When’s the last time someone tried to talk you into chasing a “hot” Treasury bond run — NOW, before it’s too late! Probably never, right? Most of us recognize that’s not what fixed income investing is for. Bonds create stability; stocks and alternatives are where the excitement is at. And yet, I often see people forgetting this timeless truth, or at least investing as if they have. Plus, to further complicate things, not all bonds are created equal. This can trick you into thinking you’re playing it safe … Following are 6 best practices for fixed income investing across all kinds of markets, whether rates are rising, falling, or in a holding pattern.
Retirement isn’t the only reason to set aside current income for future spending. But since it’s usually the elephant in the financial planning room, it’s worth a Timeless Tip of its own. Following are 6 ways to leverage lifelong financial planning, so you can retire on your own terms and on your own timeline.
I’ve spent my entire career railing against the dangers of market-timing—i.e., dodging in and out of markets based on current conditions. But there is a time when “timing” of a different sort matters. I’m talking about your investment time horizons. Today, let’s look at how to use your personal time horizons to successfully separate today’s spending from tomorrow’s future wealth.
If I could, I would grant amazing investment returns to every investor across every market. Unfortunately, that’s just not how it works. In real life, we must aim toward our financial ideals, knowing we won’t hit the bullseye every time. That’s why I recommend evidence-based investing—or investing according to our best understanding of how markets have actually delivered available returns over time, versus how we wish they would. Our “best understanding” may still be imperfect, but it sure beats ignoring reality entirely. Let’s look at why evidence-based investing based luck-based investing…
There are countless external forces influencing your investment outcomes: taxes, market mood swings, breaking news, etc., etc. Today, let’s look inward, to an equally important influence: your own financial behavioural biases. When we make snap financial decisions that “feel” right but are rationally wrong, we tend to sabotage our own best interests. By recognizing these reactions as they occur, you’re more likely to stop them from ruining your financial resolve, which in turn improves your odds for better outcomes. Let’s explore some behavioural finance examples that you’ll want to prepare for…
I would be remiss if I didn’t dedicate at least one post in my “Play It Again, Steve” series to everyone’s least favourite, but still significant topic: taxes. It’s a good thing there’s no tax on writing about tax planning; if there were, I would surely owe a lot. Here are six timeless techniques for reducing your lifetime tax load.
Recently, I sat down with Rob McClelland to join an episode of the Think Smart with TMFG podcast. Rob is with McClelland Financial Group of Assante Capital Management. We had a great conversation and I had the opportunity to describe my core business values and strategies on investing including... click through to find out.
If organizing your financial interests has become an endless game of whack-a-mole, the cost of a financial advisor might be worth it to help you tame the tangle. Remember that it's better to focus on the value that the cost of a financial advisor brings you. "Free Advice" can cost you. Fee-based advice allows you to become the boss of your financial interests. Also, the cost of an independent financial advisor should cover far more than merely helping you buy or sell this or that security in your investment portfolio. Determine what the long-term value of financial advice is worth to you. Check out these insights that you can use to assess the value of independent financial advice vs. just looking at the cost of a financial advisor.
Have you been reading the headlines, viewing your investment portfolio, and assuming the worst is yet to come? Welcome to your painful crash course on what market risk really looks like—and more importantly, how it feels. Most investors say they’re ok living with periodic market risk, as long as it helps them achieve better returns over the long run. We accept (in theory) that tolerating the interim damage done to our own investment portfolios will help us meet our long-term financial goals. But that’s investment risk in theory. Since it’s been a long time since we’ve encountered an extended bear market climate, you may have forgotten or never known the reality of it. It may not have clicked then, when significant market declines happen, it is usually due to despairingly bad news … amplified by headlines screaming how things are only going to get worse from here. The reality is, when we’re in the middle of a storm of stuff, our behavioural biases make it very difficult to believe we’ll ever see better days.
As my husband and I approached our late 40s/early 50s, we decided it was time to solidify our previous hastily sketched plans for early retirement. We had worked hard for many years and skimped in places and were confident that we had done everything right to retire early and live our best early retirement lives. However, when we sat down with the numbers, we realized our dreams of an early retirement with travel and adventure were farther from reach than we thought. We both had well paying careers and didn’t feel that we had splurged so much that we should be this far behind. What happened? And, more importantly… How do we get back on track? Once panic-mode subsided, we sat down with some spreadsheets to see what had gone awry and figure out how (and if?) we could still retire early and be able to comfortably afford the things we wanted from retirement. Here’s what we did to right the (sinking?) ship...