Why I'm My Own Financial Advisor

Just a short post on why you really need to manage your own money and if you don't you really should.

I have always found when I was involved with a mutual fund salesperson that you have the privilege of paying someone else to lose money for you.

So why not DIY?

If you lack discipline and panic easy then wait until you can control your emotions. Then dive in. Nobody will care more about your money more than you do.

Why Professional Management Sucks

• they love the efficient market theory. The concept is flawed having you believe the best you can do is what the market gives you.
• pros are too active and trade in and out of stocks at a dizzying pace.
• they tell you to focus on the long term when in reality they are fixated on short term performance.
• buy stocks at the wrong time.
• always under pressure from clients on portfolio performance.
• instead of buying the best companies they use an equal weight formula.
• they try to beat a benchmark with so many bad companies in them
• most NEVER beat the market.

To Win Focus Instead on This

• hold your stocks and never trade in and out.
• focus on the cash flow your stocks will give you.
• ignore missing out on the next Apple or Netflix stocks.
• invest for income and not capital gains.
• you are building for retirement so cash flow matters.
• own the BEST and not the most stocks.

Where to Start

To get that cash flow and grow that income you just need to own a bank, utility, telecomm and a rail stock like CNR. That's 4 stocks. Start there and then add 4 more. My choices are CN, CP, TD, RY, BCE, FTS, ENB and TRP.

Nothing wrong with other financial stocks, utilities or pipelines just have a safe mix and concentrate your money there.

I believe this is the best buying opportunity to come along in the last 10 years. When markets are down 20-25% consider it a sale. If you don't buy now when would you?

My Final Take

Professional money mangers don't have to pay the price when they're wrong. They're NOT invested where they put your money. Go ahead and ask if they are invested in the high fee fund they have put you in.

Too many conflicts for me.

I don't use low cost ETFs as there are too many really bad companies in them. Check out TSX index ETFs. Lots of resource companies that drag the index down. I don't invest in them or own them.

Never invest in high yield stocks. You risk the cash flow being cut and the dividend never growing. You invest for the future cash flow the stock will give you in retirement. This is what I've learned as a DIY investor. Make 2019 your year and buy quality companies that have a history of growing their dividend.

You can beat the professionals hands down.

NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT!

Looking for Saving Ideas So You Can Invest? 

If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!