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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, July 9, 2015 | 38 For more news, visit insidehalton.com/oakville-on Reduce risk of failure by managing risk continued from p.33 it in front of those who never felt you would amount to much. Pride is a wonderful thing. Investing does have a more precise target than many of us aim to achieve. It is called Modern Portfolio Theory. Modern Portfolio Theory says that you should arrange your investment portfolio with the least amount of risk possible that will enable you to achieve your target investment return. If you need a ve per cent return, then build your portfolio accordingly. Do not try for six per cent because that will require you taking on more investment risk and the whole objective is to eliminate as much investment risk as possible. Similar to our carpenter example, when a ve-foot piece of wood is required and there is no attempt to extend that measurement to six feet. When you have a speci c nancial objective, the starting point is to determine your target rate of return necessary on your investments in order to be successful and achieve your objectives. You can make a strong case that if you have a nancial adviser who suggests a portfolio that can signi cantly exceed your target, you should consider shopping for a new adviser. Yes, you would ultimately be happy if you made more money than needed but if the risk you took ended up causing you to fall short of your nancial objectives, you will have failed. Reducing the risk of failure is done by managing risk. Evaluating your investment portfolio should start with the amount of risk that you are taking. Our recommendation is to minimize the investment risk while organizing your investments to achieve your target return. Be precise on what you want to achieve and, like the Golden Rule for carpenters, measure twice and cut once. -- Submitted by Peter Watson, MBA, CFP , R.F .P ., CIM, FCSI., Certi ed Financial Planner RAISE YOUR HAND FOR JOBS IN CANADA Over 2,300 companies across Canada work with the oil sands. Including 1,100 companies right here in Ontario. Now is our chance to support projects to get our energy products to new markets and keep Canadians working. Think oil and natural gas developed the Canadian way is good for Canada? Then now is a good time to say so by Not actors. Real Canadians. raising your hand at raiseyourhandcanada.ca R0023349986-0709