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Todd McLay

Why Your Pension will NOT Protect your Investments when the Market Crashes | 05

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Reason #5 — No Clear Investment Strategy

This isn’t just present within pensions but with almost all actively managed funds.  The fundamental piece that is missing from most investment processes is a clear plan of attack.

….And NOT just when the markets are good.

It is far more important to know exactly what the strategy is when markets are not performing well and then how to best exploit those opportunities.

Once again….”Buy and Hold” is for dummies the book would say.

You have to take action during these periods of severe market movements. But what actions should you exactly take??? Let’s discuss your options in detail.

A common analogy we use is with seasonal sporting equipment….

For example, when shopping for downhill skis…would you find better deals in November or April?

Obvious right…

How about golf clubs?



Markets are the only thing that we consistently see that people are worried and scared to pay sale price for!!!  If you were in the market for a new car and suddenly it became 20–30% less you would be ecstatic!!! Investments, not so much.  But there is a very important fundamental reason for this. Expectations!!!  The life blood of almost all of our emotional states.  You see, if you fully acknowledge, without any hesitation, that markets are going to drop by 20% at least once to twice per decade, then you would be able to plan accordingly. Both tactically, and most importantly EMOTIONALLY!!!

But plan how? Well, again if you know that the stock markets are going to drop by this magnitude in the future, then how could you exploit this opportunity?

By having cash available to invest into the markets when they are “ON SALE”.

But the question we ask almost every investor we meet is, “How can you take advantage of cheap market prices when you’re invested in the market?”

Answer…You can’t! You are going along for the ride…

So what if you deliberately set aside a measureable proportion of your assets that would actually make money when stock markets collapse?   Wouldn’t that be even better?

Seems simple right?

And yet almost every portfolio manager and financial advisor overlooks this simple strategy.

They are often too busy speculating on which stocks to buy over another in a desperate attempt to “out smart” the other “smart” people within the industry.

And even worse, stock picking does not protect you during recessions as almost all stocks lose value during those periods.


  1. First, You must own “NON-CORRELATED” assets. These are assets that increase in value as stock markets sell off. And yes, surprisingly to most investors, these do in fact exist.
  2. Secondly, you cannot just standby and watch.  When the markets provide an exceptional buying opportunity you must take advantage of it. This does NOT mean speculate on when or what stocks to buy, but rather to enter the market at a prescribed time and amount clearly outlined far, far in advance.

Long before emotions began to come in to the equation. Trying to be rational during irrational market sell offs is nearly impossible.  However, having a clearly defined strategy on how to take full advantage of such opportunities long in advance, greater enhances your chance of executing when needed.  And yet, if you ask nearly all fund managers, advisors, and portfolio managers, they cannot even describe how they will react to such opportunities.

Buying low and selling high is something that even elementary school kids can understand….And yet financial professionals continue to do the very opposite for their clients decade after decade after decade.

Let’s begin to change this for good.

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

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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.

Why Your Pension will NOT Protect your Investments when the Market Crashes | 03

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Reason #3 – Investments are Too Closely Correlated to the Stock Market

Surprise newsflash…MARKETS HAVE RISK.

Okay, not surprising perhaps.

So why do so many investment managers fail to plan for significant market volatility or stock market crashes?

It really just boils down to what their motivation is. You see money managers, such as those that manage money within mutual funds and pensions are all competing for your business.

But not the way you might think. They’re competition is more with other investment managers than it is in providing the best investment returns for you as investors.

Seems crazy right?

Let me explain how this happens.

Let’s take a typical bond fund manager. He has just been hired to help manage the fixed income portion of a mutual fund or pension plan.

So what really is his objective?

It should be to collaboratively invest with the other asset managers and provide the best risk adjusted return possible for the investor….OVERALL.

But this seldom is the case.

Instead, this manager competes with other bond managers all while trying not to risk losing the opportunity of managing money for the pension plan. The easiest way to risk this is to sway too far away from his or her peer’s performance. And therefore plays it very conservative within his approach.

This is the absolute worst thing that can happen because it leaves the investor significantly to severe market risk.

