Adrian Mastracci, president of KCM Wealth Management, says "Revitalizing your investment game plan is as easy as trading in the square wheels for the round ones."

For Immediate Release

Vancouver, BC (December 04, 2002): Does this picture have a familiar ring to you?

Adrian Mastracci, investment counsel & financial advisor with Vancouver’s “fee-only” KCM Wealth Management, comments, “One day you look at your investment game plan and you realize that it has square wheels, not round wheels. No wonder it’s been tough sledding!”

“Investors are frustrated with the prospect that nothing they do seems to work,” notes Mastracci, “Practically all investment game plans have veered off course.”

“Many have made dramatic changes, like dumping equities and embracing bonds,” explains Mastracci, “Perhaps, they are jumping from one fire to another.”

“The daily intake of information overload has taken a firm foothold,” says Mastracci, “Oftentimes, this results in a collection of scattered investments instead of a cohesive portfolio.”

“If what you’re doing now is on target, little tinkering is likely required,” continues Mastracci, “Your investment game plan should not change dramatically if it was well positioned to begin with.”

“There is no market that offers safe refuge. These trying markets will turn one day, albeit none too soon,” remarks Mastracci, “Therefore, revisiting the game plan can deliver added benefits, especially if you’ve been piloting with the square wheels.”

“So let’s step away from the fray long enough to get a close look at your financial house,” suggests Mastracci, “Let’s see if we can trade in the square wheels for the round wheels. A little revitalization wouldn’t hurt.”

Mastracci offers some thoughts to round out the square wheels on your game plan:

The starting point

Ask yourself the question, “What is important about your nest egg to you?”

A comfortable retirement for you and your family is probably the biggest reason to accumulate the nest egg.

Make sure you know where you’re heading. Many investors focus on preservation of the nest egg. Some emphasize portfolio growth. Others require the income stream to support that comfortable retirement.

A segment of investors focuses on their small business, RRSP and RRIF. Practically everyone wishes to minimize probate fees and income taxes. And, we shall not forget those who wish to leave an estate to their loved ones.

Your candid answers will steer you towards your chosen direction.

Contemplate long-term guidance

Investing is not a straight line sloping upward. Savvy investors have learned to factor in the roller coaster effects of a bear market into investment expectations.

We’ve had 10 bear markets since World War II. So, consider bear markets and major drops as a natural part of your investment experience.

Investing is not about what’s hot today, next week, next quarter or next year. It is about what you would like to own 5 to 10 years from now. Keeping your finger off the panic button and rethinking the wisdom of those sweeping decisions helps.

Tune out the hype. Ensure that your investment time horizon is at least 5 years, otherwise equities may be too risky for you.

Understand your game plan

Take the time to understand your investment game plan. First, understand the size of portfolio required to sustain your desired retirement lifestyle. Then calculate your personal rate of return required on your investments to achieve that goal.

That personal rate of return may be the appropriate “minimum portfolio investment return” being pursued in your portfolio. Of course, be mindful of the amounts of risk you can tolerate.

Check that your investment personality matches your portfolio composition. The venerable diversify, diversify, diversify still works very well.

Try to shed that emotional attachment to investments. Instead, adopt an appropriate strategy to deal with losses on the investments heading south. Something like 30% and out.

Asset allocation, asset allocation, asset allocation

Concentrate on asset allocation. Nobel Prize winning studies concluded that asset allocation decisions have the greatest impact on portfolio returns. Neither stock selections, nor market timings.

Asset allocation decisions explained, on average, 94% of the contribution to total return. Clearly, this is important focus for every portfolio. So, make doubly sure the mixture of investments is appropriate for your situation.

“The road to success is the game plan that outlines the strategies you will follow to reach your unique personal goals,” comments Mastracci, “Building your home and your portfolio have one common thread. Things go more smoothly when you begin with a suitable blueprint.”

“The incentive to revitalize the game plan is that you avoid virtually all the common investment pitfalls,” explains Mastracci, “This alone is sufficient reason to trade in the square wheels.”

“Be prepared for some stormy sessions,” summarizes Mastracci, “Grip the steering wheel firmly and stay the course with your game plan. That is, the one with the round wheels.”

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.