# What is best way to make some return on my $$?



## Johnny (Oct 30, 2014)

Hi,

I hope I am posting to the right section. I am 37 and have managed to save close to a million in cash (most of it being in my consulting business and in US$, so ashamed to say has not been making any return over past couple years). Banks are paying 0.10% on USD and not FDIC insured which worries me a bit. I didn't want to lock it up in a term deposit/GIC because I was looking to acquire another business or real estate. I tried going with a TDW financial planner and even another firm and both failed me and had to take a loss. I am at a point where I need to find ways to make the money, I worked so hard for, grow for my children and my retirement.

I have about 100k combined with my wife in RRSPs and $0 in TFSA. I own two condos and a 5 plex, all for income purposes. The condos are paid off since I bought them at 18 and 5 plex has about 240k mortgage on it. It is worth over 500k. I also own a home with no mortgage valued at 750k+. Some of you must be saying...he is doing well...what is he complaining about and that is true but I have been doing a terrible job at managing it and making it grow.

I have been off work for almost a year now due to a new addition to the family and would love to continue to stay home with family or at least work a couple days/week. I was considering buying more income properties (real estate), but the market here on multi-units is so over inflated that the numbers/returns just don't make sense. I am waiting for that special deal to popup that does make sense but again I like not having the headaches that come with tenants....just don't like my money sitting there earning nothing!

Seem to be a lot of smart people on here and would love to hear some suggestions from as many as possible.

Thanks


----------



## Rusty O'Toole (Feb 1, 2012)

One thing I have learned is to go to headquarters and get the absolute facts. In other words don't listen to a chump like me. Listen to the real successful investors like Warren Buffet, Sir John Templeton, Peter Lynch.

There is a theme that the most successful investors have in common and that is, value investing. A very safe and profitable method over the long term.

It works like this. Every stock has 2 values, objective and subjective.

If you want to know the objective value, you need an expert accountant or "security analyst" to analyze the assets and liabilities, sales and expenses, profit and loss, to arrive at a value for the company. Divide that value by the number of shares and you have the per share value. This value changes very slowly with the activities of the company.

The subjective value is very simple, look it up on the net or in the daily paper. The value of the shares on the stock exchange, this value jumps around all the time.

Now here is the trick. When the subjective value of the stock is lower than the objective value, the stock is a buy. When you can buy stock for 50% of its true value how can you lose?

There are a couple of flaws with this method. One is, you get these bargains when the stock is stinko, either covered in scandal, or thought to be close to bankrupt, or in an industry that is out of favor. Another is an undervalued stock can stay undervalued for a long time.

Another is, when the market is overbought you can't find these bargains anymore. This is a good thing because it keeps you out of the market when it is at its peak, and gets you in when prices are low.

This method also requires a lot of work, researching different companies in depth in order to find a bargain.

But, it is a safe method and has been very profitable for those who learned it and worked at it.

Now what if you don't want to go to all that work?

In that case, index everything. Buy low cost index funds or ETFs that copy your favorite stock index like the S&P. By doing this, you will automatically beat 90% of investment advisors.

This is perfectly logical since these days, the mutual funds and hedge funds ARE the market so it stands to reason they will trail the market by the cost of their fees. Just making average returns with low fees will put you in the top 10% of results.

I got this advice from Warren Buffet, but it could have come from any really successful investor.

Now is there another method? Yes, the one used by the big banks and hedge funds which involves cheating, front running, buying companies and tearing them up and wrecking them etc but these methods are not available to the average investor.

So which do I do? Actually at the present time I am learning to trade options. So far I have been doing this for a month and made $2500 with about $60,000 of margin. I believe option trading is a very good, very safe way to make money but is more in the character of a trading business than a hands off investment. If I had enough money I would put it into index ETFs and live on the dividends.


----------



## Rusty O'Toole (Feb 1, 2012)

Another good method of investing is the dividend growth method, buying stocks in stable companies with good dividends, that have a pattern of steady growth.

This used to be good but not so much anymore, all stocks are up so much the dividend return is low and the possible appreciation limited. It works best if you start when stocks are on the bargain counter like early 2009 and dividend returns are high.


----------



## Rusty O'Toole (Feb 1, 2012)

The leading exponent of value stock investing is Warren Buffett and Benjamin Graham is his guru.

Graham wrote Security Analysis in 1934, the Bible of the industry. He also wrote The Intelligent Investor. Neither of these make much sense unless you understand what I wrote in the above posts. It may have been obvious to Graham and Buffett but they never spell it out and it took me years to figure out what they were driving at.

Graham's method can be boiled down to 2 or 3 simple formulae or ratios. Someone who writes about his methods quite a bit is Norm Rothery.


----------



## Cal (Jun 17, 2009)

You may want to talk to a few more financial planners. 1 million at 4% return is forty grand a year you could make in dividends which have preferential tax treatment to your properties. I do agree with Rusty, that the valuations are a little off on dividend payers, as every has been buying them in their quest for yield.

You have done well to save that much, however when you consider inflation, it is actually losing you money/buying power daily sitting in cash. Even a couch potato portfolio is better than cash imo.


----------



## Pluto (Sep 12, 2013)

I agree with reading Ben Graham. But we should mention that although he was Buffett's teacher and business partner, Buffet did not use Graham's strategy exactly. Graham bought companies below net asset value. They usually got that way because they were in serious trouble. Graham reasoned that because they were below net asset value, if and when they went belly up, he'd get the difference. That was his "margin of safety". I think Buffett and Munger call this something like picking up a discarded cigar off the street and taking the last puff. Apart from his "margin of safety" idea, that Buffett abandoned, Graham is good. for some concise insight into Buffett's ideas, read, "The Essays of Warren Buffett" by Cunningham as well as watching numerous interviews on youtube.


----------



## lonewolf (Jun 12, 2012)

Johnny you have been riding a major bull market in the US dollar index the last few months. The Us dollar will most likely correct some of that rally soon but the USD is the best place to be over the next year or so. For safe keeping might want to consider holding in a Swiss bank that is 100% liquid & OR A Swiss annuity held with a Swiss insurance company which are totally different then in North America your money does not have to be locked in & they are safer.

The amount of USD you have might not be increasing much with low interest rates but the value of those USD have been increasing. The danger I see if the bank does not pay back their IOU to you.


