It’s hard enough these days to find and hold on to a good family doctor. What is an investor to do when their favourite clinician hangs up his spreadsheets?
I come to do my rounds at the Investor Clinic, acutely aware of the large shoes I have to fill and of the loyal readership John Heinzl built up over the years. Exhibit A: the messages piling up in my inbox that are both welcoming and grimly expectant.
So I’m going to approach things Hippocratically and, I hope, not hypocritically. To paraphrase the doctors’ oath: I will respect the hard-won dividends of those in whose footsteps I walk, and gladly share such knowledge as is mine with those who are to follow.
John Heinzl: I’m retiring with my dividends, but Investor Clinic lives on
And first, do no harm – which, as it happens, is also a great approach to investing.
Tales have swirled around the internet for years about a study that found the best-performing portfolios belong to dead people, who are particularly skilled at leaving their investments alone.
While the study is, sadly, apocryphal – and The Globe’s legal department requires me to clarify I’m not suggesting death as an investment strategy – less vital investors have some important lessons for the rest of us. Often, less is more.
I just had a 4.6-per-cent USD one-year GIC mature with a loss of about 5 per cent in CAD terms. Reports say the USD could decline another 10 per cent. Does it make sense to convert to Canadian dollars now rather than later? I could use the money to buy U.S. stocks in Canadian depositary receipts where there is currency hedging.
There are few more effective ways of losing money than betting on currency moves over time. I’ve held on to a box of Indonesian rupiah since before the 1997-98 Asian financial crisis, figuring that it might turn around one of these days (I’m down more than 85 per cent).
There are good fiscal and geopolitical reasons why the greenback could fall against the loonie. There are also good reasons, including surprisingly robust U.S. economic data, why the U.S. dollar could bounce.
Rather than worrying about winning or losing, try thinking about where the money will be most useful. If you see value in having non-Canadian assets or expect to have a significant need for U.S. dollars in the next few years, it may make sense to keep it unchanged. If not, why not put your money to use in Canada?
If you’re really uncomfortable about locking in one exchange rate, you could try swapping a bit at a time to average it out.
As for changing USD into CAD and loading into Canadian depositary receipts (CDRs), Canadian-dollar instruments that allow you to trade global listed companies on Canadian exchanges: If you’re convinced that U.S. companies will do well but the U.S. dollar won’t, this could help to protect your gains against a falling greenback. But if the loonie falls, you’ll be wondering why you’re paying extra for hedging that helps to reduce your gains.
Should I pay $3,000 to a money coach or adviser to analyze a portfolio’s composition and risk matrix plus a Monte Carlo simulation, or ask Copilot or Gemini 3 for free?
Even committed users of tools such as ChatGPT, who believe that we’re on the cusp of a major AI-driven societal shift, admit the limitations of free AI chatbots for all but basic tasks. If you’re relying on AI to analyze a portfolio, please, for the love of Asimov, pay your $20 to $30 a month for a more advanced and capable AI model.
I have not had direct experience with the newest AI iterations, which I understand are spookily impressive. They may be very good at analyzing portfolios and I’m sure there are human analysts out there who are considering a career change.
Step aside, human advisers. AI may become the new financial planning powerhouse
But I think there’s always going to be a place for human financial advisers whose job can involve as much counselling as analyses like Monte Carlo simulations, which provide statistical estimates of risk and return. Also, a $3,000 fee sounds steep, and of course is no guarantee of good advice, but may only amount to a small percentage of a decent-sized portfolio. Some advisers may also offer hourly engagements if you don’t want to commit to a full plan.
If you want to experiment with AI, try having it help you prepare questions for a financial adviser. Use the opportunity of crafting detailed prompts for a chatbot – even a free one – to think through your priorities. That may help you to make the most of both robot and human coaches.
Matthew Learning, an advice-only planner at Mountainview Financial Planning in Vancouver, suggested retirement planning platform Adviice as another option for do-it-yourselfers. “It’s the only direct-to-consumer platform I know of that actual planners also use,” he said.
E-mail your questions to agalbraith@globeandmail.com. I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.