Darryl Brown, investment planner and founder of You&Yours Financial in Toronto.
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Question from a Globe and Mail reader: “My husband and I have very different risk tolerances when it comes to investing. His family lost a lot of money in the 2008 financial crisis and as a result, he is very conservative with his investing approach. He has almost $100,000 invested in a high interest savings account which I don’t think is an efficient strategy. Whenever I bring up the topic of investing, we fight. Do you have any tips on how to approach the subject with him?”
Answer from Darryl Brown, an independent investment consultant and founder of You&Yours Financial in Toronto: Your husband sounds a lot like my partner. Though for different reasons, she, like your husband, doesn’t tolerate financial risk well at all. Even though I am a professional investment consultant, this wasn’t an easy gap for us to bridge. Money in relationships is never straightforward. And, like all things in relationships, there is no “right” way to do things.
The decision to invest is a combination of two things: ability – do you have the money – and willingness to actually do it. Willingness to invest always trumps ability, in my opinion. A person who is not willing to accept the risk that their money will fluctuate over time, should not be pressured into doing so. Too often, it leads to unsuccessful outcomes (i.e. panic selling when the markets go down).
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In my previous post, I talked about the importance of creating an Investment Policy Statement (IPS) as the key to successful investing. For anyone investing their money, it is an incredibly important process to go through, even if you’ve been investing for years.
Creating an IPS as a couple takes a lot of consensus across objectives, timelines, risk, liquidity and more. Additionally, as with your husband, people can be significantly affected by both direct and observed experiences. For every person you hear boasting about their returns or successful investment strategy, there are 100 people who are too ashamed to share their cautionary tale.
So, how do you successfully approach investing with your significant other?
First, Listen.
Like, really listen. Take a walk through the respective experiences that affect how you feel about money in general. Think of it like financial therapy. Really dig into how you both feel and why. These can be challenging conversations, but they often reveal that a person’s attitude about money has very little to do with money.
Second, ask “Why?”
Lost in the day-to-day market commentary, which overwhelms most people, is the “why” we invest in the first place. If your basics are covered, meaning you have a good financial plan in place and an emergency fund, investing is the best way to meet your financial objectives. I think this is a simple sentiment but is often overlooked when folks get wrapped up in the jargon, highs and lows of investing and it can take on a nervous emotional energy.
Successful investing is not solely about making money. It’s about figuring out the life you want to live and what you need to get there. I encourage my clients to invest with intention. Intention means understanding why you are investing in the first place. Communicating and aligning on your goals sounds pretty basic but you’d be surprised how many couples don’t take the time and operate on assumptions.
Third, plan.
We all visualize that beach we want to retire on but going beyond the daydream to actually planning how you’ll get there really matters. Committing it to paper helps immensely. From there, investing simply becomes the mechanism by which you’ll achieve those goals, and the ebb and flow of the market and stock predictions become less central to success. When you look at investing as a way to live the life you want, it takes on a much more empowered energy. Suddenly the trees become a forest.
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I don’t believe in a one-size-fits-all approach. A successful investment strategy should be reflective of the individual(s) investing. If you commit to the above steps together, I’m certain you and your husband will open an important dialogue about investing and find solutions that feel comfortable for you both.
Darryl Brown isan independent investment consultant and founder of You&Yours Financial in Toronto.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
