I have said from day one that I want to be much more than your Investment Advisor. I want to be the first call you make if you are selling your house, need landscaping, looking to buy a car, going on vacation or any number of other needs. So I spend a lot of time looking for and talking with business owners to learn how they go about their business.
I have formed many very good relationships with entrepreneurs that I trust and have been sending them happy clients. As part of a monthly mail out, I am going to highlight two of these businesses so that you can learn about what they do as well.
If something piques your interest please call me at 613-722-1854 so I can make a warm introduction.
GEORGE RABAY – JR Elite Auto Sales
Founded in 1990, JR Elite Auto Sales was founded on principles of luxury, approachability and affordability. We believe lusting after a premiere automobile is merely the first step in acquisition: find what you want, talk to someone who can find it for you, and figure out how to get it.
As a family business, we are committed to the continued happiness of our clients. We specialize in exotic cars, and can provide mechanical service on all cars, any brand or make, import or domestic. Our full service body shop and paint shop is one of the best in the business, and our 8000 square feet of service space guarantee that wait times for repairs are kept to a minimum.
KNEALE MANN - YouIntegrate
Over his 26 year career, Kneale Mann has been a radio program director, marketing/promotion manager, talent coach, strategist and consultant.
He has helped launch and manage major commercial brands and media outlets, worked with business owners and managers and produced large scale events. He has also given his time to numerous not-for-profit initiatives including the White Ribbon Campaign, Habitat for Humanity, Easter Seals, United Way and TEDx Ottawa.
Mann has overseen countless marketing campaigns, written published newspaper and online columns, consulted radio and television projects, coached media professionals, facilitated research and web initiatives as well as hosted professional workshops and business functions.
Kneale specializes in business coaching, strategic and marketing planning, social media consultation and implementation as well as personal and company branding.
Friday, June 25, 2010
Wednesday, June 16, 2010
The Investor vs. Investment Gap
In 2004, an intensive study was conducted on investor-investment behaviour. For the period of 1984-2004, a U.S. mutual fund had an average annual return of 10.7%. What’s alarming is that during this same time period the average mutual fund investor enjoyed an annual return of only 3.7%.
It doesn’t take a math whiz to see that 7% seems to be missing.
This study still rings true today for a very simple reason: Investor Behaviour.
As humans we naturally gravitate toward wanting to “do better”. All too often we chase the idea du jour, claim this is better, that doesn’t work anymore, my neighbour made money doing it that way, the end of the world is upon us, get me out, etc.
Fear and greed rule the day.
All too often, we get caught up in the “fund of the year” or growth is better than value or technology is better than large cap or Europe is toast and there is a solution. It is a very simple, diversified portfolio, adjusted just once a year back to its original asset allocation that would likely outperform 90% of your neighbours' investments.
Most investment advisors get caught up in their analysts daily, hourly and by the minute predictions. No one can accurately predict, economies, sectors, regions, stocks, interest rates, etc. every time. If we concentrate on the one factor we can control – our behaviour – we don’t need to focus on the minutiae.
In his latest book Behavioral Investment Counseling, Nick Murray outlines three principles and three practices which will put any investor in the top ninety percentile of long-term real-life returns.
Principle: Faith
We have to believe, as it has always happened in the past, our only true test, that life will go on and that it will get better over time. It always has and always will.
Principle: Patience
It takes patience to wait through all the fads and fears constantly being thrown at us from all the talking heads in the media.
Principle: Discipline
In order to fend off the daily rhetoric you must continue to deposit money to your plan on a systematic basis, the discipline to stay the course when naturally we want to say “this time is different”.
Practice: Allocating Your Assets
Ninety-three percent of all investors’ returns can be attributed to Asset Allocation. This is the long term mix in a portfolio of stocks, bonds and cash. The proportion of each of these has the largest impact on your return (if you have the right behaviour).
Practice: Diversification
We must be certain we are not under diversified, but equally important not to be over diversified either. I like to think this as idea diversification.
As an example, in 1999 Technology was the big thing. Dot.coms and IPOs were happening at the speed of light however there was little financial of business foundation beneath much of this activity. If your portfolio was rich in tech stock in 1999, how did you fair by the end of 2001?
If you had divested your money in 1999, you would have softened the blow by more than eighty percent two years later.
Practice: Re-Balancing
This is the easy part. A year after you have set up a portfolio, revisit it to ensure you are still in the same weighting as you wanted to reach your financial goals. This should be done each year at the same time. This practice will automatically force you to take your winners and feed your losers, which will in turn increase your long term, real-life returns, and make them better than even the returns of the investments themselves.
Let’s continue the conversation.
Email me any time patrick@nicolandassociates.ca
It doesn’t take a math whiz to see that 7% seems to be missing.
This study still rings true today for a very simple reason: Investor Behaviour.
As humans we naturally gravitate toward wanting to “do better”. All too often we chase the idea du jour, claim this is better, that doesn’t work anymore, my neighbour made money doing it that way, the end of the world is upon us, get me out, etc.
Fear and greed rule the day.
All too often, we get caught up in the “fund of the year” or growth is better than value or technology is better than large cap or Europe is toast and there is a solution. It is a very simple, diversified portfolio, adjusted just once a year back to its original asset allocation that would likely outperform 90% of your neighbours' investments.
Most investment advisors get caught up in their analysts daily, hourly and by the minute predictions. No one can accurately predict, economies, sectors, regions, stocks, interest rates, etc. every time. If we concentrate on the one factor we can control – our behaviour – we don’t need to focus on the minutiae.
In his latest book Behavioral Investment Counseling, Nick Murray outlines three principles and three practices which will put any investor in the top ninety percentile of long-term real-life returns.
Principle: Faith
We have to believe, as it has always happened in the past, our only true test, that life will go on and that it will get better over time. It always has and always will.
Principle: Patience
It takes patience to wait through all the fads and fears constantly being thrown at us from all the talking heads in the media.
Principle: Discipline
In order to fend off the daily rhetoric you must continue to deposit money to your plan on a systematic basis, the discipline to stay the course when naturally we want to say “this time is different”.
Practice: Allocating Your Assets
Ninety-three percent of all investors’ returns can be attributed to Asset Allocation. This is the long term mix in a portfolio of stocks, bonds and cash. The proportion of each of these has the largest impact on your return (if you have the right behaviour).
Practice: Diversification
We must be certain we are not under diversified, but equally important not to be over diversified either. I like to think this as idea diversification.
As an example, in 1999 Technology was the big thing. Dot.coms and IPOs were happening at the speed of light however there was little financial of business foundation beneath much of this activity. If your portfolio was rich in tech stock in 1999, how did you fair by the end of 2001?
If you had divested your money in 1999, you would have softened the blow by more than eighty percent two years later.
Practice: Re-Balancing
This is the easy part. A year after you have set up a portfolio, revisit it to ensure you are still in the same weighting as you wanted to reach your financial goals. This should be done each year at the same time. This practice will automatically force you to take your winners and feed your losers, which will in turn increase your long term, real-life returns, and make them better than even the returns of the investments themselves.
Let’s continue the conversation.
Email me any time patrick@nicolandassociates.ca
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