----------



## Johnny (Oct 30, 2014)

Thanks for all the comments guys! Lonewolf, that has been one of my main concerns also. I have it in USD now and has appreciated vs the CAD$ which is good, but debating at what point should I be converting all it to CAD. When I started my business exchange was at 1.62 which was great, but that was many years ago and now it's at 1.13 which is higher than it's been in a while. I have been converting 10-20k here and there as the rate goes up. Sitting in a Canadian bank now in a USD account really does not protect my $$. So if I convert it now yes my money becomes insured but if it were to go up to 1.25 or 1.35 one day...I would be hitting my head


----------



## lonewolf (Jun 12, 2012)

If one can afford it. I like the idea of holding a little bit of the single major currency from each continent, a bag of junk silver coins for barter, a very, very, small amount in Bitcoin, little bit of gold held in Switzerland in case of confiscation (has happened in US before) & own some land in Switzerland in case of political unrest in North America could just move to Switzerland, It might be hard to move latter if things get bad here.

Near the bottom of panic deleveraging would be the time to take a core position on exiting the USD (were not there yet). The DJI will most likely be well below the 09 low.

Of course I could be wrong on all of the above.


----------



## Johnny (Oct 30, 2014)

what do you mean confiscation? and if things get bad how? 

What do you predict USD?CAD and what timeframe?


----------



## james4beach (Nov 15, 2012)

He's referring to when the USA confiscated gold held by individuals. The government forcefully took away people's gold, including in their safe deposit boxes, and gave them token dollars in return (basically stealing the gold from citizens).

It's an acknowledged risk in gold investing. I'm not tremendously worried about it, because the reality is the government can negatively impact many asset classes with policy actions. Gold, yes certainly, but also income trusts, or dividend stocks, or real estate. All of these things are at the whims of government policy.


----------



## lonewolf (Jun 12, 2012)

In the United States @ one time the government would imprison any holding gold for something like 10 years the goverment wanted to get their greedy hands on every ones gold. ( they did pay for it based on a price they set ) In a monetary crises it could happen again the government could take it (confiscate it) from its citizens. 
According to Cassy research about 500 fiat currencies have gone to zero in the past. Its just a matter of time it might not be in our life time that the USD or CAD goes to zero. (that's how things could get bad) For now I think cash will be king but only if it is held in a safe place that will give back your money, ( people not getting there money back from financial insitutions is how things will most likely get bad first) deflation first before our currency becomes worthless I think is the most likely path


I would hold on to the US dollar until @ least sometime in 2016. As far price I would maybe look to see where the USD/CAD traded during 08 through 09 when last deleveraging took place


----------



## james4beach (Nov 15, 2012)

Johnny said:


> When I started my business exchange was at 1.62 which was great, but that was many years ago and now it's at 1.13 which is higher than it's been in a while. I have been converting 10-20k here and there as the rate goes up. Sitting in a Canadian bank now in a USD account really does not protect my $$.


Funny, I also ran my business and heavily exported back in the days of that 1.6 exchange rate. Man was that sweet.

Yeah be careful about deposit insurance. $1 million in US currency in a Canadian account (not CDIC insured) is something I would not do. In the case of a banking crisis and collapse, that's the kind of account that would suffer losses. It has no deposit insurance.

Here's a scenario I want to caution you about: you freak about the million in cash, lack of CDIC insurance and no return, and plow all the money into the "value" and "dividend stocks" everyone on these boards keeps going on about. As a result you buy into the stock market at a historical high (which it is right now), then we enter a bear market and you lose 300k to 500k of your hard earned money. This is a very real possibility.

If I was you, I'd take a step back and look at all of your assets together. As asset classes you have: cash, fixed income, stocks, real estate, maybe others. At the high level, figure out what % exposures you want of each.

Your USD cash is just one part of the big picture. When you decide your desired allocations, that will guide you on what to do with that cash. For instance, maybe you'll decide you want it in fixed income... in which case I suggest you continue converting it to CAD. Use very efficient methods, such as the gambit or DLR / DLR.U shortcut.

If you decide you want to leave it in cash, and US$ cash, then please don't leave such large non-CDIC deposits. The money is safer in treasury bills, which you can access through a brokerage with ETFs such as SHV.


----------



## GoldStone (Mar 6, 2011)

james4beach said:


> Here's a scenario I want to caution you about: you freak about the million in cash, lack of CDIC insurance and no return, and plow all the money into the "value" and "dividend stocks" everyone on these boards keeps going on about. As a result you buy into the stock market at a historical high (which it is right now), then we enter a bear market and you lose 300k to 500k of your hard earned money. This is a very real possibility.


You've been saying this since the bottom of 2009. As a result, you missed the entire bull run of the last 5 years.

US market sits at a historical high in nominal terms. It's below the all-time high in inflation adjusted terms. But that's largely irrelevant. The only thing that matters is valuations.

I posted this chart before... doing it again for OP's benefit:










S&P 500 trades at the same Price-to-Dividend ratio as it did ~3.5 years ago. You can see that stock prices and dividends have been growing in line with each other. Stocks are definitely not cheap here, but it's hard to make an argument that we are in a bubble. You get the same amount of dividends for each dollar you invest now as you did in 2010. This is not another year 2000.


----------



## Johnny (Oct 30, 2014)

I have about 900k in cash, about 80% is in my business and in USD and 20% in personal and in CAD. I currently hold a bit under two million in real estate which includes my personal home and rental properties. I would be comfortable buying more real estate if I found some that meet my criteria/pricing, but I also feel like I am putting all my eggs in one basket and not diversifying. Is this the case in your opinions?

About 100k in RRSP , half in TD mutual funds and have in GIC. 

That's it! No stocks, index funds, etc

So if you had to do something rigt away to protect your non CDIC insured USD$...what would be my options?


----------



## james4beach (Nov 15, 2012)

Johnny said:


> So if you had to do something rigt away to protect your non CDIC insured USD$...what would be my options?


Sounds like ~ 700k in USD cash. Yeah, that's a large uninsured amount. I guess your options are to (1) convert it all to CAD, (2) leave it all in USD, or (3) diversify and do some of each of the previous

(1) -- if going this route, don't convert it all at once but make the conversion over maybe a year. Use gambit or DLR to save thousands$ in conversion fees. It's not terribly dangerous to leave uninsured bank deposits for a while. I wouldn't lose sleep over having uninsured deposits for a few months

(2) -- if you decide to leave it all as USD, meaning it will sit longer term, then definitely solve your uninsured deposit problem. The easiest answer is to buy shares of a short-term treasury bond ETF. Three that I know well are SHV, SHY, SCHO (I'm using SCHO). The shares let you hold treasury notes backed by the US Treasury, guaranteed by US government. SHV is the closest to cash storage, meaning the price won't fluctuate. It yields nothing. If your amounts will be sitting more like 2 years, then SHY and SCHO offer around 0.3% yield, but their prices may fluctuate a bit within 2 years. You have a lot of cash, so honestly I would diversify and buy two of them: *SHV and SCHO*, thus getting them from two different fund companies and getting one that's cash-like (very short duration) and the second with longer duration. This way, your money stays in US dollars and now it's government insured. This would be a very low-risk plan.

