Conquering portfolio procrastination and market uncertainty

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market uncertainty

Just as the sunrise and sunset are a given, so too are the ebbs and flows of global equity markets.

Much like the ocean, markets are influenced by events that can pull them in varying directions. At times, they can be unpredictable and fraught with uncertainty. So, if we want to continue sailing securely on these waters, why do many investors risk their financial futures on hazardous and unreliable ships?

I’ve been involved in a significant number of transitions and new growth opportunities over my continuing career in this industry; and I can say with certainty that the key to success is to act on the lessons learned from 40-plus years of experience.

One of the more significant behaviours I’ve observed is our tendency to procrastinate. We all do it, and one of the best ways to conquer it is to be self-aware. Decades ago, as domestic markets contracted, portfolio managers realized they had to move away from a “home bias” and look beyond our borders to enhance longer-term returns for Canadians. Unfamiliar foreign markets required re-education and procrastination often arises because of a subconscious fear of failure or over-consumption with details. On a personal level, procrastination can often prevent one from making better decisions that would help accelerate the accomplishment of personal goals and dreams.

As economies began evolving at a faster pace, and markets moving larger pools of capital driven by mathematical algorithms, the average investor had to rely on external stewardship of their financial portfolios. Unfortunately, whenever uncertainty takes hold of the markets, many investors become disillusioned with their financial advisors because they haven’t formed a real partnership with them, and don’t understand what’s in their portfolios and why.

After last month’s rough and high seas in global markets, many investors have turned their attention to their portfolios, concerned with their financial situation. Of course, it is fair to expect some adjustment in one’s valuation, but in many instances, portfolios comprised of unexplained “products”, those placed on “auto pilot” in large pools, and passive benchmarking or other platforms, all too often lead to disappointing returns and outcomes. Poor advisor communication and a lack of understanding and confusion can lead to procrastination (leaving your portfolio in status quo), which ends up costing only one person and that is you the investor.

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Years ago, when Exponent began this voyage, we sat down and determined that we could manage and engineer individual investment portfolios for private investors, charities, business owners, families and company directors that would properly reflect who they are. We agreed to avoid today’s all too popular outsourcing of asset mixes and “trendy” investments that frequently do not meet expectations. More often than not, these platforms come with higher fees that only serve the interests of the provider and not the client, causing tepid returns during market turbulence. The other issue is that these fashionable assets often come with “advisors” who lack depth in explaining their use or how they fit into the overall investment mix/strategy. Again, this is because portfolios are farmed out to a centralized group that is actually making the mix and asset decisions and not the person who handles your relationship.

In the end, Exponent’s original vision has led to mainstream and diversified portfolios, built for the long term with minimum volatility.

Creating Exponent’s business model was an easy one. We offer clients and prospects a combined 345 years of investment and financial service experience. That experience also goes well beyond Canada’s borders and includes both domestic and international investments; a unique service that comes with no additional cost. Staff have an average of 23 years of experience vs the “advisory” offerings of large institutions that are often in the 8–12-year range. Our distinction is that you work with the mechanics and not the service advisors. We also have experts in ancillary services both within Exponent and in our communities, who offer financial, and estate planning, business succession and the all-important tax services.

Human behaviour is often driven by fear and greed, based on misguided rationales to defend bad decisions. If you want to turn procrastination into profits and seek a portfolio that can remain optimally invested amid uncertainty and unpredictability, now is the time to reach out to us. It will cost you nothing for a portfolio check-up and risk analysis, and you can cross off a critical item on your “to do” list. We can help you chart a smoother course during the expected turbulence of a post-Covid seas.

Your suite awaits. Happy sailing.

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