Q&A: RRSP investing
Question: My wife and I have three RRSP accounts (including one spousal RRSP) with a full-service brokerage firm. Each of them, worth between $20,000 and $25,000, are earning next to nothing in interest (my broker told me last year he won’t spend time with small accounts). I plan to transfer these accounts to self-directed plans in 2012. We are both 50 with five to seven years of work ahead us. What kind of investment tools you would recommend in term of fair returns and safety?
Gordon Pape answers: Since the accounts are relatively small, your best bet is to stick with mutual funds. You can control the degree of risk through asset allocation – the higher the percentage of bond funds, the less the risk but of course your growth potential will be limited as well. We offer a model portfolio for RRSP investors in the Mutual Funds/ETFs Update newsletter and update it semi-annually. Some of the funds included are Beutel Goodman Income Fund, Phillips, Hager & North Short Term Bond and Mortgage Fund, and Mawer World Investment Fund. The portfolio gained 18.6% in the two and a half years from Jan. 1, 2009 to June 30, 2011. For more details about this newsletter, go here.