American venture capitalist Morgan Housel provided a remarkable essay ranking every type of wealth and poverty that was equal parts enlightening, entertaining, surprising and useful for perspective.
Stage one of 19 on the wealth chain begins where readers would expect – complete dependence on others for sustenance – but quickly jumps to people who have money and assets but are impoverished in other ways.
Stage four is a cautionary tale, “Your lifestyle expectations consistently grow faster than your income and assets. Adaptive poverty.” Stage seven is too: “Your entire personality is built upon the appearance of being wealthy, attracting a predatory social group that will abandon you.”
The stages of wealth start looking attractive around number 13, where you love your job enough that it feels like a hobby and pays more than you ever expected.
I’ll let readers discover the highest stage of wealth – the psychological Forbes billionaires list – on their own by clicking the link above.
The overriding revelation in the piece is that wealth is often as much a matter of perspective as it is a sum of money. Deeply envious and insecure people are unlikely to feel wealthy no matter how big their investment account becomes while those with close family and social connections can feel content with far less.
At base, investing is the pursuit of wealth and financial security – the goal is more. But it’s important for investors to read views like Mr. Housel’s to more closely understand why we put in the hours to profit from the market, and to recognize the wealth of all types we already have.
-- Scott Barlow, Globe and Mail market strategist
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Stocks to ponder (for subscribers)
Ovintiv Inc. One of the enduring mysteries of stock markets is why companies insist on changing their names more often than fugitives in a witness-protection plan. Encana Corp.’s announcement on Thursday that it plans to relabel itself as Ovintiv Inc. is a particularly puzzling example. What is an Ovintiv anyway? According to Encana, “the new name stands for our commitment to deliver unmatched value through continuous innovation.” Of course. Whatever the clunky new name means, it puts Encana on trend. Over the past couple of decades, a steady stream of other high profile companies have also undergone an identity shift. Read more of Ian McGugan’s take on this week’s big announcement.
Fairfax Financial Holdings Ltd. The ugly investment numbers in the latest quarterly report from Fairfax Financial Holdings Ltd. help explain why investors are sour on legendary investor Prem Watsa, with the company’s shares as much out of favour now as they were in the financial crisis. Fairfax said Thursday that it posted third-quarter investment losses of US$96.7-million, a far cry from gains of more than US$1.1-billion that it recorded in the first two quarters of the year. David Milstead reports
The Rundown (for subscribers)
The trials and tribulations of being a GIC investor – low rates and more
Low interest rates are problem enough for the conservative investors who prefer to keep their money safely stowed in guaranteed investment certificates. But there’s another challenge for GIC investors right now in picking the best term. The best five-year GIC rates offer only a modest premium over the best one-year rates, which themselves offer little or no premium over high-rate savings accounts. Might a savings account be the better choice than GICs right now? Rob Carrick shares his thoughts.
Let another investor’s loss become your gain with these fourteen stocks
A trading strategy with a strong track record has allowed investors to profit from indiscriminate selling during U.S. tax-loss selling season. Scott Barlow presents this year’s list of 14 stocks that fit the pattern.
Three forces that could jolt markets higher after two years of drifting
What should investors be watching in this highly uncertain environment? Ian McGugan’s outlines three forces that could shock the stock market out of its lethargy, for better or for worse.
Here’s the answer to the No. 1 question I receive about balanced ETFs
An entirely justified cynicism about the investment industry has prompted investors to question the fees charged on balanced ETFs. Rob Carrick explains.
Others (for subscribers)
Friday’s Insider Report: VP cashes out $1.4-million as this large-cap stock enters correction territory
Others (for everyone)
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What’s up in the days ahead
'Tis that time of the year again. John Heinzl this week will outline what you need to know about tax-loss selling.
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Compiled by Globe Investor Staff