More Money Podcast - 363 Demystifying DIY Investing - Peter McMurtry, Financial Writer and Author of Own Your Financial Future

Episode Date: April 12, 2023

I always jump at the chance to interview an expert in DIY investing for the podcast and this week I have someone who's been working in the investment industry for decades! Peter McMurtry is an author and financial writer, whose recent book Own Your Financial Future: Take Charge of Your Investments is sure to pique your interest if you're wanting to take a more self-directed approach to your investment portfolios. Peter McMurtry has been involved in the investment industry for over 30 years and his experience includes almost every aspect of the industry. He's currently a financial writer and has a Chartered Financial Analyst designation (CFA®). He's also previously been a portfolio manager and has been involved in financial planning and sales. In his new book, Own Your Financial Future, he guides budding investors to manage their own investments without the use of an advisor. Peter also shares how his newsletter, The McMurtry Investment Report, helps to empower his readers to make their own investment decisions, on top of what to know about fees, how to pick and research stocks, and how to have a balanced portfolio. For full episode show notes visit: https://jessicamoorhouse.com/363 Learn more about your ad choices. Visit megaphone.fm/adchoices

Lou, Lou, Lou, and welcome back to the More Money Podcast. This is your host, Jessica Morehouse, and this is episode 363. And for this episode, my guest, Peter McMurtry, is on the show to talk to us about how to own your financial future and how to invest in a smart way. Because honestly, I have talked to so many people over the years who just don't feel like working with someone in the industry, like an advisor is really doing the trick. And I think all of us really need to just own the fact that we need to learn this stuff ourselves and take more control over our investments. And I mean, he really is the best person to talk about this because not only is he a financial writer and has a book out called

Own Your Financial Future, Take Charge of Your Investments, which goes through pretty much everything you can think of. Also, he's Canadian. Yay for that. But he also writes a monthly investment newsletter that provides model income and growth portfolios if you really want to get into all of that. And he has a lot of experience working in the industry himself. So he's a chartered financial analyst and has over 30 years of experience as an analyst, portfolio manager, and of course, financial writer. And he is on the show to share all of his expertise. So I cannot wait to get to that interview in a moment.

But before I do, here's just a few words I want to share about this podcast episode's sponsor. This episode of the More Money Podcast is supported by FedEx Express Canada. It's been a challenging couple of years for Canadian small businesses who've had to face obstacles like never before, which is all the more reason to show them our continued support. And one way you can do that is by spreading the word about FedEx Express Canada's hashtag backing small business contest. FedEx wants to show their support and help small businesses realize their potential by giving away

$100,000 in total prizing to FedEx small business customers in Canada. The $100,000 worth of prize money includes one grand prize of $25,000, five second prizes of $10,000, and 25 third prizes of $1,000. And all you have to do to enter is register your business using your FedEx account number and make at least one qualifying shipment with FedEx Express, FedEx Ground, or FedEx Freight from now until April 30th. Don't have an account yet? Now's the perfect time to do so, plus it's free to sign up. Visit FedEx.ca slash Backing Small for full contest rules and regulations and to learn more about the FedEx hashtag Backing Small business contest. Once again, that's FedEx.ca slash Backing Small to learn more. Welcome, Peter, to the More Money Podcast.

I'm excited to have you on the show to discuss your book, Own Your Financial Future, Take Charge of Your Investments. Welcome to the show. Thank you. Yeah. So you have, I mean, a lot of experience in the industry. You are a chartered financial analyst, and you have worked as an analyst, a portfolio manager, and also a financial writer, which I guess is what, you know, is kind

of a natural, you know, kind of progression for you to eventually write your own book. Tell me a little bit about, you know, how did you get into the industry? What kind of inspired you to follow this path into the world of investing in personal finance? Well, I took a commerce degree from McGill. And then I started working in the broker side as a sales rep many, many years ago and got interested in the markets at that time, I was always more interested in the analytical part and portfolio management part as opposed to the straight selling part. So I branched off from there and went into the money management business and I've been there ever since. And I've worked in various firms from banks to in-house pension funds to all types of firms offering investment

counseling services, portfolio management, investment analysis, and things like that. And financial planning as well. I did a little bit of that towards the end of my career. But basically, I have a fairly broad experience in the industry and know the strengths and weaknesses of the industry. A former colleague who I worked with for many years at one of the Canadian banks asked me why I would write a book having worked in the industry for so long. And I said to him, it was only a natural progression because I can provide more objective, unbiased opinions than he can because he's still working in the industry and he can't say things that are somehow against what the company is saying. Yeah. So he couldn't really understand that. But I can be more unbiased, and I'm not selling a product or a service. I'm just providing an opinion. And the opinion could

