Investing lessons for everyone - Canada News Media
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Investing lessons for everyone



I’ve worked at Morningstar for more than 25 years now and one of the best aspects of my current job is that I get to think about and work on a huge range of topics that have a real impact on people’s lives, from constructing sturdy retirement plans to coping with cognitive decline to paying for college. I’m constantly learning new things, and I love hearing from Morningstar users about their strategies and successes. I also like to hear what they’re worried about, because that helps me know what I should be working on.

As I reflect on the past 25 years and look forward, here are some of the key lessons I’ve learned:

Investing is overrated
I’m not saying you shouldn’t invest. You absolutely should. It’s essential. End of story. What I am saying, however, is that investing is the attention hog in many discussions about how to reach financial goals. It’s sexy, there’s often a current-events hook to explain why the market is behaving as it is, and hitting it big with an investment doesn’t usually require any sort of sacrifice. But ultimately, your boring pre-investing choices–like your savings rate and how you balance debt paydown with investing in the market–will have a bigger impact than your investment selections on whether you amass enough money to pay for retirement or college. (I call these types of pre-investment decisions your “primordial asset allocation.”) If your savings rate is high enough and you start early enough, that can make up for some lacklustre asset-allocation and investment-selection choices. The flip side is also true: If you haven’t saved enough, great investment picks probably won’t be enough to save you.

Less is so much more
In my early days as an analyst, I covered all kinds of funds: convertibles funds, technology-specific funds, funds that invested exclusively in zero-coupon bonds. It was a great crash course in how various investment types work. But the more I’ve learned about investing, the more minimalist I’ve become. If an investment type can help investors get the job done simply, cheaply, and without a lot of moving parts or oversight, I’m all over it. That’s why I increasingly recommend total market index funds, allocation funds, and target-date funds. (I like some well-diversified actively managed funds, too – and own them – but I’m super-picky.)

If investors build a well-diversified core portfolio using these kinds of building blocks, then more narrowly focused products – whether sector or region-specific equity funds or focused bond funds like emerging markets – are usually going to be redundant. I’m also attuned to the role of investor behaviour in all of this: Because more narrowly focused products will tend to be more volatile than broadly diversified core funds, there’s a greater likelihood that investors will mis-time their purchases and sales.

In addition to reducing complexity at the product level, I’m also an evangelist for eliminating complexity elsewhere in a portfolio. The fewer moving parts in your portfolio, the easier it will be to keep tabs on the real drivers of your financial results – your asset allocation and saving/spending rates, for example.

Beware the latest fad
In a related vein, I’ve seen enough to conclude that many new products that come to market don’t actually help improve investor outcomes. Rather, they’re an effort to help investment firms capitalise on what’s hot and generate fees on new assets.

One investment craze after another has hit the market over the past 25 years: technology sector funds, narrow commodities-tracking funds, and liquid alternatives, to name a few. A consistent theme behind new product mania is firms’ zeal to create products around an asset class that has performed exceptionally well in the recent past – and may not do so in the future. Investors should always ask: “What’s in it for them?” Oftentimes the upside looks better for the seller (them) than it does for you.

But some innovations are brilliant!
That’s not to say every new investment innovation is motivated by mercenary intentions, however. A small handful of the ones I’ve seen over my 25 years at Morningstar have hit the bull’s eye.

At the top of my list are target-date funds, which solve some of investors’ most vexing problems in an extremely low-cost way: They help them arrive at a sane stock/bond mix given their life stage, and change up the asset allocation to become more conservative as retirement approaches. The early results of actual investor outcomes in target-date fund – that is, investors’ ability to stay the course and benefit from compounding – are incredibly encouraging. I’d also put exchange-traded funds (ETFs) on my extremely short list of innovations that have benefited investors.

Get some help in retirement
Thanks to innovations like target-date funds and robo-advisers, the process of allocating assets during your working career has never been simpler. If investors are going to spend on advice and they’re on a tight budget, my bias is that they spend the money on good quality, holistic, financial planning guidance rather than investment advice, which can be obtained pretty cheaply through the aforementioned avenues.

But accumulation (saving for retirement) is a walk in the park compared with decumulation (investing – and spending! – through retirement). Even though I’ve tried to address the nitty-gritty of portfolio decumulation through the intuitive framework of “bucketing”, it’s still not simple.

Most people approaching and in retirement could benefit from another set of eyes on their plans, to help ensure that their withdrawal rate system is sustainable, that they’re being tax-efficient with their withdrawals, and so on. Having a financial adviser who knows what’s going on in your financial life and portfolio is also the gold standard for helping ensure that nothing falls through the cracks if you become incapacitated or die.

While the traditional investment advice model requires investors to pay a percentage of their assets year in year out, soon-to-retire and retired investors who are confident in their abilities can pay for advice on an hourly or per-engagement basis. That will be more economical than paying for ongoing advice or oversight; the downside is that the hourly or per-engagement advisor won’t be looking over your portfolio unless you ask for help. So, it’s a trade-off.

Talk about the hard stuff
On a panel at an investment conference, I referenced my personal situation as the adult child of two parents who struggled with cognitive decline toward the end of their lives. In so many ways, my parents had everything at the end of their lives: My sisters and I adored them and saw them often, they had enough money, and they stayed in their home until very close to the end. Yet I can sum up those last years in two words (forgive my language here): They sucked. We seemed to lurch from one crisis to the next; it was a physically and emotionally taxing experience for all of us. And it cost an arm and a leg.

