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Roberto Lloren

Webinar: Thinking BIG with CORE

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Watch our webinar covering:

  • State of the commercial real estate markets coming both before and coming through the COVID-19 crisis
  • Our BIG strategy, covering Balanced, Income and Growth investment strategies

Webinar Roundup: Thinking BIG with CORE

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Investment Lessons From Moneyball

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One of the greatest movies of all time, in my opinion, is Moneyball. Perhaps it’s because I always enjoy a good David-versus-Goliath story or, in this case, how a small market team was able to outshine those with much greater payrolls.

The reason is that Billy Beane, the manager of the Oakland Athletics, is a contrarian at heart. He acknowledged a weakness in the method everyone scouted and selected players, thereby giving him opportunities to pick up high-quality, highly skilled but undervalued players for a fraction of the cost.

“In human behavior there was always uncertainty and risk,” wrote Michael Lewis in Moneyball. “The goal of the Oakland front office was simply to minimize the risk. Their solution wasn’t perfect, it was just better than the hoary alternative, decisions by gut feel.”

Similarly, investors should be asking the right questions about how they make decisions. Are they falling privy to human emotion such as following the crowd or making decisions based on intuition?

Success lies in two key concepts: being open to new opportunities and working exceptionally hard to capitalize on them. Great opportunities are constantly around us, but most of us simply don’t tune them in. How would one go about recognizing these opportunities?

Imagine radio waves or cell phone waves. We are unable to see them or feel them, however, we know they exist. Why? Because we have devices that capture those waves and turn them into something we can understand – sound.

This also holds true for “opportunity waves”. They surround us all the time. Every event creates them, yet only a few people are able to tune in, because they made the conscious choice to capture them.

The good news is, you don’t need such a device since our minds are already hard-wired to pick up on opportunity waves. Nonetheless, like most features on your smart phone, you just haven’t figured out how to use them yet.

The best investors have discovered how to effectively utilize that part of their brain. They recognize that every article they read, every interview they listen to, and every presentation they attend is infused with great ideas waiting to be received.

When ordinary investors hear a speaker examine the challenges of the inefficiencies of peak energy production, they attempt to find out which traditional energy producer is the most efficient. When extraordinary investors listen to the same speaker, they think about who is leading the new work on batteries that store power generated in off-peak times.

When ordinary investors read a report stating oil prices are on the rise, they examine which airlines have the best hedging strategies in place. When extraordinary investors view the same report, they consider which aircraft manufacturers are working on future-friendly designs that significantly maximize fuel efficiency.

And when ordinary investors come home to find their teenaged kids abandoned their chores to video chat with their friends, they get upset and take away the kids’ devices. Extraordinary investors also get upset and take away their kids’ devices, but not before deciphering the latest apps they were using and how to invest in them.

Analyze the best success stories over the centuries and you’ll discover, without exception, the ones remembered through time are those who are extraordinary thinkers with extraordinary work ethics. As with yin and yang, you can’t have one without the other.

When you are ready to embrace extraordinary, call or email us at CORE Advisory. Let’s have a CORE Conversation and begin the investor’s journey to EXTRAORDINARY.

John Was Right

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The major fortunes in America have been made in land.” – John Rockefeller

I once had an Italian client named John. While we were talking investments, he said, “You know, the mob is actually better than the banks. At least, they warn you before they take your money… the banks just take it.” At the time, I was new to the financial industry and held banks and investment companies in high regard. I chuckled and amicably disagreed with him.

You know what I discovered? John was right.

The truth is, the system is stacked against you. The trillion dollar financial industry is deliberately designed to make as much money from the everyday Canadian as it can, while creating massive profits for themselves. Banks do what they do best; they make money.

I became completely obsessed with finding a better investment strategy. It is a passion. I have been studying the strategies implemented by the some of the wealthiest people in Canada and have realized that most of us never attain access to this information. Here is one type of investment that has made many people rich, yet almost never heard about…

In the 1950s, the introduction of Modern Portfolio Theory, and its consequent implementation in the 1960s to 1980, allowed commercial real estate to transition from a cottage industry to a bona fide asset class. This was done by institutional investors and its existence and ownership was made largely inaccessible to the vast majority. Today, real estate competes directly with stocks, bonds, currencies, commodities and other financial assets.

The evolution of the commercial real estate sector occurred much as evolution does in nature: life-threatening conditions forced inhabitants to adapt or perish and introduced new entrants to the ecosystem. A new investment opportunity emerged – one that is quite resilient. Today, more than ever, real estate and capital have a symbiotic relationship. One cannot exist without the other. Understanding commercial real estate is the key to preparing for the many financial opportunities that lie ahead.

A great starting point is the advent of syndicated mortgages. What I like about this powerful and game changing investment strategy is the fact that it is simple to understand. It is secured by real estate, independent of stock market volatility and provides a SOLID rate of return.

A syndicated mortgage allows several smaller investors to combine their financial resources to fund a real estate development projects via a mortgage instrument. In essence, it is a financing and investment vehicle that allows business owners and investors to partner up and make money together.

The first reason why Syndicated Mortgage Investments are great, is the fact that it is secured.

Any time you are looking to invest your money, common sense tells us to ask: What is the collateral you are offering me in exchange for my money? When a bank gives you a mortgage, they hold your house and land as collateral. This offers them safety and security in return for the mortgage loan. With a syndicated mortgage, you are doing the same thing only at a grander scale with the real estate developers. Your Syndicated Mortgage Investment is registered with the Ontario Land Registry as a first or second mortgage.

The second reason why Syndicated Mortgage Investments are great, is the fact that it is predictable. You know well in advance how much your investment stands to earn because it is predetermined. No stock market ups and downs for you.

Depending on how the interest payments have been determined, you may receive interest payments on a monthly or quarterly basis. The structure of interest and bonuses are different from project to project.

Lastly it’s easy to understand. Most of us, one time or another, have had a mortgage. We know how it works, no rocket science involved. The only change is, now you are the bank holding the cards in your favor.

To learn more about syndicated mortgages and discover if this investment could be right for you, call or email us to speak with a CORE advisor in your area.

Protect Your RRSPs From The Retirement Sand Trap: High Mutual Fund Fees

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Canadians Continue To Delay Retirement

Michael has a respectable executive position with a renowned company, earning $115,000 a year. However, because he has been working hard for several years now, he is keen to retire in six years when he is 60 years old.

Michael’s wife, Lisa is a teacher and aims to quit her $95,000-a-year job at the earliest date possible according to her union contract. That would be a year from now when she is 53 years old. In addition to their salaries, Michael earns $15,000 per year from being on the Board of Directors.

Lisa has a completely indexed defined benefit pension plan but no RRSP. Michael has a registered retirement savings plan but he does not have a pension plan. Lisa’s pension plan will give her $56,872 a year at age 53 and $61,136 if she decides to work for two extra years. Because of their lifestyle, between Michael’s age 61 and 65, their income from pensions will be less than necessitated to sustain their ideal standard of living. Hence, they question whether they can afford to retire early.

High Fees Deter Early Retirement

Although Michael has $277,000 in an RRSP invested entirely in mutual funds, a decently timed retirement is disputed because of the 2.4 percent Management Expense Ratio (MER) he has been paying and continues to pay on underperforming mutual funds.

More and more Canadians are delaying their retirement every year. High mutual fund fees are causing Canadians to delay their retirement by as much as 11 years, or else leave them with 40 per cent less money for their retirement, says a report from the Canadian Centre for Policy Alternatives.

Canadians Are Investing, But Still Failing To Reach Their Retirement Goal