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NOV 4, 2015

The world economy explained with just two cows


When it comes to economics the world can be very complicated. Please see below for a simple yet sophisticated description of a number of the world’s economies.


Simplicity is the ultimate sophistication
Leonardo Da Vinci


SEP 23, 2015

50 years of wisdom


It is difficult to convey in words or diagrams just how incompetent I was when I first stumbled into the financial industry in 1985. In my defense, the company I worked for, McLeod Young Weir’s idea of training was 90 days at head office in which the majority of the time was spent drinking too much at the local bar and listening to a parade of “top producing” stockbrokers brag about how much money they made from selling questionable (to put it mildly) products to their clients.

However, in the early 90s I found professional redemption through a man named Nick Murray. At the risk of sounding somewhat melodramatic, Murray became the single most important and positive influence on my life as an investor and a true professional advisor.

Long-term readers of this blog may recall Nick Murray’s name as I often feature his wisdom in these missives. Murray’s book, “Simple Wealth, Inevitable Wealth” acted as a beacon of truth as I transitioned from a transactionally oriented broker to a true wealth advisor. If you are a client I have probably passed along a copy of his book to you. If not, please let me know and I will send it out immediately!

The following is an interview with the man himself.

The bad news … it is just over 88 minutes in length.

The good news … it is just over 88 minutes in length! Listen, learn and enjoy.


These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


AUG 24, 2015

Why I invested $39,530 in the stock market today


Quick quiz:

  1. How many times during the last four years has the market temporarily declined in one day over 3%?

  2. How many times during the four years previous to the most recent four years has the market temporarily declined in one day over 3%?

Answer to question # 1 is once this past Friday.

Answer to question # 2 is forty-four times.

Up until last week we have been living in investing nirvana, at least when it comes to market volatility. What happened last week was way overdue, was to be expected, and is actually a very good thing. For more context on market volatility I invite you to read Ben Carlson’s excellent blog which I have included below.

Crash Rules Everything Around Me
By Ben Carlson

Posted on August 23rd, 2015

U.S. stocks were up nearly 400% in the 1980s. All anyone remembers is the 1987 crash.

Bonds gave investors a total return of more than 100% in the 1990s. All anyone ever talks about is the 1994 crash when interest rates spiked.

Emerging market stocks were up 185% in the 1990s. Yet we continue to hear people predicting a repeat of the 1997 emerging market currency crisis.

The 1990s tech boom added enough fiber-optic cable to make all of our wildest Internet dreams come true. All anyone ever talks about is the the NASDAQ crash or maybe

Stocks are up over 200% since March of 2009. Instead of celebrating those gains, investors are constantly worried about missing the next 5-10% correction.

I could continue.

It’s very easy to dwell on the bad times because that’s when the majority of investors make their worst mistakes. Loss aversion is a well-known behavior trait by now, but just because we know that losses hurt much more than gains feel good doesn’t mean we can all of the sudden change our mental or physical make-up. Studies have shown that losses are processed in the same part of the brain that responds to mortal danger. And it’s true that some people can even relive losses in their sleep.

This is why it’s rare that anyone ever paints market losses as a good thing in terms of providing opportunities. Instead, in the headlines we see words like plunge, turmoil, plummet, disaster and destroyed. The panic feeds on itself and people start believing the hype. So people inevitably make mistakes, throw their plan out the window and become traumatized by market corrections and crashes. These periods become seared into the memories of investors even though they’re a natural part of the ebb and flow of market cycles.

Since 1980 the S&P 500 has fallen double digits just eleven times (I’m using Yardeni’s data here). That’s once every three years or so. I’ll bet you thought it was much more than that, what with the recent spate of market crashes since the turn of the century. On average, stocks fell 26% and these periods lasted a total of just over 260 days before bottoming out (the median values were -19% and 104 days, respectively). If you were to take the data back to the 1930s there were double digit losses ever other year or so.

The biggest problem is that recent history has shown fewer double digit losses, but they’re occurring in greater magnitude. Here’s the breakdown of double digit losses on the S&P 500 by decade:


Double digit losses and bear markets are the rule, not the exception. The 1990s was the only decade that didn’t see at least one 20% pull back (and both were very close to that mythical bear market definition that everyone pays attention to for some reason).

In some ways maybe it’s a good thing that the memories of past market crashes stay with us for so long. Although more crashes are guaranteed to continue into the future, it’s possible the sting from the previous losses can help keep investor emotions from getting too far out of control again so quickly. And the hope is that investors learn about themselves and their behavior during turbulant markets. But I think investors and the media can take their fixation on “abnormal” market events too far.

