Golden Girl Finance
 
Larry Berman
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Investing

Why Canadians need to become better global investors

February 17th, 2015 by

Investing expert Larry Berman shares new insights and ideas on an upcoming cross-Canada tour. Here's what you'll have access to...

 
 

Larry Berman, host of Berman’s Call on BNN, previews his keynote address for his upcoming 2015 winter-spring speaking tour, a cross-Canada series of free investor education events...

 

The world offers some exciting investment opportunities, but did you know that Canada represents a mere 4% of them? It turns out that, in the grand global scheme of things, the Canadian economy is pretty small. Good things often come in small packages, and for almost a decade Canada outperformed most of the world. All good things must come to an end though, and in the past three years, Canada went on to become one of the worst-performing markets.

Our high sector concentrations make our markets less diversified across economic sectors, and therefore more volatile (more of those big ups and downs). Just look at the price of oil or gold and other metals – all have been devastated, and our economy relies heavily upon them. Add in mounting concerns about overvaluation in our housing market, and excessive household indebtedness, and it’s clear Canadian investors will need to look at the rest of the world to help grow their portfolios.

The new reality of global investing

Investing abroad has historically presented some challenges. It wasn’t so long ago that we were restricted in the amount of foreign investing allowed in RRSPs, and weren’t allowed to hold currency other than Canadian Dollars. Investing globally also used to come at a huge cost premium, but all of that is now a thing of the past. In recent years, the ETF revolution has radically improved our access to global markets, and reduced the costs for individual investors to participate in them. Despite this freedom, Canadians continue to have the majority of their assets allocated at home. It’s time for a change.

What it could mean for you

Some of the current opportunities in global markets may surprise you: Would you buy a 5-year German Bund paying a negative interest rate? I’m here to show you what opportunities do currently exist, and how you can broaden your investing horizons to strengthen diversification and returns in your portfolio. In my upcoming tour, I’ll also be looking at the biggest factor in global returns – currency – and discuss whether the price of oil or the Bank of Canada will determine the value of the loonie in the coming years.

Interested in attending?

Register now for free
 

Upcoming tour dates include…

British Columbia:

Vancouver - February 8th
Surrey/Coquitlam - April 16th

Alberta:

Calgary - April 18th
Grande Prairie - April 23rd
Edmonton - April 26th

Ontario:

Markham - March 8th
Ottawa - March 12th
Niagara Falls - March 21st
Kitchener/Waterloo - April 1st
Toronto West (Vaughan) - April 12th

Quebec:

Montreal - March 14th

Saskatchewan:

Saskatoon - February 26th

Investing

What will 2015 bring for investors?

October 14th, 2014 by

Investing expert Larry Berman shares his insights on an upcoming cross-Canada tour. Here's your exclusive preview...

 
 

Larry Berman, host of Berman’s Call on BNN, previews his keynote address for his upcoming fall speaking tour, a cross-Canada series of free investor education events...

 

QE, or Quantitative Easing, is the policy tool that central banks have used to lower long-term interest rates after pushing short-term interest rates to near zero. This fiscal stimulus was introduced to combat the 2008/2009 financial crisis and has propelled markets to all-time highs – rewarding equity investors and pushing everyone in need of income to take on more equity risk. This, of course, has hurt savers and has created asset bubbles in things like Canadian real estate and high dividend-paying stocks.

Now, as 2015 approaches, this stimulus is starting to be withdrawn and the pace appears set to accelerate in the New Year. Will 2015 bring the first of the interest rate increases, too?

The post-QE world

In the post-QE world, you’ll need to understand how these assets will behave so you can protect your money and make it grow. Although no one really knows what will happen, one distinct possibility is a “liquidity trap” – a scenario that has kept rates and economic growth near rock-bottom levels in Japan for 25 years. During my upcoming cross-Canada tour of free educational events, I will discuss what central banks are doing to try and avoid repeating Japan’s fate, and what role governments will need to play in rehabilitating markets so they can slowly take away the punch bowl.