be anything from, because I also run a monthly investment newsletter called McMurtry Investment Report. So my book is about how to set up and start managing and what to look for. And my newsletter is about what specific investments to make. So they complement each other. I'm curious, since you mentioned that, you know, now you kind of have the freedom to kind of share your opinions, especially with your, you know, very broad experience of decades. And also that you're able to kind of take a step back and really take a look at the industry and see some of the good things, bad things. And I know reading your book, this is definitely an overall message kind of throughout the book is there's things when you're an investor, retail investor, a client that especially in Canada that you need to be aware of, because

even still, you know, I've been doing this podcast for a while, and I talk to people all the time, there's still this, I think, assumption that if you go to a bank or a firm, and you, you know, work with an advisor that they're going to help you and they're going to be 100% objective and unbiased. And you can just leave your money with them and everything's going to be fine. And then typically what happens is years go by and you're like, oh, this isn't actually what I expected. This isn't exactly what I signed up for. I'm curious, when you came out of the industry, were some of the things that maybe you believe when you're working in the industry shifted? Did some of your opinions or thoughts about the industry shift?

Well, one thing was the switch from mutual funds, which has been going on for quite a while, into exchange-traded funds, and also the switch out of DSC funds into ETFs. That was a big issue. It's still going on, but the public is still unaware of a lot of the ins and outs of the fees that they're paying. In some cases, I've seen advisors, and I'm not saying this is the norm, but I've seen advisors tell the clients that you're only paying a small fee, a token fee, whatever. But they don't mention there's a fee embedded in the mutual fund, which is a separate fee. So there's fee upon fee upon fee. And there's a lack of transparency in the industry.

And I know the Securities Commission are trying to make the information more transparent, but they haven't had a lot of success yet. The public is still very confused. And especially when the markets go down, and then they see their performance is even worse than what the market is doing because of all these embedded fees. So I try to explain to clients and subscribers what they're invested in, what the fees are, and can you do better than that?

And I had a lady ask me a bunch of questions. bank brokerage firm in basically a portfolio management service that only focused on US high-tech stocks. And it was only bought through a Canadian account, not even a US. So every time there was a transaction, a buy and a sell, there was a foreign exchange fee. And then that's just when the high-tech stocks began to collapse. Yeah. And she was freaking. So she came to me and I helped guide her away from the situation

before she lost a huge sum of money. So it's all about helping people realize what they're in and can you do better. And it's all about tailoring a portfolio so that it's almost like your personal mutual fund as opposed to just a generic one for everybody. Yeah, because I feel like often, I mean, you know, I talk about this on the podcast a lot. When you work with someone, you know, a professional and advisor, and they, you know, talk about fees, but they kind of go through really quickly. And ultimately, they're only selling you products, really, that is like the number one point of their job is to get you into a product. Sometimes they don't sell you the right products. And if you don't know what questions to ask, what to look for or how to even

understand portfolio construction or how to compare funds from each other, how to understand, you know, for example, that a person you just mentioned, she may not have really realized that she was in a very, you know, specific fund just of those U.S. tech stocks. She probably just thought she was in a U.S. fund that was maybe more broad. It's, it's, you know, can kind of leave you because ultimately, those people are still going to get paid. You're the one that's going to suffer. And you know, I appreciate you having this book that really goes through some really specific action steps on how you can then take control of your finances. Before we kind of move on, you did mention fees and you mentioned

deferred sales charge, DSCs. And I think a lot of people aren't aware of them. They're maybe not as common depending on who you have your mutual funds with, but I know lots of firms still have them. And so many times I've talked to people, they want to move out of mutual funds and go into an ETF. And I know you talk about this in your book. It's so important before you make that shift to understand if there is a deferred sales charge. Did you want to kind of discuss what a deferred sales charge is, what you should be aware of? Yes.

So this is actually, as you said, the industry is slowly changing and getting away from these products and just making them basically investment management fee. But right now, a lot of funds still charge a deferred sales charge. So when you purchase a fund, it could be up to five years. If you redeemed that fund before five years, you could be paying anywhere from 2% to 3.5% of the value of the money you put in. And there are ways to minimize that.

