Advisor.ca | RRSP season marketing letter
January 2009
Dear [Client's name],
The end of 2008 was no doubt a trying time for anyone paying attention to market
fluctuations. Some of my clients who only look at their quarterly statements are
especially shocked by the drop in portfolio values they've seen.
Please remember this: Even though this time is difficult, our plans were built to last
through market corrections like this. Moreover, because we have a plan, situations like
this are actually an excellent opportunity to build your resources for the future.
Let me explain: When markets are riding high, each dollar you invest buys fewer mutual
fund units or company shares, because each unit costs more. When the market falls, it
takes unit prices with it – the cumulative effect of this is unfortunate and it's a shock for
some, but markets do in fact recover, given enough time. The shares you are holding
today, hopefully, will eventually recover some, if not all, of their value as markets
recover.
In the meantime, shares are cheap, making this an excellent opportunity to buy and invest
more for your future. Those of you who invest automatically every month are already
taking advantage of this opportunity: Dollar cost averaging is a strategy that allows us to
acquire more shares while prices are low. It also means that we invest when prices are
high, but the regular habit or automatic deduction guarantees that we don't miss buying
opportunities like this one.
Whether you'd like to make a year-end contribution to your RRSP, take advantage of the
new tax-free savings accounts to shelter your future gains or even use some leverage to
invest (interest rates are low right now), the conditions today are good.
Of course, all of these options need to be considered within the context of your overall
financial plan. Please call my office and set up an appointment so that we can discuss
things, update your risk tolerance information and any other personal information that
might have changed since we last met, and review your plans for the future.
Yours in service,
[Your signature]
[Your name]