What you can do about it

I’ll also share my views on how to position your portfolio to take part in whatever upside may be left in markets, and how to take advantage of a correction so you can sleep at night without fearing a market pullback. Finally, I’ll outline how to put “guru” forecasts in context and evaluate the ideas you get from the financial media.

I want to help you understand what you’re buying, when to get out, and if it’s right for you. Learn more about why you should attend one of our free investor education events here.

Interested in attending?

Register now for free

 

Upcoming tour dates include...

British Columbia:

Kelowna – 11/5
Victoria – 11/6
Vancouver – 11/8

Alberta:

Calgary – 10/23
Edmonton 10/26

Ontario:

London – 10/21
Hamilton – 10/22
Ottawa – 11/18
Toronto – 11/30

Quebec:

Montreal – 11/19

Manitoba:

Winnipeg – 10/28

Saskatchewan:

Regina – 10/29
Saskatoon – 04/22

Nova Scotia:

Halifax – 11/20

Investing

The most important investment decision you'll ever make (Part 4 of 4)

July 3rd, 2013 by

Part 4 of a 4-part series on weighing whether to become a DIY investor or partner with an advisor

 
 

Having discussed the merits and drawbacks of investing on your own versus investing with a financial advisor, we will complete our four-part series with a discussion on a hybrid model: choosing to do some investing yourself while working in conjunction with an advisor. Since many of the disadvantages of DIY investing are the advantages of working with an advisor, it may make sense to you to have the best of both worlds and do both.

Not putting all your eggs in one basket

Diversification is an important concept in investing. It is most often used in reference to building a portfolio; the portfolio should have a breadth of investments to protect it against large losses. Successful diversification means owning some assets that may go up when others go down to “smooth” things out. Managing some of your own accounts while having others managed by an advisor can offer another layer of diversification. This is particularly true if you like to dabble in a specific area of the market (say technology or fashion companies), while your advisor can take a broader approach or specialize in other type of investments. In the world of big pension funds, it’s not uncommon to see them use many different managers. They call this “manager diversification,” and you can do it too.

Having someone to bounce ideas off

The saying that “two heads are better than one” might be a cliché, but it is often true. By having an advisor around to manage a part of your portfolio, you establish a relationship with an investment professional who can offer you new and interesting perspectives about investing. Any investment idea worth entertaining is also one worth arguing, and an advisor can open your eyes to alternative viewpoints, helping you make better-informed decisions. Advisors also have access to extensive high-quality research through their firms, which you as a layperson don’t have access to. Their opinions are therefore often well-informed, and they can supply it to you as well (provided you have a reasonable amount of assets with them).

Spend less on advice

Since you will not incur advisor fees on the portion of your portfolio that you manage by yourself, you end up paying less in fees. This helps you balance the best of both worlds, lowering portfolio costs while maintaining access to good investment advice. Keep in mind that good advice can help you keep your costs low by avoiding mistakes, so the cost savings can work both ways.

Left hand, meet right hand

One thing to keep in mind if you decide to split the work with an advisor is that you need to make sure your efforts are coordinated. Often people don’t like to tell their advisors about the investing they do on their own because they fear their advisor will question their ability to do it, or pressure you to consolidate all your investments with them. A good advisor should help you make good decisions and not impose their own values/judgement, so be sure your advisor knows about any accounts you don’t hold with them and specifically about what you’re investing in. For example, you wouldn’t want to load up on Apple stock only to discover that your advisor did the same in the portfolio she manages for you.

Recent developments

An increasing number of big brokerages are now implementing minimum account fees, which we’ve heard can be upwards of $600-$700 per account, per year. These fees will crush the performance of small TFSA and RESP accounts. This new fee structure may be meant to motivate small account holders to move their account elsewhere and leave only their larger, more profitable accounts. If you have an account with a large institution, be sure to check if they’ve imposed minimum account fees. If they have, consider seeking a portfolio manager or advisor that can offer better pricing for small accounts; or move your small accounts to a discount broker to handle yourself, and leave just the bigger accounts with the advisor.

