Investing for Success: Winning by Not Losing

Make me money.

Don’t lose my money.

What`s more important to you?

Most would say: both.

At Parkhouse Financial, we agree.

Accordingly, our investment mandate is to achieve stable long-term growth while protecting your capital.

Reduce Risk by Locking-in Gains

Since the bottom of the Financial crisis occurred 7 years ago next month, U.S. stock markets have been on an absolute tear with the S&P 500 increasing approximately 180%. The Canadian stock market not so much; the TSX is up only about 65% during this same period. We all know the story: the price of oil drops like a rock, the Canadian Dollar gets pummelled because of it and in turn our stock market takes a near 20% drop over the past 6 months.

The adage “you never lose money by taking gains” certainly applies during these volatile times. Frankly, it has applied for the past year and a half with daily North American market fluctuations that have continued to rattle the emotions of many private investors.

As a result, our clients’ portfolios have reflected this philosophy; since mid-2014, our recommendation has been a reduced equity position in order to: lock-in gains, limit exposure to downside risk and take advantage of short-term market fluctuations.

It`s time to be proactive.

Optimize Personal Net Worth

In order to achieve stable growth with capital protection, especially during volatile times, we need to diversify beyond the traditional stock and bond approach.

The Traditional Method:

Pay yourself first, i.e. monthly contributions to your retirement plan: Personal RRSPs, Company Plans, TFSAs. This method will indeed protect your portfolio over the long-term as you continue to purchase the types of stocks you like when they’re available at a discounted price, i.e. on sale.

This is a common method for building long-term wealth. HOWEVER, it does not protect against the emotional rollercoaster associated with daily stock market fluctuations.

The Traditional +Plus Method:

Owning assets that are not affected by daily stock market fluctuations such as real estate, infrastructure, commercial lending and private equity.

This method provides stable long-term growth through a steady stream of investment returns that are primarily not tied to the stock market nor does it involve the emotional rollercoaster ride that ensues.

Achieving Investment Success

Long-term planning is the main ingredient for achieving stable investment growth.

One of my areas of expertise is the Traditional +Plus Method.

Contact me directly to speak further.

Sincerely,
Nathan