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By Brian Lewis
Excerpt from New Money, March 01, 2001
The Province; with News Services
Today's the deadline for your Registered Retirement
Savings Plan contributions but if you haven't
contributed anything to an RRSP for the 2000 tax
year or you've contributed less than in years'
past -- you're not alone.
Preliminary estimates indicate that weaker stock
markets, falling corporate profits, layoffs and
other indicators of a slowing North American economy
are causing individual investors to hold back
or delay making their RRSP contributions.
And that, analysts were saying yesterday, may
have dealt Canada's multibillion-dollar mutual
fund industry its worst RRSP selling season in
six years.
Adrian Mastracci, owner of Vancouver-based
KCM Wealth Management, says he's seeing
many more investors this year park their RRSP
contributions temporarily in 30-to-90 day GICs.
"They're not jumping immediately into mutual
funds," Mastracci says. "They want to spend more
time thinking about how they'll invest their RRSP
money for the longer term."
That's well below the $7.8 billion in net sales
in 2000 when tech stocks were hot, but that sector
has since taken a drubbing. It would be the worst
season since 1995, when there was just over $2
billion in net redemptions.
"I'd have to chalk it up to turbulent markets
and resulting caution by investors. But I think
this season's number is still reasonably robust
given the incredibly poor markets that we have
endured over more than six months."
The Toronto Stock Exchange 300 index has shed
28 per cent over the past six months while the
tech-heavy Nasdaq Stock Market has plunged 45.8
per cent.
There has been a trend of investors shifting
into more conservative dividend funds as well
as balanced funds -- which invest in stocks and
bonds -- in addition to funds using a value-oriented
investment style.
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