Evidence-BasedInvestmentInsights:
ThreeEssentialIdeasforBuildingWiseWealth
PaulPhilip,CFP,CLU
EnnioLongo,CFP,[email protected]
Toronto–Vancouver–Calgary–Edmonton
1-866-735-5581
Evidence-BasedInvestingInsights
2
CONTENTSIntroduction.................................................................................................................3
PartI:KnowingandHeedingtheEvidence.................................................................4
You,theMarketandthePricesYouPay..................................................................4
ThePowerofGroupIntelligenceinPrice-Setting...................................................4
TheEffectofBreakingNewsonMarketPricing......................................................5
TheBarnDoorPrinciple...........................................................................................6
FinancialGurusandOtherUnicorns........................................................................7
PartII:StructuringYourPortfolio................................................................................9
TheBusinessofInvesting.........................................................................................9
MarketRisksandDiversification’sRewards..........................................................10
TheEssenceofEvidence-BasedInvesting.............................................................11
WhatHasEvidence-BasedInvestingDoneforMeLately?...................................14
InvestmentReality:ChooseYourAlliesCarefully..................................................15
PartIII:TheHumanFactor–YouandYourBehaviors..............................................16
Conclusion..................................................................................................................18
Disclosures.................................................................................................................19
SecondOpinionService.............................................................................................21
AboutFinancialWealthBuildersSecurities..............................................................23
PaulPhilip...............................................................................................................23
EnnioLongo............................................................................................................24
Evidence-BasedInvestingInsights
3
INTRODUCTIONAreyoureadytobecomeabetterinvestor?Wouldyouliketoenhanceyourunderstandingofthemostimportantprinciplesthatdrivethecreationofwealth,withoutithurtingabit?Inthisapproachablereport,we’llintroduceyoutothreeessentialsonhowtoinvestwithgreaterconfidence,withevidenceinsteadofemotionguidingyourway.Yousee,beingabetter,evidence-basedinvestordoesnotmeanyoumusthaveanadvanceddegreeinfinancialeconomics,orthatyouhavetobesmarter,fasterorluckierthantherestofthemarket.Itmeansthreethings:1. Knowingandheedingtheevidencefromthosewhodohaveadvanceddegrees
infinancialeconomics
2. Structuringyourportfoliosothatyou’replayingwithratherthanagainstthemarketanditsexpectedreturns
3. Understandingthe“humanfactor,”i.e.,yourownbehaviors,ingrainedthrough
eonsofevolutionandtrickingyouintomakingtheworstfinancialdecisionsatallthewrongtimes
Areyoureadytoapplythescienceofinvestingintoyourowndurableportfolio?Readon.
Evidence-BasedInvestingInsights
4
PARTI:KNOWINGANDHEEDINGTHEEVIDENCE
You,theMarketandthePricesYouPay
Howdoyouachieveeveryinvestor’sdreamofbuyinglowandsellinghighinacrowdofresourcefulandcompetitiveplayers?Theansweristoplaywithratherthanagainstthecrowd,byunderstandinghowmarketpricingoccurs,accordingtotheseinsights:
• Groupintelligencedrivesefficientpricing• It’snotwhetherbreakingnewsisgoodorbad,it’swhetherit’sexpectedor
unexpected• Bythetimeyouhearthenews,themarketalreadyknowsit• Financial“gurus”arenobetterthanyouatconsistentlypredictingthemarkets
ThePowerofGroupIntelligenceinPrice-Setting
Beforetheacademicevidenceshowedusotherwise,itwascommonlyassumedthatthebestwaytomakemoneyinwhatseemedlikeungovernedmarketswasbyoutwittingothersatforecastingfuturepricesandtradingaccordinglyindomesticandinternationalstocks,bonds,commodities,realestateandmore–orbyhiringhigh-pricedmarketanalyststodothisforyou.Unfortunatelyforthosewhoarestilltryingtooperatebythisoutdatedstrategy,academiahasrevealedthatthemarketisnotsoungovernedafterall.Yes,it’schaotic,messyandunpredictablewhenviewedupclose.Butit’salsosubjecttogroupintelligence,wherebygroupsofindependentplayers(suchasfreemarketparticipants)arebetteratconsistentlyarrivingataccuratefactualanswersthaneventhesmartestindividualsinthatsamegroup.Applyinggroupwisdomtothemarket’smultitudeofdailytradesmeansthateachindividualtrademaybespotonorwildlyofffroma“fair”price,buttheaggregateaverageincorporatesallknowninformationcontributedbytheintelligent,theignorant,theluckyandthelackluster.
