Hello everyone!

With many new subscribers of late - and thank you to all readers that have referred friends this way - I thought I’d step back and say a few words of introduction in section one and hopefully it gives you some food for thought about the emotional side of investing.

Hope you have a great Friday.

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Personal Finance

My name is Eddie Gudewill, 35, I’m married and my wife MJ and I have a one year old girl named Julia.

Since I can remember, I’ve been - rightly or wrongly - obsessed with money and finance.

Whether it was reading Rich Dad Poor Dad, talking about Warren Buffet and stocks with my Dad in my teen years, or absorbing everything I could listening to my superiors and mentors, it’s just been something magnetic for me.

I still prefer to listen rather than speak because there is so much wisdom out there to soak up - that’s the beauty about finance…you are looking out the front windshield instead of the rear view mirror. There is always something new to learn.

Fast forward through a CFA degree, a career in finance, including equity research, portfolio management and now real estate syndication, safe to say it is one of my passions (that, and family, friends, piano, squash, golf, sweatpants, etc).

Doesn’t mean I’m a savant or you should ask me what the next NVIDIA is or if you should triple down on the AI sector (please don’t).

On the contrary. The experience of the past 15 years working in a corporate finance setting, I learned that beating the market is nearly impossible - statistically 90% of investment funds fail to beat the market. And these are the professionals. So, I’ve resolved to just buy the market instead, and the returns I’m earning are phenomenal.

I have select investments in private real estate - because that’s my day job and I do feel that value add can be achieved in the space. The big tradeoff, however, is liquidity: you can’t spend your house.

By far the most important thing I’ve learned - and am still learning - is how heavily emotions play a factor in the earning, investing, and wasting of money and therefore, opportunity.

Not just with clients, friends, and the public, but myself included… many mistakes due to greed, ignorance, bias (unconscious AND conscious) have stung. But a mistake that doesn’t kill you only makes you stronger. And they’ve all influenced the type of investor I am today and how to approach managing family finances.

Being a more conscious consumer (please read Issue #8 on how to be a lion, not a gazelle), diligent automatic ETF investing, select real estate opportunities, maximizing tax advantaged accounts, not getting too greedy but also not being so fearful at the same time - after all, you need to risk something to earn anything, etc.

I think I have a decent handle on it now, but let’s see what I learn tomorrow.

In sum: to me, investing is simple (don’t believe me? Buy my course. If you still think it’s complex, you get a 100% money back guarantee.)

No, it is emotions that are complex.

And so I leave this thought with you to ponder over the weekend:

Is it really the investing complex that prevents you from improving your financial situation?

Or is it you?

PS. Sometimes in life you might feel like have one hand tied behind your back, your good one at that. And what happens is you defer doing something important until you think or have the ability to use your dominant hand once again.

But life is life and you’ll only have yourself to thank when you see your future report card.

When I was in Grade 12, all chipper and ‘wise’, I broke my collarbone playing rugby (actually it was my cousin Eric who slammed down on me and broke it 🤣).

So when I walked into Grade 12 math class the next day with a smirk on my face, I looked at my teacher, Mrs. Skinner, and proclaimed: ”I can’t do my homework or these math exercises today because I can’t write!”

She smiled back and said: “USE YOUR LEFT HAND”

That, is a lesson that has greatly influenced my life.

Same thing with investing. Don’t let the idea of one hand behind your back prevent you from doing great things.

Thank you, Mrs Skinner.

Stock Markets

No question the stock market is priced for perfection, hitting all time highs after the election two weeks ago.

And yes, Warren Buffet’s famous indicator of Market Cap to GDP is at levels higher than the period leading up to the 2000 dot-com crash.

And he’s got more cash on the balance sheet in the form of short term Treasury securities than the Federal Reserve itself.

He famously doesn’t make predictions about the near term movements of the market, but this is obviously something meaningful.

However, I remind you, we are not here to make our own short term predictions on the market.

In fact, I recall that ratio in the mid 2010s eclipsing the pre-2008 level and a lot of people yelling - oh no, only one other time in history (pre-2000) has this been higher, better be careful! Dough. The market has gone up about 3x-4x since then. Imagine not being invested in equities for the last 10 years.

Furthermore, since 1871 following each “record high” month in the S&P500 the average annual return the following year is 11.2%.

Now, this doesn’t mean the market won’t fall tomorrow or in the next twelve months.

It just means that it’s so effing hard to call a “market top”.

And even harder getting the timing right. If you get one of those wrong, then you are just wrong.

No, for readers of the Journal, we are here for a long time. Investing for ourselves and our future families and instilling the same principles for their future generations.

Real Estate

Read this commentary from a high level real estate executive who is sounding alarms on the strange ongoings at CMHC.

Makes you wonder, what the hell is the Government even doing?

They are speaking out of both sides of their mouths, and not in a good way.

Housing crisis, to be continued.

1 Quote

A Question

Who is someone that has greatly influenced your life?

_____________

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Thank you

Eddie Gudewill, CFA

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