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Investing through the ages



Are thinking:

I live rent free in my parents’ basement. To cover my student loan, I work three part-time jobs. Any extra money I have pays my cellphone bill with maybe a couple of hundred left over for a few fun nights out. How could that “mad money” really help me much in retirement? I’ve got tons of time anyway. And isn’t the market tanking right now? I may as well wait.

Should be thinking:

Every little bit helps. The beauty of compounding is, the sooner I start, the faster my money grows. As I invest, I’ll earn interest on interest. If I put away $2,400 a year (i.e., $200/month) for 40 years starting when I’m 25, I’ll have about $884,000 in the bank when it’s time to retire, assuming a 9% annualized return. Imagine that – almost a million bucks from saving a meager $200 a month! If I hold off another 10 years I’ll end up with 2.5x less.

Honestly, me predicting a market recovery is about as likely as me predicting what Kanye will say at the next Grammys so I won’t wait to invest. I’m lucky enough to have an investment horizon that’s about as long as it gets and if I invest more during volatile periods I’ll enjoy the full benefit when the market bounces back. It’s never too early for me to start building good investing habits.

Learn more: I wish someone had told me…

Are thinking:

Raising kids is hard! I barely have time to shower let alone keep my eye on the market. Seriously, my TV is permanently tuned to Peppa Pig, not BNN. Between running the kids to preschool and trying to advance in my career, there just aren’t enough hours in the day. Once the kids are older I’ll have more time to devote to retirement planning. It isn’t something I can tackle on my own right now.

Should be thinking:

Raising kids IS hard! My day-to-day is complete chaos. I need help putting a plan in place that will get me to my point B savings goal. A hand to hold when volatility strikes wouldn’t hurt either because I make bad decisions when I’m stressed. I could also use some encouragement to increase my savings, and guidance with asset allocation and rebalancing when necessary. I might not have time for a long shower but I’ll make time to hire an advisor because she’s got the time to come up with a plan that allows me to shape my future rather than just survive it.

Read more: The value of sound advice

Read more: Structured for success

Are thinking:

My career is finally on track. Since getting that promotion, I’ve been so busy I haven’t had the chance to sit down and figure out what’s in my portfolio. Last I checked I had about 25 funds and they each held something like 100 stocks so I’ve got a nicely diversified portfolio that hits all of the sectors. I’m invincible.

Should be thinking:

If I own 25 funds with 100 holdings each, am I overdiversified? Is it more important to have a slice of every piece of the pie or a concentrated portfolio diversified by business idea? Time to review my portfolio with my advisor, weed out the funds that don’t fit with my investment objectives and ensure I’m partnered with managers who have an investment approach that makes sense for me.

Learn more: Diversification myths

Are thinking:

Since retirement isn’t that far off, I should probably get more conservative with my investments. To protect my savings, maybe I’ll back away from sectors I’ve been told are unpredictable by buying safety stocks. Having lived through both the tech bust and the ’08 crash, I’ve seen enough volatility for one lifetime. That stuff is for 20-somethings who have 30 or 40 years of investing ahead of them.

Should be thinking:

Retirement may not be that far off but I still need to anticipate living another four decades. It’s not time to be conservative. Safety stocks may be good businesses but they tend to be overvalued, particularly when the market is volatile and investors are seeking shelter. I have to remember that entry price dictates returns. Overpaying for a stock today will prevent me from realizing a pleasing future return. I actually prospered after the tech bubble and crash of ’08 because I stuck with my long-term financial plan. My past experiences have made market ups and downs easier to bear and history has shown me the benefits of staying the course. In fact, I don’t fear volatility, I welcome it.

Learn more: Does volatility equal risk?

Learn more: Let time do its thing

Are thinking:

Sweet, sweet retirement. I recently met with my advisor and we dramatically shifted my portfolio to hold just fixed-income investments like government bonds. I can’t be in risky equities anymore! Now that I’ve got kids and grandkids, I want to be sure to give them an inheritance.

Should be thinking:

Sweet, sweet retirement. I recently met with my advisor and she talked me out of pulling all my money from equities. She has a point. I’ve got kids and grandkids. If I’m too conservative, my investments may not even outpace inflation. Even at 65, there’s a 50% chance that me or my spouse will live to be 90. I still have a 25-year investment horizon. If inflation runs 3% annually and cash earns 1%, I’ll be 22% poorer 10 years from now. I need to own a collection of businesses that will grow despite economic headwinds so I have something to leave my kids and grandkids.

Learn more: Growth matters

Are thinking:

And so it is, the end is near. I may be spending a little more than I planned but I’m not going to be around much longer and what’s the harm in enjoying the few years I have left? Pretty sure I’ve got everything in order. I hate thinking about this kind of thing. It’s upsetting for everyone to plan for me not being here and, worse still, talking about money makes me so uncomfortable.

Should be thinking:

Chances are, the end isn’t as near as I think, which means one of my biggest concerns should be that I don’t outlive my savings. I meet with my advisor regularly to rebalance my portfolio when appropriate and to make sure my withdrawal strategy is still sensible. My other priorities include reviewing my estate plan with my kids so they know what to expect. As uncomfortable as it may feel, I don’t want them to suffer any surprises.




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Rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investment of any EdgePoint investment.



Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus and Fund Facts before investing. Copies are available from your financial advisor or at www.edgepointwealth.com. Unless otherwise indicated, rates of return for periods greater than one year are historical annual compound total returns net of fees including changes in unit value and reinvestment of all distributions, and do not take into account any sales, redemption, distribution or optional charges, or income taxes payable by any securityholder, which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This is not an offer to purchase. Mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale. This document is not intended to provide legal, accounting, tax or specific investment advice. Information contained in this document was obtained from sources believed to be reliable; however, EdgePoint does not assume any responsibility for losses, whether direct, special or consequential, that arise out of the use of this information. Portfolio holdings are subject to change. EdgePoint mutual funds are managed by EdgePoint Investment Group Inc., a related party of EdgePoint Wealth Management Inc. EdgePoint® and Owned and Operated by InvestorsTM are registered trademarks of EdgePoint Investment Group Inc.