Evidence-BasedInvestingInsights
5
Insteadofbelievingthatyoucanregularlyoutguessthemarket’scollectivewisdom,youarebetteroffconcludingthatthemarketisdoingabetterjobthanyoucanatforecastingprices.MarketsIntegratetheCombinedKnowledgeofAllParticipants
TheEffectofBreakingNewsonMarketPricing
Thenextstepistounderstandhowpricesaresetmovingforward.Whatcausesmarketpricestochange?Itbeginswiththenever-endingstreamofworldnews.Here,it’scriticaltobeawareoftheevidencethattellsusthemostimportantthingofall:Youcannotexpecttoconsistentlyimproveyouroutcomesbyreactingtobreakingnews.Howthemarketadjustsitspricingiswhythere’snotmuchyoucandoafterthenewsisreleased.First,it’snotthenewsitself;it’swhetherwesawitcoming.Inotherwords,it’snotjustnews,butunexpectednewsthataltersfuturepricing.Bydefinition,theunexpectedisimpossibletopredict,asishowdramatically(ornot)themarket’sgroupintelligencewillrespondtoit.
Evidence-BasedInvestingInsights
6
TheBarnDoorPrinciple
Anotherreasonbreakingnewsisrelativelyirrelevanttoyourinvestingiswhatwe’llcall“TheBarnDoorPrinciple.”Bythetimeyouhearthenews,themarketalreadyhasincorporateditintoexistingprices.Theproverbialhorseshavealreadygallopedpastyouropentradingdoor.Thisisespeciallysointoday’selectronicworld,wherepriceadjustmentstypicallyoccurwithinthefirstfewpost-announcementtrades.MarketsReacttoEvents
Unlessyoumanagetobeamongtheveryfirsttorespondtobreakingnews(competing,mindyou,againstautomatedtraderswhooftenrespondinfractionsofmilliseconds),you’resettingyourselfuptobuyhigherorselllowerthanthosewhoalreadyhavesetnewpricesbasedonthenews–exactlytheoppositeofyourgoal.
Evidence-BasedInvestingInsights
7
FinancialGurusandOtherUnicorns
Astouchedonabove,you’realsoill-advisedtoseekamarket-forecasting,financialgurutopinchhitforyou.AsMorningstarstrategistSamuelLeehasdescribed,managerswhohavepersistentlyoutperformedtheirbenchmarksare“rarerthanrare.”ButmaybeyouknowofanextraordinarystockbrokerorfundmanagerorTVpersonalitywhostrikesyouasbeingamongtheelitefewwhocanmaketheleap.Shouldyouturntothemforthelatestmarkettips,insteadofsettlingfor“average”returns?Bottomline,ifsuchoutperformingexpertsdidexistinreliablenumbers,weshouldexpecttoseecredibleevidenceofit.Notonlyissuchdatalacking,thebodyofevidencetothecontraryisoverwhelming.Starperformers–“activemanagers”–oftenfailtosurvive,letalonepersistentlybeatcomparablemarketreturns.Acrossthedecadesandaroundtheworld,amultitudeofacademicstudieshavescrutinizedactivemanagerperformanceandconsistentlyfounditlacking,asdidDimensionalFundAdvisorsina2013analysis.
