evidence-based investment insights · evidence-based investing insights 12 for staying on course...

Evidence-BasedInvestmentInsights:

ThreeEssentialIdeasforBuildingWiseWealth

PaulPhilip,CFP,CLU

[email protected]

EnnioLongo,CFP,[email protected]

Toronto–Vancouver–Calgary–Edmonton

1-866-735-5581

Evidence-BasedInvestingInsights

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CONTENTSIntroduction.................................................................................................................3

PartI:KnowingandHeedingtheEvidence.................................................................4

You,theMarketandthePricesYouPay..................................................................4

ThePowerofGroupIntelligenceinPrice-Setting...................................................4

TheEffectofBreakingNewsonMarketPricing......................................................5

TheBarnDoorPrinciple...........................................................................................6

FinancialGurusandOtherUnicorns........................................................................7

PartII:StructuringYourPortfolio................................................................................9

TheBusinessofInvesting.........................................................................................9

MarketRisksandDiversification’sRewards..........................................................10

TheEssenceofEvidence-BasedInvesting.............................................................11

WhatHasEvidence-BasedInvestingDoneforMeLately?...................................14

InvestmentReality:ChooseYourAlliesCarefully..................................................15

PartIII:TheHumanFactor–YouandYourBehaviors..............................................16

Conclusion..................................................................................................................18

Disclosures.................................................................................................................19

SecondOpinionService.............................................................................................21

AboutFinancialWealthBuildersSecurities..............................................................23

PaulPhilip...............................................................................................................23

EnnioLongo............................................................................................................24


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INTRODUCTIONAreyoureadytobecomeabetterinvestor?Wouldyouliketoenhanceyourunderstandingofthemostimportantprinciplesthatdrivethecreationofwealth,withoutithurtingabit?Inthisapproachablereport,we’llintroduceyoutothreeessentialsonhowtoinvestwithgreaterconfidence,withevidenceinsteadofemotionguidingyourway.Yousee,beingabetter,evidence-basedinvestordoesnotmeanyoumusthaveanadvanceddegreeinfinancialeconomics,orthatyouhavetobesmarter,fasterorluckierthantherestofthemarket.Itmeansthreethings:1. Knowingandheedingtheevidencefromthosewhodohaveadvanceddegrees

infinancialeconomics

2. Structuringyourportfoliosothatyou’replayingwithratherthanagainstthemarketanditsexpectedreturns

3. Understandingthe“humanfactor,”i.e.,yourownbehaviors,ingrainedthrough

eonsofevolutionandtrickingyouintomakingtheworstfinancialdecisionsatallthewrongtimes

Areyoureadytoapplythescienceofinvestingintoyourowndurableportfolio?Readon.


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PARTI:KNOWINGANDHEEDINGTHEEVIDENCE

You,theMarketandthePricesYouPay

Howdoyouachieveeveryinvestor’sdreamofbuyinglowandsellinghighinacrowdofresourcefulandcompetitiveplayers?Theansweristoplaywithratherthanagainstthecrowd,byunderstandinghowmarketpricingoccurs,accordingtotheseinsights:

• Groupintelligencedrivesefficientpricing• It’snotwhetherbreakingnewsisgoodorbad,it’swhetherit’sexpectedor

unexpected• Bythetimeyouhearthenews,themarketalreadyknowsit• Financial“gurus”arenobetterthanyouatconsistentlypredictingthemarkets

ThePowerofGroupIntelligenceinPrice-Setting

Beforetheacademicevidenceshowedusotherwise,itwascommonlyassumedthatthebestwaytomakemoneyinwhatseemedlikeungovernedmarketswasbyoutwittingothersatforecastingfuturepricesandtradingaccordinglyindomesticandinternationalstocks,bonds,commodities,realestateandmore–orbyhiringhigh-pricedmarketanalyststodothisforyou.Unfortunatelyforthosewhoarestilltryingtooperatebythisoutdatedstrategy,academiahasrevealedthatthemarketisnotsoungovernedafterall.Yes,it’schaotic,messyandunpredictablewhenviewedupclose.Butit’salsosubjecttogroupintelligence,wherebygroupsofindependentplayers(suchasfreemarketparticipants)arebetteratconsistentlyarrivingataccuratefactualanswersthaneventhesmartestindividualsinthatsamegroup.Applyinggroupwisdomtothemarket’smultitudeofdailytradesmeansthateachindividualtrademaybespotonorwildlyofffroma“fair”price,buttheaggregateaverageincorporatesallknowninformationcontributedbytheintelligent,theignorant,theluckyandthelackluster.


