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Why emotions and investing don’t mix – Kelowna Capital News

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It’s easy to be confident in your investment approach when the markets are primarily going up.

But what happens when you add a little volatility to the mix?

“Markets have gone up by more than 250 per cent since the last recession, with very little volatility until recently. This is not normal – people have forgotten what normal volatility feels like,” says Tanya Wilson, a Kelowna-based financial advisor with Raymond James. “People have become complacent in their risk tolerance assessments.”

The problem with emotion-based decision-making

Complacency can lead to emotional decision-making when volatility does happen, and that’s when investors make the biggest mistakes.

Investors feel most at ease with investing when news is good, usually at the top of the market, and feel the most fear about investing when news is bad, usually at the bottom of the market. Giving in to these fears and allowing them to control investment decision-making can result in very poor investment performance.

“Money is emotional, so it’s natural, as humans, to allow emotions into the equation, but approaching investment decisions from a place of fear or greed is how we can make bad decisions,” Wilson says.

High risk doesn’t always equate to high returns, and those who get caught up in fads or buying the “sure thing,” can put their investment portfolios at risk. “I know of investors who have lost everything because they heard about the stock of a company that’s ‘guaranteed’ to go up,” Wilson says.

Is your retirement plan too risky?

For those nearing retirement, this long period of growth – and resulting complacency – may have led to investment plans that carry considerable risk.

“I believe that many investors, especially those close to retirement, have too much risk in their investment portfolios, and that’s happened because the markets have performed so well over the past decade,” Wilson reflects.

Assessing someone’s risk tolerance – and ensuring it’s reflected in their investment strategies – is difficult when markets are only going up, especially when an advisor hasn’t been through a full market cycle themselves, or experienced a recession.

“This is why you should work with a skilled, trusted advisor who has a significant amount of experience and education, and preferably one who works for an independent wealth management firm without targets for selling proprietary investment products. The clients’ best interests should always be the advisor’s No. 1 consideration.”

The core values of Raymond James and their advisors are conservatism, client-first, and integrity. This is reflected in the level of service their client’s experience.

“My team and I have a process which focuses on prudent risk management through financial planning. This is the blueprint for our investment strategy decisions. During times of heightened market volatility, our clients have a lot of peace of mind in our investment strategy and their financial well-being.”

To learn more about planning for your financial future, fill out the raymondjames.ca/tanyawilson/contact-us.aspx or call 250-869-2447.

RELATED READING: Why a comprehensive financial plan is vital in volatile times

Tanya Wilson is a financial advisor with Raymond James Ltd. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed. The view and opinions contained in the article are those of the author, not Raymond James Ltd. Raymond James Ltd. member of Canadian Investor Protection Fund.

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Why sound governance key to pursuing investment returns – Wealth Professional

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The report is linked to Mercer’s ongoing multi-year Transformational Investment collaboration with the World Economic Forum (WEF). The series explores investment and governance practices for global systemic risks.

Through this collaboration, the WEF and Mercer had provided institutional investors with a six-step governance and decision-making framework to pursue attractive risk-adjusted returns. The principles were:

  • Understanding the overall impact on the funding entity, objectives, and beneficiaries;
  • Collaborating with similarly situated organizations who are concerned about the same risks and opportunities;
  • Designing governance, policies, delegation, and accountabilities for material systemic risks;
  • Investing to manage the portfolio’s exposure to the global systemic risk;
  • Transforming through driving investment strategy that aims to deliver change; and
  • Monitoring and revisiting – applying learnings to improve policies and processes.

Given this framework, Mercer’s paper rolled out two objectives for institutional investors:

  • Evaluating governance strategies developed to address systemic risks, in terms of addressing the COVID-19 pandemic-driven market crisis; and
  • Considering practical investment actions by long-term investors that support economic recovery and generating attractive risk-adjusted returns. Investments that support economic recovery and resurgence are considered “transformational.”

“As illustrated by the COVID-19 pandemic, our economy, society, and planet face numerous long-term, global systemic risks, which need to be mitigated,” said Rich Nuzum, global president of Mercer’s Investments and Retirement business. “Institutional investors have the ability to respond to these challenges and continue to seek positive investment outcomes, while mitigating the effect of these systemic risks. This is especially true when it comes to governance, as sound and robust investment practices can benefit the economy and broader society through periods of market volatility and economic uncertainty.”

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Volkswagen closes $2.6 billion investment in self-driving startup Argo AI – Yahoo Canada Finance

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Volkswagen closes $2.6 billion investment in self-driving startup Argo AI
Signage at a Volkswagen dealership is seen in London, Britain

(Reuters) – German automaker Volkswagen AG <VOWG_p.DE> has closed its $2.6 billion investment in Argo AI, the Pittsburgh-based self-driving startup disclosed in a blog post on Tuesday.

Argo, founded in 2016 by Bryan Salesky and Peter Rander, is now jointly controlled by VW and Ford Motor Co, which made an initial investment in Argo shortly after it was founded.

Details of the VW investment, which does not include an agreement to purchase $500 million worth of Argo stock from Ford, was announced last July.

VW’s agreement includes the transfer to Argo of its Munich-based Autonomous Intelligent Driving unit, which boosts Argo’s employment to more than 1,000, according to Salesky.

Last week, VW disclosed that its supervisory board had approved several projects in a multibillion-dollar alliance with Ford that also was announced last July.

Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023 and had sought outside investors to help share the spiraling cost of developing autonomous vehicles.

(Reporting by Paul Lienert in Detroit; Editing by Nick Zieminski)

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Volkswagen closes $2.6 billion investment in self-driving startup Argo AI – TheChronicleHerald.ca

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(Reuters) – German automaker Volkswagen AG has closed its $2.6 billion investment in Argo AI, the Pittsburgh-based self-driving startup disclosed in a blog post on Tuesday.

Argo, founded in 2016 by Bryan Salesky and Peter Rander, is now jointly controlled by VW and Ford Motor Co, which made an initial investment in Argo shortly after it was founded.

Details of the VW investment, which does not include an agreement to purchase $500 million worth of Argo stock from Ford, was announced last July.

VW’s agreement includes the transfer to Argo of its Munich-based Autonomous Intelligent Driving unit, which boosts Argo’s employment to more than 1,000, according to Salesky.

Last week, VW disclosed that its supervisory board had approved several projects in a multibillion-dollar alliance with Ford that also was announced last July.

Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023 and had sought outside investors to help share the spiraling cost of developing autonomous vehicles.

(Reporting by Paul Lienert in Detroit; Editing by Nick Zieminski)

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