Evidence-BasedInvestingInsights
8
OutsmartingOtherInvestorsIsTough
Evidence-BasedInvestingInsights
9
PARTII:STRUCTURINGYOURPORTFOLIOSofar,we’veassessedsomeofthehurdlestoeffectivelyparticipatinginefficientcapitalmarkets.Webelievethebestwaytoovercomethesehurdlesistosidestepthementirelyinyourinvesting.Bymanagingthemarketfactorsyoucanexpecttocontrolandavoidingthetemptationtoreacttothoseyoucannot,youcanbuildandsustainanevidence-basedportfoliothatallowsthemarketdowhatitdoesbestonyourbehalf:buildlong-termcapitalwealth.
TheBusinessofInvesting
Withalltheexcitementoverstocksandbondsandtheirupsanddownsinheadlinenews,thereisakeyconceptoftenoverlooked.Marketreturnsarecompensationforprovidingthefinancialcapitalthatfeedsthehumanenterprisegoingonallaroundus,allthetime.FinancialCapitalPlaysaVitalRoleinWealthCreation
Evidence-BasedInvestingInsights
10
Whenyoubuyastockorabond,yourcapitalisultimatelyputtohardworkbybusinessesoragencieswhoexpecttosucceed.Youwouldthinkthat,whenacompanyoragencydoessucceed,yourinvestmentwouldtoo.Butactually,suchsuccessisonlyonefactoratbest,amongmanyothersthatinfluenceyourexpectedreturns.Atfirst,thisseemscounterintuitive.Itmeans,forexample,thatevenifbusinessisbooming,youcannotnecessarilyexpecttoreaptherewardssimplybybuyingitsstock.Remember,bythetimegoodorbadnewsisapparent,it’salreadyreflectedinhigher-pricedshareprices,withlessroomforfuturegrowth.
MarketRisksandDiversification’sRewards
Sowhatdoesdriveexpectedreturns?Thereareanumberoffactorsinvolved,butdecadesofacademicinquiryinformusthatamongthemostpowerfulonesspringfromacceptingunavoidablemarketrisks.Asaninvestor,youcanexpecttoberewardedforacceptingthemarketrisksthatremainafteryouhaveeliminatedtheavoidableones.Let’sexplain.AvoidableConcentratedRisks–Eveninabullmarket,onecompanycanexperienceanindustrialaccident,causingitsstocktoplummet.Amunicipalitycandefaultonabondevenwhenthewidereconomyisthriving.Anaturaldisastercanstrikeanindustryorregionwhiletherestoftheworldthrives.Theseareconcentratedmarketrisksthatcanbeavoidedbynotpilingallofyourfinancialeggsintotoofewholdings.UnavoidableMarketRisks–Ifconcentratedrisksarelikeboltsoflightning,marketrisksareencompassingdownpoursinwhicheveryonegetswet.Forexample,investinthemarketatalland,presto,you’reexposedtomoremarketriskthanifyouhadsatincash(whereitmaylosevalueduetoinflation,butthat’sadifferentrisk,foradifferentreport).Inthescienceofinvesting,wedampenavoidable,concentratedriskswithdiversification.Byspreadingyourholdingswidelyandglobally,ifsomeofthemareaffectedbyaconcentratedrisk,youcanoffsetthedamagedonewithplentyofotherunaffectedholdings.
