Telus Talks with Maili Wong

TELUS Talks | How to take smart risks with your money: Maili Wong

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Financial worries are top of mind for many Canadians amidst the COVID19 crisis, and Maili Wong was invited by TELUS Talks to provide insights about financial health and money, amidst the current crisis.  Maili compares the current economic climate with financial crises of the past and explains how you can take a “smart risk” approach to your investments.


To learn more, please email us at [email protected] or call us at 778 655 2410.


I’m Tamara and this is TELUS Talks with Tamara Taggart.


We’re bringing together experts, thinkers, and leaders, busting myths, sharing stories, and staying connected when Canadians need it the most. We’re having unexpected conversations for unprecedented times. The opinions and recommendations in this podcast reflect those of Maili Wong and hers only and not TELUS.


Maili is an investment advisor. For financial advice, please contact your advisor.



Hi, Maili, how are you?


Doing great, Tamara, thank you.




How are you?


I’m pretty good. I know you’re working from home these days. What does that look like for you?


Well, it’s a big change. I’m used to being in an office with my entire team and we are now all working remotely from our homes, and for me, it’s a big change. I’ve got my two kids also at home with school out, and my husband as well, and so I’m learning how to keep the door closed and try to keep it locked, but there are a few video conferencing calls that come in where my seven-year-old comes running out and you just have to adapt. (laughs)


Yeah, I think we’re all learning how to adapt. And I gotta tell you, when I’m watching the news and reading the news and watching what’s happening with the stock market, and I’ve known you for a few years now and I really trust your opinions, and you’re really good at navigating through some of this stuff. So when we’re looking at what’s happening with the stock markets and people’s savings and retirement funds and all that sort of stuff, it’s really scary. It’s just another added stress, money is right now. What are you telling your clients right now?


Right, it is. You’re absolutely right, Tamara. It’s a really challenging time for all of us. As advisors, portfolio managers, we’re doing our very best to provide leadership for our clients, balancing both the incoming calls from scared and confused clients, and also trying to be proactive and thinking about some of those retirees who may be at home scared, lonely, and not sure who to call. So it’s a bit of proactively trying to make sure that one, people are physically okay first, just checking in, making sure that they have what they need. This is an unprecedented health crisis where that comes and helps kind of bring to the forefront all these fears about our vulnerability. And so it’s really about first checking in if people are okay, and then addressing some of the fears and concerns about, as you point out, the stock market or just their ability to have access to their cash because of all the noise and the reports that you hear out there of businesses closing down. It can create a lot of fear and uncertainty. And so we’re just really trying to help clients sort through that, find calm, and find a way forward.


It feels particularly painful, I think, when the majority of us are not rich. We are just barely scraping by. Maybe we worked for companies where we were able to put some money away into RSPs or into a pension of some sort, and now we’re watching everything just plummet. And what I’ve noticed is a leader of a country can say one thing, and all of a sudden, everything just falls immediately. How do we find comfort or just not stress constantly about watching this up and down pattern with our money?


That’s a very good point. I think part of it is feeling that there’s this loss of control, right? And I think that’s where sometimes the simplest thing is to not take action and not react to the fear and the anxiety that’s bombarding us through the news, to not necessarily hit the panic button and sell everything in your investment portfolio. It can be really hard not to do that, but time and time again, as we’ve been through so many of these crises before, whether it’s the most recent one that we can remember in the great financial crisis in 2008 and 2009, or years before that in 2001 where there were the first terrorism attacks in the United States. And going back even further from that and just realizing that, over time, things do recover and people get back to their daily lives. And so resisting the urge to necessarily take too much of a reactive sell everything approach can actually be the best course of action to actually not take action. So I think it’s hard in the moment, but that’s where having a good companion, a good advisor, someone who can help you stay more stabilized from a psychological standpoint and also from a financial standpoint can really help get through these turbulent times.


If somebody doesn’t have someone who is advising them financially, is now an okay time to reach out to somebody? What if you’ve just never had anybody looking after this? You buy your RSPs with your bank and you don’t really pay attention to it and now all of a sudden you’re paying attention.


Yes, no, it was a great time to reach out to someone who could be a trusted strategic advisor to you in terms of financial guidance. Look for someone who maybe your friends or family have leaned on for leadership in the past, who you can trust is going to give you the best advice for your best interest and mind. And I can tell you, you know what? This is the time to really seek out that advice versus being at home isolated at the mercy of your own worst nightmare and trying to make decisions in that kind of chasm. So I think, yes, seeking out professional advice at this time is a really good idea.


Do you think there’s any opportunities right now?


