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Never leave your investment portfolio on ‘auto pilot’ – Fairview Post

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Christine Ibbotson

Dear Money Lady:

I invest on my own but am thinking of talking to a financial planner from my bank to expand my portfolio. Do you think that is a good idea or should I just keep doing it on my own? Should I take on more risk to get a better return?

John

Dear John:

Good question – but make sure your new advisor understands your risk tolerance and your future goals.

Most Canadians are invested in the market in some way or another with or without an advisor through mutual funds, market linked GICs, guided stock portfolios or exchange traded funds.

Experienced investors understand the risk-return trade-off of the market and are more comfortable with market volatility, constantly looking for opportunities to profit over long time horizons.

While it is true that one must accept a higher degree of risk to earn a higher return, not all investors can afford future losses. Our ability to bear risk has a tendency to decrease as we age, and often those investors who believe they have a high tolerance for market risk, suddenly change their minds when the market turns against them.

If you are not a knowledgeable investor John, and plan on relying solely on the decisions of your new advisor, you should make sure you have communicated your risk tolerance and are invested correctly. Often clients fill out risk questionnaires with their advisors the way they would like to behave when faced with risk, while how they really behave, may be completely different.

To give you an example, if you are moderately risk averse, you would not want to be invested in a precious metals fund since they potentially have high volatility.

Your investment portfolio should never be left static or on “auto-pilot” with your advisor (no matter how much you like them).

Assumptions should not be made when it comes to your money and you should be speaking to your advisor regularly with a routine six-month financial review. As people age, their objectives, financial and personal circumstances and overall risk tolerance change.

Proper tax planning should be a part of every investor’s overall financial strategy, but not at the expense of more risk adverse investments. Tax minimization should never be the sole objective, nor can it be allowed to overwhelm the other elements of a proper financial plan.

Remember that it is the “after-tax income return” that is important. Choosing an investment based solely on a low tax status does not make sense if it results in a lower after-tax rate of return.

The best risk and tax advantages are usually gained by planning early and planning often. Financial plans should be simple, easy to implement, and easy to maintain. Make sure you understand each investment product you have chosen and are aware of the potential risks as well as the potential future rewards.

Good Luck and Best Wishes,

Money Lady

Written by Christine Ibbotson, author of the best-selling book, How to Retire Debt Free & Wealthy, and a new book Don’t Panic – How to Manage your Finances and Financial Anxieties During and After the Coronavirus. Both are available at all bookstores across Canada. If you have a money question, please email on website: www.askthemoneylady.ca

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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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.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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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.

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S&P/TSX up more than 200 points, U.S. markets also higher

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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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