Evidence-BasedInvestingInsights
11
Everyinvestoralsofacesmarketrisksthatcannotbe“diversifiedaway.”Thosewhostayinvestedwhenmarketrisksareontherisecanexpecttoeventuallybecompensatedfortheirsteelyresolvewithhigherreturns.Buttheyalsofacehigheroddsthatresultsmaydeviatefromexpectations,especiallyinthenear-term.Diversificationagainstepsin,actingasa“dial”forreflectingtherightvolumeofmarket-riskexposureyou’reseekingforyourindividualgoals.DiversificationReducesRisksThatHaveNoExpectedReturn
TheEssenceofEvidence-BasedInvesting
Withanyriskyventure,includingtheonesthataboundincapitalmarkets,therearenoguaranteesthatyou’llearnhoped-forreturns,orevenrecoveryourstake.Thisiswhywesostronglyfavorevidence-basedinvestingasarationalapproach
Evidence-BasedInvestingInsights
12
forstayingoncoursetowardyourfinancialgoals,especiallywhenyouremotionalreactionsthreatentotakeoverthewheel.Evidence-basedinvestingrepresentsthemarriagebetweena“Who’sWho”bodyofscholarswhohavebeenstudyingfinancialmarketssinceatleastthe1950s,andthefinancialprofessionalswhoheedtheirfindingsandaretaskedwithanequallyimportantchargeofdetermining:Evenifarelativelyreliablereturnpremiumexistsintheory,canwecaptureitintherealworld–aftertheimplementationandtradingcostsinvolved?AssessingtheEvidence(SoFar)Inacademia,rigorousresearchcallsformorethananarbitrarysamplingorafewin-housespreadsheetsdesignedto“prove”aconvenientconclusion.Academicresearchdemandsaconsiderablyhigherstandard,includingadisinterested,objectiveoutlook(noforegoneconclusions);robustdataanalysis;repeatabilityandreproducibility;andformalpeerreviews.Sofar,thislevelofresearchhasyieldedfiveexpectedreturnpremiumsforpatientinvestors:1. Equity–Stocks(equities)havereturnedmorethanbonds(fixedincome).
2. Small-cap–Small-companystockshavereturnedmorethanlarge-company
stocks.3. Value–Valuecompanies(withlowerratiosbetweentheirstockpriceand
variousbusinessmetricssuchascompanyearnings,salesand/orcashflow)havereturnedmorethangrowthcompanies(withhighersuchratios).Thesearestocksthat,basedontheempiricalevidence,appeartobeeitherundervaluedormorefairlyvaluedbythemarket,comparedwiththeirgrowthstockcounterparts.
4. Term–Bondswithdistantmaturitiesorduedateshavereturnedmorethanbondsthatcomeduequickly.
5. Credit–Bondswithlowercreditratings(suchas“junk”bonds)havereturnedmorethanbondswithhighercreditratings(suchasU.S.treasurybonds).
Evidence-BasedInvestingInsights
13
DimensionsPointtoDifferencesinExpectedReturns
Scholarsandpractitionersalikestrivetodeterminenotonlythatvariousreturnfactorsexist,butwhytheyexist.Thishelpsusdeterminewhetherafactorislikelytopersist(sowecanbuilditintolong-termportfolios)orismorelikelytodisappearupondiscovery.Explanationsforwhypersistentfactorslingerusuallyfallintotwobroadcategories:risk-relatedandbehavioral.RiskReturnsFactors–Itappearsthatpersistentpremiumreturnsareoftenexplainedbyacceptingmarketrisk(thekindthatcannotbediversifiedaway)inyourportfolio.Forexample,it’spresumedthatvaluestocksareriskierthangrowthstocks,whichatleastinpartexplainsthehigherexpectedreturnstheyhaveexhibitedtodate.
Evidence-BasedInvestingInsights
14
BehavioralReturnFactors–Theremayalsobebehavioralfoiblesatplay.Thatis,ourbasic-survivalinstinctsoftenplayagainstotherwisewell-reasonedfinancialdecisions.Assuch,themarketmayfavorthosewhoarebetteratovercomingtheirimpulsivereactionstobreakingnews.
WhatHasEvidence-BasedInvestingDoneforMeLately?
Beyondthefivekeymarketfactorsdescribedabove(equity,value,small-cap,termandcredit),continuedinquiryhasfoundadditionalfactorsatplay,withadditionalpotentialpremiums(whichalsoseemtoresultfromacceptingaddedmarketrisk,avoidingill-advisedinvestorbehaviorsorboth).Inacademiccircles,themostprominentamongtheseareprofitabilityandmomentum:• Profitability–Highlyprofitablecompanieshavedeliveredpremiumreturnsover
low-profitabilitycompanies.
