The Wealthy Expect More Volatility
No matter what your net worth, we as investors all share common goals. Take a look at how the ultra wealthy are building and protecting their net worth….an informative read.
Get the facts on fixed income
MoneySense’s Invest for Success event brings people together with investing experts to hear their hard-worn advice.
In this video from the conference, Stephen Lingard, portfolio manager with Franklin Templeton Investments, talks about how bond investing has changed in the past 10 years, with returns from fixed-income falling to about 2% from 40-year historical levels of around 8%.
“From a return perspective, we’re going to count on them less, it’s really as more of a portfolio diversifier,” he says.
He also gives his outlook for Canadian equities for the next five to seven years.
Follow this link to watch the video
Investors: Don’t do dumb stuff when it gets hard
Try not to abandon your strategy as soon as it lags the alternatives.
Given the choice between a simple solution and a complex one, which would you choose? When it comes to investing, many people seem bent on making their portfolios needlessly complicated.
My blog—canadiancouchpotato.com—includes a model portfolio with just three exchange-traded funds (ETFs): one covering Canadian stocks, another for foreign stocks and a third for bonds. This trio of funds includes more than 3,000 companies from around the world, plus hundreds of bonds of all maturities. It’s super-cheap with a fee of less than 0.20%. And during the last 10- and 20-year periods it would have returned about 6% to 7%. Yet so many investors have an unshakable urge to tinker with it.
I routinely get emails that go something like this: “I like your Couch Potato portfolio, but I would like to make some changes. What do you think about adding some gold, small-cap stocks, commodities, real estate, global bonds, sector ETFs, infrastructure and maybe some blue-chip stocks to the mix?” I’m exaggerating, but only a little. Even those who admit they have no experience are convinced their tweaks will improve the portfolio.
Read the rest of this article from MoneySense Magazine on their website.
Are You On The Right Track?
In bull markets some investors develop unhealthy expectations as to the long term yields their investments should provide. Ten years ago, some came to accept returns as high as 15% to 20% per annum as the base return their fund and portfolio managers were expected to provide. Of course, these expectations came crashing back to earth in 2008 as the bull was chased away by a very large bear. Today, many fund managers are of the opinion that double digit returns are going to be very difficult to achieve with any consistency over the long term.
Is it time for us to lower our expectations?
If we have to accept lower rates of return, do we still want to be exposed to the same previous level of risk? There can be tremendous volatility in the equity markets and, as a result, many wonder if they are on the right track with their investment strategy.
4 Questions to ask yourself about your investment strategy
What are my goals?
