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Canadian investors have toughened up, and more lessons my clients have taught me during this crisis

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Over the past few weeks I have been having some interesting conversations with clients.

While the conversations usually include discussions about investments, we often spend more time discussing family, health, today’s challenges and tomorrow’s hopes. If it ever wasn’t clear before, it is very clear now that our investments are here to serve a broader purpose — which is to allow us to live as full a life as we can.

As I talk to more clients I will no doubt be learning more from each of them.

Here are my big five takeaways to date:

From a Canadian perspective — COVID-19 truly is unique

Turbulent global markets due to covid-19 In a recent chat with a 99-year-old client who was born in Canada, I asked him if he had ever seen anything like what we are experiencing today. I was surprised when he said “Never in my life.” He did say that things were clearly difficult during the Second World War, but we were never so totally shut down like we are today.

His comment was definitely a jolt to me. This is historic. It is obviously not business as usual. We need to treat it very seriously from a health and investment perspective.

From a non-Canadian perspective — COVID-19 brings back other memories

Another client in his 50s related a story from his childhood, growing up in a war-torn nation. He remembered staying at home, being warned about going outside. He said that he could now better relate to his father’s worries about supporting the family when almost everything was under siege and there was no work to be had.

COVID-19 is clearly bringing memories of war and sacrifice. It is a reminder that life can be hard, unfair and unyielding. The fact that this brings comparisons to terrible times of war is a reminder of how significantly strange times have become.

The Financial Crisis of 2008/2009 has created a tougher investor

During the Financial Crisis, there was fear that big banks would collapse. There was a worry that stocks would drop 90 per cent before it was over. Few if any investors had lived through such a broad and deep investment crash. At the time, there were a meaningful number of clients who had to be convinced not to sell out their portfolios with large losses.

Yet, they ultimately saw how markets eventually recovered and thrived.

Today, most investors lived through 2008 and 2009. Their reactions to COVID-19 related declines have been much calmer. This isn’t to say that everyone feels that way, but a much higher percentage recognize that this pandemic will end, whether in a couple of months or a year. Likely, before it ends, stock markets will make a sizeable comeback.

There remains an overconfidence that people can time the bottom of the market

Some clients have expressed frustration over missing the great investment opportunity of 2009. They have said that they want to take advantage of this new great opportunity. I am with them. They are absolutely correct. The problem is when is exactly the right time to jump in?

The reality is that these markets move extremely fast. As we saw from March 18 to 26, some beaten down stocks jumped 50 per cent or more. However, in order to have achieved all of those returns, you would need to have bought in not just on the right day, but the right hour. To have purchased in that right hour, you would have needed the guts to buy when markets were in free fall. It is possible, but you need to be significantly lucky and have the willingness to go where almost nobody else is going.

On the flip side, many people think that there is another meaningful drop ahead, so they will wait for that one before buying. They may be right, but if they are wrong, then they will have almost entirely missed the ‘once-in-a-decade’ buying opportunity.

If you really want to take advantage of weak markets you have to be willing to buy in at a certain price, accept that it will likely go lower in the short term before it recovers, and keep focused on a year from now. You won’t get it perfect, but you will get it mostly right.

Health, family, friends, investments — in that order

As I mentioned at the top of the article, COVID-19 is a big threat to everyone, but it is clearly a health threat above all else. There are definitely financial fears — and for some these are pressing. Yet, for most of our clients they understand that for now, their goal is to look after themselves and each other. If they do that, everything else will take care of itself.

Several clients have had a consistent message. Their comments sound something like this, ‘We are blessed to be in Canada. We are blessed to still have reasonably good health. We have food. We have shelter. We even have spring. We are thankful to have someone like you to help with our finances, and we are not worried. This too shall pass as long as we have patience and do the right things.’

As big and as bad as this situation has become, I thank my clients for bringing their life wisdom and perspective to this time. I know that they are right and this too shall pass.

Reproduced from the National Post newspaper article 3rd April 2020.

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
tedr@tridelta.ca
(416) 733-3292 x 221

Plan a ‘free’ Thailand vacation and… surgery.

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We’re fortunate in Canada given that we have a great health system, but we’re often subjected to long waits for important lifesaving surgery or wish for better access to specialists. New options have emerged in recent years and more of us are taking advantage, particularly medical tourism.

thailand2According to Wikipedia, Medical tourism or health tourism is the travel of people to another country for the purpose of obtaining medical treatment in that country. Traditionally, people would travel from less developed countries to major medical centers in highly developed countries for medical treatment that was unavailable in their own communities. The recent trend is for people to travel from developed countries to third world countries for medical treatments because of cost and other considerations.

Medical tourism is however controversial for a number of reasons, especially in Canada given our national health care system and its expense.

A number of our hospitals are considering ways to boost profitability by hosting international patients. For example Sunnybrook Hospital’s board quietly approved a program at the end of last year. So far they have welcomed a Barbadian woman who paid about $60,000 for radiation treatment for breast cancer, and a Jamaican man who paid $20,000 for radiotherapy for prostate cancer according to the Globe and Mail.

Canada’s publicly funded health-care system is respected globally and would easily attract medical tourists, according to a 2011 analysis from Deloitte Canada’s health services division. The question is, can Canada offer medical services to foreigners without displacing locals whose hefty taxes built the health care system. Opponents argue that patients from abroad could displace tax-paying Canadians or enable wealthy locals to buy their way to the front of the queue.

The Registered Nurses Association is calling for an outright ban; http://rnao.ca/news/ban-medical-tourism-rnao-speaks-out-medicare

Then there is the other side, Canadians traveling abroad for health care services, whatever the reason. This presumably won’t hurt our health care system in the short term, but will start to raise questions why we pay taxes if better health services are available elsewhere.

Regardless, medical tourism continues to grow and provide affordable alternatives. An excellent CNN documentary aired last week titled; ‘Surf, sand … and surgery? Inside the world of medical tourism.’ This is a must watch program that brings much needed perspective to this controversial topic and will help you decide if its good, bad or indifferent.Buy Cialis Online greatly helped me to restore the body’s functions.
This means that you can get what amounts to a free vacation given the significant savings on your next medical bill by having the work done in Thailand or another medical destination offering lower costs than Canada.

At TriDelta Financial we strongly believe in a balanced lifestyle, which incorporates wealth and health amongst other aspects, which is why we see medical tourism as a viable alternative in certain situations.

Anton Tucker
Written By:
Anton Tucker, CFP, FMA, CPCA, FCSI
Executive VP
anton@tridelta.ca
(905) 330-7448
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