Every year you can take out a certain percentage, 10% fee-free, things like that. But in a lot of cases, the clients are not really aware what they can redeem. And their advisor is not encouraged to really discuss that in much detail. So in order for you, the client, to actually find out what the deferred sales charges remaining are, instead of phoning an advisor, your advisor,

the recommendation is to phone the mutual fund company, the client services department, who's an independent objective opinion, and ask them specifically what the fees remaining are. And so when I was working for a mutual fund company at one time in my career, a client thought they understood deferred sales charges, but then after a year, they wanted the money back. And the fee was five and a half percent. And they were like absolutely floored. Now it goes down in a slow progression after seven years to zero, but it doesn't go down very quickly for the first couple of years. And so clients have this deferred sales charges, which is not really, it's discussed. They have to sign off on it but

they really don't understand it because they're not paying it right up front they only paid if they redeem the fund within seven years but there's also the the fee of the mutual fund the investment management fee of the mutual fund that the fund is charging every month uh a fee for that for their services as well And so the client may or may not see that, but then there's a third fee. It's an asset mix fee, which they will see because it goes out of their bank account. So there's all these fees and they're not totally transparent. And for the most part a lot of clients either don't know about the DSCs or when they do know they never want to go into that type of product again like I have seen some companies that have DSC funds and when they expire they put them in more DSC funds. And so the way out of them is a multi-step approach.

The first step is to stop contributing on a monthly or quarterly basis into a load fund. And then because every contribution you make today, seven years hence, it'll be some fee if you redeem that fund before. So it kind of locks you in. It kind of imprisons you a little bit. It does. And also, there's not a lot of option to, you can switch, once you're in a load of funds, you can switch a little bit, but you're stuck in that family of funds. And if you're not comfortable with that family of funds, you're basically out to, you know, you can go into a money market fund if you want, whatever, but you can't go into another company.

You're stuck. So what's the solution, I guess? So, you know, I know you do discuss this in the book, and I do kind of agree with what you discuss in the book in that a better alternative, and I agree, is to get out of mutual funds and consider ETFs, exchange-traded funds. Yes. Well, my neighbor, my former neighbor where we used to live, he had a bunch of mutual funds and he was paying, and he wasn't even sure what he was paying, anywhere from 1.5% to 2% if you included all the fees. And he said he was very

unhappy with the returns because a lot of the returns were affected by the fees he was paying. And those fees were over and above the deferred sales charges. They were just an annual fee that he was paying. And so I had to look at all the funds that he held, find out from the mutual fund companies how much fees were remaining when they expired. And then we sat down and redeemed 10% or the fee-free units that were available at the time, plus every year after that, 10% of the units were fee-free, but he had to call every single year to get the information. And so what happened was, at the end of the day, there were still some fees to pay. So say the fees was down to two and a half percent or something like that.

He had the choice of just waiting for the expiry to happen another couple of years, or compare the fee, like the investment management fee or MER, compare that on the mutual fund, compared to a similar exchange-traded fund, what the MER was for that. And in most cases, the payback was only a year or two to get out of it completely. So most of the time they said, okay, I'll pay the price now if I can get out of there, if I can break even in two years, something like that. So I quantified all that for him and his wife, and I saved them $10,000 per year. And the thing about it, he didn't want individual securities, because that's what my newsletter is more about, individual securities. He said, I want exchange-shared funds. I want

some diversification. I said, well, my newsletter has 55 companies. It's highly diversified. But he still said, I don't want to pick stocks. I said, I totally understand that. But the portfolio managers running the mutual funds are the same people running the exchange-rated funds. Instead of paying a massive fee, you're paying a tenth of the fee. Now, there is a fee to transact like there is a stock, but a lot of discount brokers don't even charge commission buying and selling ETS. It depends on the company. But for the most part, many of them don't. Exactly.

So I'm curious, because you've worked with the, it seems like you've helped a lot of friends, you've worked with a lot of clients over the years, kind of helping them get out of this high fee situation, make better decisions, because maybe they're risk guided, or they had a crappy advisor, or what have you. Is that kind of what inspired you to write the book, which is really about how to take control and, you know, basically empowering people to be more self-directed with their investments. I mean, that's definitely something that I'm, you know, very in tune with, and I'm a self-directed investor. And a lot of, you know, the people that I talk to want to do that as well. And I think a lot of it is because they've

