As the deadline (March 1, 2006) for RRSP contributions approaches, many people just walk into their local bank and buy one of the “hot” mutual funds (probably a resource fund or an income fund this year). The result is a mishmash of funds accumulated over the years, many of which are not so “hot” anymore.
Instead, this RRSP season you might want to first decide how to allocate your assets between core asset classes like cash, bonds, domestic and foreign equities and REITs. Then, rebalance your current asset allocation to get your portfolio back on track.
Needless to say, this step might take some time. If you want to make a contribution before the deadline and don’t want to be rushed into buying some funds, consider a money market fund. Later, you could buy (or sell) funds in different asset classes, according to your asset allocation.
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