How to Utilize Diversification to Manage Your Money

There are more investment management programs available for Canadians today than ever before. There are now several different opportunities for investors to diversify their portfolios through managed programs, which used to be designed only for the wealthy investor in North America. Larry Herscu wrote a book entitled The Canadian Guide to Managed Accounts(WRAP Publications, January 2004),which gives Canadians true insight into some of the leading-edge diversification programs available to investors.

Understanding the benefits of these programs comes down to a few simple tenets. First, if you realize that almost 90% of your return comes from diversification of your assets–for example, by asset class, geography, market capitalization, and investment style–then portfolio-managed programs may be for you. Second, rebalancing or adjusting your portfolio to market conditions to minimize risk and maximize returns in the best possible way takes a team of expert managers. The rebalancing is what most investors are missing. Third, teams of professionals and pension style managers–who manage millions for pension plans and private institutions–can be accessed today. They can manage your money in the same manner that successful pension plans are managed. Finally, you get three sets of eyes looking over your portfolio–the investment manager(s), the portfolio

rebalancing and review team, and your advisor–all working to make sure you have ongoing, appropriate diversification. And with several portfolio options from which to choose in Canada, managed programs are helping more and more Canadians invest in programs that are tailored for them. Find out or ask about managed programs.

Remember to read and review the simplified prospectus and appropriate merits, and disclaimers, of each program.