Friday, April 14, 2023

"Five ways investing differs from gambling"/ "Luck, fate and a lot of eights"/ Life is a gamble

Aug. 3, 2019 "Five ways investing differs from gambling": Today I found this article by Peter Hodson in the Edmonton Journal:

I was talking to my 14-year old son the other day, and he confessed to me that he tells his friends that my job is “professional gambler.”
I was aghast, of course, and went on to explain to him that investing is dramatically different from gambling. While skill can be used in some games, gambling is heavily tied to luck.
Sure, investors can get lucky sometimes but skill and homework are far more important.
I went on to explain five ways that Investing is NOT gambling:

The odds are actually in your favour
In a casino, the game with the best odds is typically Blackjack, where the house usually has an edge of one per cent or less. 

Craps has similar good odds, depending on the casino. 
But an edge is still edge: the casino will do better than you will, on average. 
With stocks, though, you have the edge. Stocks rise more than they fall, and over time even an average buy-and-hold investor should make money. 
There is a risk premium to equities, and this is your edge: Because stocks can be very volatile, you get paid to own them, through higher investment returns.

Research will overpower luck
Yes, there are some gambling games that require some skill. Bluffing in poker can make you a lot of money, if you are good at it.
 However, most games come down to luck. Even a great poker player is not likely to win without some nice cards now and again. 
Many games, such as roulette, are all luck. You can study prior numbers all you want, but the odds of hitting ‘your’ numbers are still not going to change. 
Not so with investing: Proper research and due diligence makes it far more likely you will have successful investments. Sure, investors can get lucky as well, but research will give you that extra edge, and provide even more investment gains. Stock selection is not — and never should be — just flipping a coin and buying a random stock.

The longer you invest, the better you will do
Vegas doesn’t get all of its glitzy, fancy hotels by giving away more money than it takes in. With the odds favouring the casino, if you gamble long enough you are going to lose money. 
You might have some short-term winning streaks, but eventually the longer you play the more likely it is that you will end up short of cash. It is, simply, mathematics. 
But with the stock market, time is your absolute best friend. The longer you invest, the more likely you are to win. With markets at record highs, every single market index buyer who hasn’t sold has now made money. One can certainly never say every single tourist in Vegas has made money!

Stocks are not a zero-sum game
Generally, in most forms of gambling, if you ‘win’, someone else ‘loses’, whether it is another player, or the house. Only one player gets the pot in poker (well, sometimes it is a tie), and everyone else loses all their bets in that round. The house also might take a cut. 
But with stocks, true shareholder value can be created. Certainly, investors can ‘lose’ when they sell a stock at a loss. But if a growing company sees its shares rise from $10 to $100, then true wealth has been created on a net basis. 
Despite some winners and losers along the way, the entire company is worth more than it was before. In Vegas, some will go home winners but most will go home empty-handed, which is completely different from a company generating long-term shareholder value through growth and competent reinvestment of profits.

Borrowing can be beneficial
When gamblers get themselves into trouble, it is almost always because they have borrowed money in order to keep on gambling. Because of the above-noted points, borrowing money essentially just puts you into a big hole a lot faster. Again, you could get lucky, but more likely you just get broke. 
Depending on the character of the people you are borrowing money from, you might just find yourself in a lot of trouble. But, borrowing to invest is different. For one, you can deduct investment interest from your taxes (try that with your gambling loans). 
But really, it is the prior points and time frame that matter. Over time, your investment returns are very likely to exceed your loan costs, and you will be wealthier than you would have been without borrowing money, unlike hiding from Louis the Loan Shark which is where you will likely be with your money borrowed to gamble with.
After our discussion, my son conceded that some of my points made some sense (a big win for a dad in a discussion with a teenager). I thought I had won this conversation. But then he said, “Thanks Dad, but professional gambler still sounds way cooler, so I will probably just keep saying that when my friends ask me what your job is.”
Peter Hodson, CFA, is Founder and Head of Research of 5i Research Inc., an independent research network providing conflict-free advice to individual investors (http://www.5iresearch.ca).
e m
3 hours ago
Studies have shown consistently that highly trained career hedge fund managers can't beat the market average. 
So, I think your son is right in the sense that if you allocate your TIME to pick individual stocks, you are gambling with your time - hoping it will lead to a portfolio that outperforms simple passive strategies, ie investing in indexed funds.

  • updated 1 day ago
  • Excellent article, Peter, but I must jump into the ring in defence of your son. At 14, he sounds like a smart young man, and wise beyond his years. He doesn't refer to his dad as a 'gambler' but as a 'professional gambler'. 
It is big difference to those of us who are not professional investors or financial advisors! He implies that there is much risk to investing if you don't do your homework. Think of the couple who sold off all of their assets to buy 1,000 computers to do their own cryptocurrency mining or of the physician who had put all of his investments into Nortel shares in 1998. 
I'm sure by the time he reaches 18, your son will appreciate the intricacies of well-researched investing. 

