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A Christmas Letter

Years ago a client and very good friend sent me a Christmas letter that so moved me that I pinned it up in my office and to this day I read it almost weekly. It's words help to remind me of the things that are important to me and my family. I hope you find similar inspiration in it's words. (Thanks, Dave S. and Merry Christmas) Read more…

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Are YOU Ready for the Holiday Spending Season?

There’s no doubt about it - this is one of the most expensive times of year! From gifts under the tree and a huge meal on the table (not to mention logging some serious miles on the road to visit Grandma), the average Canadian can expect to shell out big bucks to afford the holiday season. Read more…

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Retirement planning made easy: a step-by-step approach

For many of us, planning for our retirement can feel pretty overwhelming. It’s like an elephant in the room always staring at us. And the closer we get to our retirement, the bigger that elephant seems to get! Read more…

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The new robo-advisors: same shizazz, different shirt?

Over the past few months, a number of online companies have sprung up offering investors a new investing option when it comes to their savings. And the media has labeled these so-called new services robo-advisors. Read more…

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Retirement planning: start with the right approach

When selecting the right approach to retirement planning, it’s important that you know what retirement planning actually is and how it differs from financial planning. There is a difference! Read more…

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Boomer retirement planning: not everyone safely on board!

Traditionally many of us have come to imagine retirement as that point in time when we achieve ultimate freedom (aka “Freedom 55!”) where we can finally stand on our own in complete financial control of our life – with no more bosses and no more money-lenders. Read more…

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Distribution yield: getting blood from a stone

For years now investment companies have been caught in a tightening vice – interest rates and investment yields continuing to fall at a time when greater numbers of investors are retiring and demanding higher income from their investments. The investment funds have merely given investors what they’ve demanded – higher regular payments from their investments by paying out the investment’s earnings plus a portion of the investor’s own savings (return of capital). And we investors come away believing we’re satiated and happy. Read more…

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Investment risk: needs vs. wants

When working with clients I have always approached investing their hard-earned savings with this question in mind – Do they need to take investment risks or do they want to take investment risks? In much of today’s investing world, however, investors are very rarely asked how much investment risk they need to take with their savings. Instead many of today’s investment pros are much more interested in how much investment risk you can tolerate, or how much do you want. Read more…

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Look out! Investment yield vs. investment distributions

We’ve just finished updating our exchange-traded fund (ETF) catalogue and just had to comment on a growing trend in the fund industry that we believe is hurting investors – from both an investment and retirement income perspective. Read more…

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Winning investment portfolios: don’t forget the playbook

Does your investment portfolio come with a playbook? Probably not! For most of us, our investment portfolios are simply a collection of the individual investment decisions that we‘ve haphazardly made over the years, jumping in here and there, with no real guiding “light,” as it were, in our investing decisions, except for one general simple goal – to make money! And if this investment strategy is working for you, then by all means, have at ‘er!, as they say. Read more…

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Trade a lot? Maybe you (and the pros you hire) shouldn’t!

In our past couple of articles we’ve been looking at DALBAR’s latest studies listing 3 main reasons why many of us are such chronic underachievers when it comes to our investment performance. Here they are again to refresh your memory: Read more…

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Get out of the trap: find out how much your investments are costing you

If you’re like most Canadians, over 2/3rds of us have 50% (or just over $1.0 trillion) of our hard-earned savings invested in mutual funds. But did you know that mutual funds are one of the most expensive forms of investment available? Read more…

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Investor bad behaviour: buy high, sell low

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The average investor: chronic underachiever

DALBAR Inc. is an independent company that develops standards and measurement systems for the investment, life insurance, healthcare and banking industries. According to their latest research, the average investor has underachieved for the past 20 years. They say this is nothing new. In fact, DALBAR finds that if nothing else, the average investor is boringly consistent. It would appear that we’re always under-performing those investment indices (S&P500, Dow Jones, etc.) that we love to watch and use in our carefully crafted financial, retirement and investment plans. And if this case of consistent underachievement weren’t so serious, it would be down right funny. Read more…

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Performance standard deviation: measuring investment volatility (not risk!)

