The Bounce Factor: An Investor’s Guide For Turbulent Times!

The upcoming book by Jack DiNardo.

Thank you for visiting our website. This will introduce you to the upcoming book by Jack Di Nardo, based on his 28 years in the financial industry. The book is: The Bounce Factor: An Investor’s Guide for Turbulent Times! 

The focus of the book is to educate consumers on how best to interact with the financial industry. This will allow you, the reader, to maximize your financial and lifestyle goals once you have a better understanding of what the financial industry means by phrases such as “risk” versus what the average consumer hears or thinks about when they say the word “risk”. Your role is to get the best outcomes possible, as efficiently and effortlessly as possible, for you and your loved ones. The risk is that you get trapped in a swamp of irrelevant and miniscule discussions about minor details and issues that contextually have little or no bearing on your desire to build and maintain wealth and assets.

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My purpose is to guide you along the continuum of where you are today to where your ideal vision of your financial and lifestyle goals are, in the future. I know I can move you along this planning continuum faster and more efficiently than may be possible thorough your own efforts. In effect, I work with clients as their financial coach and chief financial officer through good times and tough financial times to accomplish their life’s goals and dreams.

Join me in this journey by subscribing below to get an email when book The Bounce Factor is released. No spam – you have my word on it. You can read a sample from the book below!

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The following is a draft version of the book’s introduction and is subject to change at the point of being published. It is not meant as advice nor an inducement to make any financial decisions.

An Introduction

I once had a conversation with my father-in-law, a few years before he passed away, about his views on investing. He initiated the discussion as I never brought up the subject of investing, insurance or financial planning. We had an unspoken agreement that we would only talk of such matters if he brought them up. This was likely a form of self-protection on his part, given his business, sales, sales management and training career. He knew that rookies always tried to do business with friends and family members to quickly get started in their new financial career and there was no assurance of their success or of getting good advice from such rookies.

I never asked and he never became a client. So, it was unusual that the topic of investing came up that day and I listened attentively to what he had to say. He described his experiences growing up in Toronto in the late 1920’s and the impact of the stock market crash that was a precursor to the 1930’s Great Depression. He talked of the fear and the social devastation during those difficult times. He spoke of bread lines, the massive number of unemployed men and of selling home made meat pies as a teenager on street corners for 25 cents to help support his mother and sister. Every little bit helped.

He spoke of his avoidance of the stock market for the rest of his life. He did not trust it and feared the possible losses that can come with investing. He made up his mind to only invest in guaranteed investments and bonds. I was somewhat surprised by his line of thinking and asked him a question: “The Dow Jones Industrial Average bottomed sometime in 1932 around 45”, (the Dow hit a lot of 44.08 on July 20, 1932), “and is currently trading at over 12,000; surely somewhere along the line you must have reconsidered your rule about investing in the markets?” He paused, took a puff of his cigar and looked away. We never spoke about financial matters again.

His generation was permanently scarred by the experience of the Great Depression. It was a generation that learned to live frugally (why waste money on Q-Tips when you can use a face cloth!), to save for a rainy day, to have emergency food and a back up plan to the back up plan. They knew what hardship and adversity felt and looked like.

Fast forward to the events of late 2008. The global economy teetered on the edge of total collapse following the bankruptcy filing of Lehmann Brothers on September 15th. This caused a chain reaction of defaults and bankruptcies amongst other financial companies and brought commerce to a complete standstill for a few hours on that fateful day.

I later heard stories of how the trading floor on the TSX was eerily quiet. You could hear a pin drop. No phones ringing, no traders shouting out orders, no activity of any kind. Ships transiting the Panama Canal were reportedly refused passage because their Letters of Credit were no longer being accepted – who knew if the counter-parties for these financial instruments would make good on the payments. Ship’s Captains scrambled to raise the often hundreds of thousands of dollars in cash needed to complete their voyages. Credit was no longer an option!

In early November, after the worst of the crisis had passed, I sat across from a client who had a large amount of cash to invest from a severance package and a pension that she had transferred to her own RRSP. The amount was sizeable, some 12 times larger than her current RRSP holdings. While the worst of the market corrections and economic impact from the Great Recession, as it has now been named, was behind us, fear of the investment markets was still palpable.

Following a peak to trough correction of approximately 45% in the Canadian stock market, I was meeting with her to devise an investment strategy. What would you tell her to do?

I told her to step boldly into the markets, which were on sale and trading at a large discount to the value of the underlying companies in the index. I pointed out that the G7 Finance Ministers had met in Toronto over the Canadian Thanksgiving weekend. Then Finance Ministry Jim Flaherty had emerged from the weekend meetings declaring the G7, representing the largest economies of the world, was going to do whatever it took to put a floor under the economy and prevent any further collapse. The worst was over and the markets bottomed in the following weeks (and ultimately started to recover in March of 2009).

I will never forget the look on her face as I laid out the recommended portfolio and sector allocations. There was a bead of sweat on her brow that slowly dropped down the bridge of her nose, her eyes were fully dilated in terror, her nostrils were flaring and her breathing was short and shallow. She was in full fight or flight mode while her husband paced nervously behind her chair. The lesson learned that day was that facts and logic will never triumph over fear and emotion!

Like for those who experienced the Great Depression, the 2008 credit crisis was a seminal moment in the lives of all investors in the Western world. It scarred them and they will always remember the visceral, gut level feel of it. And that is a shame if it prevents people from bettering their lives from a financial perspective.