Links:
Feb. 22, 2017 "Luck, fate and a lot of eights": Today I found this article by Douglas Quan in the National Post in the Edmonton Journal.  It's about Asians and their gambling addictions.

This should be my companion article in my Nov. 2016 blog post:

"Does your job make the world a worse place?"/ Should I get a driver's license? 

Tracy's blog: "Does your job make the world a worse place?"/ Should I get a driver's license? (badcb.blogspot.com)


During recent Lunar New Year celebrations, senior managers at the River Rock Casino Resort in Richmond, B.C., gussied up in colourful Qing Dynasty-era costumes and held a cash giveaway with a prize pool of $88,888.

The Fallsview Casino overlooking Niagara Falls boasts that its resort was designed according to feng shui principles.

The newest resort in Las Vegas, the Lucky Dragon Hotel and Casino, delivers an assortment of Asian-themed eye candy - glass-dragon chandelier and lantern-lit night market - and table games popular with the Asian crowd - pai gow and baccarat.

Across North America, the gambling industry's courting of Asian high-rollers is intensifying. 

But how to explain the love affair so many Asians seem to have with gambling? 

And at what point does the industry's aggressive marketing tactics cross the line from savvy to predatory? 

"When I was growing up in high school, if I told my parents I was going out drinking with my friends, they would absolutely yell at me, and say, 'No, that's wrong,'" says Timothy Fong, a UCLA psychiatry professor and co-director of the school's gambling studies program.

"If I said to them, 'I'm going over to my friend's house to play poker tonight, they'll say, 'Go for it, have a good time.'" 

Gambling is deeply rooted in many Asian cultures, stretching back to 3000 BC, and is celebrated and promoted during cultural holidays, says Fong, who has done extensive research on Asian gamblers and addressed the B.C. Lottery Corporation's annual New Horizons responsible gambling conference in Vancouver on Tuesday.

"The experience for a lot of Asians gambling is they're just drawn to it. ... They'll say things like, 'Well, it's in our blood; it's just who we are.'" 

There is also an intense belief among many Asians that while their fates are predetermined, there will be periods in their lives when they get lucky or when good fortune will be bestowed upon them.

At a casino, they'll try to find ways to influence that luck. That's where superstitions - or "false rituals" - come into play.

Take baccarat, for instance, a card game that is all chance, Fong says in an interview. Many Asian players will look for patterns in the game, believing they can ride a path to victory.

Others might think they can influence the outcome merely by where they sit or how they handle their cards.

"I was in Stockholm, Sweden. There are no Asians there," Fong says. "(Yet) 20 per cent of the casino crowd was Asian. I saw the same behavioural trends: groups of guys and women huddling around a blackjack or baccarat table, tracking the patterns, touching the cards in a ritualistic manner."

Some researchers theorize there might also be something about the immigrant experience that drives Asians to gamble - perhaps related to feelings of isolation or loss of social status.

But Fong says more research is needed.

"I would certainly agree that stress related to acculturation can drive up the need to escape and subsequently to gamble, but no work has been shown to specifically say that the Asian immigrant experience is much more difficult ... than any other."

Whatever the causes, the gambling industry has taken notice. It is routine for major casinos to offer daily shuttle transportation from Asian population centres, hire staff who speak Asian languages and to serve up Asian cuisine and entertainment.

No Canadian casino contacted by the National Post would discuss its Asian marketing strategies. But across the border, Melissa Free, vice-president of marketing at Seneca Gaming Corporation, which operates three casinos in upstate New York, acknowledged that Asians are "an important market ... in every gaming area in the United States."

Asian-Americans contributed as much as 25 per cent of casino revenues, The New York Times reported in 2011. No Canadian figures were available.

At the Seneca Niagara Casino, Lisa Chan, vice-president of Asian marketing, trains staff in cultural do's and don'ts.

For instance, do not tap a player on the shoulder. "Asians believe it's bad luck because there's a light to their fire, and you've just put it out," Chan says.

Staff also participate in dinner parties with loyal customers in the hopes of cultivating new relationships with "high-end players."

When it comes to casino design, no detail is too small. At the Lucky Dragon in Las Vegas, the main bar is eight-sided for good fortune. 

"And it's hard to find a No. 4 on the property," the Los Angeles Times reported. "The unlucky digit is absent from room numbers and the phone directory. The nine story hotel even skips a fourth floor."

Amid all these marketing enticements, some studies suggest Asians living in western countries could be paying a price in the form of higher rates of addiction.

Studies from the 1990s showed problem gambling rates among Chinese were about eight per cent in Calgary and five per cent in Montreal. Meanwhile, a 2002 study in Connecticut of almost 100 Cambodian, Laotian and Vietnamese refugees identified almost 60 per cent as being "pathological" gamblers.

And an analysis of a 2006 California state study found Asian-Americans whose primary language was not English were nearly three times more likely to be problem or pathological gamblers compared to the general population.

