Invest some time in Shakespeare's Primer
Montreal Gazette
Friday, December 17, 2004

Whether they like it or not, most Canadians will devote at least a bit of time to thinking about retirement investing between now and the end of the RRSP season.

It can be a frustrating task and not just because there never seems to be enough money to save.

Many people are overwhelmed by the sheer volume of information available about investing and intimidated by the apparent complexity of the choices available to them.

That's why Keith Betty, a retired Lethbridge chemist and self-taught investor, has done a great service by compiling a comprehensive, do-it-yourself investing primer on the Internet.

Betty receives no compensation for his guide, entitled Shakespeare's Investment Primer, and he is not associated with any financial-services company.

"It's just a matter of passing on some of the things I've learned over the years," says Betty, 56, who goes by the moniker Shakespeare on the Wealthy Boomer Internet discussion forum. "I want to educate people to look after themselves."

The primer aims to help people get rich slowly by examining the crucial issues of asset allocation, risk control, cost management and portfolio rebalancing.

It also looks at the ins and outs of different asset classes ranging from stocks to bonds to income trusts.

And it considers other important issues like how much retirees can sustainably withdraw from their portfolio, the use of options and foreign investing.

Betty is constantly updating the primer, and it includes many links to other Internet resources.

He focuses on asset allocation and controlling costs in his own portfolio. That leads him to buy index funds but, refreshingly, he's not an indexing zealot.

Exchange-traded index funds are hard to beat for investing in the huge U.S. stock market and in the EAFE overseas markets (Europe, Australia and Far East).

But for his Canadian portfolio, Betty prefers to buy individual large-cap stocks that have a history of increasing their dividends, especially because he uses his portfolio as his main source of income. He also invests in individual real-estate investment trusts to boost the amount of income his non-registered portfolio produces.

But he cautions that income trusts as a group shouldn't exceed 10 to 15 per cent of a portfolio and shouldn't be mistaken for bonds. Indeed, he finds the trust market to be quite high and he suspects it might be headed for a correction.

For bonds, Betty divides his money between a low-cost, short-term bond fund and real-return bonds offered by the federal government. The rate of return of these bonds is tied to the value of the consumer price index and is thus automatically adjusted for inflation.

Betty's approach has been working for him. In the six years since he took early retirement, he calculates his portfolio has earned an 11-per-cent annual return.

"As long as you spend less than you earn and invest wisely in a diversified portfolio, you will eventually be quite well off," Betty observes. He adds, of course, that "eventually" can take quite a long time, but his primer is as good a place as any to make sure you're heading in the right direction.

You can find the primer at: or by punching Shakespeare's Primer into Google.  
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Idnumber: 200412170100

Don Macdonald