A fund strategy system for investor profit

Invest gradually. That way you’ll be in a position to take advantage of lower prices when stock-market corrections occur.

• Invest the core of your portfolio in conservative equity funds that focus on well-established companies. They operate at the heart of the economy and are well positioned to build repeat business. It’s okay to invest in aggressive growth mutual funds, too, but they should form a smaller component of your portfolio.

• Buy mostly funds you want to hold on to indefinitely. That way you better positioned to minimize transaction costs and in terms of tax reduction. What’s more, these funds often prosper most over a period of years or decades.

• When looking at mutual-fund annual reports and prospectuses, pay close attention to a fund’s investment objectives, strategies and portfolio composition. Too many investors confine their analysis to a fund’s past performance and, therefore, wind up picking disappointing performers that are unsuited to their investment temperament.

• Be skeptical of predictions. That includes our own predictions and yours, as well as those made by a fund’s manager, or other analyst. Predictions are worth considering, but they are the weak link in the investment process.

• Emphasize equity funds that diversify their holdings across the five main economic sectors (Finance, Utilities, Resources, Manufacturing and the Consumer Goods sector). Such funds give you a range of holdings that include stocks with stable businesses and stocks whose profits vary with the business cycle.

Our system aims at identifying a selection of equity funds that fit your objectives, and that are worth buying and holding for years, if not decades. You’ll mainly want to sell them when your investment objectives change, and that’s largely a function of your age and income. Knowing what to buy matters more than knowing when to buy.


Canadian Mutual Fund Adviser, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

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