Bonds will ALWAYS underperform equities over the long term. This is just economic fact. If it wasn’t, then there would be no need for anyone to invest in stocks and we would all just own government and corporate debt. But because there is more risk in owning stocks over bonds, investors are rewarded over the long term by choosing equities.

So the key is to own as much equity exposure as possible with the least amount of risk.

Therefore, the only reason a portfolio manager should have an allocation of bonds is simply to protect the portfolio during periods where stocks do not perform well.

So why would a bond manager worry about underperforming other bond managers when his sole job within the pension or mutual fund is to protect the portfolio from equity risk?

Because that is how they are evaluated.

It’s a vicious cycle.

The end result for the individual investor is an investment portfolio that is too closely correlated to stock markets. Often higher than 90% correlated!!!

This means that if the stock market drops by -20% that your investment portfolio will drop by -18%.

For example: A bond manager might speculate on the direction of interest rates. The longer the duration of the bond investment the more sensitive it is to increasing interest rates. Put another way, a 10 year bond is far more sensitive when compared to a 1 year bond.

But this should need not be a worry for the bond manager. Because the more sensitive the bond to interest rates the more NON-correlated it is to stock markets. And as a result the more protection an investor would receive in the event that equity markets sell off significantly.

And subsequently the less that the investor needs invested bonds for the same protection.

So how would this be avoided….By having both equity managers and bond managers simply stay in their lanes and do their part for the greater good….That being the overall portfolio performance for the investor…


By choosing bonds that are more sensitive to interest rates and therefore the most NON-correlated to stock markets the portfolio should be best protected. Put another way….Bonds that lose a lot of money when equity market flourish and make a lot when stocks flounder.

Without any acknowledgement to what other bond managers are considering.

But this takes discipline and patience.

Something competing pension managers often lack.

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.


Why Your Pension will NOT Protect your Investments when the Market Crashes | 02

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Reason #2 – 96% of Mutual Funds Don’t Match the Performance of the Market over 10 years 

Every time we share this fact with investors they have the same exact reaction. It starts out being truly surprising. But their surprise soon leads to a very uncomfortable and perplexing feeling.

How you might ask?

That a great question….

Actually it is a $30 Billon dollar one!

The reason is more about why than how

You see when most people seek professional advice they are usually looking for someone to “take the reins” and choose the best investments on their behalf. This usually is an excellent decision. However, one would think that they will successfully be guided into the best solutions possible for their investments….Right?

But this seldom is the case.

And that is where the why comes in to play.

You see the investment industry is a big business. And I mean BIG!!!! Just how big?

In Canada alone there are over $1.38 Trillion invested in mutual funds as of February 2017.

With the average mutual fund charging its clients 2.34% for the opportunity to invest with them. So, in order to understand just how influential this might be we should share with you the math.

$1,380,000,000,000 x 2.34% = $32,292,000,000

That’s right….over $32 Billion in fees!!!

And yet over 96% of all mutual funds will not match the performance of the market. The very thing that you would think you have trusted your mutual fund manager to do.

So how does this exactly happen…?

The reason that mutual funds cannot match the performance of the market over time is based on two simple reasons:

  1. Fees
  2. Speculation


The investment industry is one of very few where you actually get more for what you Don’t pay rather than what you do pay for….Go figure.

You see every percentage point that you pay in unnecessary fees reduces your overall return by that exact amount.

But you might say, okay 1% does not seem like that big of a deal…

What investors need to realize is that every 1% that you save in fees increases their investment portfolio by more than 30% over a 30 year period.

With the exact same return!!!

For example: If you have invested for the last 30 years and have $500,000 within your investment account, if you would have saved only 1% on your management fees you would have an additional $150,000 for a total of $650,000.

Imagine that…simply by saving 1% you add over $150,000 to your retirement nest egg.

By doing absolutely nothing else. Zero!

I sure don’t have to remind you just how difficult it is to save $150,000 either…


It always surprises me just how much financial advisors and mutual fund managers overstate their abilities. Every single actively mutual fund advisor lays claim to the exact same strategy… That they are able to “out smart” all of the other smart people in the industry. At the exact same time that they are trying to “out smart” them.