"Every time we go inside an Asian-American community ... we come back with results where the rate of gambling disorder is much higher than you would expect just by random chance," Fong says.

All of which raises the question: is it ethical for the industry to be wooing Asians so aggressively? 

Fong isn't convinced the industry is being predatory. Those buses shuttling Asians to casinos?

 One interpretation is that they are preying on vulnerable citizens, he says. 

"The other is to say, 'Those people want to ride the bus.'" 

Travis Sztainert, a gambling researcher in Ontario, says the industry has every right to turn a profit and gambling provides seniors with the benefits of socialization and a sense of belonging.

"Having said that, I think there may be opportunities ... in terms of corporate social responsibility, to limit advertising/marketing to vulnerable populations," he said via email.

The industry says it's doing exactly that, spending $120 million each year in Canada on education, prevention and treatment, and delivering responsible-gaming messages.

"No one's having to twist anybody's arm," says Paul Burns, vice-president of the Canadian Gaming Association. "It's part of the DNA of our industry."

Still, there's an average of 300 clients who show up at Chinese Family Services of Ontario each year seeking help for gambling disorders, says Mary Fong, a registered psychotherapist and gambling counsellor.

They are typically 45 to 65, first-or second-generation immigrants from Hong Kong, mainland China and Taiwan. Many "worked like dogs" to build better lives for their children and are now empty-nesters.

Phyllis Chan, a clinical counsellor and prevention specialist contracted by the B.C. 
Responsible and Problem Gambling Program, says members of the Asian community are often reluctant to seek help in order to save face.

 She and her partners have been handing out pencils at Chinese restaurants etched with the number of a gambling helpline.

Meanwhile, the industry's courting continues.

One of the latest job postings at the River Rock casino is for a "Marketing Manager - Asian Market."

http://www.leaderpost.com/news/luck+fate+eights/12964988/story.html



My opinion: 

Help: If you need help, you can call for help anonymously at those helplines.  Or you can go to support groups and see a counselor for subsidized. 

Cornerstone Counselling: They have psychology Masters students who will give 1 hour sessions for $20.  A certified psychologist will read over their files.


My parents: I'm Asian, and my family isn't really interested in gambling.  My dad plays mah- jong and plays with real money.  He's not a gambling addict.

My little brother is interested in gambling, but mainly reading, and watching movies and documentaries about it.

My parents are against gambling.  This was probably in 2017, but I went to the River Cree Casino with my co-workers for the Surf and Turf buffet.  It was great.  My parents asked why I was there, if I was to gamble.  I told them it was for the buffet.

Life is a gamble: You do have to take risks, but you can avoid or mitigate some of them.

Applying for college: I remember a long time ago when my friend Cham told me about how you have to pay for the application fee to apply for college.  What if you don't get in and then you wasted the money to apply?

Tracy: Yeah, but you have to pay to apply.  The admissions are putting the time and effort to read all these applications and choose who gets accepted into this college program and who doesn't.

Going to job interviews: I have to take the bus for 45 minutes to a job interview.  The interview is 15 minutes long.  I then go home.  I don't get hired.  That's like 2-3 hours of my time and effort.  I am reading the newspaper on the bus so it's productive.

I have to attend the interview to get hired.  There's kind of a risk too.



This week's theme is about investing:


"The three steps to invest for multiple goals"/ "Five investing principles that should always apply no matter the season"

Tracy's blog: "The three steps to invest for multiple goals"/ "Five investing principles that should always apply no matter the season" (badcb.blogspot.com)


"Five so-called rules for younger investors that need a reality check"/ "What advisors are doing (or not doing) with their own portfolios in this bear market"

Tracy's blog: "Five so-called rules for younger investors that need a reality check"/ "What advisors are doing (or not doing) with their own portfolios in this bear market" (badcb.blogspot.com)


My week:

Apr. 6, 2023 "A marketing professor said he would cancel his course's finals if anyone could get a million views on TikTok. He kept his promise": Today I found this article by Aditi Bharade on Yahoo:

  • A professor promised to cancel a final exam if his class made a TikTok video that got a million views.

  • His student Sylvie Bastardo recorded the professor's slides and begged for likes on Tiktok.

  • Her Tiktok has been seen 4.9 million times, and the professor has canceled the exam as promised.

A marketing professor promised his students that if anyone made a TikTok video with a million views, he would cancel the final exams.

Matthew Prince, a public relations executive at Taco Bell who teaches at Chapman University in Southern California, put forth this challenge to his influencer marketing class in January, per The New York Times.

However, if he managed a million views on a Tiktok of himself filmed in class or about the class, the whole class would have to do an extra assignment, he told Insider.

Sylvie Bastardo, a 20-year-old sophomore in Prince's class, took up the challenge.

Rather than post original content, she whipped out her phone, and took a video of Prince standing in front of the presentation slides showing the details of the challenge.

Prince's presentation slides read: "Tiktok Influencer Challenge," "First to reach viral status on TikTok wins (Me vs. the entire class)."

