Post on 25-Dec-2015
SIX
Brian ShawInvestment Advisor
Branch Manager Campbell River BC
250 287 88071 800 347 0270
http://bshaw.mackieresearch.com/
Investment Advisor - Montreal QC1983 – 1988 Richardson Greenshields1989 - 1992 Nesbitt Thompson
Branch Manager & IA – Campbell River BC1993 - 1999 CM Oliver & Co2000 – 2012 Canaccord Capital2013 – Present Mackie Research Capital
» Licensed as a Investment Advisor since 1983
» Registered in BC, Alberta, and Ontario
» Stocks, bonds, money market, mutual funds, ETF’s & stock options.
» Certified Professional Consultant on Aging (CPCA)
You went to the big box advisor…that didn’t work.
You went to the independent advisor …that didn’t work.
You went to the “pick of the month” investment newsletters
…that didn’t work.You went to the weekend workshop
…that didn’t work.
And in all that time you have only learned what does not work.
THIS SEMINAR WILL SHOW YOU HOW TO MAKE YOUR INVESTING
CHOICES SIMPLE.Stocks Bonds
& Mutual Funds
HorizonsObjectivesDiversify
Risk
Covering your Risks
Tax Free Savings
Accounts
RRSP’sRRIF’s
Flo –ThruTax Shelters
Investment Fees
Time Horizon Objectives
Diversification Risk tolerance
Proper Investment Planning Considerations
HorizonThe length of
time over which an investment is
made or held before it is liquidated.
Proper Investment Planning Considerations
Proper Investment Planning Considerations
Objectives
Categorize according to three fundamental
characteristics
Safety,
Income
Growth
Objectives
Diversification Proper Investment Planning Considerations
1. Spread the Wealth
3. Stocks, Bonds, Real Estate Commodities, etc
2. Keep Building
5. Know When to Get Out
4. Keep a Watchful Eye on Commissions
Proper Investment Planning Considerations
Risk Tolerance An individual should have a realistic understanding of his or her ability and willingness to stomach large swings in the value of his or her investments. Investors who take on too much risk may panic and sell at the wrong time.
•Time Horizon •Future earning capacity, •Presence of other assets ie. home, real-estate, pension, inheritance, other business
Why Invest?Make investments that will generate more
cash for you in the future.
"Money isn't everything, but happiness alone can't keep out the rain."
Stock & Bond Markets
Why Bonds?• Reliable income streams • Decent yields • Lower volatility than equities• Liquidity
Bonds are therefore a popular option for those who need to live off of their investment income.
Even in times when prevailing interest rates are low, there are still plenty of options (such as high yield bonds or emerging market debt)
Bond Funds:There is no single maturity date
iShares Barclays 20+ Yr Treas.Bond (ETF)(Source - Google Finance)
Why Invest in Stocks?
They provide the highest potential returns. And over the long term, noother type of investment tends to perform better.
One of the best ways to give your money a chance to grow over the long term is by investing in stocks and stock mutual funds.
Why Own Mutual Funds vs Individual
Stocks & Bonds
Institutional Investors have an advantage
• MORE RESOURCES • MORE FULL-TIME PROFESSIONALS
FUNDSBONDSSTOCKS
Passive Investing
A strategy that doesn't entail any Forecasting.
The idea is to minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future.
The most popular method is to mimic the performance of an externally specified Index.
From Wikipedia, the free encyclopedia
Avoid “Hot” Funds
Of the Funds that Ranked #1 in performance rankings over the past 15 years:
“Over the subsequent three, five, and 10-year periods, a whopping 80 percent of these ‘star’ funds performed worse than the average similar fund.”
Lew Nason Insurance Pro Shop
Even the Experts Struggle:
Of 703 US Mutual Funds ranked 1st Quartile in 2011
31% remained in the same category 1 year later
Only 5% remained in the 1st Quartile in 2013
S&P Dow Jones Indices 2013
Why Invest in a Separately Managed Account?
Fees are charged based on the assets under administration.
No stock/bond trading commissions are charged to you.
These fees compare very favorably with mutual fund charges.
Fees are tax deductible for cash accounts. No hidden or imbedded unrealized capital gains often
incurred with mutual fund ownership.
A Study of Investor ExperiencesDalbar Study Findings
from 1984 to 2014www.dalbar.com
Avg. Equity Fund
Investor Experience
5%
S&P 500 Return
9.2%
The mistakes that Investment Advisors make:
• Chasing the hot Fund
• Not having a roadmap to highlight the steps to reach your objectives
•No system to maintain accountability of all parties involved: the investment managers, administrators and advisor.
Active Investing is a strategy where the investor makes specific investmentswith the goal of outperforming an investment benchmark index.
Many investors, including Warren Buffett,believe that stocks are often mispriced –
After all, you have billions of investors and traders out there
competing against one another for stocks, & computers armed
with complicated algorithms.
TSX 300 vs. S&P 500 ONE YEAR PERFORMANCE
TSX 300 vs. S&P 500 FIVE YEAR PERFORMANCESource - Market Q
TSX 300 vs. S&P 500 TEN YEAR PERFORMANCESource - Market Q
TSX 300 vs. S&P 500 15 YEAR PERFORMANCESource Market Q
Common Mistakes in Buying Investments
How to Help AvoidBuying at the Top of the Market
How to Help Avoid Selling at the Bottom of the Market
3 Good thing we didn’t
wait!
4Brilliant! At this price,
let’s buy more!
5We should hold.
Only the people who sell lose money!
7I know this looks really
bad ,But these are only paper
losses..
9Good thing we
soldeverything!
10 Told you
so.
12 More crazies who are going to
get taken to
the cleaners
!
