The Road to Financial Recovery: Are We There Yet?

Canadian Market Strategist Kate Warne offers tips to help investors get on the path to recovery

TORONTO, June 22 /CNW/ - Canadians who are saving for retirement are less confident that their retirement savings would soon recover than they were this time last year, according to a new poll released by Edward Jones. In 2009, 31 percent of Canadians said they expected it to take three years or less to recover their retirement savings losses of the previous year. Now, a year later, only 19 per cent feel they will recover within the next two to three years.

"When it comes to portfolio recovery, as frustrating as it may be sometimes, a healthy recovery takes time," says Kate Warne, Canadian Market Strategist, Edward Jones. "Treat your investments like a garden. You need to plant the right mix of flowers and then be patient while you wait for them to bloom."

Warne suggests the following tips to help investors get on - and stay on - the path to recovery:

Ensure there is quality and diversification in your portfolio

Owning a few different investments doesn't mean your portfolio is properly diversified. You could be missing out on opportunities for growth. While having fixed-income vehicles is a part of a balanced portfolio, being overweighed in fixed-income products can significantly impede recovery. Some investors may have turned to short-term GICs to avoid risks, but putting too much money in this kind of investment may mean facing risks that are less visible. Not only will your portfolio be slow to recover, your returns may not be enough to meet your financial goals in the future.

Avoid taking shortcuts

Risky investments may seem tempting in order to boost returns, but may have risen faster than their true value. We suggest investing in long-term opportunities instead of playing the guessing game. It's better to diversify rather than guess which countries, companies or industries are likely to lead or lag in the short-term.

Stay patient

Since nobody can say with certainty that the current market downturn has ended for good, investors need to be patient and take any necessary steps to improve their portfolios. Let history be your guide - those who invested regularly were successful at building wealth over time. For example, if an investor made a $100,000 one-time investment in 1999, plus $1,000 per month, by December 31, 2009 their portfolio would have been worth $297,342. That's one of the reasons we suggest regular contributions to your Registered Retirement Savings Plan (RRSP) and other investment accounts.

Work with a professional

Owning the right investments in the right amounts requires skill and knowledge. Sit down with a financial advisor to review and make sure you're getting the most out of your portfolio to reach your financial goals.

"In this current economic climate, slow and steady wins the race," adds Warne. "There isn't a secret formula to investing but by working with a financial advisor, you can definitely increase your chances of achieving your long-term goals."

About Edward Jones

Edward Jones is a full-service investment dealer with one of the largest branch networks in Canada. It is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, and a participating organization of the Toronto Stock Exchange. Including its affiliate, Edward Jones serves nearly 7 million individual investors in Canada and the U.S. from more than 11,000 locations.

Edward Jones is a limited partnership in Canada and is a wholly owned subsidiary of Edward D. Jones & Co., LP, a Missouri limited partnership. Edward D. Jones & Co., LP is a wholly owned subsidiary of The Jones Financial Companies, LLLP, a Missouri limited liability limited partnership.

The Canadian survey results are based on a telephone survey of 1002 nationally representative adults with retirement savings between April 8 and 13 by Leger Marketing. A sample of this size will provide results that can be considered accurate within plus or minus 3.1 per cent, 19 times out of 20.

The US survey results are based on a telephone survey of 1013 nationally representative adults with retirement savings between April 8 and 11 by Caravan. A sample of this size will provide results that can be considered accurate within plus or minus 3 per cent, 19 times out of 20.

For further information: Jessica Davidson, [email protected], 416-969-2735