After a year of market volatility that took the TSX to a two-year low, investors are wondering where they can put their retirement savings.

While uncertainty is always a sure thing, financial advisers say an RRSP-investing approach should be tailored to the needs of the investor.

Making a decision should start with a plan that takes into account their time horizon and tolerance for risk, says Darren Farwell, director of wealth management at Scotiabank. 

'We lived through 1987, we lived through '94, the Asian contagion, we lived through the tech boom and the tech bust, we lived through 2008 and 2009.' - Darren Farwell, Scotiabank

"What we recommend is the basis for the decisions has to be a plan. The whole process of talking about investing, that's all secondary to the plan," Farwell said.

Canada may be facing a low-growth environment in the near term and that means looking long term, he said.

"We lived through 1987, we lived through '94, the Asian contagion, we lived through the tech boom and the tech bust, we lived through 2008 and 2009 and remember in 2011 in Canada we were down 11 per cent while the rest of the world was flat or up," he said.

Bucking market trends

Farwell said "good quality investments" often buck market trends and will pay dividends even when economies go sour.

"A portfolio of high-quality, blue-chip, dividend-paying companies will still pay dividends even when the market goes down," he said.

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Not everyone has the risk tolerance to put money into equities. (Richard Drew/Associated Press)

"You have to have the discipline to stick it out and hold onto those high-quality companies and you have the consolation that the dividend you will be earning will be higher than a GIC or cash in the bank."

Guaranteed Investment Certificates (GICs), cash and money market funds can look like "safe" investments, but may not stay ahead of inflation and can't make your retirement fund grow.

There is a place for them, especially when an investor is approaching retirement age and needs to set aside part of his or her funds for use in the near future, Farwell said.

'The question is not "should you have equities" but what percentage of equities should you have.' - Tony Maiorino, RBC Wealth Management

But for investors looking for long-term growth, there is also a key role for equities, says Tony Maiorino, vice-president and head of wealth planning services at RBC Wealth Management.

"Yes you should have a portion of a portfolio deployed in those types of investments," Maiorino said. "The question is not 'should you have equities' but what percentage of equities should you have."

Tolerance for volatility in markets is a personal decision, dependent in part on investment knowledge, he said, and some people will not be comfortable with any risk.

Time is key variable

But as they live through multiple investment cycles, most investors come to accept the downs with the ups.

A key variable is time — how much you have before you need the cash you have set aside.

"If you have less time, volatility can be very impactful," Maiorino said.

People in their 20s and 30s will ride out this year's volatile markets and, if they continue investing, may well find they have bought stocks at a low point.

As people approach retirement, a more intensive planning process is needed to determine how much cash they'll require in the near term. Consider not just living expenses, but also health costs, charitable giving and how much to leave to the children, Maiorino said.

"If you are retiring, you won't use all your money next year. If you tell me you plan to retire at age 60, you have 20 to 25 years of time to make your money last," he said.

"Put some of the money in money market, GICs, bonds, where the rates of returns are low but so is the risk, but as we look further out, we can look at growth investments [with part of the money]," he added.

Outlook for 2016

What investment you buy with any cash you have on hand in the first two months of the year depends in part on what you already own, says Jeff Singer, chief investment officer at Investors Group.

"You don't want too many eggs in one basket," he said.

It's better to have a diversified portfolio of investments and to put money into your RRSP regularly, he said.

"Don't try and time the market," he warns. "The typical investor is very emotional. They tend to want to put money in when the market is high and everyone is happy, but that's when stocks are expensive."

Singer is optimistic about the Canadian market this year after its correction in 2015, but he says the outlook for bonds is poor as interest rates rise.