Absolutely, in fact, that’s one of the things that we’re spending a lot of time talking to clients about, and we speak about this constantly where, in times of crisis, there are really two sides of the coin, both the danger and the opportunity. And the opportunity is that there’s some really great quality companies that are going to still survive through this economic downturn, still be able to have strong financial situation, we call them balance sheets. There’s companies out there who will be able to survive, and guess what? Their share prices are also trading at big sale prices right now. So there’s actually an opportunity in many cases, even if you already are invested, to do what we’re suggesting and that is switch from low price to low price, but upgrading quality, and position yourself in a good spot for the next chapter. Because I think ultimately, we will get through this, and if we’re in the thick of the storm now, there’s still a lot of uncertainty, but when we look back at this experience years from now, I think we’re gonna look back and see that these were some of the best opportunities had we had the wits about us to take advantage of them.


And I know your dad, your dad also was in the same business that you’re in right now.




So you’ve learned a lot from your father. And you have this really, I guess you could describe it as an uncommon approach to wealth. So why don’t you talk a little bit about that, this uncommon approach?


Sure. I would say that leaning on my dad’s experience, he’s had over five decades of experience investing in the markets, he would always tell me, “Maili, it’s not as bad as back in the ’70s “or bad as when we went through “these hyperinflationary times.” And having that perspective is really helpful, especially going through these tough times. I would say our uncommon approach is that we tend to embrace volatility, look at volatility or all this turbulence as an opportunity for our clients to be in a position where they can actually pick up some of the best quality investments over time, and that way, that they’re actually gonna be in a position of strength when we get through this. Because the markets are kind of like life, right? There’s ups and there’s downs, and when we start to expect these ups and downs as a normal way of life, the same way we approach it with the markets. So that’s where we can, in good times, position portfolios to be prepared for when the tough times come, and so have a little bit of extra defense in the portfolio. And then when the tough times come, like we’re experiencing right now, be ready to act on offense so that when things normalize, the portfolio is in a position of strength. So I call that the smart risk approach. It’s about recognizing that there’s risk in everything that we do, and there’s risks to the upside, there’s risk to the downside, but we try to manage the most likely outcome. And I think that’s where, when we look across the landscape right now, sure there’s still uncertainty, but like Mark Carney, the governor of the Bank of England, he said it’s a short, substantial shock to the system, but it’s temporary. So when we look past this storm, we’ll be back into a period where, guess what? Humans, we are resilient and we want to be able to position ourselves for when that time comes. And at the same time, in the meantime, what we’re telling folks is, hey, let’s stay in the highest quality companies that pay dividends. Dividends are a cashflow that gets paid out by these investments into portfolios, so that even when markets are down, clients are still collecting some cashflow. And guess what? That cashflow can help pay the bills for the next little while. So even if things are still topsy turvy, turn off the TV, don’t pay attention to that fluctuating price, and just collect those dividends while you wait. Get paid to wait for the markets to recover.


Yeah, it sounds good. And I know you advocate for smart risks. You wrote a book about it.


Yes, that’s right.


How can we take a smart risk right now? Can you give me an example of that?


Sure. So I’d say a smart risk right now is, it always depends on the person’s individual circumstance, but let’s say you’re a working professional and you’ve just faced the fact that you’re working from home now, or maybe you just got laid off and it’s a really challenging time and cashflow is scarce. But you have some savings in an RSP that you’ve been putting away for some time and you don’t plan to touch those RSPs till later. That RSP might be a really great place for you to talk to your financial advisor about perhaps using some of the cash that’s been in the portfolio to put to work in some high quality companies that pay dividends right now. Why? Well, yes, the market’s about 30% off right now. So quality companies that people can go back to after things resume to normal, some companies that are good investments these days have more cash on their balance sheet than even the US government. So they’re in a really good position to be resilient over the next few years. And guess what? Their company’s share prices are now 30% off where they were a month ago. So it can be a smart risk to start moving some of that cash on the sidelines into some of these companies, not necessarily all of it right now, but certainly some of it. And that’s where I liken it to the idea that, for some of us ladies who might enjoy having maybe that designer handbag we’ve been looking at over time and always wanted to get that designer handbag, and imagine that store had a 30% off sale off of everything in the store and it’s that one opportunity to get that handbag now that’s 30% off. And so these are the types of high quality companies that are on sale right now that are typically always expensive. And so it’s almost a generational opportunity to acquire assets that are going to help you get to your retirement goal sooner, faster, and then ultimately put you in a better position for the longterm.


Right. Okay, so let’s talk a little bit about comparing what’s happening right now in the financial industry with 2008 and 9/11. How does it compare? Does it compare?


