{"id":419,"date":"2016-01-06T10:55:52","date_gmt":"2016-01-06T18:55:52","guid":{"rendered":"https:\/\/chaltenadvisors.com\/blog\/?p=419"},"modified":"2016-01-06T10:55:52","modified_gmt":"2016-01-06T18:55:52","slug":"only-2-resolutions-for-canadian-investors-in-2016","status":"publish","type":"post","link":"https:\/\/chaltenadvisors.ca\/blog\/only-2-resolutions-for-canadian-investors-in-2016\/","title":{"rendered":"Only 2 Resolutions for Canadian Investors in 2016"},"content":{"rendered":"

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We have heard\u00a0so many suggested new years resolutions over the last couple of weeks\u00a0but\u00a0believe\u00a0it’s worth piling on two more for Canadian investors. \u00a0We hope not but suspect we’ll be highlighting\u00a0the same resolutions for years to come.<\/p>\n

Chalten has been open for business for less than a year but already we have seen some very concerning consistencies in the portfolios that we have reviewed, the two biggest and most concerning being\u00a0high fees and lack of diversification<\/strong>. \u00a0For 2016 we recommend Canadian investors address both issues.<\/p>\n

Yesterday\u00a0Morningstar Canada\u00a0released preliminary data for 2015 on the performance of its 42 Canada Fund Indices which measure aggregate returns of funds for\u00a0various standard categories. \u00a0The data, which shows significant underperformance of Canadian Equity funds in 2015, can be viewed on their website:\u00a0Slumping loonie boosts foreign equity funds in 2015<\/a>. \u00a0<\/em><\/strong>The article reveals two clear reasons for the underperformance – \u00a0firstly, the Canadian dollar’s depreciation – 16.2% versus the US dollar, 6.6% against the Euro and 11.5% against the British Pound. \u00a0\u00a0Secondly the Canadian stock market is overweight the energy and natural resources\u00a0sectors relative to the global market and\u00a0both\u00a0fund groups were down more than 20% on the year.<\/p>\n

The result is that in\u00a02015 many Canadian investors holding exclusively Canadian stocks or a significant overweight position suffered from a massive opportunity cost. \u00a0In Canadian dollar terms our local market underperformed many other developed markets by 20% or more. For example, while I’m sure many were spooked by the headlines about Greece and concerns of a Euro area meltdown during 2015, they probably weren’t aware that the European Equity fund group was plodding along and racking up returns of 19% in Canadian dollar terms for the year.<\/p>\n

We are not suggesting people\u00a0chase historical performance. \u00a0It’s always easy to point to something that underperformed or outperformed last year. \u00a0The performance might reverse next year. \u00a0It’s just a very poignant example of why Canadians need to better diversify their portfolios\u00a0and subject themselves to less\u00a0specific risk from single stocks, sectors, countries and currencies. \u00a0Any change to your portfolio should be done with a view to\u00a0improving\u00a0returns and\/or\u00a0risk exposure. \u00a0We believe proper diversification does both.<\/p>\n

With respect to fees, Canada still has among the highest mutual fund fees in the world – these fees, often higher than 2% per year and lacking transparency, are charged even in down years like 2015 and over the long run have a punishing impact on the value of your portfolio.<\/p>\n

So for 2016, take a moment to review your investment portfolio with a particular focus on diversification and fees. \u00a0We wish everyone all the best for a happy and prosperous 2016.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

We have heard\u00a0so many suggested new years resolutions over the last couple of weeks\u00a0but\u00a0believe\u00a0it’s worth piling on two more for Canadian investors. \u00a0We hope not but suspect we’ll be highlighting\u00a0the same resolutions for years to come. Chalten has been open for business for less than a year but already we have seen some very concerning […]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,17,11,10,7],"tags":[],"class_list":["post-419","post","type-post","status-publish","format-standard","hentry","category-all-posts","category-costs","category-diversification","category-evidence-based-approach","category-graham-bodel-posts"],"_links":{"self":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/comments?post=419"}],"version-history":[{"count":1,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/419\/revisions"}],"predecessor-version":[{"id":421,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/419\/revisions\/421"}],"wp:attachment":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/media?parent=419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/categories?post=419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/tags?post=419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}