Five important financial questions for this economy
(NC)—Near the end of 2012, the economists at Desjardins Group predicted that it will be harder than expected to get back to normal financially in the coming year. Canada's economy continues to feel the effects of a weakening global demand, the public sector has entered austerity mode and the housing market is slowing. So what does that mean for your financial strategy? Here are some examples of questions and answers to help start the conversation with your financial advisor.
1. Should I continue contributing to my RRSP?
Yes. The decision to contribute to an RRSP is independent of the changes occurring on financial markets. This is actually defined by your investor profile to help determine which investments you should choose. In addition to still being an excellent tax shelter, your RRSP can help you to achieve your retirement or education goals, or even to purchase a property.
2. Should I change my investment strategy?
That depends. Have you given your portfolio a check-up? This is something you should do every six to 12 months to make sure it still reflects your investment goals. For example, some investors may prefer to protect their capital by investing in fixed income products. Or some see this type of market as an excellent time to invest in some bargains. The important thing is to be comfortable with your own strategy and to invest for the long-term.
3. Should I take advantage of this situation to pay down my mortgage?
Yes if you can afford to, paying down your mortgage is a good decision. This leaves you free to contribute more to your registered and nonregistered investments.
4. Is this a good time to buy a property?
Buying property is always a good idea, as long as you stay within your financial means. Your borrower profile is a very useful tool to help you deal with changing interest rates. Simulations that take several variables into account can also help you better understand the nature and consequences of the choices you're making.
5. I'm nearing retirement age. Should I put it off?
Whether you're a few years or a few months away from retirement, sit down with your financial advisor to obtain a realistic snapshot of your financial situation. He or she can present you with a few scenarios to help ensure that your savings last. With the proper asset mix, you will be able to manage future market fluctuations and changes in your expenses.
Review these questions and more with your financial advisor. Or for more immediate answers to your financial questions, and to access calculators and simulators, visit Desjardins Group at www.Desjardins.com.
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