It does in a lot of ways. 9/11 in 2001 was a time where terrorism all of a sudden came into the forefront when two planes struck the Twin Towers. And I happened to be in New York at the time when that happened and it was absolutely terrifying. And it was almost like life came to a standstill and you didn’t know up from down. And I think New York City, being the epicenter of where that took place, you saw fear and panic and people were worried about their health. Shortly after the Twin Towers were hit, then this anthrax breakout took place. And we often forget about this because it has been almost 20 years now, but at that time, yes, market sold off, nobody wanted to travel, airlines shares came way down. So there’s a lot of similarities, even the impact to the economy. I think this in a way feels like a little 9/11 happening in all of our communities in the sense the way that we are directly impacted and having to change our behaviors in such a short period of time. And so we’re seeing these same types of behavioral patterns happen in the market, where you see panic selling, you see people worried about the impact on the economy. And what happened in 2001 after the 9/11 attacks is that yes, the economy was negatively impacted, but after about a year and a half or two years, things started to really recover and went on to one of the biggest expansions that we’ve experienced. So it’s sometimes very helpful to lean on past experience.


And what about an 2008, yeah?


So 2008 was a very sharp downturn in the economy, but it actually took place over more time. And I think that’s what the difference is, is that today, we’re experiencing a similar drop in the magnitude of the markets, but it’s in a compressed period of time. So it’s been a few weeks, big drop, whereas with ’08, ’09, it was more drawn out. But I think the important thing to remember is that in ’08, ’09, the financial industry was in a very different place. There was a lot more leverage, a lot of great uncertainty whether the system itself would work, the financial system. Today, while there are pockets of leverage that can create problems and people may experience where there still may be pockets of problems in terms of bankruptcies and too much borrowing, overall, the system is not in the same way at risk and we can lean on the playbook that we’ve seen that was part of the solution back in ’08, ’09. And that’s where you’re seeing responses from the US government, the Canadian government, governments around the world and central banks around the world that are putting in place programs that they came out with in ’08, ’09, which took months to develop. Today, they’re able to now kind of throw that entire playbook into the forefront to try to stem or try to prevent some of the prolonged downturn we saw in ’08, ’09. And so that is a positive because we may see more central bank response, more fiscal and more monetary response to this crisis based on what we learned from ’08, ’09.


You talk a lot about financial purpose.




So how do we find our purpose during a crisis?


So our financial purpose is something that is a guiding post to how we prioritize what we want our money to do for us. And it’s one of the five guideposts that I talk about in my book, “Smart Risk: “Invest Like the Wealthy to Achieve a Work-Optional Life.” It’s a guidepost that is an enduring guidepost. So it’s important that even in times of crisis like this, that we don’t lose sight of that. So first and foremost, safety, right? I think in terms of establishing what our purpose financially is, we all may have different longterm goals, but in the short term, it’s about safety, and it’s about making sure we have enough of a financial safety net to get through the next, say, six months. So that’s where it’s good to take stock of, okay, what access do we have to cashflow for the next six months? Where are we exposed? What types of programs are in place to perhaps give us some flexibility in the near term i.e. mortgage deferrals, line of credit, talking to the bank about giving us a bit of a deferment on the line of credit payments. And so the good news is that these are available right now, and I know of clients who’ve been able to negotiate for six months sort of deferment of their mortgage payments just to get over the next little while.


Can I ask you something about that? Now my understanding, and I don’t know if this is true or not, but somebody mentioned this to me, that if we do defer our mortgages and say we defer it for three months or six months, that when that three months is up or that six months is up, then all of that money is due at the same time. Is that true? Do you know?


In some cases. So I think it’s still very case by case. We’re sort of in this state of flux where the programs are being announced, but it’s basically case by case in terms of how they’re being implemented. I have heard of that, yes. I’m also aware that when the payment is due, there’s interest owed on the entire amount that’s been deferred.


Oh boy. See that’s the fine print I guess, right? That’s the fine print, ’cause if that happened to our family, like if I didn’t read the fine print, and I’m assuming that other families are the same, and that happened in three months or six months, I would be in so much trouble. So I guess the lesson is, isn’t it, Maili, is that you really have to comb through all the fine print, and if you’re not able to do that yourself, which some of us aren’t, we find it really boring, sorry, no offense, and that’s when we can go to somebody who is an expert and get their opinion of what is gonna work best for our families, right?


Absolutely. And having a look through with either your trusted circle of people, right, a financial professional who can understand the fine print and help communicate it in a clear way is really important, because we don’t want you to say yes to something that sounds great, but in the end is not gonna put you in any better position.


Or put you in a worse position really.


Yes, that’s true, yeah.


Yeah. Okay, so Maili, let me ask you this. As we wrap things up, do you have three tips or three things for us to keep in mind when it comes to our finances or our investments as we’re all navigating through this crisis at the same time?