been burned before, or they just don't, there's, you know, a lack of trust in the industry. There is, and that's exactly why I wrote the book. I want to help people. When you feel empowered about any things in life, you get a sense of pride and accomplishment that you're in control over your life. And that makes people feel very comfortable. And if you have an advisor that doesn't have your best interest at heart, they may or may not, but if they don't, you're going to feel very uncomfortable, particularly in a market like this today. And if you have control over what you're doing, and you understand that you're going to have to do your homework. You do not have to be a financial expert. You don't have to be a CFA or an MBA to do this. I have many subscribers

that are in completely different fields that manage their own money and they have no problem with it. They use my newsletter, they use my advice, but it's all about giving them the empowerment and tools to do it themselves. And I give them information about where to find things on the internet, how to get information for free if available. And in some cases, you have to pay a little bit to get some

information. But with my newsletter, you can actually, I have two model portfolios. You can actually run a portfolio through my newsletters very inexpensively because the cost is ridiculously low. And I help them and I cover all 11 subsectors of the Canadian and US market. I cover fixed income and all of that together. And I explain to them when I make a recommendation why I'm doing it and what I expect them to do and how it'll help them from either a diversification point of view, from a growth point of view, from an income, whatever it is. So they understand. They don't always agree every time. But the key is understanding what's going on. Like a couple of weeks ago, Algonquin Power, which is a very reputable company,

they announced that they had some financial difficulties. So the stock collapsed. And then last week they announced a 40% cut in their dividend. Now, it's subsequently risen a bit since then, but the point is that the public is aware of supposedly reputable companies, but they have to do their homework. Because supposedly reputable companies can go bankrupt. And you have to find out how much debt that they were in, and if the debt is manageable, and if not. And if a company in an industry like a utility, like a Goncun Power, they tend to have more debt than companies in more cyclical industries, such as mining or energy. But that doesn't mean they can ignore the debt levels indefinitely. For example, Enbridge, a couple of years ago, had the same type of situation with their debt,

and they sat down the senior management and figured it out. So they sold off non-core assets, they paid off their debts with their cash flows, and they made their balance sheet healthier to deal with the future. So it's important to understand where to look to find out if the company is overly leveraged, if they have too much debt. It's just a matter of doing your homework. And I know in your book, you do have a section specifically on how to read those statements, how to do that research. Are there any kind of important things, you know, for example, for anyone who's never done that before, and it seems kind of daunting? What are some of those practical things to make sure if you want, you know, for example, if you do want to

look specifically at individual security, as opposed to just buying a broad market ETF, for example, what are some key things to look out for to make sure you are investing in companies that are actually, you know, what they say they are reputable and profitable? Well, first of all, I start off, if I'm looking at a company, I start off with what industry are they in? And I categorize the industries by growth industries, which are like technology and social media, defensive industries like healthcare, not cannabis. That's the healthcare stocks in Canada are cannabis stocks. They're not healthcare stocks. And grocery stores are also defensive. And then the cyclical stocks are the rest, and that's financial, mining, energy, industrial, and consumer cyclical or retail.

Those cyclical stocks are more affected by the economy than more defensive stocks are. So they tend to go up and down more. But I start off with that. I look at the company. I compare the company to its peers, to the market, and to its history. Are they going more into debt? Do they understand the market and where they're positioning themselves going forward? Are they in trouble financially? Because you see that there's a lot of companies

that get into trouble and their bondholders restrict them through their bond covenants to looking after the bondholders' needs before the shareholders. That's when the company is in real trouble, when that happens. But you don't always see that, but it does happen. So it's a matter of, so what I do is I do not advise an investor to, first of all, buy a stock because they've heard a rumor is going to be taken over. That was a major faux pas. I do not recommend buying a stock because there's insider trading. No. Because I had this friend of my brother-in-law's, he was telling me about this stock and it's a disaster. And the person's, the insiders are buying it, it doesn't mean it's good. Yeah. Because they get the stock

options for free. Right. A lot of these executives. So it doesn't mean anything to them. But it does to you, the investor, if you're buying something. And I don't buy a stock simply because the chart looks good. That's another thing that a lot of individual investors do. I buy the stock based on what the fundamental aspect of the company, the earnings, the cash flow, the revenues, the profit margins, the balance sheet, how they compete against their peers. What is the industry? What's the outlook for the industry?

So, for example, one of the reasons why the energy industry in Canada is doing so well recently is not only the price of the commodity, it's the fact that in past economic cycles, corporate management of these energy companies would always increase production at the wrong time. And they always did it simultaneously, causing an oversupply of the commodity and eventually the price of the commodity collapsed. This time around, they also realized with global warming and renewable energy that they have an immediate threat to their long-term viability, the energy companies, so they better do something more proactive than they have in the past.