Crashes, corrections, drawdowns, losses, system resets or whatever you want to call them are a feature of the financial markets, not a sign that they are broken. These things have to happen every once and a while for the system to function properly and wash out the excesses. It makes sense to learn from them and you definitely have to mentally prepare yourself for dealing with losses. But the infatuation with down markets can be taken too far when loss aversion begins to cloud your judgment.

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


JUL 23, 2015

Who would benefit from a stock market correction?


I recently came across the article below by one of my favourite bloggers, Ben Carlson. I must admit that I have been sounding like a broken record every time I suggest “we are long overdue for a market correction”. With the Greek “crisis” now receding into the background it looks as if once again we may have dodged another bullet. Having said that … it’s not a matter of “if” but only of “when” the markets will decline by at least 10% (correction) or 20% or more (bear market). I love Carlson’s list of who would benefit from a market correction, particularly his first point,”Anyone with a time horizon that extends beyond a few months”.

Who Would Benefit From a Stock Market Correction?

By: Ben Carlson
 Posted on July 9, 2015

Things are starting to get interesting in the markets. Over the past couple of weeks there’s been a constant barrage of bad news coming out about Greece, China and Puerto Rico. Then yesterday the New York Stock Exchange decided to have a “technical glitch” and shut down for a few hours.

Regardless of whether this stuff is just noise or actually ends up moving the markets, eventually the stock market will crack and have a correction. Maybe this confluence of events will be the trigger. Maybe it’s just another blip on the wall of worry. Eventually people will stop buying the dip and the complacency everyone’s been worried about for 2-3 years will cause a 10% or 15% correction.

Regardless of when it happens or why, here’s a list of who would benefit the most from a stock market sell-off:

  • Anyone with a time horizon that extends beyond a few months.

  • Anyone that will be a net saver in the coming years.

  • Millennials, who should get on their hands and knees and pray for a correction so they can buy stocks at lower prices, higher dividend yields and lower valuations.

  • Actually, this applies to anyone who is interested in buying stocks at lower prices.

  • Jesse Felder’s razor blade.

  • Everyone who’s been calling for a “healthy” correction.

  • Everyone who’s been saying we’re “due” for a pullback.

  • Everyone who’s been saying volatility is a “second half story.”

  • The financial media and blogs (traffic tends to increase when markets sell off).

  • The doom and gloom crowd who will surely take a few victory laps, maybe book a speaking gig or two and make as many appearances on CNBC as they can (of course, they’ll never actually buy back into the market after it falls).

  • That co-worker of yours who told you in 2012 that they were going to wait for a 10% correction until they put their 401(k) contributions back into the market.

  • Everyone who works in the graphics department of the financial news stations and knows how to spell the word “CRISIS.”

  • Paper traders, who will brag about how they called the top of the market.

  • Anyone who is currently holding cash or bonds in their portfolio and has the requisite intestinal fortitude to buy stocks when no one else is willing or able.

  • The fact that there have been two market crashes since the year 2000 has caused many investors to automatically assume that anytime the stock market goes down it must be a painful, gut-wrenching experience. Rarely do you hear people discuss the virtues of a good stock market correction. It’s a shame that people associate down markets with calamity and heartache, as opposed to opportunity and good fortune.

Everyone invested in stocks loses money in a correction. For some, it’s temporary. For others, it’s permanent. Stock market corrections are where successful investors make money and unsuccessful investors make mistakes.

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


JUN 18, 2015

Life is beautiful


I recently came across this blog by Sam Altman. Although he is only 30, I thought Altman’s 36 “life advice” tips were incredibly thoughtful. I am in agreement with his comment that he usually finds such lists ‘hollow’. However,  Altman’s tips captured so much wisdom … I just had to pass them along!


The days are long but the decades are short

By: Sam Altman

I turned 30 last week and a friend asked me if I’d figured out any life advice in the past decade worth passing on. I’m somewhat hesitant to publish this because I think these lists usually seem hollow, but here is a cleaned up version of my answer:

  1. Never put your family, friends, or significant other low on your priority list. Prefer a handful of truly close friends to a hundred acquaintances. Don’t lose touch with old friends. Occasionally stay up until the sun rises talking to people. Have parties.

  2. Life is not a dress rehearsal—this is probably it. Make it count. Time is extremely limited and goes by fast. Do what makes you happy and fulfilled—few people get remembered hundreds of years after they die anyway. Don’t do stuff that doesn’t make you happy (this happens most often when other people want you to do something). Don’t spend time trying to maintain relationships with people you don’t like, and cut negative people out of your life. Negativity is really bad. Don’t let yourself make excuses for not doing the things you want to do.

  3. How to succeed: pick the right thing to do (this is critical and usually ignored), focus, believe in yourself (especially when others tell you it’s not going to work), develop personal connections with people that will help you, learn to identify talented people, and work hard. It’s hard to identify what to work on because original thought is hard.

  4. On work: it’s difficult to do a great job on work you don’t care about. And it’s hard to be totally happy/fulfilled in life if you don’t like what you do for your work. Work very hard—a surprising number of people will be offended that you choose to work hard—but not so hard that the rest of your life passes you by. Aim to be the best in the world at whatever you do professionally. Even if you miss, you’ll probably end up in a pretty good place. Figure out your own productivity system—don’t waste time being unorganized, working at suboptimal times, etc. Don’t be afraid to take some career risks, especially early on. Most people pick their career fairly randomly—really think hard about what you like, what fields are going to be successful, and try to talk to people in those fields.

  5. On money: Whether or not money can buy happiness, it can buy freedom, and that’s a big deal. Also, lack of money is very stressful. In almost all ways, having enough money so that you don’t stress about paying rent does more to change your wellbeing than having enough money to buy your own jet. Making money is often more fun than spending it, though I personally have never regretted money I’ve spent on friends, new experiences, saving time, travel, and causes I believe in.

  6. Talk to people more. Read more long content and less tweets. Watch less TV. Spend less time on the Internet.

  7. Don’t waste time. Most people waste most of their time, especially in business.

  8. Don’t let yourself get pushed around. As Paul Graham once said to me, “People can become formidable, but it’s hard to predict who”. (There is a big difference between confident and arrogant. Aim for the former, obviously.)

  9. Have clear goals for yourself every day, every year, and every decade.

  10. However, as valuable as planning is, if a great opportunity comes along you should take it. Don’t be afraid to do something slightly reckless. One of the benefits of working hard is that good opportunities will come along, but it’s still up to you to jump on them when they do.

  11. Go out of your way to be around smart, interesting, ambitious people. Work for them and hire them (in fact, one of the most satisfying parts of work is forging deep relationships with really good people). Try to spend time with people who are either among the best in the world at what they do or extremely promising but totally unknown. It really is true that you become an average of the people you spend the most time with.

  12. Minimize your own cognitive load from distracting things that don’t really matter. It’s hard to overstate how important this is, and how bad most people are at it. Get rid of distractions in your life. Develop very strong ways to avoid letting crap you don’t like doing pile up and take your mental cycles, especially in your work life.

  13. Keep your personal burn rate low. This alone will give you a lot of opportunities in life.

  14. Summers are the best.

  15. Don’t worry so much. Things in life are rarely as risky as they seem. Most people are too risk-averse, and so most advice is biased too much towards conservative paths.

  16. Ask for what you want.

  17. If you think you’re going to regret not doing something, you should probably do it. Regret is the worst, and most people regret far more things they didn’t do than things they did do. When in doubt, kiss the boy/girl.

  18. Exercise. Eat well. Sleep. Get out into nature with some regularity.

  19. Go out of your way to help people. Few things in life are as satisfying. Be nice to strangers. Be nice even when it doesn’t matter.

  20. Youth is a really great thing. Don’t waste it. In fact, in your 20s, I think it’s ok to take a “Give me financial discipline, but not just yet” attitude. All the money in the world will never get back time that passed you by.

  21. 21) Tell your parents you love them more often. Go home and visit as often as you can.

  22. This too shall pass.

  23. Learn voraciously.

  24. Do new things often. This seems to be really important. Not only does doing new things seem to slow down the perception of time, increase happiness, and keep life interesting, but it seems to prevent people from calcifying in the ways that they think. Aim to do something big, new, and risky every year in your personal and professional life.

  25. Remember how intensely you loved your boyfriend/girlfriend when you were a teenager? Love him/her that intensely now. Remember how excited and happy you got about stuff as a kid? Get that excited and happy now.

  26. Don’t screw people and don’t burn bridges. Pick your battles carefully.

  27. Forgive people.

  28. Don’t chase status. Status without substance doesn’t work for long and is unfulfilling.

  29. Most things are ok in moderation. Almost nothing is ok in extreme amounts.

  30. Existential angst is part of life. It is particularly noticeable around major life events or just after major career milestones. It seems to particularly affect smart, ambitious people. I think one of the reasons some people work so hard is so they don’t have to spend too much time thinking about this. Nothing is wrong with you for feeling this way; you are not alone.

  31. Be grateful and keep problems in perspective. Don’t complain too much. Don’t hate other people’s success (but remember that some people will hate your success, and you have to learn to ignore it).