GoldStone: the only thing that chart shows me is that investing in stocks is a crazy roller coaster ride. Yes long term returns can be good, but this doesn't change the fact that -50% declines can be seen short term. So if the OP decides to put a million$ into stocks, he has to be willing to accept that one point he may see a 500k loss. Sure, he might see his 1 mil become 2 mil in the future but the fact still remains, 500k can be lost along the way. Perhaps temporarily, perhaps permanently.


----------



## Johnny (Oct 30, 2014)

yes that's correct. about 700k in cash. Someone told me over the weekend than money sitting in a TDW moneymarket is insured even if in USD. Anyone can confirm that? I am waiting to hear back from TDW also


----------



## Johnny (Oct 30, 2014)

I have been wanting to use the Gambit strategy, but seeing how the pair is so volatile, up one penny friday for example, I can never be sure what rate I will get since I read it takes 3 days to setlle DLR/DLR.U. I am using customhouse which is much better than the bank but still lose 60 pips on each trade. What do you guys recommend?


----------



## Mortgage u/w (Feb 6, 2014)

Johnny, I think you should be consulting a reputable investment advisor - not just a bank employee. Find a Broker such as, for example, an Investor's Group advisor. You may want to meet a couple of advisors and analyze the plan they present you. If you plan on managing the assets on your own, then you will have to do a lot of research and be very familiar with all your options. Everyone here will have their own opinion and are all very good opinions. However, I think in your situation, you need a trusted professional to go over your portofolio.


----------



## GoldStone (Mar 6, 2011)

Mortgage u/w said:


> Johnny, I think you should be consulting a reputable investment advisor - not just a bank employee. Find a Broker such as, for example, an Investor's Group advisor. You may want to meet a couple of advisors and analyze the plan they present you. If you plan on managing the assets on your own, then you will have to do a lot of research and be very familiar with all your options. Everyone here will have their own opinion and are all very good opinions. However, I think in your situation, you need a trusted professional to go over your portofolio.


Investor's Group is the LAST place I would go for advice, and only if someone put a gun to my head. They are high fee mutual fund sales people. They have a massive conflict of interest. You won't get an impartial advice from them.

That said, I agree with the general idea to seek professional advice. I would go to a fee-only planner who doesn't sell any products.


----------



## thepitchedlink (Feb 17, 2014)

Wow, just following this thread for interests sake.....my small advice is STAY AWAY from Investors Group!! It just cost me a heap of money to get MY money back from them....now it's time to get smarter and stop giving it away. If your going to consult a advisor my advice is look for one that is fees based.....pay him for his time, not products he might want to sell you


----------



## Mortgage u/w (Feb 6, 2014)

Don't understand all this negativity towards Investor's Group. If some have had a bad experience, I doubt its the organization's fault - rather, I think someone didn't do their homework when selecting an Investment Advisor.

You do know that there are fully licenced, fee based, Wealth Management Planners at Investor's Group, right? And they are not only mandated to sell IG products, right?

In any case, the whole point here is to consult AN advisor - regardless which firm they represent.


----------



## Johnny (Oct 30, 2014)

what can I expect to pay with a fee based advisor? I noticed some charge $150/hr, others charge $300/hr and others are $3000-5000 for a plan/structure. How do you pick the right one? I want to avoid having to visit five different ones and pay 1-2 hours of each before I decide, but is that the only way?


----------



## GreatLaker (Mar 23, 2014)

*Finding a planner*



Johnny said:


> what can I expect to pay with a fee based advisor? I noticed some charge $150/hr, others charge $300/hr and others are $3000-5000 for a plan/structure. How do you pick the right one? I want to avoid having to visit five different ones and pay 1-2 hours of each before I decide, but is that the only way?


Reputable advisors will offer a phone interview or in person meeting for free to help you understand their service before deciding. Do a web search on how to select a financial planner and you will find lots of information and questions to ask prospective planners and help evaluate if they meet your needs.


----------



## Mortgage u/w (Feb 6, 2014)

Johnny said:


> what can I expect to pay with a fee based advisor? I noticed some charge $150/hr, others charge $300/hr and others are $3000-5000 for a plan/structure. How do you pick the right one? I want to avoid having to visit five different ones and pay 1-2 hours of each before I decide, but is that the only way?


Given the amount you have to invest, essentially YOU will be determining the fee to some extent. Depending on what you choose to invest in, the fees can be negotiated as a percentage (< 1%). They should not be charging for initial consultation if they want to gain your business. I recommend you go with a referral - choosing someone at random can be difficult. You will need to trust this person with your assets and have total confidence in him/her.


----------



## OptsyEagle (Nov 29, 2009)

Johnny said:


> I tried going with a TDW financial planner and even another firm and both failed me and had to take a loss.


Johnny, if your objective is to find an advisor that will prevent you from experiencing a decline in value or a loss, I would suggest that you simply save your money and stop looking. That advisor does not exist. A financial advisor has only very limited control over your returns. In other words, a very good one may improve your return a percentage or two above the market benchmark and a really bad one might reduce it by the same amount, but what the stock market does will drive the overall direction of your portfolio ... and your advisor does not have any control over what the stock market does.

If you go to an advisor and pay them a fee and then fire them when the portfolio goes down, then as I said, save your money. It's not that your portfolio might go down at times, it's that it will go down. If you are not comfortable with this, then you should not invest in the stock market, or real estate or anything non-guaranteed.


----------



## Johnny (Oct 30, 2014)

OptsyEagle, what gave you the impression that I am expecting to find someone that will always give me unrealistic returns?  I am a newbie to self investing but i am not a dreamer. I obviously prefer no losses and always positive returns, but know the market fluctuates. From an advisor, I expect someone that will balance my stuff and avoid loss as much as possible. if I do have losses be at a minimum and maybe something else would compensate for it


----------



## blin10 (Jun 27, 2011)

OptsyEagle said:


> Johnny, if your objective is to find an advisor that will prevent you from experiencing a decline in value or a loss, I would suggest that you simply save your money and stop looking. That advisor does not exist. A financial advisor has only very limited control over your returns. In other words, a very good one may improve your return a percentage or two above the market benchmark and a really bad one might reduce it by the same amount, but what the stock market does will drive the overall direction of your portfolio ... and your advisor does not have any control over what the stock market does.
> 
> If you go to an advisor and pay them a fee and then fire them when the portfolio goes down, then as I said, save your money. It's not that your portfolio might go down at times, it's that it will go down. If you are not comfortable with this, then you should not invest in the stock market, or real estate or anything non-guaranteed.


best advise in this thread imo... everything depends on what market does


----------



## blin10 (Jun 27, 2011)

try to learn to invest yourself, lots of tools online... take it slow, watch companies over time (how they behave), buy quality stocks (stay away from penny stocks, gold/silver stocks, air lines companies, very small market cap companies, etc), look at couch potato strategy, look at dividend investing, shape it into your own system, diversify, develop investor psychology and emotions control... If you don't want to learn or have no time/passion, I would avoid investing.. stick with GICs or put it in high interest account and earn your %1.5 



Johnny said:


> OptsyEagle, what gave you the impression that I am expecting to find someone that will always give me unrealistic returns?  I am a newbie to self investing but i am not a dreamer. I obviously prefer no losses and always positive returns, but know the market fluctuates. From an advisor, I expect someone that will balance my stuff and avoid loss as much as possible. if I do have losses be at a minimum and maybe something else would compensate for it


----------



## lonewolf (Jun 12, 2012)

GoldStone said:


> Investor's Group is the LAST place I would go for advice, and only if someone put a gun to my head. They are high fee mutual fund sales people. They have a massive conflict of interest. You won't get an impartial advice from them.
> 
> That said, I agree with the general idea to seek professional advice. I would go to a fee-only planner who doesn't sell any products.


 In the 1990s an Investor Group sales rep bragged to me how he was making his clients lots of money by having clients borrow against their homes to go long stocks. I have never used them. The best brokerage firm I ever traded with was Lind Waldock years ago. Commissions in Canada were just to high back then. I stopped trading with L W ( I think L W went under) years ago & now I do not think it is that easy to set up an account across the border


----------



## Synergy (Mar 18, 2013)

GoldStone said:


> Investor's Group is the LAST place I would go for advice, and only if someone put a gun to my head. They are high fee mutual fund sales people. They have a massive conflict of interest. You won't get an impartial advice from them.
> 
> That said, I agree with the general idea to seek professional advice. I would go to a fee-only planner who doesn't sell any products.


1+. Personally I'd stay away from Investor's Group, bank sales reps / financial planners and the like - conflict of interest, high fees, etc.. I like the idea of a fee only advisor for those that need help managing their portfolio / finances.


----------



## gardner (Feb 13, 2014)

thepitchedlink said:


> STAY AWAY from Investors Group


Funny, I've been contemplating a position in TSX:IGM. They're priced well right now, PE of 14.6, yield 4.8% on a payout ratio around 70%. They've been a reliable dividend payer for as far back as google can see. I would consider them reasonably investable.


----------



## Synergy (Mar 18, 2013)

gardner said:


> Funny, I've been contemplating a position in TSX:IGM. They're priced well right now, PE of 14.6, yield 4.8% on a payout ratio around 70%. They've been a reliable dividend payer for as far back as google can see. I would consider them reasonably investable.


I would be a little concerned here with all the low fee ETF's coming out, fee only advisors promoting their services, etc. that the profitability for MF sales people may get squeezed a little going forward? This is one reason why I've stayed away from Power Financial - times seem to be a changing.


----------



## GoldStone (Mar 6, 2011)

gardner said:


> Funny, I've been contemplating a position in TSX:IGM. They're priced well right now, PE of 14.6, yield 4.8% on a payout ratio around 70%. They've been a reliable dividend payer for as far back as google can see. I would consider them reasonably investable.


I think you missed the context of this discussion. We are not talking about IGM as an investment.


----------



## OptsyEagle (Nov 29, 2009)

Johnny said:


> OptsyEagle, what gave you the impression that I am expecting to find someone that will always give me unrealistic returns?  I am a newbie to self investing but i am not a dreamer. I obviously prefer no losses and always positive returns, but know the market fluctuates. From an advisor, I expect someone that will balance my stuff and avoid loss as much as possible. if I do have losses be at a minimum and maybe something else would compensate for it


This statement here: 

_"I tried going with a TDW financial planner and even another firm and both failed me and had to take a loss."_

What did they do that failed you? How long were you with them? Just trying to guide you in the right direction.


----------



## Johnny (Oct 30, 2014)

When I said they failed me, I meant they didn't only under perform, but they both actually made me take a loss. Yes the ultimate decision was mine, but when you are inexperienced, you tend to panic and do as they say. Anyway I am not going to put the blame on anyone but myself as I should of been wiser. It was an expensive tuition


----------



## gardner (Feb 13, 2014)

GoldStone said:


> I think you missed the context of this discussion. We are not talking about IGM as an investment.


No, I missed nothing -- I was making a funny. Sorry if you didn't think it was.


----------



## GoldStone (Mar 6, 2011)

Mortgage u/w said:


> Don't understand all this negativity towards Investor's Group. If some have had a bad experience, I doubt its the organization's fault - rather, I think someone didn't do their homework when selecting an Investment Advisor.


This is a DIY forum. Investor's Group has a terrible reputation among DIY investors. They are known for high fees, poor performing funds and DSC charges that lock you in.



Mortgage u/w said:


> You do know that there are fully licenced, fee based, Wealth Management Planners at Investor's Group, right? And they are not only mandated to sell IG products, right?


"Fully licensed" is meaningless. Mutual fund salespeople at the local bank branch are fully licensed too. So are used car salespeople. Do these planners operate under fiduciary standard of care? Fiduciary duty requires that an advisor *always* works in the best interests of the client. Mutual fund salespeople don't have to meet this standard.

Fee-based is not the same as fee-only. Fee-based planners still sell a product. They still have a conflict of interests between (a) doing what's best for the client and (b) selling the most profitable product.



Mortgage u/w said:


> In any case, the whole point here is to consult AN advisor - regardless which firm they represent.


Agree, assuming the OP is not willing to learn or feels overwhelmed.


----------



## OurBigFatWallet (Jan 20, 2014)

Johnny, I'm curious - what part of the country are you in and do you have any tips for real estate investing?


