Your retirement dreams can come true if you have a solid investment plan in place. Here are four golden rules to put your investments on the path to successful retirement planning.

RULE #1: Create an investment plan

A wealth advisor can help you develop an investment plan suited to your unique requirements, your timeline and your tolerance for risk. With a plan guiding your investment strategy, you’ll feel comfortable today and secure about tomorrow even when markets get stormy.

RULE #2: Stick to the plan

Short-term fluctuations in the value of any equity-based investments are normal. In fact, volatility is necessary to achieve higher returns over the long term. Your investment plan should be built to withstand those fluctuations.

Rebalancing may be required from time to time and your wealth advisor can help with that. Remember that impulse buying and knee-jerk selling are not part of the plan. Markets tend to rise over the long term; rely on time, not timing the markets, to reach your goals.

RULE #3: Invest regularly

Skipping just one annual Registered Retirement Savings Plan (RRSP) contribution of $5,000 could reduce the value of your retirement nest egg by almost $17,000 after 25 years (assuming a 5% average rate of return, compounded annually).

The easiest way to invest regularly is with a pre-authorized contribution plan. You’ll automatically invest a fixed amount of money every month in your chosen investments.

With this approach, there’s no need to guess at the best time to invest. Your money automatically buys more units when prices are lower and fewer units when prices are higher.

RULE #4: Diversify

Different types of investments react differently to economic events. When you hold a variety of investments in your portfolio, you protect yourself against day-to-day fluctuations in any one category. At the same time, your portfolio has a better chance of benefiting from the current best performing asset class.

Talk to an advisor about your specific situation.

Servus Wealth Strategies Ltd. is a subsidiary of Servus Credit Union Ltd. offering financial planning, life insurance and investments.  The information contained in this article is provided as a general source of information and should not be considered personal tax advice or investment advice.