Rob Crocker

🔍 Investment Management vs. Holistic Financial Planning: Seeing the Forest for the Trees 🌳💼 In the world of finance, it's easy to get lost in the details of investment management without considering the broader financial landscape. Let me share a story that illustrates the difference between focusing solely on investments and embracing holistic financial planning: 🌟 The Tale of Two Investors: Meet Alex and Jenny. Both are diligent savers with a passion for building wealth. Alex opts for investment management only, diligently tracking market trends and optimizing portfolio returns. Jenny, on the other hand, embraces holistic financial planning, partnering with a trusted advisor to craft a comprehensive financial roadmap. 🔍 The Narrow Focus: Alex, driven by the allure of maximizing investment returns, dedicates all efforts to fine-tuning portfolio allocations and chasing market gains. While Alex's investment prowess yields impressive short-term gains, there's a crucial component missing from the equation: a holistic view of financial well-being. 💼 The Big Picture Perspective: Jenny takes a different approach. Recognizing that financial success extends beyond investment performance, Jenny collaborates with her advisor to address broader financial needs, including retirement planning, tax optimization, risk management, and estate planning. 🌳 Seeing the Forest for the Trees: As time passes, the limitations of Alex's narrow focus become apparent. Despite stellar investment returns, Alex realizes too late the importance of comprehensive financial planning. Meanwhile, Jenny thrives, confident in her holistic strategy that considers all aspects of her financial life. 🔑 The Key Takeaway: While investment management plays a crucial role in wealth accumulation, true financial success lies in embracing holistic planning that considers the bigger picture. By prioritizing comprehensive financial planning, individuals like Jenny position themselves for long-term security and peace of mind. Are your financial objectives clearly defined in a customized financial plan? If not, let's connect. #BeWellAdvised #FinancialPlanning #InvestmentManagement #WealthManagement #PersonalFinance https://lnkd.in/ePZydm-m ​

5

Nicolas Bérubé on the The Empowered Investor Podcast 🔥 Nicolas is a champion of Indexing Investing and is helping Canadians tremendously. He is helping them: Get an sensible portfolio. Pay less fees. Have an evidence based investment philosophy. Telling them the truth about DIY & Behavioral pitfalls. There is still a LOT of work to do to unbundle Canadians from High Fee Mutual Funds and their love and blind trust of the banks but Nicolas is helping the cause tremendously. Tune in here 👇

3

Thinking of retiring early? Taking CPP before age 65 results in a permanent reduction of your monthly benefits. For every month you take CPP before age 65, your benefits are reduced by 0.6%, which amounts to a 7.2% reduction per year. If you can comfortably support yourself without early CPP benefits, delaying might be beneficial. We can help you assess your current and projected financial needs; there is no one-size-fits-all answer.

3

David Rosenberg-Why the BOC needs to cut rates now (On both sides of the border, the private sector is hurting. Now, we just need governments to learn how to spend less) The message: Go long on the Government of Canada bond market, with the biggest yield declines to come at the front end of the curve and the greatest total net return at the back end due to convexity and duration. This should be good news for the banks as well as other rate-sensitives such as pipelines, real estate investment trusts (selectively) and utilities.

4

Woah that's a lot of open space – there's an investment opportunity here, but only for the right risk reward (see below). This is a great article about the status of Toronto's office situation…it's actually not as bad as other major hubs in the US, like San Francisco, but pain is nevertheless being felt. One of the apparent trends is that those who want space in the core now have ample bargaining power so they are trading up – either moving in or moving up to the highest-Class A towers "with more amenities such as green spaces and cutting-edge ventilation systems". "Newer buildings built after 2015 are seeing significantly stronger demand than older buildings that are still five-star buildings. This gets missed in the flight-to-quality narrative." The numbers really put this into perspective – Class A occupancy is approx. 79%, whereas Class C occupancy is only approx. 54% (ouch). From what I've read, those trends (moving up market) are consistent across the US too/ It's hard to take the investment hat off and when there's distress, there's opportunity. So how do you play this? Tough question, but it seems to me that those older office towers are going to need refurbishing if they want to be competitive since there still is ample space available in newer towers. That, combined with a major spend from tech companies on data centers, electrification, new power generation, etc. means that businesses that will have demand across the board will benefit greatly. One company in particular that we've been doing research on, with collaboration with our US analyst team, has significant exposure to big multi-year secular trends of electrification (smart everything), power grid hardening, reshoring, Chips act spend, data centers, energy transition, etc… They've been investing (causing lower recent profitability and thus a lower multiple) in creating "an Amazon effect", to quote their CEO, for critical products. Despite significant investment, their return on invested capital (ROIC) is above 30% with return on equity (ROE) > 45% and an operating margin above 25%. Yet, they only trade at a P/E multiple of about 10. What is very attractive is that they may very well see the holy grail for investors: accelerating revenue growth (with increased spending from the trends mentioned above), operating leverage – meaning more $$ fall to the bottom line (earnings grow faster than revenue), and significant multiple expansion.