If after reading this article you decide that hiring an advisor is an avenue you’d like to pursue, take the time to learn the four things a financial advisor should do to earn your trust.

About Larry Berman

Larry Berman is best known to Canadians as the host of the top-rated TV show Berman’s Call on the Business News Network (BNN). After leading an impressive career with some of Canada’s largest financial institutions, Larry had seen enough of the dark side of the financial industry to know that Canadian investors had the deck stacked against them - saddled with the highest fees and lowest levels of financial literacy in the developed world, they needed help. This is why, in 2006, Larry left the corporate world behind to pursue his passion for helping people do better with their money.

Larry is now the co-founder of the Independent Investor Institute – which is dedicated to empowering self-directed investors through hands-on education, and ETF Capital Management, a boutique portfolio management firm for affluent investors who are looking for a highly customized and hands-off approach to investing. Larry also hosts free speaking tours across Canada throughout the year, and free beginner trading workshops through the Independent Investor Institute.

Investing

The most important investment decision you'll ever make (Part 3 of 4)

June 20th, 2013 by

Part 3 of a 4-part series on weighing whether to become a DIY investor or partner with an advisor

 
 

Having discussed the benefits and costs of doing your own investing in our previous article, this week we will discuss the merits and drawbacks of working with a financial advisor. It’s unsurprising that many of the disadvantages of DIY investing are the advantages of working with an advisor, and vice versa. The difference makers - as always - are your abilities, personal preferences, lifestyle, budget, and perception of value. We will only touch briefly on the subjects of advisor compensation and the different types of advisors here, but will explore them in detail in future articles.

Discretionary vs. Non-Discretionary Management: Who steers the ship

Although there are five different categories of advisors, it is only necessary (in the context of this article) for you to understand the difference between discretionary and non-discretionary investment management. Historically, the traditional advisor relationship for the everyday investor was non-discretionary, meaning that you either had to call your broker with instructions about what to buy/sell, or your broker could “solicit” a trade by calling you with an idea of their own. Either way, the ultimate decision was still yours; you just paid a pretty penny for it. Mutual funds, which are how most Canadians invest, are typically sold on this same non-discretionary basis.

Until fairly recently, discretionary investment management was something reserved for your pension plan (if you’re lucky enough to have one) and large institutions. As the name implies, the manager responsible for the portfolio uses their own discretion to make buy/sell decisions as opposed to seeking approval from the client for each trade. Normally the client and the manager sit down to establish an investment policy statement (IPS) which sets out the ground rules for the portfolio, and the manager takes it from there. There has been a trend in the past 10-15 years where discretionary portfolio management has become more available to individual investors with smaller portfolios. It’s still a fairly exclusive world however, as only a tiny fraction of those branding themselves “financial advisors” have the education, experience, and credentials to be registered as discretionary managers, and their investment minimums are rarely south of half a million dollars. Still, for some of our fortunate readers, this may be a valid option.

The advantages of choosing an advisor

  • Free your time: Having an advisor handle your investments means more time for the things in your life that really count – family, friends, travel and leisure. If you’re still working – especially if you’re in your peak earning years, chances are your time is more valuable doing what you get paid for than trying to play investment manager, but only you can decide if that’s really the case.
     
  • Free your mind: Being constantly reminded about what’s happening with your investments, and having all those extra decisions to make can take its toll on your peace of mind. Often the investors with the best performance are the ones who leave their investments alone and let the market do its thing (with the right course corrections over time). Money is also a leading cause of trouble between couples. Having an advisor act as a third party in your relationship can help mediate different “money management” personality types. If one of you is more conservative than the other when it comes to investing, an advisor can help you both understand risk and reward balance. Think of an advisor as a mediator and an educator who can alleviate the stress of investment management in your relationship.
     
