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Welcome to Autumn

People normally associate spring with rain; not autumn.  Metaphorically, however, it’s raining out there.  As the calendar moves into the official start of the autumn, markets on both sides of the border are facing the prospect of a correction – a drop of 10% or more from a previous peak. 

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Under-Promise and Over-Deliver

One phrase that has become so trite over the years as to be threadbare is the old chestnut that certain people and businesses aim to under-promise and over-deliver.  That sounds fine in theory.  Most people don’t even question the sentiment.  Here’s a way to test the sentiment in the investment

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Déjà Vu (all over again?)

Now that we have passed Labour Day and summer is over (at least unofficially), the time has come to get into new routines.  It’s back to school time.  Time to close the cottage, put away the golf clubs and hunker down on the big push to hit your yearend sales

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The Buffett Indicator

For pretty much all of 2020, I have been offering somber and cautious warnings about the dangers one implicitly accepts when investing in markets with valuations as high as they are currently.  I have been particularly concerned about the U.S. market as represented by the S&P 500 and by the

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Lower for Longer and the Implications for Public Policy

In the second half of August, the two countries that share the bulk of the North American continent independently signaled that they are shifting their economic courses and pursuing a public policy initiative which had been considered somewhat heretical until very recently.  We are now left to reflect upon what

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The Future of Financial Advice

One thing that many observers notice about financial services is that the evolutionary process is slow to change.  Glacially slow.  As a simple illustration, Ontario Securities Commission (OSC) Commissioner Glorianne Stromberg wrote a report in 1995 (!) where she clearly indicated that embedded commissions in mutual funds – both in

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Don’t Be Smug About Markets

Many American commentators are gleefully noting that the pandemic-induced bear market for the S&P 500 is now officially on record as the shortest bear market in history.  The stark reality of a pandemic-induced economic slowdown has been countered with a federal reserve-induced monetary stimulus the likes of which has never

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When the top 1% Advises Everyone Else

Like most Canadians, financial advisors exist all over the income spectrum.  The major difference is that a disproportionate number of them are highly successful.  That should come as no surprise.  Many would-be clients are comforted by this and some even seek out advisors who are conspicuously successful because obvious opulence

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The Shape of Things to Come

For nearly half a year now, pundits have been offering their viewpoints on what the Coronavirus means for both investors and the broader economy.  Many have taken to offering prognostications regarding the shape of the eventual recovery.  While I find these viewpoints amusing (my personal favourite is the “square root”

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Cost Matters – But Does Your Advisor Care?

Perhaps the most conspicuous disconnect in the financial services industry today revolves around cost.  It should be noted at the outset that the cost paid by a client comes in two forms – the cost of advice and the cost of products used to construct portfolios.  Both matter a great

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Advisor’s Alpha

One of the great debates around the investing world revolves around the extent (if any) to which advisors add value.  Many in the media say the number is either small or negative. Many advisor cheerleaders say the number is substantial.  Everyone should be skeptical.  What follows is my unscientific assessment

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Connecting Dots

The distinction between solid analysis and wonky forecasts can be tiny.  As a Portfolio Manager who has spent more than his fair share of time dealing with the media, I am highly mindful of the need for the fifth estate to look for controversy as clickbait.  As the saying goes,

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Advice Quicksand

I have a question for you.  How many people do you suppose end up getting worse financial results than they expected simply because they believed and followed an advisor who insisted they “could do better”?  For years, I’ve been speaking with my fellow advisors and getting the impression that many

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The Market and the Economy are not the same

We’re now into the last week of the first half of 2020 – and what a six months it has been!  The news for capital markets has been mixed, as markets have tumbled frighteningly and then rebounded smartly.  If one were to naively look at market levels at the start

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Have You Considered Retiring Later?

