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Accumulating money - 3 things you need

Investments, Personal Finance

Posted by Peter Wouters

Apr 22, 2016 9:02:46 AM

Directeur, Planification fiscale et successorale et planification de la retraite, Gestion de patrimoine
Placements Empire Vie

We hear so much from the media that we are not saving enough for retirement. This message is beaten into the minds of middle and upper middle income Canadians. Saving for retirement is tough, considering all the demands you have now. Investment choices are mind boggling. And rates of return rule the roost.

Let’s spend some time on saving money.
There are 3 things we need to accumulate money:

  • Dollars
  • Time
  • Rate of return

Pick up the newspaper or journal, turn on the radio or watch television and most of what you hear focuses on one factor. Which one? Rate of return. Why continually focus on the one factor over which you have the least control? Regular deposits over a healthy time period can work wonders for savings.

This seems to be a hard lesson to learn, even today, for investors and advisors alike.

Analysts have noticed that advisors and investors have been chasing yield for a number of years now.  In a world where market volatility and unpredictability are the new norms, this market environment can lead to assets being mispriced due to momentum instead of valuation fundamentals during price and value determinations.

A bottom up approach that focuses on factors for individual companies first, then industries and trends, helps identify mispricing. This in turn helps analysts make better risk adjusted decisions…That said, there is much more to consider than just investment risk.