  • Excellent execution: Portfolio managers and some more knowledgeable advisors know how to navigate the ins and outs of the market better than you likely could by yourself. They often have access to forms of trading and foreign exchange that are more cost effective than anything available to individuals. Experience and familiarity with market cycles, today’s economics, and a depth of knowledge of investment vehicles means that an advisor is likely to have a more well-rounded view of the big picture and how your investment goals fit inside it. Just because some advisors aren’t very insightful doesn’t mean there aren’t some great ones out there.
     
  • More than just investments: Well-rounded investment advisors are also likely to have backgrounds in aspects of wealth management that extend beyond the realm of investments. A Certified Financial Planner (CFP), for example, will not only help you build and manage an investment portfolio, but can also advise you on ways to cut your tax bill, and build a well-rounded financial plan. So while you may be a great stock picker, there’s much more work involved in achieving and maintaining financial independence.
     
  • Someone to watch over me: When doing your own investing, only one partner in a couple tends to know what’s going on with the investments. This means the burden is on them to keep a constant watch on the whole world’s economy, not to mention following each sector, country, or company they might be invested in. If they’re not available to sit in front of a computer because of unexpected illness, or something a bit more fun like an extended vacation, today’s volatile markets can sideswipe even the most carefully constructed portfolio in the blink of an eye. While some of today’s advisors are really just asset gatherers (sales people) who sock your money into investments and ride the trailer fees, the new generation of discretionary managers tend to take a more active approach to safeguarding your portfolio - keeping a lookout on your behalf, and taking swift action when needed.

The downside to choosing an advisor

  • Handing over the reins: With discretionary investment management you work with your advisor to establish the boundaries and rules for your portfolio, but from there you must be open to their methodology because the portfolio will largely be hands-off for you. This is only a disadvantage if you want the control. Working with a non-discretionary advisor offers more control in that you must approve or reject each investment, but many advisors employ the use of “managed money”, where they hire discretionary mangers on your behalf, or have a particular method by which they make their portfolio recommendations. The degree to which your broker will be open to your meddling in their investment style varies widely, so be sure to ask before you hire an advisor if you think you’ll have the occasional urge to grab the wheel when the road gets bumpy. We will cover this subject in more detail in the fourth and final part of this series when we discuss the merits of combining investment advice with DIY investing.
     
  • The cost of advice: We’ll be bringing you a dedicated article on understanding advisor compensation, but suffice it to say that no one works for free, and there is a very big range in the fees, commissions, etc., that advisors charge for their services. If your portfolio is in the six to seven figure realm, the collective cost of advice (plus the cost of the investments recommended) should start (in percentage terms) with a 1, but sadly it often starts with a 2, 3, and sometimes an even bigger number. Canadians pay on average 2.5% for mutual funds. In a world where equities return low-single digits and interest rates barely keep pace with inflation, you simply cannot afford to over-pay for investment advice unless your manager/adviser has a knack for adding (consistent) alpha to your portfolio. Saving on fees is one of the main drivers of DIY investing, but since most people still opt for the use of an advisor, be aware that fees have been falling steadily over the past 10-15 years, and there any many choices available to you. The trouble with many investments, chiefly mutual funds, is that it’s often very difficult to understand what fees you are actually paying your advisor. By 2016, new regulations promise to level the playing field and provide crystal clarity to Canadians so we can make better decisions in this area.

