To avoid falling into these and other RRSP investing traps, it is important to take the time to develop a good financial plan. Whether you use a financial adviser or invest on your own, planning and research are essential to creating a successful RRSP strategy for the long term.
The other Wall Street bright idea is the fund of funds (FOF). It sounds good, but it actually creates a double layer of costs; the cost of purchasing the fund itself, and then the expenses of the mutual funds the FOF purchases. Take for example, the Enterprise Group of Funds. It shows an expense ratio of almost 2% plus a sales charge of 4.75% according to Morningstar. Tack on the underlying expenses and you're paying out more than 3% a year in investment expenses.
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