GO FOR MORE GROWTH This issue's por...

GO FOR MORE GROWTH

This issue's portfolios belong to a retired brace in their early 50s. The husband retired from business because of health reasons and they now live on the farther side the income from the Holding Company's portfolio. Their three children are no longer conditioneds Collectively, the portfolios represent almost $2 million which is committed largely to savings productions (e.g. T-Bills, Bonds, GICs, etc)

Because of the large amounts involved and the hardly any equities in portfolios, I thinking it would be interesting and instructive for readers, as well as Mr & Mr Retired ("Mr & Mr R") to diocese how two highly-regarded financial counsellors would redeploy these assets. Mr & Mr R stated that they wanted to locate up a portfolio "...to provide income and growth" the one and the other Bill Burghuis and Alf Wirth are experienced persons in constructing and managing portfolios to encounter such objectives for high net-worth individuals. Editor

Mr and Mr R have an interesting plant of portfolios, and their situation is similar to that of many Canadians, namely, what to do as high-yielding fixed income holdings mature or reach a peak, and where to memorize good, on-going investment advice.

As a general observation, Mr and Mr R are conservatively invested, achieving upright current income, but there is limited opportunity for product of capital. They say that the early advice they received from a middleman proved disappointing. This is unfortunate as it appears to have soured them from investing in any additional general stocks. The companies they have invested in are all seasoned and in various ways interesting, if it be not that clearly the entry point was wrong

INVESTMENT OBJECTIVES

With regard to investment objectives, Mr. and Mr R say they are using the holding company to achieve general income, Mrs. R's growth portfolio to achieve germination and their RRSPs for safety and preservation of capital. I would put in mind of that the couple needs to be long more concerned with the growing of capital, especially considering their relatively young ages. With one as well as the other at age 53, statistically at least single is likely to live into his or her eighties. in the same manner with an investment horizon of thirty years or in like manner there will be many investment opportunities which could work abroad exceedingly well over that time.

Moreover, and in spite of the subdued inflation and low interest rates commonly prevailing, it seems very likely that inflation will run in the mind within a few years' time. As of the like kind Mr. and Mrs. R should be disturbed with preserving purchasing power the one and the other in the near term and through the longer haul.

I would advise that Mr. and Mrs. R continue to live opposite the income from their holding company and, if necessary, addition their requirements with occasional capital gains from other securities. To maximize compounding, they should be encouraged to allow their RRSPs continue to make progress to age seventy-one.

HOLDING COMPANY PORTFOLIO

The holding company is surpassingly liquid and is very conservatively invested--with 95% of the value in fixed income investments. These investments are of serviceable quality, but with interest rates still trending down at the signification Mr. and Mrs. R's income will be declining as T-Bills, GICs, and similar holdings mature. Just 5% of this portfolio is in usual stocks which have some growing potential, and I would intimate that one clue to the yet to be is in the BC Gas holding which has been providing reasonable income and which has shown unassuming appreciation. For starters, I would move that Mr. and Mrs. R ne more of this protoplast of investment.

I would put in mind of establishing a goal of gradually moving the often met with stock exposure up to 40% further this should be done through the whole extent of time, and as investment opportunities near themselves. The accompanying table list a certain stocks to be considered. (Table list omitted)

MR R'S bourgeoning PORTFOLIO

In Mrs. R's portfolio, I agree with the stated objective of achieving extension At 1993 year-end, about 42% of this portfolio was in cash and short-term investments, shoot by an interesting group of mutual stocks comprising nearly 45% of the portfolio. The year 1993 has been exceedingly good for many funds, and in this portfolio, Mr and Mr R have experienced first-hand to what extent well a number of these supplys can grow.

RRSPS

Fortunately, Mr and Mr R's respective RRSP still have a certain quantity of time to go with high-yielding GICs, unless if interest rates stay at rife levels, the couple will have a reinvestment question Current interest rates will moderate down the rate of compounding athwart the next eighteen years. Here again, I would direct the eye to introduce some promising often met with stocks and perhaps mutual capitals including up to 20%, the generally received limit, in non-Canadian securities. With foundations keep in mind that there is a hidden management reward of about 2% which is taken from the value of the portfolio.

LONG-TERM MANAGEMENT

Mr and Mr R should prove by experiment to find someone to help with their investments through the years ahead. They might inquire among friends and professional contacts in order to endeavor to gain out a person or a firm that can as well-as; not only-but also; not only-but; not alone-but guide them with their investment goals and help them make specific investments.