A Money Coach in Canada

Follow & Subscribe

Each Saturday, I will be responding to a reader’s specific Money Question.  Today’s, from K, is about what to do with mediocre mutual funds – and they were mediocre before the market tumble.  I bet a lot of people will relate to her conundrum –


Here’s my question:

Like many people, I have lost a lot of money (at least on paper) in my RSP account.

I don’t think I have a particularly good mix of mutual funds, and I had started the process of rebalancing into an ETF-based “couch potato” mix (by started, I mean I had thought it through, read up, and picked an asset mix but didn’t actually sell and buy) when the market tanked.
What should I do now?  I am still saving but currently holding them in an ING savings account.  Should I just accept my losses, sell my mutual funds and execute my plan (I hate to lock in the money I’ve lost but….)
Or, should I just wait it out with my current portfolio, and use my new savings to operationalize my couch potato portfolio?
If I wait for my current portfolio to bounce back (at least partway) , how long is reasonable?  1 year? 5 years?


K – I need to be extremely clear on this:  I am not a financial planner, or financial advisor, or registered anything.  I’ll describe what I’m doing personally, and you can take what you want from that, but please consult a registered professional before making your decisions.  In short:  massive disclaimer!

Here’s what I personally have chosen regarding my investments:

  1. I rely on my own decisions and purchase individual stocks and bonds.  I’m nerdy, and I take my nest egg seriously, and I actually enjoy the process of researching and selecting companies to buy.   I realize not all people want to do the same, and so mutual funds in principle are still a good way to go for many people.  It sounds like you are interested in more of a do-it-yourself approach – join the club!  It’s exciting.
  2. I’m your average joe – a history major – with no formal training in investing.  I just use a lot of common sense.   I do, however, try to inform myself.  I muck around on the net a lot on sites like these:

So, if I were in your shoes I would do the following:

  1. Find out what is in my mutual funds. What companies are in there currently?  Using my own judgement, do I think those companies will make a comeback – are still really solid companies, but just went down because the whole market went down? (eg. I’m hanging onto my apple stock despite its tumble – although Steve’s illness concerns me)
  2. Revisit the ETF plan. Lots of cdn personal finances bloggers have done a lot of research and formed opinions on ETFs – like this by Canadian Capitalist .  How do the ETFs you are considering stack up to the mutual funds you currently hold?
  3. Start investing, using the funds in your ING account (assuming these funds are intended for your long term nest egg).   Personally, I’m going to invest aggressively this year.  If I can buy a lot of companies at today’s cheap prices, by the time I retire I should be doing very well, thank you very much.

Again, that’s what I would do, personally, but absolutely go have a talk with your financial planner, and continue to do your own research on the net.

Readers:  if you have a question about budgets, debt, smart shopping, relationship to money, relationships with others where money is an issue, please e-mail me at Nancy at Your Money by Design dot Com and I’ll answer next Saturday!

About the Author

Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com


  1. I bought ING mutual funds for my RRSP because they are investing in index funds… couch potato for lazy people like me, with 1% MER… One day I hope to be be more proactive and in charge, but I decided to take small steps.

    Wooly Woman’s last blog post..Shhhhhhhh, the baby is sleeping!


    Mar 28, 2009
  2. brad

    I would keep those mutual funds and wait for the market to recover before switching them over to your couch potato portfolio…the worst time to sell is when the market is down, as you’ll lock in your losses. And I would start afresh with your ING savings to build your couch potato portfolio. I wouldn’t invest in ING’s Streetwise funds — even though they’re index funds, the 1% MER is really high for an index fund. You can do much better with TD’s e-Series index funds. I wouldn’t bother with ETFs unless you’ve got a lot of money. There’s a point at which ETFs make more sense than funds, and that’s when your transaction fees for buying/selling ETFs work out to be lower than a mutual fund’s MER. Given that the TD eSeries MERs are so low, you’d need quite a bit of money in your portfolio before ETFs work out to be cheaper in terms of fees.


    Mar 29, 2009
  3. I agree that now is not the time to sell. If you would like to learn about trading /investing yourself I recommend Technitrader (http://www.technitrader.com/). I’m really enjoying their programs.


    Mar 30, 2009
  4. Kristi

    Thanks for featuring my question – and for the helpful comments.

    Will check out technitrader!


    Apr 15, 2009

Leave a Reply

CommentLuv badge