MY INVESTMENT PHILOSOPHY
Anyone can be a great captain when the seas are calm. Character is visible only when times get tough. Our mission is to exceed the expectations of every client and achieve results that are in line with their highest financial aspirations. We believe the integrity of our philosophy provides the necessary foundation to help clients weather the storm and create a clear path forward.
Here is a review of the core beliefs which provide the foundation for our investment process:
1. The fundamental investment risk is not losing one's money, but outliving it.
Most people are looking towards more than 30 years of retirement. Even with a relatively "modest" inflation rate over the past 30 years, consumer prices have more than tripled. So the risk to the long-term investor may not be short-term volatility, but rather the extinction of purchasing power. Therefore, the investor's true objective (and greatest challenge) is often to protect the purchasing power of their assets over long periods of time.
2. Like storms of nature, financial storms are inevitable and should be expected.
As Sir John Templeton once said, "It is only common sense to prepare for a bear market." Common sense investing means that one should prepare themselves both financially and psychologically. Financially, one should be prepared to live through any bear market without being forced to sell assets at an inopportune time or price. Psychologically, to buy low and sell high is difficult for persons who are not mentally ready to act opportunistically.
3. Consensus views are rarely helpful in guiding an investor's future actions.
We believe in a contrarian approach. The broader investing populace is rarely correct, and often the best investment decisions are those that are contrary to the popular opinion. A non-consensus idea will often lead to a successful investment outcome if given enough time. Perhaps nothing is more difficult to learn than the fact that the price of shares is never low except when most people are selling and never high except when most are buying.
4. Transparency and liquidity are essential.
It is our belief that the less an investment relies on multiple counterparties or ratings agencies, the better. The Bernard Madoff saga illustrates the importance of due diligence and the dangers of not knowing exactly what is inside your portfolio. We believe that the most transparent, logical and effective way to implement an intelligently diversified portfolio is to utilize a core index approach using select index-linked ETFs. These instruments provide relatively low-cost, liquid exposure to most asset classes and provide an exceptionally efficient vehicle to implement a well-diversified investment strategy. Importantly, their component holdings can be monitored daily to help avoid unpleasant surprises.
5. Human emotion is the number one enemy in the battle for investment survival.
Anyone can feel panicky during periods of turmoil or euphoric during times of jubilation. That said, we believe emotional decisions are dangerous and detrimental to long-term financial success. To be a successful investor, we feel one needs to understand human psychology and counteract emotional reactions with a rational discipline. A good rule of thumb is to sell during times of market hysteria and buy during times of panic. To buy low and sell high sounds so simple, but in reality is an extraordinary challenge.
INTEGRATED FINANCIAL SOLUTIONS
Because of the complex and unique needs of our clients, we often incorporate the advice and expertise of RBC Wealth Management's numerous specialists who work in the areas of estate and trust planning, asset protection, credit and lending, and business succession planning. These seasoned planning professionals offer independent and objective advice to help clients centralize their investment planning and make better decisions.
Our holistic focus and client-centered approach allows us to "zero-in" on the unique challenges and appropriate solutions for a select number of client relationships. We do not accept "trading" accounts, as that would dilute the long-term strategies we focus on for the benefit of our clients.
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RBC Wealth Management is a division of RBC Capital Markets, LLC. Professional Trustee services are offered to RBC Wealth Management clients by RBC Trust Company (Delaware) Limited (RBC Trust) and Comerica Bank & Trust, N.A., either or both of which may serve as trustee. RBC Capital Market, LLC, is a subsidiary of Royal Bank of Canada (RBC), and RBC Trust is a division of RBC. RBC Wealth Management and/or your Financial Advisor will receive compensation in connection with offering or referring these services. Neither RBC its Financial Advisors are able to serve as trustee. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.
