New Energy Landscape
Bill Nye the Science Guy met with Prime Minister Justin Trudeau in Ottawa earlier this year to promote the use of alternative energy fuels in our economy. He is a strong advocate of moving away from carbon-based fuels. Yet, Nye admitted, in a Toronto radio interview some days later, that the economy will likely transition […]
Understanding Market Volatility – Part 2
Our previous article looked at the increase in market volatility in 2018 in historical terms to put it in perspective. The other factor to consider is where are we in the market cycle and what this might mean for you personally in terms of your own long-term financial strategy. Many market commentators suggest that […]
Understanding Market Volatility – Part 1
This year began with some market turbulence resulting in a correction in the S&P Index in late January of about 10%, and about 7% for the TSX during the same period. You would have thought the world was ending with all the hand-wringing and hysteria stirred up by media reports at the time. More […]
De-Dollarization and You – Part 2
The US has been Canada’s largest trading partner for decades, so our economy is closely tied to the fortunes of our southern neighbour. In addition, because the US economy is still currently the largest in the world, whenever an investor implements or revises a financial strategy, it is always important to consider how US Government […]
Hype, Hope and Glory
Advisors offer clients many value-added services, in addition to investment planning, insurance and risk management planning and general financial and Estate Planning advice. This often leads to a discussion by clients of what is hot in the market and what is actively being discussed in the media and whether the client should participate in the […]
There is Risk and There is Risk
The penny finally dropped a couple of months ago during a client conversation about the risk of investing in the equity markets. The client was reluctant to commit money to the investment markets and gave me several reasons – “the markets were too high and ready to crash”, “there were safer alternatives”, “I never fully […]
How to Start An Investment Plan
Wouldn’t life be better if it was easier to get ahead? For many, there’s just too much month left over at the end of the pay cheque. After all, you’ve got a mortgage or rent and utilities to pay, food and clothes to buy, and a vehicle to operate. First, let’s understand the difference […]
America Decides
On November 8, 2016, Americans will elect the 45th President of the United States. Many Canadians have been vehement and passionate observers of every twist and turn of the campaign. Yet, once you strip away the nasty name calling and accusations of one kind or another by both candidates, you are left with their policy […]
Active Versus Passive Investing
There are very passionate views on both sides of the debate as to whether it is better for individual investors to use active investment managers versus using an index approach, with its main selling feature being lower fees. Let us first bear in mind why people invest in the first place, whether it is […]
The Story Behind ‘Sell Everything’
The media in general has a tendency to take an idea or story and run with it until the original context or point is lost in a wave of misinformation, taking a form of its own. At that point, the idea can become very dangerous to you as an individual working to build your own […]
The Advice Dilemma
A constant dilemma for Advisors working with clients to help them realize their goals and dreams is striking a balance between the tyranny of immediate current events with the need to stay focused on your longer term goals. The recent Brexit vote in the U.K. is a case in point. The media created a […]
Investing Like the Rich Do
“Everyone has a plan until they get punched in the face.” George Foreman. With RRSP season upon us, it might be useful to see how the wealthy invest their funds for some indication as to how they differ from average Canadians. As Baron Rothschild famously stated, “The time to buy is when there’s blood […]
China’s Global Impact
The August correction in the Chinese stock market led to a lot of “how terrible” news coverage and speculation as to whether or not this signaled the end of the China growth story and how it would impact the US and global economies. Calmer voices were more resolute in the midst of the chaos, […]
Anatomy of a Market Correction
The origin of the recent stock market correction started earlier in the spring of this year. During the month of April, the Canadian, U.S. and many other global stock markets achieved new record highs. Instead of celebrating such a numerical milestone, many media commentators started wringing their hands in worry and expressing their fears […]
World Reserve Currency Regime
Canadians, like many nationalities, have a home bias when it comes to investing. The majority, if not all of their investments, such as RRSPs, real estate, mutual funds, segregated funds and businesses, are in Canada and are tied to its future economic growth. These Canadian investments could see reduced returns in the future, however, […]
Evolution of an Investor
