September 2018

I’ve spent the last month rehabbing my knee replacement and have had plenty of time for reflection!

As I thought about my own investment strategy over the last six years, the most important aspect that comes to mind is diversification. Of course, it’s the standard stuff of not having too big a holding in any specific stock or industry, as well as having the appropriate blend of fixed and equity investments.

It’s about getting the right mix between Canadian, US and international equities, and not being too Canadian-centric, however comfortable that feels. It’s important to decide which industries you feel comfortable investing in. From a personal perspective, there are industries I avoid, as I don’t understand them.

I believe there’s a need to look outside the traditional markets. Mortgage funds, specific mortgages, rental property ventures and real estate development projects should be part of your strategy. In addition, adding one or two alternative investments should be considered. Of course, for these types of opportunities, you have to do your due diligence, not just on the investment but more importantly on the people behind it.

We’ve all been nervous about a correction in the equity markets and real estate for a very long time. For sure this will happen at some point. Make sure you have some liquidity in your portfolio for this eventuality. In the meantime, you need to generate returns and seek opportunities. Make sure that when the downturn comes, you’re so diversified that any investment that doesn’t work out as planned can be no more than a flesh wound to you!!

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