How to Easily Outperform Investment Advisors & Robo-Advisors
Understand how long-term thinking, having a Financial Plan, and unconventional wisdom can help you EASILY outperform both investment advisors and robo-advisors.
Fun podcast with Chrissy & Money Mechanic of Expore FI Canada:
- On this episode, financial planner Ed Rempel tells us how to easily outperform investment and robo advisors. (Hint: it’s simpler and easier than you think—no tricks or secrets required!)
Here is the podcast:
029: How to Easily Outperform Investment Advisors and Robo Advisors | Ed Rempel
Ed
Planning With Ed
Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax accountant, expert in many tax & investment strategies, and a popular and passionate blogger.
Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.
The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.
Get your plan! Become financially secure and free to live the life you want.
Hi Nicolas,
In the chart, “Total Return Investing” is the global stock market index, specifically the MSCI World index. It is a good index to look at for all investments, so that you can see how much return you give up when you focus on dividends, invest with home country bias, invest partly in bonds and cash, or focus on investing for less risk.
In all 4 cases, you should expect a lower long-term return. It is worthwhile seeing how much return you are giving up with various investment strategies.
Ed
Hi Chrissy,
Thanks so much for the kind words. It was a lot of fun being on your podcast.
Ed
Hi Lois,
The amount you need to be financially independent is different for everyone. It depends on how much income you need to live the life you want.
Investing for more growth usually works, but your time frame makes a huge difference. It usually means investing more in equities and less in fixed income. Equities have historically outperformed fixed income in 60-70% of 1-year periods, but virtually 100% of 25-year periods. There will be signficant down periods, that are usually less than a year and usually fully recover in 1-2 years. Equities are also much more tax-efficient.
The right amount of equities depends on how much growth you want or need for your life goals, whether and how much of temporary declines you can tolerate, how sure you need to be of higher returns, and how long of a time frame you have.
You probably have a longer time period than you think, since you should plan to have enough money even if you live surprisingly long. Equities outperfrom the vast majority of the time, so investing for more growth usually works for most people.
Ed
I’m sorry but what do you mean by your total return method?
Hi Ed,
We had a great time talking to you. As always, you’re full of unconventional wisdom that everyone needs to hear (even if they don’t immediately agree).
Old beliefs die hard. To be the best investors we can be, we need to keep learning from those (like you) who are a few steps ahead.
Thanks for sharing your knowledge with us and our listeners!
Hi ED I AM HOPING ITS NEVER TOO OLD TO BECOME FINANCIALLY INDEPENDENT , ALTHOUGH I AM COMFORTABLY WELL OFF, I WORRY THAT I MAY LOSE MORE THAN I GAIN, HOW LONG DOES IT TAKE , STARTING AT A HALF A MILLION DOLLARS.?