RRIF Registered Retirement Income Fund
Since many major Banks now converted to a hybrid model of managing their clients investments, in other words allowing their clients to manage their investments themselves, the question comes to mind: “how many clients have in the past trusted their pension funds to their banks, and how many got burned by seeing their much-needed portfolios’ value decline rapidly ?”
The older you get the more important it becomes to hang on to these funds which may constitute a major part of your monthly income.
The other concern is the HOW, how do a good job of managing yourself a complex financial portfolio without the necessary training to do so. Imagine a 90 year old person who may not even have access to a computer or has never done any online banking. In my case I have made my living developing computer systems and doing all my banking online. Still, it is not that easy
Banking professionals who are learning new procedures and platforms always receive training courses on HOW to do this. That’s easy. Yet, they expect all their (retirement) clients to easily adjust to this new reality. Without offering instructions on the (new platform self directing) websites themselves.
The way I see this: (1) Never get nervous when markets decline – bear markets are always shorter than bull markets. (cf. end 2018, beginning 2019); instead wait it out, do not check your portfolio daily.
(2) When markets decline and depress, think before SELL. For example, when any of my stocks decline by 5 to 10% or more, BUY the same stock may be better than SELL. What counts is, how much income/yield each individual investment produces.
(3) Beware of what the Bank that holds the portfolio is trying to sell to you, in the name of “you are already over 80 and should not have to worry, instead buy our own (in house) mutual fund portfolio.” (This usually predates the transfer of a client’s portfolio to the new (self directing account.)
Investment Advisors are sales people just like car salesmen. They live on commissions, and therefore do not always have a client’s interest on their mind. Always do your own research. Provided you have access to valuable and trustworthy information. ‘Tolerance of Risk’ is the key determinant for any investment decisions for any portfolios, more so Registered Retirement Income Funds/RRIF. Because they are the source of income.
[NOTE. I will do a separate write-up on mutual funds because it’s such a wide ranging topic.]
PS. Please note, that I am not an investment professional. I consider myself a DUMMY who is on a constant learning trip. My mantra: “The more you know the less you know.”