Petrov Wealth Management Group of RBC Dominion Securities

Top questions I would ask if I was interviewing a financial or investment advisor as a consumer, in no specific order: - What is your process for determining the right overall financial strategy for me? - What is your process for selected and deselecting investments?... - What is your investment philosophy? - Do you represent an in-house product line (such as a mutual fund company) or are you licensed as a full-service broker (access to entire market)? - How are you paid? Are you paid differently based on which products I invest in? - What do you control and what don't you control? - What potential conflicts of interests would exist in our potential working relationship? - What is your service plan? Once I sign up, what is your process for servicing me and my account going forward? - What do your team members do on your team?

Team meetings can either be a great experience or a total waste of time. Leaders can sometimes get lost in generalities or things that have nothing to do with the business. In my view, internal meetings are an opportunity to brainstorm these two topics, or things that contribute to these two topics:... 1. How can we elevate the client experience (service, results, outcomes) 2. How can we get known to more clients? (Growth) Stay focused!

When reviewing clients portfolios, I take the time to explain how we have allocated the portfolio, when we last rebalanced, what major decisions were made, returns and attribution, and ultimately how things are progressing relative to the written financial plan. When returns are excellent, clients are obviously happy and some will be nice enough to give us credit. Positive feedback is always much appreciated. I reciprocate and give the client just as much credit back.... Sure we diversified well, made the right allocations, bought good businesses, rebalanced on time, etc... The truth is: No matter how well we did our work, if the client gave in to their emotions and asked us to make the wrong decisions, we couldn't produce those results. This is partnerhsip.

The Petrov Wealth Management Group is looking for talent. Our going commitment to excellece has translated into incredible growth. We are looking for someone to focus on business development and proactively identify opportunities with new potential clients. Our primary focus is the business owner market.... If you know a candidate that is strong in sales and business development, reach out to me on LinkedIn or send an email to [email protected].

Every action AND inaction is a decision which has a compounded effect years into the future.

Human behaviour is predictable, particularly on a large scale. In studying history we find that the environment changes, but human nature never changes - it is constant. Studying the markets to me is essentially synonymous to studying large-scale human behaviour.... The fads and fears of the moment will cause excess buying or selling in the short-term but ultimately capital will be allocated rationally to excellent businesses with great profitability over the long-run.

Good service is when your needs are met. World-class service is when you needs are anticipated.

New Petrov Blog post is up... Check it out! In this post I refer back to a few points I shared before and how many of them have materialized so far this year. I give my tow cents on why equities is, and has always been one of the most reliable ways to combat inflation. In addition, I share Jim Allworth's (RBC DS economist) comments on equity markets, fixed income markets, currencies and asset allocation.

Comparing a portfolio to a benchmark of market indices has its merits. However, it also has its flaws in most cases. - Is the benchmark truly blended proportionately to the portfolio? For example, you could easily misrepresent relative performance if you have a globally diversified portfolio and only compare it to the Canadian stock market. - If there were allocation changes made to the portfolio, was that factored into the benchmark? Most often, the chosen benchmark does not... capture those changes. - It is hard to capture investor behaviour in a benchmark. For exmaple, if an investor made the mistake of trying to time the market and held on to cash for a while and then got back in later, has that been considered in the benchmark? - An investor sits on large amount of cash for a long time and only invests a small portion of their wealth. They selectively only look at performance of the small invested portion but in reality their overall returns are weak. Again, investor behavior is often overlooked with benchmarks. Ultimately, these are some of the reasons I believe the only appropriate benchmark is the Required Rate of Return of one's comprehensive financial plan. Everything else is somewhat of a distraction.

I confess that I tend to be a bit of a "party pooper" when it comes to hot, trendy investments. Every now and then someone will tell me why a company or stock is the next big deal. An exciting story and enthusiasm doesn't make it a profitable business so I ask these questions: - What is the business model? How does the money flow through the supply chain?... - What were the sales to date, last year, the year before, etc...? - What are the profit margins? Net income? - How much free cash flow was generated to date, last year, the year before etc...? - What are the company's assets? What are the company's liabilities? - The stock price is $X and there are Y numbers of shares outstanding. Do you think this is a good valuation? On what basis? By this point, I usually crashed the party for 99% of cases. At the very least, it allows the person to look at their stock idea for what it is: A pure gamble. If they still go ahead with the stock, at least they have the right mindset and expectations.

