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.
investement habits

Follow these 5 investment habits to maximize your portfolio gains

At first glance, some bad investment habits seem sensible, even conservative. One of the most common is to hold off on buying stocks “until things settle down.” The funny thing is that the urge to hold off on buying becomes much more common just when we’re close to a great buying opportunity.

Below we share five investment habits of successful investors.


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  1. Investment marketing makes unsafe bets sound like winners—avoid them

A number of well-respected financial firms have launched so-called “liquid alternative” mutual funds.

The name may suggest something safe, like T-bills or other liquid investments. But these funds aim to generate income using a milder dose of risky hedge-fund strategies. When these strategies begin to backfire, the respected sponsors of some liquid alternative funds do the right thing: they shut the funds down while investor losses are still modest, even though this shuts off a source of fee income.

Investors still lose money, of course. But losses are far less than in earlier hedge-fund failures. That’s progress, of a sort—a little like the invention of filtered cigarettes.

Read more on bad investment habits involving marketing campaigns.

  1. Practice accounts can lead to risky investment habits—stay away

The online brokerage industry is winning a lot of attention and goodwill for itself by offering “practice accounts.” These accounts are supposed to be identical to real accounts in all but one respect: you trade in them with imaginary or “play” money, rather than the real thing. The industry says this gives would-be traders a free opportunity to learn how to trade online, without risking any money.

I’d say that’s a misstatement—a classic example of the essence of marketing, which is to describe a feature in such a way that the prospect comes to see it as a benefit.

Practice-account users aren’t learning how to invest. They are just learning how to enter orders online. Rather than an educational experience, practice accounts are a little like play-money sessions at Las Vegas, where gambling novices can learn to play casino games without risking any real cash.

Discover more about why practice accounts can lead to bad investment habits.

  1. Focusing on a single attractive reading on an investment can lead to bad investment habits—be wary

Many investors acquire the habit of focusing on stocks that have an attractive reading on a single investment measure, but that one measure may disguise problems that could make the stock a disaster-in-waiting.

As mentioned, when they look for stocks to buy, investors sometimes fall into a habit of focusing on those with a particularly attractive reading on a single investment measure. These readings include a low per-share ratio of price-to-earnings, a low price-to-book-value ratio, or a high dividend yield. This seems like a quick, easy way of spotting an investment bargain.

However, most investment measures fall into a spectrum that ranges from suspiciously cheap to extraordinarily expensive.

Read more on why the quick and easy way to buy stocks can be a bad idea.

  1. Relying on a sector rotation strategy can be problematic—and not for successful investors

Some investors follow a “sector rotation” approach to investing. That’s when they try to hop from sector to sector, underweighting or overweighting their holdings in certain sectors of the stock market depending on a forecast or other factors.

Sector rotation can work in any one year, say. However, it’s difficult if not impossible to produce consistently good longer-term returns. Here are two reasons why:

  • You need to guess right three times to profit in sector rotation
  • Sector rotation can overweight you in the worst-performing sectors

Learn more about the reasons to avoid sector rotation strategies now.

  1. Patience is needed for successful investing

Good chess players never “go for broke,” as the saying goes. Instead, they position their pieces so they can profit from the mistakes they expect from opponents who are less talented, less experienced or less patient.

Successful investors follow a similar approach. The crucial difference is that they have no opponents who can be relied upon to make the wrong move. Instead, successful investors try to arrange their portfolios so that they can more or less automatically tap into the steady profits and long-term growth that inevitably come to well-established companies operating in relatively free and stable economies.

Read more about good investing habits that successful investors use.

What’s the single-worst investment habit you’ll admit to?

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