Tag Archives: Investment Planning

Why did Charles Wilton Buy Valmont?

Charles Wilton

A new interview with Charles Wilton, Portfolio Manager with the Private Investment Management Group at Raymond James. In today’s episode, we talk about the recent acquisition in his portfolio.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

Mike Flux – Market Update and Investment Alternatives Q4 2014

MichaelFlux_1000x1230

In this video, I speak with Mike Flux, Senior VP of Connor Clark & Lunn Private Capital to chat about their investment outlook from Q4 of 2014. We also discuss how to interpret the current events, and how to properly position portfolios to take advantage of these market events.

In this second video, Mike gives an update on the alternative strategies that they are using in their portfolios to help reduce the effects of the current volatility without sacrificing returns.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

How to Respond to Market Crashes

Oftentimes, we hear on the news that the markets have crashed, but bear in mind that the media frequently dramatize events and make it seem as if things are really crazy. While things may become a little hectic, the real question is how you respond to such events. In today’s blog post, I will talk about the things you could do in the event of a market crash and the 4 Don’ts and 5 Do’s in terms of your financial affairs during these times.

Generally speaking, when a market crash occurs, there are four classic things that you could do with your money:


  1. Invest an additional sum of money—the best time to buy is when things are the cheapest, and things are cheapest when the market is down.
  2. Keep everything where it is—in addition, you could choose to start a monthly contribution plan.
  3. Don’t do anything—you wouldn’t add or take away anything. You could simply choose to ride it out.
  4. Take a defensive stance—this means you could sell your position, get out of the market, put it into cash, and re-enter the market when it is back to normal. Emotions tend to drive this option, but I highly suggest that you don’t let your emotions dictate your investment decisions.

It’s important to remember that for every crisis, there’s an opportunity. When the market crashes, we weigh our options and decide which of them we should take. History has shown that the more violent the correction, the more rapid the recovery. So what should and shouldn’t we do in these times of opportunity?

4 Things You Should NOT do

1. Don’t Panic

People panic when they are afraid of the unknown. Panicking affects your emotions and your rationality, and you will end up making poor financial decisions as a result. Recognize that a negative market event is a requirement for above average returns. So embrace the fact that when the markets turn south, this is setting your portfolio up for a positive future.

2. Don’t Talk to Your Friends

People only talk about their successes. Your friends are not going to tell you about the failures that they’ve had. The truth is, most of your friends are simply bragging about small, short-term successes. The reality, however, is that those big, short-term successes don’t often translate into sustainable long-term returns.

Talk to a CFP instead because they are trained to understand what a market crash means on a global level. They will really help you figure out your next step.

3. Don’t Sell to Stop the Bleeding

This option is essentially choosing option number four: selling for a perceived “defensive” stance. People want to wait until the market is stabilized before they re-invest in the market because this makes them feel better. However, the reality is that more often than not, these “defensive” investors miss out on some of the greatest gains because they let their emotions dictate their investment decisions. Just think about it logically—the formula for profits is to “buy low and sell high”, not “buy high, hoping to sell at a higher point.” The latter is known as “the greater fool theory.” A fool buys a security without paying any attention to the actual value of that security in the hopes that they can find a greater fool to sell it to in the future at a higher price. Take a moment to think about that. Simply put, investing is all about paying the right price for something and the right price is more often than not present right after a market setback. This is called in simple terms “a sale.”

4. Don’t Be Uneducated

Make sure you talk to a financial planner. It is important to understand the situation at hand and discuss the plan and strategy with your financial planner. One of your options is to listen to our Fly on the Wall webinar series and listen in while I talk to various investment professionals and portfolio managers that we work with and get firsthand information on the status of the market. Remember to stay informed and understand the fundamentals of what you are dealing with.

5 Things You SHOULD Do

1. Educate Yourself

This tip essentially reiterates the last point in the previous list. Educate yourself so that you and your financial planner both understand the plan and the strategy.

