Financial Advisor Wealth Philosophy

On 09/26/2012, in Financial Advisors, by Jordan Wilson

When assessing potential financial advisors you should consider the advisor’s wealth management philosophy and general approach to financial planning.

An extremely important point to review, but one that many individuals overlook.

Being comfortable with the philosophical approach of your financial advisor is crucial for a few reasons.

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Dangers of Dividend Funds

On 05/13/2012, in Equities, Mutual Funds, by Jordan Wilson

Dividend funds are currently very popular with investors.

In many parts of the world, interest rate yields are quite low on a historical basis. To enhance returns, fixed income investors have turned to riskier investments that may offer higher yields. Such as dividends on preferred shares or dividend paying common shares.

As well, general equity investors are turning to perceived “safer” equity investments. Common shares in large, dividend paying companies. Shares that provide capital gains potential over time, but are back-stopped by a (hopefully) steady stream of dividend income.

Sounds like a good strategy to me. But there are always risks when investing.

Here are a few things to consider when assessing dividend funds (or dividend paying shares). 

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Investors Shun Risk

On 04/04/2012, in Investment Concepts, by Jordan Wilson

A relationship exists between investment risk and expected return.

The safer the asset, the lower the expected return. The greater the investment risk, the higher the required return. Or it can be a tad more technical if you like.

Investors should take an objective view of investment risk. Unfortunately, investors tend to be emotional creatures and these volatile times lead people to become fearful of investment risk.

So what is happening? And what should you do as an investor?

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Emerging market investments can add value to one’s portfolio.

On the one hand, emerging market assets provide potential diversification benefits that help lower overall portfolio risk.

At the same time, emerging markets offer potentially higher returns than investments in developed markets. This helps enhance overall portfolio expected returns.

Lower portfolio risk, higher expected returns, count me in!

Well, like any investment, there are always a few strings attached. 

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Compare Performance to Peers

On 05/18/2011, in Investment Strategies, by Jordan Wilson

If you create a portfolio of individual stocks and bonds, it may be unique to you.

Creating a benchmark may take a little work.

If your invest in index funds, you will be able to easily find a relevant benchmark.

But I suggest you do not stop there in comparing your portfolio performance.

A great way to assess fund performance is to also compare results against the fund’s peers. 

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Investor Profiles

On 07/03/2010, in Investment Concepts, by Jordan Wilson

Investor psychographic models can help investors determine their own risk tolerance.

Pyschographics refers to the description of an individual’s psychological characteristics. It attempts to classify investors based on their personality traits.

There are a variety of models in use today. I suggest you look at a couple of models to better understand your own investor profile.

In this post, we shall look at the Bailard, Biehl, & Kaiser Five-Way Model.

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What is Your Risk Tolerance?

On 06/28/2010, in Investment Concepts, by Jordan Wilson

The risk tolerance of each individual is different.

It is based on one’s experiences, desires, needs, objectives, and attitudes.

Understanding a person’s unique risk tolerance is important. How investors view the risk and associated expected return of investments will guide their investment strategy.

Today we will look at few questions that shape an individual’s perception of risk.

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Risk Management Tools

On 06/03/2010, in Investment Concepts, by Jordan Wilson

Managing risk is extremely important in daily life, as well as in business and investing.

Today we look at five key ways to manage pure risks. These include: avoidance, loss control, retention, non-insurance transfers, insurance.

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Defining Investment Risk

On 05/07/2010, in Investment Concepts, by Jordan Wilson

What is investment risk?

Investment risk is a form of speculative risk. Speculative risks differ from pure risks in that with a speculative risk there is a possibility of gain, not just loss or no change in status.

But what does that mean?

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Pure Risks

On 05/04/2010, in Investment Concepts, by Jordan Wilson

Although not a focus of this investment series, knowing a little about pure risks will prove useful in your life. Especially when you start to acquire assets that require safeguarding.

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