There are countless pieces of advice regarding retirement planning out there.  Some of them deal with lifestyle issues (How will you fill your day?  Are you sure your spouse shares your vision of how time in retirement will be spent?  What will you do to stay sharp now that you’re

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I Don’t Know Means I Don’t Know

For a generation now, the women’s movement has engaged in a worthwhile and important campaign regarding sexual consent called “No Means No”.  What I want to touch on today is considerably less noble, but still part of what I believe is a systemic societal problem.  It involves people who know

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Same Facts; Different Spin

Narratives have a funny way of taking on a life of their own.  In particular, there are some facts that are clear and undeniable, but those facts can be (and often are) interpreted in radically different ways.  Competing narratives can go a long way in explaining the psychological makeup of

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More On Japan

The Japanese experience of the last 30 years has resulted in a lost generation and a half of market returns.  I wonder what financial advisors in downtown Tokyo were saying to their clients around New Year in 1990.  Were they concerned about valuations?  Did they go out of their way

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Is U.S.A. 2020 like Japan 1990?

It sure looks like there’s a fair amount of hubris in the American stock market these days.  The American 30-year bond just hit an all-time low of 1.89%.  We had three rate cuts in late 2019 despite strong employment and GDP numbers.  Household debts are again high as are defaults

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My Beef with many of my Peers

I’ve been an advisor for over a quarter century and I’ve enjoyed (almost) every minute of it.  Like so many others who do what I do, I have a passion for solving problems.  On weekends, that means doing sudokus, crossword puzzles (both traditional and cryptic) and the like.  By day,

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Speculative Volatility in a Free Society

The final chapter of Robert Shiller’s book Irrational Exuberance has the same title as this blog post and contains a cogent synopsis regarding what some people believe is going on now.  In essence, stock market valuations (especially in the U.S.) have been high for years and most people (investors and

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What if Market Fear is the Real Epidemic?

A month ago, a relatively small number of people had heard about the CoronaVirus (since re-named COVID-19) and few people cared about it.  In the past couple of weeks, the spread of the virus – and the damage it has done and is likely to do in terms of:  

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Playing with the Box

I was on a cross country flight recently and I re-read a book called “Simple Wealth, Inevitable Wealth” by Nick Murray, a former rock star speaker who was beloved by the financial advice industry – mostly because he constantly told his advisor audiences that they are great, do important work

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Start Date Bias

Some people have really short memories.  Investing is one of the most emotional pursuits that many humans engage in, yet so often, we seem determined to make decisions based on the recent past rather than on long-term history.  Behavioural economists call this phenomenon “recency bias”.  In simple terms, it means

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Make that RRSP Contribution a Conservative One

Every year around this time, people like me pound their fists on the proverbial table for ordinary Canadians to make an RRSP contribution.  Spoiler alert: that’s what’s going to happen here, too.   What’s different in this post is that I’m going to go a little bit further than others

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A Penny Saved is a Penny Earned

Isn’t it amazing how so many people can know something and not know it at the same time?  That’s a teaser question, but likely a fair one.  Allow me to illustrate the dichotomy. How many humans do you know who have heard and generally agree with the statement, “a penny

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Define “Bubble”

The word “bubble” is bandied about often to explain quick and often unwarranted run-ups in securities prices.  If you use the word in that context in a general conversation about economics, most people will have a quick, intuitive understanding of what you’re talking about. Interestingly, two of the most prominent

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The Dunning-Kruger Effect for Advisors

A little over 20 years ago, two academics from Cornell, David Dunning and Justin Kruger, released groundbreaking research which showed something that many people had long suspected.  This was simultaneously earth-shattering news and non-news, depending on where you stood. To whit, some people are simply too incompetent to recognize their

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The Most Under-Owned Asset Class

Pretty much every serious investor has a favourite investment thesis or theme that they employ.  Many of these are mainstream, which, by, definition, means that a number of people do something similar.  One such theme is to invest disproportionately in either dividend paying stocks or stocks that have a history

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Behave Yourself!

I seldom write about specific products, but every once in a while, something comes along that makes me take notice.  So much of the product universe is cluttered with knock-offs and me-too versions of pre-existing ideas with one or two minor variations.  As a result, there have been relatively few

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Vanguard Outlook for 2020

I hope you’re sitting down.  No one wants to hear this, but it really needs to be said.  Ready?  Here goes: your return expectations for the foreseeable future are almost certainly too high.  They may even be shockingly high.  Our friends at Vanguard recently released their outlook for 2020 and

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The information contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.  WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.