  32. Be a doer, not a talker.

  33. Given enough time, it is possible to adjust to almost anything, good or bad. Humans are remarkable at this.

  34. Think for a few seconds before you act. Think for a few minutes if you’re angry.

  35. Don’t judge other people too quickly. You never know their whole story and why they did or didn’t do something. Be empathetic.

  36. The days are long but the decades are short.

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


MAY 28, 2015

The greatest trick the devil played


The French poet Baudelaire once wrote, “The greatest trick the devil ever played was convincing the world he did not exist”. In much the same way I feel the greatest trick financial academia has played on the investing public is to have persuaded us, through the creation of theories such as the efficient market hypothesis, that “volatility” and “risk” are one and the same thing.

I would like to once again draw upon the wisdom of Nick Murray. I feel he continues to be one of the most thoughtful and perceptive financial commentators whom I have experienced in my 30 years in this industry.  I believe his article, The Horror, The Horror , will help bring perspective on how to think and react when your portfolio experiences a temporary decline in value.

The chart below highlights how temporary declines in the market are to be expected each year.  Please click here for a full image of the chart.


These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


APR 28, 2015

A simple way to be smart about your money


Happiness, at least from a financial blogging perspective, is when two of your favourite writers come together in a single post. And so it is with the Morgan Housel and Carl Richards article shown below. Line by line or in Richards case, sketch by sketch, no one does a better job of communicating “Wealth With Wisdom” than these two individuals. If you are serious about creating and maintaining financial security, I encourage you to read and watch the following.

“The One Page Financial Plan”

By Morgan Housel

I have read a lot of books about investing and money. It’s part of my job. My favorite part, actually.

Here’s what I’ve found: There are a lot of smart financial people. And there are a lot of good writers. But there are very few of both.

Financial books tend to come in one of two flavors. They are either smart but unreadable to the average American – filled with jargon and formulas — or they’re easy to read but full of nonsense and bad advice.


A few years ago I stumbled across the rare writer who wrote with as much clarity as he did wisdom. He quickly became one of my favorite writers.

Carl Richards is a financial advisor and New York Times columnist. His trademark is illustrating complicated financial topics in the simplest way possible – with a Sharpie, on the back of napkin.

This sketch, for example, contains more wisdom and perspective than can be found in most investing books:

The genius of Carl’s work is that he’s stripped finance down to the few important topics that matter most. Since he focuses on big-picture topics, he never gets drawn into the weeds, getting trapped in the depth of nitty-gritty topics like what the market’s going to do next month, or what Friday’s jobs report means for your stocks. He writes about the terror of buying high and selling low. About the dangers of overcomplicating investing. About saving too little, or too much. About financial goals, and how to talk about money with your family.

These topics might seem simple and boring, but that’s kind of the point. The financial media spends so much time talking about financial topics that are complicated but don’t matter that the simple stuff that matters gets swept under the rug.

Carl spoke at a Motley Fool event last month. Here’s a snippet of a great analogy between investing and soccer goalies, and the importance of inactivity in investing.


Carl has a new book out called The One-Page Financial Plan. It’s a fantastic read devoted to understanding the big-picture of your financial wellbeing, getting things roughly right rather than precisely wrong. Focusing on detail and perfection, he writes, leads to all kinds of problems:

Book Link:

The One-Page Financial Plan: A Simple Way to Be Smart About Your Money: Carl Richards: 9781591847557: Books

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


MAR 25, 2015

Doing nothing is a decision


One of my favourite financial bloggers is Ben Carlson who writes under the title “A Wealth of Common Sense”. I thought he recently knocked it out of the park with his blog about how truly hard it is to “buy and hold” (i.e. do nothing in today’s market). By way of comparison he cited a rather amusing University of Virginia study illustrating how some people would rather administer mild electric shocks to themselves rather than sit quietly in a room alone for 6 to 15 minutes.


Me alone in a room, attempting not to administer electric shocks to myself. 

For more wisdom on how today’s “overstimulated environment” may destroy your investment returns I would encourage you to read Carlson’s “Doing Nothing Is A Decision” in its entirety.


All of humanity’s problems stem from man’s inability to sit quietly in a room alone
Blaise Pascal


FEB 25, 2015

Your personal tax calendar


As I have now begun to receive a flurry of tax “T-Statements” I realize, once again , it is that time of year when we all prepare to feed the goose. Given this fact, I thought you might appreciate our 2014 Personal Income Tax Organizer and The Personal Tax Calendar for 2015


The 2014 Personal Income Tax Organizerprovides you with a checklist to help you compile the information you need to complete your personal tax returns, whether you do it yourself or engage the services of a professional tax preparer.

