Financial Planning Month: Investment Strategies to Consider in the Current Economic Context

Financial Planning Month: Investment Strategies to Consider in the Current 
Economic Context 
MONTREAL, Oct. 5, 2012 /CNW Telbec/ - Financial planning for retirement is an 
exercise that should be undertaken early and reviewed periodically. Such 
planning is influenced by a number of factors, including risk tolerance, the 
number of years away from retirement, and market fluctuation, among others. 
Within the context of today's unstable economic climate, Laurentian Bank has 
certain tips and advice to offer with respect to investment strategies. 
Combating Volatility 
Given the current economic context and significant market volatility that 
prevails today, effective financial planning demands the adoption of a 
rigorous strategy established in accordance with the specific characteristics 
of each individual. Because there is great disparity between the returns on 
different financial vehicles, it is essential to be diversified in order to 
disperse the risk. Such diversification is reflected in the mix of assets — 
cash, fixed income and equity — within an investor profile. According to 
Sylvain, Ratelle, Vice-President and Strategist with Laurentian Bank 
Securities, "investors must establish the profile that corresponds to their 
specific situation. Proper diversification in accordance with this profile 
makes it possible to balance the portfolio, stabilize its performance, and to 
reduce volatility." 
Laurentian Bank Securities has defined six different investor profiles that 
are available through its advisors that range from most conservative to most 
venturesome. Looking at the evolution of these portfolios over a period of 
about 10 years (9.67 years, to be more precise), the average total return of 
these different profiles has remained within the range of 5.8% to 6.63%, while 
that of the different indices (monetary, bond and equity markets) has varied 
much more dramatically from 0.59% to 10.37%, as illustrated in the table 
below. This confirms that investing via a portfolio that corresponds to one's 
profile can yield both interesting returns and stability. 
Annual Returns - Investor Profiles and Principal Indices 
|Index/Profile                       |10-Year Average |Highest|Lowest |
|                                    |(approximately) |       |       |
|Monetary Market Index               |        2.13%   | 4.14% | 0.33% |
|Bond Index: XBB + 0.32%             |        6.46%   | 9.72% | 3.52% |
|Canadian Equity Index: SPTSX        |        8.97%   |35.00% |-32.96%|
|Composite                           |                |       |       |
|Developed Country Equity Index: MSCI|        2.74%   |21.07% |-26.60%|
|World  $CAN                         |                |       |       |
|Emerging Country Equity Index: MSCI |       1.,37%   |54.87% |-42.59%|
|Emerging  $CAN                      |                |       |       |
|Alternative Investment Index: JP    |        0.59%   |37.77% |-13.13%|
|Morgan Alternatives  $CAN           |                |       |       |
|LBS Fixed Income Profile            |        5.81%   | 8.50% | 3.59% |
|LBS Income Profile                  |        6.41%   |11.54% |-3.61% |
|LBS Conservative Profile            |        6.35%   |13.06% |-7.24% |
|LBS Balanced Profile                |        6.38%   |14.22% |-9.31% |
|LBS Growth Profile                  |        6.63%   |18.82% |-15.19%|
|LBS Maximum Growth Profile          |        6.44%   |26.52% |-26.88%|
"Diversification based on individual profiles offers much more stability and 
resistance to volatility because it disperses the risk among different asset 
categories," underlines Sylvain Ratelle. "Moreover, these profiles can be 
adjusted or modified periodically based on the client's age and financial 
position so as to correspond to their specific situation as it evolves." 
Geographic and Sectoral Diversification Based on Proven Strengths 
When it comes to portfolio diversification in accordance with investor 
profiles, dispersion by markets or geographical sectors is aimed, first and 
foremost, at achieving a proper balance. "In a balanced portfolio that 
contains an equal proportion of fixed income and equity components," explains 
Sylvain Ratelle, "equity, for example, is generally distributed among 
Canadian, developed and emerging markets at a proportion of 20-20-10 so as to 
limit exposure to risk. Similarly, we favour sectors that represent strengths 
in each of these markets. For instance, Canada is recognized for its resources 
and its banking sector; these are its particular strengths. In the United 
States, technology, pharmaceuticals and major brands constitute the dominant 
sectors and, thus, are the ones to concentrate on. For emerging markets, the 
exchange traded funds or mutual funds provide access to greater 
In light of all these factors, financial planning must be done with a prudent 
approach. By selecting the profile that best matches their situation, by 
opting for diversification, and by building a balanced portfolio, savers will 
ultimately reduce risk and volatility and obtain more stable returns. 
Moreover, in preparing for their retirement, they would certainly stand to 
benefit from consulting a financial planner, who will conduct a comprehensive 
analysis of their needs and portfolio, and then suggest a program that is 
fully aligned with their investor profile while minimizing their exposure to 
About Laurentian Bank
Laurentian Bank of Canada is a pan-Canadian banking institution that has more 
than $35 billion in balance sheet assets and over $32 billion in assets under 
administration. Founded in 1846, Laurentian Bank was selected as the Québec 
and Atlantic Canada regional winner of the Canada's 10 Most Admired Corporate 
Cultures program presented by Waterstone Human Capital. The Bank employs more 
than 4,000 people. 
Known for its excellent service, proximity and simplicity, Laurentian Bank 
serves more than one million clients in market segments in which it holds an 
enviable position. In addition to occupying a choice position among consumers 
in Québec, where it operates the third largest branch network, the Bank has 
built a solid reputation across Canada in the area of real estate and 
commercial financing thanks to its teams working out of more than 35 offices 
in Ontario, Québec, Alberta and British Columbia. Its subsidiary, B2B Bank, 
is a Canadian leader in providing banking products to financial advisors and 
brokers, while Laurentian Bank Securities is an integrated broker, widely 
recognized for its expertise and effectiveness nationwide. 
Mary-Claude Tardif Public Relations Advisor 514 284-4500, extension 4695   
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CO: Laurentian Bank Securities
ST: Quebec
-0- Oct/05/2012 13:51 GMT
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