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Diversification: A Timeless Strategy
Turn on the business news or read a Wall Street research report and you’ll notice something: many people in the investment world will tell you where to put your money for maximum gain. Buy gold before it soars. Sell bonds before they crash. Or maybe speculate on this stock because it’s destined to go up….
Read MoreCost Matters
It’s natural for investors to be focused on costs. Higher costs eat into your returns, leaving you with less money at the end of the day. On the flip side, if you can efficiently lower your costs, your net returns will rise. That’s the simple story. Problem is, many people just focus on one particular…
Read MoreA Loss vs. A Decline (There’s a Big Difference)
Imagine it’s November 2008 and two people are looking at their portfolios. They both see that the stock market has fallen roughly 40% in just over a year, taking the value of their equity investments down with it. Investor A decides they can’t take it any more and sells. Investor B does nothing. On a…
Read MoreOnly Take Risks Worth Taking
It’s a truism of investing: there’s a trade-off between the risk you take and the reward you might receive. The safer the investment, the lower the probable return, and vice versa. Some investors, understandably wanting to make the most money, take a lot of risks. Maybe a small percentage of them end up with outsized…
Read MoreWhat to Expect When You’re Investing
Depending on your level of investment knowledge, you may be wondering just what you can expect from your portfolio. There’s good news and bad news on this front. The bad news is that we, nor anyone else, have the foggiest idea what will happen tomorrow or next week. We’ll leave that kind of guessing to…
Read MoreThe Financial Media Can Be Harmful to Your Wealth
Nowadays, it’s pretty much impossible to avoid talk of the markets. There are 24/7 cable channels devoted to investing and business. Here in Toronto, the radio station AM680 does not one, but two dedicated market updates every hour (24 updates a day!) And we haven’t even mentioned all the newspaper and internet coverage. The wall-to-wall…
Read MoreAvoid These Common Investment Errors
What do investing and tennis have in common? We could probably come up with a few similarities, but avoiding unforced errors has to be top of the list. In other words, while you can’t control what the market (or your opponent) does, you can do your best to ensure you don’t make avoidable mistakes with…
Read MoreThere’s More to Investing Than Canada
Canada is a wonderful country for a whole host of reasons. It’s amazingly inclusive compared to most places in the world, the land itself is beautiful and, let’s face it, we’re tops at hockey. Things are far from perfect, but as countries go, Canada is a pretty good one to live in. With all this…
Read MoreBehavioural Biases and Investing
People, by their nature, are biased. Another way of saying this is that everyone tends to preference some things over others, sometimes unfairly. Perhaps you’re biased towards one sports team. Or maybe you’d rather listen to jazz than the blues. Not all biases have serious repercussions. In the field of investing, however, there’s an increasing…
Read MoreTime is Your Friend
We live in a world filled with constant updates. And nowhere is this more evident than in the world of investing. Turn on a news radio station and chances are you’ll hear how the markets are doing that day. On television, you can see the fluctuating markets with your own eyes as some networks have…
Read MoreBeing Mindful: Understanding How Our Brains Affect Our Investing
Human beings are inherently psychological creatures. We get worked up watching our favourite sports teams and cry during sad movies. And we often fear flying more than driving, even though the latter is far more dangerous statistically. Much of how our brains are wired isn’t necessarily harmful, but rather what makes us human. Yet when…
Read MoreBig Names Don’t Mean Big Gains
In the world of finance, the media tends to cover the “big names” with awe. They dutifully record the pronouncements of billionaire investors, and scour regulatory filings to see where large funds are placing bets. At one level, this is totally understandable. For an individual to have amassed so much money, they often made prescient…
Read MoreThe Virtues of Keeping it Simple
If you think about many areas of your life, chances are they’ve become more complex over the years. Your basic flip-style cell phone, used to make and receive phone calls (imagine that!), turned into a mini-computer known as a smartphone. Even the shows we watch on television have become far more complicated, with multiple plot…
Read MoreHow To Create Good Inheritors
For many families, the subject of wealth is rarely discussed. It can be a taboo, an elephant in the room, or perhaps even a secret, known by the parents but not their offspring. This may be especially true of families in which the older generation has accumulated sufficient wealth that the kids will inherit significant…
Read MoreThree Ways to Reduce Your Portfolio’s Volatility
In a prior post, we likened market volatility to going to the dentist: unpleasant, but ultimately good for you. Volatility brings with it opportunities (often lower stock prices, for example), and is really just the price investors pay for solid long-term returns. That said, there are some ways to reduce your portfolio’s volatility to let…
Read MoreMarkets Making You Nervous
Markets Making You Nervous? Here’s How to Cope Many people feel anxious when markets are especially volatile. This is completely understandable. If you have a significant portion of your savings tied to equities, a sharp decline can easily be unnerving. So, what should you do if you find yourself unmoored by falling markets? Here are…
Read MoreThe Gift of Giving
Watching your wealth grow can obviously be enjoyable. But for many people, the process of giving away their hard-earned money can be even more gratifying. The ability to fund meaningful, life-changing charitable endeavours is a gift unto itself. But how should you donate to worthy causes? ‘Appreciate’ The Benefits of Giving Shares If you are…
Read MoreCommodities
Do Commodity Investments Belong in Your Portfolio? Natural resources (often just called commodities), are in a sense the building blocks of modern economies. Consider most of the cars on the road: they’re made of steel, run on gasoline, and were probably made in a plant that had copper wiring. But however central commodities are to…
Read MorePolitics and Investing
Why You Should Leave Politics out of Investing We live in a world where on any given day, one person’s tweets can move the stock market. That person, of course, is the current President of the United States. Whether it’s about trade policy or a specific company, these short missives can send shockwaves through everything…
Read MoreA Short History of Market Panics
A Short History of Market Panics (and What they Can Teach Investors) As investors know all too well, the COVID-19 pandemic has led to panic selling in financial markets. Indeed, to call what we’ve seen “heightened volatility” doesn’t do it justice. Equities crashed from record highs as outright fear gripped the marketplace. Even for individuals…
Read MoreYour Covid-19 Financial Questions Answered
The hallmark of any good relationship is communication. With this in mind, we’ve dedicated significant time in recent weeks to client concerns about the COVID-19 pandemic and how it might affect their finances. We’ve also, as you’ve probably noticed, sent out a number of emails with resources that you might find useful. For this month’s…
Read MoreSigned, Sealed, Delivered: Estate Planning During Covid-19
Understandably, the Covid-19 pandemic has led many people to think about estate planning. The trouble, of course, is that the traditional approaches to Wills and Powers of Attorney are not always feasible at the moment. Fortunately, there are viable workarounds, so estate planning does not need to be put on hold. The Problem The problem…
Read MoreHow and Why to Disengage from the Markets
Investing is usually discussed solely in terms of money. What to buy, what to sell, and what fees you should pay in the process. Of course, the money aspect is important: You’re investing so that you and your loved ones can have a bright future. A portfolio that grows over time is central to that…
Read MoreWhy We Should Not Speculate
Be Mindful of Excessive Speculation Soaring interest among the public in the stock market. People day-trading to earn quick fortunes. If you didn’t know otherwise, this sounds like a description of the late 1990s, a time characterized by a frenzy for technology stocks as the internet came into its own. But history has a way…
Read MoreInvesting for Income in a Low Rate Environment
Bonds Have Become Less Interest-ing. What’s an Income Investor to Do? Two decades ago, a 10-year U.S. Treasury bond paid interest of around 6%. (No, that’s not a typo.) Today? The same bond pays well under 1%. Put another way, a retiree in 2000 looking to invest $1 million in exchange for steady income could…
Read MoreYour Personal Financial Checklist
A Back to School Financial Checklist for You Kids have recently returned to school. Being the strange year that is 2020, some are there in person, and some are attending virtually. Whatever the case, chances are many parents made checklists before classes started so their children would be ready. Books, pencils, and, if they’ll be…
Read MoreWant to be a Successful Investor? Embrace Optimism
Especially these days, it’s easy to be a pessimist. Bad news tends to dominate at the best of times, but it does seem like there’s currently more of it than usual. As citizens, we of course can’t be willfully blind to what’s happening in the world. And as investors, we must be attuned to risks…
Read MoreTaking inflation into account as an investor
How Rising Prices Can Lower Your Wealth (And What To Do About It) When AMC, the giant U.S. theatre chain, announced they were re-opening in late August, they decided to lure customers back with a one-day promotion: tickets would only cost 15 cents, the same price as they did back in the 1920s when the…
Read MoreAn “Alternative” Take on Asset Allocation
As we’ve talked about previously, equities and bonds should be at the core of an individual investor’s portfolio. Equities offer the potential for long-term capital appreciation. Bonds, meanwhile, may provide some capital growth, but their role is more defensive—providing income and helping to offset market volatility. Equities and bonds are what might be termed “traditional”…
Read MoreGameStop and the Madness of Crowds
Chances are, you’ve read in the news about a once-obscure, now famous stock called GameStop. It’s a fascinating saga, and there are timeless lessons for investors. Some background: GameStop is a bricks and mortar retailer of video games and consumer electronics. In a world where seemingly everything is moving online, GameStop does not exactly occupy…
Read MoreUnderstanding Duration
Duration and Your Portfolio All specialties have their own unique terms that probably come across as incomprehensible to those who don’t spend their days immersed in the subject. In the world of investing, ‘Duration’ is one of these sorts of words. So, what exactly is it, and why should you as an investor care? (Don’t…
Read MoreStaying Active Has Its Advantages
Active Investing, Passive Investing, or Both? It’s a big debate in the world of finance: Should you be a Passive or Active investor? There are good arguments on both sides, but like many things in life, perhaps the answer is a bit more complicated than just choosing one or the other. That is to say,…
Read MoreHow to Prepare for the Next Bear Market
The sun is currently shining on the stock market. And for most investors, it probably feels pretty comfortable. But it’s during the good times that investors need to make sure they’re prepared for an inevitable downturn. While it’s practically impossible to predict when the next bear market will hit, being ready for it can make…
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