Underneath, in bullet points, he wrote: "If you win, the Final is canceled."

Bastardo's caption on the TikTok posted on February 2, said: "My professor said if our class got a tiktok to 1 million likes he would cancel the final!! Please like!!!"

She later told The Times in an interview that she had misheard her professor, who only wanted a million views, not a million likes.

The open call for likes quickly clocked loads of views for Bastardo as the Tiktok community rallied to help her get the final exams canceled.

At press time, Bastardo's TikTok had more than 4.9 million views and nearly 860,000 likes.

Insider saw many comments on Bastardo's TikTok from people who said they were "rooting for" her and her classmates.

Just a day after she posted the video, it had reached a million views. Prince's co-workers saw the TikTok video before he did, and he was shocked when they told him about it.

Prince told Insider that he preferred this method of learning over setting examinations.

"I believe finals are just a reflection of your ability to regurgitate information. Students aren't going to remember any of the questions from a test after they graduate – but I'm hopeful a fun learning opportunity like this could be a memory they take into their careers," he said.

A marketing professor said he would cancel his course's finals if anyone could get a million views on TikTok. He kept his promise. (yahoo.com)



Apr. 9, 2023 "Drive-thru or order inside: What's the quickest way to get your fast food?": Today I found this article by Danielle Nerman on CBC.  The drive- thru is faster:


"We're taught that drive-thru is top priority because the people inside have a little more patience than out in the car."


Then, there's the matter of optics.

If the drive-thru gets behind, the lineup will snake onto the street blocking traffic and vehicles will just sit there, idling. 

Carter says fast food chains don't want to be seen as polluters, which is another reason why they put more resources into moving those cars along.

"These restaurant chains are very cognizant of the environmental impact."

Drive-thru or order inside: What's the quickest way to get your fast food? | CBC Radio

My opinion: I don't drive, so I always go to the counter.  If I'm with someone in a car, then we go to a drive- thru.  Do you want to drive to a fast food place, and get out of car, and walk to the counter, and then get your food, walk back to your car, and start it up again?

Apr. 11, 2023 "Tupperware shares tank as company warns it may go out of business":

Today I found this article by Pete Evans on CBC:


Shares in Tupperware had been on a downslope for years, as the 77-year-old company's main business model of selling direct-to-consumers via consumer salespeople fell out of favour. 

But that trend reversed in the early days of the pandemic, as the sudden popularity of eating meals at home led to new demand for its core product: sealable, reusable food storage containers.

Tupperware books most of its revenue from sales from independent representatives who sell the products door-to-door. At last count, there were more than three million such salespeople — whom the company calls Tupperware Business Leaders — in more than 70 countries around the world.

https://www.cbc.ca/news/business/tupperware-bankruptcy-1.6806751


 Apr. 13, 2023 "Prime Minister Justin Trudeau praised for interaction with 'confused' PPC supporter": Today I found this article by Elianna Lev on Yahoo.  I'm neutral with Trudeau, but he sounds smart here where he is asking good questions:

“OK, do you think women should have the right to choose what happens to their own bodies?” Trudeau asks the man filming him.

“Personally no,” he responds.

Trudeau asks if he thinks that he has a right to choose what happens to women’s bodies.

“Well, I think if they’re sleeping around they shouldn’t be allowed to abort the baby, personally,” he says, calling himself pro-choice before correcting himself and asserting that he’s pro-life.

When pressed further by the prime minister as to why he thinks women shouldn’t have rights over their own body, the young man says that it’s “their fault they chose to sleep around.”

When Trudeau asks about women who are raped, the man stops recording on his iPhone and tells him that’s where it gets complicated, protesting that it’s a “super specific example.”

“It’s an all too common example,” Trudeau responds. “Women get raped all the time and it’s something we have to take seriously.”

When Trudeau asks the young man again if a woman who gets raped should have access to abortion, he says he’s split on it.

After some further back and forth on the topic of abortion, the video ends with Trudeau telling his confronter: “Well, it sounds like you need to do a little more thinking and a little more praying on that as well.”

On social media, many praised Trudeau for taking a patient approach with the man, who didn’t appear to have carefully thought through his points.


Prime Minister Justin Trudeau praised for interaction with 'confused' PPC supporter (yahoo.com)


Suburu commercial:



My friend Leah Beaudry is in this commercial.




Subaru Canada


 

 
They say the True Urban Legend fits down tight streets and fits all your weekend gear. Where will you take the All-New #2024Crosstrek? 👇
All reactions:
Leah Beaudry


Harvest Meat: 


Wieners
1.5 kg

This is made of pork and beef.  It's gluten free.  My family and I really like this.  I like this so much I'm writing about this on my blog.


https://www.harvestmeats.ca/products/wieners/wieners-1500g/


https://www.harvestmeats.ca/products/wieners/



Posted by at No comments:

"Five so-called rules for younger investors that need a reality check"/ "What advisors are doing (or not doing) with their own portfolios in this bear market"

Jan. 28, 2022 "Five so-called rules for younger investors that need a reality check": Today I found this article by Peter Hodson on the Financial Post: 


We’re getting a few questions from customers lately on how a young person should start investing. It is, of course, ironic that these questions are coming in the midst of a giant stock-market correction, one of the fiercest, and one that’s making even seasoned investment professionals quake with fear. But we love it. The best time to invest is when everyone else is panicking.

