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Invest Well. Live Well: The value of advice – Kamloops This Week

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The best athletes in the world use coaches to help them keep on track, maintain focus, monitor progress and achieve their goals. Despite being incredibly talented, athletes realize the value a coach brings to them personally and/or their team. 

We like to say we are like your personal chief financial officer reviewing aspects of your wealth, providing personalized advice specific to helping you achieve what truly matters to you. There have been several compelling studies showing that working with a trusted financial advisor can help build wealth faster.

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A January 2018 report from the Investment Funds Institute of Canada showed investors receiving advice accumulate 290 per cent, or 3.9 times, more wealth after 15 years than non-advised investors. Put another way, it could take 34 years to amass the same amount of wealth by going at it alone. 

Another study by Vanguard Investments in 2019 showed that advisors may add approximately three per cent of value in portfolio returns over time. These returns were net of both fees and taxes. The Vanguard study mentions the range of around three per cent because not all advisors offer all of these services.

A breakout of where we believe advisors can help improve results:

1. Portfolio construction: Includes suitable asset allocation of a mix of stocks, bonds and alternatives. For example, we employ seven layers of diversification (asset class, geography, currency, style, size, sectors and alternatives). This should also entail using cost-effective solutions and placing each investment in the most tax efficient account (RSP, TFSA, etc.). 

2. Wealth management: Includes regular portfolio rebalancing (trimming at highs and adding near lows).  Creating a draw down or cash flow strategy. To help keep clients on track, advisors should be revisiting client’s objectives before major life events such as: having a child, marriage, divorce, retirement, disability, illness or death. 

3. Behavioural coaching: 2020 has been a roller coaster ride that has tested investors. Advisors should help through challenging times by acting like an emotional circuit breaker to avoid hindering your wealth.

The study concluded the most important skill an advisor can bring is behavioural coaching. This coincides with several studies that have shown that the average investor underperforms due to emotional behavior working against them. A 2019 report from J.P Morgan showed that over a 20-year period, a portfolio of 60 per cent stocks and 40 per cent bonds in the U.S. returned an average of 5.6 per cent, whereas the average investor only earned 2.5 per cent.  

On top of potential increased return, according to FP Canada, investors working with advisors feel twice as prepared for retirement as those without. These investors also reported higher levels of emotional, financial and overall contentment.

Financial concepts are complex and continually changing along with stock markets and demographics needs.  Some key areas not covered in any of the research were the benefits of pension selection, charitable giving, income splitting and estate planning strategies. Savings in these areas could magnify the results but are likely harder to quantify.

The studies concluded that provided the advisor charged a reasonable fee, the benefits from the guidance of a full-service professional wealth manager should outweigh the costs and add 2.5 per cent a year.

Until next time, Invest Well. Live Well.

Written by Keith Davis. This document was prepared by Eric Davis, vice-president, portfolio manager and investment advisor, and Keith Davis, investment advisor, for informational purposes only and is subject to change. The contents of this document are not endorsed by TD Wealth Private Investment Advice, a division of TD Waterhouse Canada Inc.-Member of the Canadian Investor Protection Fund. All insurance products and services are offered by life licensed advisors of TD Waterhouse Insurance Services Inc., a member of TD Bank Group. For more information, call 250-314-5124 or email Keith.davis@td.com.

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ROGER TAYLOR: CPP's investment head says sticking with oil and gas companies will help wind, solar development – Cape Breton Post

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Climate change is important to the Canada Pension Plan Investment Board, but it’s not ready to divest of its holdings in conventional oil and gas.

Although a segment of the Canadian population may want the CPPIB to drop conventional energy, the board’s top spokesman says its investment decisions are not necessarily motivated by politics or a change in public policy.

Michel Leduc, CPPIB senior managing director and global head of public affairs and communications, said in a phone interview on Monday that conventional energy sources are not going away as quickly as some people may believe, and oil and gas will have a role in the global economy for some time to come.

Michel Leduc is senior managing director and global head of public affairs and communications at the Canada Pension Plan Investment Board. – Contributed

It is the investment board’s view that conventional oil and gas is still a good investment, providing a good return for years to come, said Leduc, and the board will maintain such investments.

