Pay attention to the nickels and dimes
Watch this short video and read on.
What we see here is likely an inaccurate representation of what is actually happening.
HOWEVER!
The lesson we ought to learn from this video is very simple. We have to watch out for our nickels and dimes and let the big bucks handle themselves. The world is attempting to rob you of your pocket change, with no real exchange of value for your metal monies. While you obsess over your paper money, “they” are quietly taking you for the big stuff.
I think we are all aware of this generally, and begrudgingly accept the concept as part of our daily lives. Online investment brokerages have taken advantage of this for decades; charging you less in theory (and in marketing); you watch your fees, while not paying attention to performance and growth. Meanwhile, your brokerage account is charging you trading fees, transfer fees, taxes, commissions, etc without you even noticing.
Ever buy a new car? How many extras are you roped into? How many value adds actually add value? Do you think that undercoat and/or 3M film are adding extra value, or did the dealership just make nearly 100% profit on the sale of an add on?
Now more than ever we require an equal or overweight exchange of value for our pennies.
Enter the segregated fund. A simple investment contract between you and an insurance company. Exchanging your money with the added protection of guarantees at maturity and death on your capital — the ability to increase the value of those guarantees over time as the market grows to actually guarantee the growth you have made. Along with various other benefits other investment contracts (Mutual Funds, Stock and bond trading accounts, GIC’s, etc) lack — for about 50 basis points (.5%) on the annual fee being charged.
This value exchange is extremely valuable right now.
Want to know how I know?
Industrial Alliance, a company that we feel has one of the best and most fair investment contracts in the country, backed by a second to none executive, marketing, management team, is seeing their investments into Segregated Funds skyrocket during this period of turmoil. The value added just by being able to generate contractually obligated and regulator enforced surplusses to support these guarantees is enormous when markets get hairy.
Mutual Fund and Self Directed accounts are being bled dry to capitalize on this value.
These are the big bucks— your money that makes up the portfolios we manage with your consent.
The small change, from our point of view, are the dollars sitting around doing nothing at a moment like this. We understand it is going to be a tough slog in Alberta, but we still have a job to do in providing solutions for your future. Your investments have to grow, and we have been adamant that you invest in regular intervals right now and spread your pennies around equally over the next few years instead of making big lump sum investments. (Best if you could do both, but some is better than none.)
Forcing yourself into making a small sacrifice today and every month, once a month, will add up in the future. The nickels and dimes add up.
Today on a nationwide conference with IAG, where their people were giving a broad market update from their fund and portfolio managers, both first and second party. Some of North America’s top economists and portfolio managers felt we were sitting on the cusp of a U shaped recovery, and the next few months look pretty bright due in part to massive government stimulus all over the globe and the hard work and sacrifices we are making to “Flatten the curve”.
Another thing they all agree on, however, is that the future is uncertain. Their advice, and remember these are some of the most intelligent minds we will ever have the chance to work with, is to use Dollar Cost Averaging (DCA) to invest and capitalize on the volatility through the recovery.
Not just now, but in the future. Forever.
These guys manage the big bucks, all told I would bet about $10,000,000,000,000 (trillion) around the globe.
We will allow them to continue to do this, but you have to do your part too.
Take those small amounts, if you have them. $50, $100, $500 a month and put that to work. Don’t let carnival marketing take it from you. These are the moments that allow you to retire comfortably. If you’re trapped at home, your fuel bill dropped, probably by at least $80-100 a month. Invest it. Had to cancel the trips down south? That’s probably $100 a day right there. Working hard on a budget? I bet if you sweep away the eraser dust you can find $50/ month…
If you have it, or can get it, find a way to invest. The markets will continue to move up and to the right, take advantage of that now, continue to invest regularly, and work with us to find the best value possible.
Now is the time to sweat the small stuff.
Thank you for reading.
Darris Cameron,
President & COO
Financial Value Inc.