Right. Absolutely, I’d say first of all, recheck your plan, your financial plan. What did you have in place before this crisis? Where are you now exposed in the crisis, and what are your priorities for the longterm in terms of what’s gonna get you through this? And not all of us have a financial plan. That’s where now is a really important highlighting factor that, okay, it’s a good time to start to develop one. And that leads me to the second point is that working with a financial professional, a trusted strategic advisor, can help you develop that plan and also help you make good rational decisions in this very emotional time to get you through this. And I guess the third point is stay diversified, stay focused on your immediate and longterm goals, and remember that we’re gonna get through this and it’s a time of challenge right now, but there are opportunities. And if you can stay focused on your goals and not lose sight of the fact that we will get through this, then I think you’re gonna come out and be a stronger, more resilient investor in the end.


Great advice. Thank you so much, Maili, I really appreciate it. Always nice to hear your voice and really good advice. So thank you for joining us on TELUS Talks with Tamara Taggart.


And don’t forget, you can find Maili’s book, “Smart Risk,” at online bookstores, and you can also visit her website at


And be sure to join us every Tuesday and Thursday as we speak to all kinds of guests to help support Canadians during the COVID-19 pandemic. Be well.


English (Canada)

Wealth Professional Article featuring Maili Wong, CFA

Leading Portfolio Manager Maili Wong featured in Wealth Professional magazine

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Embracing volatility

While some portfolio managers may fear volatile times, Maili Wong sees them as an opportunity to buy companies on sale and enhance quality


This issue of Wealth Professional Magazine spotlights 8 of the country’s leading portfolio managers and their pandemic-proof strategies.

Click here to read this 2 page article on Maili Wong’s philosophy on embracing volatility and managing risk throughout market cycles and access the full digital magazine by Wealth Professional.

Wealth Professional Magazine article Embracing Volatility

Wealth Professional Magazine article Embracing Volatility

The challenges that COVID-19 has created for many in the wealth management industry is just another to add to the list. Yet not everyone views the challenges the same. For Maili Wong, senior portfolio manager, director and EVP at Wellington-Altus Private Wealth, she has seen the volatility as opportunity and is now upgrading positions in her portfolios because of it.

Wong entered the industry in 2000 and became a discretionary portfolio manager in 2012 as the practice she was part of, with her father, was not only transitioning to her but from a more transactional one to discretionary. “I had grown up with a portfolio management background through schooling in the UBC portfolio management foundation program. We were taught by institutional money managers how to manage a portfolio as institutional managers would and were held to those standards. So, I started my career learning how to manage on an institutional basis.”

In addition to her education, Wong also gain more exposure to different techniques while working for a global management firm in New York. After she obtained her CFA, she returned to Vancouver to begin working as a portfolio manager.

“I saw an opportunity to merge this global institutional portfolio management style with high-net-worth individuals and families. The discretionary management style is a win/win and can liberate both investors and advisors to do their best work. Now, it is the only way we would look to do what we do.”

Wong describes her approach as three-fold. She takes a scientific, disciplined approach; embraces volatility; and globally diversifies. “I call it smart diversification. The idea is to include as many different types of investment, that behave differently under different scenarios, so you are diversified across asset classes, geographies and different industries.”

With one of her pillars being embracing volatility, 2020 presented many opportunities for Wong. She notes that because it is rooted in her approach, it is something that her clients understand. While other portfolio managers’ clients may have been panicking, because of the communication and processes Wong and her team had in place, it allowed them to focus more on opportunities than managing client emotions. “When markets dropped, we looked to pick up quality companies on sale or switch to other low prices and upgrade the quality of the portfolio. We talk about opportunities like this out of the gate when we set the asset mix and we ask how much risk clients can tolerate.

“We talk about how, in any given year, the market can pull back 10%. When you set that mindset, it creates calmness because clients remember what we talked about. When it happens, they know we are taking steps on their behalf to upgrade the portfolio quality.”

Before the pandemic, Wong says she was already positioning the portfolios more defensively, focusing on companies with solid cash flows, good balance sheets and low paying dividends compared to overall profits. When the markets sold in March, Wong sought to buy into quality companies on sale or those with strong growth prospects. “We added to positions benefiting from the work-from-home, digital way of living lives. We picked up some technology names that had sold off, but that we felt would benefit from people working from home. Even in the retail space we looked at some companies that shifted to be more online. Ultimately, as discretionary managers, our clients hire us to make those day-to-day informed decisions to set up them up for long term success.”

Part of setting up that long-term success is taking advantage of all the tools available. For Wong, that includes passive investment as well. “As long as they have a good process to give you exposure to areas of the market you want to have all the time. You must be mindful, when using passive investment tools, that the construction is owning what you want to own, market cap or equal weighted. Passive tools can be very effective, if built the right way.”

Wong saw 2020 as more of an opportunity than a challenge but it comes back to her underlying philosophy. She says that establishing and sticking to that philosophy is one of the toughest things portfolio mangers need to deal with.

