Just returned from a glorious 10-day vacation, one week spent at a quiet cottage south of Virginia Beach on the ocean – well close enough. This accountant was only shelling out for third row from the beach but I digress. Kinda hot to be driving 800 km due south you might say (boy, was it — we clocked mid-30s most days)! The Orhs have been enjoying summer vacations south of the border for a handful of years for lots of reasons (yes we love Canada and, no, I’m not a big fan of all the guns).

In fact, we made the pilgrimage to Barbary’s Coast (the quirky name of our rented cottage) exactly eight years ago. The kids were, well, kids then. As they like to remind me they are “no longer kids at 17 and 14” (I think they are but it’ll be our secret). Our kids are miles grown up from the last time. I haven’t changed (wink, wink) but Barbary’s Coast was exactly the same. I mean exactly, including dishwasher, furniture and nautical prints on the dark paneled walls.

Just as I hoped it would be.

Sometimes the best approach is to leave well enough alone – change for the sake of change is rarely good (except for socks, maybe). Unfortunately many investors can’t sit still. Why? Because the news media wants us to believe that sitting tight with our investments is going to cost us money. Quite the opposite. Average investors fritter away 4% of their returns every year simply by not buying and holding the market. A recent Dalbar study found that the average US mutual fund investor underperformed the S&P 500 by 4% a year for the 20 years ended last Dec 31.¹

Worse, think of all the missed morning walks on the beach, bike rides at dusk and conversations on the back deck while these poor investors were glued to their computer screens trying to read up on and beat the stock market. As in life, successful investing demands that we direct our efforts to those things which we can control and away from what Jane Bryant Quinn called “investment pornography.”² We spend a considerable amount of time with our clients deciding on, then monitoring how their money is split between stocks and bonds and keeping an eye on their tax bill as a result. John and I won’t spend time debating whether to buy Apple or Google stock but we will offer practical advice on how to spend less and save more (have I got a lot to say on this – talk to me some time).

Ted Cadsby, former CEO of CIBC Securities, put it this way: “Success in investing is very much dependent upon putting probabilities in your favour – getting them working for you, not against you. And putting market odds in your favour couldn’t be easier, because the best investment strategy is basically to do nothing.”³ Now that sounds an awful lot like my vacation at Barbary’s Coast. Hope you’re doin’ a little bit of nothing this summer.

‍

Mark Orr
CPA, CA, CFP, CIM

Senior Financial Advisor
Aldershot Financial Group

‍

^{1 Dimensional Fund Advisors, Quarterly Investment Update, July 2013.
2 Larry E. Swedroe, Investment Mistakes Even Smart Investors Make and How to Avoid Them. McGraw Hill, 2012.
3 Ted Cadsby, The 10 Biggest Investment Mistakes Canadians Make, Toronto, Stoddart Publishing, 2000.}

_{This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above please make sure to see me for individual financial advice based on your personal circumstances. The opinions expressed are those of the author and not necessarily those of Aligned Capital Partners Inc. Aligned Capital Partners Inc. is a member of the Canadian Investor Protection Fund and is registered with the Canadian Investment Regulatory Organization (“CIRO”). Mark Orr is registered to provide investment advice and transact in securities products in the provinces of British Columbia, Nova Scotia, Manitoba, the Yukon and Ontario.}