The Personal Tax Calendar for 2015 gives you a list of important dates for personal tax filing and planning for this year.

And in case you are interested, you may wish to input your own numbers to determine this year when you stop working for the government and start working for yourself.  Please use the Personal Tax Freedom Day Calculator from the Fraser Institute. WARNING…. this exercise can be depressing! (Unfortunately, it only works for incomes between $20,000 to $150,000)


Taxes are our way of feeding the goose that lays the golden eggs of freedom, democracy and enterprise. Someone says, ‘Well, the goose eats too much!’ That’s probably true. But better a fat goose than no goose at all
Jim Rohn


JAN 16, 2015

You should be amazed


It has been my practice to begin each year’s “Wealth with Wisdom” with a focus on all of the positives that are happening in the world today. As I become older and, hopefully, a bit wiser,  I have come to the conclusion that how we perceive  our world is largely a matter of choice. Personally, this is evidenced by an annual Christmas email letter our family receives from a wonderful individual with whom I once served on an international non profit board. This is how this year’s edition began.

“There was, of course, plenty of adversity to ‘make use of’ in this year of 2014:  increasing despoilation and degradation of the planet; ever-widening wars, displacement, and brutalization of innocents; new fears of globalized epidemics; ethnic and religious hatred of scale and intensity not seen since the Holocaust, ifnot the Wars of Religion or the Crusades.” 

Geez  …. kinda makes you want to reach for the nearest bottle of Prozac! When I first started to receive these “Christmas updates” in which the themes were depressingly similar my first thoughts were to respond to my friend with fact based diatribes citing statistics that, to the contrary, clearly demonstrate that the world is actually improving on a number of social and environmental fronts. But (and this is perhaps where the wisdom comes in) what’s the point? In the end we all choose to see exactly what we wish to see. To that end, if like me, you choose to adopt a more optimistic perspective of today’s worlds, I invite you to read the following by Oliver Emberton. Even better, if you choose not to adopt a more optimistic perspective of today’s world … I invite you to read the following by Oliver Emberton.


You Should Be Amazed

By: Oliver Emberton

Like millions of people I was carried to work today in a comfortable metal box by the controlled explosion of 60 million year old dinosaur juice. (You call that petrol).

I avoided unexpected traffic on my way thanks to flying machines orbiting the earth, which talked to a metal and glass supercomputer in my pocket smaller than a bar of soap. (You call that a phone).

My pocket supercomputer is – of course – wirelessly connected to the entirety of humanity’s knowledge. The entirety of humanity’s knowledge is – of course – free. And I can search all of it as fast as I can type.

None of this is even interesting to anyone anymore.

At work I help make software, which is to say I am able to benefit the lives of people mostly by thinking, and occasionally pressing some buttons on a surface. Somehow, I am paid for this.

At the supermarket I look for bananas, which have been transported five thousand miles for my convenience, yet remain fresh, tasty, and so cheap I don’t even notice their price (12 pence). I enjoy food without even considering the possibility that it might be diseased, or toxic, or fatal. I buy a plump, delicious chicken – the byproduct of a thousand years of careful breeding – and let machines scan my choices with beams of light and pay them with a thin piece of plastic. If I run out of money, there are whole industries competing to loan me some, for a price.

Best of all, I realise, I have my place amongst all of this wonder, and so do most people around me. My trip to the supermarket likely helped employ a hundred thousand people or more; from chefs to engineers, shelf stackers to logo designers. A few of those people are in their dream jobs, most less so, but together we’re all a lot more prosperous and opportune than when we built our own shacks and dug dry vegetables out of our gardens.

Is this world perfect? No. Many are exploited, and most are denied it entirely. I’ve walked through slums in Africa, India and South America. I know I’m among the luckiest alive.

But once upon a time, I wouldn’t have been lucky either. If you look at the whole of human history, a trend becomes clear. Draw a graph of the rights of women, or income per person, or human lifespan over the past thousand years. Compare the life of a child today with one fifty years ago. Consider how likely it is, today, that a person living in a developed nation will be drafted into war, or die in childbirth.

There are blips in that graph, to be sure, but the world is getting better constantly, and it’s not about to stop anytime soon.

If you’re able to read this, you live in the most amazing time imaginable. And the funniest thing is, most of us never even notice.


For more pithy wisdom written with a great sense of humour and coupled with excellent graphics, I would encourage you to visit Oliver Emberton’s website.

Have a great 2015 living in the most amazing time in human history!

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.

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