Martin Pelletier: Here are five key factors to look for when it comes to determining what’s right for you
Springtime usually brings about change as we come out of winter hibernation, and the same goes for managing your portfolio, since this time of year tends to be when investors begin reviewing their financial situation and start cleaning things up ahead of the upcoming tax season.
Not surprisingly, this often leads to discussions about how your wealth is being managed and if it is on track to meeting certain financial goals and objectives.
If this happens to be your situation, here are five key factors to look for when it comes to determining what’s right for you and whether you have the proper team and resources supporting your needs.
Even if you have the time and the level of sophistication to assume responsibility for your portfolio, you may still want to deploy an investment adviser, because the more information you have, the more prepared you can be. A good adviser will provide you with the relevant information and research required to make sound investment decisions as well as challenge you on your ideas.
That said, many people just don’t have the time or knowledge to do it themselves and this is where a good fee-based, discretionary portfolio manager can help. This means handing over control of the investment decisions, since they will assume responsibility for the overall management of your portfolio. However, it will be guided by the rules set out in the investment policy statement, so make sure it properly matches your objectives and risk tolerance.
If you’re wondering why you don’t hear from your adviser, it’s probably because they have too many clients to service. Sticking to a hard investment minimum and turning clients away is a difficult thing for any adviser to do, but a necessity when it comes to maintaining a high level of service.
To avoid this, conduct a mutual interview to see if there is the right fit on both sides, and ask if there is capacity for taking on your business. A good adviser can also refer you to a colleague if there isn’t.
Having someone who is conflict free, meaning your adviser isn’t simply selling you internal proprietary investments, can really help improve performance. Be sure not to confuse this with in-house pooled funds, which can improve efficiency in managing portfolios, because the holdings within those funds may not necessarily be proprietary in nature and might make use of other managers and/or exchange-traded funds.
Some may also prefer a portfolio manager that has the flexibility to allow for some customization or outside-the-box holdings, such as a tactical sleeve, or even utilize very effective investment vehicles such as structured notes.
It isn’t uncommon to look at things in absolute terms against a particular benchmark(s) when evaluating performance. This creates two problems: benchmark selection and the risk taken to generate the return.
We really like the goals-based benchmarking approach, complemented by an active risk-management process. This means a target return is set to meet a set of goals or objectives and the risk is minimized as much as possible in trying to achieve it.
Finally, a planning-led approach is essential in managing any portfolio. This will become a driving factor in the years to come, especially in an environment of persistent deficit spending and governments looking for ways to support it through increased taxation.
Undertaking an advanced wealth plan should include much more than a forward cash flow projection, and get into tax strategy discussions, will and estate planning.
Like any good old-fashioned spring cleaning, having a to-do list and sticking to it can really help get things done, so that you can relax and start enjoying the sunshine and warmth of knowing that everything is being looked after.
Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc, operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning.
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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.
The stock is now showing a 16.1% gain for the year after rising the past two days.
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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