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Highlights from the Investor Intelligence Event
On Wednesday, November 14, The Globe and Mail hosted Investor Intelligence: Position Your Portfolio for 2019, in partnership with iShares by BlackRock.
Rob Carrick, personal finance columnist with The Globe and Mail was the keynote speaker, and the event also featured a panel of investment experts who provided insight into how investors can best position their assets for the coming year. Below are a few takeaways from these conversations.
> View Photos from the Event
Don’t overestimate your investment returns
The big draw of the evening was a keynote presentation from The Globe and Mail’s personal finance columnist Rob Carrick, who walked the audience through what he sees as seven common investing mistakes to avoid.
While Carrick does support having a diversified portfolio that isn’t just reliant on the value of your home in paying for your retirement, he cautioned against the expectation that investments in stocks, ETFs or other products will be anything more than modest in today’s economic landscape.
“If you’ve got any double-digit dreams, I suggest you put them aside and be realistic,” he stated. “Ratchet back from even eight, nine or even 10 per cent returns.”
Why the conservative outlook? “The world is changing,” Carrick noted. “Populations in Canada and other industrialized nations are getting older and there’s going to be a skew towards more people in retirement and less in the workforce… We’re moving into a slower growth world.”
In some ways, slower economic growth can be a good thing – it makes the boom and bust cycle much quieter. But, “investment returns won’t turbo-charge your portfolio like in the past,” said Carrick.
DIY investing has its pros, but make sure you get professional advice as well
Carrick is a big proponent of taking charge of your own investments – financial planners who intimidate clients with their knowledge base are one of his pet peeves. But his email inbox, full of very detailed questions from readers, has also shown him that many investors are in need of personalized advice, and he believes it’s worth paying for. In particular, Carrick sees real value in seeking out advice from a financial planner and focusing primarily on that subject (as opposed to focusing more on which stocks you should buy). Someone who helps you figure out how to get ready for retirement based on your spending habits is worth seeking out.
What’s more, many financial planners are now willing to consult with clients on a fee-for-service basis. Just as you would hire a lawyer or personal trainer, there’s an increasing openness among planners to receive payment based on their time or specific services, and you can often seek out a quote in advance to see if their services match your budget.
Pay attention to those fees
On that note, when you do seek help, make sure you’re closely monitoring the fees charged by institutions and advisors. Fees, of course, will eat into your investment returns, and when you pay high fees in a low return world (such as the one we currently occupy), there’s less left over for you.
However, “there’s value in paying fees for advice,” says Carrick. “It’s not always a winning situation to just get the lowest fees you can find – you have to make sure you’re getting good value.”
Parents – don’t dip into your savings to make big purchases for your kids
Parents want what’s best for their kids, and with fewer young people being able to afford a home in a major North American city, mom and dad have been jumping in to pay the bill to get their kids into the market. While parents might mean well on this front, Carrick strongly advises against dipping into your savings to help your kids make a down payment on their first house, or contribute to any other major investments.
“Parents, do it if you can. But don’t dip into your RRSPs, don’t compromise your own personal retirement for your kids’ houses,” said Carrick. Parents should guide their kids towards financial autonomy, and helping them get a house may not help their case. As Carrick noted, “If your kids can’t pay the down payment on their own, they could struggle.”
To mitigate portfolio risk, take a closer look at investment opportunities beyond the stock and bond markets
Given current global trade tensions, four investment experts who joined the event to discuss portfolio management noted 2019 will likely bring a certain degree of market volatility.
Westcourt Capital’s president and chief investment officer Robert Janson believes Canadians, on a large scale, need to start looking for investment opportunities beyond traditional asset classes. “I’m not sure why everyone in this country is so focused on stocks and bonds,” he said. “There are more arrows that can be place in your quiver,” he added, referring to private equity, private debt and real estate equity. Moving outside of the TSX can also present opportunities.
Dorothy-Anna Orser, a portfolio manager and senior investment advisor with Echelon Wealth Partners, agreed with Janson’s assessment, but noted that clients can often be intimated by the extra steps involved in making an alternative investment. “I think the problem there is compliance,” said Orser. When she explains why an extra form might be required for investments, as many products outside of stocks and bonds can be classified as “high-risk,” some of her clients become uncomfortable.
Jeet Dhillon, a portfolio manager with TD Wealth Private Investment Counsel, encouraged attendees to be forward-looking, and be as actively involved in their portfolios as possible. “You should have a core portfolio of good quality stocks and good quality bonds,” she noted, but “what’s worked for us in the last three or four decades – going forward, it’s a different landscape, and you do need to look beyond the traditional asset classes and also look beyond Canada.”
Energy stocks and oil prices will likely be in a volatile state for the foreseeable future
Panelists cited infrastructure as the primary reason for why they’re not confident on oil prices or energy stocks for the time being, as both the Trans Mountain and Keystone XL pipelines remain in political limbo.
“It’s not a sector I would play in the public markets right now,” said Janson.
“All year we’ve been dealing with deep discounts on Canadian oil to West Texas Intermediate and Brent,” noted panelist Kurt Reiman, BlackRock’s managing director and chief investment strategist for Canada. “When you account that 20 per cent of the TSX is energy, that has a big impact…The pipeline situation has to really be solved.”
“Building the pipelines is a big issue, and it will permeate through the energy stocks,” added Janson. “The TSX has such a heavy [energy] weighting, it could be a wild ride for awhile – because it’s a political issue, it’s not a fundamental economic issue.”
