I don’t have a lot of money to invest, but we’ve got some RRSPs, and the company has a little money from the sale of digitalisland.com several years ago. My accountant has just suggested meeting with an “investment advisor” to discuss where this money sits. In getting back to him, I tried to express my investment philsophy; here’s what I told him:
I have no interest in investments that are stock market-related, so mutual funds and stocks are out. I don’t know enough about bonds to understand what I’d be investing in and what the risks are, but I’m open to learning. As you know, the Reinvented Inc. investments and my existing RRSP are both in Metro Credit Union GICs at present. I’m comfortable with them there, but I understand that I’m earning less interest there than I would otherwise; if there are other vehicles that would share about the same level of risk, and would also involve investing in my own community, I’m open. That said, I’m not interested in spending a lot of time on this, and I’m generally averse not only to risk, but to investment advisors.
I say this here in public only to declare that it’s possible to live a good and happy live without having anything to do with the stock market, which I consider to be inherently evil.
I’m probably more on the “needlessly stupid” side of the fence on this, of course. But I do have the benefit of having had to expend exactly no effort thinking about investing for the past 10 years. As such, I didn’t profit from the bubbles, but nor did I stress out over the crashes.
The Metro Credit Union rates for RRSPs and GICs are pretty low. Go with a Mutual Fund, ya got nothing to loose. When your talking to your investment specialist ask to see the Andex Chart and ask em what it is. Or I could just tell you what it is, it is pretty much a chart that shows the increase/decrease in mutual funds, with the exception of a couple things…With Mutual Funds, sometimes you can loose %10 of their value, however they’ve always gone back up and always will…unless the world is destroyed, which won’t matter because ya won’t be able to use them anyway!
As an active investor myself, Id always suggest Mutual Funds to anyone! Perfect for retirement, or just putting away some money for a new house or whatever.
I disagree with John. Mutual funds we are learning are to a very worrying degree coloured by a scam where funds are scooping way too much on management fees, then compromise your money again in dealings with the managers of the stocks they invest in. Peter, you may find some better retuenrs with as much security in particular forms of bonds, such as US municipal monds, but you should also first ask yourself why you are putting your money in RRSPs at all when investments outside of that particular tax deferral structure may be more to your needs.
I agree Alan, I’ve just pulled all my Mutual Funds in the last month. The whole industry has scandal written all over it, it seems.
There are some interesting things going on in the ethical investment world, a bit of googling might turn up something that catches your fancy.
pete, whether you like it or not when your money is in a financial institution of any kind you are participating in the “inherently evil” world of the stock market. i think people of our inclinations (those who enjoy the creative aspects of the business world but loath the day-to-day elements) tend toward becoming our own versions of venture capitalists. We look for projects, people, events, that interest and excite us and invest our time and money into them. If we were able to find a way to do that with the feasible business ventures of people we know and trust, I don’t think we’d hestitate to invest.
Here is another reason why you are right beyond any ethical aspect. The market is set up by design to cheat you.
When I started in the business, in 1972. It was a very small place where there was not that much money in reality. So we could look at companies and see if they were managed well invest and over time do well. We got our information by developing relationships with the leaders and we talked a lot. We thought that a good rate of return would be say 6% year over year. This is by the way a huge return but it is in most cases of a well managed firm doable.
Now there is so much more money and so much more information that it no longer matters what the fundamentals are. Also expectations are so unrealistic — we expect companies to keep growing at a high rate. People look for doubles in a year every year. But this can’t be done without taking too much risk or by cheating.
It is easy in rare cases for a good company like Dell to grow from 20 million in sales to 100 million. It is relatively easy with momentum for Dell to get from 500 million 2 billion. Tough to get from 2 to 6. Even harder to get to 25 billion — but how do they get to 100 billion? See what I mean, we expect exponential growth to be like linear growth. It is impossible. But weak ego management like Enron, which is mainly the norm now, tries to meet this expectation.
This is what I mean by the design is to cheat you. You will have more fun at vegas. At least you know what is going on there.
My advice — invest in your self, in your children’s education (not school) in your close friends, in where you live and also to do something that we have forgotten to so — save money on a regular basis. I paid for both my kids to go to university and they had money to spare at the end. I saved $200 a month for 20 years to pull this off.
The day I stopped believing precisely as you do Pete, my economic condition began to rise slightly (though it may have anyway) and my contentment with what I was doing for a living plummeted.
Thanks for saying it out loud.
Stock markets simply value companies; companies that lie, are audited by complicit liars, and whose shares are sold by scalpers. Mutual funds are the same thing, with more savvy scalpers.
I prefer CD’s and other investments with low risk and no ripoff/scandal factor. No other investment absolutely guarantees your return, no worries; just simple interest.
If you don’t completely understand the investment, someone else who does is taking advantage of you.
Take a look at <font color=”orange”>ING Direct<font color=”black”> they pay interest without fees.