The Petrov Wealth Management Group is looking for a business development assistant. I am looking for: - Mindset of a winner... - Excellent communicator and natural likeability - Results-focused - Solutions, not excuses - Ability to handle constant rejection - Competitive nature - Integrity, integrity, integrity Share the link with someone who might be the right fit. This is not for the faint of heart.

Common financial mistakes we see investors make: - Not having a written financial plan. Without clear goals written down and without a roadmap for the future, one is much less likely to achieve the desired outcome. Furthermore, they will be prone to be sidetracked by the latest news.... - Not being adequately diversified. Diversification in a portfolio is equivalent to diet and exercise for your health. It is as important a location in real estate. Investors who choose to ignore this all-important aspect end up paying the price sooner or later. - Trying to time the market This is the most certain way of losing money. The market is almost perfectly efficient and almost all information is priced in. Having lots of cash on the sidelines for years is a common symptom of this. - Not conducting fundamental analysis on stocks Most people think of stocks as things that go up and down in price and never actually dig into the company and look at their financial statements. They just speculate on the price in isolation. Buying stocks is buying businesses and an investment thesis should be largely based on fundamentals. - Forgetting about tax and estate planning Not having a written plan often leads to leaving tax dollars on the table while you're alive and beyond yourself.

When a client or another professional asks me "What kind of clients would be a good fit for you?" they may expect that I will answer simply with a dollar figure. While we primarily work with families with significant wealth, there is much more to it than just a minimum dollar amount. The "fit" needs to be perfect in terms of philosophy and personality traits.... I elaborate further on the answer and explain that we work with eternal optimists. I have learned that eternal pessimists are doomed to fail as investors regardless of how sound our portfolio management process is. Sooner or later they will give into their emotions when headlines are calling for the end of the world, causing them to make very expensive mistakes. No matter the dollar amount, I cannot be the captain of a sinking ship. Eternal optimists believe it is the best time to be alive and the future is bright. Looking back at history, they observe human beings always come out on the other side stronger than before, regardless of how bad it got. These investors lean on the undeniable evidence that equities are on a constantly rising trend line and market downturns are an incredible opportunity. They also tend to look at headlines with a skeptical eye. With this mindset, we can do great work together.

What is a "good quality" business AKA a "good investment"? - Sound business model The business is a leader in its industry and we understand how they make money. There is demand for their products and services and they are successful in selling them.... - Skilled management team Is the business managed by competent people who know how to allocate resources? Are they successful in executing on their projects? This team needs to be stable and have a demonstrated track record of success. - Robust cash flow generation Business produces consistent and rising free cash flow over time. - Solid balance sheet Company has a strong balance sheet to ensure debt levels are sufficiently covered by earnings and assets. - High return on invested capital Company produces returns when they allocate their own resources. With this in mind, you could probably guess my opinion on the next hot stock tip. Bonus: If everyone's REALLY excited about it, I'm out.

Some of the common questions I have been getting from investors and some of my (simplified) answers. Q: Markets are high, aren't we due for a correction? A: Markets are high relative to the past... That's the point of investing. Based on 100 years of history markets are not high relative to the long-term future. Statistically, markets are due for a correction annually and that is the normal cycle. As long as we own quality businesses with rising earnings, we should see rising... price over time, with dips in between. Q: Markets are due for a correction because of A, B, C reason. What do you think? A: A, B, C reason is information that already exists and thus, it is considered in today's prices. By definition, the next correction or downturn cannot be for reasons that you already know. Attempting to time the next correction is the most disastrous idea an investor can entertain. Q: Rates are so low, should I bother owning bonds? A: There are only 2 reasons an investor would own bonds. 1, desire to reduce volatility. 2, potential need to withdraw cash in the short term. Both reasons imply the investor accepts to lower their expected return. Many institutional investors are choosing to be overweight equities to offset the lower rates. Bonds to be used for the right reasons only.

I had the pleasure once again to be invited to speak to an incredibly sharp group of graduate students at McGill University. I shared my experience with managing sizeable portfolios, asset allocation, wealth planning, entrepreneurship and behavioral finance. Even though nowadays these speeches are done through the camera, I could still feel that hunger to learn and enthusiasm.... I always enjoy closing the gap between theory and practice. Looking forward to more of these opportunities!

