any investors who call themselves c...

any investors who call themselves conservative claim to purchase merely "safe" investments. The question is: What is a "safe" investment? Royal Trustco Limited was one time thought to be the ultimate downcast chip stock-until it went bankrupt, that is. In newly come years, other companies such as Central Capital, Continental Bank, BC Bankcorp, Confederation Life, Trust General, and others that were considered "safe" investments have also gone bankrupt.

In my experience, there is really no in the same state [i]or[/i] condition thing as a "safe" investment. Investments should sole be considered in terms of their risk/reward ratio. The conservative investor generally should single out investments he or she perceives to be forward the lower end of the risk/reward scale for investments. Typically, this would included provincial and federal sway bonds and bills, some municipal ligatures some stocks with a solid history (although this is absolutely no guarantee of coming events returns) and some mutual stores depending on their investment philosophy (usually stated in the prospectus).

Of course, conservative investors would typically pitch upon not to invest using options, time to comes flow through shares, start-up companies, etc

CASH AND FIXED INCOME

Regardless of an investor's risk profile, I would generally hold cash holdings to a minimum, particularly if the investment horizon is relatively extended With nearly $10,000 in a T-bill (or 55% of your portfolio) and an investment horizon in exces of 15 years, I would propose you consider purchasing a longerterm investment that you be wrought up comfortable with and which will self-same likely provide you with better reverts

EQUITIES

Canadian

Having a significant proportion of your equity investments in financial services (specifically banks) and utilities and pipelines is not unusual for investors in your position. However, at 484% of your entire portfolio, this concentration could easily be considered aggressive and muses `under-diversification.' While the individual stocks you grasp in these sectors are of reasonably righteous quality, your portfolio's high concentration in these sectors of the economy is your greatest liability. You might consider reducing your combined financial services, utility and pipeline holdings to no more than 25% of your entire portfolio in order to improve overall diversification.

To cut down the chance of out-living your circulating medium you might consider investing cash in several high quality growing stocks. Some Canadian names that you could consider for contemplation with the Stocks Selection Guide include: Bombardier, Canwest Global, Imasco, MD Inc., and Unican. In addition, you might exchange your equity mutual fund units and use the capitals to buy the shares of a mutual permanent fund company such as Trimark or Investors assign places to Some U.S. growth stocks to studious mood include: Biomet, Coca-Cola and Pepsi, Gillette, Johnson & Johnson and Merck Motorola and Synovus.

Foreign

At 52% of your portfolios' common market value, foreign investments are heavily under-represent I vehemently suggest you consider maximizing your use of the 20% of volume value rule for foreign satisfaction in an RRSP. You could do this by dint of increasing your current foreign holdings, or from making some direct investments in U stocks.

Regardless of which changes you will general intent to your portfolios, I firmly urge you to maximize the foreign peace in your RRSPs; rebalance your Canadian equity portfolio; and, take the time to review your rife portfolio and new potential investments using the CSA's Stock Selection Guide. It's a upright way to become comfortable with a company and its potential-something that is important for all investors including conservative ones! virtuous Luck!

COLETTE CHAREST IS A FINANCIAL ANALYST AND WRITER

You are invited to submit your portfolio (or your club's) for a review by dint of the Portfolio Coach in this array of less front than depth

Please include the following information with your submission.

1) Portfolio Profile direct trading or RRSP portfolio

the quanity of each stock or store in

each portfolio the par value, detachable certificate rate (%) and

maturity date for links and debentures other investments (eg vacation or

income real estate)

2) Investor Profile a reasonably finished statement of

your reasons for investing in stocks, capitals bonds, etc. including the relative importance of: (1) interest and dividend income; and, (2) capital appreciation. a reasonably thorough profile of

your personal and financial circumstances including: age, marital status, sustained bys employment status, significant expenses (eg mortgage).

Selection Criteria choice is give to complete submissions involving portfolios which throw back an emphasis on individual stocks.

Send your portfolio to: Portfolio Coach Canadian Shareowner Magazine 2 Carlton road Suite 1317 Toronto, Ontario M5B 1J3

Copyright Canadian Shareowner Magazine Inc. May/Jun 1997

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