----------



## My Own Advisor (Sep 24, 2012)

Same Johnny, I only have my primary residence and CDN REITs.


----------



## thepitchedlink (Feb 17, 2014)

gardner said:


> Funny, I've been contemplating a position in TSX:IGM. They're priced well right now, PE of 14.6, yield 4.8% on a payout ratio around 70%. They've been a reliable dividend payer for as far back as google can see. I would consider them reasonably investable.


Darn right, exactly what I did....got my money away from them, then bought them.

Johnny, my fees only fella was 180$/hr. My initial consultation started by email, about 5, back and forth. Then I drove down and met him for an hour and a half or so. Final bill was 380$. Worth every penny and just a fraction of the MER's I was getting charged by IG. Is my "new"plan better then the old "plan"....Not sure yet, but I'll bet my couch potato just just as well if not a bit better, and I'm not giving 2.25% away!!! And if it doesn't, well just my self to blame.....


----------



## james4beach (Nov 15, 2012)

thepitchedlink said:


> Wow, just following this thread for interests sake.....my small advice is STAY AWAY from Investors Group!! It just cost me a heap of money to get MY money back from them...


I second (or third) that. Stay away from Investors Group!

Once I learned how bad their fees were, I decided to take all my money out of them. Amazingly, they did not comply with my demand to return my money and made me jump through some hoops.

As a "thank-you" to them, I now remind people whenever I get a chance to stay away from Investors Group. I have another close friend who is locked into some DSC funds with them, and unhappy.

Still another friend of mine believes IG sometimes violates rules surrounding DSC and the process around the resetting of the fee schedule. She's thinking of suing them.


----------



## Mortgage u/w (Feb 6, 2014)

I don't want to defend Investor's Group - I have no interest in them except own their stock. But these issues people have been having such as high fees and DSC funds is not limited to Investor Group advisors only. Anyone licenced to sell mutual funds can be just as guilty and prone to poorly advise and manipluate DSC funds. A good planner will explain all the type of funds to the client as well the pros and cons of each. A company such as IG is highly regulated and has strict compliance standards that prevents their brokers to take advantage of their clients. I've worked in the past for a highly reputable investment dealer which caters to independant brokers and let me tell you, there were many bad apples who took advantage of their client's investments. Classic example was taking the yearly 10% free units from a DSC fund and buying another DSC fund rather than a FE equivalent. Our compliance would catch this and serious consequences followed.

All this to say is *do your due diligence *when choosing an advisor. Whoever got locked in a DSC fund without understanding it, well sorry to say but you chose a horrible advisor. IG OR NOT, BEWARE OF ALL BROKERS!! If you want to save yourself the headache, do like me and many others and manage you're own money!


----------



## Pluto (Sep 12, 2013)

GoldStone said:


> You've been saying this since the bottom of 2009. As a result, you missed the entire bull run of the last 5 years.
> 
> US market sits at a historical high in nominal terms. It's below the all-time high in inflation adjusted terms. But that's largely irrelevant. The only thing that matters is valuations.
> 
> ...


Yes I know you are looking at the 2000 era vs now. 
What about the 2007 -09 era vs now. the 07-08 era in your chart shows that the blue line crossed below the black line. In other words, stocks commenced a serious down trend while the black line was still going up. You don't offer a reason why we can't be on the cusp of something similar right now. In 2000 the bubble was partly tech ipo that didn't have any earnings, so obviously no dividends. The next bubble, 2007, the bubble was partly potash prices and potash companies did pay dividends. 

I'm not at all convinced that this is a safe time to go all in on stocks. (And no, I didn't miss the bull market.) In 2008, had I listened to the don't worry, be happy, be in stocks all the time crowd, I would have been spending the last 5 years trying to break even.


----------



## Pluto (Sep 12, 2013)

GoldStone said:


> Investor's Group is the LAST place I would go for advice, and only if someone put a gun to my head. They are high fee mutual fund sales people. They have a massive conflict of interest. You won't get an impartial advice from them.
> 
> That said, I agree with the general idea to seek professional advice. I would go to a fee-only planner who doesn't sell any products.


Very very true.


----------



## Pluto (Sep 12, 2013)

thepitchedlink said:


> Wow, just following this thread for interests sake.....my small advice is STAY AWAY from Investors Group!! It just cost me a heap of money to get MY money back from them....now it's time to get smarter and stop giving it away. If your going to consult a advisor my advice is look for one that is fees based.....pay him for his time, not products he might want to sell you


Yes. don't go to an "advisor" that has mutual funds and what not to sell. They are not advisors, they are sales. They will bleed you slowly, but surely. And over the years it will amount to a lot of money. 

Maybe go to two or three fee only advisors. don't tell them you have consulted with others. Just get two or three plans. Then assess them. There is no reason to be in a rush to start making money, investments and what ever. 

Typically, people with money but not a lot of investing experience come in to stocks after the market has been going up for some years. That helps to make them feel safe, because they protect the last few years of market gains into the future. Inevitably, the market falls, and they are stunned. You are much better off to do the bulk of your stock buying after the fall, and in the meantime have capital preservation as your main goal. 

There are cute sayings such as, "it isn't market timing, it's time in the market" to persuade people to go all in anytime. Such cute sayings are mutual fund sales pitches designed to get commissions and fees from you.


----------



## Pluto (Sep 12, 2013)

Mortgage u/w said:


> Given the amount you have to invest, essentially YOU will be determining the fee to some extent. Depending on what you choose to invest in, the fees can be negotiated as a percentage (< 1%). They should not be charging for initial consultation if they want to gain your business. I recommend you go with a referral - choosing someone at random can be difficult. You will need to trust this person with your assets and have total confidence in him/her.


Correct me if I am mistaken, but a Fee Only advisor never has your/his money. Under this scheme, you always have your money in your account that only you control. The advisor primarily advises one on how and what to invest in.And if it is fee only, why would it be a %?


----------



## Pluto (Sep 12, 2013)

gardner said:


> Funny, I've been contemplating a position in TSX:IGM. They're priced well right now, PE of 14.6, yield 4.8% on a payout ratio around 70%. They've been a reliable dividend payer for as far back as google can see. I would consider them reasonably investable.


yes, I did that too and it was OK. Buying IGM stock is different than being a customer and buying their mutual funds. If one buys the IGM stock one is a part owner of the mutual fund business, not a customer.


----------



## gardner (Feb 13, 2014)

Synergy said:


> I would be a little concerned here with all the low fee ETF's coming out, fee only advisors promoting their services, etc. that the profitability for MF sales people may get squeezed a little going forward?