So what they're doing, they're not increasing production nearly as much as they did in the past. They're buying back their own shares. They're increasing their dividend, and they're paying off all their debts. So the commodity doesn't have that extra supply coming on. Once the demand picks up, when China starts to reopen again, the commodity will start to go up again. And so every industry is different, but it's important to see how the management of a company,

how they react and what they do. And you don't have to talk to the management. Just look at their actions. What have they done? How are the revenues? What are they doing? And look at their actions. What have they done? How are the revenues? What are they doing? And look at their margins. Have they been able to achieve? Like, for example, there are many companies today with high costs but are able to control their margins, either through price increases or by controlling costs, even in this period of high inflation. That, to me, means a very strong management of a company.

So it doesn't take rocket scientists to figure this out. Just look at the quarterly and annual reports. Again, it is confusing reading them. It's very, very confusing. I'm not saying it isn't. The language is hideous at times, but there's there's um there's language that's like for example when one company takes over another company there's a word dilutive and non dilutive. What that means is that

affect the bottom line. If it doesn't hurt the bottom line, if it doesn't hurt the bottom line, if it improves the bottom line, it's not dilutive. It's beneficial. It's a creative is the word. But dilutive means it's going to hurt them if they take over the company. So these little language, little subtle words like that, and the companies don't always save them when they're taking over the companies. But it's a matter of getting used to it. And when you look at one company, look at their peers, look at the competitor. Like what I do is I start off,

like for example, there's 11 sub-industries in the North American market. Take financials. Take Royal Bank and you can compare Royal Bank compared to the other banks. Why has Royal Bank done better? Why has their share price done better over the years than some of the other banks? Is it quality of management?

I say yes. Do they know where they're going? Yes. So do they get into trouble very often? No. So when they make a position, so when HSBC Canada was for sale, the only bank available to take them over was Royal Bank

because they're so well capitalized. Their balance sheet is so strong relative to the others they were able to make that takeover. It still has to be approved by the government and shareholders and all that. But nonetheless, it just shows you how strong Royal Bank is compared to the others. Yeah, absolutely. Yeah.

No, I'm curious because this sounds, I mean, this makes a lot of sense. And again, you do give some great advice in your book. But I think a lot of people, especially if they are making that transition from, you know, very, their portfolio is very managed, and maybe they want to go more self directed, it can be, again, very kind of confusing, it's because you're doing something brand new. And so you want to make sure that you're doing it right, you're not making a mistake. And that's often what I, the concerns I hear from listeners is I don't want to make a mistake. How do I, you know, I don't want to be that person on Reddit who complains that they, you know, bought something the wrong, you know, ticker or something like that. Would you be able to share like some of the common, you know, things for people to be aware of as they start their kind of self-directed investing journey, things to make sure that they don't get wrong? When they place a purchase order, if there's a bid and they ask, they have to understand there's this, it's like an auction. And to go in there, don't go any higher than the offering price.

And when you sell it, this bid is what you're looking for. Or go in between. But don't just put a limit order and expect it to get done, because it may not ever get done. So you have to be very proactive when you buy something you have to look at what you're buying look at what you're willing to pay for that and be very proactive on those things um one of my subscribers uh i basically guided him when he made transactions at first to show him what he was doing, placing limit orders, things like that.

Just help him transition because he was a bit, as you said, afraid at first until his comfort level increased. So once he made a couple of transactions, he realized this isn't too bad. But he always asked me before he made a purchase or sale, he would say, am I doing the right thing? Look at the market right now. Am I doing the right thing? And I said, okay. And I always had time for him. He emailed me, phoned me. I always had time. And he learned very quickly what to do. And sometimes he would have positions that he already inherited. What do I do with these positions? Well, I researched them and said, how do they fit into your overall other holdings, your overall consolidated portfolio? And I analyzed that to see how they fit in and came up with a conclusion.

One thing also that's very important to consider is don't just look at the tax implications of what you're doing. It is something to consider, but I've seen many, many clients in my career not sell nor tell because they had a capital gain. And they lost it all. In fact, I had an individual that my wife's, she's a friend of the family. And I was managing the father's money. And he had 95% Nortel. And I started saying, this is crazy. He had a significant sum of money.