The conventional oil and gas companies are making the switch to unconventional wind and solar energy themselves, Leduc argued, so if the CPPIB was to cut its investment in such companies it would actually help slow the transition from conventional to renewable energy.

The subject of energy may come up again Tuesday when Leduc hosts a CPPIB virtual town hall for Nova Scotians, during which he will explain what the investment board is doing with its $430-billion fund.

Every second year, the CPPIB holds public meetings individually for each province and the northern territories throughout October. Nova Scotia is the second last of year’s presentations.

There are a total of 20 million CPP contributors and beneficiaries in Canada and, of that, there are 461,799 contributors and 220,693 retirement beneficiaries in Nova Scotia.

Leduc said that despite the economic concern brought about by the COVID-19 pandemic, the solvency and sustainability of the Canada Pension Plan is on solid footing for at least the next 75 years.

Before the creation of the CPPIB in 1997, the Canada Pension Plan was 100 per cent invested in government debt, Leduc said. To better prepare for so-called black swan events, such as a pandemic, the investment board has diversified the fund.

The fund is invested in three broad categories: 20 per cent in fixed income, which is mainly sovereign bonds and provincial bonds; 53 per cent in equities, both publicly traded stocks and private companies wholly controlled by the CPPIB; and the remainder would be in real assets, which includes toll roads, commercial real estate and ports, which provide steady income for a long period.

Geographically, only about 15 per cent of the CPPIB’s investments are in Canada, Leduc said, and about 85 per cent is invested across the developed economies of the world.

Considering that Canada represents only about three per cent of global markets, most of the CPPIB investments are outside of the country to be fully diversified and protect the fund from downturns in the Canadian economy.

The largest portion of the outside investments are in the United States, followed by Europe, Japan, South Korea and then developing countries, which includes China, India, Brazil, Mexico, Chile and Colombia.

In Canada, the fund is invested in both conventional and renewable energy, the financial sector and technology, including Ottawa-based tech darling Shopify, Leduc said.

The CPPIB has a 50 per cent holding in the 401 toll highway in Ontario, which has proven to be the investment board’s biggest return on investment so far, he said.

In Nova Scotia, the fund has investments in Empire Co. Ltd., parent of the Sobeys grocery chain, and Crombie REIT, both of which are controlled by the founding Sobey family of Pictou County.

Internationally, the CPPIB owns 23 ports in the United Kingdom, which also provide steady income over a long period.


CPPIB VIRTUAL TOWN HALL

The virtual Canada Pension Plan Investment Board town halls are accessed at cppinvestments.com/publicmeetings. The Nova Scotia session is scheduled for today from noon to 1 p.m.

To join, click the link for the meeting and register with an email address. Registrants will get a response and can submit a question in advance.

In Nova Scotia, 461,799 residents are CPP contributors (47.9 per cent of the provincial population) and 220,693 are CPP retirement beneficiaries (22.9 per cent of the population).

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Jarvis: A massive, game-changing investment – Windsor Star

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So the third shift is forecast to return in 2024, when mass production of the new vehicle begins. All 425 workers still laid off are expected to have the opportunity to be recalled plus another 1,500 are expected to be hired.

Here’s the but.

Workers will have to weather more layoffs before more jobs come back.

“We’ve got another down week coming. That’s already been announced,” said Dias. “I wish I could say with conviction that everything is going to be fine after the down week, but I really can’t say that.”

Everything is tied to consumer demand. Minivan sales are stable now, he said, “but it’s not like it was.”

There are also questions about the investment, said Automotive News Canada reporter John Irwin.

Normally, when negotiations lead to a new investment, that investment happens before the contract expires. Mass production of the new vehicle announced as part of this contract won’t start until 2024, after the contract expires.

But retooling for the new product will start in 2023, before the contract expires, Dias said.

The auto industry makes these decisions four to five years in advance, he said.

“If we had waited another three years to talk about this investment, it probably would have been in Mexico,” he said.