The ugly side of hiring an advisor: Thieves of Bay Street

While cases like this are rare in the grand scheme of things, some “advisors” are really thieves in disguise. They promise you the world, conning you into believing they have the “perfect” investment vehicle that will earn you a healthy return, only to leave you high and dry - sometimes snatching your life savings from you in the process. In fairness, this is a risk that any investor may be exposed to whether they have an advisor or not. Nevertheless, be wary of grandiose claims of “sure things”, promising all upside and little to no downside. Remember that if it’s too good to be true, it is. No investment should return significantly more than other comparable investments. There is always risk in any investment. Furthermore, the greater the return, the greater the risk. This is such a critical concept that it’s worth repeating: There is always risk in any investment. If an advisor you’re considering working with spends little or no time talking to you about the inherent risks of the investment products they offer, move on...quickly.

What to do if you hire an advisor

If you do decide to hire an advisor, the responsibility of investing isn’t entirely off your shoulders. Here are a few things to keep in mind when working with an advisor:

  • Do a background check: Make sure you get a good picture of an advisor’s reputation and past performance. Talk to friends and family who know the advisor and solicit their feedback. You can also Google your advisor’s name to see what they’ve been up to. Also, make sure their firm is large and reputable, and if they’re part of a smaller boutique firm, make sure they utilize a custodian that is well-regarded to safeguard your money. You should make sure your accounts will be protected by The Canadian Investor Protection Fund (CIPF), and that your advisor is properly registered with the provincial securities commission, or a self-regulatory organization that can provide you with some recourse in the event of unscrupulous behaviour by your advisor. If you live in Ontario, you can check the regulatory history and registration standing of both your advisor and firm. If you’re from any other province, you can check here.
     
  • Understand what’s happening with your money: Meet with your adviser regularly, and inform them immediately of any change in your financial circumstances such as a change in your family, change of employment, adjustments to your retirement timeline, or a need for liquidity (converting large amount of your portfolio to cash). Also check in with your advisor periodically to ensure that your portfolio design is meeting your investment objectives, and just to be safe, once or twice a year try to reconcile what your advisor tells you with your account statements.
     
  • Insist on full disclosure about fees and your investments: Many advisors are compensated directly or indirectly by the institution whose products they’re selling you. The problem is, these fees are often hidden, but come out of your pocket anyways. Fortunately, new regulations will phase in between July 2013 and 2016 that will require investment dealers to disclose the exact amount of compensation your advisor and the firm are being paid, either directly by you or by the issuing institution. The rules also require much more comprehensive reporting about your total account performance, going back to when you first became a client. All of this is already available today from the very best advisors, and has always been required of portfolio managers.

If after reading this article you decide that hiring an advisor is an avenue you’d like to pursue, take the time to learn the four things a financial advisor should do to earn your trust.

Investing

The most important investment decision you'll ever make (Part 2 of 4)

May 26th, 2013 by

The pros and cons of doing your own investing

 
 

In this article, we will focus on helping you choose whether or not to do your own investing (also known as Do-It-Yourself, or DIY investing). While this option certainly gives you the most freedom to control your money, it also encumbers you with a fair amount of responsibility to ensure that you make the right decisions. Not for the faint-hearted, being the sole captain of your portfolio can take you into some choppy waters. However, it can also be highly rewarding - both emotionally and monetarily.

The good (pros)

Ultimate control: You’ll have complete personal responsibility for each decision. No one will talk you into or out of an investment decision, and you can buy and sell at your whim, at your convenience, in your underwear - whatever works for you. You’ll have no one to blame for those less-than-ideal trades, but you’ll get all the kudos for a good call.

You don’t need to trust someone with your money: Finding an advisor you can trust can be difficult, and your trust can always be betrayed. You don’t need to worry about this when doing your own investing. Besides, you’re pretty trustworthy, right?

“No one cares about my money as much as I do”: Ever get the sense that advisers either don’t have your best interests in mind, or that they simply don’t pay enough attention to your account? The simple truth is that many (but certainly not all) advisers in Canada are rewarded for sales activities, not investment expertise. It’s also well known that with all the forms of hidden compensation out there (the regulators are working hard to change this), it can be difficult to tell if an investment recommendation is based on what’s best for you, or what’s best for your advisor. It’s not surprising that many investors are choosing to manage their own money because they can pour in their own efforts, and hopefully improve results.

