We're Not All Bleeding.

Right about now is the time where, against all advice from the best in the business, people will be looking to de-risk their investment portfolio. Usually asking about GIC’s or if they should sell out and hold on to cash. The only accomplishment a person can achieve in this case is 100% crystallizing their losses and making it much harder, many magnitudes more difficult, to get back into the black.

This is something you want to be asking about when everyone in the world is salivating at the next quarters earnings. When everyone is greedy, be cautious. When everyone is greedy, be cautious. (guess who says this probably twice a day, every day.)

Of course, our advice is to stay the course. This doesn’t mean we will sit on our butts waiting and waiting, it means we think you ought to continue to buy, buying regularly is the course.

We didn’t invent this strategy, we just suggest investors adhere to it as closely as possible.

The time to de-risk has passed. We spent a lot of time diversifying and working to find the right kinds of risks going into this decade so we can focus on generating a great return for investors moving along to the next.

It has worked as we have funds in the positive as of the end of last week and are down about 1/3 the indexes are and 25% of the average Canadian portfolio based on various metrics. So we are in a good spot. Yay us!

*pats back

But long before we were switching around funds and moving into positions we thought would be advantageous, we were using investments that have contractually obligated and capital reserved backed de-risking agents built into them.

Segregated funds allow for guarantees on your capital at maturity and death, allow you to reset those guarantees to a higher amount, which guarantees capital and growth, and frankly with the added benefit creditor protection and named preferred beneficiaries, avoiding probate and arguments between family members over the will, there is nothing else like Seg. Funds available to Canadians.

Why am I telling you this? Well, because the traditional asset classes like Mutual Funds, Self Directed investment accounts, and newer robo-advisor platforms lack any kind of asset protection unless you are using GIC type contracts to invest.

Because of this, banks, IIROC firms(stock and bond traders), MFDA firms (Mutual Funds) and firms like “weathsimple” and or “questrade”, who not only lack any kind of asset guarantees on their investment funds but also lack proper advice channels: ARE BLEEDING INVESTMENT CAPITAL BY THE BILLIONS!

On the other hand, and this is especially true at Industrial Alliance, who has a net increase in investments that is up over 100% year over year into Segregated Funds. Keep in mind that at this time last year, a globally diversified portfolio would be up between 15-20%.

If you’re asking why that would be, simply it is because of the contractual guarantees. You pay a little bit more for it, but the mental and emotional toll left on the side of the path is enormous. The lack of stress makes it much easier to be investing at times like this to take advantage of buying low philosophies, and all that implies.

We are expecting to have the biggest year Financial Value has ever had. We expect the next couple of years to be quite good for our investors.

Does your advisor at another firm feel the same?

Maybe it is time to ask…

Darris Cameron,
President and COO
Financial Value Inc.