– Hi there, Mike McKague here. Are you invested in a portfolio
that’s handcuffing you to never make money over your lifetime? I had an interesting conversation over the weekend with a
fellow, a baby boomer. He’s a 65 year old farmer
who also has a part-time job. And we were talking about his portfolio. He has two things that he fears. Of course, ten years ago
he was heavily invested in equities in the stock market. And the crash came in ’08, and he lost about 40% of his assets. And he recognizes that at age
55, that was a terrible thing to have happened, but at
age 65 he cannot afford to have that happen again. So the problem is now, he’s scared to invest in the stock market, and his bank advisor
that’s helping him out has recommended he invest in GICs. Now GICs are guaranteed,
as far as the banks go, but the problem is, the
return on the investment that you get there after taxes
in a non-registered account actually is lower than
the rate of inflation. So even though he’s invested in something, he’s actually losing the value of money because of the cost of inflation. And what’s he supposed to do? He’s in a real conundrum. And many baby boomers
are in this situation where they’re scared to take risk, and rightly so, because they
don’t want to lose their money. But yet they are in a portfolio that handcuffs them to really
gain no value over time. Here at work we of course
recommend that you investigate being invested in a low-cost,
fully diversified portfolio in non-correlated asset classes. And that’s really the key point there. We’re not looking at just one asset class or another asset class
because every asset class over a period will of course
have a major draw down. The stock market right
now is quite inflated. We don’t know, but we
expect that at some point there will be a draw down. So what asset classes
are in your portfolio to insulate against losses there, so you can have gains
in the other classes? Investigate please further
if you’re interested onto our website, and look
up risk parity portfolio, because this is how we
help clients consistently and steadily grow their money, whether they’re 25 year olds,
55 year olds, or 75 year olds. Thanks, and I hope that’s
of value to you today. (calming piano music)