Summer 2018 - Bluestone Financial
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Summer 2018

July 11, 2018 | Memo


portfolio    behaviour    wealth

At a recent conference we heard financial researcher and author, PREET BANERJEE, speak about how to become financially empowered.  It was a profound presentation, especially his argument that it’s all about managing three things: portfolio, behaviour and wealth.  Also recently, we have been reading JONATHAN RAUCH’s new book on wisdom.  Put these two brilliant thinkers together and a wonderful story about wealth and well-being emerges:

one: PORTFOLIO MANAGEMENT   The main reason we prefer investing through Mutual Funds is professional portfolio management.  Professional money managers have the education, experience, support staff, and a host of other resources necessary to invest successfully.  We are now finding compelling reasons to take professional portfolio management to the next level.  Rather than selecting individual Mutual Funds ourselves, the Mutual Fund companies are developing ways to do this for us.  This enhanced portfolio management increases the benefits of portfolio diversification and portfolio rebalancing, and it sharpens the focus on minimizing risk while pursuing investment opportunities.  There’s an added bonus; these “Managed Portfolios” are more efficient, giving rise to reduced fees.  This is a positive evolution in portfolio management that we’re excited about, you can expect to hear us talking about this more.

two: BEHAVIOUR MANAGEMENT   Financial advice is abundant.  Most people are aware of the basic strategies for financial success.  So why isn’t everyone rich?  As it turns out (no surprise) our own behaviour plays a critical role.  Jonathan Roach writes that wisdom is the key driver in managing behaviour.  His list of the six traits of wisdom is worth pondering:

  1. Compassion and prosocial attitudes that reflect concern for the common good.
  2. Pragmatic knowledge of life.
  3. The use of one’s pragmatic knowledge to resolve personal and social problems.
  4. An ability to cope with ambiguity and uncertainty and to see multiple points of view.
  5. Emotional stability and mastery of one’s feelings.
  6. A capacity for reflection and for dispassionate self-understanding.

That’s quite a list.  It’s a lot to take in.  And it’s a lot to put into practice.  However, our human makeup is disposed to comprehending and employing this sort of wise behavior management.

three: WEALTH MANAGEMENT   Wealth management is just wisdom applied.  Jonathan Rauch writes, “Behaviour or action is an essential part of wisdom.  An individual may think wisely, but unless she acts wisely, she does not truly embody wisdom.”  Here’s some wealth management wisdom for young people just getting started: live below your means and invest 10% of your income.  The results are staggering: $1000 invested monthly for 30 years, earning 8% annually, grows to 1.5 million dollars.  At Bluestone Financial we get excited about these kinds of possibilities.  In fact, we want to take on more young clients and journey with them as they grow and manage their wealth.  Please refer young people to us.

Using wisdom to manage our portfolio, manage our behavior, and manage our wealth is a life-long journey.  It’s a lot to think about, and it opens the mind to all kinds of wonderful possibilities.  Having conversations about this is what we love to do.  Please call upon us.  Securing wealth and enjoying well-being along with our clients is our passion.

This memo was prepared solely by Terry and Patty Rempel who are registered representatives of FundEX (a member of the Mutual Funds Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this memo are those of Terry and Patty Rempel. Bluestone Financial is a personal trade name of Terry and Patty Rempel.

Wealth and Well-being. Be rich.

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