The ego is the biggest barrier to the truth. How does this apply to investing? Approximately 90% of your return is explained by your asset allocation, NOT individual stock picks. Often self-directed investors fall prey to the "self-attribution" bias. They may buy a certain stock based on something they read. If the stock goes up over the next few months they may feel euphoric and they may attribute the increase in price to their ability to pick stocks.... They may not realize that the entire sector went up and that stock is riding the wave of the entire sector, for unrelated reasons. This then leads to overconfidence and making "bets" on companies that they do not truly understand. During upswings they feel like they are doing well but during downswings, the losses can be devastating. Investors who don't understand their biases often end up looking back at disappointing results. Average out the ups and the downs and check the annualized long-term returns. I recommend setting hard-rules to prevent disasters. Some examples: - Multiply the price of the stock by shares outstanding and ask: "Is this business worth X?" Why? - No more than X% in each position - No more than X% in each sector *Bonus: Surrender your ego to the truth... You probably can't outsmart the market.

Has this ever happened to you? You're on your way home and you get stuck in traffic. You are not moving and you notice cars are passing you on the lane to your right so you decide to change lanes. Shortly after changing lanes, the new lane you're now on stops moving and the one you were in before suddenly starts to move again. You realize that if you were patient you would have been ahead and both lanes probably get to the destination at the same time. The impatient person wh...o is reactive gets left behind while the one who stuck to his initial plan got to his destination earlier. This is exactly what happens with investors who chase the most recent "hot stock" or recent top-performing fund (or overweighting tech stocks right now). They end up buying things after they went up and selling things that were just about to "pop". Be patient, stick to the plan and save yourself the regret!

"It's not the hours you put in, it's what you put in the hours" Great quote by Jim Rohn.

The stock market is the only market where most people shy away from buying when prices are discounted.

It is incredible what we are capable of when our back is against the wall. Having been in this situation myself, I know with certainty that when failing means no shelter or food... Your entrepreneurial spirit awakens and success becomes non-negotiable. Your mind constantly scans for solutions and you spend every waking moment taking action towards a better outcome. There is only one condition for this to be true: You actually have to believe it's possible to get out of the ru...t and into a beautiful place. If you don't believe it's possible then why take action at all? "Whether you think you can or you think you can't, you're right" - Henry Ford Amidst all the negative news, I thought I'd share some positivity. I was inspired by a show I recently watched "Undercover Billionaire". Check it out!

Diversification bores investors. they heard about it over and over and it is natural that they get more excited by something that sounds more clever or different. The reaction may be "Yeah yeah, diversification... I heard that before..." It is similar if I said that diet and exercise are the key to being healthy and fit. "Yeah yeah, diet and exercise... I heard that before...". We know this is the truth and the right thing to do but yet there is no shortgage of crash diets, pills and all kinds of other "shortcuts". Diversification works for optimizing your portfolio's risk-adjusted returns the same way diet and exercise works for optimizing your health and fitness. If it is boring, old and simple wisdom then it is worth understanding and considering.

I sometimes hear the comment "The stock market is out of whack and it does not seem to reflect the current reality". The truth is the stock market moves ahead of reality in anticipation of the future. Today's stock prices are an anticipation of future cash flows. In other words, the information that is available to all of us about how the future might look is already baked into the price. For you to time the market (and be right consistently), you would have to to know of fut...ure events which there are no signs of at all and thus, it could not be priced in. Chances are, if you thought of a possibility it was already baked into the price long before you thought of it... Markets are largely quite efficient. This is one of the reasons attempting to time the market, to me, is as good as astrology.

4 Tips for better client meetings: - Be a beacon of positivity and confidence. There is no shortage of negativity and "heavyness" in the world. For most people, talking about their finances (or buying a high value item) is like getting their teeth pulled. That pain needs to be alleviated by the fact that it feels good to be around you and that you provide a helping hand. - Be fully present. The client deserves your undivided attention and energy. People can intuitively feel i...f you have other things on your mind. Nothing else exists in that moment except the client in front of you. - Care about the client's desired outcomes over your outcomes. As the service provider, your needs and desired outcomes are last in line. Ironically, the less self-serving your process is, the more business you will earn as a byproduct. - Have a defined process. Professionals don't wing it and having a process is a sign of someone that has an organized mind. This builds procedural trust.

Check out the new "Petrov Blog" on our Website! I will share my thoughts on family wealth planning, tax planning, investing, markets and all things wealth-related.

