By: Mark Doyle On: April 10, 2018 In: Educational Comments: 0

Welcome to the Marksman Blog! My first series of newsletters will address what I believe are the most important issues faced by
investors as they navigate a financial path to retirement and beyond. The good news is that you do not need to become an
expert at investing to be a successful investor. The most important things I learned were not necessarily in any textbook
and can easily be understood and applied by anyone.

Each letter will be focused on a single issue or topic and will also be posted to my website at
Some of the topics I will cover include:

  • Behaviour biases. Most investors perform much worse than the funds in which they invest.
    This is largely due to the tendency of investors to act on emotion and other factors, that work against their long-term interests.
    How do we recognize it and what can we do about it?
  • The advice business. The investment management business is riddled with real and potential conflicts of interest,
    giving rise to manager behaviour that is less than forthright and not in their clients’ best interests.
    How can we make sure interests are aligned between clients and managers?
  • Manager skill vs. luck. Most professional investment managers fail to beat their benchmarks over time.
    Even for those that do, the evidence suggests that it is unlikely due to skill. How can we use this information
    to become better investors ourselves?



  • Management fees. In a 2015 global study of fund investors in 25 developed and developing countries, Canada received a D- rating,
    coming in last place. This compares unfavourably to the US, Australia, and The Netherlands, which all topped the survey, each with a
    ranking of A. What is the impact on investor portfolios in Canada and what can we do about it?
  • Return expectations. Over the last 30 years, balanced portfolios in Canada have averaged about 9%;
    but is that a reasonable estimate for future returns? What are implications for investors, retirees and investment managers?
  • Importance of time. Time can work for you and against you, depending on the situation. It’s important to understand
    the potential impact of decisions on your retirement, which may be decades away. Short-term tactics usually distract from
    a long-term disciplined strategy and often have a negative impact.
  • Investment forecasting. Economists and strategists love to talk to TV pundits and business reporters, providing their
    outlook for the economy, the stock market and interest rates. How does their forecasting ability measure up? How skeptical should we be?
  • Asset allocation. Asset mix (stock, bonds, domestic, foreign) is the most important investment decision. All else being equal,
    more diversification is better than less. It spreads your potential sources of return and risk around.
  • Taxation of equity and bonds. The more you can reduce and defer taxes, the larger your retirement nest egg will be.
    In taxable accounts, trading often creates taxable gains. Dividends and interest are subject to tax as well. All else being equal,
    investors should defer taxes by reducing taxable gains and optimizing the asset mix between taxable and non-taxable accounts.

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