The 3 things that need to occur correctly in order to have speculation work in your favor as an investor.

1. What investment you are going to buy

2. What investment you are going to sell

3. When you are going to both buy and sell each investment.

Just the mere probability of getting all three decisions correct over long periods

of time is not even a reasonable expectation.

And yet the entire investment industry is built upon that very fact.

Now, one manager may be able to outpace markets for a short period of time, but the longer you invest, the higher the probabilities of failure with these speculative methods.

In comparison, by having your retirement savings invested into the market itself, say by either using index funds or exchange traded funds (ETF’s) you are assured to receive the performance of the overall market.

Yet very few pensions have access to these types of investments. Mainly because they simply are not as profitable for the pension provider. After all, they want to earn their fair share of that $30,000,000,000 in fees. So these pensions will continue to force you to choose mutual funds and money managers that speculate in return for a handsome fee.

So by transferring your Pension and RSP assets out hands of active money managers, you are 96% certain to achieve superior performance.

…Many Canadians would consider losing 30% of their retirement portfolio a very tragic event.

…And yet buy continuing to invest into these actively managed investments you are virtually assuring this very outcome.


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.

Figures sourced from the IFIC

Why Your Pension will NOT Protect your Investments when the Market Crashes | 01

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Reason #1 – FULL of Proprietary Investments

Chances are if you are participating in a company pension plan then you are subject to a suite of investments that are either proprietary or are “selected” by the provider for you on your behalf.

What proprietary means is that the investment options available are decided upon by the pension provider and marketed to you within the plan. Although this is to be expected, the effect of such influence certainly needs to be clearly understood.

For example….A Ford dealership will never recommend a Chrysler product when shopping for a new vehicle regardless of your needs as a customer.

But obviously this makes perfect sense.

However, it doesn’t necessarily make it the best experience for the consumer.

Investment management is not any different…

The problem, however, is that by possibly not having the correct investment options within your pension’s portfolio actually may not be able to adequately protect your investment portfolio. If markets sell off suddenly, which they always do, your assets are extremely vulnerable to risk.

Furthermore, too often decisions on why an investment may be included or not, is based on the profitability of that particular investment for the provider themselves….Not the individual investors inside the pension plan.

Efficiency is not the objective of the pension manager. Profit is.

Remember that, after all, these are big businesses and these companies have shareholders of their own to satisfy.

This is not wrong….it is just a fact of life.

It unfortunately does not align the interests of the pension provider and that of the investor.

Now, because you have no choice in what you have to invest in, simply do your homework and/or consult with an independent advisor….I repeat, an INDEPENDENT Advisor!!! — By selecting an independent advisor you are ensuring that there are no “proprietary” pressures influencing the decisions and advice from that advisor and that they are suggesting the best options available to you.

With literally thousands of investments available to investors under independent investment platforms, it is clear to see that some choices have to be made. — But it is the nature of how these choices are made that investors should be worried about.

Just remember that these limited choices affect your portfolio’s performance, especially when stock markets pull back significantly. — And they always do…

So… it goes without saying that as soon as you have an option to transfer your pension out of a plan that you strongly consider it. This may be a result of either a job or career change or even retirement.

The risk is simply far too great not to consider this option.

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.

Dividends and Earnings Growth is all you get

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It still surprises me how many people don’t clearly understand where a return on investment comes from.

Let’s take the equity markets.  Many people understand that stock prices increase and decrease over time.  But what they don’t seem to realize is why they actually move in the first place.

Now speculation plays such an important part in the pricing of securities, however if you take a long term investment time horizon all you are left with are…


Earnings and Dividends.


Yes the earnings multiple may adjust over time higher and lower depending upon the feelings about the overall economy and forecasted GDP growth.  But in the end all you are buying whether you buy an entire company or a single share is your respective proportion of, that’s right, the earnings and dividends.


Nothing else matters.  

Absolutely nothing.  


