TORONTO, ONTARIO — (Marketwire) — 11/26/12 — BMO InvestorLine reminds Canadian investors that one of the keys to successful investing is awareness of how their investments are performing and watching out for warning signs.
An effective way to measure an investment-s performance is by comparing it to a benchmark index such as the S&P/TSX Composite Index. This will show whether the investment is outperforming, underperforming or matching its benchmark. This is best used for investments that are indexed themselves – such as Exchange Trades Funds (ETF) and mutual funds – as the comparison is more similar. Most ETFs track an index – such as a stock index or bond index – while mutual funds are a collection of investments typically focused on a particular sector or type of investment.
Investors can also do their research by watching economic indicators – such as GDP and the unemployment rate – that point to what lies ahead for markets and the economy. This can help investors decide their next steps in managing their portfolio.
“Compare your investment-s returns with those of its benchmark over one-, three-, five-, and ten-year periods, if possible,” said Viki Lazaris, President & CEO, BMO InvestorLine. “It also helps to understand how leading economic indicators can affect your investments. Doing so will allow you to invest more effectively and adjust your financial strategy as necessary.”
Some of the most commonly used benchmarks to measure an investment-s market performance include:
BMO InvestorLine offers the following tips to help investors use economic indicators to invest more wisely:
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BMO InvestorLine Inc. and BMO Ligne D-action Inc. provide this commentary to clients for informational purposes only. The information contained herein is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete or may change without notice. The comments included in this document are general in nature, and professional advice regarding an individual-s particular position should be obtained.
An adviceDirect account is a non-discretionary fee based account which offers investment recommendations. adviceDirect does not provide portfolio management by a portfolio manager. The client makes their own investment decisions and manages their own investment portfolio. adviceDirect does not offer discretionary, managed accounts.
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