“I would say the biggest challenge is making sure you have an investment philosophy and stick with. When we get times of challenge, like we have seen, portfolio managers just buying the stocks they know or who don’t have a strong disciplined process, can be affected by the emotional aspect of the volatility. I always say it is about the process, not just the outcome. You want to make sure that you have the discipline to stick with and see through your process.”

Having that process is one thing Wong says will create a successful portfolio manager. Yet there are a few other qualities she outlines. “A good portfolio manager is humble, hungry and smart. Humble being that they can recognize they are not smarter than the market. You will make investments that don’t turn out, so being humble enough to cut losses and move on, take corrective action, and not let your ego get involved. Hungry, meaning you are always looking to improve and hone your skills. And smart, by investing in your own competence.”


Article written by Darren Matte, Wealth Professional Magazine November 2020 edition

Talkin’ About My Generation: How Family Affects Your Finances

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Are you sandwiched between two generations: supporting your children and providing care for your parents? According to Statistics Canada, one in three Canadians between the ages of 45 and 64 has children under 25 still at home, and about one-quarter of those also care for aging parents.

This number is only likely to grow as Canadians continue to live longer and postpone child rearing, while at the same time, often struggling to save for their own retirements. Fellow “Sandwich Generationers” face many stressful issues, among them:

  • How do I know if my parents need a retirement, nursing home, or live-in care?
  • What are the housing options available in my parents’ area?
  • How do I have conversations with my parents about what they want vs. what they need?
  • Can my family afford the type of care I’m seeking for my parents?
  • What expenses will the government cover and how can I qualify?
  • How can I better prepare myself for my own potential care down the road?

Having to make these kinds of decisions can be overwhelming. This is where it can be helpful to reach out to a qualified investment advisor or Certified Financial Planner (CFP). As an advisor myself, here are some things a good advisor should be able to help you with.

Building a circle of trust.

Who should handle medical, legal and financial issues if you’re unable to do so. Ideally you want to identify people who only have your best interests in mind yet will also give you their objective advice or voice their concerns if they don’t agree with you.

Create financial safety nets.

These could include living benefits such as critical care insurance, which pays you a cash lump sum, tax-free, if you suffer from a covered illness. Long-term care insurance can provide a much-needed boost to cash flow during a long period of illness or disability and could relieve anxiety about potentially outliving your resources.

Prepare a critical document repository.

Keep important documents that outline your resources and preferences together in a binder, along with the names of key contact people and ways to reach them. This binder should be stored someplace convenient and be readily available should your “circle of trust” need to access information quickly.

Although your financial advisor can’t make family decisions for you, she can act as an objective sounding board and help you to navigate the financial side of being in the middle of the sandwich!

By Maili Wong, CFA, CFP, FEA and Author of “Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life”

Sailing into your “Work Optional” Life

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“Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised.”
– Jim Parker, Australian Portfolio Manager


Financial markets are volatile: geopolitical trade wars, interest rate changes, and global financial events. When seas get rough, should investors jump ship?

Before doing anything, recognize that market volatility is a normal part of the journey along the path towards building your retirement savings. How can investors maintain discipline through market ups-and-downs, political and economic uncertainty, or whatever crise du jour appears to threaten our retirement goals?

Here’s one way we can do it, based on my experience of learning how to sail in the Vancouver’s coastal waters. It was a perfectly sunny day when my instructor took three students, including me, across the Georgia Strait. Everything was fine until we got way out on the water and a few clouds started to roll in. Suddenly, the water became very choppy and our sailboat tossed violently from side-to-side. Needless to say, the students were very uneasy.

As a novice sailor, I was scared and disoriented as we bobbed on the growing waves. Fortunately, our instructor remained calm – he had a plan for these kinds of situations. I’m writing this today because he took over navigation and led us to calmer waters.


Investing is a lot like sailing We all know that the voyage may not always go as planned, and there may be rough waters. If you’re prepared, the odds of reaching your destination safely go way up. In my book, Smart Risk, one of the “5 Ps” stands for Plan. Before embarking on an investment, you need to choose your goal and be confident that it’s achievable. The actual portfolio is the vessel to get you there. Always ask yourself, or your advisor, “How much “bad weather” can my plan withstand along the way?”


A successful sailing voyage needs a good navigator
This is where a trusted advisor comes in. A skilled advisor—someone who is ever vigilant and makes the necessary adjustments—is key. When your personal circumstances or the investment horizon changes, you may need to replot your course.


The markets are as unpredictable as my little sailing adventure in Georgia Straight.  A sudden squall can whip up waves of volatility, tides can shift, and strong currents can threaten to blow you off course. An experienced advisor can work with these and adjust and adapt.


Once the storm passes, you can pick up speed again. Think of a well-diversified portfolio as a sturdy vessel that acts as a ballast against tempestuous markets.


