Talking the Talk, Walking the Walk.

So....

I write this daily blog about Wealth Management.

Do you wonder how I actually invest my money?

It might be somewhat hypocritical if I were to go on and on as I do and not have my money invested in one of my models.

Oh, and the other question, do I rent or own?

• Rent.

and...

I prefer the 60% equity / 40% fixed income model with a few caveats (at this time):

• I have a little more cash that I have come into recently and I am being patient with it (keeping it in a short-term money market fund) for the moment.
• My fixed income holdings are a little overweight in high yield bonds and preferred shares because the yields are so relatively attractive.
• However, once I feel more comfortable about the equity and fixed income markets (yes, I am watching what the Fed and BOC are up to next, the general economic trends and volatility), I plan to ear-mark that cash for the 60/40 target model.
• Yes, because I believe in what I write about, but more importantly, I feel it is paramount to invest for the long-term.
• This 60/40 model, in all the research that I have done, consistently provides returns on average, over multiple years of approx. 7-8% .

I still spend a significant amount of time researching and back-testing as to how to best allocate the 60% equity into sub-categories:

• % of Canadian Equity (do you know that Canadian Equity makes up only approx. 4% of the World Equity Index).
• % of US Equity (clearly the best performer over the last few years, but perhaps ahead of itself at the moment?)
• % of International Equity (and in this category how much in Emerging Markets)
• % of Alternative Strategies (ie a more tactical approach other than ETF's?)
• Speaking of ETF's...which ETF's are best suited to providing me with what I consider to be good liquidity, strong performance, distribution yield and very importantly, cost.

Equal research goes into analysis of the 40% that makes up the cash and fixed income sub-categories:

• % dedicated to the safety of Government and Investment Grade Corporate bonds (relative to their very low yields and high prices).
• % of inflation indexed bonds (will inflation pick up into the future and when?)
• % of high yield bonds (pretty inexpensive at the moment, with some fairly attractive yields, but you want to have those that will survive to pay their coupons and return their principal).
• % of preferred shares with tax efficient dividend yields.

I believe in balance and diversification and know that whatever comes that may, in the long-term, that is where I want my money. So that is where it is/will be. 

Same place that I would want my clients money to be. 

The views expressed are those of the author, Scott Tomenson, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.