Save the cost of advisory fees: This is a big motivator for doing your own investing. The math shows that if you save the typical 1% per annum that a reasonably priced adviser might add to your investing bill, the lower returns compound over the years and end up being a fair size chunk of change (we should add that there are many unreasonably priced advisers that tack on far more than 1%). In the case of $200,000 invested over 20 years at an average 5% annual return, a 1% fee saved means a difference of over $92,000 in total portfolio value. This example of course assumes: 1) That you just buy investments and hold them for 20 years (without selling them in a panic one day), and; 2) That the investments you choose return an average of 5% per year. Generally speaking, that’s not how markets work. There are lots of ups and downs on the road to “average” long-term returns. That said, the math is sound enough that, if all things are equal, lower fees mean better performance.

It’s a hobby: It’s not for everyone, but many DIY investors genuinely enjoy the challenge of understanding what’s happening in the economy and making their own market calls. For these folks, investing is fun. It’s a way to keep the mind sharp (which is especially important for good health among those who are retired), and hopefully generate some income to cushion their retirement nest egg.

You might shoot the lights out: It’s certainly possible that you’ll rack up an impressive track record and perform better than you would have with an adviser. Mental accounting can make it hard to be honest with yourself about how you’re really doing, so be sure to track every investment, commission paid, gain, and (be honest) loss - in writing.

The bad (cons)

Time is money: Actually, it isn’t. Time is the one thing money cannot buy. Doing your own investing successfully (shouldn’t) be a piece of cake. Expect to spend plenty of time learning about how markets work, following politics and the economy, researching your investments, tracking your positions, and analysing your results. Among students at the Independent Investor Institute, we find successful DIY investors tend to spend a minimum of 10-20 hours per week on their portfolios. Time, like money, has an opportunity cost – you could otherwise spend the time with family, enjoying your favourite leisure activity, or staying active.

The emotional cost: Money is the biggest worry for most, and the biggest cause of tensions between couples. Not everyone is cut out for managing their own money. Here you really have to be honest with yourself – if the gyrations of the market mean you don’t sleep at night, you’re a perpetual grouch at the dinner table, or just don’t have enough “emotional bandwidth” left over for your spouse and family, consider those intangible costs. Stress is also linked to almost every physiological ailment, and that 1% you save actually isn’t worth much without your health. Also bear in mind that a small portion of investors have the same addictive relationship to market action as compulsive gamblers, so beware because the market can take your money as fast as any casino.

It’s low fee, not no fee: There are still plenty of costs involved in doing your own investing. The typical $9.95/trade is just the start. You need to know what you’re doing, so investing in some education and training makes sense before you stake your entire financial future on your investing savvy. Access to low-quality information may be free, but quality books, research subscriptions, and training courses do come with a cost.

One of the biggest costs unknown to most average investors is incurred using market orders, which is the main way you can buy and sell investments on your own. Market orders involve a counterparty that facilitates the transaction and skims a “bit off the top” for themselves for their troubles. Also watch out when buying mutual funds because many discount brokerages force you to buy the fund units which pay them the very same 1% adviser fee you’re working so hard to save. Stick with low-cost ETFs instead - advisor fee or not - because they carry far lower management expenses. Some discount brokers will even let you trade a selection of ETFs commission-free, which is perfect for smaller accounts which you contribute to frequently.

Have a back-up plan: Women live longer than men, but men tend to be the investment decision-makers in many households. Doing the math, this means your ship could find itself suddenly adrift in the event something happens to its captain. This is why we like to see both partners at the table whether working with an adviser or doing it themselves. One disadvantage to ditching the adviser (at least in theory) is that there’s no one to watch the radar and help out when the unexpected happens.

