Ten Timeless Principles of Investing
A guide for high-net-worth investors navigating complexity and volatility
Let’s face it: investing has evolved. Twenty years ago, most Canadians thought of diversification as simply balancing stocks and bonds. But today, the landscape looks very different. In our video The Evolution of Investing, WealthCo Asset Management’s Chief Investment Officer, Dave Makarchuk, explains how investing strategies in Canada have progressed through distinct stages, from traditional stock-and-bond mixes to the pension-style diversification used by large institutions like the Canada Pension Fund.
While the tools have evolved, the fundamentals have not. Here are ten timeless principles that continue to guide successful investors through both calm and volatile markets.
1. Asset Allocation Drives Your Results
Your portfolio’s asset mix: how much is allocated to equities, fixed income, alternatives, and cash will determine the lion’s share of your investment performance. It’s not just about chasing returns; it’s about aligning your portfolio with your financial goals, time horizon, and tolerance for risk. For most high-net-worth families, asset allocation becomes a strategic tool to preserve and grow wealth across generations.
2. Diversification Is Your Best Risk Manager
In volatile times, diversification can help soften the blow, and more importantly, help you stay invested when many others are tempted to exit.
This principle reflects how investing has evolved, not just for large institutions, but for individual investors too. As Dave Makarchuk, Chief Investment Officer at WealthCo Asset Management, explains in our video The Evolution of Investing, pension plans like the Canada Pension Plan have moved decisively into private and alternative spaces. As of March 31, 2023, over 50 percent of the CPP’s assets were invested in private equity, real estate, infrastructure, and other alternative asset classes. These allocations once reflected only institutional scale, but today, thanks to pooled strategies and strategic platforms, individual high-net-worth investors can access similar exposures with far less complexity.
3. Think Beyond Canada’s Borders
The Canadian market represents just 3% of global investment opportunities. While many of our clients have strong Canadian roots, global diversification offers access to broader sectors, currencies, and economic cycles. A global lens strengthens your portfolio’s resilience, and enhances return potential.
This principle connects closely to how investing itself has evolved. In our video, The Evolution of Investing, Dave Makarchuk, explains how strategies once reserved for large institutions like the Canadian Pension Fund are now accessible to individual investors, since 2005, when foreign content limits were removed for RRSPs and RRIFs.
4. Uncertainty Is the Norm, Not the Exception
Market cycles, geopolitical tension, elections, pandemics... There will always be reasons to feel uneasy. Trying to anticipate every market move isn’t a viable strategy. What is viable: building a portfolio that can weather uncertainty and adjusting it intentionally, not emotionally.
5. Returns and Risk Travel Together
It’s a universal truth: higher potential returns come with higher levels of risk. The key isn’t to eliminate risk altogether, but to find the right balance based on your financial goals and emotional comfort level. If you need to sleep at night, your portfolio needs to reflect that.
6. Success Comes from Time in the Market, Not Timing the Market
Trying to jump in and out of markets based on headlines or gut feelings rarely works out. Even missing just a handful of strong-performing days in the market can have a lasting impact on returns. Staying invested and invested appropriately tends to reward patience.
7. Markets Move in Cycles, That’s Normal
Long stretches of growth can make us forget how normal downturns are. Markets don’t move in straight lines. That’s not cause for panic; it’s simply the rhythm of investing. Structuring your portfolio for long-term goals means you don’t have to react to every dip.
8. There’s No Single Strategy That Always Wins
Trying to predict the next “best” investment category is tempting, but unrealistic. What worked last year, or last decade, might not lead the pack tomorrow. Rather than chase performance, focus on diversification and discipline. Over time, that consistency is what builds wealth.
9. Your Emotions Are Powerful and Often Misleading
Emotion is one of the greatest risks to your investment success. Fear and excitement can cloud judgment, especially when markets swing sharply. Having a long-term plan and a trusted advisor to anchor decisions can help reduce reactionary moves that may do more harm than good.
10. A Down Market Doesn’t Mean a Personal Crisis
If your portfolio is built for resilience, a temporary downturn doesn’t need to derail your long-term plan. In fact, disciplined investors often view corrections as opportunities to invest at better valuations. The key is perspective and planning.
A Final Thought: Focus on the Long Term
These principles aren't new, but they are often forgotten when emotions run high. Building and sticking to a sound investment strategy requires perspective, discipline, and professional guidance.
Chief Invesment Officer, Dave Makarchuk emphasizes in The Evolution of Investing video that here at WealthCo Asset Management, “we serve a variety of families in a variety of situations”, leading to a spectrum of investment options to suit your risk tolerance, timeline, and investment objectives. Whether that means a focus on public vs. alternative equities, or growth vs. income strategies, we offer a range of funds from conservative to balanced, growth, and even aggressive growth based on each funds’ asset allocation.
If you're wondering how these investing truths align with your current strategy, reach out to your advisor. A well-designed plan tailored to your unique goals is your strongest asset.
Disclaimer: The strategies outlined in this article are intended for informational purposes only and do not constitute legal, tax, or financial advice. The suitability and effectiveness of any wealth transfer strategy depend on individual circumstances and objectives. Be sure to consult with your advisor and qualified professionals before implementing any planning approach.
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