Five Questions to Ask Your Advisor

Good advice is worth it's weight in gold. There is no doubt about that but your advisor can't do all the work alone. You still need to be involved and asking questions about the person managing your investment portfolio and about the advice they are offering.

We recently came across an article in the Financial Post, written by Martin Pelletier. 

In the article, Pelletier talks about FIVE questions you should be asking your advisor to protect your portfolio.

1. How are they being compensated? 

Are they being paid by an investment firm or do they charge a flat fee no matter the investment?

2. Are they selling near-term performance? 

Martin Pelletier says a downside to a commission-based compensation structure is that advisors will focus on what is easiest to sell and that often means those funds with the strongest recent performance.

3. Are they offering near-term predictions? 

Investors are often comforted by near-term predictions. Pelletier suggests advisors will often seek out economists, market strategists and stock analysts who provide positive near-term forecasts. The problem is that no one, even the experts, can predict near-term moves in the market. 

4. What are they doing to manage risk? 

Pelletier points out that the problem with trying to beat the market is that you end up taking on more risk. Of course that in the end could cause more harm than good. Pelletier suggests you ask your advisor for the  historical standard deviation and then divide it into the specific return generated less a risk-free rate such as the current 90-day T-bill rate. That equation will help you figure out how much return was achieved per unit of risk taken.

5. How have they positioned your portfolio in the past? 

In the article, Pelletier suggests you keep a logbook of your portfolio. It is helpful to know what is happening so that you can review things, like the timing of your purchases and sales, with your advisor.

For a full look at the article, check it out HERE in the Financial Post

Investing For Success

There is no doubt the markets can be a roller coaster ride, but those who ride the wave and stay invested make money. Here are a few tips to help you stay focused and keep your financial goals in sight.

1.     Think Globally

 When it comes to investing, many people feel safer sticking close to home. There is nothing wrong with wanting to feel safe but Canada makes up only 4% of the world's markets, investing solely in the Canadian market limits both investment opportunities and diversification. 

Investing abroad can introduce additional risks, like shifts in currency values and political or economic upheaval, but it can also bring real benefits like, rapidly growing economies

2.     The Risks of “Safe” Investments

When it comes to calculating your investment goals, you should always factor in inflation. The risk of inflation is one reason what many consider safe investments, like GICs, may not be so safe after all. 

3.     Don’t Miss Out

There is that old cliche "Buy low. Sell high." A great strategy if you have a crystal ball. Otherwise, every time you buy and sell you can incur additional costs or risk missing out on the markets best days. A better strategy is to stay fully invested. 

4.     Diversification = Less Risk

There is something to be said for not putting all your eggs in one basket. Drop the basket and your lose all your eggs. The same could be said for your investments. It is important to diversify and put your money into different types of investments.

5.     Time is Money

"I just don't have the money to invest right now." It is a common reason people put off investing but there is wisdom in the saying time is money. One of the best ways to build wealth is to start early.  The sooner you invest the more time your money has to grow and benefit from the power of compounding.

6.     Time Heals All

Some investors may shy away from equity investments, fearing volatility. While over the short term that might be true because equity returns can fluctuate, historically, equities tend to become less volatile the longer you hold on to them .

If you have any questions or need advice, remember you can always reach out to the ContinuumII Inc. team. We are always ready to help. 

**information provided in part by Fidelity Investments**

Top 3 Tips For Business Owners in Managing Group Benefit Plans

In this helpful video, Peter Andreana of Continuum II Inc. shares his top 3 tips for HR Managers when it comes to employee health & dental benefits.

1. Always speak to your benefits broker before offering extended benefits to employees who are no longer with the company.

2. Clearly identify people who are consultants or others who are not eligible for benefits.

3. When terminating employees, the employer has the responsibility to inform the employee of many details related to their benefits.

Find out more detail in the video below, or visit our website at www.c2inc.com for more information.