The Investor Education Fund has launched a new online tool designed to help investors get their retirement goals back on track after the market downturn of recent months.
The calculator shows people how to adjust their investing goals so they can recover from losses and better manage their finances during challenging economic times.
“Many people mistakenly believe that a 20% gain in a portfolio will offset a 20% loss,” said Tom Hamza of Investor Education Fund — a non-profit source of information and tools for Canadian investors. “In fact investors will actually need a 25% gain to make up the money they’ve lost plus the growth that did not occur in order to get the ongoing growth they require.”
Investors use the calculator by inputting the amount they invested, the rate of return they had expected, and what their portfolio is currently worth.
The calculator shows that one of two things needs to happen to get investments back on track: either an increase in the annual rate of return on a portfolio, or an increase in the length of time an investment is held.
The calculator also offers illustrative examples that help investors understand the effects and corrections they would need to make, depending on their circumstances. The Web site provides various scenarios, including losing money many years prior to retirement, losing money a few years before retirement and making more money than expected.
The Investor Education Fund Web site also offers several other worksheets, calculators, and resources to help investors understand and manage their finances at RRSP season and throughout the year.
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Investor Education Fund tool helps investors deal with market downturn
Calculator shows how to recover from investment losses
- By: Megan Harman
- February 10, 2009 October 31, 2019
- 11:15