Independent Financial Advisor Toronto
Throughout the turmoil of the last two years, investors have been examining the relationship they have with their Financial Advisor and as a result, they are starting to ask some tough questions:
1) Why haven’t I heard from you for so long?
2) Why was my portfolio so risky?
3) Why haven’t I made any money over the last 5 years / 10 years?
4) Why didn’t you protect me when the market crashed?
The answers to these questions are usually the same:
1) Stop paying attention to the “noise”.
2) Investing is for the long term.
3) You haven’t made money because the markets haven’t made any money.
4) Market timing doesn’t work. Nobody saw the crash coming.
Our responses to this “sage” advice are:
1. If you’re standing on the railroad tracks and you hear a freight train coming, ignoring the “noise” will get you killed.
2. Long-term investing involves a series of short-term up and down (bull and bear) markets. Recognizing this is essential to success.
3. If all that you want to do is mirror market performance, fire your financial advisor and buy some passive index funds. Then, if you haven’t made any money for 5 or 10 years, you will only have yourself to blame. We believe that you should be able to make money in all markets by making the right tactical asset allocation adjustments to your portfolio.
4. Market timing doesn’t work because nobody knows the absolute top and bottom of the market. Tactical Asset Allocation does work, however, and it allows an Advisor to preserve capital when markets are vulnerable and make money when opportunities present themselves. The idea that nobody saw the crash coming is ridiculous. This was the most obvious and telegraphed market crash / recession in modern history and 99% of economists didn’t see it coming. We warned our clients about the crash two years before it happened.
Please use this form to contact us for a free consultation. We want to work with you to make a difference in how you see your future and your financial security.
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