• Momentum–Stocksthathavedonewellorpoorlyintherecentpasttendtocontinuetodothesameforlongerthanrandomchanceseemstoexplain.
Butbeforewegetaheadofourselves,let’sdiscussafewcaveats.WetPaintWarning–Whilethese“new”factorsmayormaynothaveexistedforsometime,ourabilitytoisolatethemismorerecent.Astheinkstilldriesontheresearchpapers,wearestillassessingtheirstayingpower.CostversusReward–Justbecauseanexpectedpremiumexistsintheory,doesn’tmeanitcanbeimplementedinreallife.Wemustbeabletocaptureitafterthecostsinvolved.DuelingFactors–Sometimes,itcanbedifficulttobuildonefactorintoaportfoliowithoutsacrificinganother.Benefitsandtradeoffsmustbecarefullyconsideredatthefundlevelaswellasforyourindividualgoals.Asaresult,opinionsvaryonwhen,howorevenifprofitability,momentumandothernewerfactorsshouldplayaroleincurrentportfolioconstruction.Wewouldbehappytospeakwithyouindividuallyaboutourevolvingapproach.
Evidence-BasedInvestingInsights
15
InvestmentReality:ChooseYourAlliesCarefully
Infact,thisisoneareawherewebelieveanevidence-basedadvisorrelationshipcanbecriticaltoyourwealthandwell-being.Howdoyoudeterminewhattoheedandwhotoignoreasthefinancialcommunitycontinuestodebatevarioustheoriesandpavethewayforfutureimprovements?Evenwhenanewacademicinsightisrocksolid,hyperactivereactiontoitcanstripawaythepracticaladvantagesofanenlightenedinvestmentapproach.Ouraimasaprofessionaladvisoristoextractthediamondsofpromisingnewevidence-basedinsightsfromtheconsiderablylargerpilesofmisleadingmisinformation.Wefeelyouarebestservedbyheedingthosewhotakeasimilarapproachwiththeiradvice.
Evidence-BasedInvestingInsights
16
PARTIII:THEHUMANFACTOR–YOUANDYOURBEHAVIORSWeturnnowtothefinalandpossiblythemostsignificantfactorinyourevidence-basedinvestmentstrategy:thehumanfactor.Inshort,yourownimpulsivereactionstomarketeventscaneasilytrumpanyothermarketchallengesyouface.Despiteeverythingweknowaboutefficientcapitalmarketsandallthesolidevidenceavailabletoguideourrationaldecisions…we’restillhuman.We’vegotthingsgoingoninourheadsthathavenothingtodowithsolidevidenceandrationaldecisions–abrewofchemicallygenerated,“survivalofthefittest”instinctsandemotionsthatspurustoleapbeforewehavetimetolook.Tostudytherelationshipsbetweenourheadsandourfinancialhealth,thereisanotherfieldofevidence-basedinquiryknownasbehavioralfinance.WallStreetJournalcolumnistJasonZweig’s“YourMoneyandYourBrain”providesagoodguidedtourofthefindings,describingboththebehaviorsthemselvesaswellaswhatishappeninginsideourheadstogeneratethem.Tonameacoupleofthemostobviousexamples:Whenmarketstumble–Yourbrain’samygdalafloodsyourbloodstreamwithcorticosterone.Fearclutchesatyourstomachandeveryinstinctpointstheneedleto“Sell!”Whenmarketsunexpectedlysoar–Yourbrain’sreflexivenucleusaccumbensfiresupwithinthenetherregionsofyourfrontallobe.Greedgrabsyoubythecollar,convincingyouthatyouhadbestactsoonifyouwanttoseizetheday.“Buy!”Beyondsuchmarket-timinginstinctsthatleadyouastray,yourbraincooksupplentyofotherinsidiousbiasestooverlyinfluenceyourinvestmentactivities.
