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Dear Nancy Woods,

The market doesn't seem to be going anywhere.  The banks have reported good earnings (I hold a high percentage of bank shares), but my portfolio doesn't look like it's going up.  I'm 58 and I realize I have to start thinking about my retirement savings more seriously.

What do you suggest?

Signed Bob

Dear Bob,

Without seeing what specifically is in your portfolio there may be several reasons that you don't see significant gains in your portfolio.  Are the other holdings in sectors that are in a decline?  Are you taking out the income from the portfolio?  Do you have fixed income or other interest sensitive stocks that maybe declining because of the small rise in interest rates recently?

Just because one part of your portfolio is rising doesn't mean that your total portfolio will increase.  There are the benefits of diversification, mainly that there is reduced risk, however, with that also means that there may be a lower growth because it is only a portion of your portfolio.

I suggest that you have the dividends reinvested into more shares, (a DRIP plan is the easiest and cheapest way) if you haven't already.  Also, get a second professional opinion to possibly reduce the holdings that are interest rate sensitive.

We all know interest rates will rise and of course the big million-dollar question is, when.  It would be foolish to not use this knowledge and be proactive with your portfolio to prevent a significant impact on the downside.  A thorough review of your holdings is prudent and may save you a lot of heartache later on.


Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website
www.nancywoods.com or send an email request to asknancy@rbc.com. You can send your questions to asknancy@rbc.com as well.

If you would like to attend Nancy's seminar, "Is Your Portfolio Prepared for Rising Interest Rates" on September 18, 2013 in the Toronto area, please visit her website nancywoods.com.  If you are unable to attend, you can request a portfolio evaluation by sending an email to asknancy@rbc.com.

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