You’re welcome to speculate on whether the earnings and dividends will increase or decrease over time.  That is the whole game isn’t it.   But over time investors will only be paid from the real return of those two sources.


For example… the top 500 companies in the US are certain to increase their earnings overtime….I mean that is why they are the top 500 right…..then an investor should understand that they will only receive the earnings growth and dividends as a return from those companies when investing into the S&P500 Index.


Now throughout history the average earnings growth of the S&P500 has been between 5-6% with dividends ranging between 2-3% on average.

Add those two figures together and that is realistically what you should expect for a long term return on the stock market.  

7 – 9 %


Everything else is speculation and involves added risk.


It’s important then to understand that the higher the return over the mean average of 7 – 9 % the greater the probability that the investment portfolio will provide a lower return in the near future.  Subsequently the lower the return below the mean average the higher the probability of obtaining a greater return in the near future.


And yet, so many investors overlook these fundamentals.   


It is only speculation that creates wild bull and bear markets.  


Earnings and dividends cannot be created by waiving a magic wand.  They need to be truly earned.

By their very nature, markets will rise over time….But only by the rate of real earnings growth and dividends paid…Also known as “productivity.”
It is your job as an investor to ensure your wealth advisor is actually gauging whether the investments you own inside your portfolio are above or below the long term mean return and prepare accordingly.  



Written by:

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.

Missing Best Trading Days

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So you think you can time the market?


Or perhaps you feel that you know someone that can.  

They may even be a financial professional, investment advisor, or money manager.  

Is it really achievable and better yet even worth trying???


The market performance of the Dow Jones Industrial Average over the last 15 years was 7.28% per year.  Many other market indexes would provide similar returns, but this is the one that we will use for the basis of this discussion.

There are 252 trading days per year.  Which equates to exactly 3780 trading days over the entire 15 year period.  

By simply missing just 10 of the best days in the market over the 15 year period (or .2% of the days missed) would reduce your return by 4.68% per year to only




By missing the 20 best days out of the 3780 trading days your return drops to -0.25%!!!  


That’s right…a negative return


…All by missing merely .4% of the trading days over the past 15 years.


Okay, so you might be thinking “I can time the market and miss some of the worst days in the market to make up for it.”  


But as Warren Buffet stated in his recent shareholder address to shareholders of Berkshire Hathaway,

“I have never met anyone who can consistently beat the market, nor have I met anyone that has met anyone that could either.”


Remember that the math statistically works against you over time just by strict probability.In order to outperform the market you have to get 3 variables correct continually when trading.


First, What company you are selling…

Second, What company you are buying…

Third, The timing of both the buying and selling…


***Not to mention the fees…Add fees on top of this and you can see why it has proven to be virtually impossible to beat the overall market performance by mutual fund and hedge fund managers***


So the question comes then… What type of investment portfolio would actually help take advantage of such opportunities?  Are there any?

Well, first we need to forget speculation and trying to buy individual stocks and companies at “perfect” times.  That simply not sustainable over time.  But using proper asset allocation you can almost certainly take advantage of these so called “best trading days.”

Here is how…

It’s vitally important to realize that 9 out of the 10 best trading days occurred within 2 weeks of the worst trading days.  So, by simply moving cash into the market following those worst trading days you were virtually guaranteed to miss 9 out of 10 of the best performing market sessions.  And therefore a great probability for a strong investment return over time.


Question for you though….How do you buy more of the market if you’re invested in the market?  

As your portfolio and assets are also dropping in lockstep with the market…  


You can’t!!!!


That is why it is imperative to own “Non-correlated” investments alongside your stock market investments.  

You would never sell low to buy low.  That is straight useless.  

Non-correlated means that they move in somewhat opposite directions relative to that of the market.


So what type of investments will actually grow or at the very least maintain their values as the stock markets sell off?


The most NON-Correlated investments are Long Term US Treasuries and Precious Metals such as Gold and Silver.

Boring right?

You bet!


Yup.  Not sexy, certainly not fancy…but proven to be the most valuable investments you should own during periods of market turmoil.