Young people flock to the shopping mall when there is a sale (well, they used to, pre-pandemic), so why not flock to the stock market when it is on sale?

There are dozens and dozens of suggestions one could make to a new young investor. Some are good, some are bad, some are conflicting. Let’s look at five and put them through the grinder.

Always keep six months of cash on hand for emergencies

This rule can make sense when you are older and have a lot of fixed expenses and/or a mortgage. But young investors don’t generally have a lot of excess cash in the first place. If you have a big cash cushion on hand for emergencies, it’s not very likely you will have much left over for investing.

Assuming a young adult has a job, we would skip this so-called rule and start investing as early as possible. The best time to invest, as they say, is yesterday. 

This cushion-of-cash rule can also be a bit relaxed these days, because there are 11 million job openings in North America right now. If a new investor loses their job for some reason, they are likely going to be able to find another one, very quickly.

Avoid advisers and high fees at all costs

This rule is tricky for us, since our company specifically helps DIY investors, and adviser fees can indeed be a big drag on a portfolio’s performance. 

But we would rather see a young investor work with an adviser in order to position themselves properly than see them make all sorts of mistakes in their early investing days.

If a young investor wants to go out on their own later, then fine, as long as they have learned the basics and understand the market more. We have seen too many new investors gamble, make mistakes and then never return to the market and never reach financial security. If an investment adviser helps them stay in the game then we are all for it.

You are young, so use leverage to maximize returns

Um, no. We have seen this rule a few times, the idea being that a young person has the time to stick with investments and get good long-term returns. 

A young investor also tends to grow their income with time. Thus, leverage can increase returns and can be covered if things go south for a while.

But we think this is a horrible idea. Using leverage to buy investments when starting out is only going to stress young investors out more. Trust me. I once (at 23, after the crash of 1987) had to cover a margin call with a credit card. 

Leverage can be a wonderful thing when the market is rallying, but it can be downright deadly in a downturn. 

We would never suggest using debt for a young investor just starting out.

Invest in what you know

We don’t mind this rule, but it can’t just be applied willy-nilly. If I followed this advice in the ’90s, I would be stuck with a bunch of worthless Blockbuster Video shares today.

Young people can identify trends amongst their peers, but this does not always translate to investment success. 

Homework is needed, and young investors may not be so good at doing their homework. But it can certainly work at times: my two daughters loved Aritzia Inc. stores, so we covered the company, and that stock has tripled in the past three years.

Buy the dip

This is not the best advice for young people, which might seem contradictory if you recall our opening paragraph that suggested buying stocks when they are on sale. But it is not. Buying the dip is essentially just another form of market timing. 

Dip buyers are assuming the market will bounce after the dip. It may, it may not. But it is a form of timing, nonetheless, and we absolutely do not think investors should attempt to time the market.

We would change this bit of advice to “buy consistently.” 

Invest every month, 

every quarter, 

whatever you can, 

at regular consistent intervals, with consistent purchases. 

When the markets drop, your investments will buy more (exchange-traded funds, stocks). 

When the markets are high, your dollars don’t go as far. It turns volatility into your best friend, rather than something to fear.

Peter Hodson, CFA, is founder and head of Research at 5i Research Inc., an independent investment research network helping do-it-yourself investors reach their investment goals. He is also associate portfolio manager for the i2i Long/Short U.S. Equity Fund. (5i Research staff do not own Canadian stocks. i2i Long/Short Fund may own non-Canadian stocks mentioned.)

Five so-called rules for younger investors that need a reality check | Financial Post

Buying the dip on the way down is a totally different beast than buying the dip on the way up. What are the odds of a severe market correction Play the odds



Aug. 8, 2022 "What advisors are doing (or not doing) with their own portfolios in this bear market": Today I found this article by Renee Sylvestre-Williams on the Financial Post:

The stock market is known for its ups and downs, where investments might see good returns before trailing off, or vice versa. 

The “bull market” is a market where there are increases in value of 20 per cent or more over a minimum of two months. 

As expected, due to rising inflation, we are currently in a bear market, where there are value drops of over 20 per cent on stocks.

As an investor, a bear market is a key time to consult with financial advisors and planners to find out what can be done to mitigate the effects on your portfolio.

Some advisors are also investors, who are personally affected by market shifts, and even more in tune with how to help their clients. We spoke to four advisors across North America to ask them what they’re doing with their own portfolios and what they’re telling clients.

The answers were varied but all four advisors have common lessons that any investor can use to navigate the ups and downs of the market.

