Exactly 30 years ago today, on October 11, 1994, I started my career at RBC Dominion Securities.

 

In early October of 1993, I was attending UNB Law School in Fredericton. By this time, I had been in University since 1985 and getting tired of living the typical student’s life: being poor! Law school was particularly painful for me as I was not enjoying it and was quite sure I did not want to be a lawyer. I was sticking it out and finishing the degree, mainly as a promise to my parents. I happened to have about $1000 lying around and was curious about investing it in stocks. So I picked up the yellow pages and looked for companies that could help and arranged a meeting with a gentleman named Michael Bardsley. He was the manager of the local Nesbitt Thompson office which eventually became what is known today as BMO Nesbitt Burns.

 

I remember the meeting well. I told Michael I wanted to buy some stocks and asked which he would recommend. Of course, $1000, even in 1993, wasn’t enough to have anywhere close to a diversified stock portfolio so he patiently suggested that I consider mutual funds instead. He gave me some brochures for companies like Trimark and Templeton and then gave me a book called “One Up on Wall Street” by Peter Lynch who was a portfolio manager at Fidelity and is still considered today to be one of the most successful investors of all time. Our meeting was close to an hour long.

 

When I settled down for the evening and despite having a stack of law text books beside my bed that I had barely cracked open, I started to read the book he gave me and couldn’t put it down. I was completely enthralled and stayed up late reading it. By the end of the next day, I had finished it and realized I wanted to know more about investing. I was hooked and decided right then and there to focus all my energies on finishing my law degree and figuring out how to get hired as an investment advisor.

 

What I know now is that Michael was incredibly generous with his time with me. Knowing that I only had $1000 to invest, It would have been much easier for him to not take the meeting or at the very least, hand me off to a junior investment advisor. Instead, he took the time to educate me and steer me in what he felt was the right direction. I have tried to pay it forward in my career and so whenever I have the chance to help a young person who is interested in investing, I do it without hesitation. As it turns out, I bumped into Michael at the CN Rail Annual General Meeting that was held in Moncton years ago and thanked him for his kindness.

 

It would be impossible to summarize everything I’ve learned over 30 years in one newsletter. I love talking about investing and sharing my knowledge. I was tempted to share with you one lesson for every year of my career but I thought I would give you what I consider the 10 most important things I’ve learned about money and investing.

1. Pay yourself first: You can’t invest if you haven’t saved any money. Pay yourself first by spending less than what you make and regularly invest the money you don’t spend.
2. You are not smarter than the market: I have seen more money lost by people trying to time the market or predict where it is going in the short term than anything else. On average, the market goes up in the long term. Bet on that and you will be just fine.
3. Successful investing depends more on temperament than knowledge or intelligence: Giving in to your emotions when making investment decisions almost never ends well. Never make buying or selling decisions based on emotion. Never get too excited when the market is up and never get too anxious when the market is down.
4. It’s not what you make, it’s what you keep: The biggest enemy of most portfolios is taxes. The more you pay in taxes, the less your money will grow. It is critical to minimize the tax you pay on your portfolio.
5. If you fail to plan, you are planning to fail: this applies to all aspects of investing and managing your wealth. Everyone should have as their goal to have an investment plan, a financial plan and an estate plan. Review these plans regularly!
6. Be patient: Sometimes good things come to those who wait but this almost always the case in investing. Never focus on the short term and for the stock market, focus on time horizons of at least 3 – 5 years.
7. Compounding is the 8^th wonder of the world: Whenever I speak to the children of clients, the power of compounding is the one lesson I want them to remember and my hope is that it inspires them to start their investment journey as soon as possible.
8. Manage risk to your personality: You have to invest in a way that matches your personality. If you like taking risk and are comfortable with a range of outcomes, especially in the short term, then you should take more of it so you can benefit from what will likely be higher returns. The opposite is also true: if you don’t like taking risk then you should be careful of how much you take on so you are not put in a position of “losing sleep” over your portfolio. Your portfolio should be designed so that you will feel fine no matter what the market is doing.
9. Diversify: If everything in your portfolio is going up, you are not properly diversified. The same goes if everything in your portfolio is going down. A well-diversified portfolio will keep you invested and should give you good “risk adjusted” returns. In other words, you should aim to get a return that rewards you appropriately for the amount of risk you take.
10. Be fearful when others are greedy and be greedy when others are fearful: I am stealing this from Warren Buffett, but it is by far my most favourite rule of investing. Some of the worst days of my career were related to events like 9/11, the Great Financial Crisis and the Covid-19 pandemic. However, they turned out be among my best days because I was able to take such great advantage of these market crashes to make money for my clients. Markets will evolve and change but human nature does not.

 

Thirty years is a long time but in many ways, I feel like I’m just getting warmed up. Finance and investing are endlessly fascinating, and it simply doesn’t feel like work for me. This is what makes coming to the office so much fun. I truly believe that the best is yet to come for me and my clients. I have had many conversations over the years with clients about retirement. Figuring out the money is the easy part. The hard part is deciding whether you can leave a job or business you love. I’m not a psychologist but I’ve gotten to the point where I can tell if a client is ready. For some, leaving an occupation is not hard. For others, it makes no sense to retire even if you can afford to.

 

The best part of my job is the relationship I have with my clients and I don’t know if I will ever be able to give those up. Words can’t express how grateful I am to have been a part of their lives and to help them achieve their financial goals. I can’t imagine doing anything else. And in case you are wondering, I want you to know that I have no intention of retiring. I love what I do too much and I won’t stop until I absolutely have to.

 

 

Thank you so much for your trust and confidence!