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Insteadofbelievingthatyoucanregularlyoutguessthemarket’scollectivewisdom,youarebetteroffconcludingthatthemarketisdoingabetterjobthanyoucanatforecastingprices.MarketsIntegratetheCombinedKnowledgeofAllParticipants

TheEffectofBreakingNewsonMarketPricing

Thenextstepistounderstandhowpricesaresetmovingforward.Whatcausesmarketpricestochange?Itbeginswiththenever-endingstreamofworldnews.Here,it’scriticaltobeawareoftheevidencethattellsusthemostimportantthingofall:Youcannotexpecttoconsistentlyimproveyouroutcomesbyreactingtobreakingnews.Howthemarketadjustsitspricingiswhythere’snotmuchyoucandoafterthenewsisreleased.First,it’snotthenewsitself;it’swhetherwesawitcoming.Inotherwords,it’snotjustnews,butunexpectednewsthataltersfuturepricing.Bydefinition,theunexpectedisimpossibletopredict,asishowdramatically(ornot)themarket’sgroupintelligencewillrespondtoit.


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TheBarnDoorPrinciple

Anotherreasonbreakingnewsisrelativelyirrelevanttoyourinvestingiswhatwe’llcall“TheBarnDoorPrinciple.”Bythetimeyouhearthenews,themarketalreadyhasincorporateditintoexistingprices.Theproverbialhorseshavealreadygallopedpastyouropentradingdoor.Thisisespeciallysointoday’selectronicworld,wherepriceadjustmentstypicallyoccurwithinthefirstfewpost-announcementtrades.MarketsReacttoEvents

Unlessyoumanagetobeamongtheveryfirsttorespondtobreakingnews(competing,mindyou,againstautomatedtraderswhooftenrespondinfractionsofmilliseconds),you’resettingyourselfuptobuyhigherorselllowerthanthosewhoalreadyhavesetnewpricesbasedonthenews–exactlytheoppositeofyourgoal.


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FinancialGurusandOtherUnicorns

Astouchedonabove,you’realsoill-advisedtoseekamarket-forecasting,financialgurutopinchhitforyou.AsMorningstarstrategistSamuelLeehasdescribed,managerswhohavepersistentlyoutperformedtheirbenchmarksare“rarerthanrare.”ButmaybeyouknowofanextraordinarystockbrokerorfundmanagerorTVpersonalitywhostrikesyouasbeingamongtheelitefewwhocanmaketheleap.Shouldyouturntothemforthelatestmarkettips,insteadofsettlingfor“average”returns?Bottomline,ifsuchoutperformingexpertsdidexistinreliablenumbers,weshouldexpecttoseecredibleevidenceofit.Notonlyissuchdatalacking,thebodyofevidencetothecontraryisoverwhelming.Starperformers–“activemanagers”–oftenfailtosurvive,letalonepersistentlybeatcomparablemarketreturns.Acrossthedecadesandaroundtheworld,amultitudeofacademicstudieshavescrutinizedactivemanagerperformanceandconsistentlyfounditlacking,asdidDimensionalFundAdvisorsina2013analysis.


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OutsmartingOtherInvestorsIsTough


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PARTII:STRUCTURINGYOURPORTFOLIOSofar,we’veassessedsomeofthehurdlestoeffectivelyparticipatinginefficientcapitalmarkets.Webelievethebestwaytoovercomethesehurdlesistosidestepthementirelyinyourinvesting.Bymanagingthemarketfactorsyoucanexpecttocontrolandavoidingthetemptationtoreacttothoseyoucannot,youcanbuildandsustainanevidence-basedportfoliothatallowsthemarketdowhatitdoesbestonyourbehalf:buildlong-termcapitalwealth.

