Q. I am reviewing my investment portfolio after having completed my RRSP home buyers plan repayment. What is the maximum amount that I am allowed for foreign content and do you recommend that I maximize my foreign content?
Carrie Anne, Ottawa
A. The foreign content limit for registered plans was eliminated several years ago, so, you could have 100% of foreign content exposure within your RRSP, if you wanted to.
Whether you should or not is a different story.
You may want to consider that almost 97% of the world’s equity and fixed income markets are located outside of Canada and that over concentration in one market can certainly heighten your exposure to risk.
So how much foreign content should you have?
Not knowing anything about your situation makes it impossible for me to advise you on this.
I’d recommend that you meet with an independent Certified Financial Planner and discuss your goals; objectives risk tolerance, current investment holdings and risk tolerance, to get some guidance on this. A detailed retirement plan will not only show you if you are on track for retirement, but will also develop an ideal asset allocation that will produce the returns that you need to retire, with the portfolio volatility that will allow you to sleep at night.
This article provides general information and does not constitute financial or other professional advice. Seek independent advice before implementing any of the strategies discussed.
Imran Syed, BA CFP CFSB TEP is an independent, Fee Only Certified Financial Planner and can be reached at www.feebasedadvisor.ca. Please send any home related, financial planning questions to him by email at homes@ottawacitizen.com
