Because advisors and the investment industry make the highest incomes from managing risk, most Canadians carry too much of it.

The most common obstacle to fair returns is too much risk, which in turn creates volatility and then discomfort, to the point where assets are sold at a loss in market downturns. In the real world high risk means lower returns. (See pp. 69-79, Investors-Aid Guide to Protecting Investment Returns)

Risk Reduction Checklist
•Get rid of individual shares, especially small cap or volatile issues.
If you want to be a successful long-term investor, use low-cost index funds or index ETFs instead.
•Make sure you are comfortable with the equity allocation in your portfolio.
Use the Risk Tolerance Tool on the IA website to check or ask your advisor. If your costs are low, as they should be, you can hold more (safer) fixed income. Ask for help from your advisor.
•Get rid of investments you don’t understand or are uncomfortable with.
These could be stocks or complicated new hybrid product like Protected Index Notes. If there is a decline in the market, you don’t want to risk selling these at too low a price.
•Change ‘growth’ equity to ‘dividend’ equity.
Dividend equity is much safer, with less volatility, lower cost, higher quality, and about the same returns (or better) than growth equity. Again ask your advisor for help.
•Consider GICs instead of fixed income mutual funds.
These funds charge far too much and may decline in value if interest rates rise.