Mutual Funds are No. 1 with Canadian Investors
June 28th, 2008 | by Editor |The choices of Canadian mutual funds seem endless for investors, but a good Certified Financial Planner can help see you through the maze of options.
Mutual funds continue to be the most popular investment for Canadians, a choice supported by the high failure rate of individual investors or ‘do-it-yourself’ers. Mutual funds offer a wide range of benefits, including the following:
Investment process: Your average investor tends to be a fickle buyer and an impulsive seller, a dangerous combination when dealing with stock market volatility. With mutual funds, investors can rely on a disciplined investment approach applied by seasoned fund managers.
Diversification: Mutual funds are, by definition, diversified. Mutual funds have strict limitations that prevent them from holding a high percentage of any one stock in their portfolio.
Specialization: Specialty funds of every flavour are available, enabling investors to customize their portfolio.
This last point is particularly true now that the foreign content limits have been removed in Canada. Typically limited to holding mostly Canadian equities in their registered portfolios, Canadians now have a lot more opportunities to buy global mutual funds, which may be an appealing strategy.
No Shortage of Choices: Canadians can choose from a universe of over 5,000 mutual funds.