Friday, January 27, 2012

Alison Griffiths on Lang & O'Leary Exchange

Interview with Alison starts at 47 min. and 30 sec. into the video
The first thing I want to talk about the interview is what she had to say about using advisors.  In her words, "Very few advisors add value to most investors."  She isn't saying advisors never provide value, but that few do, most of the time.  She also said up to 75% of the portfolios of people she talks to are in the negative position!  Even if it is only 50%, that means the average advisor is making more money than the average investor!  She says that, "Advisory services are about selling product."  Of course, Kevin O'Leary disagrees, and he isn't the only one who compares investing to brain surgery.  I agree with Alison - it doesn't need to get that complicated!  Again, advisors and people like Kevin want us to believe that so they can sell us more product.

Alison says "Don't buy junk."  I agree, stick to quality.  We don't get more RRSP contribution room because we lost money buying junk.  She also makes the point that depending on how much money you have saved, GIC's (guaranteed investment certificates) might even work (despite losing to inflation).  She recommends we  forget mutual funds (too expensive); buy broadly based exchange traded funds (ETF's), instead.  Keep it simple - we don't need a lot of product.

When asked about yield she failed to mention REIT's.  There are ETF's which consist of Real Estate Income Trusts.  Globeinvestor.com shows the yield of iShare's XRE as 4.8%.

I haven't read her book, but I may do just that after seeing the interview!

Are you a fan of what Alison Griffiths is telling us?




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2 comments:

  1. AnonymousJanuary 27, 2012 at 8:08 PM

    With your system using the 200 MA, you would have been out of the market since August 2011 - this is the last time the TSX has been above the 200 MA except for briefly this week.

    That system does not make money. What you should do is buy the dips, ride it up, then sell when you think the market is over heated.


    Anonymous 1

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    1. Ian BrennanJanuary 30, 2012 at 5:59 PM

      @Anonymous
      You are correct, and what you suggest is what I do with my own money. Other people don't want to follow the market every day, and once out of the market, may not know when to get back in. The use of the 200-day moving average is intended to prevent substantial loss of capital, and signal when it is safe to invest, again. When the market drops below the 200-day moving average, we can never tell just how low it will go, and how long it will take to get back to where it had been. We are less than 10 percent above the market high from the year 2000, but anyone using the 200-day moving average would have more than doubled their investment over the same time period!

      Thanks for your comment.

      Delete

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