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Invest
some time in Shakespeare's Primer Whether they like it or not,
most Canadians will devote at least a bit of time to thinking about retirement
investing between now and the end of the RRSP season. It can be a frustrating task
and not just because there never seems to be enough money to save. Many people are overwhelmed
by the sheer volume of information available about investing and intimidated by
the apparent complexity of the choices available to them. That's why Keith Betty, a
retired Lethbridge chemist and self-taught investor, has done a great service by
compiling a comprehensive, do-it-yourself investing primer on the Internet. Betty receives no
compensation for his guide, entitled Shakespeare's Investment Primer, and he is
not associated with any financial-services company. "It's just a matter of
passing on some of the things I've learned over the years," says Betty, 56,
who goes by the moniker Shakespeare on the Wealthy Boomer Internet discussion
forum. "I want to educate people to look after themselves." The primer aims to help
people get rich slowly by examining the crucial issues of asset allocation, risk
control, cost management and portfolio rebalancing. It also looks at the ins and
outs of different asset classes ranging from stocks to bonds to income trusts. And it considers other
important issues like how much retirees can sustainably withdraw from their
portfolio, the use of options and foreign investing. Betty is constantly updating
the primer, and it includes many links to other Internet resources. He focuses on asset
allocation and controlling costs in his own portfolio. That leads him to buy
index funds but, refreshingly, he's not an indexing zealot. Exchange-traded index funds
are hard to beat for investing in the huge U.S. stock market and in the EAFE
overseas markets (Europe, Australia and Far East). But for his Canadian
portfolio, Betty prefers to buy individual large-cap stocks that have a history
of increasing their dividends, especially because he But he cautions that income
trusts as a group shouldn't exceed 10 to 15 per cent of a portfolio and
shouldn't be mistaken for bonds. Indeed, he finds the trust market to be quite
high and he suspects it might be headed for a correction. For bonds, Betty divides his
money between a low-cost, short-term bond fund and real-return bonds offered by
the federal government. The rate of return of these bonds is tied to the value
of the consumer price index and is thus automatically adjusted for inflation. Betty's approach has been
working for him. In the six years since he took early retirement, he calculates
his portfolio has earned an 11-per-cent annual return. "As long as you spend
less than you earn and invest wisely in a diversified portfolio, you will
eventually be quite well off," Betty observes. He adds, of course, that
"eventually" can take quite a long time, but his primer is as good a
place as any to make sure you're heading in the right direction. You can find the primer at:
Shakespeare's Investment Primer or by punching Shakespeare's Primer into
Google. dvm1@sympatico.ca
Idnumber: 200412170100 Don
Macdonald
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