Working with Parkyn—Doyon La Rochelle: Our Approach to Managing Wealth

Managing wealth is at the heart of everything we do as portfolio managers and financial advisors at Parkyn—Doyon La Rochelle. After all, wealth is the foundation of your financial independence and money properly invested will help you reach your goals.

With so many options, and so many preconceived ideas, where do you start?

When it comes to investing money, we think transparency is always the way forward. So, let’s go back-to-basics, and answer fundamental questions regarding how we manage your wealth.

Here is how we work at Parkyn—Doyon la Rochelle.

Why invest in financial markets?

A successful financial plan hinges on your money being properly invested to grow and generate returns. But why invest in financial markets? There are several reasons:

• Grow wealth over time: Historically, investing in financial markets tends to offer a higher return than savings accounts for example. This means your money has the potential to grow at a faster rate, allowing you to build wealth for your retirement or future goals.
• Beat inflation: Inflation slowly reduces the buying power of your money over time. Investing can potentially help your money grow faster than inflation, which means you maintain or even increase your purchasing power in the future.
• Diversification: Investing in a variety of assets can help spread out your risk. This means that if one investment goes down in value, the others may help balance it out.

What is a financial plan?

A financial plan is a comprehensive strategy for managing finances to achieve long-term goals. For high wealth individuals, this typically means preserving and growing wealth through tailored approaches to investing, tax optimization, and legacy planning. A financial plan for affluent clients might involve structuring trusts and philanthropic endeavors alongside traditional asset management.

How do we invest your money?

The Parkyn—Doyon La Rochelle approach starts with discussing and understanding your goals. Is it simply to retire comfortably? Travel more or acquire a vacation property? Fund post-secondary education for your kids and grandchildren? Give back through philanthropy? All of the above?

Based on your goals, we create an investment plan designed to achieve the returns you need to attain these goals, taking into consideration the level of risk you are comfortable with.

How do we approach risk?

We know that returns are closely correlated to risk. That is why we take the time to discuss your tolerance to risk and risk capacity and answer all your questions about how markets fluctuate.

Your goals and risk tolerance will dictate how we design your investment portfolio, as well as where and how your money will be invested.

When building a portfolio, we subscribe to evidence-based and data-driven investment principles that minimize costs and maximize your diversification. This allows us to ensure greater, more reliable returns.

How do we design a tailored portfolio for you?

Here are all the dimensions we consider while designing your portfolio:

• Asset allocation: This is the foundation of your portfolio. It involves dividing your investments among different asset classes based on your tolerance to risk and risk capacity and goals.
  Here’s a general breakdown:
  • Stocks: Ownership in companies; generally, offer higher growth potential than other asset classes, but also higher risk.
  • Bonds: Loans to governments or companies; provide regular income but typically lower growth than other asset classes.
  • Cash equivalents: Very low-risk investments like savings accounts or money market funds; used for short-term goals or emergencies.

• Diversification: We don’t put all your eggs in one basket. We carefully distribute your investments across various asset classes, sectors, and geographical locations. This helps to mitigate risk because if one investment loses value, others may compensate.

What is an asset class?

An asset class is a grouping of investments with similar characteristics and subject to the same laws and regulations. Common examples of asset classes include: Equities (e.g., stocks), fixed income (e.g., bonds), cash and cash equivalents, real estate, commodities, and currencies. Focusing on asset classes is one way to help investors diversify their portfolios.

• Investments: We invest in broad-market ETFs from reputable providers such as Vanguard, iShares, BMO, and institutional calibre mutual funds sourced from Dimensional Fund Advisors Canada ULC (DFA).

What is a broad-market ETF?

A broad-market ETF is a type of exchange traded fund that tracks major indices such as the S&P 500. They diversify exposure to the overall market, reducing risk while providing potential long-term growth. ETFs are similar to stocks since they both trade on stock exchanges. An example of a broad-market ETF is the is the SPDR S&P 500.

What is an institutional calibre mutual fund?

An institutional calibre mutual fund is a high-quality fund designed for large investors, offering professional management and lower fees. These funds have rigorous selection criteria and are often used in portfolios for stability and growth. An example is Dimensional Canadian Core Fund Class F.

• Fees and taxes: Investment fees and taxes can eat into your returns. That is why we use low expense-ratio mutual funds and ETFs. We minimize potential tax implications in your investment choices.

What is a low expense-ratio mutual fund or ETF?

A low expense-ratio mutual fund or ETF has fewer fees deducted from returns. Investors use them to maximize gains and reduce costs. An example is the Vanguard US Total Market Index ETF (VUN), known for its minimal expense ratio while offering broad market exposure.

• Rebalance and review: Over time, the value of your investments will fluctuate, causing your asset allocation to drift. We periodically rebalance your portfolio to get back to your target asset allocation. We also regularly review your financial situation and tolerance to risk and risk capacity and adjust your portfolio accordingly.

What is our role as a portfolio manager?

Expertly managing your wealth and helping you achieve your financial goals is at the core of our mission as portfolio managers and financial advisors.

• Risk mitigation and diversification:One of our primary objectives as portfolio managers is to spread risk across a variety of assets. This reduces the impact of poor performance in any one given area to ensure more stable returns over time.
• Return optimization: We aim to maximize returns given your specific level of tolerance to risk and risk capacity. This involves a careful balance between conservative and more aggressive investments to achieve the highest possible return on investment.
• Behavioural coaching: Through behavioural financial coaching, our role is to provide guidance, helping you stay on course and adhere to your financial plan, preventing decisions that may impact your long-term objectives.
• Capital preservation:While seeking returns is important, preserving capital is equally vital. As portfolio managers, we strive to protect your initial investment, especially if you have a lower risk appetite.
• Liquidity management:We ensure that your portfolio maintains sufficient liquidity to meet your short-term financial needs.
• Tax efficiency: Portfolio management often involves strategies to minimize tax liabilities, such as tax-loss harvesting and asset location, to enhance after-tax returns. We identify opportunities to optimize tax efficiency.
• Long-term growth:We help prioritize long-term growth in our clients’ portfolios, to build wealth for retirement or other significant financial goals.
• Cost management:Reducing investment costs such as fees and expenses can significantly impact overall returns. We efficiently manage these costs to enhance your outcomes.

Why partner with Parkyn—Doyon La Rochelle?

We understand the importance of investing wisely to build wealth, beat inflation, and diversify risk.

When you partner with us, you get a personalized approach grounded in transparency, evidence-based strategies, and a deep understanding of your unique goals and tolerance to risk and risk capacity. You also gain a trusted advisor who can help you navigate the complexities of the financial markets and secure a prosperous future.

Let’s start building your roadmap to financial prosperity today

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