Ron Beaton, 62
Occupation
Retired dentist
The investor
After becoming a dentist, Ron Beaton met another dentist who was a Chartered Financial Planner. So in 1996 he took the course for his own personal interest and benefit, and stopped practising dentistry in 1998. “I did so well investing I started a small financial and retirement planning business primarily working with other dentists.”
His approach
Boring. Oh, and passive! “I’m not a speculator, I’m an investor. I believe very strongly in the asset allocation model which I follow very strictly.”
His fixed income
Mr. Beaton has some 40 per cent of his portfolio in fixed income investments. He traditionally used a five-year bond ladder, meaning every year a five-year bond matures, which he then simply reinvests. But rather than bonds these days, he’s been using GICs due to their higher yield.
His equities
While he’s aware of the rule-of-thumb of having a percentage equal to 100 minus your age in stocks, he’s comfortable with having a heaver weighting. “I feel pretty confident about equities because I’m fairly knowledgeable. Although there’s volatility I don’t think I’m putting myself at risk.” His equities are 60 to 70 per cent Canadian stocks, 20 per cent U.S. stocks, and 10 per cent in real estate through real estate investment trusts (REITs).
How he picks equities
Mr. Beaton either uses exchange-traded funds, or follows Moneysaver columnist David Stanley’s “Beating the TSX” approach. This involves putting money into the 10 highest-yielding stocks on the TSX, excluding high-income companies that typically are converted trusts. It’s not an entirely passive approach, notes Mr. Beaton – you do have to dig a little deeper. For instance, if a company is yielding 9 or 10 per cent, “That’s a red flag.”
Best move
Using the “Beating the TSX” system. “It historically outperforms the TSX index year over year,” says Mr. Beaton. “It’s a no-brainer.”
Worst move
“I could probably sum up that under one umbrella: It’s when I get greedy.” For instance, back in 2004 he tried to duplicate the stated returns of the “Contra the Heard” investing newsletter. “It was almost impossible to follow the system because there are too many stocks, it’s too complex and complicated.”
Advice
“Write out your own investment policy and use it as the basis for your investing. It should include what your own personal philosophy is based on your own tolerance for risk, whether you’re active or passive, your objectives, and your age and stage in life. This will help you decide how much you want in growth versus income, and your asset allocation. The last thing you do is pick individual investments, but that’s where most people start.”
Special to The Globe and Mail
Want to share your strategies?
tony.martin@sympatico.ca
