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Investment Philosophy

 There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows. Investors can use this information to pursue higher expected returns in their portfolios.

Factors that drive returns:

EQUITIES

Small companies expected returns are typically higher then bigger companies.

Value companies over time have higher expected returns than growth companies.

Higher expected returns typically come from more profitable companies.

It is better to be globally diversified. If you miss out on top performers, your expected returns decrease. It is nearly impossible to predict which country will perform well on an annual basis.

FIXED INCOME

Term (Sensitivity to Interest Rates)

Credit (Credit Quality of Issuer)

Currency (Currency of Issuance)

Focus on what you can control

•Create an investment plan to fit your needs and risk tolerance.

•Structure a portfolio along the dimensions of expected returns.

•Diversify globally.

•Manage expenses, turnover, and taxes.

•Stay disciplined through market dips and swings.

Advisor fee - what are you paying for?

When you invest in a mutual fund you pay a fee and part of the fee is split between the advisor and the dealer. The fee typically ranges between 0.5% and 1.25%.  Sometimes it is transparent and other times it is embedded but you are paying it.. You should be receiving the following:

-Check-ins and a minimum of an annual review

-Behavioural coaching

-Investment research

-Cash flow management

-Tax advice- depends on advisor's knowledge and training

-Debt management

-Risk management

The service may vary but you are paying and should be hearing from your advisor.

Stay Invested

 Here is a quick video on the consequences of trying to time the market.

Video

Timing the market

My favorite line in this article is "If you flip a coin enough times, eventually someone will get heads 10 times in a row." Most people quickly acknowledge we can't time the market but how many times do you or others keep trying? One of the most common mistakes investors make is trying to get in and out of the market or a particular equity at the right time. This article discusses the research that shows it can't be done consistently over time. Read the article here.

 

 

Markets in 2023 Rewarded Discipline

Read the article here

Active versus Passive Investing

Here is an article discussing the differences between active and passive investing. Read here.

Diversification

We know diversification is important across both sectors and geography. Here is an article explaining the importance of diversification across geography: article.

Growth versus Value

What is the difference between a growth and value fund? Here is an article explaining the differences:

article.