Blogs

It is well known that investing in equities is more profitable than bonds or cash over the long term. While one might assume this outperformance is achieved through active management – shrewd trading of individual stocks – the reality is this can be achieved through passive management – simply maintaining a portfolio equivalent to a broad equity index.

The iShares 1-5 Year Laddered Government Bond Index Fund (CLF) posted a 1.38% annual pre-tax return in 2012. Some taxable investors may be surprised to find out that their after-tax return on the fund was actually negative over the same period.

Taxable investors have it tough: not only must they determine the right mix between stocks and bonds (their asset allocation), they must also choose the right account to hold each security (their asset location). If they choose poorly, they will end up paying a lot of unnecessary tax.

Travellers roaming the streets of a foreign city for the first time must deal with uncertainty in some form or another. Finding their way to points of interest, choosing a restaurant or communicating with locals may require concentration. Part of this process is information selection: filtering out non-useful information that distracts us from the really useful stuff. Successful investing is a bit similar: what information we decide to ignore is as important as what we pay attention to. Here’s our short list of information that is best ignored.

One of the core principles of PWL’s investment philosophy is diversification among asset classes. By utilizing the core asset classes, we can then allocate client funds to produce the highest expected return based on their risk tolerance

Cameron Passmore discusses the safety question with co-founder James Parkyn.

Cameron Passmore interviews co-founder James Parkyn and discusses the principles on which PWL was founded, and how we have stayed true to this day.

Cameron discusses the safety question with co-founder James Parkyn.

Cameron interviews co-founder James Parkyn and discusses the principles on which PWL was founded, and how we have stayed true to this day.

We spend a lot of time exploring our client’s need versus ability to take risk – two very different concepts. In this case, the risk I’m referring to is that associated with the potential for a decline in value of a portfolio due to exposure to the equity markets, often thought of as volatility.