Evidence-BasedInvestingInsights
17
HumansAreNotWiredforDisciplinedInvesting
Rapidreflexesoftenserveuswellineverydayliving.Butinfinance,wherethecoolestheadsprevail,manyofourbaseinstinctscausemoreharmthangood.Ifyoudon’tknowthatthey’rehappeningordon’tmanagethemwhentheydo,yourbraincantrickyouintobelievingyou’remakingentirelyrationaldecisionswhenyouareinfactbeingoverpoweredbyinstinct-driven,chemicalreactions.Thisisanotherreasonwhywesuggestworkingwithanobjectiveadvisor,tohelpyouseeandavoidcollisionswithyourselfthatyourownmyopicvisionmightmiss.
Evidence-BasedInvestingInsights
18
CONCLUSIONWehopeyou’veenjoyedreadingourreportonevidence-basedinvestingasmuchaswe’veenjoyedsharingitwithyou.Whenweintroducedourthreeessentialideasforbuildingwisewealth,wesoughttoreplacemostofthetechnicaljargon,withthreekeyinsightsforbecomingamoreconfidentinvestor:1. UnderstandtheEvidence.Youdon’thavetohaveanadvanceddegreein
financialeconomicstoinvestwisely.Youneedonlyknowandheedtheinsightsavailablefromthosewhodohaveadvanceddegreesinfinancialeconomics.
2. EmbracingMarketEfficiencies.Youdon’thavetobesmarter,fasterorluckierthantherestofthemarket.Youneedonlystructureyourportfoliotoplaywithratherthanagainstthemarketanditsexpectedreturns.
3. ManagingYourBehavioralMiscues.Youdon’thaveto–andwon’tbeableto–eliminateeveryhighandlowemotionyouexperienceasaninvestor.Youneedonlybeawareofhowoftenyourinstinctswilltemptyouoff-course,andmanageyouractionsaccordingly.(Hint:Aprofessionaladvisorcanaddhugevaluehere.)
Howhavewedoneinourgoaltoinformyou,withoutoverwhelmingyou?Ifwe’vesucceededinbringingourevidence-basedinvestmentideashomeforyou,wewouldlovetohavetheopportunitytocontinuetheconversationwithyouinperson.Giveusacalltoday.
Evidence-BasedInvestingInsights
19
DISCLOSURES1.Thispublicationmayincludeforward-lookingstatements.Allstatementsotherthanstatementsofhistoricalfactareforward-lookingstatements(includingwordssuchas“believe,”“estimate,”“anticipate,”“may,”“will,”“should”and“expect”).Althoughwebelievethattheexpectationsreflectedinsuchforward-lookingstatementsarereasonable,wecangivenoassurancethatsuchexpectationswillprovetobecorrect.Variousfactorscouldcauseactualresultsorperformancetodiffermateriallyfromthosediscussedinsuchforward-lookingstatements.2.Pastperformanceisnotindicativeofanyspecificinvestmentorfutureresults.Viewsregardingtheeconomy,securitiesmarketsorotherspecializedareas,likeallpredictorsoffutureevents,cannotbeguaranteedtobeaccurateandmayresultineconomiclosstotheinvestor.3.Anyinformationprovidedbyadviserregardinghistoricalmarketperformanceisforillustrativeandeducationpurposesonly.Clientsorprospectiveclientsshouldnotassumethattheirperformancewillequalorexceedhistoricalmarketresultsand/oraverages.4.Themateriallistedinthispublicationiscurrentasofthedatenoted,andisforinformationalpurposesonly,anddoesnotcontendtoaddressthefinancialobjectives,situationorspecificneedsofanyindividualinvestor.Anyinformationisforillustrativepurposesonly,andisnotintendedtoserveasinvestmentadvice,sincetheavailabilityandeffectivenessofanystrategyisdependentuponyourindividualfactsandcircumstances.Resultswillvary,andnosuggestionismadeabouthowanyspecificsolutionorstrategyperformedinreality.5.Advisordoesnotmakeanyrepresentationsorwarrantiesastotheaccuracy,timeliness,suitability,completenessorrelevanceofanyinformationpreparedbyanyunaffiliatedthirdpartyandincorporatedherein,andtakesnoresponsibilitytherefor.Allsuchinformationisprovidedsolelyforconveniencepurposesonlyandallusersthereofshouldbeguidedaccordingly.6.Inclusionofindexinformationoranyothermarketinformationisnotintendedtosuggestthattheirperformanceisequivalentorsimilartothatofadviser’sclients.Investorsshouldbeawarethatthereferencedbenchmarkfundsmayhaveadifferentcomposition,volatility,risk,investmentphilosophy,holdingtimesand/orotherinvestment-relatedfactorsthatmayaffectthebenchmarkfunds’ultimateperformanceresults.Therefore,aninvestor’sindividualresultsmayvarysignificantlyfromthebenchmark’sperformance.7.Nosolicitationtobuyorsellanysecurities:“Thisinformationisprovidedasageneralsourceofinformationandshouldnotbeconsideredpersonalinvestmentadviceorsolicitationtobuyorsellanysecurities.”