And I started recommending, because I just inherited of money and i started recommending because i just inherited the account i started recommending selling it but it was a capital gain he did not like that and he went to a different account and i i said to the daughter i said you you are aware that if your father had uh even liquidated a portion of that Nortel, your life would have been very different. And so tax can really crimple you from making the right investment decision. I know. I hear a lot of people even come to me and are so concerned about tax.

And I don't know where this comes from. I feel like part of it comes from the US who are very anti-tax. And yeah, they're just terrified of paying any taxes. But I'm like, well, I mean, yeah, you're paying tax in one way or another, no matter what account you have your investments in. And, you know, whether it's before you put the money in the account or after, like there's, there's always going to be tax. But people are just very afraid of paying taxes. And like you said, they could be and a lot of people make their choices based off tax implications first, as opposed to what their investment goal is, or what this could actually do for their financial future. And that happens all the time.

And it's absolutely wrong. They get burned more often than not by not focusing on the underlying investment and keeping an investment that's gone up in value. I had one client and he had massive gain in Apple. It was, again, huge proportion of his portfolio. Apple, I said, is a great company. But they're not invulnerable. Like right now, with the cost of cell phones today, people are not automatically getting the new version. They're just not doing it. Yeah.

It's like a mini computer price at this point. You know? So having all your money in Apple is not beneficial to your net worth. And so I look at investments and say, look, are you well diversified? You shouldn't have any more than, when I recommend a position in a company, initial position should not be more than

a couple of percent of the total market value of your total stock portfolio. And if it's any more than that, you should not be, you know, it's not diversified. So diversification by industry, by asset mix, and by stock, and also in fixed income, you have to diversify as well. Some people think fixed income is just a cakewalk. It's very simple. It's not.

Like right now, again, with the market collapsing, there's a huge demand for GICs. They yield 5%. They think it's fantastic. Well, why is it that no fixed income portfolio manager buys GICs? Because they're not liquid. Right. If they can't sell it and buy something else when the market opportunities present themselves. You can buy an investment grade corporate bond that is reasonable high quality, that's liquid.

Like, for example, Royal Bank has a short-term one-year bond. So instead of buying a GIC, the yield was to maturity, which is what the yield you should be looking at, was only slightly less than 5%. And yet I had the flexibility of the liquidity. I could sell that bond and buy something else. And then buying a fixed income fund, it's very important to find out what's in the fund. Is it only long-term bonds, which are very volatile?

Is it riskier bonds, which is also very volatile? So you have to look and if you, so what I do is I dissect portfolios for people. Individual stocks are easy because they're transparent. But if you're in a fund or an ETF, you have to dissect what's in there. And it takes a fair amount of work, but it's really important because short-term fixed income is very different than a 30-year bond portfolio. And when rates go up, you could be absolutely creamed in a long bond portfolio. So it's very important to dissect what's in there because a lot of clients are unaware what they own. Yeah. I mean, yeah. I mean, in their entire

portfolios, most people, especially if you just went, you just went to the bank, you know, used an advisor, they got you into a fund, most people have no idea what's in there. I mean, I used to be like that when I was, you know, first started to invest, I had no idea because they don't take the time to explain to it. And there's less, obviously, transparency with mutual funds than ETFs, ETFs, at least now you can go online and find exactly what's in there. But with mutual funds, you know, good luck. Yeah,'s also uh i was watching my wife and i were watching the birdie madoff netflix series and he promised the moon and he he didn't even invest he basically used fake trades and all the stuff but the point was he was promising something wasn't even deliverable

so a lot of people want to believe the returns that they're supposedly showing, but they're not legitimate. So when I see a return, a dividend yield of 14%, I don't believe it. I think there's something wrong. And in a lot of cases, you see these ETFs use, or mutual funds, either or, use leverage. So they invest in a conservative portfolio of, say, banks, which yield about 4%, 4.5%. But why is their dividend yield 14? Because they're borrowing to get a higher yield. It only works when the market goes up. But when the market goes down, the clients can lose an absolute fortune. Yeah. And I think a lot of people don't realize when they're in a fund in which there is leverage,

because I mean, if you're not dissecting what exactly is in that fund, you'd have no idea unless someone said something. No. And I had this lady say that she was getting some fantastic return on this ETF. And I didn't believe her. So I researched the ETF and it said that the investments were very conservative. And I said, well, how is a conservative investment reeling 14%? Exactly. In the back page, in in small print they said to use leverage uh-huh yeah so it's they're disguising you see the information the securities commission wants the companies to report is still not transparent they're not being required to be as transparent as they should be. And that's why I think a lot of people, yeah, get themselves into, you know, portfolios and funds that they don't really understand.

