investment planning

You've likely heard the term "financial resilience". You may even know it refers to a household's ability to navigate and overcome financial stress and hardships that life inevitably throws at you. But did you know that financial resilience can be measured?

Investment icon Warren Buffett says there's wisdom in being "fearful when others are greedy and greedy when others are fearful." ¹ He first gave this advice in 1986 and has re-iterated it over the past few decades during times of financial uncertainty: 9/11 in 2001, the 2008 mortgage crisis, the 2011 Black Monday crash and the 2020 global pandemic.

The Tax-Free Savings Account (TFSA) was introduced in 2009 to offer Canadians an incentive to save over their lifetimes. TFSAs provide tax-free growth, flexible investment options, and easy set-up and withdrawals, making this registered account a powerful tool for financial well-being. Below are some key features.

Below are some key features:

If you are a prudent investor, then you have a financial retirement plan that will ensure you have sufficient funds for the lifestyle you envision after you stop working. What constitutes sufficient depends on your ambitions and your hobbies, and also on how long you live. People are living longer, and it's not unreasonable to think that you could live into your 90s.

From listening to the media and online commentators, we have identified two key observations that can impact your efforts to build assets and wealth over time.

The first is the way many individual investors place one-way bets on their market investments. As long as the investment is making money, all is good. But the minute the investment sinks for a couple of days or goes negative (relative to their starting capital), they quickly sell.

It's challenging to be patient in a fast-paced, immediate gratification world, but some things are worth the wait. Consider, for example, how a powerful financial reality (compound interest) can help investors accumulate a lot of assets over time to reward their patience and perseverance. Here's how it works:

During our ongoing weekly discussions with clients, we occasionally get questions from individuals about their approach to investing – particularly in terms of fees and value.

The questions are usually focused on the cost of accessing investment advice, or the cost of buying specific investment vehicles such as mutual funds, ETFs etc. With the rise of fintech, trading platforms for smartphones and so on, we also hear questions about the technology related to buying, selling, and monitoring investments.

Getting emotional about investments can easily lead to poor decisions as investors fall prey to negative thoughts and fears. The chart below helps to illustrate the emotional aspects of investing.

The human brain constantly searches for trends or patterns in things, trying to make sense out of even random events and data. This essential life skill is not very helpful when it comes to investing.

When investment markets officially hit "bear market" territory in June 2022 - while Central Banks in North America and elsewhere were continuing to raise interest rates - questions began swirling about whether the US Federal Reserve (Fed) would once again rescue the markets by exercising the famous Greenspan "put"!

Looking back over the past few years, one thing is certain - we can never be absolutely sure what the financial markets will do at any given time. We can study charts and graphs, both historical and forecasted, we can consult with economic experts, business leaders, and government officials, we can look at inflation and interest rates, and still we cannot predict the markets with absolute certainty.