True Believers in Investing Are Not the Norm

in Investments

One of the things I learned after peppering some experts on investing is that for the most part, there are very few True Believers for any of the current investing heuristics (e.g. Passive Investing, Dividend Investing, etc.,). That was the one answer to one of my questions that I got to ask at CPFC13 that had me raising my eyebrow a little.

Surely someone who calls himself the Canadian Couch Potato would be a Kool-Aid guzzling zealot of Passive investing, but Dan proved that while he thinks that Passive Investing is a good thing, he did not unequivocally implore that folks must use this method if they want to be a good investor. The real advice was even more sensible which was, “do what makes you comfortable”.

FaithI was a little disappointed after I poked at the Dividend True Believers, questioning whether this really was the Holy Grail of investing as has been advertised by many folks, and again, no Dividend Jihadist stood up and called me an investing infidel for making that statement.  Even My Own Advisor did not rise to a direct provocation by me, I was a little crest-fallen that my jabs were ignored.

It actually ended up being an informative and intelligent discussion of investing no matter how much I attempted to turn it into a Barbed-Wire Cage Investment Match (which is a credit to the panel members, not rising to my petty commentaries).

The questions I put to the panel were as follows:

Financial Planner or DIY ? Can Canadians be trusted with something as important as their own investments?

The panel’s view was that many if not most Canadians could use some help with investing and maybe should be availing themselves of the services of some professional help.

Active or Passive Investing ? Why can’t we all beat the market?

The simple answer to the second question is, you just can’t for a long period. This is where the Couch Potato let slip his agnostic views on Passive Investing. Somewhere in the Couch Potato Investing world a spud fell into a deep friar fryer.

Dividend investing, what’s all the fuss ?

It ended up that the Dividend Jihadists showed moderation in their views on things, and some good points about Dividend Investing is not an excuse to eschew diversification (something I on occasion forget as well).

Is the best investment for most Canadians to simply pay down their own debt?

A sucker question from me, we all knew the answer, although again, cooler heads prevailed when I attempted to derail the discussion about how (in my opinion) there is no such thing as good debt.

Given the aging population of Canada what is your opinion of the idea that seniors should be holding a high percentage of equities as part of their retirement savings ?

The simple answer is, you invest money you are willing to lose (or lose a large part of), so if you rely on having this money, maybe it should not be overly invested in equities.

What is the “magic number” for when an investor might think they will have enough investments/money so that they don’t need to work?

I guess the panel was having a bit of a low  blood sugar attack (as it was nearly lunch time), as we ended up agreeing on the answer, “it depends”, although Jason did say he thinks he can get a high certainty number for most folks if they come and talk to him.

What is the biggest NEW and EXCITING thing on the event horizon for investors (in your opinion) that worries you ?

The panel agreed that my Leveraged Chinese Housing Hedge Fund ETF might not be the best thing to be in right now.

All in all a very interesting time for me. The panel members were:

Michael James  http://www.michaeljamesonmoney.com/

Dan Bortolotti @CdnCouchPotato http://canadiancouchpotato.com/

Jason Heath http://www.objectivefinancialpartners.com/

Thanks Gents, very informative

{ 8 comments }

  • CanadianInvestor October 7, 2013, 9:35 AM

    Shucks, sorry I missed it. If there’s one next year, will be sure to attend. (Then I can claim the trip as a business expense.) Well done to you Alan and all the other speakers.

    Reply
  • My Own Advisor October 1, 2013, 9:58 PM

    “Even My Own Advisor did not rise to a direct provocation by me, I was a little crest-fallen that my jabs were ignored.”

    Your jabs weren’t ignored, I was listening intently, even to the moderator 🙂

    I think Dan has definitely softened his views on dividend investing. I appreciated his take on “do what makes you comfortable”. I don’t think the mental aspect to investing can be overlooked. If someone feels more “safe” to invest with GICs and not a bunch of equities, who is to judge them? Even indexing devotees can make a mess of their portfolios. Indexes are not perfect. Also, what do you index? There is no perfect portfolio. Do you index the entire world? Just 33% of US, CDN and bonds? What about resources, commodities, real estate? And what allocation do you assign to each? There is nothing that satisfies every investor. Just my take.

    I was a little disappointed with the “how much is enough” investment portfolio number. I wanted to hear, for most Canadians, a $2M portfolio is “enough”…or something like that with some justifications. Instead, “it depends”. Of course the answer “it depends”…?

    The BCM did a good job of moderating. Next time, I will smuggle in some beers and have a few pops to add more life to the debate 🙂

    Overall, a good discussion and Michael’s logical take is always good to listen to.

    Mark

    Reply
  • Michael James October 1, 2013, 11:54 AM

    You did a great job moderating. I think there was real disagreement, but the tendency for people to hear what they want to hear tones it down. For example, I took Dan’s words to mean that if you must deviate from index investing, do it on a small scale — you’ll lose money but hopefully less than if you abandon index investing entirely at a market bottom. But people no doubt heard that he endorsed their pet investing strategy.

    I think the best way to get the sparks flying would be to put up an actual portfolio and let people take shots at it. Then the differences of opinion would become more apparent.

    Reply
    • bigcajunman October 1, 2013, 12:21 PM

      True, I agree with your interpretation as well, the fear of creating a mob riot about investing strategy was possible.

      Reply
  • LifeInsuranceCanada.com October 1, 2013, 8:01 AM

    Funny typo: “deep friar”. Is his name the “Chip Monk”?

    Reply
    • bigcajunman October 1, 2013, 8:36 AM

      That’s what I get for writing on a train!

      Reply
  • Sandi October 1, 2013, 7:07 AM

    The panel was magnificent. Jason, Dan, and Michael really were moderate and full of common sense, and it was a real pleasure to listen to them…and I like that you rattled the cage a bit, Alan.

    Reply
    • bigcajunman October 1, 2013, 8:39 AM

      Didn’t rattle it enough, but I learned a few things, so that is all that mattered to me.

      Reply

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