And then, you know, years later, they're unhappy because there's still a lot of work to be done in terms of reshaping the industry because it's not where it should be. I mean, I love that I've been able to educate myself and have this platform to educate others, but I wish it was easier. Like people shouldn't have to like go and find a personal finance podcast to understand these very basic fundamental things that we all, all of us have to be investing. So all of us are probably have experienced lots of these things that we've discussed some of these issues, which is an unfortunate thing. But I mean, that's just the world that we live in right now, where the only way to get ahead and to actually, you know, build wealth, be smart with your money is you have to teach yourself this stuff because no one else will. And it's a hard pill to swallow because it's, you know, lots of other elements in life. You don't, it's not that hard. But for whatever reason, finance is still, or the financial industry, they still want to have that kind of mystery about them.

Well, I find, I question when someone promises something that is not really there. But I also question people in other professions. For example, even in the medical profession, some doctor was telling me something that I didn't believe. There's no other therapies. That's it. Well, when I did my homework, I realized, of course, there's other therapies, but he didn't want to disclose that information. And I had a few doctors misdiagnose me for eye problems, which I didn't end up having. They said, oh, you have glaucoma. I said, no, I don't have glaucoma. And they said, you do. I said, no, no, I don't. And so I found out that I didn't. And then I went back to the doctor, and this is not my doctor,

but somebody else. And I said to him, you know, I don't have glaucoma. I don't know how you assume that I did. But so he said to me, I don't make mistakes. I said, but I said, you, but you do. I said, I'm not suing you. I'm just telling you to take more than five minutes to examine. Yeah, exactly. Just because 99% of your, you know, patients have glaucoma or something like that, it doesn't mean that you shouldn't always do your due diligence. And that, I think that's a really important kind of message to get across is even if you trust, you know, a certain professional, no matter what field, like they're human and humans make mistakes, right?

No matter, they may be very confident that they don't, but it doesn't mean that they, you know, don't make mistakes. Come on, everyone makes mistakes. They do. What I like about individual securities as opposed to a fund or an ETF is that you see it. It's transparent. You see the dividend. You see what the company is doing. You can compare it to other companies.

And you know what you're invested in. There's no guesswork. It may go up and down. But as long as you're diversified across all the 11 subgroups and your asset mix is conservative, everything else, you see more clearly, you're in more control over what you're doing. In a mutual fund or an ETF, you can get the good companies and the bad. Like, for example, a sector ETF invests in, say, real estate. Well, there's some really good real estate investment trusts and there's some not so good.

Yeah, you get them all. And you get them all. So for example, right now, industrial warehouse real estate is doing the best. So like when Walmart and Amazon build these huge warehouses, distribution centers, the real estate investment trusts own them and rent them to the Amazons and the Walmarts of the world. And they're just growing like crazy. But in the, for example, in the retirement home, there's real estate investment trusts. And there's an oversupply of retirement homes right now.

So they don't have the same pricing power that they used to. So it depends on, so in a real estate investment ETF, a sector ETF, you have all the ones, not just the ones that you like, but you have the ones that you don't like. And I'd rather invest in the ones that I like, as opposed to a combination of everything. Absolutely. Now, before I let you go, because we're almost at time, is there anything else you would like to convey to anyone who's about to pick up your book or anyone who wants to become more empowered and take charge of their investments? ask me any questions. It's peter at mcmurtryinvestmentreport.ca. And that'll come right to my email. And basically, or you can phone me at 613-816-1045 is my cell phone. And just say, I have a situation. I'm not comfortable here. I'll help guide you. And I'll basically see if I can help you or not. And I'm not going to charge you if I can't help you. And the fee is really infinitesimal anyway, compared to what you're invested. A lot of people are just terrified of making a decision.