The agreement also doesn’t identify the vehicle to be produced, only that it will be a plug-in hybrid “and/or” battery-powered electric vehicle.

A key feature is that the platform will be flexible enough to build cars, crossovers or pickups, Dias said.

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ROGER TAYLOR: CPP's investment head says sticking with oil and gas companies will help wind, solar development – The Journal Pioneer

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Climate change is important to the Canada Pension Plan Investment Board, but it’s not ready to divest of its holdings in conventional oil and gas.

Although a segment of the Canadian population may want the CPPIB to drop conventional energy, the board’s top spokesman says its investment decisions are not necessarily motivated by politics or a change in public policy.

Michel Leduc, CPPIB senior managing director and global head of public affairs and communications, said in a phone interview on Monday that conventional energy sources are not going away as quickly as some people may believe, and oil and gas will have a role in the global economy for some time to come.

Michel Leduc is senior managing director and global head of public affairs and communications at the Canada Pension Plan Investment Board.  - Contributed
Michel Leduc is senior managing director and global head of public affairs and communications at the Canada Pension Plan Investment Board. – Contributed

It is the investment board’s view that conventional oil and gas is still a good investment, providing a good return for years to come, said Leduc, and the board will maintain such investments.

The conventional oil and gas companies are making the switch to unconventional wind and solar energy themselves, Leduc argued, so if the CPPIB was to cut its investment in such companies it would actually help slow the transition from conventional to renewable energy.

The subject of energy may come up again Tuesday when Leduc hosts a CPPIB virtual town hall for Nova Scotians, during which he will explain what the investment board is doing with its $430-billion fund.

Every second year, the CPPIB holds public meetings individually for each province and the northern territories throughout October. Nova Scotia is the second last of year’s presentations.

There are a total of 20 million CPP contributors and beneficiaries in Canada and, of that, there are 461,799 contributors and 220,693 retirement beneficiaries in Nova Scotia.

Leduc said that despite the economic concern brought about by the COVID-19 pandemic, the solvency and sustainability of the Canada Pension Plan is on solid footing for at least the next 75 years.

Before the creation of the CPPIB in 1997, the Canada Pension Plan was 100 per cent invested in government debt, Leduc said. To better prepare for so-called black swan events, such as a pandemic, the investment board has diversified the fund.

The fund is invested in three broad categories: 20 per cent in fixed income, which is mainly sovereign bonds and provincial bonds; 53 per cent in equities, both publicly traded stocks and private companies wholly controlled by the CPPIB; and the remainder would be in real assets, which includes toll roads, commercial real estate and ports, which provide steady income for a long period.

Geographically, only about 15 per cent of the CPPIB’s investments are in Canada, Leduc said, and about 85 per cent is invested across the developed economies of the world.

Considering that Canada represents only about three per cent of global markets, most of the CPPIB investments are outside of the country to be fully diversified and protect the fund from downturns in the Canadian economy.

The largest portion of the outside investments are in the United States, followed by Europe, Japan, South Korea and then developing countries, which includes China, India, Brazil, Mexico, Chile and Colombia.

In Canada, the fund is invested in both conventional and renewable energy, the financial sector and technology, including Ottawa-based tech darling Shopify, Leduc said.

The CPPIB has a 50 per cent holding in the 401 toll highway in Ontario, which has proven to be the investment board’s biggest return on investment so far, he said.

In Nova Scotia, the fund has investments in Empire Co. Ltd., parent of the Sobeys grocery chain, and Crombie REIT, both of which are controlled by the founding Sobey family of Pictou County.

Internationally, the CPPIB owns 23 ports in the United Kingdom, which also provide steady income over a long period.


CPPIB VIRTUAL TOWN HALL

The virtual Canada Pension Plan Investment Board town halls are accessed at cppinvestments.com/publicmeetings. The Nova Scotia session is scheduled for today from noon to 1 p.m.

To join, click the link for the meeting and register with an email address. Registrants will get a response and can submit a question in advance.

In Nova Scotia, 461,799 residents are CPP contributors (47.9 per cent of the provincial population) and 220,693 are CPP retirement beneficiaries (22.9 per cent of the population).

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