General Hillier: “Validate and verify, rely on your confidants and protect yourself from surprise attacks”
TORONTO (September 9, 2009) – While the worst of the battle may be over, now is not time to be complacent. General (Retired) Rick Hillier and Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse, are issuing Fall Marching Orders designed to help Canadians ensure that they have a sound financial strategy in place. TD Boot Camp’s proven military directives align military strategy with investment strategy to help Canadians develop a plan of action and seize opportunities.
TD Boot Camp’s Fall Marching Orders:
Ms. Lovett-Reid and General Hillier began providing advice to Canadian investors through TD Boot Camp in January 2009, and the duo are back with fall marching orders. The General and Ms. Lovett-Reid collaborated to adapt military directives to financial planning advice for Canadians adjusting to the new economic climate.
1. Validate and verify
Validate and verify that your strategy is still applicable. It is essential to continually reassess.
“Remember this: Order. Counter order. Disorder,” says General Hillier. “What does this mean? The worst thing a leader can do is constantly change their long-term goal or strategy, because the result of that is no strategy, no approach and therefore a much higher risk of failure.”
What does this mean for Canadian investors? “Now is the time to verify that you have the right composition in your portfolio, but that doesn’t mean you should change your original strategy,” says Ms. Lovett-Reid. “Despite the recession, we’ve proven that buy and hold still works for long term investors. So, revisit your original strategy and ensure you have a plan in place to help you achieve your retirement goals. A first step is to speak to and receive a personal assessment from your financial advisor.”
2. It’s all about the people: rely on your confidants
You trusted your battle buddies to get you through the worst. Those battle buddies, the people that saw you through the economic downturn, are the confidants you can now rely on to give you advice and counsel.
“Soldiers want to execute their mission with the conditions set for success,” says General Hillier. “To succeed, you need your battle buddies who can now help you move forward and take advantage of a changing dynamic.”
“For Canadian investors, we’ve been through the worst of the battle; now we want to win the war,” says Ms. Lovett-Reid. “To do this, we need to trust the people who got us through the past year because they can help: professionals such as your financial advisor, lawyer and accountant.”
3. Maintain flexibility
Ensure you always keep a reserve so that you can take advantage of opportunities and manage risk.
“Flexibility is essential,” says General Hillier. “You don’t want to lock everything in to one tactical approach, things change and you want to be ready to seize opportunities and balance risk when that happens.”
“Keep a reserve and maintain a balance in your portfolio,” echoes Ms. Lovett-Reid. “Your portfolio is not carved in stone—you want the ability to be proactive to changes in market conditions.”
4. Metrics for success
You can’t manage what you don’t measure. This is extremely important during a mission—and also for your investment portfolio.
“You have to set metrics and the challenge is that many measurements in life are subjective, not objective. Rely on your confidants to help you to measure success against both concrete benchmarks and the subjective goals,” advises General Hillier.
“Half of market movement is valuation and the other half emotion,” says Ms. Lovett-Reid. “What does that mean? While it is very important to continually benchmark your portfolio’s performance, it is also importance to evaluate your emotions and discuss them with your confidants who can help you to gain control and feel less anxious about your financial future.”
5. Protect yourself from surprise attacks
“You can give yourself protection from surprise attacks, but the risk is never reduced to zero,” says General Hillier.
“For investors, it is about ensuring you have downside protection in your portfolio: rebalance your asset mix, stick to quality stocks and bonds, avoid concentration risk (holding large positions in a single stock or sector), keep a reserve and use a disciplined stop-loss rule to protect your portfolio from volatility,” advises Lovett-Reid.
Ms. Lovett-Reid advises that investors could take advantage of key opportunities in the Canadian market. “The current global recession has placed Canada front and centre on the world stage, showcasing its financial stability. Canada is not just a great place to live and raise a family but also to conduct business and invest,” says Lovett-Reid.
“Canada is the best country in the world,” agrees General Hillier. “We have security, stability, luxuries and rights that most people in the world can only dream about.”
A photo accompanying this release is available here
Photo caption: Battle buddies General (Retired) Rick Hillier, former Chief of the Defence Staff and Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse, bring investors TD Waterhouse Boot Camp: Fall Marching Orders, proven military principles you can apply to your financial plan. The pair discussed their battle plan at the original Dominion bank vault at 1 King St. West in Toronto. (CNW Group/TD Waterhouse Group, Inc.)
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