There is only one path to true Confidence: Competence I don't believe in "Fake it till you make it" and people can read right through it. If I want to be the trusted advisor to other successful businesspeople, I must have real value, deep knowledge and sincere empathy to bring to the table. No "tactics" are required if you are an authority and expert in your field. Confidence comes as a result of competence.

One of the most common biases we see with self-directed investors is what we call the "Home Bias". Since we live in Canada, DIY investors are more familiar with Canadian companies due to proximity. As such, they tend to overweight their portfolios in Canadian stocks. Here are some reasons it is crucial to have proper diversification outside of Canada. - Canada represents less than 5% of the world's total market cap. The US represents approx. 50% of the world's total market ca...p. - The TSX (Toronto Stock Exchange) is not adequately diversified by sector. It is overweight in 2 sectors: Financials and Energy. - In the large-cap space, there are only a small number of companies to choose from within the Canadian market. In other words, there is limited opportunity. - As at August 7 2020, the S&P 500 (US) delivered a 11.6% annualized return while the S&P TSX (Canada) delivered a 3.4% return in the same period. - One of the keys to superior risk-adjusted returns is proper diversification. Geographical and Sector diversification are absolutely crucial. See more

Human nature drives economies and markets. External circumstances change and the world evolves in cycles. Having said that, here is what is constant: - Change. Circumstances evolve, typically for the better over the time. We go through crises and difficulty but on the other side, we see continuous improvement of the quality of our lives over history thanks to our nature. As Ray Dalio puts it "everything looks bigger up close" but when you zoom out, you can see that change is ...constant and it is what makes up our evolution. - Human nature. One of greatest qualities we have as a species is our ability to adapt to new circumstances. In spite all of our imprefections, we have a clear track-record of being resilient and adaptable even through seemingly insurmountable adversity. It is reasonable to say that human nature has not changed and likely will not change soon. In light of that, I believe long-term optimism is the only rational view.

I have found that these two questions are the most challenging ones to figure out in the beginning stages of the retirement planning process: 1. How will I spend my time? 2. How much will that cost? (Figuring out what your lifestyle expenses will be)... In your working life, you may have your identity tied closely tied to your business. When you sell your business or retire from your career, you may go through a period of deep introspection to define your renewed purpose. It is important to figure out how you will spend your precious time and that is what will make up your lifestyle. Suddenly money is no longer a metric to see how well your business is doing. It now becomes a means to an end (a tool you use to fund your lifestyle). Once you have figured how much money is needed to fund your lifestyle, building out a plan becomes much easier. Now we can begin to think about tax strategies, RRSP conversions, withdrawals from a holding company, income splitting, asset allocation and all the rest.

A mentee who is early in his career asked me: "How much time per week do you spend reading to deepen your knowledge?" We know that when starting a practice a lot of time has to be spent doing business development to survive so every minute counts. However at the end of the day, being a great advisor (or any professional) means you have to be a thought leader in your space.... To be a thought leader, you have to be able to form a strong opinion. To form a strong opinion you have to have deep knowledge and genuine interest in a topic. That is what clients rightfully expect. The short answer is: As many hours as it takes to be a thought leader and teacher. This takes on a whole dimension far beyond "sales".

Managing a portfolio well involves using our brain and our stomach. By brain I mean technical knowledge and by stomatch I mean emotional resilience. Managing other people's portfolios involves one more very important layer on top, which is using our heart. By heart, I mean empathy. My advice may be logical and sound but if you do not feel my empathy, you will not take my advice.

Be aware of the Recency Bias. When markets have recently been going up, we assume they will continue to keep going up. When markets have recently been going down, we assume they will continue going down. In other words, we can easily get emotionally pulled into the momentum of overall sentiment.... Market downturns are as normal as Winter following Fall. After Winter comes Spring and after Spring comes Summer. Yet, investors subject themselves to the same emotional distress every time the metaphorical Winter comes. You can take advantage of the opportunities when you can peacefully accept the inevitable difficulties in between

"I don't trust the stock market... It's like a big Casino" From time to time I hear this and I understand why someone might say make this argument on the surface. The markets can feel crazy, especially if you look at it on a day-to-day basis. The reality is the stock market is nothing like the Casino.... In the Casino, the longer you stay in - the lower and lower your odds of making money become. In the stock market, the longer you stay in - the higher and higher the odds of making money. The challenge is having the discipline to stay in and stay diversified. Attempting to time the market and deviating from a diversified portfolio to make a "bet" is the Casino itself.