TheBusinessofInvesting

Withalltheexcitementoverstocksandbondsandtheirupsanddownsinheadlinenews,thereisakeyconceptoftenoverlooked.Marketreturnsarecompensationforprovidingthefinancialcapitalthatfeedsthehumanenterprisegoingonallaroundus,allthetime.FinancialCapitalPlaysaVitalRoleinWealthCreation


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Whenyoubuyastockorabond,yourcapitalisultimatelyputtohardworkbybusinessesoragencieswhoexpecttosucceed.Youwouldthinkthat,whenacompanyoragencydoessucceed,yourinvestmentwouldtoo.Butactually,suchsuccessisonlyonefactoratbest,amongmanyothersthatinfluenceyourexpectedreturns.Atfirst,thisseemscounterintuitive.Itmeans,forexample,thatevenifbusinessisbooming,youcannotnecessarilyexpecttoreaptherewardssimplybybuyingitsstock.Remember,bythetimegoodorbadnewsisapparent,it’salreadyreflectedinhigher-pricedshareprices,withlessroomforfuturegrowth.

MarketRisksandDiversification’sRewards

Sowhatdoesdriveexpectedreturns?Thereareanumberoffactorsinvolved,butdecadesofacademicinquiryinformusthatamongthemostpowerfulonesspringfromacceptingunavoidablemarketrisks.Asaninvestor,youcanexpecttoberewardedforacceptingthemarketrisksthatremainafteryouhaveeliminatedtheavoidableones.Let’sexplain.AvoidableConcentratedRisks–Eveninabullmarket,onecompanycanexperienceanindustrialaccident,causingitsstocktoplummet.Amunicipalitycandefaultonabondevenwhenthewidereconomyisthriving.Anaturaldisastercanstrikeanindustryorregionwhiletherestoftheworldthrives.Theseareconcentratedmarketrisksthatcanbeavoidedbynotpilingallofyourfinancialeggsintotoofewholdings.UnavoidableMarketRisks–Ifconcentratedrisksarelikeboltsoflightning,marketrisksareencompassingdownpoursinwhicheveryonegetswet.Forexample,investinthemarketatalland,presto,you’reexposedtomoremarketriskthanifyouhadsatincash(whereitmaylosevalueduetoinflation,butthat’sadifferentrisk,foradifferentreport).Inthescienceofinvesting,wedampenavoidable,concentratedriskswithdiversification.Byspreadingyourholdingswidelyandglobally,ifsomeofthemareaffectedbyaconcentratedrisk,youcanoffsetthedamagedonewithplentyofotherunaffectedholdings.


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Everyinvestoralsofacesmarketrisksthatcannotbe“diversifiedaway.”Thosewhostayinvestedwhenmarketrisksareontherisecanexpecttoeventuallybecompensatedfortheirsteelyresolvewithhigherreturns.Buttheyalsofacehigheroddsthatresultsmaydeviatefromexpectations,especiallyinthenear-term.Diversificationagainstepsin,actingasa“dial”forreflectingtherightvolumeofmarket-riskexposureyou’reseekingforyourindividualgoals.DiversificationReducesRisksThatHaveNoExpectedReturn

TheEssenceofEvidence-BasedInvesting

Withanyriskyventure,includingtheonesthataboundincapitalmarkets,therearenoguaranteesthatyou’llearnhoped-forreturns,orevenrecoveryourstake.Thisiswhywesostronglyfavorevidence-basedinvestingasarationalapproach


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forstayingoncoursetowardyourfinancialgoals,especiallywhenyouremotionalreactionsthreatentotakeoverthewheel.Evidence-basedinvestingrepresentsthemarriagebetweena“Who’sWho”bodyofscholarswhohavebeenstudyingfinancialmarketssinceatleastthe1950s,andthefinancialprofessionalswhoheedtheirfindingsandaretaskedwithanequallyimportantchargeofdetermining:Evenifarelativelyreliablereturnpremiumexistsintheory,canwecaptureitintherealworld–aftertheimplementationandtradingcostsinvolved?AssessingtheEvidence(SoFar)Inacademia,rigorousresearchcallsformorethananarbitrarysamplingorafewin-housespreadsheetsdesignedto“prove”aconvenientconclusion.Academicresearchdemandsaconsiderablyhigherstandard,includingadisinterested,objectiveoutlook(noforegoneconclusions);robustdataanalysis;repeatabilityandreproducibility;andformalpeerreviews.Sofar,thislevelofresearchhasyieldedfiveexpectedreturnpremiumsforpatientinvestors:1. Equity–Stocks(equities)havereturnedmorethanbonds(fixedincome).

2. Small-cap–Small-companystockshavereturnedmorethanlarge-company

stocks.3. Value–Valuecompanies(withlowerratiosbetweentheirstockpriceand

variousbusinessmetricssuchascompanyearnings,salesand/orcashflow)havereturnedmorethangrowthcompanies(withhighersuchratios).Thesearestocksthat,basedontheempiricalevidence,appeartobeeitherundervaluedormorefairlyvaluedbythemarket,comparedwiththeirgrowthstockcounterparts.

