Most Canadians put their life savings into stock market related securities such as mutual funds. Historically, on average, these have been decent performers, but investment returns are often eroded due to knee-jerk emotional reactions due to market volatility. People tend to buy high and sell low. When the markets plummet, people’s first reaction is to sell to prevent further losses and they don’t re-invest until a recovery is evident and substantial gains have been missed.
There is another class of investments that can offer the same or better performance without the volatility. Exempt market investments are once again gaining popularity. Since new legislation was introduced in 2009 and 2010, these investments require much stricter compliance than they did previously offering much greater security for the investor than they did in the past. So what can these investments offer? Regular, high yielding, returns without market volatility. These products range from oil and gas to real estate and everything in between and are RRSP, RESP, and TFSA eligible. These investments are not offered by banks and their advisors. You need to speak to an independent financial advisor or exempt market dealer to see if this product is right for you. Exempt market investments can be a great addition to one’s investment portfolio.