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Coreen Sol, senior portfolio manager with Solinvest Portfolio Management at CIBC Wood Gundy in Vancouver, is passionate about why and how investors make financial decisions.

Ms. Sol, who is on The Globe and Mail and SHOOK Research’s Canada’s Top Wealth Advisors: Best in Province ranking, spoke with Globe Advisor about her new book, Unbiased Investor: Reduce Stress and Keep More of Your Money.

Why did you write a book about financial behaviours?

I wanted to help steer investors away from some of the biases that happen in financial decisions.

There’s one thing I do on a regular basis to take my behaviour out of the process. I like to write things down whenever I’m making an investment decision. Doing so allows me to see things more analytically. Writing is also helpful with hindsight. When you write down your process, it makes you more accountable to the process. When things go sideways, you can look back and evaluate why you made that decision in the first place.

If you apply it consistently to the way you manage money, invest, or save, then you’re looking at a much longer-term view and not getting caught up in day-to-day emotions and various transactions.

What’s another way of reducing bias when making investment decisions?

The ultimate way is to make fewer but better decisions. If you make fewer decisions, you’re going to naturally have fewer errors.

How do you make better decisions? It comes down to knowing your long-term vision goals, the kind of person you are, and how you look at money in the real world. If you can base your decisions on those things, they will align with where you want to go, and avoid the in-the-moment transactions that cause mistakes.

What do you think about the advice young people may find on social media platforms from finfluencers?

It’s a problem because you see many people jumping on a bandwagon and perhaps not researching these investment options directly.

People want to be a part of something. Because other people have been investing in it, it must be a good idea. And when you’re investing in something that everybody else is already investing in, everyone else has already driven the price up. So, your opportunity for profit is diminished and your exposure to risk is heightened.

For example, with GameStop Corp. last January, was the business any more attractive at a $3 or $81 stock price? It was the same business regardless of the stock price.

Is that similar to what happened with some cryptocurrency assets?

Yes. I personally struggle with cryptocurrency because it doesn’t produce anything. It doesn’t have a value in and of itself. The only value it has is whatever the participants believe the value is.

This interview has been edited and condensed.

- Deanne Gage, Globe Advisor reporter

Must-reads from Globe Advisor this week

How to make up for the retirement income gap when pensions won’t be enough

Pensions were not something many Canadians talked about until retirement was around the corner, but with the high cost of living and unaffordable housing, conversations about what retirement will look like are coming up more often and at an earlier age. Many no longer have access to employer pensions as a lot more people are doing contract work and/or are self-employed. Even the existing government-backed pensions won’t be enough to support many retirees. The maximum monthly amount of Canada Pension Plan benefits an individual could receive today as a new recipient is $1,253.59. In fact, the average amount paid to a new retiree in July was $727.61. Daina Lawrence looks at strategies advisors are using to help clients.

‘Overly pessimistic’ view of retailers in the holiday season creates cheaper valuations

The holiday shopping season is a make-or-break period for retailers looking to capture a share of consumers’ wallets. For investors, it’s a time to check out companies poised to outperform their peers and help boost portfolio returns. It could be a challenging holiday season for retailers this year with consumers expected to curtail spending as rising inflation and interest rates make the cost of goods and debt more expensive. Concerns about a recession and the growing number of layoffs in the headlines also have households minding their budgets. Brenda Bouw speaks to experts about the outlook for the sector and where the opportunities are.

Anti-beta strategies that provide uncorrelated returns hit fever pitch – but what are the risks?

The past several months have demonstrated the benefits of investments uncorrelated to the public markets. As such, never before have low beta or alternative strategies – sometimes called “anti-beta” – been more in vogue. An example is a long-short fund that seeks to capture a market anomaly often cited in academic journals that “low-beta, or low-volatility securities, tend to do better than high-beta, high-volatility securities on a risk-adjusted basis,” says an expert. But one challenge with these strategies is the drag on portfolio performance during bull markets. Joel Schlesinger looks at the pros and cons of using anti-beta strategies.

What investment industry stakeholders are looking for from the new self-regulatory organization

While industry stakeholders welcome the launch in January of a single self-regulatory organization (SRO) resulting from the amalgamation of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada, some still have some reservations. Questions over dealer fees in coming years, eliminating regulatory redundancy, and groups retaining their access and ability to be heard are some of the issues that have been brought forward. The name and executive board of the new SRO also have yet to be announced. Deanne Gage gathers reaction after the SRO received formal approval from the Canadian Securities Administrators last month.

Also see:

How advisors can help investors ‘cultivate’ the superpower of patience

COVID-19 vaccine makers’ shares slump, but there’s upside as other products hit the market

There is no alternative to alternative assets

How advisors starting out during this market downturn are overcoming challenges

How the gates closed on Blackstone’s runaway real estate vehicle

What you and your clients need to know

ETFs packed with ‘moat’ companies that can keep their competitive advantage

From the perspective of an equity investor, Wednesday’s Bank of Canada interest rate hike means the cost of debt for companies increases, which puts pressure on management to generate enough earnings to service both debt obligations and continue to provide returns to shareholders. A common measure used to compare a company’s bottom line against both its debt and equity obligations is return on capital. As long-term value investors, Morningstar Inc. believes that a core determinant of a company’s ability to generate said return on capital in excess of its cost of capital (which is driven by interest rates) are competitive barriers to entry, or “economic moats.” Ian Tam looks at 16 exchange-traded funds (ETFs) that hold companies with wide moats.

Canadians look to side hustles to make up for inflation pressure but at what cost?

Canadians’ budgets are being stretched thin as the cost of living climbs – and to compensate, some are taking on a side hustle. From reselling used items or dog walking to taking shifts driving for delivery services and acting as a brand ambassador, there are plenty of ways to earn some extra cash. New data from professional service company Accenture found that 41 per cent of Canadians plan to take up a side hustle such as babysitting, dog walking, and selling items online to earn additional income before the holidays. Whether it’s to save money in the long term or the short term, experts weigh in on how to make additional income effectively and its drawbacks.

Employee burnout is getting worse. Employers have work to do

A study released earlier this year found one in three working Canadians felt burned out. The report warned that anxiety and exhaustion are at an all-time high for many workers. The World Health Organization’s international classification of diseases diagnostic manual defines burnout as a syndrome “resulting from chronic workplace stress that has not been successfully managed.” It can lead to physical and psychological challenges, says a psychologist. Dene Moore looks at what employers are doing to prevent burnout and help manage employees’ mental health.

– Globe Advisor Staff

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