Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Jerome Gessaroli is a finance professor at the British Columbia Institute of Technology.

Jerome Gessaroli

Occupation

Finance professor

Story continues below advertisement

The portfolio

Exchange-traded funds, preferred shares, convertible debentures and corporate bonds.

The investor

Jerome Gessaroli is a finance professor at the British Columbia Institute of Technology. He is also the co-author of the textbook Financial Management: Theory and Practice (3rd edition).

"The more I read, the more I believe it's very difficult for an individual to consistently outperform the market," he said in his Me and My Money profile of 2010. That same view still holds today.

How he invests now

Since Mr. Gessaroli believes stock picking is unlikely to beat the market over the long run, he instead invests in low-cost ETFs that track all the stocks in a market index. At the core of his portfolio is the iShares S&P/TSX 60 Index ETF.

Story continues below advertisement

He bought units in late 2008, when the last great bear market was in full swing. He has studied financial markets enough to know that the best time to buy stocks is usually when they are "devastated by bad news" and selling at deep discounts.

In early 2016, there was a chance to put this contrarian strategy to work again. When the price of crude oil tumbled in 2015 and 2016, he bought units in the iShares S&P/TSX Capped Energy ETF. They were sold six months later for a nice capital gain.

Now, in his mid-fifties with retirement looming, Mr. Gessaroli also wants to keep his portfolio's risk level fairly conservative. In recent years, he has been buying more income securities – such as corporate bonds and the preferred shares of financial, utility and pipeline companies.

To maximize after-tax returns, he holds the bonds in his registered retirement savings plan or tax-free savings account. Dividends and capital gains are earned outside tax-sheltered accounts.

Best move since 2010

It was buying into the iShares S&P/TSX Capped Energy Index ETF in early 2016. "I sold it in August of 2016 for a gain of about 30 per cent," Mr. Gessaroli reports.

Story continues below advertisement

Worst move since 2010

Just before the oil sector was blindsided by falling prices, he bought Enbridge Inc.'s reset preferred shares (dividends reset every five years in line with government bond yields). At one point, the shares lost more than a third of their value.

Advice

He recommends investing in the broad market or a sector when all the news is gloomy. "And I mean really gloomy," he emphasizes. "Pick up a low-cost, high-quality diversified ETF or index-mutual fund in that beaten-down sector, and wait for the recovery."

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies