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investment planning

Market Highs Cause Anxiety

As stock market indexes in Canada and the U.S. make new highs on an almost daily basis, as of late June and early July, many investors have expressed increasing anxiety about a possible “correction”. Media headlines and commentary on BNN speculating about a possible correction from these recent highs, following a strong run over the past year or more has added to this investor anxiety.

The Magic Wealth Ingredient

There is a legend about a successful financial advisor in Warren Buffett’s stomping grounds of Omaha, Nebraska. It is reported that this advisor has learned the art of communicating the basics of wealth building with the local farmers. The advisor, who we will call Fred Smith, greets clients in his office with a window behind his desk that overlooks fields of blowing wheat and corn.

Improving Investment Returns

One Saturday, famed investment manager Peter Lynch was working at the office when he decided to answer the phone. The caller was a holder of his mutual fund who was calling to cash in the investment. Peter explained how he was excited about the growth prospects for the economy and his fund and asked him why. As Peter tells the story the caller said: "Because I am breaking even!"