EBI – Principle #1: Invest in Asset Classes
About This Episode
One of the challenges Canadian investors face is choosing between the sheer number of choices of types, styles, and strategies for investing that are available. To help you to cut through the noise and overwhelm, we’re starting this series on the best investment philosophy for investors, evidence-based investing.
An evidence-based strategy is a scientific approach to investing where investment decisions are based on facts and research on what’s worked for investors over the long-term. Over the next couple of episodes, we’ll be going through the four main principles of evidence-based investing every empowered investor needs to know, starting today with investing in asset classes.
On this episode, Ruben and I talk about the role of evidence-based for the empowered investor, how evidence-based investing is different from alternative approaches like market timing and stock picking, the benefits of an evidence-based investing approach, the four traditional asset classes for investment portfolios, why you should embrace the average advantage, and so much more!
Thank you for listening!
- The role of evidence-based investing for the empowered investor (1:53)
- How this approach reduces overwhelm for Canadian investors (3:00)
- What is evidence-based investing? (3:48)
- The four principles of evidence-based investing (4:53)
- Two popular alternative investment approaches (5:56)
- The problem with making accurate market predictions (6:34)
- How market predictions have played out during the current pandemic (7:41)
- Why I don’t consider a market-timing approach to be a philosophy (9:08)
- What is stock picking? (9:43)
- What the evolution of Apple stock shows us about the risks of stock picking (10:22)
- The difficulty in picking winning stocks (13:16)
- Defining asset classes (14:26)
- The four traditional asset classes for investment portfolios (15:42)
- Breaking down the main asset classes (16:39)
- Examples of alternative asset classes (17:49)
- Why we don’t consider hedge funds to be an asset class (18:26)
- Advantages of asset class investing over market timing and stock prediction approaches (19:42)
- Making decisions based on asset allocation (20:36)
- Embracing the average advantage (22:36)
- Why some investors don’t use an evidence-based investment approach (24:05)
- Key takeaways about asset class investing (25:44)
- The power of patience (26:23)
- And much more!
Thanks for Listening!
In this episode, Marcelo and Keith talk about how to manage money during turbulent times. We explore the research around the performance of tactical asset allocation strategies, why these “opportunity funds” are appealing to many investors, how balanced funds perform compared to tactical allocation, key strategies you can use to weather the storm of volatile markets, and so much more!
On this episode, Hugh and I talk about the advantages of contributing to a retirement savings plan (RSP), the general rule to keep in mind for tax deductions, the benefits of working with a tax professional, the hefty penalties that stem from incorrect and incomplete filings, how you can be proactive when it comes to your taxes, what to do if you realize you’ve made a mistake, and so much more!
In this episode, Edmond and Keith talk about how CPP, QPP and OAS work, the history of these programs and recent reforms, what you need to consider when deciding when to take your pension benefits, how survivor, disability and orphan benefits are calculated, and so much more!