The Risk/Return Problem in a Challenging Market
Over the past two years the stock markets have seen huge value swings. Some people lost a fortune, a few lucky ones made excellent gains. Most are still reeling from all the uncertainty. On the other hand, interest rates on the very safest investments (government bonds and even GIC's) are at historic lows. Where do we go from here? What risks are reasonable to take? What return expectations are realistic?
You are the First Piece of the Puzzle
Mark's method relies heavily upon thorough discovery of the most important element in the investment recipe -- you. Only after he has come to an understanding of what brought you to this point in your life, is Mark comfortable making a recommendation that he can say is tailored just for you. This speaks to some of the first principals of ethics in this industry: 1) Know Your Client, and 2) choose investments which are Suitable for them. That might sound obvious, but failure to adhere to such simple ideas as this has caused many headaches and heartaches.
Rather than picking a lucky race horse, Mark then applies the full resources of Canada's largest investment firm to build the right portfolio for you. With his commercial banking and risk management background, his investment discipline naturally leans to the conservative.
Here are some protocols:
Avoid highly speculative investments
Don't buy on rumor. If you don't understand it, don't buy it
Research, research, research, from credible professionals
Trying to time the market is largely guesswork -- even for the most seasoned professionals get it wrong
If one blue chip stock is a good idea, a basket of blue chip stocks whose risks balance one another out, is a better idea
For some people, stocks are not a good idea at all
If you love your family, get properly insured
Not all banks are a good risk, but some are a very good risk. The same can be said of governments
Guaranteed funds are only as solid as the guarantor. Confirm that the guarantor can reasonably be expected to pay all the obligations it is on the hook for in the case of a collapse of confidence such as we have recently seen.
When all is said and done, we must take some reasonable risks if we expect to get ahead. There is no way to completely eliminate risk. Instead we work to manage it for long term profitability. Our job (and it is truly a fascinating and rewarding job) is to help you manage it in a way that suits your very unique needs.