Tip:
If you are considering taking out a loan to make an investment, use this Investment Leverage Calculator to compare an interest-only investment loan to making regular monthly savings. 

10) Have you ever made an investment that lost money?
[x] Yes
[x] No

Overreacting to investment losses and making changes to your portfolio allocation can negatively impact long-term investment performance. Having an investment allocation that fits your goals and risk profile and ignoring short-term fluctuations in value has proven to provide better long-term performance.

Planning Tip:
Investing can be complex and it often has risks. But with knowledge, you can choose the level of complexity and risk that you are comfortable with. This Website outlines the basics of investing so that you can choose the approach that suits your needs.

10a) If you answered Yes, how did it make you feel?
[x] No big deal
[x] Not good
[x] Very upset

You should review your risk profile and asset allocation each year to make sure that any potential fluctuations in value are within your comfort level. If you have any concerns related to volatility you should update your risk profile and asset allocation immediately to make sure that any potential fluctuations in value are within your comfort level.

Planning Tip:
Your Investment Policy Statement should include a summary of your risk tolerance and asset allocation. Make sure that it accurately reflects your comfort level for investment losses.