Maybe. I was reading their annual report from last year and they locked in something like $7b in assets under management last year. They probably lock in something like 5b to 8b every year. Right now they have 5b x 5 years ~25b of assets that they are guaranteed to get 2.3%/year taste of, even if *everybody* quits. I have friends that are locked into them -- and I know they are quite terrible to deal with. They are probably going to do alright for at least 5 more years.


----------



## etfstrader (Sep 26, 2014)

Johny, my best suggestion to you is to learn the craft of investing/trading before you attempt to put your money into any kind of market (e.g. stocks, currency, bond and etc.) Don't rush into it now as we are about to enter into the 6th year of a bull market cycle, which it's not a good time to chase after market's new high. Beside, everyone has different investing/trading styles or objectives which their opinions or advices might not suit you. Yet, I don't recommend you to rely on any advisor's opinion since they don't have the proper knowledge and skills to analyze stocks or stock market. What they are good at is to choose the products that would closely fit/match your investment objectives. 

As a full-time trader (not a day trader) with years of experience, all I can tell you is that there are always opportunities to make money regardless of market conditions, but you need to have sharp eyes (from learning and practicing) to analyze charts or data in order to find those profitable opportunities.


----------



## Pluto (Sep 12, 2013)

I echo etfstrader's thoughts above. 

right now, in my opinion, preservation of your capital should be your highest priority. To earn a little $ you could buy a short bond etf. Short bonds don't fluctuate much, so your capital is fairly safe. They pay a paltry sum, but that's the price for safety. There should be short bond etf's that pay about 2.5 - 2.7% and pay monthly. In order to avoid what happened to you in 2000, just wait for a market correction. When the market corrects to the point where Canadian big banks dividends are around 5% or better, start buying bank stock. At that point, with bank yields > 5% don't go all in at once, but don't be too cautious either as the window of opportunity could be small. Have bank stock as your core. Add other conservative to very conservative dividend payers for some diversification. 

Just look at the price charts around the time you were in the market back around 2000. Had you waited then for good Canadian bank stock prices, you would have been set. 
Go to your local Library and ask at the reference desk for ValueLine. Every DIY investor should be familiar with it. Look up the Canadian banks, and other Canadian large caps. Photo copy the reports of interest and study them. don't pay attention to ValueLine rankings for timeliness. While you are at the library, ask to have a look at the Investment Reporter. They probably cover just about any stock US or Canadian, that you need for your purposes and categorize them according to very conservative, conservative, average speculative and so on. 

If you learn to buy quality dividend payers when they are beaten down, you will find you will be on top of the market instead of it being on top of you.


----------



## Janus (Oct 23, 2013)

Johnny said:


> OptsyEagle, what gave you the impression that I am expecting to find someone that will always give me unrealistic returns?  I am a newbie to self investing but i am not a dreamer. I obviously prefer no losses and always positive returns, but know the market fluctuates. From an advisor, *I expect someone that will balance my stuff and avoid loss as much as possible. if I do have losses be at a minimum and maybe something else would compensate for it*


Hi Johnny,

To be totally honest it sounds like you *do* still have somewhat unrealistic expectations, particularly in the bolded part. Rest assured that an advisor will give you exposure to the stock and the bond market, and while they will have your long-term goals (and thus long-term returns) in mind, they will not be in the business of avoiding losses. 

I mean frankly, an advisor would likely put half of your money in stocks. Sure they may select *good* stocks, or they may index, and they may do well over time, but they're not being irresponsible if your equities dip 20% in a year due to a stock market gyration. So please don't think an advisor will be protecting you on the downside. You're paying them to give you market exposure to stocks & bonds - hopefully quality exposure, but exposure nonetheless. Exposure means gains and losses.


----------



## james4beach (Nov 15, 2012)

Pluto said:


> right now, in my opinion, preservation of your capital should be your highest priority. To earn a little $ you could buy a short bond etf. Short bonds don't fluctuate much, so your capital is fairly safe. They pay a paltry sum, but that's the price for safety.


Just to clarify, Pluto is talking about "short-term bond" ETF and not a short/inverse fund.

Example is XSB, a perfectly good and very low risk holding.


----------



## lonewolf (Jun 12, 2012)

Pluto said:


> I echo etfstrader's thoughts above.
> 
> right now, in my opinion, preservation of your capital should be your highest priority. To earn a little $ you could buy a short bond etf. Short bonds don't fluctuate much, so your capital is fairly safe. They pay a paltry sum, but that's the price for safety. There should be short bond etf's that pay about 2.5 - 2.7% and pay monthly. In order to avoid what happened to you in 2000, just wait for a market correction. When the market corrects to the point where Canadian big banks dividends are around 5% or better, start buying bank stock. At that point, with bank yields > 5% don't go all in at once, but don't be too cautious either as the window of opportunity could be small. Have bank stock as your core. Add other conservative to very conservative dividend payers for some diversification.
> 
> ...


The once or twice in a life time lows to buy in the stock market are when the price earnings are in single digit & the dividend yield is above PE in the current mania were no where near that.


----------



## My Own Advisor (Sep 24, 2012)

I wouldn't be rushing in to buy stocks now. The only sector I am buying more of now is the O&G sector, i.e., COS, CNQ.


----------



## marina628 (Dec 14, 2010)

I sold a large chunk of my business assets 2 years ago for mid 7 figures and from then until now I have over 3 million USD cash sitting at TD bank and I sleep like a baby even though no insurance.At that time the US dollar was less than CAD.I recently started selling some and getting about $1.12 to $1.13 and buying Canadian Dividend stocks with it that I consider safe to hold for 5-10 year time frame.I believe we may see another 5 cent increase in USD against Canadian dollars in 2015 but that can easily fall the other way so I recommend you not be greedy but set realist goals on exchanging your cash.In the next 60-90 days I will convert 90% of this to CAD ,not because of no insurance concerns but it is at a exchange that I am happy with.


----------



## gardner (Feb 13, 2014)

Maybe preferreds -- PFF yields a bit over 6% and is not too volatile.


----------



## james4beach (Nov 15, 2012)

marina628 said:


> I sold a large chunk of my business assets 2 years ago for mid 7 figures and from then until now I have over 3 million USD cash sitting at TD bank and I sleep like a baby even though no insurance.


I think that's crazy to hold $3 million in uninsured deposits. Carney and our government directly warned you about this. They said that CDIC insured amounts are always safe but there are no guarantees for uninsured amounts.