Every so often, a client may mention to me that their children (in their 20's) are interested in speculating with a couple of stocks and may ask for my opinion. My advice to a younger person would be: 1. Develop skills that enable you to add a significant amount of value to the marketplace so that in turn you will earn a high income. Learn how to become a excellent communicator and leader, how to build systems, develop productive habits, learn everything about your industry. ...Unless you are in the penny stock business, any time looking at penny stocks is time away from developing high income skills that will produce during a lifetime. Your ability to produce income is your greatest financial asset. 2. Develop great money habits. Learn the basic principles of finance so that you can appreciate the importance of saving. If you understand the concept of Future Value and the power of compounding, you will have a clear incentive to be disciplined with your dollars. I would also encourage them to learn the basics truths about the markets and behavioural finance. Ex: The cost of attempting to time the market, the benefits of diversification, etc... Trying to make a quick buck speculating can divert your attention away from what truly matters (spend less than you earn).

The stock markets in the course of history have always been the same. They show a constantly rising trend line with temporary periods of excess optimism (greed) and excess pessimism (fear). In other words, long-term opportunity mixed in with short-term difficulty. Successful investors focus on the constantly rising trend line over time. Most investors, sooner or later focus on periods of excess optimism and excess pessimism when they inevitably happen and lose sight of the co...nstantly rising trend line. If an investor can rationally and emotionally realize this, she is well on her way to succeed.

Today I got a phone call from one of the dry cleaners I use (only one) to let me know they are open for business. I love it! This is the proactive approach we need for a speedy recovery. Usually the things we need to do to grow are easy to do and easy not to do.... Rather than wait for customers, why not simply call everyone in your database to let them know you are ready to serve them?

I thought I would share a video of an interview with Nick Murray. For decades, he has been an advisor to advisors and in this video he shares a rational view on the markets and the value of financial planning. The advice he shares is what I consider to be timeless wisdom. I encourage re-watching this when volatility strikes again (as it certainly will many times over the years). https://bitly.com/2XnRVJ0 (You can skip to 2:15 to get right to the content)

I am proud to say that we are one of the rare teams are has continued to experience incredible growth. A few thoughts: - We feel immense gratitude for being able to run our practice. That gratitude translates into a sense of duty to be all-in for our clients and for the overall economy. More than ever we want clients to feel our presence an continue to earn their trust. We are lucky to have an active seat in the economy so we think it is our ethical obligation to use it to it...s full capacity. - From the early stages, the decision was made that each member of our team is increasing activity on all fronts from client service, portfolio monitoring, self-education all the way to marketing efforts. One way to offset a challenging circumstance is to increase activity. - We operate with an stewardship over salesmanship approach. Have the heart of a teacher and empower people with knowledge.. Nobody wants to be sold... People want to learn. If we focus on how we can be better listeners, educators and communicators (even remotely), the results will take care of themselves. - Creativity follows commitment. In other words, we commit to making it work first and then we will find a way to figure it out. Solutions don't come to a hesitant mind. ie. Working remotely, etc...

Client & customer service standards in general are lower right now. We experience long wait times, long turnaround times, difficulty reaching people, less phone availability, auto email replies about how high the volume of inquiries are and how long it will take to get an answer, etc... This presents an incredible opportunity to stand out by delivering much needed value. We could decide to expand into this contraction and make ourselves more available than ever to clients. Wh...y not use this as an opportunity to impress clients with ultra-quick response times? Why not pick up the phone and call proactively? Why not send an email literally inviting an inquiry? While we need to adapt to changing environments and come up with new processes, plain and simple customer service is a marketing strategy that never fails.

What is your "Capitulation" Point? Capitulation means to surrender or give up. This is the point where you prefer to incur a permanent financial loss in order to calm temporary anxiety caused by temporary volatility. A risk tolerance questionnaire is not enough to capture your true risk tolerance. Proof: Investors answer these questions more optimistically during rising markets and more pessimistically during volatile markets. This change in sentiment during a volatile market...s can cause an investor to capitulate, hence incurring permanent losses. I believe a quality advisor should go much deeper than "selling" you on past returns and having you fill up a risk tolerance questionnaire. We should take the time to know our clients' entire situation financially and behaviourally. An investor's sentiment change could even be caused by factors outside of the markets... It could be a personal circumstance which seems unrelated but it is our duty to know and adjust accordingly. In essence, we should be behavioural finance specialists.

