Ian Quigley is a partner and senior consultant with the innovative financial advice firm Qube Consulting. He is an expert in investment, insurance and tax strategies and has developed numerous online courses dealing with these subjects. Some of the courses developed by Ian include Insured Annuities. Small Business Healthcare, Segregated Funds, Wage Loss Plans and Innovation Group Benefit Plans. He shares with ILSTV his views of the year that was and what we can expect in the financial world in 2010.

Ian Quigley: Before we look ahead to 2010, let’s take a second and look back at where we’ve come from. That will give us context.

2008 left investors down a fair bit. The TSX was down 33% in 2008. That really tied us for one of the worst years ever in the stock market’s history. 2008 also brought us to the end of a ten year period; going back obviously to 1998 to 2008, which was the worst ten year period ever in the S&P 500’s history. So that left a lot of people pretty gun shy.

Going into 2009 we’ve seen, thankfully, a very large rebound. Into the end of November, 2009 the TSX was up almost 16%, so that’s pretty exciting stuff.But a deeper story can be found if you look at the precious metals and the precious metals pure index. The precious metals pure index was also down in 2008; it was down 35%.Nowcoming to the end of November 2009, it’s up, if you can believe this, up 104%. Now this is making many of our investors in Canada metal crazy, gold crazy. And this really leads us to the true challenge a financial planner is going to have going into 2010. We are either going to be helping clients with fear because it will be a down market, or with greed because it’s going to be an up market. And really, dealing with fear and greed is our primary role as a financial planner. I really encourage financial planners to look at things like papers that are presented and published by organizations like the World Gold Council. The World Gold Council is an industry group, so they are going to publish papers that promote the sale of using gold as an investment. And they’ve published some really good papers in the last year. Just recently they published a paper about what role gold would have in an investment portfolio using it as an inflation hedge. The particular paper I would like to talk about was published by Natalie Dempster and Juan Artiquez, and it’s published at gold.org.

After many pages of interesting reading in their particular paper, they conclude, and remember they are biased, they want to promote the use of gold in investment portfolios, they promote gold all the way up to 7% of your portfolio. Seven percent! That’s it. And so we have to give that context to our clients when they are going all metal and gold crazy, that it’s a back to the basics type of advice in 2010. We need to deal with that greed if the greed has come back and say, you know, gold could be a good investment, and find some papers to show our clients that support this is a good idea, but obviously going beyond 7 or 10 percent may beyond the risk profile of that particular account.

So, as markets are recovering from 2008, I think just reminding our clients of the importance of sticking to their investment plan, and a sort of back-to-the-basics type of advice. Reviewing with them the implications of their asset allocation decisions;this is how much money they have in the stock market. Is that risk profile they have in their account matching their personal psychological profile? Are they staying awake at night worrying about things? If they are, we need to help them go back and review their asset allocation decisions. So, for more information aboutback-to-the-basics investment planning, check out some of our courses available to you where you can earn CE credits and refresh some of your skill set with back-to-the-basics ideas. www.ilscorp.ca