Rely on Equity Funds

Have you ever stopped to think that your retirement might last a good 25 or even 30 years? Statistics say you could live until age 80, or even longer! Will you have enough money in the years ahead to ensure that your retirement is everything you hoped it would be?

Equity Funds: The Best Choice for the Long Term

If your investment horizon is average or long term, your portfolio should include equity funds in proportions that suit your investor profile. Stocks offer the best potential for long-term growth of any investment category.

By giving preference to equity funds, you maximize the value of your investments while you protect your portfolio against inflation.

Maximize the Value of Your Investments

Stocks sometimes fluctuate markedly over the short term, but improve and appreciate over longer periods of time. The following table shows this clearly.

Annualized Returns for Five Investment Categories Over 25 Years (1984–2008)

	1 Year	25 Years
Treasury bills	3,33 %	6,33  %
Bonds	6,42 %	9,52  %
Canadian stocks	-33 %	7,85  %
U.S. stocks	-21,20 %	9,74  %
Foreign stocks	-29,18 %	8,87  %

Hedge Against Inflation with Equity Funds

When times are good, rising prices help company profits increase. Over the long term, stock prices usually go up as a function of inflation. Because long-term equity fund returns exceed the rate of inflation, they can protect you against its harmful effects, specifically the erosion of your purchasing power and your nest egg. 

Do your plans call for you to start drawing on your savings in five, ten, or fifteen years? You’ve still got time to invest—so take advantage of it!