Being a successful investor has much more to do with emotional fortitude than complex technical knowledge in many cases. You could have all the technical understanding of finance but when the amygdala (emotions) hijacks the brain, you could make serious mistakes with your money. Think about how much self-discipline it takes to:... - Sell things that have gone up - Buy things that have gone down - Question or, in some cases ignore information thrown at us by mainstream media - Be cautious (boring) when everyone is seemingly making money - Be opportunistic when everyone is afraid - Side-step a seemingly perfect short-term opportunity when it does not fit your process - Avoid the hot sector/trend right now and staying diversified - Separate ego from money - Not think in terms of stock price or current market value, but in terms of business valuation - Being an eternal optimist, even in the midst of chaos I believe emotional awareness needs to be discussed more in our industry, as it has the biggest impact on outcomes.

I believe fulfilment in ones work is derived from helping others. In more business terms we call it adding value. As entrepreneurs, how can we get creative to go above and beyond to help clients right now? As an employee, how can you go above beyond your job description to keep the business running as smoothly as possible?... As far as activity, we have 3 options: 1. Slow down output 2. Keep output the same 3. Increase output beyond normal levels Option 1 and 2 leads to the same outcome: Decline in business. We must offset the environment (out of our control) with increased output (in our control) with option 3.

The Petrov Wealth Management Group is operating at full-throttle and is available from 9:00AM to 9:00PM during these times. While we are remote and isolated, we are fully connected and more active than ever. If you want to find out if you have adequate safeguards in your investment portfolio, reach out to us at (514) 630-1634 or by email at [email protected].

Top 5 questions I have been getting: 1. Are we headed for a recession? Recessions are defined as 2 consecutive quarters of negative GDP. Some are cyclical and mild while some are severe and triggered by a wild-card. Recessions are always confirmed looking back at the numbers but it is safe to say we could be right in the middle of one right now.... 2. Will the markets recover? We have been through the Spanish flu, the great depression, world war 1, world war 2, terrorist attacks, the tech bubble, the financial crisis and the list goes on. Every time without exception, markets have rebounded stronger to newer and newer highs forming a constantly-rising trend line. You would have to get creative beyond facts to explain why markets would not recover this time, particularly the US markets. 3. When will the markets bottom out and recover? It is always interesting to try to anticipate how the future will play out and exchange ideas for the sake of stimulating our minds. The only truth is nobody can answer this question. The entire world is watching events unfold together. 4. What should I tangibly be doing with my portfolio? Wait? Sell? Buy? Rebalance your portfolio. Hopefully your asset allocation and diversification were already correctly aligned to your written financial plan and your personal risk tolerance. For example if your target asset mix was 60% stocks and 40% bonds and your stocks went down, then you are likely off-side and overweight bonds relative to target (maybe youre now at 50/50). If so, then you could trim bonds and buy a small amount of stocks at a discount (bringing you back to target). Since we dont know when the bottom is, this creates slow, gradual entry-points at cheaper and cheaper prices. Do not Panic Sell. 5. I have X amount of Cash and I want to take advantage of lower prices but Im afraid of getting in at the wrong time. What do I do? We dont know when the bottom is so be humble and hedge your risk. Break down your cash into 3, 4, 5 or more chunks and commit to deploying the cash at a pre-set frequency/interval. The hard part is staying disciplined if markets continue to decline after you deployed your first or second chunk. Again, dont waste your time trying to predict what will happen in a week, a month or even a year. I am making myself available over videoconference (Facetime, Skype, Zoom) if you want to see if all the safeguards are in place in your portfolio. The best way to reach out is to email me at [email protected].

We asses where the global economy stands in the fast-moving COVID-19 crisis. Read the latest from our Global Portfolio Advisory Committee.

Coronavirus - Should you worry? Whenever there is uncertainty, be it epidemics, political unrest, terrorist attacks or other... markets experience a spike in trading volume, typically on the sell-side and thus, discounting the price of stocks - creating excellent buying opportunities. When the fear of the moment starts to fade, markets recognize investors oversold and trading volume rises on the buy-side again, causing prices to rise again. This cycle repeats itself over time... and when you zoom out of the current fear, you notice a constantly rising trend line. While it's impossible to predict market in the short-term, here is how the stock markets have performed 6 months and 12 months following the announcement of an epidemic. Thinking of going to Cash? Think again. Selling equities when they are trading at a discount results in permanent loss of capital. This is the ultimate mistake. Even if you think you'll just wait it out a few weeks to see what happens, know that the S&P's best performing days during the past 20 years were within two weeks of the 10 worst days. Epidemics should be taken seriously. The media's role is to keep your attention. As of yesterday, 2,814 people died of the coronavirus while 76,456 people died of the seasonal flu this year.

