Ah yes January, a month filled with freshly pressed gym membership cards, holiday shopping hangover and of course ever increasing amounts of signage with 4 letter combinations such as RRSP, TFSA etc. For many Canadians it’s also that time of the year that they become reacquainted with that person that manages their money. Over the next few weeks, tens of thousands of us will be scheduling a visit with the bank or financial advisor to prepare for our 2011 RRSP contribution.  Some much more prepared than others, compounding charts and Forbes magazine in hand, others just barely squeezing in the visit between little Susie’s dance recital and finishing that report due on Monday. One common theme I’ve noticed amongst almost everyone that invests in RRSP’s is the fundamental urge to delay paying taxes.

How many of us however have honestly asked ourselves where our money really goes after you and I receive that tax credit?

Let’s consider for a moment...

-          In the last 10 years the stock market has on average only increased 0.89% per annum (S&P500- 01.11.2002 -01.06.2012)

-          Stats Canada indicates that the cost of living has increased approximately 20% during that same period.

-          According to several publications the fear of not having enough money into retirement has now trumped the fear of public speaking as a person’s number one fear.

But is there another way or are the vast majority of us destined to an, at best, mediocre retirement full of worry?

Personally, one of the fundamental concerns I have specifically for Canadians investing in RRSP’s through major institutions is the amount of fee’s that the investors have to dish out.

Here are just a few articles from several Canadian Media outlets that dig right into the thick of it.

Morningstar Grades Canada an F in Mutual Fund Fees 

MER debate: Mutual fund industry stands its ground 

Very few of us however have been exposed to Private Markets where the vast majority of Wealthiest Canadians have made or kept their wealth (referred to as the Primary Market).

There’s a saying one of my mentors once shared with me that goes something like  “better the devil I know then the one I don’t” meaning people rather work with what’s familiar to them ( even if they know it’s not working well) than to take a chance at doing something different that can improve their situation.

It’s an interesting time in the stock market to say the least, once THE place to be, now turned into Vegas like environment where basic fundamentals like P/E  ratios (Price to Earnings) and long-term company outlooks have been taken a backseat to peoples fear and greed. Even OMERS ( Ontario Municipal Employees Retirement System ) at over 50 Billion dollars under management, making it the largest pension fund in Canada has announced that it plans to move over 20 Billion dollars out of the Public Markets into the Private Sector/Primary Market ( Hint Hint ) in areas such as Real Estate and Infrastructure. The reason you might ask? OMERS is responsible for over 400,000 people receiving monthly income into their retirement years and cannot allow itself to be subjected to the volatility that the Public Markets have shown over the last decade.

 If Canada’s largest Pension fund is moving into the Private Sector to protect and grow it’s investors retirement savings, why aren’t you?

I encourage everyone to take some time to learn about the Private Markets or team up with some people that can help you understand them better. Don’t follow the masses, take action and become better prepared to protect yourself and even profit during these turbulent times.  We hope to see you at one of our upcoming events in your city!