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Investors: Beware Of The Disruptors

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Apple, Amazon, Google and Facebook have replaced Exxon, GM and GE as the largest companies in the world. In my opinion, Apple is fast approaching a market capitalization of $1 trillion.

Tech Companies Changing The Way We Live, Work, & Communicate

Think pieces continue to be written about the Amazon Effect and how the company that started as an online bookseller is now dominating online sales of just about everything and in the process revolutionizing how we shop. Google has moved from online search to driverless cars and Facebook is evolving from a networking site to a distributor of creative content. Together these technology companies--all flush with cash--are changing the way we live, work and communicate.

They are also disproportionately pulling stock markets up so we are not getting a fulsome representation of what’s happening widely across economies. For example, when the Dow Jones Industrial Average, which is made up of 30 stocks, went from 22,000 to 23,000, just a few companies made up half of that jump.

Take A Moment To Gain Some Perspective

In this environment, it’s easy to get caught up in the upward momentum and want to be part of it, which is why it’s important to take a moment to gain some perspective and assess the bigger picture. Start by gaining an understanding of what the indexes represent. For example, the NASDAQ is primarily made up of technology stocks. The TSX is largely comprised of oil, gold and bank stocks. And the Dow Jones is price weighted, which means the higher priced stocks--which tend to be technology stocks today--have greater influence than lower-priced stocks.

For investors with diversified portfolios, this is the reason your investments have not achieved the same record highs. It’s also the reason these records are misleading because they don’t equate one to one with respect to your portfolio. In other words, disruptors disrupt the economy because they skew results in a certain direction. Right now that direction is up but that won’t always be the case--which is why you opted for a diversified portfolio. When the market declines--and it will--these same tech stocks will lead the selloff.

The best advice today: stay calm and carry on. Focus on why you are investing, not the headlines.

Call Me or Email Me

My approach to investing is straightforward. I study the markets, global economies and what’s happening within industries to be in a position to best help my clients find good quality investments that will help them meet their goals. I welcome you to call me at 416-332-3863 or email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

How Facebook, Twitter & LinkedIn Are Informing How We Invest

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It’s no secret that social media has become a critical tool in how we choose to communicate. Facebook, Twitter and LinkedIn have very quickly become the preferred channels for people to get information about anything and everything, from news and weather reports to health and wellness and movie reviews.

So it’s no surprise that research also shows investors--both individual and institutional--are increasingly turning to social media for information to help them make investing decisions. There are a couple of key reasons for this: the information is available in real time and it’s coming from peers (people they “friend” on Facebook, follow on Twitter or connect with on LinkedIn), which builds in a layer of trust.

Too Much Unvetted Info?

While access to information is a good thing, access to too much information that has not been properly vetted is not. It can lead to information overload and, in some cases, just misleading or wrong advice that simply isn’t in your best interest.

Due Diligence Best Practices

As an investor, it’s up to you and your Investment Advisor, if you’re working with one, to conduct your own due diligence on what you’re reading and seeing on social media. Here are a few best practices to help you sort through all the noise.

  • Start with the source. Who is providing the information? Is what they are saying fact or opinion? Do they have an agenda with respect to the investments they choose to endorse or dismiss? This goes for “experts” you may be following and peers who may be recommending a hot tip. In some ways, social media is an update on water cooler or playground sharing of investment strategies only coming from many more directions all the time.
  • When you read about a “good investment” in the media--any media--it’s probably too late to get in on the upside. Getting caught up in the always-on social media news cycle can also promote emotional investing and the behavior you want to avoid: buying high and selling low.
  • Assess the advice you’re getting based on how it fits with your investing objectives. Is it right for you even if it is a good investment? Does it reflect your risk profile and time horizon? Don’t go off the path/plan you have mapped out. That’s when you get into trouble. Having an advisor can help you stay on track--in good and bad times.

Call Me or Email Me

As a trusted Investment Advisor, part of my job is to manage expectations and help keep clients on track especially today when markets seem to hit new highs on a daily basis. I welcome you to call me at 416-332-3863 or email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

Source: LinkedIn Business

Newstalk 1010 Ask The Experts Show

CFRB AllanSmall November18 2017 SocialMediaRobo

Last Saturday, I joined Iain Grant on AM1010 Ask The Experts show to discuss various topics including:

  1. How social media affects your investment decisions?
  2. How can you protect your investment portfolio in volatile times?
  3. The pros & cons of robo-advisors and more...

Click here to listen to the full interview >

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