All you have to do to make that $3 million safer is put it into US t-bills (if your broker has those) or SHV, SHY, SCHO depending on your time horizon. Trading costs are negligible on such a large amount and you'll have full liquidity.


----------



## marina628 (Dec 14, 2010)

As I said over next 60-90 days we will be transferring it from out TD US Dollar Account over to Canadian Dollars ,at least 40% of it will remain in cash and I have no intention to open bank accounts all over the place for CDIC coverage.Since we sold the biz we have been slowly buying stocks with it but it takes a long time to invest this sort of money.I was not comfortable to smack 7 figures into the stock market and 2 years later we still have less than 25% invested.


----------



## humble_pie (Jun 7, 2009)

james4beach said:


> I think that's crazy to hold $3 million in uninsured deposits ... All you have to do to make that $3 million safer is put it into US t-bills (if your broker has those) or SHV, SHY, SCHO depending on your time horizon. Trading costs are negligible on such a large amount and you'll have full liquidity.




i wonder whether SHV & SHY are all that safe? they do not appear to be holding the US federal t-bills that their marketing literature claims they hold. Rather, they appear to be tracking a simulated index of US federal t-bills & paying a distribution based on its simulated distribution. SCHO may follow a similar protocol.

along with many ETFs these days, SHV & SHY track indexes using a representative sampling modality.

http://www.ishares.com/us/literature/prospectus/p-ishares-short-treasury-bond-etf-2-28.pdf


BFA [the iShares financial advisor] uses a representative sampling
indexing strategy to manage the Fund. From the prospectus:


_" 'Representative sampling' is an
indexing strategy that involves investing
in a representative sample of securities
that collectively has an investment
profile similar to that of the Underlying
Index.

" The securities selected are
expected to have, in the aggregate,
investment characteristics (based on
factors such as market capitalization
and industry weightings), fundamental
characteristics (such as return
variability, duration, maturity or credit
ratings and yield) and liquidity measures
similar to those of the Underlying Index.

" The Fund may or may not hold all of the
securities in the Underlying Index."_


----------



## My Own Advisor (Sep 24, 2012)

Marina628, you have some EXCELLENT problems to have :biggrin:


----------



## tygrus (Mar 13, 2012)

She echos a problem that many former business owners have with their profits from sale of business. Its one thing to put a few hundred k in the stock market and in a downturn watch it lose $10-20k assuming a 10% correction on average. Its an entirely different thing to put a few million in there and watch a 10% correction. In fact, one any given day, you could see a $20k fluctuation on your investment. Hard to stomach.


----------



## humble_pie (Jun 7, 2009)

tygrus said:


> Its one thing to put a few hundred k in the stock market and in a downturn watch it lose $10-20k assuming a 10% correction on average. Its an entirely different thing to put a few million in there and watch a 10% correction. In fact, one any given day, you could see a $20k fluctuation on your investment. Hard to stomach.




i find exactly the opposite is true for so many hi net worth investors. A portf of several $ million can far more easily weather a 10-20-30% downturn.

among brokerage houses that cater to hi-value clients, their managers know very well that the uber-wealthy are far more tolerant of market losses than mister & missus average investor. As one manager of a prestigious boutique broker operation once remarked to me, in a foolish unguarded moment, "The very rich don't care about their money, as long as they believe it's being managed by the right people."

perhaps this explains why, regularly, unpleasant schemes & outright scams do occur. With only a tiny minority of broker representatives, of course. But among such brokerage houses. For such clients. The Madoff customers were nearly all hi net worth individuals & prestigious institutions.


----------



## OptsyEagle (Nov 29, 2009)

The other thing to consider is how much money does a person really need. This may become a whole new thread but it is my opinion that happiness is reduced by both; having insufficient amounts of money and by having more money then one needs. The former is of course the bigger problem, but the latter does create issues that I think one should think about trying to avoid. 

Once I have about 50% more money then I think I will need in my lifetime, then you will see my allocation to equities reduced considerably. Why bother.

Of course in my case I have no children, so I have no aspiration to create wealth for the next 3 generations.


----------



## GoldStone (Mar 6, 2011)

humble_pie said:


> i wonder whether SHV & SHY are all that safe? *they do not appear to be holding the US federal t-bills that their marketing literature claims they hold.* Rather, they appear to be tracking a simulated index of US federal t-bills & paying a distribution based on its simulated distribution. SCHO may follow a similar protocol.


The bolded statement is false. They do hold US federal t-bills directly.

SHV holds 26 treasury notes.
http://www.ishares.com/us/products/239466/ishares-short-treasury-bond-etf

SHY holds 74 treasury notes.
http://www.ishares.com/us/products/239452/SHY?referrer=tickerSearch

SCHO holds 64 treasury notes.
https://www.schwabetfs.com/portfolio.asp?symbol=SCHO

These are direct holdings. Anyone can easily verify this by looking at the audited financial statements.




humble_pie said:


> along with many ETFs these days, SHV & SHY track indexes using a representative sampling modality.


SHV & SHY target indexes are filled with short term government paper. These indexes have a high turnover because short term notes mature all the time and have to be replaced. ETFs use sampling to reduce costs. They don't try to chase every single treasury note in the target index. Instead, they own a smaller subset of the treasury notes.

SHY and SCHO track the same index: Barclays U.S. 1-3 Year Treasury Bond Index

The index currently includes 95 treasury notes
https://indices.barcap.com/Benchmark_Indices/Index_Constituents_for_UCITS

SHY holds 74 out of 95.
SCHO holds 64 out of 95.

Is it more risky to hold 74 & 64 holdings rather than 95?

In theory, yes.
In practice, it doesn't make one iota of difference.

All treasury notes are backed up by the power of U.S. printing press. If US stops the printing press and declares a default, it won't matter to you how many treasury notes your ETF holds. 64, 74 or 95 -- you are busted in any case.

HP, time to give this particular meme a rest, maybe?


----------



## Pluto (Sep 12, 2013)

What ever you do, Johnny, my best advice is to have preservation of capital a top priority right now. 
Your goals are to get some $ so you don't have to return to work, or maybe just work part time. I think it is interesting that you went to pro advisors in 2000, around the time of a market peak - got burned, and now you are more cautious, but again considering stocks after almost 5 years of a rising market. I fear stocks may not cooperate with your objectives right now. I fear you may be setting yourself up for a similar experience as 2000. 

