Video | Why is it important to match your education savings investor profile?
Obviously, we don’t want to take any risks with our children’s future, but the notion of risk takes on a whole new meaning when it comes to investments, including Registered Education Savings Plans (RESPs).
Once your child’s RESP is open, you will need to choose the product type that meets your investor profile. Will you opt for growth or caution? Jean-Stéphane Parent, Vice-President and Chief Investment Officer at Kaleido, explains the importance of choosing the right type of RESP investment.
Time is your best ally
When you open an RESP, you are usually investing for the long term. As with any other investment, this allows you to benefit from the upward potential of the markets over the long term. Don’t miss out on this potential.
Indeed, even though there may be some short-term volatility, you’ll still be able to make the most of your investment thanks to good diversification and a longer investment horizon. “However, if you don’t take any risks, you might leave returns on the table that could benefit your child,” argues Jean-Stéphane Parent.
Determine your investor profile
To select the product that best suits your investor profile, your advisor will help you assess your risk tolerance using a questionnaire that takes into account, among other things, your investment knowledge and experience, as well as your financial situation. They can then develop a strategy accordingly.
“Growth” profile
Generally speaking, you have a more daring investor profile. In other words, you are comfortable with the idea of tolerating a certain amount of risk in the short to medium term, in order to enhance your returns over the long term.
“Caution” profile
On the other hand, you may be more conservative by nature. In this case, your portfolio will need to be built to minimize short-term fluctuations, while seeking attractive returns over the long term.
“There is also a whole range of profiles in between, including balanced risk profiles. In all cases, Kaleido offers you a process that allows you to find the education savings product that is really right for you, with the help of your advisor or representative,” maintains the Vice-President and Chief Investment Officer.
Asset diversification and scalable management
That said, Kaleido’s IDEO+ products are all diversified, i.e. they combine different asset classes. What’s more, they incorporate an adaptive management strategy in which we automatically adjust the allocation of these assets as the beneficiary ages, to protect accumulated returns and reduce variations as the time for post-secondary education approaches.
You can rest easy knowing that we will be taking care of the necessary rebalancing and adjustments to ensure that your education savings product matches your investor profile throughout your journey.