2. Align Yourself with a Discretionary Investment Firm

Ensure that you are making the right decisions with an investment firm that can implement your portfolio strategy and work on your behalf to take advantage of any opportunities that present themselves. Discretionary management allows advisors to make decisions for their clients based on the discussions they have had and the investment policy statement that has been put in place. Make sure that this is properly set up because you are protected if your portfolio manager ventures outside of these boundaries. They can become liable for doing so.

3. Consider Tax Loss Selling

When the markets are down by a significant percentage, you can trigger that loss by choosing to sell an investment, and then re-invest it in another version of your current portfolio. This allows you to avoid the superficial loss rule in Canada, which states that you are not allowed to claim a loss that you triggered by selling and then repurchasing the same security. Selling an investment and re-investing it in a different version essentially allows you to sidestep this rule.

Now, you can take the loss that you triggered and offset any taxes that were paid on any gains you had prior to the current year. So if you had paid taxes on a capital gain within the past three years, you can reclaim that loss and get some money back. Similarly, you can also take that loss that you triggered and carry it forward indefinitely. This will allow you to offset any future gains with some capital losses.

4. Make Sure You Don’t Get Caught in the Paperboy Syndrome

If your paperboy qualifies for the same type of investments that you are in, consider migrating your portfolio to a more appropriate investment solution that is better suited and priced for your level of investment account. Watch out for the three thresholds. If your portfolio is:

Less than $100,000—mutual funds are ideally suited for you (good diversification; something anybody can purchase)

$100,000 and above—start hiring your own portfolio manager and investment counselling firm to work with (really direct and customized management tailored to each individual)

5. Recalibrate Your Financial Plan

Whenever the markets drop by a certain level, it is understandable that you would have a lot of unanswered questions. Recalibrating your financial plan could be called the first thing you should do. It means taking your plan and keying in the current values so that you would know what you are working with. Work with your financial planner to answer all your questions and find out how the market crash would affect your financial decisions and goals. You can check out the report at our website called 12 Key Questions You Must Ask a Financial Advisor Before You Hire One. It will help you get involved with a financial planner and begin the process of managing your finances.

Related Links
How to Choose a Financial Planner
https://www.ironshield.ca/landing/how-to-choose-and-work-with-a-financial-planner-you-can-trust/

Fly on the Wall Update Calls
https://www.ironshield.ca/blog/fly-on-the-wall-update-calls/

Mike Flux – General and Investment Alternatives Update Q3 2014

MichaelFlux_1000x1230

In this video, I speak with Mike Flux, Senior VP of Connor Clark & Lunn Private Capital to chat about their investment outlook from Q3 of 2014. We also discuss how to interpret the current events, and how to properly position portfolios to take advantage of these market events.

In this second video, Mike gives an update on the alternative strategies that they are using in their portfolios to help reduce the effects of the current volatility without sacrificing returns.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

Why did Charles Wilton sell Citi Bank and buy John Deere?

Charles Wilton

In today’s episode, I chat with Charles Wilton, Portfolio Manager with the Private Investment Management Group at Raymond James.  We talk about the recent deposition and acquisition in his portfolio.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

Mike Flux – General and Investment Alternatives Update Q2 2014

MichaelFlux_1000x1230

In this video, I speak with Mike Flux, Senior VP of Connor Clark & Lunn Private Capital to chat about their investment outlook from Q2 of 2014. We also discuss how to interpret the current events, and how to properly position portfolios to take advantage of these market events.

In this second video, Mike gives an update on the alternative strategies that they are using in their portfolios to help reduce the effects of the current volatility without sacrificing returns.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

Charles Wilton – Why It Was Time To Sell Walgreens

Charles Wilton

A new interview with Charles Wilton, Portfolio Manager with the Private Investment Management Group at Raymond James.  In today’s episode, we talk about the recent disposition in his portfolio and why he decided to sell Walgreens.

IRONSHIELD Financial Planning’s “Fly On The Wall” update call.
These calls are recorded by Scott Plaskett and allow you to get a behind-the-scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the Internet.

The Richest Person In The Nursing Home

Featured in the July 2014 Newsletter of HAHN Investment Stewards. Republished with permission.

