Whatever your stage of life, successful investment planning takes honest assessment of your investment knowledge and your comfort with risk. It also considers the number of years you have until you withdraw from your investments or need to use your investments for income. In other words, you need to understand your investment profile.
These 17 questions will help you understand your investment profile and enable you and your financial security advisor and investment representative to develop a personal investment plan that suits your needs and goals.
As a general rule, you should have an emergency fund to cover at least three months of basic living expenses. Consider building an emergency fund based on cash or cash equivalents such as daily interest plans, short-term investments certificates (GICs) or money market funds.
Please note Harmony Score System addresses long-term investment goals and, as such, does not include GICs or money market funds. If you have shorter-term goals (for example, saving for a vacation) as well as planning for the longer term (such as retirement), consider a combination of investment funds and other products.
Your financial security advisor and investment representative can help you create a plan to meet your investment needs.
|Reserved||80 or less|
|Enhanced||81 to 114|
|Calculated||115 to 149|
|Skilled||150 to 183|
|Advanced||184 or more|
Reserved investing is a strategy that prioritizes the preservation of capital over market returns. This portfolio seeks to protect its investment value by investing in lower-risk securities, such as fixed income, bonds, money market securities, sometimes mixed with blue-chip or large-cap equities. It is mainly used by people who are targeting a shorter term investment goal or relying on this portfolio to produce an on-going income stream. Typical investment makeup is 20% equity and 80% fixed income.
Enhanced investing is a strategy that is built on the foundation of the reserved approach. This portfolio is looking to protect its investment value by investing in lower-risk securities, yet it is also designed to take advantage of market volatility by adding some actively-managed solutions, such as mutual funds and/or segregated funds. It is mainly used by people who are near their retirement targets or individuals who don’t need to chase investment returns in order to fund their lifestyle comfortably. Typical investment makeup is 40% equity and 60% fixed income.
Calculated profile is also referred to as an “all-weather” investment strategy. This portfolio obtains a balance of security, income, and growth, with security and income ranking before growth in priority. This strategy is a way of combining a variety of asset classes in one portfolio that aims to balance risk and return in the majority of market conditions. It is designed for people who may have a mid- to long-term time horizon, who are comfortable with some market volatility, yet depend on the results of such a portfolio to provide for income or purchasing goals. Typical investment makeup is 60% equity and 40% fixed income.
A skilled profile requires a suite of investment solutions which may involve domestic and foreign, large and small size, long-term and short-term investment opportunities, which are designed to thrive in the more favorable market conditions. This investment strategy may require some experience, capital and net worth, most importantly, understanding of the market and patience for the long term potential returns. This is designed for people who are aiming for the long-term success of the portfolio, yet can tolerate frequent portfolio movements, or people who are in the aggressive saving stages. Typical investment makeup is 80% equity and 20% fixed income.
Advanced investing puts its main effort in growing its portfolio and maximizing return. An advanced investment strategy attempts to achieve higher than average returns typically emphasize capital appreciation as the primary investment objective, rather than income or safety of the principal. Regardless of the investor’s age, a high tolerance for risk is an absolute prerequisite for an advanced investment strategy. It is designed for people who have longer time horizon, which enables them to ride out market fluctuations, or investors who are well diversified in many asset classes outside such portfolio, yet has excess means to face potential loss in principle. Typical investment makeup is 100% equity.
Note: All investment profiles are designed with diversification as a foundational baseline.