Over the last few months I've begun speaking to more people about their investments. I'm very surprised to find out that the majority of people know very little about what they are invested in,
what fees they are been charged and how the current state of the economy will affect their existing portfolio. Most people put a lot more time and effort into researching what vehicle to purchase
then they do researching an investment or choosing an investment professional. Personally I've always put a lot of weight in the old saying, "no one cares more about your money then you do".
Maybe I've got it wrong? Maybe someone else does care more than you? At least that's what the financial advisers and planners competing for your business want you to think.
I feel that most people only start to care about their investments after they have suffered a serious loss. Or they start to go through their statements in more detail and find out that they
actually do pay fees for their mutual fund holdings or their latest stock purchase. Do these fees make sense for the level of service provided?
The time to be most vigilant about your investments is when everything seems to be all rainbows and unicorns. Complacency is the ultimate destroyer of portfolios. The latest example of this is
Canadian energy stocks. It was only about 4 months ago that the oil and gas sector was working its way higher without a care in the world. Now things look a lot different and many well loved oil
and gas stocks are down 50% or worse. This means if you suffered a 50% decline in one of your holdings it will have to double to get back to where it was 4 or 5 months ago. How many 100% winners
have you experienced since you began investing? Did anyone mention reducing exposure to equities when the market was making new highs? Or how about hedging? Has that ever been mentioned as an
The reality is most investment professionals are sales people and have little to no experience investing and trading. The more assets they manage or the more transactions they initiate the more
fees/commissions they make. The more assets and clients they have the less time they can focus on your investments. There's an inherent bias that exists in the financial planning industry to
either place your hard earned money in funds that pay the highest fees or to make more trades than necessary in order to generate more commissions. I'm not saying all planners and advisers do
this but the temptation is always present. Make sure that the investment professional you use is not just another sales person.
Make 2015 the year that you take more of an active role with regards to your investments. This doesn't mean you have to open a self directed account and make all your own decisions. What it does
mean is that you take the time to ask some questions such as how much am I paying in fees? How much time does my adviser or planner dedicate to my portfolio? What have my returns been minus fees
and expenses? Also, spend time educating yourself on investing and the equity markets so that you can be armed with solid information when making decisions with regards to your portfolio. In the
end no one should care more about your hard earned money then you do!