Avoid Distractions
Distractions take both sailors and investors off course. It takes discipline to side-step hot investment trends that could veer you away from your plan. The business media with their scary news headlines are experts at creating distracting noise, tempting you to act on fear or news that’s probably already be priced into markets.


The Bottom Line
A degree of uncertainty is inherent in the investment journey—as in everything else. Nevertheless, you can prepare for a range of possibilities while always keeping your final destination in mind. Trust yourself and your navigator to chart the course to your Work-Optional Life.


By Maili Wong, CFA, CFP, FEA and Author of “Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life”

What Should Your Advisor Do For You?

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Do you think an investment advisor’s role is to predict the future? Well, think again. Investment advisors (IAs) don’t have a crystal ball. The advisor’s job has changed a lot. Years ago, she might have been expected to pick stocks or gain her clients access to IPOs (Initial Public Offerings). Investments were often made based on reactions to news events, “hot” stock tips, or even anecdotes.

Yet without research and scientific evidence backing each decision, when the markets got volatile, it was difficult to stay invested: the advisor or investor was more likely to sell on a whim. Reactive trading isn’t such a good idea because while, a price dip for a stock or fund could be part of a downward trend, it could also be a temporary blip, causing the investor who exited to miss out on significant long-term gains, in which case the investor would be better off weathering the downturn.

The introduction of better, more disciplined approaches and new technologies over the past decade have enabled advisors (and clients) to actively track their investments. Transparency is a buzzword in the industry today, as all stakeholders can see a much richer and more complete picture of how their investments are performing, as well as a more holistic view of how these align with their goals.

Greater transparency has led to a better advisor-client relationship. You and your advisor should be able to communicate openly not just about investment ideas, but about your hopes and goals for your lifestyle, family, retirement, long-term care options and other major choices you may face. Today, the advisor’s role is multi-faceted: including understanding their client’s needs, risk appetite and circumstances, and then creating an effective investment strategy around them.

Every good advisor should wear these 7 hats:

  • Expert: Develops client-specific expertise and risk-aware strategies to help clients meet their goals.
  • Objective Advisor: Serves investors’ needs without becoming a salesperson.
  • Listener: Gives clients time to discuss their goals, dreams, and concerns, and provides practical solutions to accommodate them.
  • Teacher: Explains investment fundamentals.
  • Architect: Builds a long-term wealth management strategy that matches the client’s risk appetite and life goals.
  • Coach: Reinforces the investment strategy and its benefits during periods of high emotion.
  • Guardian: Takes a proactive approach to highlight issues that may affect the clients’ investments.

How do you find the right advisor for you? Ask questions!

As an investment advisor myself, potential clients ask me everything from my personal history to past performance to client deliverables. Here are the questions that every investor should ask of a potential advisor:

  • How would you describe your investment approach?
  • How do you develop investment strategies for each client?
  • Who is your ideal client and am I a good fit for your practice?
  • How have your clients’ portfolios fared in down markets?
  • What type of risk management strategies do you use to deal with downturns or adverse market conditions?
  • What is your client retention rate?
  • How often do you meet with clients to discuss future strategies and past performance?
  • How and what do you charge for your services?

Once you find the right investment advisor – one who feel has your best interests in mind, has an honest, intelligent approach, and has the expertise to stay on top of the evolving financial landscape, hold on to her dearly. Avoid the trap of judging your advisor’s value based on short-term investment performance and, instead, focus on what you and your advisor can control, namely:

  • Creating an investment plan to fit your needs and risk tolerance.
  • Structuring a portfolio tilted towards capturing positive expected returns.
  • Diversifying investments globally.
  • Managing expenses, turnover, and taxes.
  • Staying disciplined through market dips and swings.

A good financial advisor will help you focus on actions that will add value in the long run. Investing your time to find the right advisor for you will certainly pay dividends.

By Maili Wong, CFA, CFP, FEA and Author of “Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life”

Opinion: Looking at your kids’ inheritance — Rethinking wealth transfer

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Do your children expect to inherit from the ‘Bank of Mom and Dad’? Recent surveys point to mismatched expectations between generations on the issue of inheritance and just how much they can expect. A recent Vancouver survey made waves when it revealed that 39 per cent of British Columbian millennials expect to inherit $300,000 or more, while only 12 per cent of parents anticipate being able to match that amount.While about 1.5 million Canadians are apparently relying on inheritance as the primary source of funding for their own retirement, their reality may be markedly different when the time comes. Decima Research’s 2006 Canadian Inheritance Study indicated Canadians then expected to receive $150,600 compared with the actual average inheritance of $56,000.

