Is it time to review your investment portfolio strategy?


Did you make a last-minute contribution this past RRSP season without having an investment strategy in place? If so, now is a good time to implement a plan. Since financial planning is an ongoing process, even those who already have a strategy may need to adjust periodically.


Your personal and business needs will change over time. Therefore, it’s essential to review your investment portfolio regularly to ensure it stays on track. Over time, your portfolio may organically migrate away from its ideal asset allocation — the strategic mix of equity, fixed income and cash assets. Left unchecked, this change in your portfolio can decrease returns or increase your risk.


Another consideration is asset location — whether to hold investments in registered or non-registered plans to optimize after-tax returns. It’s important to consider not only the potential tax break on the way in, but also the tax implications to get your money out.


And while invested, it’s critical to protect your gains from tax erosion. For instance, structuring your investment portfolio for tax efficiency may include holding interest-bearing investments inside your RRSP to defer taxes for as long as possible.


Meanwhile, holding some of your equity investments in a non-registered plan can allow you to take advantage of the preferential tax treatment offered to capital gains and Canadian dividends. You may also be able to reduce the amount of taxable investment gains from your non-registered plan by applying capital losses against your gains. Additionally, including corporate class funds in your non-registered investment portfolio can provide capital gains tax efficiency, irrespective of how the income is earned.


Maximizing the advantages of your corporation for long-term planning also should not be overlooked. When structured properly, putting corporately taxed dollars to work can result in tax savings now and over time. Of course, finding the right structure for you will be key in navigating corporate tax rules and will even provide for creditor protection.


Possibly most important is to reflect on, discuss, and update your objectives and timelines with your advisor to ensure that you are tracking towards your goals.


Remember, financial planning decisions are very important and have long-lasting effects, so choose an accredited professional when seeking advice about the best strategies for your situation. Investment Planning Advisors* at CDSPI work exclusively with dental professionals and their families and can develop a comprehensive investment plan for you. The plan will address both your short- and long-term savings goals and provide strategies for reaching them.


Even if you have insurance or investments from other providers, we can perform an objective review of your overall portfolio at absolutely no cost to you. It’s a complimentary membership benefit of your provincial dental association.


To obtain a no-cost investment review, book a meeting with one of our Investment Planning Advisors.


*Investment Advisory services are provided by licensed advisors at CDSPI Advisory Services Inc. Restrictions may apply to advisory services in certain jurisdictions.