4. Term–Bondswithdistantmaturitiesorduedateshavereturnedmorethanbondsthatcomeduequickly.

5. Credit–Bondswithlowercreditratings(suchas“junk”bonds)havereturnedmorethanbondswithhighercreditratings(suchasU.S.treasurybonds).


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DimensionsPointtoDifferencesinExpectedReturns

Scholarsandpractitionersalikestrivetodeterminenotonlythatvariousreturnfactorsexist,butwhytheyexist.Thishelpsusdeterminewhetherafactorislikelytopersist(sowecanbuilditintolong-termportfolios)orismorelikelytodisappearupondiscovery.Explanationsforwhypersistentfactorslingerusuallyfallintotwobroadcategories:risk-relatedandbehavioral.RiskReturnsFactors–Itappearsthatpersistentpremiumreturnsareoftenexplainedbyacceptingmarketrisk(thekindthatcannotbediversifiedaway)inyourportfolio.Forexample,it’spresumedthatvaluestocksareriskierthangrowthstocks,whichatleastinpartexplainsthehigherexpectedreturnstheyhaveexhibitedtodate.


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BehavioralReturnFactors–Theremayalsobebehavioralfoiblesatplay.Thatis,ourbasic-survivalinstinctsoftenplayagainstotherwisewell-reasonedfinancialdecisions.Assuch,themarketmayfavorthosewhoarebetteratovercomingtheirimpulsivereactionstobreakingnews.

WhatHasEvidence-BasedInvestingDoneforMeLately?

Beyondthefivekeymarketfactorsdescribedabove(equity,value,small-cap,termandcredit),continuedinquiryhasfoundadditionalfactorsatplay,withadditionalpotentialpremiums(whichalsoseemtoresultfromacceptingaddedmarketrisk,avoidingill-advisedinvestorbehaviorsorboth).Inacademiccircles,themostprominentamongtheseareprofitabilityandmomentum:• Profitability–Highlyprofitablecompanieshavedeliveredpremiumreturnsover

low-profitabilitycompanies.

• Momentum–Stocksthathavedonewellorpoorlyintherecentpasttendtocontinuetodothesameforlongerthanrandomchanceseemstoexplain.

Butbeforewegetaheadofourselves,let’sdiscussafewcaveats.WetPaintWarning–Whilethese“new”factorsmayormaynothaveexistedforsometime,ourabilitytoisolatethemismorerecent.Astheinkstilldriesontheresearchpapers,wearestillassessingtheirstayingpower.CostversusReward–Justbecauseanexpectedpremiumexistsintheory,doesn’tmeanitcanbeimplementedinreallife.Wemustbeabletocaptureitafterthecostsinvolved.DuelingFactors–Sometimes,itcanbedifficulttobuildonefactorintoaportfoliowithoutsacrificinganother.Benefitsandtradeoffsmustbecarefullyconsideredatthefundlevelaswellasforyourindividualgoals.Asaresult,opinionsvaryonwhen,howorevenifprofitability,momentumandothernewerfactorsshouldplayaroleincurrentportfolioconstruction.Wewouldbehappytospeakwithyouindividuallyaboutourevolvingapproach.


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InvestmentReality:ChooseYourAlliesCarefully

Infact,thisisoneareawherewebelieveanevidence-basedadvisorrelationshipcanbecriticaltoyourwealthandwell-being.Howdoyoudeterminewhattoheedandwhotoignoreasthefinancialcommunitycontinuestodebatevarioustheoriesandpavethewayforfutureimprovements?Evenwhenanewacademicinsightisrocksolid,hyperactivereactiontoitcanstripawaythepracticaladvantagesofanenlightenedinvestmentapproach.Ouraimasaprofessionaladvisoristoextractthediamondsofpromisingnewevidence-basedinsightsfromtheconsiderablylargerpilesofmisleadingmisinformation.Wefeelyouarebestservedbyheedingthosewhotakeasimilarapproachwiththeiradvice.


