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Mutual Fund News


Special to The Globe and Mail



Retired engineer

The portfolio

Has 40 per cent in blue-chip stocks (including Bank of Nova Scotia, Power Corp., Great-West Lifeco, BCE, TransCanada and Intel) and low-cost equity mutual funds; bond exposure provided by a short-term bond exchangetraded fund and strip bonds (long-term bonds stripped of their principal to leave just interest payments that are paid at maturity).

The investor

David Clark opened a registered retirement savings plan as soon as he landed in Canada from Britain in 1975. He began with guaranteed investment certificates and "made a bundle when interest rates climbed to almost 20 per cent in the late 1970s." Now he manages his own stock portfolio with the help of the Successful Investor newsletter.

How he invests

Mr. Clark's equity portfolio is spread across major industrial sectors, with 25 per cent allocated to the United States. Positions are held long term and dividends are allowed to compound. No heed is paid to "musings in the financial press," although he reads it daily.

Gaps in equity diversification are plugged with low-cost mutual funds (the ones sold directly to investors, not through financial advisers). A case in point is Steadyhand Investment Funds Inc. Its global equity fund provides exposure outside of North America, while the firm's small-cap equity fund taps into "their manager's outstanding small-cap expertise."

His most recent transaction was in early 2014. To bring his target allocation in line, he lightened up on his Steadyhand equity fund in favour of their income fund.

Best move

"I set up a strip bond ladder [a portfolio of strip bonds maturing at different times] 15 years ago with each bond yielding more than 5 per cent. This conservative approach over a period of falling interest rates has been extremely profitable, with little risk."

Worst move

When Mr. Clark started investing in equities more than 20 years ago, he didn't like the returns he got from following his broker's advice to buy small-cap resource stocks.


"More than two decades in the markets have taught me to no longer lose sleep if the market crashes, and to treat major reversals as buying opportunities."

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