Cycle of Investor Sentiment
1 Look at the track record on this HOT
fund
2The trend is
holding.We should buy!!
6Once this goes up, we are selling out!!
11I don’t know what is going on. Let’s watch it.
13Let’s buy in again.
8Enough! Let’s cut our losses and move to XX fund that is really
HOT NOW.
Moving AveragesThe average of a number of past data points
For example: 10- Day Moving Average 10 Days of Closing prices/10
Using Moving Averages
Use Two Moving Averages to Buy and Sell. Weekly Moving averages - 22 to 7 RatioTSE300 2010 to 2015 example(Source - Google Finance)
π
TSE300 six months Moving averages 22 to 7 Ratio Dailyπ
Shorter-term Moving averages are compared when selling.
Sell
Sell
Source – Google Finance
MARKET PROBABILITY STRATEGY (MP)(Source – Google Finance)
The Obvious Trend Strategy identifies the sectors and stocks that are trending higher and higher regardless of what market trends are saying or doing.
There are always, sectors and stocks that defy the market movements. This strategy sorts and filters for those sectors and stocks.
OBVIOUS TREND STRATEGY (OT)
Buy Strength - Sell WeaknessThere is only one exit strategy to exit an
investment.YOUR TRAILING STOP LOSS GETS TRIGGERED
OBVIOUS TREND STRATEGY (OT)
ALWAYS SET A SELL STOP!
Covering your RisksSupport vs Resistance
Sell Stop Buy
Sell Stop
Insert a trailing sell stop
General Motors GMSource Market Q
Covering your RisksTrendlines
General Motors GMSource Market Q
Insert a trailing sell stop
1. Individual StocksInitiate with 4% of portfolio & set 25% Trailing stop loss (only risking 1% of portfolio)
2. Sectors:Initiate with 20% of portfolio & set 25% Trailing stop loss (only risking 5% of portfolio)
3. IndiciesInitiate with 100% of portfolio & set 25% Trailing stop loss (risking 25% of portfolio)
OBVIOUS TREND STRATEGYUSING TRAILING STOPSEXAMPLE
4 METHODS TO APPLY TRAILING STOPS
REVIEW
Percentage Trailing StopMoving Average Trailing Stop
Resistance/Support Trailing StopTrend Trailing Stop
1ST ? YOU ASK YOURSELF IS
» Strategy Diversification!» Investing doesn’t have to be complicated
“HOW MUCH AM I WILLING TO LOSE!”25% 20% 15%
5%10%
What is a flow-through?
CANADIAN INVESTORS
Flow-throughLP
Taxdeduction
Resourcecompany
Issueflow-through
shares
Renounce Canadian
ExplorationExpense
(CEE, CDE)to Partnership
A $10,000 investment
Amount
at risk:
$5,360
Tax savings:
$4,640
Investment value $10,000 Notes: This and the next two slides present a simplified example for illustrative purposes that assumes: a marginal tax rate of 46.4%,
Tax Capital Incomededuction gains tax advantage
$4,640 – $2,320 = $2,320
Tax benefits
Fully taxable income has been effectively turned into capital gains, reducing tax by 50% with
potential for deferral.
Risks Faced Before & During Retirement:
Outliving retirement savings The erosion of purchasing power from
inflation Savings being depleted at a faster rate
because of a bad timing of market returns.
RRIF Owner Considerations
Revenue Canada New simplified version of 2014 Tax Return 1. How much money did you make? $_____________ 2. Send it to us.
TFSA – IntroductionA great way to save tax-free!
Contribute up to $5,500 per year Savings and investments grow tax-free
Unused contribution room can be carried forward indefinitely
Eligible investments include cash, stocks, bonds, GICs, and mutual funds
Withdraw your money at any time, for any reason, without being taxed and you may replace the withdrawn funds the following year
No maximum age limit on contributing TFSA contributions will not affect your RRSP contribution limits or other federal income-tested benefits or tax credits
Reduced Taxation of Investments
Unregistered TFSAIncome After Tax: $1000 $100010 yrs GIC @ 5% $1629 $1629Tax (at 44% Earned income rate) $ 276 $ 0
Net Available to Spend $1353 $1629
TFSA – Other OpportunitiesGift funds to spouse / partner to contribute
Attribution rules will NOT apply
Gift funds to kids over 18
TFSA funds can be used as collateral to secure loan
No impact on government-tested benefits:
GST credits Child Tax Benefits
GISOAS
TFSA’s are TAX FREE to spouse upon death
The Hidden Costs in MF’sINVESTMENT STYLE TYPICAL TRADING
COST TERMS
Management Expense Ratio (MER %)
MGMT Fees (%)
FE LL LL3 DSC
2014 $24,270 2015 $24,930
Details:Your allowable RRSP contribution for the current year is the lower of: • 18% of your earned income from the previous year, or • The maximum annual contribution limit for the taxation year, or • The remaining limit after any company sponsored pension plan
The RRSP Deadline for (2014 tax year ) is March 02, 2015
Why RRSPs work for High Income Earners
Evaluation SheetToday’s Date:______Location__________________What topic did you most enjoy or get value from ? ________ _________________________________________________What is your greatest financial concern? ________________ _________________________________________________AN OPPORTUNITY TO TAKE ACTION I want to ensure that I have sufficient assets and make them last. I want to protect the assets I have accumulated.
I would like a free consultation to have a personal review:Select a Day:_________Time________________Your Name _____________________ age __ Your Spouses Name ____________________ age __ Address ________________________________________ CITY, PROVINCE, POSTAL CODE
Phone:__________________ Email:__________________________
Brian ShawInvestment Advisor
Branch Manager Campbell River BC
250 287 88071 800 347 0270
http://bshaw.mackieresearch.com/