I interact with this low-level tension and fear every day. I hear comments like this all the time: “The market is at an all-time high it is going to crash”; “The US presidential election will be bad for the markets”; “If Britain votes in favour of Brexit, the markets will crash”; “I read we are going to have a recession” (which didn’t happen in the timeframe they feared); “The markets are over valued and I am going to cash” (they marched on to newer highs for quite some time after that); “I read somewhere that the markets are going to correct 5%” (or 20%, pick a number) and it didn’t happen.

This level of trepidation and questioning of the status quo and the principles of investing and financial planning is relatively new in today’s world. People were more optimistic and open to the investment markets at the beginning of my career 1990, even following the steep market correction of 1987. Sure, they had concerns, but they had not turned their backs on investing or displayed the same level of scepticism about the markets as is experienced almost daily by myself and my colleagues today.

As for my client, the advice was sound. The markets fully recovered over the following 18 months or so and client portfolios not only recovered from the market impact of the Great Recession but went onto all-time new highs by mid-2011. This was not the case for many investors however, as I continued to review potential client portfolios for many years afterwards and their accounts had still not recovered to their pre-2008 market correction levels, never mind making new highs.

Hear More Stories Like This

My clients have paid me for professional advice like this for decades. This book shares from the wealth of my experiences, and teaches you how to survive — and thrive — during the times everybody else is in fight or flight mode. Sign up below to get an email when my book is available.

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So why write a book? It is my observation that the most successful clients have an ability to bounce back from adversity. They have a resilience that allows them to keep the larger picture in mind and to make tactical moves and decisions that allow them to recovery from any events beyond their control. This ability or “bounce factor” has little to do with intellect or even the amount of money they may have. It has everything to do with how they handle their emotions and their reactions to uncertainty and an unknown future. Human beings hate uncertainty!

The purpose of this book is to give people some knowledge and insight into some key concepts, distinctions and insights that while seemingly simple are often not easy to implement or follow through on. The idea is that armed with greater knowledge and tools you can resist the often-strong pull of taking actions that may not be in your best long term interests.

The ultimate goal is to allow you as a consumer of financial products and advice a greater ability to engage with the financial services industry with a sense or empowerment and knowledge in order to maximize your personal financial outcomes and ultimately live the life and lifestyle you aspire to, both during your career and beyond.

The book is based on the experience of working with and talking to over 5,000 individuals, families and business people about the intimate details of their financial lives and more importantly, their hopes and dreams for a life well-lived. As well, I have had the privilege of meeting most of the top investment, insurance professionals and many thought leaders from around the world. At one time or another, they have all come to Toronto for investment meetings and seminars.

Finally, some of the greatest life and financial lessons have come from my colleagues and peers who have shared their wisdom and experience in building and maintaining a successful financial services practise. I thank each one of these people, especially my clients, past and present, for sharing their wisdom and for honoring me with the trust and confidence needed to form a successful advisory partnership.

The book will cover several concepts and distinctions to assist readers in their personal growth and understanding of how my industry really works. The goal is for you to get the best results possible from dealing with the industry, whether it is opening a bank account or devising a sophisticated investment strategy. The use of numbers, graphs and charts numbers will be kept to a minimum. There are many other books you can access that cover these aspects competently.

My hesitation in writing a book has always been that many of the concepts covered lead to “aha” or “eureka” moments when the lightbulb of understanding lights up for the listener. Drawing upon my days as a training and management consultant, liberal use is made of adult learning principles to communicate the information in an interactive manner in a face to face discussion; what is an aha moment for one person, is not for another person. I can never tell in advance which points will resonate with an individual and which are already understood by them.

The first few chapters of the book will lay down some basic concepts and ideas, including a simple decision making model for all your cash flow and financial decisions. Then we will get into more depth discussing a simplified approach to financial planning and strategies, investment theory, the function of markets, the various asset classes, the role of portfolio managers, what it takes to trade the market or pick stocks. Finally, we will look at the current state of the global economy, basic portfolio construction and design, building wealth versus focussing on the nominal value of investments, the role of risk management and planning in retirement strategies, as well as the greatest risk facing Boomers who are heading into retirement: longevity risk.

Hopefully, once we peel away the layers of the onion, you will start to discern the one critical success factor that has greatest power to propel you forward towards your life’s hopes and dreams for you and your family.

Finally, the book will attempt to demystify some of the confusion caused by the sloppy use of various terms and language about and from the financial industry. For example, there was a billboard at a major intersection in Toronto in 1994 from a major national real estate agency that said: “You can’t live in your mutual funds!” This is an perfect example of the confusion between a lifestyle asset, a home, and building savings for retirement, or a child’s education. It is not an either-or decision, most young people need to do both – save for a house, pay down the mortgage and at the same time, save for retirement. The ad implied that you can only do one or the other and at the expense of one or the other. Nonsense!

The hope is that you can strip away some of the prejudices, misconceptions, emotional and spiritual blocks that may be hindering your ability to successfully interact with the financial industry and know when you are getting sound advice and guidance or not.

The concepts in the book, have been drawn from and synthesized from many sources over the years. They have all been used and tested with my clients and potential clients. These concepts have not all been seen by my clients in one sitting. Nor do I believe that my clients may even remember them after a few months. Repetition is key for any new learning or realization of any important new understanding, so I encourage you to refer to this book often, underline, highlight and make notes as needed. This book is meant to be a dialogue and a conversation with you the reader.

Learn the Secrets to Building Wealth

The wealthiest people know how to survive tough times. The Bounce Factor unlocks the secrets to financial success during difficult times. If this excerpt from the book has piqued your interest, then sign up with your email below. I’ll let you know when the book is released later this year.

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