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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, December 12, 2013 | 18 Reduce risk and diversify Dollars & M Sense ost investors want a diversi ed portfolio but few actually are successful at accomplishing this. True diversi cation can be illusive despite efforts to spread the risk of owning investments. The key word is risk. The main reason to diversify is to reduce risk. We cannot predict future investment performance, so diversication is the best defensive strategy available. Risk is measured by annual volatility, the normal ups and downs in the value of investments. A riskier investment is one that has a high degree of volatility. Lower-risk investments have a low degree of volatility. There is less uctuation in the value of that investment during the year. Peter Watson Guest Contributor Christmas Sleigh Rides Join us for our Christmas Sleigh Ride Celebration at Revera ­ Churchill Place. Come out to enjoy a beautiful afternoon sleigh ride and stay to enjoy an assortment of hot chocolate, specialty coffees, chocolate truffles and fruitcakes at our Christmas Sleigh Ride Celebration. Invite a friend along ­ or come meet someone new! At Revera, you have the freedom and independence to live your life, your way. Come and go as you please and choose your favourite foods and activities. A perfect portfolio Investors prefer low-risk investments. A perfect portfolio earns a good return with minimal price volatility. In investment jargon, Modern Portfolio Theory says to maximize the return within a given amount of risk. The single most common error Canadians make is investing too much in our country. Our experience when reviewing investment statements from clients of large investment dealers is that approximately 80 per cent of investments are held in Cana- dian assets. It is easy to see how this might happen. People feel comfortable owning what they know, so there is more familiarity to owning stocks and bonds in Canadian companies and governments. Canada accounts for just four per cent of the global economy; therefore, putting all or most of your money into such a small part of the world is risky. Investors do not set out to over-invest in Canada but without a proper plan, that is the way it evolves. A typical portfolio that fails to diversify would hold several Canadian stocks and a number of different mutual funds that are mostly invested in Canadian securities. Sometimes there are two or three different investment advisers all doing the same thing. Looking back over the last 20 years can illustrate how diversi cation works in your favour. see Better on p.20 Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics · Carpet · Oriental Rugs · Vinyl · Hardwood Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics · Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics · Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics Thursday, December 19th, 2 pm ­ 4 pm UP TO Tours also available. 1/2 ALL IN-STOCK AREA RUGS... END OF YEAR CLEAR OUT! PRICE OR LESS! DESIGNER AREA RUGS Calvin Klein · Wholesale/Retail of Persian Rugs Call to RSVP today! Churchill Place 345 Church St Oakville reveraliving.com Working together to overcome ageism. Visit AgeIsMore.com 13565 11.13 THIS WEEK'S CHRISTMAS DEAL! LICENSED NHL RUGS Reg $59.99 Now only $19.99 Limit 1 per customer While quantities last 905-338-3311 UP TO 75% OFF DISCOUNTED AREA RUGS, CARPET ROLL ENDS, LAMINATES AND VINYL FOLLOWING LOCATIONS ONLY: 125 Cross Ave. TRAFALGAR VILLAGE OAKVILLE · 905-849-4472 SUPERSTORE 228 KING ST. E. Hamilton · 905-546-1921 Carpet · Oriental Rugs · Vinyl · Hardwood · Ceramics · Carpet · Oriental Rugs · Vinyl · Hardwood