The worst advice is sometimes from friends with sales pitches, âYou gotta buy thisâ¦!â
GGF: What was your best investment?
MW: My best decision was choosing whom to marry because itâs a life investment.It helps take the biases out of the process as it bakes volatility into the plan.
Rita Silvan, editor-in-chief of Golden Girl Finance talks to Maili Wong, author of the bestselling book Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life.I use my five-point âSmart Risk Road Mapâ as a guide.Get underneath why youâre attracted to an investment.How are you advising clients to prepare for retirement?
MW: There always has been and will be uncertainty when planning for retirement.For example, taking a smart risk when investing can involve looking for an âasymmetric payoffâ where the likelihood of a large profit outweighs the likelihood of a large loss.Maili is a portfolio manager with CIBC Woody Gundy based in Vancouver.[Per How Writer 100 First Month As A To Your Freelance Make]
GGF: Whatâs the biggest risk you took?
MW: The two biggest risks I ever took were both personal.I find that oftentimes, people havenât thought much about how much they will actually need to fund retirement.Asset class allocation is very important because, historically, equities have outperformed fixed-income over the long term.If you can earn it, it gives you the ability to create more choices.After period of market volatility had just started and there were many layoffs during this period and that opened up possibilities for earnest people like me to step into more responsibility and leadership.
GGF: Maili, thank you for sharing your experiences with us.[And Your Affecting Finances People Culturalism Color It8217s How Amongst Of About Truth The]
GGF: Thereâs a lot of pessimism in the markets today and talk of slowing global growth.
GGF: In your book, you give examples of people, including your Mom, taking âsmart risksâ.For example, enabling a friendâs gambling addiction.Of course, it was distressing to stay but I felt it wasnât the right time to leave either, as it was my second day on the job.I am thankful for our relationship, to have someone who is my partner, emotionally and psychologically.So, the long-term trend is growth and the trade-off for that is short-term volatility.Â¹
Â¹Based on MSCI Canada Index (gross dividends) returns from 1/1970 to 12/2017
GGF: What financial advice would you give to a young woman?
MW: That itâs never too early to start building financial independence.However, just because weâre late cycle doesnât mean you canât make money.Statistics have shown that, in Canada, after a market decline of 10% or more, the average annualized return one year later was 15.2%, and over a three-year period it was 11.8%.In 2018, Maili was named one of Canadaâs Most Powerful Women by WXN.In fourth quarter of 2018, investors saw a 20% correction from peak to trough in the U.S.My advice is to plan an independent retirement portfolio and donât rely on your employer to do it.[Iceland Kids With In 6 Do To Things]
GGF: Whatâs the best/worst piece of investment advice that youâve received?
MW: The best advice is to always seek clarity, to keep asking questions and to not be afraid of looking stupid.With our clients, we plan for longer and more expensive life spans.I met Keith in university and then we had a long-distance relationship while I was working in New York.Take your time, use your emotional intelligence and embrace your feminine energy.
GGF: You give the example of the Nortel meltdown and the risks of herd mentality.Get to the real truth of what the issue is.What is the difference between a âsmart riskâ and a âdumb riskâ?
MW: A âsmart riskâ is one where the likelihood and magnitude of a good outcome outweighs the likelihood and magnitude of a bad one.However, there are factors today that make generating sufficient passive income more challenging.How can investors deal with volatility?
MW: I think of it as learning to âdanceâ with volatility.I have a high-stress job thatâs emotionally draining sometimes, so itâs great to have a partner who supports my growth.[To Waiting Your Do Thing You Simply You Here In Are Video Want Permission Fill Really For Really]
My second smart risk was leaving New York five years later to move back to Vancouver.A âdumb riskâ is when thereâs a low chance of success and high potential of a significant loss.Women can feel very vulnerable and they need to gain confidence on how to make good financial decisions.
GGF: You recommend that investors not focus on the rate of return but on the risk of outliving their capital.I had reached some career milestones and had matured and was ready to lead a more purposeful life.[Social Know Get Benefit Security Your To]
MW: My pleasure!
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GGF: What money lessons did you learn from your parents?
MW: To value money and the freedom it can bring.In investing, taking smart risks means acting in a consistent and disciplined way so risks are more in your favour and thereâs a high probability of good results over the long term.We then see a 180-degree turn in their behaviourâfrom carrying huge lines of credit to being more mindful of their spending, but not any less happy.My kids have three bank accounts: one is money to spend now, another is money to save and spend later, and the last one is money to give to others who may need it more.[Downloadable Resource Template Net Worth Calculation].Iâm like a warrior to free women from financial fear.How should investors adjust to a potential future of lower-than-historical returns?
MW: Youâve got to assess your lifestyle costs against the long-term returns of different asset classes.I always say, âhold a spaceâ for long-term results.
GGF: Most people would say that a âwork-optionalâ life is very desirable.Equity market (S&P 500 Index).Is it a case of FOMO (fear of missing out)?
GGF: The Chinese phrase wei chi translates as danger + opportunity.We may start the process with clients as young as 30 or 40.Where do you think we are in the market cycle and what is the best investment approach at this time?
MW: I think weâre late cycle in terms of economic expansion.Staying in New York after the September 11 attacks was a smart risk.Of course, thereâs always a range of outcomes and we run best- and worst-case scenarios.[Revere Win Engineer Pittsburgh In Rosie To Tickets] MW: The first clue is when friends or colleagues boast about the investments theyâre making and say these are âa sure thingâ.Yet, most of us are risk averse.We should expect volatility because itâs a normal part of investing.
MW: The first clue is when friends or colleagues boast about the investments theyâre making and say these are âa sure thingâ.Yet, most of us are risk averse.We should expect volatility because itâs a normal part of investing.