Q&A: Wants to sleep easier

Question: I saw you last evening on television and I am going out to purchase your book, Sleep-Easy Investing . I’m certainly one of those people who would rather be sleeping easier!

I am a 58-year-old single female, living in Edmonton and working in real estate. I had planned to retire at age 65. I own my home and live off of my salary. I had $310,000 in two balanced investment accounts: 54% bonds and 40% equity; 65% Canada and 22% global. I have always wanted to make a little money and never lose any. On paper I have now lost $50,000.

In the last three weeks I have learned so much and it is my fault for not paying more attention with my money earlier. I now know that I can move 10% of each of the two accounts into RRSP GICs without fees and would feel better doing so, but should I wait until my loss is less (hopefully things will improve) or take my losses and do it now? – Janet S.

Gordon Pape answers: In effect, you are asking where the bottom is. The answer is that no one knows and the wild swings we are seeing these days have created an almost unprecedented situation. All I can say is that there will be a bottom at some point, but it could be a lot lower than now. My sense is that we are not there yet so you risk further losses by waiting. The other side of the coin is that switching money to GICs means you’ll reduce your profit potential when the rally comes.

Your portfolio mix is fairly conservative but if you are uncomfortable with it then you should act on your convictions and move some of your assets from equities to GICs. Remember, the whole premise of Sleep-Easy Investing is health before wealth.

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