The Investment Approach involves taking low risk, with 25% of the portfolio in equities and 75% in fixed income investments. The focus is on domestic securities, with some exposure to US stocks.

This is a Taxable Portfolio. We are assuming here that these assets are not sheltered from tax: any interest income, dividends or capital gains are taxable as you realize them. The income from the fixed income investments will be taxed at your full tax rate but, as the focus of the portfolio is on the preservation of capital and income, tax considerations are of lesser importance.

The Typical Investor for this type of portfolio is someone who has savings that they are likely to want to access the money within the next 5 years. Perhaps you are saving for a house, another major purchase or are using the assets to supplement your retirement income. You are probably quite conservative financially and not very comfortable with the fluctuations of the markets, but you do realize that with a time frame of 5 years, equities provide some greater opportunities to enhance the return you get.

The Asset Mix for a medium-higher risk taxable portfolio, such as this one, appears below. It is intended as a broad guideline for your overall mix.

Lower Risk, Taxable Portfolio (Risk Level 1)

The Potential Target Return for this portfolio falls around 6% per year over the long run. Note that this is not an estimate for the next 12 months, or for any period in particular. Rather, this figure reflects the long-term (20-year) average returns of the different asset classes, based on a variety of assumptions. As we all know, what happened in the past may not happen again. And long-term statistics mask the agony and the ecstasy that investors experienced during shorter time periods along the way. Thus, any individual year will almost certainly have higher or lower returns, in some cases dramatically so.

Suggested holdings:

The bulk of the holdings are in Exchange Traded Funds, which provide broad asset class and sector exposure at low cost. In the case of Canadian equity growth exposure, we used a specialized Canadian equity growth fund. Of course, you may want to substitute your own particular funds or securities in place of the appropriate securities shown below.

The sample portfolio size is $100,000, allocated as follows:

$75,000 Fixed Income:

$25,000 Equities:

* roll into another 91-day t-bill at maturity.