Insights

A value stock could be one that is priced low relative to its cash-flow, its book value (its assets minus its liabilities), or its sales. Warren described his early value stock picks as “cigar butts” - stocks of companies that were so distressed that their total outstanding stock value was actually worth less than the book value of the company. His style has evolved since those early years, but his philosophy has remained intact. His strategy is to buy stocks of quality companies at relatively low prices and hold onto them for a long time.

What is it about small company stocks that made their addition so impactful to Bill Bengen's original safe withdrawal rate findings? Is there something unique about small company stocks that causes them to outperform large company stocks over long periods of time?

Watching the market on a daily basis can feel chaotic. In this video I look at monthly stock returns for Canadian stocks going back to 1956. Up months. Down months. No observable pattern. Anxiety inducing, perhaps? You bet! But, when you zoom out and look at the data differently, we can see that stock returns as a whole are positive most of the time. Small moves upward, punctuated by significant moves both upward and downward. Volatile years like this one can be difficult for any investor. But, if you have a portfolio that is tied to a financial plan and is a good fit for you - you can tune out the noise and have a much better outcome.

The research that Lorie performed to prove that stocks returned 9% per year is a finding in historical data, which we will refer to as an “empirical” finding. It was observed in historical data, it is not a theory or a guess. Next, we might question what are the unique characteristics of stocks that made them a better investment than, say, bonds? And, then, let’s extend that further and ask - what other characteristics or “factors” exist in publicly-traded securities that we can observe “empirically”? And then finally, how can we use that insight to construct portfolios for different investors with different needs, tastes, preferences, and goals?

Registered Education Savings Plans (RESP’s) are a very popular and useful way to help a loved one pay for their post-secondary education. In many cases the beneficiary of the RESP, a child or close family member, graduates high school and uses the funds in pursuit of a college diploma or a university degree. But sometimes, life changes and the beneficiary of that RESP account no longer needs the money for their education. This situation leaves the RESP holders wondering - what else they can we do with this RESP account? In this post, I offer some alternatives for families that are faced with this question.

Now that we are nearly 10 months into this "death-by-1000-cuts" bear market, you may be looking at me a little bit sideways when I say that a lot of the bad news around a possible recession, among other fears, is already priced into the market. How is this possible?

In this video, I challenge the assumption that retirees should avoid all volatility in their retirement portfolios. I look at a retiree who began retirement in 2008 with a 60% stock / 40% bond portfolio, and compared their withdrawal experience with another retiree who held only cash or short term fixed income estimates.

Investors worry about deploying capital into the market at all time highs. They also worry about deploying capital into the market after a correction. But, what does history tell us about market returns in each of these scenarios?

"Should I simply get out of the market and wait for the dust to settle?" This is a question that many investors have asked themselves so far in 2022. They may even have acted on it. While getting out of the market may feel satisfying for a short period of time; historically speaking, it has been a bad way to manage your investments during downturns.

If the year were to end today, it would mark the single worst year for the US bond market in history. So, what should fixed income investors do about it? In this short video, I show how the bond market has rebounded after significant drops.