When the US Federal Reserve gave indications in the summer that it would begin scaling back on its $85 billion/month bond-buying program - known as quantitative easing (QE), financial markets were quick to react. Market watchers were confident that if the economic recovery in the US continued to show signs of improvement, the Fed’s tapering decision would be a certainty come Fall. In reaction, bond yields started rising: the 10 year Treasury bond rose 110 basis points from April until September.

One of the basic principles of finance is the “risk-return trade-off”. This trade-off explains that the more risk we assume in our portfolios, the higher rate of return we should expect to earn.

All investors realize the value of the Registered Retirement Savings Plan (RRSP). Since 1957, this has been a powerful vehicle for Canadians to save for retirement.