[PNG Merlin Archive]

So how do you feel when you hear about the much hyped great wealth transfer that is expected to take place over the next 20 years? An estimated $1 trillion is said to be changing hands in Canada as boomers pass down their wealth to the next generation. If you are like many people, the idea is fraught with emotion:

How can I leave a legacy to my children and grandchildren when I don’t even know how long I will live? How much will I need to age comfortably in a volatile economic market?

I meet with people approaching retirement age almost every day and nearly all of them are wondering these same things.

This week was Make A Will Week in B.C. and it brings up the question, “What do I do?” I believe people need to think about investments and financial decision-making in a new way, to take what I call “smart risks.” Emotions — our own limiting perceptions, beliefs and expectations — are often what hold us back from making significant financial progress. To overcome these, I recommend a framework that follows five guideposts, or the ‘5 P’s’, to help you rationally and objectively assess probabilities of outcomes and compare risk versus reward in a prudent and disciplined way. This allows you to consistently stack the odds in your favour and keeps you on the path to long-term financial success.

  • Purpose: whether you are looking to secure your own financial future or leave a legacy to your children, you need to begin by defining your purpose;
  • People: surround yourself with the right people to help you make smart decisions. Build a circle of trust with people who are experienced, resourceful and who have your best interests at heart.
  • Plan: a good plan is one that is designed to be flexible as the marketplace takes unexpected twists and turns and sets appropriate risks and return targets.
  • Perspective: being open-minded to changing your views will allow you to take actions that break through any emotional baggage holding you back.
  • Positive Action: this is often the hardest step; it is also where the momentum and resilience you’ve built up can propel you forward to achieving your goals.

You’ve worked hard all your life; it’s time to make your money work hard for you — and for those you love and plan to pass it on to. Starting with the 5P’s can help you clarify steps to achieve your purpose, and then prepare for the conversations with your kids to help manage expectations effectively.

Maili Wong is executive vice-president and senior portfolio manager with Wellington-Altus Private Wealth.  Her published book Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life became a #1 bestseller on Amazon.

The ‘work-optional’ life and the purpose for building wealth

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Many of us hope to reach the point where work is an optional activity. It’s a way of life where you no longer need to work to sustain your lifestyle.

Instead, you have built a source of sustainable cash flow from your portfolio of stocks and bonds, real estate or other investments.

To achieve this “work-optional” life, start with understanding which stage of life you’re in, then focus on appropriate priorities when building wealth over the medium and long term.

Here are four key stages of pre- and post-retirement where you may find yourself searching for solutions.

Stage 1: Wanting it all

This is a stage often experienced 15 to 30 years before retirement. It’s characterized by multiple goals, including the desire to accelerate your career and income, buy a bigger home, plan for children’s education or support aging parents.

At this stage, it’s worthwhile to consider developing a financial plan that projects the impact of current saving and spending on future retirement goals, and set up automatic monthly contributions to your investment portfolio.

Build a financial safety net like critical illness insurance, to help protect retirement savings from being depleted in the event of an unplanned health setback.

Stage 2: Time is running out

This stage typically arrives three to 10 years before retirement. Feeling like time is running out, at this stage people often ask, “How much money will I need to have before I can retire comfortably?” Beware of underestimating how much is required to fund a sustainable retirement that involves an active lifestyle.

Consider increasing your savings to your investment portfolio and review portfolio returns with your adviser.

Determine if existing insurance policies, wills and estate plans are providing the right protection for you and your family.

Stage 3: Work-optional life

This stage begins at retirement when going to work is a choice, not a necessity. At this stage you may be active and travel a lot. In order to sustain the work-optional life, you may require professional advice to balance cash flow needs.

Your cash flow may come from multiple sources, unlike a salary, which tends to be fixed.

Balance spending for today and investing for tomorrow and cut down on unnecessary expenses.

Stage 4: Giving back and a focus on legacy

This stage tends to be filled with greater reflection and a deeper awareness of your life’s purpose, and it typically involves less physically active travel.

Consider consolidating your assets to simplify the process of succession and estate planning.

Update your financial, investment and estate plans, allowing you to be prepared for future challenges like memory loss and cognitive decline.

There is no fixed age bracket or prescription for each of these retirement planning stages. For some, the stages may come earlier; for others, later. But the need for financial planning is important for all, especially for those who want to achieve a work-optional life.

By Maili Wong, CFA, CFP, FEA and Author of “Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life”

The Gold Standard Interview: Maili Wong

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Rita Silvan, editor-in-chief of Golden Girl Finance talks to Maili Wong, author of the bestselling book Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life. In 2018, Maili was named one of Canada’s Most Powerful Women by WXN.  Maili is a senior portfolio manager with Wellington-Altus Private Wealth based in Vancouver.

GGF: In your book, you give examples of people, including your Mom, taking “smart risks”. What is the difference between a ‘smart risk’ and a ‘dumb risk’?

