Traders work on the floor of the New York Stock Exchange (NYSE) in New York.
Brendan McDermid | Reuters
Building your investment portfolio is dependent on your ability and willingness to take on risk. The more you’re willing to take, the higher your potential returns … and losses. Your risk tolerance depends on your risk capacity and your risk willingness, and is affected by age, stage in life, and goals.
If you’re investing for retirement and are 45 years old, you have more time to grow your money and can take on more risk than a 65-year-old can. With 30 years to build a nest egg, your investments have more time to ride out short-term fluctuations with the hope of receiving a greater long-term return.
Here are five tips to help determine if you’re risk-averse, a risk-seeker, or somewhere in between.
1. Determine your risk profile Important factors include your time horizon (length of time of your investment) and your risk tolerance. These help you get an idea of which investment strategy, from conservative to growth-oriented, corresponds with your investor profile.
When you’re afraid of taking on risk that could cause a decline in your portfolio’s value, you’re risk-averse and more conservative. When you want larger gains and are willing to take on more risk, you’re a risk-seeker, leaning toward growth. Most people are in the middle.
If you have a lot of liabilities (debt) and little cash assets, you’ll tend to be risk-averse because you can’t afford to take on risk. If you have large cash assets and few liabilities, you’re better positioned to take on risk.
2. Understand your risk tolerance Modern financial planning utilizes two independent risk scores: risk capacity and risk willingness. Risk capacity is based on your investment objectives, initial investment amount, and time horizon. This addresses your ability to handle risk and the primary investment goal.
Risk willingness indicates how willing you are to accept investment risk in terms of volatility of investment returns as well as the probability of loss.
How comfortable are you with risk? Are you more concerned about your investment losing value, equally concerned with your investment losing or gaining value, or more concerned with your investment gaining value?
It’s vital to understand that some investments may have dramatic fluctuations in value with high potential for larger gains, while others may be more stable with less returns. Choose investments that fit your risk tolerance level.
3. Know your time horizon Your timeline for meeting your goals is vital. How long until you withdraw money from your investments? Once you begin, how soon do you plan to spend all of the funds?
4. Select your investment strategy As you determine your risk profile and evaluate investments, you might allocate money into various categories (or work with an investment professional). Typically, investing dollars are allocated among a spectrum of portfolios: conservative, conservative balanced, balanced, balanced with growth, and growth equity.
5. Determine the kind of risk you’re comfortable taking Figure out what risks exist, which ones you’re willing to take, and which ones aren’t worth taking. In addition to volatility risk – risk related to the stock market – you should be aware of:
Market risk: A general decline in financial markets causing investment losses.
Inflation risk: Rising prices limit your ability to purchase goods and services with your investment dollars.
Interest rate risk: Increases or decreases in rates and resulting price fluctuation of an investment, particularly bonds.
Reinvestment rate risk: Reinvesting funds at a lower rate of return than your original investment.
Default risk: When a bond issuer can’t pay bondholders’ interest or repay principal.
Liquidity risk: How quickly investments can be converted to cash.
Political risk: The adverse effect of new legislation or changes in foreign governments to overseas markets or companies you invest in.
Currency risk: Fluctuating rates of exchange between U.S. and foreign currencies negatively affecting the value of your foreign investment, as measured in U.S. dollars.
It helps to understand the kinds of risk and the extent of risk that you choose to take, and then to learn ways to manage those risks.
However, while this do-it-yourself approach is a good start, risk profiles don’t replace your existing financial strategy. Your financial advisor can connect the emotional dots of your risk analysis as part of their process to help map you to the portfolio that fits you best. It’s important to go through this exercise on an ongoing basis because your financial goals and your tolerance for risk will change over time.
—By Kevin Simpson, founder and chief investment officer at Capital Wealth Planning, and author of “Walk Toward Wealth.”
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