Evidence-BasedInvestingInsights
20
8.OpiniondisclaimerandWSImemberdisclaimer:“TheviewsexpressedarethoseoftheauthorandnotnecessarilythoseofWorldsourceSecuritiesInc.InvestmentsareprovidedthroughWorldsourceSecuritiesInc.,SponsoringInvestmentDealerandMemberofCanadianInvestorProtectionFundandoftheInvestmentIndustryRegulatoryOrganizationofCanada.”
9.Formutualfunds:“Commissions,trailingcommissions,managementfeesandexpensesallmaybeassociatedwithmutualfundinvestments.Pleasereadtheprospectusbeforeinvesting.Mutualfundsarenotguaranteed,theirvalueschangefrequentlyandpastperformancemaynotberepeated.”
10.ForETFs:“ETFsmayhaveexposuretoaggressiveinvestmenttechniquesthatincludeleveraging,whichmagnifygainsandlossesandcanresultingreatervolatilityinvalueandbesubjecttoaggressiveinvestmentriskandpricevolatilityrisk.ETFsarenotguaranteed,theirvalueschangefrequentlyandpastperformancemaynotberepeated.Pleasereadtheprospectusbeforeinvesting”
11.Fortaxrelatedmatters:“Theinformationprovidedisgeneralinnatureandshouldnotbeconsideredpersonaltaxationadvice.Wearenottaxadvisorsandwerecommendthatclientsseekindependentadvicefromaprofessionaladvisorontaxrelatedmatters.”
12.“InsuranceProductsandrelatedservicesareprovidedaspartofacomprehensivefinancialplanthroughFinancialWealthBuildersInc.”
Evidence-BasedInvestingInsights
21
SECONDOPINIONSERVICEWhenthemarketsandeconomiesturnvolatileandconfusingastheyhaveoverthepastyear,eventhemostpatientinvestorsmayquestionthewisdomofthefinancialpaththatthey’vebeenfollowing.Overthepast20years,we’vereviewedhundredsofinvestmentportfoliosandfinancialplans.We’veseenanumberofdifficultmarketscomeandgo.Andwecancertainlyempathizewiththepeoplewhofindthatcurrentenvironmenttroublesomeanddisturbing.We’dliketohelp,ifwecan,andtothatend,here’swhatweoffer.