By: Scott E. Plaskett, CFP
Senior Financial Planner & CEO, IRONSHIELD Financial Planning, www.ironshield.ca

Is your financial planning putting you on track to be the richest person in the nursing home?

I bet it IS.

How do I know?  For the majority of Canadians, financial planning is based upon the principle of saving as much as possible on an annual basis and trying to earn the best rate of return in the process.

If this sounds like the underpinnings of your financial plan, you’ll want to read on.

First, let me provide you with a little background about how traditional financial planning is causing you to deny yourself today for the hope of wealth tomorrow.

Let’s look at the questions that are typically asked, during the creation of a traditional financial plan.  The questions may look like this:

  1. When do you want to retire?
  2. How much money do you want to live on during retirement?
  3. What level of risk are you comfortable accepting to earn the return on your portfolio?

And these questions, although they sound like intelligent questions to ask, are the wrong questions.

Let’s look at the first question.  It revolves around the word “retire” or “retirement”, which is a really bad word.

Don’t believe me?  Just take a look at this list of synonyms for the word retire (Synonym: a word or phrase that means exactly or nearly the same thing):

  • withdraw
  • retreat
  • expire
  • terminate
  • disengage
  • death

If you ask me, I don’t want to experience any of these things, yet most financial planning is based upon the concept of choosing a date in the future for your “retirement”.  And the focus becomes, what can/should you deny yourself today, so that you can save as much as possible for tomorrow?

Now for the second question.  If you asked me how much money I’d want to live on during retirement, my answer would be, “As much as possible…”  In other words, most people really have no idea of what their cash flow requirements are going to be when they cease to generate employment income, so putting an actual dollar amount on that today, is next to impossible.

As for the question about your comfort level with investment risk.  This is such a loaded question I don’t even know where to begin.  The concept of risk makes me think of gambling and believe me, I don’t want to gamble with my money.  Why would I want to accept ANY “risk”?  The reality is, we should be focusing on our ability to create the highest probability of success.  Projections alone – as in a traditional financial plan – won’t do that.  Finding the minimum rate of return that will allow your financial plan to succeed is where the focus should be.

So, being asked and answering these questions really doesn’t accomplish much – other than fill an hour of time with a conversation that feels important but really doesn’t get any closer to what’s truly important.

So, how should the financial planning conversation go?

I have found, that the better financial planning questions are the ones you should be asking, but just don’t know it.

  • What after-tax income am I on track for?
  • What is my financial independence day, or let’s call it “freedom age”?
  • What is my required rate of return?

Once answered, these questions will provide you with a tremendous amount of insight into what you need to do to be successful with your financial planning.  This type of clarity is what will allow you to make better decisions, knowing that your subsequent decisions will either enhance or detract from your ability to accomplish your goals.

Following this financial planning approach yields your Financial Minimum Effective Dose (MED), thus allowing you to spend on your lifestyle today, without guilt.

The concept of minimum effective dose comes from the world of science.  For example, in science class I learned that water boils at 100⁰C at standard air pressure.  Water is not “more boiled” if you add more heat.  Adding more heat is simply wasteful.

So, your Financial Minimum Effective Dose is the minimum amount of savings required for you to accomplish your financial goals.  Saving more money can be considered just as “wasteful” and may not support your lifestyle goals for today – just as important as tomorrow.

You see, in today’s world, retirement is an outdated concept.  People don’t want to “retire”, they want to be engaged in life, for life.  The problem is, that without a financial plan that assists you in figuring out what your Financial MED is, life is full of denying yourself today – out of fear – in the hopes of having more in the future.  The problem is, what happens if you don’t make it to tomorrow?  Will you have enjoyed your experience along the way?

Determining what your Financial MED is, will not only provide you with the confidence that you are on track to be financially free on your terms, it will also provide you with the permission to enjoy what’s important to your lifestyle today, without feeling like you are spending tomorrow’s money too soon.

You may still be the richest person in the nursing home, but it won’t be measured by your bank balance alone, but by the richness of the life you’ve lived.