Long-term outlook

Elke Rubach, president of Rubach Wealth in Toronto, Ont. isn’t looking at her portfolio because she’s a long-term investor focusing on the next 10 to 20 years and her portfolio is “really boring.”

“I’m not high risk. I didn’t go out and buy Bitcoin to begin with,” she says. “My portfolio is

diversified between [commercial and personal] real estate, 

insurance and funds 

that are already diversified, some are up some are down but it’s not money I need right now.”

Higher-risk investments

Herman Thompson Jr., a financial planner with Innovative Financial Group in Atlanta, Ga. says he checks his portfolio when he makes a trade.

“It would be hypocritical of me to tell my clients I know what they’re invested in but I don’t know what I’m invested in.”

Thompson is continuing his strategy of dollar-cost averaging: 

putting a certain amount of money into the market every month. 

Some goes into his 401K or into investments. Since the markets are on sale, he’s taking a few more risks with his purchases.

“What I’ve done in my dollar cost averaging is to actually turn the volatility up. I want to be buying the riskiest stuff that I can buy right now because it’s been hurt the most.”

One of those risky funds is with an investment bank that has a mutual fund company. Thompson says this bank has “the best growth managers in the world,” and since they’re down 40 per cent for the year, he’s buying into the fund every month.

Other than that, he’s keeping a strong cash position for his short-term investments.

Keeping things the same

Then there are advisors who lay it all out there online. Robb Engen, a fee-only financial planner and co-founder of Boomer & Echo in Alberta, recently wrote a blog post called, “How I invest my own money.”

“I wanted to show how your financial or your investment strategy shouldn’t change based on the current market conditions,” he says. “It should be something that you can stick to for the long term. 

In my case, what that means is that I’m not chasing what’s doing a little bit better and I’m not panicking when things are not going as well.”

Like the other advisors, his portfolio is diverse. 

He’s currently invested in Vanguard’s VEQT ETF, which has 13,000 stocks all across the globe bundled into one product. 

That way, it’s harder to see each individual stock so there’s less chance of worrying over the poorly performing ones. He’s also holding some cash in a tax-free savings account to supplement his downpayment on a new house.

Staying the course

John Sacke is an investment advisor and portfolio manager with BMO Nesbitt Burns in Toronto, Ont. He doesn’t manage his own portfolio, 

“I find the emotional attachment one has of one’s own money, sways your bias.”

However, Sacke l makes five trades a year that make up less than three per cent of his portfolio, mostly for fun.

Sacke has 85 per cent in equities and 15 per cent in fixed income such as bonds and preferred shares. He’s not worried about the dip in the market because history has shown that it will recover and often surpass previous earnings.

Key takeaways

When it comes to advice on dealing with bear markets, all the advisors were on the same page:

  • Don’t react emotionally and pull your money out of the market because markets move in cycles and what goes down will go back up.

  • Don’t attempt to time the market, instead, as Rubach says, “It’s time in the market, not timing the market.”

  • Understand your risk tolerance. That way, you’re not making risky purchases in your portfolio.

  • Have a diversified portfolio. That way, lower-performing assets will be balanced by better-performing ones.

  • If you’re not sure, work with an advisor. “Pick an advisor you trust and one who loves working with people,” says Sacke.

When it comes to bear markets, no one is losing sleep over it. As Sacke says, “I might look at my portfolio late at night when I can’t sleep. I’m not worried about my money, I just don’t sleep very well.”

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

What are advisors doing (or not doing) with their own portfolios in a | Financial Post

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"The three steps to invest for multiple goals"/ "Five investing principles that should always apply no matter the season"

Jun. 1, 2022 "The three steps to invest for multiple goals": Today I found this article by Fisher Investments Canada. This is an advertisement/ sponsored content:


Tackling multiple financial goals can be a challenge. Maybe you’re trying to ensure a comfortable retirement while saving for a home purchase. Perhaps you want to take a dream holiday in several years. Whatever the case, typically, investors are in pursuit of multiple financial goals. The difficult part is developing a strategy that allows you to pursue them all.

Fisher Investments Canada has three steps to help you plan investing with multiple financial goals in mind. Thinking and acting strategically now can have a significant impact on achieving these goals in the future.


Step one: Prioritize your goals and establish time horizons

The first step is to list your main financial goals and estimate how much money you’ll need for each. 

Keeping your list short can help you stay focused. 

Rank your goals by importance to you and your family. 

When prioritizing, consider whether the goal is a necessity or “nice-to-have.” In most cases, necessities should take precedence. You may want to take a luxury holiday, but you likely need to save for retirement. So, saving for retirement would almost certainly be a higher priority.

The next consideration that will help prioritize your financial goals is how much time you have. Fisher Investments Canada recommends separating your investment goals into at least three main “buckets”—short-, medium- and long-term. 

These buckets are important because the time horizon for each of your goals will influence your investment strategy. For example:

  • Short-term bucket: Money to be used in the next three years for goals such as a kitchen remodel, large wedding or dream vacation.

