At Canadian Investment Services, it’s no secret that we prefer to lean towards real estate and other non-traditional investment options to empower our clients with broad access to financial growth opportunities. 

We primarily tap into the ‘private assets’ investment marketplace, which includes Real Estate Income Trusts (REIT), real estate fix & flips, and private mortgage lending, to name a few. You can find out more about the numerous lucrative factors for this alternative investment approach on our website.

Having said this, we do recognize that some people like the potential upside of investing in ‘public assets’ which involve mutual funds and stocks. If you are one of these investors, then this article is directed at you.

Take our advice, it’s free

It is important to be aware that mutual fund investing is a very self-serving industry, and many financial advisors are only motivated to sell you on the product offered by their company, rather than focusing on what may be best for your personal situation. 

At CIS, we want to set our clients up with the investments they actually want to be invested in, and for that reason we have established a few strategies that allow our clients to stay invested in mutual funds while mitigating the negative aspects of this type of investing.

Mutual fund investment considerations

In our opinion, there are two main issues regarding investing in mutual funds: market volatility and high management fees.

Market volatility

There are inevitable fluctuations in the market and no level of experience or expertise will allow anyone to accurately predict and take advantage of them – despite what some financial advisors might tell you. 

Extremely high management fees 

Often, these management fees are not well communicated to investors by banks and investment companies and can be as high as 2.5% – 3% regardless of whether the investor is actually experiencing any return from their investment in the mutual fund.

When most investors are presented with these facts, they inevitably begin the process of searching for new investment opportunities that do not have these issues. But before you do, consider the CIS difference, as follows:

The CIS difference

At CIS, we use two separate strategies to individually combat each of these issues: 

  • Dollar-Cost Averaging 

Dollar-Cost Averaging is a strategy in which an investor places a fixed dollar amount into a given investment on a regular basis (usually common stock or mutual funds). The investment generally takes place each and every month regardless of what is occurring in the financial markets. Making these predetermined monthly investments allows the investor to take advantage of inevitable market fluctuations in value, and be much less susceptible to losing money as a result of these fluctuations. 

The graph below shows the beauty of Dollar-Cost Averaging, as even during the most turbulent and unpredictable economic times (such as the 2008 market crash), your investments will continue to grow.

The benefit of Dollar Cost Averaging is that if and when the market goes down, you are actually bringing more “units” or “shares” with your monthly investment. So, when the investments eventually go back up you have more “units” or “shares” that go up accordingly. 

  • Robo Advisors

For clients who like the idea of being invested in mutual funds, we will often suggest they switch their investments to be managed by a robo advisor – a digital entity that provides financial advice based on mathematical rules or algorithms.

Robo advisors allow our investors to keep their money in similar mutual funds, but with a significant reduction in management fees. Traditional management fees with banks or other investment companies usually cost up to 3%.

But when investing with CIS through our roboadvisor network, our investors enjoy a management fee of only 0.5%. Therefore, if you were investing $100k, the difference in management fees could be saving you $2,500 a year. 

The robo advisor mimics moves made by other investment portfolio managers, so our investors normally experience similar growth to what they might see with their previous investment company (but since the management fee is much lower they actually experience a much higher growth).


Trust the investment specialists

Overall, using one or both of these strategies can be a great way to improve the returns and stability of your current mutual fund investment. It has allowed many of our clients to continue with the simplicity and convenience of investing in mutual funds, while at the same time combating the negative aspects by taking advantage of fluctuations and reducing money lost to high management fees. 

I hope you have found this article both informative and helpful. Please feel free to share it with your friends and family.

Until the next time,

Gerry J. Hogenhout, CPA, CGA, CFP, AMP

Founding Principle, Canadian Investment Services


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Are you looking for smarter ways to invest in mutual funds? To find out more, visit our website to book a free consultation today.