in Mutual-fund executive Joseph Canavan invests broadly, in both private companies and philanthropy. ‘My payback, my massive return on investment is emotional and karmic,’ he says.Kevin Van Paassen/The Globe and Mail
Mutual-fund executive Joe Canavan is old fashioned when it comes to saving and investing. Ever since he was a young man building Fidelity Investments Canada – and GT Global Canada after that – his philosophy was to live frugally and plow all of his savings into the market – his own companies' funds in particular. The chief executive officer of Aston Hill Financial Inc., which recently merged with Front Street Capital, remains a strong believer in active management, despite a side investment in robo-adviser Wealthsimple. Mr. Canavan, who is also the former CEO of Assante Wealth Management and Synergy Asset Management, spoke to The Globe and Mail about where his money goes and his own flawed experiments with timing the market.
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When did you start investing?
It wasn't until my Fidelity days that I started to make real money. We were able to convert it from a loser into the fastest-growing company in Canada. All of my money went into it. I also lived very frugally. I rented an apartment. I drove a used car. I kept making more and more money and compounding it. I did that again when I started GT Global – I put all of my money in those funds – and when I started Synergy I did that again. I just kept plowing my money into the market and not living beyond my means. That set me up for everything that has happened since.
What's in your portfolio today?
It's mostly in mutual funds, most of them are part of the CI empire. It has worked out well for me. I target the overall portfolio construction that I want: how much in equities, fixed income and cash, what geography and sector. I then plug in the best managers in each category. I like to get away from the market and the index. With Aston Hill, I'm investing $500,000 in the company. I also own some individual stocks such as Tesla and Apple. Everything else I do is venture capital, companies such as Wealthsimple, Borrowell, Koho, Kids and Company, Thalmic Labs and Side Launch Brewery. When I see CEOs that are passionate, visionary and can execute, I support them financially and sometimes in an advisory role. I also invest in philanthropy through the Canavan Family Foundation. We try to engage and invest in charities we think will transform the lives of children, such as the Children's Aid Foundation, where I was CEO for two years. For me, my payback, my massive return on investment is emotional and karmic – it means a lot to me. It makes me feel excited and so proud.
Where are your investments geographically?
I have gone very local in the last six or seven years. After the financial collapse, I went heavy into the United States and Canada. I'm about evenly split between the two. I love emerging markets, but they still scare me a bit. If we get the 3 [per cent] to 4-per-cent economic growth the [U.S. president-elect Donald] Trump administration is talking about I would probably shift money back to Asia, if it starts to stabilize. I have some global funds, but they have a high G7 leaning.
What has been your best personal investment move to date?
It has always been investing in my own companies.
What about the worst?
I'm [a] glass-half-full kind of guy. I get so excited about investments that I sell too late. I time it wrong. I have made two or three big mistakes doing that. What I do now is dollar-cost-average out of the market, instead of into the market. No matter how positive I am on a stock, I start taking money off the table and I just keep selling until I have all of my original investment capital off the table. Then I chose whether or not I continue to ride it out.
What's your advice for others?
If you're young, constantly, continually invest in yourself. Take 10 [per cent] to 20 per cent of your income and keep plowing it into the market. A lot of young people spend what they make. Pay yourself first. Continue to invest. Have a discipline and adhere to it.
This interview has been edited and condensed. For this series, a high-net-worth investor has investable assets of more than $750,000.
Alyssa Gowing is a 27-year-old homeowner who follows a strict budget and finds creative ways to save money in order to afford her mortgage