The Vault
All together now: Take a big-picture look at your investments

by Graham Barber

Do you know how many mutual funds and other investments you have? Can you easily determine your portfolio's worth? If your investments are spread across a number of accounts, it's not only difficult to keep track of what you own.

It's also difficult to get your investments working together to achieve your goals. Simplifying your investing arrangements can provide many benefits.

Ease of management In our finances, as in our lives, taking care of the small things can make it easier to get the bigger things right.

A good way to simplify your finances is to consolidate your investments in one account.

Having only one account reduces the number of statements you receive every quarter, cutting down on clutter, and giving you an at-a-glance view of what you own.

It's much easier to manage your portfolio - and find new opportunities for maturing investments - when everything is in one place.

Self-directed Investing Tip: Having your banking and brokerage accounts linked at the same institution provides some key benefits: the convenience of seeing all your holdings (stocks, funds, bonds, GICs) in one place, and the ease of moving money between your accounts to take advantage of investment opportunities.

More effective diversification For most of us, it's a good idea to diversify our investments. We should have some cash for liquidity, some fixed income - such as longer-term GICs - for stability, and some equities for investment growth.

The asset mix that's right for you will depend on your goals, time horizon, and comfort level with risk.

It's important to have a diversified portfolio, but remember that diversification doesn't simply mean having more investment accounts.

If you hold a number of mutual funds at different institutions, it can be difficult to spot areas of duplication - the funds may overlap and hold similar investments, which can easily make you less diversified.

Keep your asset mix on track

Having a diversified investment mix that reflects your goals is key to long-term success. But sometimes, market activity can cause your asset mix to drift from the target mix that's right for your situation.

For instance, if the equity funds in your portfolio have done well, the equity portion of your portfolio may have grown beyond your comfort level.

In this case, you may need to "rebalance" your portfolio by moving some of your investments around or directing new savings to a specific asset class.

Having a consolidated investment account makes it easier to see where to invest any new savings and ensure that your asset mix continues to reflect your unique situation.

Tip: All-in-one diversified mutual funds can provide you with a professionally managed asset allocation plan that is rebalanced on a regular basis - all with a single investment.

Know where you stand

In order to get where you want to go - a comfortable retirement, for instance - you need to know where you stand today. That's why it's important to have a big-picture view of all your investments.

Having all your investments in one place makes it easier to determine your net worth.

For instance, once you know the value of your portfolio, you can plug that number into retirement calculators. The results will show what combination of savings and investment growth you'll need to meet your long-term goals.

Banking Tip: Do you have multiple bank accounts? Depending on the number and type of transactions (online, ABM, debit) you conduct, you may be able to save on fees by switching all your accounts to a single account.

The proceeding information was provided by Graham Barber, Branch Manager of Scotiabank, Alcona Branch.

The Scotiabank, Alcona Branch, is located at 1161 Innisfil Beach Road, (705) 431-6116.

The Vault is a weekly series of articles provided by Graham Barber with financial advice and suggestions.