  • Medium-term bucket: Money you’ll need about four to seven years from now. Goals for money in this bucket might include a down payment on a home or starting a business.

  • Long-term bucket: Money that you will need eight or more years in the future. Bigger financial goals like retirement might fall into this category.
TIP: Get help from a financial professional. It can be difficult to determine how much you’ll need to reach your goals, especially for the larger, longer-term ones. 

A financial professional can help you define your goals and think about ways to prioritize them. 

As you progress, they can offer unbiased guidance and perspective to help make sure you’re on track.

Step two: Get the right investment mix for each goal

Once you’ve placed your goals into different time-horizon buckets, it may make sense to set up different investment portfolios to meet these goals. 

That way, you can match each time horizon with the appropriate asset allocation — the mix of stocks, bonds, cash or other investments.

Picking the proper asset allocation gives your money the best chance of meeting your goals while taking appropriate risks. 

Generally, the longer your time horizon, the more risk you can afford to take. Here are some examples of asset allocations for various time horizons.


  • Short-term bucket (within the next three years): Given the short timeline, preserving your capital will be a main concern. That often means limiting short-term market volatility. 

  • Consider more stable investments like cash, money market funds or certificates of deposit (CDs). You won’t see much growth from this asset allocation, so regular contributions will do most of the work.

  • Medium-term bucket (four to seven years out): Given the extended timeline, the portfolio can target a mix of growth and capital preservation. 

  • Fisher Investments Canada believes this calls for a portfolio of equities and fixed interest securities. 

  • The equity allocation should provide growth, while the fixed interest can help reduce short-term volatility.

  • Long-term bucket (eight or more years): For these longer-term goals, growth will be the primary aim. Fisher Investments Canada suggests that this portfolio is best allocated almost entirely to equities. The short-term volatility will be a small price to pay for the long-term growth that equities can offer.
TIP: Automate your investing. Contributing money to various savings and investment accounts on a regular basis can be a hassle. 

If your bank allows, consider automating your investment contributions. 

That can help simplify the process and prevent you from accidentally spending the money that will help you achieve your financial goals.

Step three: Review regularly

Fisher Investments Canada doesn’t recommend obsessing over day-to-day account balances; however, it is critical to check in with your investments at least once a year to make sure you’re still on track.

Your investing strategy probably shouldn’t change, but you may need to occasionally rebalance your portfolios to make sure you’re still investing in line with your goals. 

As the years go by and you close in on your medium- and long-term goals, you’ll likely need to adjust the asset allocation to reflect the closer time horizon.

As you achieve some financial goals, others will emerge or change. You will also want to adjust your investments to incorporate those new goals and priorities. 

You will want to revisit your investment strategy any time there’s a major life change to see if you need to make a modification.

TIP: Don’t underestimate your retirement needs. As you approach your retirement age, don’t assume you need to shift into low-risk, low-return investments. 

Many people live in retirement for 20 to 30 years or more. 

That can make “living in retirement” a long-term goal, which may require significant investment in equities to keep up with inflation and ensure you don’t run out of money.

Investing requires focus to reach your goals. 

However, it doesn’t have to mean focusing only on one goal. 

By prioritizing your financial objectives, 

selecting the appropriate investment mix for each 

and checking in regularly with your investments, 

you can give yourself a greater chance of reaching multiple financial goals over time.

Investing in stock markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. 

Past performance is no guarantee of future returns. 

International currency fluctuations may result in a higher or lower investment return. 

This document constitutes the general views of Fisher Investments Canada and should not be regarded as personalized investment or tax advice or as a representation of its performance or that of its clients. 

No assurances are made that Fisher Investments Canada will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. 

In addition, no assurances are made regarding the accuracy of any forecast made herein. Not all past forecasts have been, nor future forecasts will be, as accurate as any contained herein.

Fisher Investments Management, LLC does business under this name in Ontario and Newfoundland & Labrador. In all other provinces, Fisher Asset Management, LLC does business as Fisher Investments Canada and as Fisher Investments.

Disclaimer: This story was provided by Fisher Investments Canada for commercial purposes.

Sponsored:Fisher Investments Canada: The three steps to invest for multiple goals | Financial Post


Aug. 26, 2022 "Five investing principles that should always apply no matter the season": Today I found this article by Peter Hodson on the Financial Post: 

I hate to break it to you, especially to any kids reading this, but school starts in a couple of weeks.

Investors shouldn’t really take the summer off, but many do, so consider this a refresher course in five basic investment principles that should apply in both bear market and bull markets to get your brain in shape for the upcoming school/investment year.

Pay attention, class. There won’t be an exam, but losing thousands of dollars because you forgot the basics can be just as disheartening as getting a D on a test.

Debt can kill a company

Endo International PLC filed for bankruptcy protection this week. This is the company that took over Canada’s Paladin Labs Inc. about a decade ago. Endo shares are down 91 per cent this year. The problem? Very high debt. Endo has US$8 billion in debt after a large acquisition spree. Cash flow in the past 12 months? Just US$80 million. It paid US$560 million in interest charges in the past 12 months.