Financial knowledge falls into 3 camps. 1. None or Limited This is where we all start out. This group sees financial planning and investments as obscure concepts. The financial world seems very intimidating. Stocks? Bonds? ETFs? Mutual funds? RRSP? TFSA? Tax? S&P 500 sounds like a Nascar race track. Their biggest risk is getting bad financial advice.... 2. Knowledgeable This group did some digging, they learned the lingo and they are comfortable looking at stock charts. They follow stocks on their phone, they know the latest news and they form opinions on where markets are going. They can hold a conversation and they can sound sophisticated. This is quite an empowering phase. 3. Sophisticated This group often has experience directly working in finance. They know how markets work and some can even stock valuation. These people typically come full-circle and appreciate behavioural finance. They know that the biggest obstacle to successful investing is their own emotions. Despite their technical abilities they realize that it comes back to basics: asset mix, diversification and time in the market vs timing the market. They now appreciate the value of advice for its objectivity and behavioural coaching. Group 2 has the highest risk of making costly mistakes while investing.

Everybody is an expert in their own opinions. As professionals, it is valuable to have strong convictions and be capable of forming our own opinions. After all, our knowledge and expertise means we can interpret data and draw conclusions. Where it can get tricky is when your opinion gets you to stray too far away from proven, evidence-based principles.... When an opinion starts sounding like an over-confident forecast of the future, its time for a reality-check. I believe it is important to keep enough humility to accept the variables we do not know. When making a prudent investment allocation decision, we would factor in the variables we do know as well as the variables we do not know before proceeding.

If you have been a disciplined investor for at least few years, you may appreciate the incredible power of compound returns over time. Once you appreciate this power, you see money very differently and you start to see the future value of the dollars you spend. If you buy something for $100, you could look at it as you spent $400 in future value. If you spend $1,000 you may be spending $4,000 in future value. If you spend $100,000, you may be spending $400,000 in future value and so forth.

I never lose sight of the fact that it is an incredible privilege to manage other peoples life savings. Sure we already successfully manage a substantial amount of assets, sure we are confident in what we do - we do this day in and day out after all. To clients, those assets are 20-30 years in the making and a lot of sweat equity went into earning and accumulating wealth. One thing I make of a point of is when I am in a meeting with a client, I am fully present in the moment. Nothing else exists and that is my only client in that moment. If I am given that trust then I owe them total presence. That is the only way to capture the nuances of what deeply matters to this person/family.

All businesses and professionals have to sell themselves to grow. However, have the heart of a teacher instead of the heart of a salesperson. If you care more about the other person learning something valuable instead of obsessing about closing the deal, people will want to work with you.... Value is completely subjective. Having said that, any professional should have a clearly defined process for uncovering needs, making recommendations and moving things along the path of decision-making. I always suggest to use the integrity test to see if your process needs some cleaning up. This means to ask yourself Could I proudly advertise my process?. The answer should always be a definitive yes.

We all intuitively know what we need to do to improve our physical health. We have to sleep well, exercise and eat healthy. Having said that, why do people people hire personal trainers if we can go online, print out clearly laid out program and hit the gym? Because left to our own devices, we are statistically not as likely to be as consistent, as intense, as goal-focused, as disciplined and we are more likely to give in to temptation. Theoretically speaking, we could save the cost of a personal trainer and achieve the same results but in practice it rarely works out that way due to our own behaviour. The same is true of wealth and investment advice.

You cannot buy past performance. You can buy into a process.

An investment advisor should never use their knowledge as leverage against you or to intimidate you. It is your money, not our money. Thus, if we are entrusted with the management of that hard-earned wealth, then it is our duty to ensure you understand and to do so with respect. Never should a client feel embarrassed to ask a question out of fear of seeming ignorant. One of my biggest pleasures is making a client (who thought he knew nothing) realize that it comes down to bas...ic principles that in fact he CAN understand. Also, it should take no longer than a few seconds to explain how we are remunerated. This comes back to the famous saying: Nobody cares how much you know until they know how much you care.