Dave Chilton

And so people put in their $2,500 a year.

They get the $500 grant.

Now they're working with $3,000.

The best and most important question now is what do they do with it?

When they first start out, the child's obviously quite young.

They have a good number of years.

Do you tend to invest therefore a little bit more aggressively at that point?

Now, one of the things I've seen over the years that's worried me a little bit is people have gotten fairly aggressive with the monies inside the RESP and done quite well in many instances.

The markets, for the most part, have been quite strong.

over the last X number of years.

But as the child has gotten closer and closer to university, they haven't lightened up on the equity portion at all.

And so they're taking the risk, the market stays fairly strong.

If on the other hand, it corrects 20, 30, 40%, which as you know happens, they're in a position where they need to access the money and therefore can't patiently wait for the markets to rebound.

Do you tend to teach them to lessen the equity exposure as they get within three, four, five years of needing some of the money?

Absolutely.

Okay.

Do you recommend self-administered plans and kind of DIYing this and making sure you stay on top of it?

And when you say product, for the most part, are you using ETFs or index funds and keeping it low cost and widely diversified broad market averages?

No, I agree.

The evidence strongly says that breeding the broad market averages for a variety of reasons is extremely difficult to do.