INVESTING 101

I'm often asked if I will manage my clients' money. The answer is no, for a number of reasons:

I believe strongly in the entire financial plan. History shows that the actual selection of individual stocks and bonds is not nearly as important as asset allocation and how the entire plan works together - income, investment, and spending. We won't invest for you directly, but we will figure out your best asset allocation.

There are many ways to successfully invest and build a portfolio. I am a very strong believer in just one method, which I detail below. I'm not sure I'd be acting in the best interests of all my clients if I only used this one technique (even if it has been very successful).

As my senior citizenship looms, I don't have a yearning for hundreds of panicked phone calls from clients when the market is down. (If you're currently freaking out about the market, read this.)

I'm not a licensed broker, so while I can give advice, I cannot actually take over the funds and invest them.

That being said, I have a long history of successful investment management and a solid philosophy of what works and what doesn't (backed by empirical evidence). Under the heading of "putting my mouth where my money is", I will share these theories and actual practices with you in the posts below. These are not necessarily recommendations on my part, but it is an overview of the process that I do use for managing my own and my family's investments.

I like to purchase individual stocks, but I'm not convinced that they necessarily out-perform market index Exchange Traded Funds ( ETFs) or low-cost mutual funds. I enjoy doing research on companies, as I've spent much of my business career evaluating businesses. It does take work, though.

That being said, I don't disagree with Warren Buffet's advice to his wife on how to invest his billions upon his passing:

"My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers."

I have also started using a "Robo Advisor", for both some of my own holdings, and many clients are also using one. They follow a very strict asset allocation model using low-cost ETFs. I have put some of my assets into one of them, Wealthsimple, and their performance so far has been good.

Investing 101

INVESTING 101

I'm often asked if I will manage my clients' money. The answer is no, for a number of reasons:

Individual Stocks, ETFs, or Mutual Funds?