Wealth Management
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.
- 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.
- 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.
- 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.
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A good stock broker can help you manage your investments if you don’t want to do it yourself. However, good stock brokers have always been hard to find. And, as any good stock broker or experienced investor can tell you, bad brokers are all too common. By “bad brokers,” we mean those who put their own interests above their clients’. Keep in mind, however, that a bad stock broker can do this in a perfectly legal fashion, by catering to their clients’ whims and weaknesses. Here are four ways to tell if brokers are putting their interests ahead of yours:...
When building your portfolio, it’s crucial to follow our stock investing advice of downplaying stocks that seem to be near-universally recommended by brokers and are getting a lot of favourable media coverage. That’s because, in investing, familiarity can breed excessive feelings of comfort, security and performance. After all, brokers get information from the media, investment journalists spend a lot of time talking to brokers, and company managers listen to both. A feedback loop can develop that spurs high expectations, derails criticism, and leads companies (and their investors) to make devastating mistakes. You may get the feeling that these are can’t-miss investments, and that it’s safe to buy and forget them. That’s exactly the wrong thing to do with these stocks. Our stock investing advice is that your in-the-limelight holdings are the ones you need to watch most closely....
At Successful Investor Wealth Management, we sometimes get questions from investors who are looking for one great stock pick, or one big idea, that can quickly make them rich.
Beginning investors often start their portfolio investing with these types of ideas....
Beginning investors often start their portfolio investing with these types of ideas....
Some advisors like to use sports or military analogies to describe their investment approach. They see a great stock pick as the equivalent of a touchdown or home run, and a series of them as a successful military campaign. This, however, puts too much emphasis on excitement and glory, and pays too little attention to risk. In contrast, if we had to compare our approach to anything outside the investment business, we’d choose chess. (You can learn more about our value-investing strategy for selecting stocks in our new free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada.”)...
A market slump like the one we’ve experienced since 2007 demonstrates the appeal of a conservative, risk-averse portfolio investing philosophy like ours. While the well-established companies we invest in may not fly as high as speculative stocks when the market is soaring, they hold up much better in market downturns.
As part of our portfolio investing strategy, we diversify by spreading the investments of clients of our Successful Investor Wealth Management service out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; Utilities), even when much of the market’s action is concentrated in one or two industries or sectors.
That’s because the market’s hottest segments can unpredictably jump from hot to cold....
As part of our portfolio investing strategy, we diversify by spreading the investments of clients of our Successful Investor Wealth Management service out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; Utilities), even when much of the market’s action is concentrated in one or two industries or sectors.
That’s because the market’s hottest segments can unpredictably jump from hot to cold....
As investors near retirement, their advisors often recommend that they move a larger part of their portfolios from stocks and mutual funds to bonds and other fixed-return investments. To some extent, this is an understandable retirement investing strategy, since bonds provide steady income and a guarantee to repay the principal at maturity.
Bonds will lower the long-term returns that are key to successful retirement investing
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Perhaps the most fundamental piece of investment advice you will ever receive is to make sure you carefully read a contract and get clarification of anything you don’t understand before you sign. Most investors are familiar with this investment advice, of course, but it’s important to keep in mind, especially when doing things like opening an investment account, or transferring investments from one brokerage to another. It’s something we take very seriously when we manage the portfolios of clients of our Successful Investor Wealth Management service. When we fill out account transfer forms, we make sure that each form is checked and double-checked by two different people in our office, to avoid costly mistakes....
Many investors consider annuities when they are planning their retirement investing. There are basically three types of annuities: Term-certain annuities are payable to you, or your estate, for a fixed number of years. Your estate will receive the payments even if you die. You could outlive this type of annuity....
On his Wealthy Boomer web site, Financial Post personal-finance columnist Jonathan Chevreau recently made the link between the time you start saving for retirement and when you will be able to start your retirement in earnest. Click here to read the full article on the Wealthy Boomer. Chevreau has been the personal-finance columnist at the Financial Post since 1996, and is the author or co-author of eight financial books, including The Wealthy Boomer and Findependence Day, released last fall. His Wealthy Boomer blog features interviews with investment experts (including Pat McKeough)....
We’ve been asked a number of times over the years about how we manage in our investing advice to recommend so many stocks that get taken over at a big profit. Some readers, especially those of our Successful Investor newsletter, tell us that they never had a stock taken over at a profit until they began following our investing advice. And some of these takeovers have generated big profits, indeed: Fording Canadian Coal jumped 163.2% in five months on a takeover offer after we recommended it to Successful Investor readers in January 2008....