Education Centre

Learning path for self-directed investors who want to know more about financial markets and investing

The 10 golden rules of successful investing

Do what successful investors do and apply the following rules:

  1. Do not focus on returns; choose investments that meet your needs
    Past performance does not guarantee future returns. That is why it is important to base your choice on the characteristics of the investment, not on its past performance.
  2. Do not try to second-guess the market and time your investment
    Even investment experts do not always succeed in predicting market movements and the best time to buy. By investing today, you widen your investment horizon and increase your chances of growth.
  3. Invest regularly
    By allowing you to invest a specific amount at specific intervals, depending on what makes sense to you, periodic investing lets you take advantage of the market at your own pace. Plus, by investing often throughout the year, you can make the most of market highs and avoid being hit too hard by the lows.
  4. Diversify your investments
    To minimize your risks and boost your potential returns, invest according to your investor profile in different product types, geographical regions, asset classes and industry sectors.
  5. If markets are volatile, be patient
    When you invest for the long term, as for retirement, stick with your investment strategy. Remember that, historically, a market slowdown is often followed by recovery.
  6. Go for investments that offer tax benefits
    Besides your RRSP and TFSA, invest in products that offer tax benefits, such as those that generate capital gains and dividends, rather than in products that generate interest income.
  7. Do not miss out on the growth potential of stock markets
    A portfolio that contains bonds as well as stocks is less risky than a portfolio consisting solely of stocks. Indeed, a balanced portfolio should include several asset classes to reduce the risk of a downturn in one sector.
  8. Maximize the foreign content of your portfolio
    Expand your horizons by investing outside Canada. Global markets offer excellent potential returns and allow you to take advantage of opportunities in industries that, while not as popular in Canada, can potentially be profitable.
  9. Contribute to your RRSP every year
    Rather than foregoing your RRSP contribution and depriving yourself of thousands of additional dollars at retirement, why not opt for an RRSP loan?* You can then use the tax refund you receive to pay off part or all of the loan.
  10. Review your portfolio at least once a year
    Your financial needs and personal situation are evolving constantly, therefore it is essential to review your portfolio once a year or whenever a major event happens (buying a home, having a child, receiving an inheritance, losing your job) to make sure that your investment strategy is still in line with your needs.

* Using borrowed money to finance the purchases of securities involves greater risk than purchases using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.

For more information, don’t hesitate to contact our Investor Services. Our representatives are ready to assist you with your investment process.

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