If you hand your money over to an advisor or manager, they will very likely make you sign a document making you completely responsible for what they do. It won't matter what they verbally promise or imply. If you authorize them to buy stocks, they will buy stocks, and you, not they, will be responsible for any capital losses. If this was 2009 or '10 I wouldn't be as concerned. But this is a maturing bull market - exactly the time that inexperienced people tend to feel safe. People tend to project the last 3 to 5 years of stock gains into the future, and when the last 5 years have been great, they think the next 5 years should be too, but it rarely if ever works out. Preserve your capital, work one or two days a week if you have to, continue your stock market education, and get ready to buy stocks when the inevitable fall arrives.


----------



## marina628 (Dec 14, 2010)

I am doing everything myself so in end have only myself to blame if things go wrong and I am probably doing things different than many people here.I believe in DCA so this is why we are slowly investing the cash and in October did have a $13000 paper loss that has since bounced back.Of course TD Bank calls me every couple months to tell me we should invest more in mutual funds /GIC etc.Being only 47 we have many years ahead of us so preserving capital is priority for us ,I also have a $30,000 a year expense most do not have with my homecare but it's all good .I am sure Suze Orman would tell me to go back to work until I am 67 but we sold our cottage and boat which saved us about $14,000 a year in expenses plus freed up some additional money to invest.Down to 2 cars from 4 and I have not bought a piece of jewelry in 9 months so maybe I am cured


----------



## My Own Advisor (Sep 24, 2012)

@tygrus,

Yes, while Marina has a very, very good problem to have, I would disagree that business owners might have a tough time watching their portfolios go down (i.e., lose $10-20k assuming a 10% correction on average).

This should be a concern for them only if they intend to live off their capital only. I don't see many successful business owners doing that; they've learned money that makes money makes more money. In this regard, they know (already better than most) living off the income your investments make is a far better strategy than living off your capital.

This is an assumption on my part but maybe marina628 can share her perspective. 

A footnote to this: when investors see a 10% correction, the smart ones buy and become happy, their stomach does not churn.


----------



## marina628 (Dec 14, 2010)

We took a big dividend payout each when we sold the business ,enough to retire all mortgage debt we personally which results in lower expenses.We are both drawing a salary plus taking dividends from the business .I bought a large amount of Disney Stock which has increased 46.37% and my plan has always been to gradually invest all in dividend stock except 20% which I would keep in cash.I have mostly BNS ,CM.TD,ENB,CNQ ,DIS.My YTD date ROI including dividends are 20.36% and previous 12 months was 10.77%.I don't want to start rumors but we also have sold off some of the rentals in Ontario in 2014 because I think I can find better investment opportunities elsewhere.Most people like us who are business owners and use to 100 hour work weeks won't sit by and just live off the investments ,I have found something to do part time that can make me enough to pay the bare living expenses and always looking for other investment opportunities.


----------



## gardner (Feb 13, 2014)

Pluto said:


> my best advice is to have preservation of capital a top priority right now.
> Your goals are to get some $ so you don't have to return to work


I feel like those goals are fundamentally at odds. The best low-risk way I know to keep up with inflation (almost) with $US is a Tangerine GIC -- you can get 2% on $US for 5 years. TDDI HISA $US pays 0.25%, Tangerine HISA $US is 0.45% or so I think. Treasury yields would be 0.4% to 0.5% -- bupkes. If you want *income* you have to put it into the stock market and create risk for yourself.

Personally, I have a relatively large slug of $US also -- 1/4M or so. The way I handle it is a mixture of:


Cash in TDDI HISA @ 0.25%
VTI, VEA
Preferreds via PFF
Tangerine GIC ladder @ 0.75% to 2.0%
Buy cross-listed Canadian dividend stocks (banks, AGU, POT etc) (ie: convert to $CAN, when timing is right)

We are talking about non-registered holdings here. Are T-Bill funds like premium bonds where they pay yield on paper (that is taxed) but that you never actually receive due to the capital loss in the bond price?


----------



## Pluto (Sep 12, 2013)

yes, gardner, right now those goals are fundamentally at odds I suspect, because stocks are unlikely to do as well over the next 5 years as they have over the last 5 years. At some point they are going to head lower, and I suspect, but don't know, it will be sooner rather than later. Johnny's odds of getting good income from stocks will be greatly enhanced if he waits for a much better buying opportunity. I'm almost certain he will not have to wait 5 years for a fine buying opportunity.


----------



## alanlo (Nov 29, 2014)

With the amount of capital you have there are many options out there. One of the options that you might want to consider is private equity investments, which in general will generate a higher return compared to traditional investments. The key is to pick the right combination so that you will be diversified enough to protect your downside risk.


----------



## GoldStone (Mar 6, 2011)

^^^ Pitching private equity in your first post? Doesn't pass the smell test.


----------



## etfstrader (Sep 26, 2014)

Private equity funds are managed by so-called "investment professionals" which investors are required to pay annual management fees. These funds carry high risks and there is no guaranteed that their picks will generate a better return. To me, they are not different than financial advisers that I always stay away with.


----------



## alanlo (Nov 29, 2014)

GoldStone said:


> ^^^ Pitching private equity in your first post? Doesn't pass the smell test.


I know what you mean. I have been in that space in the past few years and is something that I preach.

Private equities are considered to be higher risk but there is a trend where structure of some of these offerings are better compared to years ago. With the right mixture and diversification (ex: max 10% of portfolio on a single offering) the downside would be much more manageable.

Just my two cents.


----------



## GoldStone (Mar 6, 2011)

Problems with private equity:

1. Arbitrary valuations.
2. Poor liquidity.
3. Poor transparency.
4. High fees.
5. Unverifiable performance claims.


Buffett's quote comes to mind:

_"If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy."_


I have no interest in private equity because... what are the odds that I'm NOT the patsy at the table?

No thanks.


----------



## alanlo (Nov 29, 2014)

You are right, and that is the general perception to private equity investments.

In the past few years, however, there are offerings that provide disclosures similar to a prospectus' calibre, and some of them can be quite liquid or for shorter term. There are also companies that provide audited track record through reputable accounting firms.

To me the space is somewhat similar to how mutual funds was 40 years ago, and will become more popular in the next 5-10 years. Ontario (where I am at) is also exploring ideas to loosen up the rules so that it won't be restricted to Accredited Investors only. There are many variety of products with different risk/return profile, and they are basically business ideas that are made available to the general public. Not everyone of them is rock solid but if you do your homework and pick carefully, your risk will be greatly reduced. Can't really dismiss the whole sector and say that there are no good products out there. The problem, however, is that people are stopping short to find out more once they hear the term "private equity".


----------