5

Want to get operator angels on your cap table? This list is for you 👇🏼 I posted recently about how angel cheque sizes and the value angels bring are not linked. Many of you asked who the best operator angels are, so I wanted to share a list of some of the most active operator angels. As angel investing has grown in popularity and the friction points of writing angel cheques have been reduced, anyone in your operator network could be a potential angel for your startup. No need to comment, like, or share a photo of your dog to get the list; it's in the comments below! Duplicate the list so you can add other operator angels active in your vertical. #founders #vc #angelinvestor #startup

139

28 Comments

www.GKirklandWealth.com While this article is UK-based, and we are Canadian in my practice, which does not include estate planning advice - this article points to the importance of estate planning; a very important component of financial health.

3

Why aren't oil prices spiking right now? Despite brewing tensions between Iran and Israel, investors are maintaining their confidence, betting on cooler heads prevailing and geopolitical risks being contained. Do you have a question about investing? Feel free to call me at 416-332-3863 or email me at allan@allansmall.com

1

The AI landscape continues to mature and consolidation becomes increasingly inevitable. Being able to identify who those players are early on could yield fantastic results for your portfolio! Do you have a question about investing? Feel free to call me at 416-332-3863 or email me at allan@allansmall.com

1

Absolutely! 💯 CPP should have had far more money in the benchmark, with adequate exposure to fixed income. So many high priced consultants wanting to buy private this, and private that - its far inferior to the index. #coreandexplore #theindex #passivebenchmarking #simplicity #wealthmanagement #portfoliomanagement #comprehensivewealthmanagement

5

This is so misleading...shame on the author. You can do a lot of "fun" things with math and assumptions to prove a point or air frustrations and it strikes me that the latter is the more likely scenario here. First off, 1.8% fees are generally a thing of the past, even many mutual funds have been lowering their rates to be more competitive with ETFs (thankfully). I do, however, think that there are plenty of people with high-fee legacy funds that are underperforming and being underserved. If that sounds like it could be you, then it's on you to demand more or make a change. Second, they assume that 1.8% is then compounded at 4% over time. Third, when the RRSP/RRIF is in wind down mode vs. the continuously compounded "fee account", there is no "value" assigned to the withdrawals so you have an account that has mandatory withdrawals (RRIF) showing the account value declining vs. a steadily increasing fee amount. I'm not going to defend all investment advisory fees because some advisors underserve clients, and some managers are terrible, but there should be value for the fee you're paying. I've seen some do-it-yourself portfolio's with no game plan where many of the stocks are at, or close to, zero and the other businesses aren't fully understood - who can blame them too, it takes a full-time job to properly research a portfolio of companies and then track them quarter-by-quarter. Would those people be better off without professional direction, even if the investment team underperformed? In today's world, what you get for your management fee should cover much more than investment advice... ...make sure you're getting that extra value!

8

2 Comments

Google's ($GOOG) results are the envy of corporate earnings season. However discouraging macroeconomic data pulled some of the wind out of their sails after their most recent price spike. Do you have a question about investing? Feel free to call me at 416-332-3863 or email me at allan@allansmall.com

2

This is a great lesson for those who are inclined to be passive investors – let’s dive into why WealthSimple’s (WS) managed portfolio’s have underwhelmed. To be clear, there is nothing wrong with passive investing, but you need still need to know where you are investing! As I’ve commented before, the S&P500 has been the most difficult index to beat over the last decade because of the incredible performance of the FAANGM (now updated to the Mag-7). However, other markets around the world have been much easier to beat, and the S&P have crushed them all. A few weeks ago (see post link below) we discussed how equity markets are efficient, and thus passive investing is fine, but other less efficient markets, like bond, are ripe for active management outperformance – and by a wide margin if you can analyze and choose a good portfolio management team, as we saw. That point helps us understand why WS’s conservative portfolio (62.5% bonds) has compounded at a mere 2.6% performance over the past 7-years. Turning to the Growth portfolio that is 80% equity markets, only 26% has been invested in US companies vs. 30% in global/international markets and 14% in emerging markets. From the graph attached, you can see that the US market has trounced the other developed markets over the past 10-years, and emerging markets has been largely flat over that whole period. The following post from February provided a reason why the US market has outperformed by so much – US companies, on average, are far more profitable than companies from other regions: https://bit.ly/3zsU50S Bottom line: passive investing isn’t a silver bullet. Geographical and asset class allocations matter tremendously to your ultimate investment experience. Here is the prior post on passive vs. active investing in bond markets: https://bit.ly/3RU8M3k

13