You and your wife should be congrat...

You and your wife should be congratulated for having a remarkably respectable investment account at a relatively young age (early 40's). Between the trading account and RRSP you have throughout $150,000 at market value. Your wife should also be extoled for devoting half of her monthly disposable income to a regular investment program. Regular investing is explanation to long term wealth accumulation. A portfolio re- i view is timely, since you have established a medium-term goal of buying a abiding-place in two years. You are also considering taking throughout the management of your poorly-performing RRSP

ASSET ALLOCATION

You have indicated that single of your major 1 goals is buying a abode I don't know the 1 value of the house you want to bribe and therefore cannot recommend the down payment you'll ne Your trading account is valued at about $82000 If you use this entire amount as a down payment, you could support the purchase of a abiding-place in the region of $320000 The question of for what cause much of your trading account will be used to purchase the house is important in determining the greatest in number appropriate asset allocation.

Your present allocation (73% in equities), is reasonably aggressive given your young age and the fact that you have 20 years of compounding ahead of you before retirement. However, you are planning to pervert with money [i]or[/i] gain a house in two years. This longitudinal dimensions of time is generally considered to be a relatively short-term investment horizon. When too high a proportion of your portfolio is held in shares, it becomes more vulnerable to a general decline in market values. As well, brace years is a relatively short time to win back from inevitable "mistakes" such as the individuals you experienced in the past with Tembec, Royal Trustco, and three of your U.S.-based stocks. like mistakes or a decline in market value could impact onward your ability to achieve the goal of purchasing a house. Therefore, a relatively conservative asset allocation might be more appropriate. You should consider raising the proportion of cords or other fixed income instruments being held in your portfolio.

EQUITY INVESTMENTS--RRSP OR TRADING ACCOUNT?

Normally, an investor should shut in stocks in a trading account outside of an RRSP in order to benefit from the lifetime $100000 capital gains exemption, the lower tax rate forward capital gains, and the tax-favoured nature of dividends. links and interest-earning deposits are normally held in an RRSP However, in your case I would commend reversing that normal relationship. The safety of principal is requireed in the trading account (outside your RRSP) which will provide the stores for your down payment.

Even after the house purchase, the equity constituent of your portfolio should rise steadily through time. The effects of reinvesting gains and dividends and your wife's regular investment of $1000 through month in the American Stock Plan will add up Regular investing and reinvesting are important practices. self-same few investors can successfully apply a "timing" technique from one side of to the other an extended period of time.

SHOULD YOU "DO IT YOURSELF?"

Since you are generally pleased with the comes of the stocks you generally manage on your own, you are now considering managing your confess RRSP. A review of your trading account exhibit tos that, overall, it is in a profit position. A further review of your stocks point out tos that most of your losse occurr in a single security, Tembec. greatest in quantity of your gains occurred in brace securities, Nova and Bracknell. Also, your largest individual security positions are in sum of two units U.S. holdings--Marion Merrill Dow and Pepsico, which have tolerateed minor losses.

Your RRSP is managed on a brokerage firm. That account has also experienced a certain quantity of losses--Royal Trustco which was virtually a total write of and Glaxo Holdings, which not to be found about one-third of its value. Respectable gains have been earned forward the balance of your RRSP holdings.

The stock holdings you manage yourself have fared about as well as those managed by dint of your broker, despite the extensive resources available to him. If you make choice of to manage your own RRSP you can probably be at least as happy as a brokerage firm. However, your circulating objectives--achieving safety of capital and aggressive putting out --are at odds with each other. Investment finance is based upon the principle that higher answers necessitate higher risk. Conversely, i safety of capital can normally simply be achieved with lower risk investments that proffer lower rates of return.

A not many ALTERNATIVES

Regarding your specific portfolio, there are a scarcely any changes you could consider.

RRSP ACCOUNT:

In your RRSP account, Glaxo hasn't performed as wait fored and its presence as a "loner" foreign equity violates the diversification mastership which is especially important in an RRSP I would consider selling either Mitel or Northern Telecom since the two companies are in the telecommunications industry. If a high-tech alternative is desired, consider a bio-tech company like MDS

TRADING ACCOUNT

In your trading account you could consider selling Tembec which has not performed as awaited The proceeds could be used to purchase another basic mineral-based company as it is as Stelco.