Right. Absolutely. Yeah, that analysis paralysis is real. So I'm there to guide and help. A lot of people don't like to pay monthly bills. And I understand that totally from a budgeting point of view. So an hourly consultation, just to guide you, is what I also do as well. Amazing. And so, as I said, I've got several people that are either fully invested and shouldn't be fully invested and are terrified. And I don't recommend anyone fully invested. And some people have no investments and are terrified because of inflation. Yes. And everybody in between. And both those people are unhappy. Mm-hmm. So I'm trying to guide people to take a more middle-of-the-road approach, that asset mix timing going in and out of the market constantly is dangerous,

but you can be proactive without making major changes. Just slowly going into the market as we come out of the recession here, just slowly start buying. And the decision right now over the next two years, how you invest your money will determine how long your money lasts for the rest of your life. And if you make a mistake and sell everything when you think the market's going to fall further

and it doesn't fall further, you're sitting in cash. It's like sitting in the dust. So that's the message. I can help people just call anything or email me and I'll be glad to help anybody. Yeah, don't be afraid to get started. And if there's ever, I feel like a good time to change, if you're unhappy with what's going

on with your investments, or you're not investing, and you want to get started, the best time to do something about it is literally when you have that thought in your head. Because if you don't act on it, I find you're gonna, you know, blink and six months will be down the road and nothing will have changed, right? So do something about it. Do something about it. And it doesn't matter how much money you have as long as you start now. That's all that matters.

That's all that matters. Yeah, absolutely. Well, thank you so much, Peter, for taking the time to chat with me on my show. You shared some valuable information I know a lot of people are going to love. Once again, if anyone is interested, your book is called Own Your Financial Future, Take Charge of Your Investments. And people can grab a copy on Amazon, Indigo, every kind of place you would normally get your books. Thank you very kindly. And you have a wonderful reputation in what you do. And it's very clear. And I've watched some of your podcasts are terrific.

Oh, thank you so much. Thank you so much. Well, it was a pleasure having you on once again. So thanks. Thanks a bunch. Thank you very much. And that was episode 363 with Peter McMurtry. Make sure to check out his website, McMurtry investment report.ca. I will link to it so you can easily find his newsletter and also his book, Own Your Financial Future in the show notes for this episode, jessicamorehouse.com slash 363. And as always, I've got some things to share with you. So do not go away. You're not going to want to miss the things that I'm going to share with you. So stick around. I just want to share a few short words about this podcast episode sponsor. This episode of the More Money Podcast is supported by FedEx Express Canada. Do you run a small business or know someone who does? Because if you do, listen up. FedEx Express Canada is running their hashtag backing small business contest and giving away $100,000 in total prizing to $10,000, and 25 third prizes of $1,000. So there

are lots of chances to win. And all you have to do to enter is register your business using your FedEx account number and make at least one qualifying shipment with FedEx Express, FedEx Ground, or FedEx Freight from now until April 30th. Don't have an account yet? Now's the perfect time to do so. Plus, it's free to sign up. Visit FedEx.ca slash Backing Small for full contest rules and regulations and to learn more about the FedEx hashtag Backing Small business contest. Once again, that's FedEx.ca slash Backing Small to learn more. All right, so a few things to share with you. Number one, just reminding you that I'm giving away a copy of his book and also a bunch of other books. If you're interested, all you have to do is go to jessicamorehouse.com slash contest. Also, you'll find a link to it in the show notes, jessicamorehouse.com slash 363. And if you ever want to find out the show

notes for any episode that ever was put out by me, you can either just go jessicamorehouse.com slash the number of that episode or jessicamorehouse.com slash podcast. So I'm giving away a ton of books. So make sure to check that out. And also, if you were not aware on the topic of investing, I do have my own investing course called Wealth Building Blueprint for Canadians. It is now two years old, which is really exciting. Hundreds of students have taken it and are very happy about that. You can check out all the testimonials and reviews. And the great thing is, if you are interested, of course, you can go to jessicamorehouse.com slash course to learn what is involved.

There's a lot of things. But really, we do take you from the fundamentals of investing all the way to the end of showing you how to actually invest in a passive way. But also, so many other benefits, like a Facebook group where you can be part of the community. I host a monthly Q&A session that you can take part in and ask me your questions live. You always have access to me and you get a free 30 minute one on one with me once you finish the course. So lots of good goodies in the course. So make sure to check that out at JessicaMoorhouse.com. And one last thing before I let you go. Well, two things. Number one of those two things is I do have a bunch of budget spreadsheets. If you want to get your, you know a YouTube channel and you may have realized because,

you know, we're in April right now. The first home savings account just came out and I've been getting a lot of questions about it and I made a video all about it. So check it out on my YouTube channel, JessicaMorehouse.com slash YouTube, or if you go into YouTube, just Google my name, Jessica Morehouse, and you'll find it and you'll find that video to answer all of your questions about the new registered account called the FHSA. So thank you so much for joining me. I will see you back here next Wednesday with a fresh new episode. Big shout out to my podcast editor, Matt Rineout. Have a good rest of your week and see you soon.

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