MW: A ‘smart risk’ is one where the likelihood and magnitude of a good outcome outweighs the likelihood and magnitude of a bad one. For example, taking a smart risk when investing can involve looking for an “asymmetric payoff” where the likelihood of a large profit outweighs the likelihood of a large loss. A ‘dumb risk’ is when there’s a low chance of success and high potential of a significant loss. For example, enabling a friend’s gambling addiction. In investing, taking smart risks means acting in a consistent and disciplined way so risks are more in your favour and there’s a high probability of good results over the long term. I always say, “hold a space” for long-term results.

GGF: What’s the biggest risk you took?

MW: The two biggest risks I ever took were both personal. Staying in New York after the September 11 attacks was a smart risk. Of course, it was distressing to stay but I felt it wasn’t the right time to leave either, as it was my second day on the job. After period of market volatility had just started and there were many layoffs during this period and that opened up possibilities for earnest people like me to step into more responsibility and leadership.

My second smart risk was leaving New York five years later to move back to Vancouver. I had reached some career milestones and had matured and was ready to lead a more purposeful life.

GGF: You give the example of the Nortel meltdown and the risks of herd mentality. How can investors learn to spot herd mentality?

MW: The first clue is when friends or colleagues boast about the investments they’re making and say these are “a sure thing”. Get underneath why you’re attracted to an investment. Is it a case of FOMO (fear of missing out)?

GGF: The Chinese phrase wei chi translates as danger + opportunity. Yet, most of us are risk averse. How can investors deal with volatility?

MW: I think of it as learning to ‘dance’ with volatility. We should expect volatility because it’s a normal part of investing. If you build in the expectation, then you’re not as shocked when it happens. I use my five-point “Smart Risk Road Map” as a guide. It helps take the biases out of the process as it bakes volatility into the plan.

GGF: Most people would say that a ‘work-optional’ life is very desirable. However, there are factors today that make generating sufficient passive income more challenging. How are you advising clients to prepare for retirement?

MW:There always has been and will be uncertainty when planning for retirement. With our clients, we plan for longer and more expensive life spans. I find that oftentimes, people haven’t thought much about how much they will actually need to fund retirement. We may start the process with clients as young as 30 or 40. We then see a 180-degree turn in their behaviour—from carrying huge lines of credit to being more mindful of their spending, but not any less happy. My advice is to plan an independent retirement portfolio and don’t rely on your employer to do it.

GGF: You recommend that investors not focus on the rate of return but on the risk of outliving their capital. How should investors adjust to a potential future of lower-than-historical returns?

MW: You’ve got to assess your lifestyle costs against the long-term returns of different asset classes. Asset class allocation is very important because, historically, equities have outperformed fixed-income over the long term. Of course, there’s always a range of outcomes and we run best- and worst-case scenarios.

GGF: There’s a lot of pessimism in the markets today and talk of slowing global growth. Where do you think we are in the market cycle and what is the best investment approach at this time?

MW: I think we’re late cycle in terms of economic expansion. In fourth quarter of 2018, investors saw a 20% correction from peak to trough in the U.S. equity market (S&P 500 Index). However, just because we’re late cycle doesn’t mean you can’t make money. Statistics have shown that, in Canada, after a market decline of 10% or more, the average annualized return one year later was 15.2%, and over a three-year period it was 11.8%. So, the long-term trend is growth and the trade-off for that is short-term volatility.¹

¹Based on MSCI Canada Index (gross dividends) returns from 1/1970 to 12/2017

GGF: What financial advice would you give to a young woman?

MW: That it’s never too early to start building financial independence. I’m like a warrior to free women from financial fear. Women can feel very vulnerable and they need to gain confidence on how to make good financial decisions.

GGF: What money lessons did you learn from your parents?

MW: To value money and the freedom it can bring. If you can earn it, it gives you the ability to create more choices. Money is an enabler. My kids have three bank accounts: one is money to spend now, another is money to save and spend later, and the last one is money to give to others who may need it more.

GGF: What’s the best/worst piece of investment advice that you’ve received?

MW: The best advice is to always seek clarity, to keep asking questions and to not be afraid of looking stupid. Get to the real truth of what the issue is. Take your time, use your emotional intelligence and embrace your feminine energy.

The worst advice is sometimes from friends with sales pitches, “You gotta buy this…!”

GGF: What was your best investment?

MW: My best decision was choosing whom to marry because it’s a life investment. I met Keith in university and then we had a long-distance relationship while I was working in New York. I am thankful for our relationship, to have someone who is my partner, emotionally and psychologically. I have a high-stress job that’s emotionally draining sometimes, so it’s great to have a partner who supports my growth.

GGF: Maili, thank you for sharing your experiences with us.

MW: My pleasure!