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PARTIII:THEHUMANFACTOR–YOUANDYOURBEHAVIORSWeturnnowtothefinalandpossiblythemostsignificantfactorinyourevidence-basedinvestmentstrategy:thehumanfactor.Inshort,yourownimpulsivereactionstomarketeventscaneasilytrumpanyothermarketchallengesyouface.Despiteeverythingweknowaboutefficientcapitalmarketsandallthesolidevidenceavailabletoguideourrationaldecisions…we’restillhuman.We’vegotthingsgoingoninourheadsthathavenothingtodowithsolidevidenceandrationaldecisions–abrewofchemicallygenerated,“survivalofthefittest”instinctsandemotionsthatspurustoleapbeforewehavetimetolook.Tostudytherelationshipsbetweenourheadsandourfinancialhealth,thereisanotherfieldofevidence-basedinquiryknownasbehavioralfinance.WallStreetJournalcolumnistJasonZweig’s“YourMoneyandYourBrain”providesagoodguidedtourofthefindings,describingboththebehaviorsthemselvesaswellaswhatishappeninginsideourheadstogeneratethem.Tonameacoupleofthemostobviousexamples:Whenmarketstumble–Yourbrain’samygdalafloodsyourbloodstreamwithcorticosterone.Fearclutchesatyourstomachandeveryinstinctpointstheneedleto“Sell!”Whenmarketsunexpectedlysoar–Yourbrain’sreflexivenucleusaccumbensfiresupwithinthenetherregionsofyourfrontallobe.Greedgrabsyoubythecollar,convincingyouthatyouhadbestactsoonifyouwanttoseizetheday.“Buy!”Beyondsuchmarket-timinginstinctsthatleadyouastray,yourbraincooksupplentyofotherinsidiousbiasestooverlyinfluenceyourinvestmentactivities.


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HumansAreNotWiredforDisciplinedInvesting

Rapidreflexesoftenserveuswellineverydayliving.Butinfinance,wherethecoolestheadsprevail,manyofourbaseinstinctscausemoreharmthangood.Ifyoudon’tknowthatthey’rehappeningordon’tmanagethemwhentheydo,yourbraincantrickyouintobelievingyou’remakingentirelyrationaldecisionswhenyouareinfactbeingoverpoweredbyinstinct-driven,chemicalreactions.Thisisanotherreasonwhywesuggestworkingwithanobjectiveadvisor,tohelpyouseeandavoidcollisionswithyourselfthatyourownmyopicvisionmightmiss.


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CONCLUSIONWehopeyou’veenjoyedreadingourreportonevidence-basedinvestingasmuchaswe’veenjoyedsharingitwithyou.Whenweintroducedourthreeessentialideasforbuildingwisewealth,wesoughttoreplacemostofthetechnicaljargon,withthreekeyinsightsforbecomingamoreconfidentinvestor:1. UnderstandtheEvidence.Youdon’thavetohaveanadvanceddegreein

financialeconomicstoinvestwisely.Youneedonlyknowandheedtheinsightsavailablefromthosewhodohaveadvanceddegreesinfinancialeconomics.

2. EmbracingMarketEfficiencies.Youdon’thavetobesmarter,fasterorluckierthantherestofthemarket.Youneedonlystructureyourportfoliotoplaywithratherthanagainstthemarketanditsexpectedreturns.

3. ManagingYourBehavioralMiscues.Youdon’thaveto–andwon’tbeableto–eliminateeveryhighandlowemotionyouexperienceasaninvestor.Youneedonlybeawareofhowoftenyourinstinctswilltemptyouoff-course,andmanageyouractionsaccordingly.(Hint:Aprofessionaladvisorcanaddhugevaluehere.)

Howhavewedoneinourgoaltoinformyou,withoutoverwhelmingyou?Ifwe’vesucceededinbringingourevidence-basedinvestmentideashomeforyou,wewouldlovetohavetheopportunitytocontinuetheconversationwithyouinperson.Giveusacalltoday.


