If you’re a disciplined, long-term, strategically focused investor, chances are that such “mad money” positions are only a small part of your portfolio anyway. Still, by being extra-cautious about them, you’ll solve many potential problems before they begin. Always remember the old lesson about risk: the best way to minimize it is to avoid it in the first place. Use sophisticated protection strategies Traditionally, when investors felt that they needed protection against a sudden drop in the market (or in a particular security), they would purchase a “put” option on their position: that is, the right to sell their position at a given price. Such options are readily bought and sold on most major indexes, as well as most well-known stocks. Of course, such protection does cost money but, typically, only a fraction of what it might cost you if the market suddenly took a turn for the worse. For sophisticated investors, using alternative investments such as hedge funds and private equity might be a good strategy as well. The appeal of such investments is that their performance is “non-correlated” with equity market performance – that is, they can generate positive returns no matter what’s going on with stocks. Theoretically, including some of these investments in your portfolio could insulate at least a portion of it from a broader stock market downturn. Again, such protection usually comes at a cost – increased transaction fees, higher management expenses and other costs. But such costs may be well worth it for the increased peace of mind they can bring. Finance Do you have questions or need help filing your Canadian or U.S. tax return? Do you have Canadian or U.S. rental property? Are you disclosing the proper information to CRA and the IRS? Do you cut your vacations short to file your taxes each year? YOURCANADA/U.S.A. TAX PREPARATION SOLUTION ALDO SISTILLI CPA Professional Corporation 416.248.6411 1 Kingsmill Road Etobicoke, Ontario M8X 2N7 Email: aldo@sistilli.com Website: www.sistilli.com CATHERINE BINDER CPA, U.S. & Canada – Tax Solutions Plus 727.791.3561 2701 Sunset Point Rd Clearwater FL 33759 Westchase (Tri County Business Park) 12002 Race Track Road,Tampa FL 33626 Email: cathy@taxsolutionsplus.com Website: www.taxsolutionsplus.com Aldo Sistilli CPA Professional Corporation, based out of Toronto, Canada andTax Solutions Plus based out of Clearwater, Florida USA, have teamed up to provide their clients with Canadian and U.S. tax services for personal, business, trusts and estates. You are now able to visit either office where staff will be able to assist you with processing your taxes in either country or both if required. It’s up to you... The debate about market timing isn’t a new one, and it’s unlikely to go away anytime soon. As long as there are markets, there will likely always be investors – both professionals and amateurs alike – who profess to have insight or knowledge or a special “system” that allows them to time the market accurately. If you’re a highly skilled, veteran investor with a deep financial knowledge who likes to followmarket movements and keep up-to-date with the latest market and economic information – then by all means, give market timing a go. Just be prepared for mediocre results. Chances are that youprobablywon’t do all that much better than many of the other people out there who are trying to beat the market. And you may do much worse. If you’re more of a hands-off investor, someone who’d rather spend your time pursuing hobbies, travelling, being with family, or just sitting down with a good novel rather than the latest economic report – then you’re probably better off forgetting about market timing. At the end of the day, it’s a time-consuming, complicated strategy that’s probably not worth the extra time and effort it takes to pull it off. That is, if it works at all. CSANews | WINTER 2017 | 37
RkJQdWJsaXNoZXIy MzMzNzMx