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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, March 7, 2013 | 12 M Successful management of assets starts with good foundation sure of too few stocks in too If you could predict the few world markets. future, this would be unnecThe preferred way to invest essary; however, that is not is to attempt to capture the possible, so spreading the market returns. risk around is needed. Many Some years that will mean investors fail to do this. you will have a low or negaIt is not uncommon for intive return, but over time vestors to own several CanaBy Peter Watson the markets have rewarded dian stocks and to feel conpatient and disciplined infident they are adequately vestors. diversified. A better approach Try and avoid the temptation to do better than is to spread the dollars you have invested in equithe market. ties around other parts of the world. That attempt is what motivates some investors to All areas of the world have risk and the strategy is to minimize those risks by limiting your expo- time the market or concentrate on specific security selection. Great in theory, but it does not work on a consistent basis. Academic research over the past four decades has shown stock picking and market timing of active portfolio management has a high likelihood of a lesser result. The success of the Halton Catholic District School Board Harvard Business School professor Michael Jensen published a significant study of active managers rests entirely on the talents, dedication, and efforts of in 1968 and concluded they did not have the abilour 3,400 employees. ity to beat the market. His research included tracking the investment On Friday, March 8, 2013, we acknowledge and celebrate performance of all U.S. mutual funds from 19451964. the members of our staff community who make such Studies since then have repeated his conclusion a difference in the lives of more than 30,000 students, and many of those studies have been covered in this column. entrusted to our care each day. There is less risk investing in broad markets than by selecting individual securities. anaging your wealth is challenging where your success will influence your ability to achieve your long-term objectives. Today's column will review the critical foundation to being a successful manager of your family assets. Investing is all about risk. You take one type of risk in order to avoid other risks. There is a delicate tradeoff between taking investment risk now in order to grow your assets so you can avoid the risk of running out of money during retirement. The key is not to take any more risk than needed. The starting point in any portfolio is to diversify across a wide range of different asset classes. Dollars & Sense Congratulations to all HCDSB employees on Staff Appreciation Day! For all you do in your role , and for all you do that goes over and above the call of duty, to support our students... Discipline is needed. That means forgoing the temptation of altering a long-term strategy as a result of short-term events. The reality of investing is that you most often do not earn the desired annual investment returns. If your target return is say six per cent, you should expect your actual annual returns to range plus or minus 10 per cent or greater in any specific year. You might achieve the six per cent target over a long period but there will likely not be many years that your return was actually six per cent. That is just the way it works so variable returns should be expected. Try and manage your costs as best as possible. This includes all expenses associated with owning securities and mutual funds as well as tax costs. Regular trading outside of your registered account can result in higher tax costs than on a buy and hold strategy. The final suggestion is to invest with a purpose and hopefully that purpose, along with the investment approach, is written in an Investment Policy Statement and referred to on a regular basis. The purpose is the reason you are saving and investing. Whether the financial objective is to save for your children's education or for your own retirement, investing is done for a reason. That reason determines how you invest. Building your investment and wealth management process on a structurally sound base will increase the likelihood that you will be successful. -- Submitted by Peter Watson, MBA, CFP , R.F .P ., CIM, FCSI., Certified Financial Planner Thank Audiology and Hearing Aid Centre HEARING SCIENCES Fortunately, the hearing instruments of today bear no resemblance to those produced even 5 years ago. Research to improve the quality and naturalness of sound has resulted in digital instruments that perform up to patient expectations. TEST DRIVE A HEARING AID! If you haven't listened to a hearing aid in the last 3 years, come in for a TEST DRIVE* and prepare to be amazed! 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