After the panel, it was as if the floodgates had opened. Everywhere I went at the conference (even in the bathroom!), people stopped to share their own stories of struggling with the care of loved ones. It was obviously cathartic for them. We talked about the financial aspect of care but also the hard decisions that often come fast and furious later in life. My experience at that conference illuminated for me the value of simply sharing our experiences with one another. So many times, financial matters are about much more than finance. I’ve been thrilled to share my thoughts with readers all of these years, and I’m so grateful for all that you’ve all shared with me.

Christine Benz is director of personal finance at Morningstar

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Funding unveiled for mining investment event – Whitehorse Star



The federal government is investing $500,000 in an Invest Canada North initiative at a large prospecting convention this spring.

By Whitehorse Star on January 20, 2020

The federal government is investing $500,000 in an Invest Canada North initiative at a large prospecting convention this spring.

Yukon MP Larry Bagnell made the announcement on behalf of the Canadian Northern Economic Development Agency (CanNor) in Vancouver over the weekend.

The two-day northern-focused event will take place within the Prospectors and Developers Association of Canada Convention in Toronto.

“This project demonstrates the clear strategic advantages of partnership and collaborations in the North among industry, governments, service sectors and Indigenous development corporations to promote investment in the territories,” Bagnell said.

“Increased investment in the North benefits all northerners.”

Invest Canada North will be hosted in partnership with the Yukon Mining Alliance, N.W.T. and Nunavut Chamber of Mines and the three territorial governments.

It will consist of “an exclusive networking reception” of food and entertainment inspired by northern culture and a forum that will inform attendees of the investment opportunities in the North.

There will also be the opportunity to interview exploration stakeholders: mineral and mining companies, government officials, Indigenous development corporations, and others.

The conference will kick off on March 1 with a premier networking reception. Attendees will be invited to try the Yukon’s Sourtoe Cocktail, and there will be an Inuit throat singing performance.

The single-day forum will take place on March 2. It will include a keynote presentation by Anmar Al-Joundi, the president of Agnico Eagle Mines.

The three territories will each host individual forums throughout the day.

Byron King, the editor of Agora Financial, and Andrijana Djokic, the CEO of the Na-Cho Nyak Dün Development Corp., will moderate the Yukon’s forum mid-morning.

There will be a fourth forum entitled “Environmental Social Governance” which will explore the future of mining in the changing environmental landscape.

In a press release issued this morning, Premier Sandy Silver expressed optimism for the conference’s potential for attracting mining investment Northward.

“Yukon is a great place to invest,” Silver said.

“This strategic initiative will raise the investment profile of Canada’s North on the global stage and advance our mineral industry.”

Anne Turner, the Yukon Mining Alliance’s executive director, said the conference will bring attention to the territory’s undiscovered resources.

“Invest Canada North will connect global investors with the significant untapped mineral potential, strong geopolitical stability and progressive Indigenous and community partnerships found in Canada’s North,” Turner said.

The Prospectors and Developers Association of Canada Convention will take place March 1-4.

Last year, the Toronto conference attracted 25,000 attendees from 132 countries.

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London Community Foundation tackling lack of housing with $20-million investment – Global News



The London Community Foundation (LCF) is committing up to $20 million to addressing London’s affordable housing crisis.

The funds will be used to create a dedicated affordable housing fund of $17 million to $20 million to support the creation of more affordable housing options in the city.

“Adequate, safe and affordable housing should not be out of reach,” said LCF president and CEO Martha Powell.

“The shortage of affordable housing in our community is at a crisis point.”

London currently has a housing shortage of 3,000 units and more than 2,400 individuals and families accessing emergency shelters each year.

The fund is designed to offer flexible financing for community organizations interested in creating affordable housing.

London is rethinking how it addresses homelessness and housing instability

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According to the LCF, a major barrier to entering the affordable housing market is the high startup costs.

LCF is proposing low-interest, early-stage, flexible financing to help groups with initial startup costs like fund assessments, land acquisition, and planning and zoning expenses needed before the first phase of a project can be completed.

This idea builds upon the concept of LCF’s $10-million Social Impact Fund, which has helped to create 341 units of affordable housing.

In addition to the $20-million fund, the foundation announced the establishment of a Housing Action Committee, which will identify organizations that have an interest and capacity to help create affordable housing but who need more information and financial assistance to develop their plans.

“We hope to help those already providing housing solutions and those who may be able to help,” said committee chair John Nicholas.

© 2020 Global News, a division of Corus Entertainment Inc.

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Kate Middleton and Prince William host glamorous reception for UK-Africa Investment Summit



William a speech at the event in which he spoke about the important relationship between the UK and Africa.

“The African continent holds a very special place in my heart,” the Duke of Cambridge said in a speech after arriving in the Music Room for the event. “It is the place my father took my brother and me shortly after our mother died.

“And when deciding where best to propose to Catherine I could think of no more fitting place than Kenya to get down on one knee.

“Throughout my life, I have been lucky enough to spend time in many other parts of Africa. I’m also honoured to be the Patron of the Royal African Society.

“And as Catherine and I have said to several of you here tonight, we hope to have the chance to visit many more countries in the future and share our mutual love of your continent with our children.”

Photo: © Yui Mok/AFP via Getty Images

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