The ugly

When cheap is expensive: While we’re being brutally honest, your results when investing on your own may not be very good. Mistakes in the markets can be very costly. Whatever your opinion is of investment advisors, they do spend more time on markets than you do. This means they’re likely more in-the-know, which could translate into better returns even if they serve many other clients. To drive home this point, here are three of the many, many woeful tales we’ve heard over the years:

Sebastian from BC:

“In January 2011, I opened an RRSP and TFSA account with Questrade. I lost 80% of my money and I don't feel like doing any investing on my own anymore.”

Larry from Saskatchewan:

“I am a retired businessmen that did fairly well in my 40 years in business. Sold out fall of 2008 and started losing my money under management at ***** Bank. I took over June 2009 and did OK but in April 2011 I took a big hit because of using a loaded margin account with no stop loss in place, and continued down from there. I have a fair income outside my investment fund accounts in real-estate holdings, so I was a little more aggressive with my liquid funds than I should have been. I needed to kill time waiting for my wife to retire and thought I'd try the market for a few years till she was ready. I only have three hundred thousand left after debts paid and need to smarten up fast or continue to lose my comfortable future. I think I may have blown it and may not be able to do the things we wanted to do in full retirement together.”

Harold in Ontario:

“My dear wife has suffered with the market meltdown and feels she cannot retire early, as she had hoped. She is under contract to work 4 days per week, though her employers have her working 5-6 days per week. This is unfortunate, as she is a cancer survivor, who works far too hard for her health. It pains me to see it.

She is 51 years old. In order to accelerate her retirement plans, one year ago we decided to forgo the inclusion of bonds in the portfolio in favour of an all-equity portfolio. The subsequent meltdown has frightened her into selling everything near the end of December (2008) and resolving to hold cash for now, never to again be invested only in equities. Though we had sat down in Oct 2007 to design this approach, I must take some blame for being a bit too persuasive. Needless to say, I have "tendered my resignation" as her chief financial advisor.”

With great freedom comes great responsibility

Ultimately, investing on your own brings a freedom of choice you wouldn’t otherwise have if you handed all your money over to someone else to manage. If you choose to do your own investing, we want you to  remember three golden rules that will likely improve your experience:

1.       Understand risk: Don’t let risk be another four letter word. Understand what you’re buying, and how much its value could drop in a worst-case scenario. Then make sure you’d be okay with that, or don’t make the investment at all. Pretending the worst can’t happen when it comes to investing is a losing strategy, because every so often, it does.

2.       Understand diversification: Never put a large amount of your money in any single investment. Never put all your money in a single asset class (like all in stocks, or all in a high-interest saving account). Whether it’s the equity rollercoaster, wild commodity markets, changing interest rates, or inflation, your portfolio needs to be able to survive the unexpected, and that can only happen if you own a sufficient variety of investments that react differently to market events.

3.       Get educated: You wouldn’t choose to defend yourself in court without having some knowledge of the law, and you wouldn’t try to perform your own surgery, so make sure you know what you’re doing before you start doing your own investing. If you’re already a DIY-er, don’t stop learning.

The upcoming article in this series will cover the pros and cons of choosing to have an advisor manage your money.

About Larry Berman

Larry Berman is best known to Canadians as the host of the top-rated TV show Berman’s Call on the Business News Network (BNN). After leading an impressive career with some of Canada’s largest financial institutions, Larry had seen enough of the dark side of the financial industry to know that Canadian investors had the deck stacked against them - saddled with the highest fees and lowest levels of financial literacy in the developed world, they needed help. This is why, in 2006, Larry left the corporate world behind to pursue his passion for helping people do better with their money.

Larry is now the co-founder of the Independent Investor Institute – which is dedicated to empowering self-directed investors through hands-on education, and ETF Capital Management, a boutique portfolio management firm for affluent investors who are looking for a highly customized and hands-off approach to investing. Larry also hosts free speaking tours across Canada throughout the year, and free beginner trading workshops through the Independent Investor Institute.