…And it just might allow you to invest into the market in order to take advantage of the upcoming best performing trading days that all investors so desperately search for.


To learn more about how to effectively use non-correlated assets inside an investment portfolio, visit our Risk Parity Asset Allocation Tutorial at


Written by:

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.

Would you pay $80 for a Café Latte?

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Yikes!   My friends…

I need to share a little simple math with you that almost every single Canadian over looks when considering buying mutual funds inside their investment portfolios.

You see, the financial industry is the only place where your neighbor could be paying over 20X times less for their investments than you.

Here is an example…The investment Funds Institute of Canada (IFIC) stated that in 2016 the average Mutual Fund management expense was 1.24 %  This excludes trailing commissions, taxes, and other soft costs charged to you as a client either.

Buy investing in such mutual funds you are voluntarily paying an “asset manager” 1.24% of your assets in order to choose what stocks and bonds are best for you.

Here’s the problem…

96% of mutual funds do not match the market over a 10 year period.  Therefore, if you wanted to simply obtain the return of the overall market and invested inside an index tracking exchange traded fund,  you would outperform 96% off all active money managers over a decade.

Crazier yet?

The cost of investing is the passive strategy….

Many S&P500 Index investments can be purchased for as little as .06%

Yup…6 one hundredths of a percent!!!

Over 20X less than the active manager would cost.  And yet, you would have over 96% chance of outperforming that particular managers investment returns.

Some examples of daily items that would cost 20X  ???

  • A cafe Latte   $80
  • Winter tires   $16,000
  • Netflix subscription   $199
  • Litre of gas   $18

I think you get the picture….

Now you might still think that the difference is trivial.  I mean, it is just over 1% right?  Please understand that you would earn 38% less over a 30 year period.

So if you plan on living at least for the next 30 years….This is worth paying closer attention to.

Written by:

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.

5 ways to ATTACK the cost of your accounting fees?

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  1. Understand exactly what and how you are charged.

Most people have no idea how they are charged by their accountant or tax professionals.  If you are like many, you simply cross your fingers, hold your breath and wait until your accounting invoice arrives…and then the frustration continues.  Most tax professionals do a very poor job of communicating their value to clients. 

This is for only one of two reasons: 

1. They just do not provide much value. 

2. They are simply not pressured to do otherwise.

It is so common to hear that people are frustrated with their accounting and tax filing process.  This doesn’t have to be the case.  But it all starts with pushing for clearer disclosure and communication.  But it starts with you…the client. 

After-all, it’s your money, and it is your life.

2. Get better organized

Yes, but you already knew this.  Just like you don’t need anyone to tell you the benefits of sit-ups.

What do you expect will happen when you bring in a shoebox full of tattered paper receipts?  You’d charge more for that as well.  However, what you may not appreciate is that bookkeeping is far cheaper than accounting.  So take the time to ensure your books are tight and as clean as possible.

Unsure of how to do this….Simply ask.  A great accountant and tax professional should be willing to assist you and teach you how to ensure your books are in good order.

3. Save on tax!!!

Seems pretty simple I know, but this is so under appreciated. 

If your tax professional is doing their job well, then there should be far more value in the form of tax savings, deductions, and credits then what their overall cost should be. 

But this seldom occurs.

Remember that employing additional imagination and creativity take effort.  “Counting” does not…It’s simply paint by numbers.  So it is up to you to push your tax accountant harder to provide you value.  Because the more tax you save the less your net cost of the accounting becomes.

4. Expect more from your tax professional

Sadly, pretty much everyone on this planet (short of a few exceptions) is committed to doing as little as possible for the largest reward.  This isn’t to suggest that accountants are intentionally acting not in your best interest.  It’s just that the system is designed against you.  The way accountants are compensated, for the most part, is in complete contradiction to what you are trying to accomplish as a customer. 

They get paid on time spent

While you get value from efficiency and tax savings.

See the dilemma? 

So you have to ensure to work with a tax professional that is focussed on what truly is the task at hand….To save you as much tax as possible, while staying within the letter of the law.

