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Jonathan Batch
Sharon Tingley
Tric Daer

Toll Free: 800-265-4195
Tel: 519-646-3009

Address
255 Queens Ave.
Suite 1900
London, ON
N6A 5R8
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Our Philosophy

Slow and Steady wins the Race

There is no magic to making your investment portfolio realize the goals you want it to. You simply need to follow some basic rules.

1. You are Investing not Trading:
Have a long-term view for your investments.

Have a long-term view for your investments. Buy quality companies and hold them until their potential is realized or their outlook changes. Short-term events are difficult to ignore, but acting on them is rarely prudent.

2. Diversification is Key:
Everyone knows not to put all your eggs in one basket when it comes to investing, but how many baskets are enough?

Everyone knows not to put all your eggs in one basket when it comes to investing, but how many baskets are enough? A concentrated portfolio of individual securities can be adequately diversified with 15-25 securities. A mutual fund portfolio of 5-8 funds that have low correlations provides all the diversification you need. If you have more than 8 different mutual funds in your account you may have overlap which can lead to watering down of your returns. We can quickly analyze a mutual fund portfolio to determine the correlation between the funds. This tells us whether you have diversification or duplication.

3. Dividends Pay, Period:
Holding a portfolio of blue-chip, dividend paying companies has often proved to be a sound investment strategy.

Holding a portfolio of blue-chip, dividend paying companies has often proved to be a sound investment strategy. It is no different in today's market, and the reason is simple. Consider this analogy. If you get to start a race 1/3 of the way ahead of everyone else, there's a pretty good chance you are going to place well. So, let's assume you have an 8% total return goal on your investment portfolio in order to meet your retirement needs. If you have a 3% annual dividend return built into your portfolio, you are already over 1/3 of the way there.

4. Stocks are not more risky than Mutual Funds:
There is a perception that investing in stocks is akin to gambling, while investing in mutual funds is safe. I see it the other way around.

There is a perception that investing in stocks is akin to gambling, while investing in mutual funds is safe. I see it the other way around. A concentrated portfolio of individual securities gives you much better control over your portfolio and therefore allows you to mitigate risk better than a portfolio of mutual funds. This is because you can know all the information you need to about the stocks you hold, while your knowledge of holdings in a mutual fund is limited. Also, you can quickly change holdings in individual security portfolio as the need arises. The caveat to owning an individual stock portfolio is that you have to have good information. The top rated research of BMO Nesbitt Burns provides that solid basis of information.

5. Be Mindful of Costs:
Another misconception is that developing and managing a portfolio of individual securities is expensive and/or you need to have a huge amount of investable assets to do so. Its not and you don't.

Another misconception is that developing and managing a portfolio of individual securities is expensive and/or you need to have a huge amount of investable assets to do so. To put things in perspective, the average equity mutual fund has an annual internal cost or Management Expense Ratio (MER)of 2.5%, which comes right off the top of your annual return. In todays single digit return environment this can be a significant portion of your total return. That said, the point is not to avoid fees all together - good advice rarely comes without a cost - but to ensure that costs are reasonable and appropriate for your investment portfolio. The bottom line is that if you have an investment portfolio of $150,000 or more, you can create a diversified individual security portfolio that will cost less than your average equity mutual fund. As well, if the investment portfolio is in a taxable account (i.e. not an RRSP account) and managed on a fee-basis, the fee can be tax deductible which reduces the cost even further.