Video Highlights
Rob Carrick, personal finance columnist with The Globe and Mail was the keynote speaker, and the event also featured a panel of investment experts who provided insight into how investors can best position their assets for the coming year. Below are a few takeaways from these conversations.
> View Photos from the Event
Key Takeaways
Don’t overestimate your investment returns
The big draw of the evening was a keynote presentation from The Globe and Mail’s personal finance columnist Rob Carrick, who walked the audience through what he sees as seven common investing mistakes to avoid.
While Carrick does support having a diversified portfolio that isn’t just reliant on the value of your home in paying for your retirement, he cautioned against the expectation that investments in stocks, ETFs or other products will be anything more than modest in today’s economic landscape.
“If you’ve got any double-digit dreams, I suggest you put them aside and be realistic,” he stated. “Ratchet back from even eight, nine or even 10 per cent returns.”
Why the conservative outlook? “The world is changing,” Carrick noted. “Populations in Canada and other industrialized nations are getting older and there’s going to be a skew towards more people in retirement and less in the workforce… We’re moving into a slower growth world.”
In some ways, slower economic growth can be a good thing – it makes the boom and bust cycle much quieter. But, “investment returns won’t turbo-charge your portfolio like in the past,” said Carrick.
DIY investing has its pros, but make sure you get professional advice as well
Carrick is a big proponent of taking charge of your own investments – financial planners who intimidate clients with their knowledge base are one of his pet peeves. But his email inbox, full of very detailed questions from readers, has also shown him that many investors are in need of personalized advice, and he believes it’s worth paying for. In particular, Carrick sees real value in seeking out advice from a financial planner and focusing primarily on that subject (as opposed to focusing more on which stocks you should buy). Someone who helps you figure out how to get ready for retirement based on your spending habits is worth seeking out.
What’s more, many financial planners are now willing to consult with clients on a fee-for-service basis. Just as you would hire a lawyer or personal trainer, there’s an increasing openness among planners to receive payment based on their time or specific services, and you can often seek out a quote in advance to see if their services match your budget.
Pay attention to those fees
On that note, when you do seek help, make sure you’re closely monitoring the fees charged by institutions and advisors. Fees, of course, will eat into your investment returns, and when you pay high fees in a low return world (such as the one we currently occupy), there’s less left over for you.
However, “there’s value in paying fees for advice,” says Carrick. “It’s not always a winning situation to just get the lowest fees you can find – you have to make sure you’re getting good value.”
Parents – don’t dip into your savings to make big purchases for your kids
Parents want what’s best for their kids, and with fewer young people being able to afford a home in a major North American city, mom and dad have been jumping in to pay the bill to get their kids into the market. While parents might mean well on this front, Carrick strongly advises against dipping into your savings to help your kids make a down payment on their first house, or contribute to any other major investments.
“Parents, do it if you can. But don’t dip into your RRSPs, don’t compromise your own personal retirement for your kids’ houses,” said Carrick. Parents should guide their kids towards financial autonomy, and helping them get a house may not help their case. As Carrick noted, “If your kids can’t pay the down payment on their own, they could struggle.”
To mitigate portfolio risk, take a closer look at investment opportunities beyond the stock and bond markets
Given current global trade tensions, four investment experts who joined the event to discuss portfolio management noted 2019 will likely bring a certain degree of market volatility.
Westcourt Capital’s president and chief investment officer Robert Janson believes Canadians, on a large scale, need to start looking for investment opportunities beyond traditional asset classes. “I’m not sure why everyone in this country is so focused on stocks and bonds,” he said. “There are more arrows that can be place in your quiver,” he added, referring to private equity, private debt and real estate equity. Moving outside of the TSX can also present opportunities.
Dorothy-Anna Orser, a portfolio manager and senior investment advisor with Echelon Wealth Partners, agreed with Janson’s assessment, but noted that clients can often be intimated by the extra steps involved in making an alternative investment. “I think the problem there is compliance,” said Orser. When she explains why an extra form might be required for investments, as many products outside of stocks and bonds can be classified as “high-risk,” some of her clients become uncomfortable.
Jeet Dhillon, a portfolio manager with TD Wealth Private Investment Counsel, encouraged attendees to be forward-looking, and be as actively involved in their portfolios as possible. “You should have a core portfolio of good quality stocks and good quality bonds,” she noted, but “what’s worked for us in the last three or four decades – going forward, it’s a different landscape, and you do need to look beyond the traditional asset classes and also look beyond Canada.”
Energy stocks and oil prices will likely be in a volatile state for the foreseeable future
Panelists cited infrastructure as the primary reason for why they’re not confident on oil prices or energy stocks for the time being, as both the Trans Mountain and Keystone XL pipelines remain in political limbo.
“It’s not a sector I would play in the public markets right now,” said Janson.
“All year we’ve been dealing with deep discounts on Canadian oil to West Texas Intermediate and Brent,” noted panelist Kurt Reiman, BlackRock’s managing director and chief investment strategist for Canada. “When you account that 20 per cent of the TSX is energy, that has a big impact…The pipeline situation has to really be solved.”
“Building the pipelines is a big issue, and it will permeate through the energy stocks,” added Janson. “The TSX has such a heavy [energy] weighting, it could be a wild ride for awhile – because it’s a political issue, it’s not a fundamental economic issue.”