This week marked the deadline for public submissions to the Canadian Securities Administrators (CSA) as it develops new guidelines for its mutual fund risk classification system. Specifically the CSA is proposing that each mutual fund manager be required to calculate the volatility of their mutual fund’s past investment performance in the form of its performance standard deviation and that calculated number will be used by the fund’s managers to classify the fund’s risk rating. That risk rating is to then be published on the fund’s Fund Facts form for investors. Read more…

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Properly assessing risks and returns on the investment tight wire

The terms risks and returns are two of the most commonly used words you hear in any discussion about investing. For most of us, when we talk about our investment returns we simply mean how much money our savings made for us – or lost for us! And we like to quantify our returns by quoting a single number, where we say something like – Yes! I just made 10% on that investment! Or, as can also be the possibility – D’oh! I just lost 15% on that dumb investment! In any case, we like to think that a simple, single number says it all. But does it really? Read more…

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Question: How many mutual or exchange-traded funds should I own?

When it comes to investing, many average Canadians get confused by this question. We’re often told that we need to diversify our investments if we want to lower our investment risks, but how much diversification do you need? Read more…

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Are you feeling lucky punk? Well, are you?

When it comes to choosing investments, I sometimes think investors feel like the punk anxiously staring down the barrel of Dirty Harry’s 44 Magnum. And just like the punk contemplating the odds that Harry’s gun is out of bullets, I think investors anxiously look at a mutual fund contemplating the odds of the fund having another great year. They know the funds’ managers have had a great run for 3 or 4 years, but is that run going to last or are the funds’ managers out of bullets as well and is the fund about to fall? Read more…

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Comparing PTRs: a case study

As we have discussed previously, the Portfolio Turnover Ratio (PTR) for any given mutual or exchange-traded fund is a quick and easy tool to use when you’re trying to figure out which is the better investment for your savings. A fund’s PTR gives you a way to judge how much activity and risk the professional money managers are taking on to generate their investment returns. Read more…

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Portfolio Turnover Ratios (PTRs): Break away from the flock

Did you know there’s actually a name used by investment industry insiders to describe retail investors that blindly, mindlessly follow investment recommendations? They call those investors sheeple (that’s sheep + people). And as we discussed in our previous article it would appear that Canada has a lot of sheeple when it comes to investing in mutual funds and exchange-traded funds (ETFs). Read more…

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Practice safe investing: Get protection by using a PTR!

So, how can you protect yourself from that second layer of professionals when you invest in mutual funds or ETFs? Answer: Get to know a fund’s Portfolio’s Turnover Ratio (PTR)! Read more…

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Oil’s market price today: where do you want to sit as an investor?

As we discussed in our last article, just like those investors that bought into the gold story (rising inflation due to money printing), most oil investors have also bought into the oil story. You know the one – where we’re told how oil’s market price is all about Peak Oil's diminishing supply in the face of the growing demand out of emerging markets (China et al). Read more…

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Do you know where your investments are when you go to sleep at night?

In my previous life as an investment advisor, my relationship with prospective new clients would always start as interviewer and interviewee. In other words, at that first meeting the goal was for both of us to ask questions to learn more about each other’s personalities, as investors and individuals, and to determine if we were a good match. Read more…

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Warning: is oil the new gold?

Anyone watching oil prices right now has got to be asking his/herself the question, is the future of oil prices going to fall to the Dumber Guy Rule? That’s the investing rule that governs the market price of assets that don’t produce anything, don’t manufacture anything, don’t create any new technologies or processes, don’t create any revenue or profit, and don’t pay investors any interest or dividends. It’s the rule where you can’t value investments using the usual business and investment valuation models to determine current and future market prices. You know, the same rule that brought down the price of gold. Remember? Read more…

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Thinking outside the box: more benefits to focusing on your mortgage

One of my favourite quotes is Albert Einstein’s definition of insanity. For him insanity was simply doing the same thing over and over again and expecting different results. If this definition holds true, then maybe it’s time for a saner mortgage-before-RRSP strategy. Why? Read more…

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Mutual Funds vs. ETFs: and the loser is … you and me, I’m afraid

In the investment industry the only measure of success that really counts is money – specifically how much money you can get your clients to hand over for you to invest. It doesn’t matter if you’re an investment advisor, professional money manager, investment firm, mutual fund, or exchange-traded fund (ETF). All that matters is how much money you get to work with – and charge fees on. And this money is called your assets under management (AUM). Read more…

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RRSP contribution or extra mortgage payment: an out-of-the-box strategy

When it comes to the debate about contributing to an RRSP or paying down the mortgage, we’re all familiar with the two standard strategies promoted by the investment world – the one extreme and the compromise: Read more…

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