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Jim Roache

Age: 62

Occupation: Retired public servant

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Portfolio: GICs, government bonds, TD preferred shares

View on investing

For most of his working life, retired public servant Jim Roache avoided the stock market not in spite of but because of what he learned at business school.

"The message from school was stay away from the stock market because you don't have the information that people who will do well will have," the Ottawa man says.

"As Peter C. Newman said, 40 or 50 families run the country, and they get their insider information as part of their social network. You'll be guessing what they know and you can't win at that game."

How he invests

Over the years, Mr. Roache stuck to bonds, GICs, and treasuries. "There was no risk, and the returns were fine," he says. " I even paid for my car and house with cash."

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How things went south

When he retired, an illness led him to hire an adviser. "I thought this guy had my back." He discovered the broker had not only put him into risky investments, but had lost him a lot of money. Eventually, he says, the broker was disciplined, and after going to court, Mr. Roache received a settlement. While he wasn't particularly happy with what he received, "that's life. This is planet Earth, not Disneyland."

What he likes now

Over the past several years, he says, many big banks issued preferred shares that boasted yields of 6 to 7 per cent, guaranteed. Mr. Roache bought some from TD.

He's also keen on capital trust units, which come with a specified yield - generally about 1.5 percentage points higher than long-term government bonds - and typically hold mortgage-related assets.

If he was rich

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If he were loaded, Mr. Roache says he would happily put 20 per cent of his funds into any of the companies in the TSX 30, such as the big banks. "The banks have gotten a bad rap but we haven't had any failures. The fact of the matter is the government has to keep them afloat."

Best move

Avoiding debt has been a terrific investment, Mr. Roache says, for the simple reason that avoiding a 20-per-cent charge on a credit card balance means you're effectively making that same rate. "It's pretty hard to get that rate of return from an investment."

Worst move

"Trusting my broker and allowing him to put me into investments I wouldn't have got into myself if I had been well." Mr. Roache sees ready-to-retire boomers as baby turtles on the beach that try to make it to the water only to find hungry fish awaiting them. "When they retire, most people haven't considered what to do with their money, and they're sitting ducks for dicey brokers and advisers."

Advice

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"People have the same expectations of competence and trustworthiness of financial advisers as they do of doctors or lawyers. They say, 'I don't know anything; here's my money and do something with it.' But people should not be as blindly trusting."

Special to The Globe and Mail

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