Sometimes during social events or other gatherings a person will approach someone in the financial services business with an opening question: “I hear you do investments. What kind of returns can I expect?”. The type of questions asked by individuals are usually a good indication of their investing experience. Newer (younger) investors are often […]
Living Longer & Retiring Faster
Over the last one hundred years, every new generation of Canadians has enjoyed the benefit of a longer life expectancy. With dramatic improvements in health care, the human life span has never been longer. Additionally, some have set their sights on early retirement. The combination of living longer and retiring earlier creates a serious cash […]
QE Continues
Quantitative Easing, otherwise referred to in the media as ‘QE’, refers to governments printing money out of thin air in order to stimulate economic growth. The US ended their program of QE in late 2014. The impression this left with many people was that the need for economic stimulus ended. This also goes hand […]
Predicting the Future
Human nature includes the desire to predict and or anticipate both the immediate and longer term future. The reason for doing so is often to eliminate or reduce the fear or anxiety about the unknown. Human beings detest uncertainty and will do almost anything to reduce this uncertainty. In ancient times people made special […]
Investor Emotions & Media Influence
During a recent client call, the topics discussed included how the media influence people’s investment behaviors. This client woke up one day with an ‘epiphany’ thinking that a market correction was just around the corner. They did admit after a discussion that they had been reading something to that effect in the newspapers during the […]
Improving Investment Returns
One Saturday, famed investment manager Peter Lynch was working at the office when he decided to answer the phone. The caller was a holder of his mutual fund who was calling to cash in the investment. Peter explained how he was excited about the growth prospects for the economy and his fund and asked him […]
Building Wealth
There are many definitions and meanings for the term ‘wealth’. It is often said that it is easier to build wealth over time than it is to keep it! Some confuse high incomes with wealth while others point to assets owned as an indicator of wealth. And, many people use the terms ‘assets’ and ‘wealth’ […]
Reaching for Yield in a World of Low Interest Rates
While we can talk about concepts such as inflation and purchasing power the struggle for many people today is earning enough income on their savings to meet their lifestyle needs. Interest rates and the earnings from capital through dividends, bonds and real estate rental income have dropped dramatically in the past few years. Government […]
What is a ‘Stock Market’ Anyway?
Imagine it is late Monday afternoon and you are wrapping up your day at a large pension plan, as you stretch, your elbow hits the sell button on the keyboard. The board lot (100 shares) of a large Canadian telephone company is quickly bought for $20 and is the closing price as the final trade […]
Investing vs. Trading
In the last article we defined investing as buying an ownership stake in companies who are profitable today and whose profits are expected to rise over time. Trading is any other form of managing your money which may or may not take into account corporate profits as part of the decision-making process. Trading, which […]
Business Adaptation Mechanism
There is a concept in biology about the ability of organisms to adapt to changes in the environment. This adaptation process increases the odds of survival for organisms under stress due to environmental changes. A similar mechanism exists in finance that allows economic organizations, otherwise known as companies, to survive and thrive in changing or […]
Integrated Investment Management Can Save Taxes
High net worth investors are now sitting back and enjoying the summer weather, breathing a sigh of relief now that they are done with their annual tax filings. The work involved in assembling all of the relevant tax information is made more complicated by the fact they often deal with several investment firms. U.S. […]
Volatile Economy = Investor Fatigue
Investors are becoming increasingly exhausted trying to follow the seemingly never-ending bad global economic news. Overseas markets have put a strain on Canada even though we are more stable, economically, than most other countries in the world. Crystal balls are in short supply resulting in increased skepticism and general feeling of Is this downturn […]
Cooler heads will prevail
The newspaper headlines read: ‘Roller coaster stock markets have investors feeling queasy’ (The Globe and Mail; ‘The stock market crash: History repeating itself?’ (The Calgary Herald); ‘Uncertainty continues to pummel stock markets’ (Sudbury Star); ‘The next market boom may be a lifetime away’ (Financial Times). Interestingly enough, these headlines are from November 2002. One year […]
Great Depression 2.0?
It’s been a long and volatile quarter in the financial world. Markets are taking most investors on a wild and sometimes frightening ride, the news about corporate failures and bailouts is confusing and the economic news is almost certainly disheartening. As some in the media eagerly seek to assign blame for the current stock […]