Don’t try to beat the markets; instead let the markets work for you.
Bay Street & Wall Street firms along with active money managers spend billions of dollars every year persuading you that stock-picking, market-timing, and portfolio manager-picking will give you returns that “beat the market." But the facts don’t support this message. The overwhelming evidence reveals that investing in the global markets through low-cost index funds is the most prudent approach over your investment lifetime.
Utilize low-fee investments.
Many investors are paying way too much in investment management fees. And the worst part is they don’t even know it. That’s because the fees are usually hidden and they’re just not talked about by most financial advisors. There are excellent alternative investments out there with a significantly lower fee that many investors are not aware of. We’ve been able to lower investors’ fees by 40% - 50% per year. That means considerable savings of tens of thousands of dollars and improved portfolio results over your investment lifetime.
Asset allocation explains long-term performance.
Research further demonstrates that the performance differences between portfolios are predominantly (i.e. greater than 90%) explained by how investments are allocated among asset classes (e.g. short-term government bonds, Canadian stocks, International stocks, Real Estate stocks, etc.) It’s the markets, not portfolio managers, that produce lifetime returns. Source: SPIVA® report 2023
Global diversification is key.
Consistency of returns is an important goal, especially for clients drawing down their nest eggs. Markets will always fluctuate, but asset classes don’t move in unison. Diversification among different assets classes helps smooth out the overall return of a portfolio – investors are not subject to large moves in portfolio value due to the movement of a single country, sector, or stock.
Don’t get distracted by the media.
The television, print, and online media are in the business of entertainment and advertising, as opposed to the advice business. The emphasis is often on short-term, sensational, and emotionally charged headlines. Their message may compromise your long-term focus and may lead to poor investment decisions.
Manage your emotions and stay disciplined.
There will always be swings in the markets (and many large swings both ways) over your lifetime. This is normal. This volatility is what creates the long-term equity returns, and it’s critical that you keep your emotions in check during these times in order to achieve a successful lifetime investment experience.