five investing concepts for financial success
TRANSCRIPT
Five Key Concepts to
Financial Success
Diversify Yourself
“Don’t put all your eggs in one basket.”
Many investors feel they have an advantage by investing in the companies they work for
Not only should you invest in different companies, but make sure you have a variety of asset classes, sectors, and industry groups
Allocate your assets
Balance between high and low riskAn asset class is a group of investments whose risk factors and returns are similar. Five major groups (from least to most volatile) are:- Fixed income- U.S. stocks- International stocks
- Real Estate Investment Trusts- Commodities
Design an efficient portfolio
Use the Modern Portfolio TheoryThe theory calculates the optimum combination of risk that will give the highest rate of return for every level of risk. The efficient frontier line (in green) forms the optimum combination of investments. Many investor profiles fall below the frontier.
Rebalance
Consider the portfolio drift
If one asset class is outperforming the others, remember that it will eventually correct itself.
Make sure to constantly add and trim and re-evaluate your portfolio to avoid volatility
Know yourself!
We’re prone to five mistakes
OverconfidenceInvestors believe they can "time" the ups and downs of the market and make bets based on this perceived ability
Over-thinking the short-termLong-term trends can be radically different from the short-term
Break even-itisDon’t wait until you break even to sell. It’s like gambling and usually ends badly!
FamiliarityWatch out for home country bias both within your borders and your own company
Social proof
Keep a level head and don’t get caught in the latest “hot” trends
Tending to your portfolio and keeping these five concepts in mind will help
you achieve financial success!
Presented by:Matthew Lekushoff, CIMAFinancial advisor at Raymond James Ltd.Phone: 416-777-6368Email: [email protected]: www.matthewlekushoff.ca
Thank you!
This has been prepared by Matthew Lekushoff and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their
accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member-Canadian Investor
Protection Fund. Insurance products and services products and services are offered through Raymond James Financial Planning Ltd., which is not a Member-Canadian Investor Protection Fund.