Retirement takes meaning in the context of work. For most people, it means working less or not at all and living on one's accumulated wealth held in public accounts, such as the Canada Pension Plan, or in private accounts such as Registered Retirement Savings Plans. For those who have saved and invested well, retirement can be a time of realization of dreams. For those who have not built sufficient wealth, it can be a time of nightmares.
A good financial planner can help steer a client through the maze of competing theories and claims of superior performance. Since portfolio management theories are as changeable as fashions - and are, cynics say, little more than fashions - it is best to remain focused on total return and volatility rather than to become committed by an over concentration of assets in one management style. The greatest fortunes in history have been made slowly by investors who are willing to buy when others are desperate to sell and to sell when others are in a frenzy to buy. A good financial advisor can help the investor to stand apart from the mob and even to pursue the simplest rule of all in a world of ever-changing market enthusiasm: try to figure out what everybody is doing and then, if possible, do something else.
This is the ultimate contrarian strategy and, for the investor who bought consumer staples and banks in the tech frenzy, who bought long bonds that paid single digit returns to maturity in 2000, and who have been prepared to buy income properties at knockdown prices, the future is bright. It is far less joyful for those who were part of the tech stock bandwagon in 2000 and 2001 and who held Nortel Networks and other stocks as they lost over 90% of their value. In the market, cynicism pays, but it must be an enlightened form of disbelief accompanied by a willingness to act the opposite way of the mob. "The trend is your friend", is frequently heard in bull markets, but it is a fickle friend at best. Standing apart from the rushing bulls or the frightened bears remains the least risky way to build wealth. For those who need it, advice on how to build and manage an independent investment plan is precious.