Elizabeth O’Connor of RBC: An investment strategy is as unique as you are

Your Investment Strategy Should be as Unique as You Are!

We tend to head to our online search engines when we are perplexed. One personal example from a few years ago was when our dog, Lucy came down with an upset stomach. It being late Saturday and wanting to avoid an emergency vet bill we looked up a “natural remedy for doggie upset stomach”. It took some digging through a page or two of tips and remedies before we discovered “try canned pumpkin (not the sugar pie-filling stuff)”. Inside of one day the problem was solved. Unfortunately, not always are we rewarded with a quick and easy solution.

Google ‘how to invest’

When you type “how to invest” into a search engine, 142,000,000 results pop up. How do you know what information is correct and what information is misleading? Most of the results prioritize diversification, which is a method for strategically allocating capital across asset classes. This is all well and good, as diversification is crucially important to minimize risk. However, the ideal asset allocation for one person may not be ideal for another.

Here is an example

Two couples are friendly neighbours. They are close in age, with roughly the same financial assets. On the surface it would seem a well-thought-out, perfectly balanced portfolio for Couple A might also then apply to Couple B. The truth is the “ideal” diversification of any portfolio will be as diverse as the couples themselves. Any difference between the two, large or small, changes everything. Couple A may love to travel and plan on selling their home in the next few years to augment their retirement dreams. Couple B may have adult children still at home and they plan on leaving their home and everything else they can to their children.

Different lifestyles and goals require a different kind of diversification

A simple Internet search will not make this distinction. And some financial advisors may not make this distinction either. Only a professional advisor who takes the time to truly get to know you can design the portfolio you require for every stage of your life. What is going on with you right now? What are your plans for the future? Where are your children at in life? What is your risk tolerance? How much longer do you want to work? Do you want to (or have to) leave anything behind? All these questions must be asked to get to the root of your needs.

Honesty about your specific situation is important

The most important tool needed to build or revise your financial future is knowledge. Only when you have found an Investment Advisor you are willing to open up to completely are you going to get on the right track. Financial statements are a start, but are just one piece of the puzzle. Family circumstances, stresses, goals and dreams are also crucial. If your advisor isn’t taking all this into account—if he or she is giving you Internet-style, one-size-fits-all advice instead—they may not be the right advisor for you.

This article is supplied by Elizabeth O’Connor, an Investment Advisor with RBC Dominion Securities Inc. (Member–Canadian Investor Protection Fund). This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article.

Elizabeth O’Connor can be reached at 705-789-2100 or [email protected].

Whether you are looking for a full time, full service financial advisor or seeking expert financial advice as a second opinion, call Elizabeth. With offices in Haliburton, Huntsville and Bracebridge, Elizabeth works closely with clients in cottage country from the lakes and surrounding towns.

Elizabeth O’Connor is an Investment Advisor with RBC Dominion Securities, which is a member of the Canadian Investor Protection Fund. 705-789-2100