What investors need to know for 2013
2013 is the year of the snake (the yin to last year’s dragon yang), and according to www.astrology.com that means “we’re likely to see significant developments in the area of science and technology this year.” So if you want to base your investing on the stars that’s your prerogative, but for those looking for more down to earth advice I spoke with David Campbell Lester, a financial life coach and author of the best-selling book I Heart Money.
He also says it’s going to be a slow climb from the 2009 bottom of the fiscal crisis. Old strategies are about as reliable as basing your investments on your horoscope, Lester says. “Buying ETFs and mutual funds, with the hope that they will go up over time, won’t work anymore. Investors need to diversify into dividend or income producing investments to “get paid to wait.” Look at alternative investments to gain income like REITs or covered call strategies on large cap dividend companies.”
Of course when crystal balling 2013, it’s not all about money. Fortune tellers are constantly being asked about finding love (or holding onto the love you’ve got). So don’t let your financial plan mess up a good thing. Lester says make sure you and your partner are both on the same portfolio page.
“Having a common money strategy with your love monkey is a huge plus,” says Lester. “Separately draw up all your material, personal and professional goals. Then sit down together and discuss what you both want. Look at what the other person wants to achieve first. Is it paying off the mortgage or building a retirement nest egg? That would suggest to me that they were looking for security. If your partner wants trips and convertibles, they are looking for freedom. Working together to satisfy both of your core values, set up a monthly contribution to both of your RRSPs. At the end of the year, take the return and enjoy it with a trip somewhere awesome! Now that is how to satisfy both your values while being financially responsible as well!”
And even if you’re not ready to invest, there are some simple steps you can take to bolster your financial situation, without resorting to tea leaves, or even a budget. “Budgets don’t work,” says Lester. “Everyone hates them. It goes against our humanness. Automatically have your housing, retirement, debt repayment, and goal saving taken out of your pay each month. What is left over is what you get to spend until [the] next paycheque. Take out the cash and when it is gone, it is gone. Or dump your miscellaneous spending amount on your credit card before you spend, and THEN spend down to zero. That way you’ll get the points and will never spend more than what you’ve dumped on the card. Or you shouldn’t, if you’re good! ;)”David can be found on his blog, Iheartmoney.ca.
— Steven Bereznai, MSN Money