Why Your Pension Will NOT Protect Your Investments when the Market Crashes | 04

By April 25, 2017Uncategorized

Reason #4 – Not the Right Investment Tools in the Tool Belt


Just as a home builder should never build a house with a set of hand tools, an investor must be conscious about using the right investments within their portfolios as well.

Now that’s not to say that the home builder couldn’t build a home with hand tools. It would be crazy to consider, for efficiency and profitability sake, but it could be done.


And that is the key…

Just because you could doesn’t necessarily mean that you should.

…So consider your investment options within your currently pension or RSP from your investment provider, representative, or bank.


Do they actually have the right tools to protect your investment portfolio from major market shocks? And if so, do they actually use them?  

…You likely may not even know the answer to this question.


***Here is a set of quick and easy questions to help you assess if you are in good hands or not with respect to your investment portfolios***


1. If the stock market were to suddenly drop over -20% what would happen to your portfolio?

Surprisingly, the most common answer we hear is that they the investor will go down with the ship. This does not have to happen. There are many preventative options available to you as investors that you need to be aware of. However, these are not your typical “hand tools”.


2. What strategy does my “advisor” or portfolio manager have when the market does drop significantly?

“Buy and hold” is a ridiculous answer by the way. One that covers up the notion that your investment professional neither anticipated nor knows how to navigate your investment portfolio during turbulent times.

Could you imagine if every coach simply said to his team after a losing season….”Stay the course…No adjustments needed fellas.”

Crazy right!?


3. Does your advisor claim to be able to predict where markets are going in the future?

If you hear this or anything that resembles this…RUN!!!

And yes, almost all professional advisors do.

It continues to baffle me just how many financial advisors state this. Even though it has been so well documented that nearly all professional managers simply do not beat the performance of the stock market indexes over a long period of time.

– This is so rare, that we always ask our clients to even try to find an active manager that has beat the market over a 10 year period or longer.


At least we haven’t personally seen one yet.

And this is what most clients find so unfortunate. Not because of the facts…but because of what they were led to believe.

Many feel that is the very thing that they pay their pension, mutual fund, or portfolio manager for. This so called “Out-performance”…

In other words, looking into their crystal ball.


Drum roll….So, after you ask these questions to your advisor, bank, or portfolio manager…
Did you get a confident answer that you can feel good about???

Or worse yet, Did you even get an answer???

You need to educate yourself on what the real truths are with respect to investing. No one should care about your money more than you. And no one ever will.

You need to fully understand what you should really be paying, and exactly what you should be paying your advisors for.

But most importantly of all, make sure your advisors themselves can help protect you when you need it the most. When the stock markets are going through turmoil.

Because it will happen again…It always does.

Question is, will you and your money be best prepared when it happens?


Todd McLay


Precedence Capital / Gravitas Securities Inc.
The views, opinions and positions expressed by the author and those providing comments on these blogs are theirs alone, and do not necessarily reflect the views, opinions or positions of Gravitas Securities Inc.

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