Cineworld Group PLC this week said it was “considering” bankruptcy. The stock is down 95 per cent in the past year. This company tried to take over Cineplex Inc. in 2020, with about the worst timing a company could have (just prior to the COVID-19 shutdown). It had about US$8.9 billion in debt at the end of fiscal 2021 including lease liabilities, more than 27x its 12-month cash flow. Bausch Health Cos. Inc., once Canada’s largest company, this week retained advisers to help “map out its future.” Its stock is down 81 per cent this year. It has US$22 billion in debt, and cash flow of less than US$700 million.

The lesson here: Debt can kill a company, sometimes quickly. Make sure the companies you own can service their debt. Times are not always great, and a company must be able to survive before it can prosper.

Dividends rule

We discussed in a prior column how many companies are increasing their dividends, even with a possible recession ahead. That’s great, but even better is that dividends provide a big part of an investor’s return over time. 

The amount can vary depending on who is doing the academic study and the timeframe chosen, but BlackRock Inc.’s global equity team not that long-ago suggested 90 per cent of equity returns in the United States over the past century have been a result of dividends and dividend growth. We do not think it is that high, and S&P Global Inc. claims it is around 30 per cent.

Regardless, dividends certainly help investors grow their portfolios. What’s more, a dividend helps you keep your stocks during rough market periods. 

Of course, the longer you hold an investment, the greater its potential compounding impact on your portfolio. 

The lesson: Own some dividend stocks.

Time vs. timing

Our clients always ask: “Is this a good time to get into the market?” We — almost always — say yes. Equities have provided substantial long-term returns over time, even if you buy just prior to a crash or a market correction.

No one knows if the market is going to crash tomorrow, or soar. You can guess, trade, pay taxes, go to cash, borrow money to buy, buy technical trading software and so on, and none of it is going to improve your market predictive ability. 

Just invest what you can when you can and see the benefits over time. 

The lesson: stay in school (stay invested).

Share takeovers can backfire

Yamana Gold Inc. recently agreed to an all-share takeover by Gold Fields Ltd. The transaction calls for each Yamana share to be exchanged for 0.6 shares of Gold Fields. But Gold Fields’ shares were US$12.20 ($15.86) each the day before the announcement, and are now US$8.75 ($11.38). Because the takeover compensation is in shares, Yamana shares, even with an announced takeover premium of 37 per cent, have fallen to $6.21 from $7.03.

I would get pretty depressed if I owned shares in a company that received a takeover bid, and my shares fell 13 per cent. Of course, things could have gone the other way, but the lesson here is that in a share-exchange takeover, you are still at the mercy of the stock market. 

Share-exchange deals happen all the time, and don’t require debt, but they can still be risky for shareholders in the target companies. 

A secondary lesson: Cash does not drop in value.

Permanent losses versus temporary losses

A loss is the difference between what you paid for an investment and what it is worth today if it dropped (usually evidenced by a market price). 

Permanent losses are those that have been fully realized through sale, liquidation or termination (bankruptcy). Such losses are not coming back.

Market prices can go above intrinsic value when investors are bullish and greedy, and can plummet when investors are scared and fearful. 

But the intrinsic value of a company doesn’t change nearly as much as the market price. 

The job of the intelligent investor is to avoid permanent losses and to accept temporary paper losses. 

Most investments are subject to the prospect of permanent loss, but the key is to get paid for that risk by the prospects of much higher returns.

This year, you no doubt have lots of paper losses, with all major markets down on the year. But is this always going to be the case? (Answer: no). 

If you sell now, all you have done is crystalize a permanent loss.

Every situation is different, of course, but the lesson here is to determine what’s happening with your investment. 

Is your investment bad, or is the market bad? 

Knowing the difference will be key in whether you should accept a permanent loss or not.

Peter Hodson, CFA, is founder and head of Research at 5i Research Inc., an independent investment research network helping do-it-yourself investors reach their investment goals. He is also portfolio manager for the i2i Long/Short U.S. Equity Fund. (5i Research staff do not own Canadian stocks. i2i Long/Short Fund may own non-Canadian stocks mentioned.)

Five investing principles that should always apply no matter the season | Financial Post


"A secondary lesson: Cash does not drop in value."

REALLY??? 😂


A very good column and pointing out that “the intrinsic value of a company doesn’t change nearly as much as the market price.” was excellent. However, dividends don’t deserve a lot of emphasis.  They are popular but there is no net benefit. 


The amount received is offset by an identical decline in the intrinsic value of the investment. 


When buying equities, an investor is buying part of a business and it is how well the business is doing that matters. 


Technology stocks that have dominated the growth in the S&P are not known for paying significant dividends. Going back 100 years is pointless as the industry has only existed for around 40 years.



Apr. 4, 2023 My opinion: I'm rereading these articles, and I see the "really?" comment is not on the Financial Post site anymore.  I thought the comment was kind of funny.


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