BMO Nesbitt Burns
1 First Canadian Place
39th Floor, P.O. Box 150
Eight habits of successful investing
Rule #1: Know why you are investing, and keep the end in mind Why invest?
- Know what your money is for – keep the end in mind
- Know what you own and act like an owner
- Understand and manage the risks you face
- Have someone managing your money who treats your money uniquely as you are
- Know what it costs
- Avoid fads and complexity and quick fixes
- Appreciate that our attitudes and behaviour towards money are directly related to success
- Life is not a spreadsheet.
Anyone can invest. Successful investors know what their money is for- be it income for retirement, fund an important cause, support children or grandchildren.
At the Ryback Group, we help clients clarify what they need their money to do first before we embark on investing. We go well beyond just the numbers to understand the emotions attached to the goals each client has, and respect that these goals can and will change as people’s lives change.
Rule #2: Know what you own and act like an owner
Do you remember the pride owning your first house?
We have drifted far from the pride and responsibility that comes with owning a stake in a company. Investors flip shares like pieces of paper.
At The Ryback Group we actively educate our clients to know the companies that they keep, and keep them as long as they are good companies. We prefer direct ownership of companies, not through mutual funds and money managers.
Rule #3: Align your investments to your risk personality
You can know and control how your money experiences and biography affects your view of risk. Markets you cannot control.
Investors who understand deeply their tolerance and aptitude for risk make choices more aligned with what works for them.
At The Ryback Group, we know that each client’s risk profile is a three-dimensional behaviour drawn from client’s first money memories, how money was discussed in their family. We go far beyond the risk checkmark questionnaire.
Rule #4: Have someone managing your money who treats your money uniquely as you are
Have you ever felt that your investment portfolio is an off-the-rack pre-packaged solution, like a TV dinner?
Your money experiences are unique; your risk aptitude is yours, so your portfolio should be as unique as you. Too many investors have been shoved into packaged shrink-wrapped investment solutions.
At The Ryback Group, we construct portfolios one client at a time. Should a client be averse to tobacco companies due to a family illness, we will avoid them. We are bespoke tailors, not suppliers of off-the-rack clothes
Rule #5: Know what you are paying for advice
How many people know how much a cup of coffee costs, but do not know what they pay for advice?
Too many investors own investments with hard-to-understand fees, hidden costs buried in legal text, or pay fees as they lose money. Having a clear understanding of the costs for advice provides peace of mind; having clear, simple and transparent costs builds confidence.
At The Ryback Group, we believe that clients should pay for what we do – listen, build portfolios, buy and sell companies, and be in regular contact to let them know what is happening with their money. No hidden fees, just old-fashioned accountability.
Rule #6: Avoid complexity, fads and quick fixes
How often have investors been sold products that come with dozens of pages of opaque text, chased the latest new shiny product or taken short cuts?
More than we call care to admit. We live in a world of instant communication, and with it, the temptation for instant and easy fixes. Seasoned investors cast a skeptical eye on overly complex products, where fees are hard to determine, where how money is made is unclear, and what you own is foggy.
At The Ryback Group, we steer clear of hedge funds, structured products, and the like, focusing our client’s money on owning good companies and stable bonds. Costs are lower and we know what we own.
Rule #7: Our attitudes and behaviour towards money are directly related to success
Why do some people succeed and others stumble?
What we think and what we believe bear a strong connection to what we create and accomplish. Lance Armstrong, Terry Fox, Oprah Winfey - our lives are full with examples of people who, despite the odds, rose up with attitude and belief to change theirs (and our) world.
What does this have to do with investment success?
At The Ryback Group, having worked for years with clients, we can say first-hand that people with an attitude of abundance create more abundance. That is the reason we spend so much time understanding our clients - how they view success, how money fits into their lives.
"The greatest discovery of my generation is that a human being can alter his life by altering his attitudes"
Rule #8: Life is not a spreadsheet
We honour the fact that our clients are human and their life goals are not merely data on a spreadsheet. In getting to know our clients very well, we not only do a better job managing their investment expectations we also help them to map out their future from a personal perspective.