RRSP season is once again upon us, and again investors are facing critical decisions about where to invest their money.

In Canada, investors have up until the first 60 days of 2006 to make eligible contributions to a Registered Retirement Savings Plan (RRSP) that are deductible in the 2005 taxation year. While many investors take advantage of a dollar cost averaging strategy to spread their contributions out throughout the year, many others do not contribute until close to the deadline. Whether this is for a good reason like receiving a year-end company bonus, or simply procrastination, many investors start to feel the pressure to make their investment choices in the first two months of the year.

If for whatever reason, you find yourself in this situation this RRSP season, there may be a couple of reasons why you might be hesitant to invest before the deadline. Perhaps you may not have had the time to properly research your chosen investments. With the demands of work and family, the average Canadian does not have a lot of time left at the end of the day to spend doing the in-depth research that is needed to make an informed decision about investing. Or, with the current market strength, those in the position to invest a single lump sum may be worried about investing it all at a time of high prices.

There's No Rush
Despite the looming RRSP deadline, there is no need to make rash decisions, or potentially mistime the market. Instead, why not park your contribution in a stable investment such as a money market fund or daily interest account before the deadline? This way, you still get your tax-deductible contribution for 2005, and you are not pressured into making an investment decision that you are not comfortable with. This will give you time to consult with your financial advisor and do some further research before making a decision.

Additionally, most companies will allow you to invest a lump sum into a money market fund, and then use an automatic dollar cost averaging strategy to transfer set amounts from the money market fund into investments of your choosing. This would reduce the risk of “buying high” and allow you to gradually invest at different prices without the worry of trying to time the markets.

There is no need to let the pressure to make investment decisions prevent you from contributing to your RRSP this season. If you would like to set up an appointment to discuss your investment strategy, please give us a call or e-mail us to set up an appointment. We'd be happy to help.

Yours truly,

Tactical Asset Management, Inc.
phone: (306) 757-2121
fax: (306) 347-3655
e-mail: inquiry@tacticalassetmgmt.com
website: www.tacticalassetmgmt.com