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DISCLOSURES1.Thispublicationmayincludeforward-lookingstatements.Allstatementsotherthanstatementsofhistoricalfactareforward-lookingstatements(includingwordssuchas“believe,”“estimate,”“anticipate,”“may,”“will,”“should”and“expect”).Althoughwebelievethattheexpectationsreflectedinsuchforward-lookingstatementsarereasonable,wecangivenoassurancethatsuchexpectationswillprovetobecorrect.Variousfactorscouldcauseactualresultsorperformancetodiffermateriallyfromthosediscussedinsuchforward-lookingstatements.2.Pastperformanceisnotindicativeofanyspecificinvestmentorfutureresults.Viewsregardingtheeconomy,securitiesmarketsorotherspecializedareas,likeallpredictorsoffutureevents,cannotbeguaranteedtobeaccurateandmayresultineconomiclosstotheinvestor.3.Anyinformationprovidedbyadviserregardinghistoricalmarketperformanceisforillustrativeandeducationpurposesonly.Clientsorprospectiveclientsshouldnotassumethattheirperformancewillequalorexceedhistoricalmarketresultsand/oraverages.4.Themateriallistedinthispublicationiscurrentasofthedatenoted,andisforinformationalpurposesonly,anddoesnotcontendtoaddressthefinancialobjectives,situationorspecificneedsofanyindividualinvestor.Anyinformationisforillustrativepurposesonly,andisnotintendedtoserveasinvestmentadvice,sincetheavailabilityandeffectivenessofanystrategyisdependentuponyourindividualfactsandcircumstances.Resultswillvary,andnosuggestionismadeabouthowanyspecificsolutionorstrategyperformedinreality.5.Advisordoesnotmakeanyrepresentationsorwarrantiesastotheaccuracy,timeliness,suitability,completenessorrelevanceofanyinformationpreparedbyanyunaffiliatedthirdpartyandincorporatedherein,andtakesnoresponsibilitytherefor.Allsuchinformationisprovidedsolelyforconveniencepurposesonlyandallusersthereofshouldbeguidedaccordingly.6.Inclusionofindexinformationoranyothermarketinformationisnotintendedtosuggestthattheirperformanceisequivalentorsimilartothatofadviser’sclients.Investorsshouldbeawarethatthereferencedbenchmarkfundsmayhaveadifferentcomposition,volatility,risk,investmentphilosophy,holdingtimesand/orotherinvestment-relatedfactorsthatmayaffectthebenchmarkfunds’ultimateperformanceresults.Therefore,aninvestor’sindividualresultsmayvarysignificantlyfromthebenchmark’sperformance.7.Nosolicitationtobuyorsellanysecurities:“Thisinformationisprovidedasageneralsourceofinformationandshouldnotbeconsideredpersonalinvestmentadviceorsolicitationtobuyorsellanysecurities.”


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8.OpiniondisclaimerandWSImemberdisclaimer:“TheviewsexpressedarethoseoftheauthorandnotnecessarilythoseofWorldsourceSecuritiesInc.InvestmentsareprovidedthroughWorldsourceSecuritiesInc.,SponsoringInvestmentDealerandMemberofCanadianInvestorProtectionFundandoftheInvestmentIndustryRegulatoryOrganizationofCanada.”

9.Formutualfunds:“Commissions,trailingcommissions,managementfeesandexpensesallmaybeassociatedwithmutualfundinvestments.Pleasereadtheprospectusbeforeinvesting.Mutualfundsarenotguaranteed,theirvalueschangefrequentlyandpastperformancemaynotberepeated.”

10.ForETFs:“ETFsmayhaveexposuretoaggressiveinvestmenttechniquesthatincludeleveraging,whichmagnifygainsandlossesandcanresultingreatervolatilityinvalueandbesubjecttoaggressiveinvestmentriskandpricevolatilityrisk.ETFsarenotguaranteed,theirvalueschangefrequentlyandpastperformancemaynotberepeated.Pleasereadtheprospectusbeforeinvesting”

11.Fortaxrelatedmatters:“Theinformationprovidedisgeneralinnatureandshouldnotbeconsideredpersonaltaxationadvice.Wearenottaxadvisorsandwerecommendthatclientsseekindependentadvicefromaprofessionaladvisorontaxrelatedmatters.”

12.“InsuranceProductsandrelatedservicesareprovidedaspartofacomprehensivefinancialplanthroughFinancialWealthBuildersInc.”


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SECONDOPINIONSERVICEWhenthemarketsandeconomiesturnvolatileandconfusingastheyhaveoverthepastyear,eventhemostpatientinvestorsmayquestionthewisdomofthefinancialpaththatthey’vebeenfollowing.Overthepast20years,we’vereviewedhundredsofinvestmentportfoliosandfinancialplans.We’veseenanumberofdifficultmarketscomeandgo.Andwecancertainlyempathizewiththepeoplewhofindthatcurrentenvironmenttroublesomeanddisturbing.We’dliketohelp,ifwecan,andtothatend,here’swhatweoffer.

