Interest rates at the bottom. A euphoric stock market. A pandemic that continues: in these times of uncertain economy, how do you go about growing the nest egg in your registered retirement savings plan (RRSP)? Portfolio managers Édith Beaucage and Martin Lalonde make a few recommendations.
Posted on February 7, 2021 at 2:00 p.m.
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They believe there are opportunities. However, we must be careful. Opting for shorter maturities, betting on sectors that will recover as the pandemic subsides, investing in Europe and Asia as well as keeping liquidity in your portfolio are all strategies to consider.
According to Martin Lalonde, portfolio manager and president of Investissement Rivemont, we are “at the last round of an incredible stock market that has lasted for 12 years now”. You might as well be prepared for any eventuality, he believes.
We believe this is an ideal time to add alternative strategies to portfolios that are not fully correlated with the stock market. We are talking about commodities and alternative funds.
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Martin Lalonde
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Martin Lalonde is interested in gold. Devoting a small portion of his portfolio to it (especially through exchange traded funds) is not a bad idea, he believes. According to him, “the superimposition of silver” by governments could give wings to the yellow metal.
PHOTO ROBERT SKINNER, LA PRESSE
Martin Lalonde, portfolio manager and president of Investissement Rivemont
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Ditto for consumer products and technologies. “If you haven’t already done so, you have to try to position your portfolio to be exposed to new ways of socializing and sharing,” he says. The economy is changing and many businesses are benefiting from it. The only downside is that the stocks of these companies are overvalued. It’s the same with renewable energy companies. ”
Finally, Martin Lalonde maintains that we must “prepare to play more defensive”. Holding cash is worth thinking about when you factor in US large caps, he says. In short, there is nothing wrong with checking out during these exciting market times.
Stay the course, but with openness
According to Édith Beaucage, portfolio manager and co-founder of Beaucage Bruneau Groupe Conseil, affiliated with Desjardins Securities, any investor should stay the course and stick to the plan developed. But nothing prevents, she says, from exploring sectors or products that point to a bright future.
Sooner or later, in the post-pandemic, there is going to be a recovery. Everything is in place for a resumption of economic activities. In the markets, yesterday’s losers will be tomorrow’s winners.
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Édith Beaucage
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So you have to be ready to move. Edith Beaucage suggests shorter maturities, especially with regard to the purchase of bonds.
Mme Beaucage believes that increasing its presence abroad is also a strategy that could pay off in the long term. Wanting to reduce its continental presence, it evokes in particular Europe and Asia. Among his vehicles of choice to achieve this: exchange-traded funds (ETFs) and mutual funds. “These products,” she says, “make it easy to reach markets elsewhere in the world, whether on a geographic or sectoral basis,” she explains.
But beware: even if she considers ETFs as “extraordinary tools”, she calls for the greatest caution. Numbered in the hundreds, if not in the thousands, not all ETFs are created equal, says Edith Beaucage.
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