Wealth Management
Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.
If you’re new to investing, a good place to start managing your wealth is to consult your tax preparer or accountant. They may be able to provide you with financial planning services. They may also be able to refer you to somebody who can.
There are three types of professional wealth management services you can use.
1.    A full service stock broker – A good stock broker is one who understands investing and who has the integrity to settle conflicts of interest in the client’s favour. Good stock brokers can provide an effective and economical way to manage your investments. But if you are going to use a full-service broker, take the time to find a broker you can trust.
2.    A discount stock broker – A discount stock broker will simply carry out buy and sell orders for their clients, and charge lower commission rates than full-service brokers. You pay even lower commissions if you trade stocks online, instead of placing orders over the phone.
3.    Portfolio managers – A portfolio manager is someone who fully manages your wealth portfolio and has a fiduciary responsibility to make sound investment decisions on your behalf. Portfolio managers are more stringently regulated than full-service or discount brokers.
investing decisions

Investing decisions should be well thought out and based on these sound investing strategies

It’s essential to avoid letting an investment opinion turn into a fixed idea about the future. Instead, keep an open mind. Nobody can consistently predict what stocks will do. You should always look on your opinions as tentative and subject to continual review, in light of any new information that comes along.

If you develop a fixed idea about what happens next or in the future, chances are you’ll quit considering new developments or contrasting opinions. You may decide you don’t need any new information, since you already know the answer!

Worse, you may develop an unconscious filtering mechanism. You may zero in and dwell on news and commentary that supports your fixed idea, while disregarding news and commentary that supports other points of view.

Investing decisions made from broker jargon

Stock broker jargon can slant your investment decisions. Some of this stock broker jargon is simply shorthand that brokers use amongst themselves, to refer to familiar situations without having to explain the underlying concept. However, the concepts that these “broker-ese” words and phrases represent are just naturally conducive to furthering the goals of the brokerage business.

If you find yourself thinking in broker-ese, you’ll naturally make assumptions that are in tune with the goals of your stock broker, and may be out of tune with yours.


The retirement you want

Here is how to make your financial plans work, before and after retirement. Pat McKeough has poured four decades of experience into this comprehensive new report, “Wealth Management and Retirement Planning”. It’s free and ready to read now.

Read this NEW free report >>


Stock market advice: Gains add up for bottom-up investors

Over periods of five years and beyond, top investment honours mostly go to a member of the bottom-up crowd. That’s partly because bottom-uppers tend to make fewer big mistakes. This lets their gains accumulate. This also leads to longer holding periods, which provide greater tax deferral and lower brokerage costs.

The top-down approach appeals to beginning investors, when they have not yet learned how little they know. (That’s a good time for it, when you have little money to invest and can’t do yourself much harm.) By the time they build up enough of a stake to begin serious investing, most advisors and investors have settled on a mix of top-down and bottom-up. As years pass, successful investors tend to put more weight on bottom-up. They like the way it cuts risk.

Sometimes, a top-down idea acquires way too much influence on way too many investors.

How to avoid jinxing your portfolio

If you try to profit by acting on market predictions, it will often cost you money.

Investors try to improve their returns by taking money out of the stock market when they feel risk is high. They often get this urge after a few weeks or months of bad financial news or unsettling political developments. By then, however, the market may have already dropped far enough to offset any negative developments. Often, these temporary sellers wind up buying their way back into the market when the news has improved and stock prices have gone above the price where they sold.

All too often, brokers encourage this costly practice. They may advise clients to “take some money off the table”, setting up a false analogy between investing and gambling. That’s in a broker’s interest.

Every sale generates a commission. It also gives the broker the opportunity to sell the client something new and make another commission. The investor may re-invest in a product that’s more profitable for the broker—selling the proceeds of a stock sale to buy an annuity or a universal life insurance policy, say. However, investors who use discount brokers to trade also manage to sell low and buy back high, without any broker encouragement.

Building a portfolio for the long term—not avoiding “dead money” stocks—is key to investment success

Rather than trying to stay out of so-called “dead-money” stocks, it’s better to focus on building a portfolio that can produce a growing stream of dividends for you, plus long-term gains.

That’s your goal as an investor. It differs and often clashes with the goal of the brokerage business, which is to sell you investments.

What are some of the major investing decisions you’ve made during your investing career? Does this article shed light on anything you have experience with? If so, share your experience in the comments.

Read More

Wealth Management Post Archives

Are you making the best investing decisions?

Are you making the best investing decisions?

Investing decisions should be well thought out and based on these sound investing strategies

It’s essential to avoid letting an investment opinion turn into a fixed idea about the future. Instead, keep an open mind. Nobody can consistently predict what stocks will do… Read More

Trading with a discount broker could actually cost you money

Trading with a discount broker could actually cost you money

Trading online through a discount broker, rather than with a full-service broker, is now the preferred option for many investors—but it has risks.

The main advantage of switching to a discount stock broker is lower commissions. And commission rates can be even cheaper if you… Read More

Hidden risks of prepaid funerals

Hidden risks of prepaid funerals

Prepaid funerals may seem like a great deal for older investors, but you need to know about the hidden risks
There’s no limit to the types of financial questions Inner Circle members can ask me and my team of investment experts. But aside from asking our… Read More

How RRSP meltdown strategies could jeopardize your retirement

Whether you’re a beginning or experienced investor, these weekly updates are designed to give you the specific investment tips and stock market advice you’ll need for 2016 and beyond. Each Investor Toolkit update gives you a fundamental piece of investment advice, and shows you how you can… Read More

New free report: 10 Stocks to Buy and Hold Forever

Most successful investors describe themselves as buy-and-hold investors. But for many, their strategy is more like buy-and-hold-till-I-get-bored. How long you hold depends on the ability to find good stocks to buy.

Rather than “buy and hold,” we prefer a “buy and watch closely” strategy. That’s… Read More

Using bonds for retirement will hurt your retirement income

Using bonds for retirement will hurt your retirement income

Using bond for retirement income has often been standard investing advice for the last 50 years—but we think it’s bad advice.

As some investors near retirement, their advisors recommend switching to bonds and other fixed-income investments for their retirement investments instead of holding stocks… Read More

3 retirement investment “strategies” to avoid

3 retirement investment “strategies” to avoid

Here are 3 retirement investment “strategies” that will kill your returns and put your retirement goals in jeopardy.

If you’re headed into retirement, you’ve probably read about a range of different retirement investment strategies to follow. One we’ve been asked about a number of… Read More

The odds are stacked against you when investing in IPOs

The odds are stacked against you when investing in IPOs

Investing in IPOs may seem like a quick way to make money—but studies show that the reality is quite different.

Human nature puts the odds against you when investing in IPOs or Initial Public Offerings (we also refer to them as new stock issues).

Insiders decide… Read More

New 2016 FREE Report: Your complete guide to wealth management and planning the retirement you want: Wealth Management & Retirement Planning: Canada RRSP Contribution Limit, RRSP Interest Rates, TFSA Contribution Limit and more.

New 2016 FREE Report: Your complete guide to wealth management and planning the retirement you want: Wealth Management & Retirement Planning: Canada RRSP Contribution Limit, RRSP Interest Rates, TFSA Contribution Limit and more.

Whether you look after your own investments or have someone else do if for you, this report is essential reading. We have distilled decades of time-tested investing strategies and successful wealth management experience into this comprehensive guide. It’s ready to download now… Read More

Retirement income planning for you and your spouse

Retirement income planning tips for when one spouse has lower income.

There are a few retirement income planning steps you and your spouse can take to lower your taxes.

These steps work especially well if your spouse makes a lower-income than you do. There are… Read More