Anoobligationsecondopinion
Justasit’swisetogetasecondopiniononyourmedicalhealth,it’sonlyprudenttogetasecondopiniononyourfinancialhealth.Thingschange.Lifemoveson.Andthefinancialplanthatwasrightforyoufiveortenyearsagomaynotsuityourneedstoday.Areyourcurrentinvestmentsstillrightforyou?Findoutwithourcomplimentary,confidentialSecondOpinionService.OurSecondOpinionServicewillhelpyouclearlyseetheBIGpicture:
• Understandhowyourmoneyisreallyinvested
• Knowyourportfolio’srisk
• Identifyhiddenfees
• Learnhowtosafelymaximizeyourretirementcashflow
• Learnhowtoreducetaxes(inconcertwithyourtaxprofessional)
• Reviewyourinsurance,longtermcare,andriskmanagementstrategy
• Addressyourestateplanningconcerns(inconcertwithyourlawyer)
HowItWorks:Fromthecomfortofyourhome(viawebinarorcall)we’llseektounderstandyourfinancialgoals–andwhatyourinvestmentportfolioandfinancialplan(ifyouhaveone)isintendedtodoforyou.Thenwe’llreviewtheportfolioforandwithyou.
Evidence-BasedInvestingInsights
22
Ifwethinkyourstrategiesandinvestmentscontinuetobewell-suitedtoyourgoals–inspiteofthecurrentmarketturmoil–we’llgladlytellyouso,andsendyouonyourway.If,ontheotherhand,wethinksomeofyourinvestmentsnolongerfit,we’llexplainwhy,inplainEnglish.And,ifyoulike,we’llrecommendsomealternatives.NextStep:Simplycompletearequestforinfoatwww.fwbsecurities.comorcallusat1-866-735-5581andaskforPaulPhiliporEnnioLongo.Note-Duetoourlowfeenatureourserviceisbestsuitedtoinvestorswithportfoliosof$250,000orgreater.
Evidence-BasedInvestingInsights
23
ABOUTFINANCIALWEALTHBUILDERSSECURITIESAsindependentwealthplannerswekeepourclientlistsmall,sowecanfocusonyourspecificsituationandwhat’smostimportanttoyou.Wearecommittedtogivingourclientsaccesstoworldclassinvestmentideas,guidedbyevidencebasedstrategiesusuallyreservedfortheverylargeinvestor,atareasonablecost.Ourclientscountonusforstraighttalk,commonsenseideas,hardwork,andcompletetransparency.WebelieveCanadianscandobetterandhavemore.It’sourmissiontohelpyougetthere.
PaulPhilip
PaulPhilip,CFP,CLU,InvestmentAdvisor
Today’straditionalfinancialplanningissorelylacking.Financialinstitutionsandthemediaareinbusinessforthemselvesandit’suptotheconsumertorecognizethisandtakeresponsibilityfortheirownfuture.Formost,financeandeconomicsistoocomplexandfastchangingtomanageeffectivelybythemselves.Ibelievewhatmostpeoplereallywantisexpertprofessionalguidancethattheycantrust,someonewhohastheirback….andatafairprice.Ibelieveinopenness,transparencyandvalueforyourhardearnedmoney.
Paul lives in Toronto with his wife Susana and their 2 daughters, Julia and Jacqueline. He is active
in his community and is a volunteer coach for underprivileged youth. He is an avid squash player,
and loves to have a good time skiing and travelling with his family.
Paul Philip Phone 416-497-9577 x223 Email [email protected]
Evidence-BasedInvestingInsights
24
EnnioLongo
EnnioLongo,BBA,CFP,CLU,InvestmentAdvisor
EnnioLongo,BBA,CFPhasbeeninthefinancialservicesindustrysince2007.Sincethattime,Enniohassoughttocontinuallyfindnewandbetterwaystohelphisclientsintheirfinanciallives.EnnioholdstheCertifiedFinancialPlanner(CFP)designationandhassuccessfullycompletedtheCanadianSecuritiescourse.Enniospecializesinprovidingholisticfinancialplanningforhisclients,raisingthebarabovethetraditionalapproachemployedinthemajorityoffinancialinstitutions.Hisgreatestachievementisseeingthepeaceofmindhisclientsreceiveashehelpsthembuild,protectandenjoytheirwealth.
Ennio resides in Toronto with his wife Daniela and their three children Julian, Victoria and
Samantha and his favourite past time is being a soccer coach to all three.
Ennio Longo Phone 416-497-9577 x 225 Email [email protected]