Concentration is Key

In the investing world, the topic of diversification often arises. As money managers, we advise clients on their stocks, bonds, mutual funds, hedge funds and real estate funds, among others. The intellectual stimulation of this job is hard to beat. We do believe portfolios should be diversified across asset classes. But, when it comes to owning simple common stocks, concentration is the way to go.

My friend David Kaufman recently published an excellent article in the Financial Post on the merits of owning a concentrated portfolio of stocks. David writes for all readers, regardless of their familiarity with high-tone investment language, and his column is worth reading. You can find it here.

David makes a simple point. With the proliferation of exchange traded funds and, I will add, the number of smart people that have flooded into the investment business, it becomes difficult to outperform the stock market.
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Performance, performance, performance …

Recently I read an interesting article in the Globe & Mail by Rob Carrick. It was about robo-advisors and how to pick the right one. In it he said several things I’ve been telling my clients for years, long before there was such a thing as algorithm-based portfolio management.

Right off the top he wrote: “Robo-advisors are for people who want a sound, smart investing solution, not home runs.” Quite frankly, that should be every investor’s goal, because counting on “home runs” Read More »

Investing isn’t only about the numbers …

There’s no question that every investor, myself included, has the same goal: to make sure we have enough to fund our dream retirement, to see us through to the end of our days; and, also, to leave something behind for those we love.

Which is where Investment Advisors come in, to offer sound, objective advice based on knowledge, experience and skill — ours and the experts and specialists who are part of the extended team.

What’s interesting, though, is that when we consider our relationships with our Advisors, we tend to Read More »

Still nothing to sneeze at …

Why is it that, as investors, we never seem to be satisfied? That enough is never enough? Our attitude seems to be, why settle for less, even when less is more than sufficient.

As an Investment Advisor, I see it all the time, not just in my business or when talking with other Advisors, but in article after article, blog post after blog post, book after book. Investors the Read More »

Is Gold a Store of Value?

The U.S. dollar used to be backed by gold. Anyone could exchange their paper currency for a certain amount of gold (e.g. $35 per ounce). That changed on August 15, 1971 when President Nixon ended convertibility by “closing the gold window”.

Since 1971, the U.S. dollar has not been backed by gold and it has fallen to less than 17 cents in 1971 dollar terms. One dollar today will buy only 17 cents worth of “stuff” versus one dollar worth of “stuff” Read More »

You’re Not Warren Buffett

As Clint Eastwood said in Magnum Force, “A man’s got to know his limitations”. Warren Buffett is perhaps the wealthiest and most famous investor of all time. Therefore many have tried to emulate him – including professional money managers – without much success. The fact is, very few could ever duplicate the process and the success he and his partner, Charlie Munger, have achieved at Berkshire Hathaway.

First, Buffett has over 75 years of investing experience, having bought his first stock at age 11. As well, except for a few hands of bridge with Bill Gates, he spends all of his time evaluating investments. His wealth and ownership of Read More »

It Can Pay to Get Out of Your Comfort Zone

Managing emotions is an important part of investing. An experienced Investment Advisor can help with that. We work with clients to prepare a financial plan and help them stick with it over the long term, regardless of market fluctuations.

In recent years, a whole new field of study has evolved called “Behavioural Investing”. It explains why people react the way they do and points out Read More »

It’s a Business …

If you invest in securities that trade in the markets, you have to expect price fluctuations. Markets can be volatile over the short term. It goes with the territory. But never forget that shares represent part ownership in a business.

Many people are fascinated by the stock market, especially “hot” stocks that are moving up sharply. It is an old adage in our industry that you can tell theRead More »

A Different Point of View

Sometimes it’s all in your point of view. With investing, people tend to focus on the performance of the capital markets. As Investment Advisors, we are often asked what our performance has been. With the focus being on the markets, that question is about whether or not we have out-performed “the market”. If capital markets were the only focus, that would be the logical wayRead More »