Anoobligationsecondopinion

Justasit’swisetogetasecondopiniononyourmedicalhealth,it’sonlyprudenttogetasecondopiniononyourfinancialhealth.Thingschange.Lifemoveson.Andthefinancialplanthatwasrightforyoufiveortenyearsagomaynotsuityourneedstoday.Areyourcurrentinvestmentsstillrightforyou?Findoutwithourcomplimentary,confidentialSecondOpinionService.OurSecondOpinionServicewillhelpyouclearlyseetheBIGpicture:

• Understandhowyourmoneyisreallyinvested

• Knowyourportfolio’srisk

• Identifyhiddenfees

• Learnhowtosafelymaximizeyourretirementcashflow

• Learnhowtoreducetaxes(inconcertwithyourtaxprofessional)

• Reviewyourinsurance,longtermcare,andriskmanagementstrategy

• Addressyourestateplanningconcerns(inconcertwithyourlawyer)

HowItWorks:Fromthecomfortofyourhome(viawebinarorcall)we’llseektounderstandyourfinancialgoals–andwhatyourinvestmentportfolioandfinancialplan(ifyouhaveone)isintendedtodoforyou.Thenwe’llreviewtheportfolioforandwithyou.


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Ifwethinkyourstrategiesandinvestmentscontinuetobewell-suitedtoyourgoals–inspiteofthecurrentmarketturmoil–we’llgladlytellyouso,andsendyouonyourway.If,ontheotherhand,wethinksomeofyourinvestmentsnolongerfit,we’llexplainwhy,inplainEnglish.And,ifyoulike,we’llrecommendsomealternatives.NextStep:Simplycompletearequestforinfoatwww.fwbsecurities.comorcallusat1-866-735-5581andaskforPaulPhiliporEnnioLongo.Note-Duetoourlowfeenatureourserviceisbestsuitedtoinvestorswithportfoliosof$250,000orgreater.


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ABOUTFINANCIALWEALTHBUILDERSSECURITIESAsindependentwealthplannerswekeepourclientlistsmall,sowecanfocusonyourspecificsituationandwhat’smostimportanttoyou.Wearecommittedtogivingourclientsaccesstoworldclassinvestmentideas,guidedbyevidencebasedstrategiesusuallyreservedfortheverylargeinvestor,atareasonablecost.Ourclientscountonusforstraighttalk,commonsenseideas,hardwork,andcompletetransparency.WebelieveCanadianscandobetterandhavemore.It’sourmissiontohelpyougetthere.

PaulPhilip

PaulPhilip,CFP,CLU,InvestmentAdvisor

Today’straditionalfinancialplanningissorelylacking.Financialinstitutionsandthemediaareinbusinessforthemselvesandit’suptotheconsumertorecognizethisandtakeresponsibilityfortheirownfuture.Formost,financeandeconomicsistoocomplexandfastchangingtomanageeffectivelybythemselves.Ibelievewhatmostpeoplereallywantisexpertprofessionalguidancethattheycantrust,someonewhohastheirback….andatafairprice.Ibelieveinopenness,transparencyandvalueforyourhardearnedmoney.

Paul lives in Toronto with his wife Susana and their 2 daughters, Julia and Jacqueline. He is active

in his community and is a volunteer coach for underprivileged youth. He is an avid squash player,

and loves to have a good time skiing and travelling with his family.

Paul Philip Phone 416-497-9577 x223 Email [email protected]


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EnnioLongo

EnnioLongo,BBA,CFP,CLU,InvestmentAdvisor

EnnioLongo,BBA,CFPhasbeeninthefinancialservicesindustrysince2007.Sincethattime,Enniohassoughttocontinuallyfindnewandbetterwaystohelphisclientsintheirfinanciallives.EnnioholdstheCertifiedFinancialPlanner(CFP)designationandhassuccessfullycompletedtheCanadianSecuritiescourse.Enniospecializesinprovidingholisticfinancialplanningforhisclients,raisingthebarabovethetraditionalapproachemployedinthemajorityoffinancialinstitutions.Hisgreatestachievementisseeingthepeaceofmindhisclientsreceiveashehelpsthembuild,protectandenjoytheirwealth.

Ennio resides in Toronto with his wife Daniela and their three children Julian, Victoria and

Samantha and his favourite past time is being a soccer coach to all three.

Ennio Longo Phone 416-497-9577 x 225 Email [email protected]

evidence-based investment insights · evidence-based investing insights 12 for staying on course...

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