5. Consider a holistic & integrated approach to your finances

The billable hour is very likely the worst concept ever invented in the eyes of the customer. 

GOOD for accountants…BAD for their clients.

It neither promotes nor rewards efficiency on behalf of the tax professional.  It explicitly stands in the way of a successful accountant / client relationship.

This billable hour model is broken.  Now listen, you need to pay for your taxes to be filed both properly and accurately.  That is common sense and goes without saying. 

But where does the real value come in that process?

Consider a fresh new way to approach your tax planning…

  By seeking out a holistic and integrated financial planning and tax planning professional, you very well can obtain the best of both worlds: 

  • The teams Financial Planner will ensure to do what is in your best interest to grow your wealth and ensure that you are actually getting closer to your goals with every aspect of your finances including your tax planning.
  • The accountant will then ensure that your taxes are filed both accurately and according to the plan outlined by your financial planner.

But again….It is up to YOU to demand more as a customer. 



Written by:

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.

Why has your advisor not offered Labour Sponsored Investment Funds to you?

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This always puzzles me  …  Especially if you are from Saskatchewan.  

Because Saskatchewan Labour Sponsored Funds have an amazing track record in comparison to their peers nationally.


AND…most importantly gives Saskatchewan investors the ability to recapture as much as

$3950 in tax refunds from a $5,000 investment…

I don’t care what




background, etc.,

you are….


That math just makes sense.


And yet still so many advisors do not discuss these investments with their clients.  

Here may be a few reasons why…


They simply don’t understand:

Believe it or not, advisors are stubborn.   And often, once a particular stereotype enters their brain it is game over…it is very difficult for them to overcome and to be convinced otherwise.

Also unfortunately, the lack of education, may play a significant role in this as well.

Other times it may just simply be the discomfort of the unknown….

Advisors continuously overstate their abilities to provide consistent returns.  Tax refunds and Tax credits are guaranteed ways to save and build wealth.  Investment returns often are NOT.  So be sure to reach out and pick the low hanging fruit first.  It’s far easier in the long run…trust me


They misunderstand the fee structure:


Some advisors often criticize Labour Funds for their higher than average fees.  But higher than what?  In comparison to other mutual funds?  They are not the same as mutual funds.  So again this is an apples to oranges comparison

Private investments take MORE time to analyze and perform due diligence and there is no easy way to obtain information and purchase them.  

This differs from a standard mutual fund that buys only publicly traded securities such as stocks and bonds.  There are legal fees, appraisal costs, and other expenses that are very necessary when assessing the viability and quality of a private investment.  Secondly, the execution of purchasing private investments are not as straightforward and efficient as those within public markets.

However, obviously the effect that these investments have on growing investment assets and net worth should always be considered after fees.  


For example, SaskWorks Venture Fund has not had a single negative return within the last 10 years  Source: &

….and yes, after fees. ☺    


No Access:

Many advisors, banks and credit unions are not offering these products on their shelves anymore.  This is unfortunate but the push towards more and more proprietary management is the recurring theme in Canada and throughout the world.

Full service brokers and portfolio managers are no longer able to carry these types of investments in client name accounts and therefore have begun to unfortunately not even recommend them to clients.



Proprietary Pressure from their Company / Firm:


Most Banks, Credit Unions, Insurance Companies, Non-Independent Mutual Fund Firms cannot even recommend this to their clients.  

Reason being….  The particular company did not “manufacture” the product.  

There is HUGE profit margin within internally structured investment products and every bank and company is moving further and further towards these types of solutions.

Quite simply….If there name is not on it….They often simply aren’t interested in providing it as a solution to their clients.


Again the client loses out.


“It’s like walking into a Ford car dealership and asking them if they recommend a Chrysler product… Pretty certain we all know what the answer would be!”


All in all, Labour Funds truly are an excellent way to leverage against the highest expense that us as Canadians have….INCOME TAX

And although they very specific risks that must be clearly understood by every investor, they still should at least be considered as a solution to building wealth.


Because the math never lies….


Written by:

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. This Blog is provided for informational purposes only and is not a solicitation or an offer to sell securities.