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R&R Investment Partners

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    • Who Do We Help Best?
    • Financial Blueprint
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    • Our Team
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Worry Free Wealth Management

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Worry Free Wealth Management

Randy and Ian discuss why having multiple financial “buckets” is critical when creating your investment plan.

 

Ian Munro:

Many of the families we work with often begin the investment process asking questions like, how much stock should I own? How much cash should I hold? And when should I put my money into the market?

Randy Yozipovic:

Sometimes they're worried about investing right now as they believe the market is going to experience a correction any day.

Ian Munro:

And this confusion can best be mitigated by following a basic three-step process, which can be illustrated by the three buckets example. The buckets can help you determine what monies are needed when and how to invest them accordingly.

Randy Yozipovic:

Bucket one is for cash you need to spend in the next couple of years. This is money we know that's going out the door, so this money should always be in liquid investments that do not fluctuate. Keep this bucket simple all the time.

Ian Munro:

Bucket two is for money you need in the next two to three years. These funds can be balanced, some in stock, some in bonds, or even some in income notes. They can fluctuate, but not as much as the broad stock market.

Randy Yozipovic:

Bucket three is your portfolio allocation geared for growth. This bucket should include discipline stock strategies, your work pension, your stock options, and the value of your private business and any investment property you have. This bucket should be expected to fluctuate, and when it does like the financial crisis in 2008 or March 2020 during COVID, you won't need to worry because your near term needs are met by bucket one, and it'll give you the peace of mind to let this bucket mature for the longer term.

Ian Munro:

And the result of this system means that bucket three can stay invested for the long-term growth, giving it time it needs to mature.

Randy Yozipovic:

The fact is, market fluctuations do happen. And though it's easy to say that we're going to be mentally prepared, the fact is we have to establish in advance how we are going to behave when we see that our portfolio moves down from a million dollars to 660,000 in March of 2020 during COVID. That was a 34% market correction pullback that also recovered extremely quickly if you stayed the course.

Ian Munro:

And a pullback like that gets your attention and the media will play off of your fear and you're more likely to act drastically if you haven't been prepared with bucket one and bucket two. You're much more likely to stay true to your plan if bucket one is full for your near-term needs.

Randy Yozipovic:

Following this three-bucket process always gives you enough liquidity to sleep at night, while at the same time growing your money for the future. That really is the only way to realize the real-world growth possibility of sensible strategies that are designed for long-term growth. It's critical to remember, nobody knows what the market's going to do in the short term, so following the bucket process will give you a sensible plan on how to allocate capital that will help you achieve your goals.

Ian Munro:

Many of the families we work with often begin the investment process asking questions like, how much stock should I own? How much cash should I hold? And when should I put my money into the market?

Randy Yozipovic:

Sometimes they're worried about investing right now as they believe the market is going to experience a correction any day.

Ian Munro:

And this confusion can best be mitigated by following a basic three-step process, which can be illustrated by the three buckets example. The buckets can help you determine what monies are needed when and how to invest them accordingly.

Randy Yozipovic:

Bucket one is for cash you need to spend in the next couple of years. This is money we know that's going out the door, so this money should always be in liquid investments that do not fluctuate. Keep this bucket simple all the time.

Ian Munro:

Bucket two is for money you need in the next two to three years. These funds can be balanced, some in stock, some in bonds, or even some in income notes. They can fluctuate, but not as much as the broad stock market.

Randy Yozipovic:

Bucket three is your portfolio allocation geared for growth. This bucket should include discipline stock strategies, your work pension, your stock options, and the value of your private business and any investment property you have. This bucket should be expected to fluctuate, and when it does like the financial crisis in 2008 or March 2020 during COVID, you won't need to worry because your near term needs are met by bucket one, and it'll give you the peace of mind to let this bucket mature for the longer term.

Ian Munro:

And the result of this system means that bucket three can stay invested for the long-term growth, giving it time it needs to mature.

Randy Yozipovic:

The fact is, market fluctuations do happen. And though it's easy to say that we're going to be mentally prepared, the fact is we have to establish in advance how we are going to behave when we see that our portfolio moves down from a million dollars to 660,000 in March of 2020 during COVID. That was a 34% market correction pullback that also recovered extremely quickly if you stayed the course.

Ian Munro:

And a pullback like that gets your attention and the media will play off of your fear and you're more likely to act drastically if you haven't been prepared with bucket one and bucket two. You're much more likely to stay true to your plan if bucket one is full for your near-term needs.

Randy Yozipovic:

Following this three-bucket process always gives you enough liquidity to sleep at night, while at the same time growing your money for the future. That really is the only way to realize the real-world growth possibility of sensible strategies that are designed for long-term growth. It's critical to remember, nobody knows what the market's going to do in the short term, so following the bucket process will give you a sensible plan on how to allocate capital that will help you achieve your goals.

Back to Video
 

Ian discusses the importance of investor behaviour and how we should focus on what we can control.

 

Ian Munro:

It is possible to own top-rated investment funds and still not get wealthy, if we fall victim to our emotions and chase manias, or sell when we think the world is going to end. If you think about it, what we tell our kids is true. The only thing that we can control is our attitude. Likewise, in investing, the only thing you can control is your behaviour. That is truly where we should focus our limited energy, managing our behaviour during market fluctuations. Unfortunately, most investors focus their energy on things they cannot control, inflation, interest rates, government debt, last year's top 10 stocks, and the latest news story about the crisis of the day.

Ian Munro:

In addition, other investors often share their winning stories. Yet what people rarely tell you, are the harrowing stories about how they got swept up in emotion and bought or sold at the wrong time and lost real money that hurt them financially and emotionally. People bury those stories.

Ian Munro:

After being on the front lines and making our own mistakes, we are here to tell you that investor behaviour, like the foundation of a skyscraper, is the cornerstone of sensible wealth cumulation and staying wealthy. We are also here to remind you that true wealth comes from peace of mind, which is an attitude that must be learned. Peace of mind can be gained by recognizing and taking to heart this basic truth. Markets go up, markets go down, and markets historically always recover to new all-time highs.

Ian Munro:

Why does such a simple, powerful concept continue to be panned by most as irrelevant? Because humans are emotional. We are not computers. We like to think we make decisions just with our own heads. But our gut feelings often get in the way. We are prodded by the media daily, about worries of get rich quick schemes, followed by stories of fear, both of which continue to resonate the most, as unfortunately, no one wants to hear the boring truth about good investing.

Ian Munro:

What is the antidote to this itch to do something and the key to good investor behaviour? Establish a wealth plan, review it, and stick to it, and stay disciplined. Take a media fast, take the news with a grain of salt, and avoid reactive decisions based on fear or greed. Be a long range optimist. Things just work out and we don't have to understand how it's going to happen. It just does. And know this truth, if you feel you must do something right now that contravenes your wealth plan, walk away and let cooler heads prevail.

 

Ian Munro:

It is possible to own top-rated investment funds and still not get wealthy, if we fall victim to our emotions and chase manias, or sell when we think the world is going to end. If you think about it, what we tell our kids is true. The only thing that we can control is our attitude. Likewise, in investing, the only thing you can control is your behaviour. That is truly where we should focus our limited energy, managing our behaviour during market fluctuations. Unfortunately, most investors focus their energy on things they cannot control, inflation, interest rates, government debt, last year's top 10 stocks, and the latest news story about the crisis of the day.

Ian Munro:

In addition, other investors often share their winning stories. Yet what people rarely tell you, are the harrowing stories about how they got swept up in emotion and bought or sold at the wrong time and lost real money that hurt them financially and emotionally. People bury those stories.

Ian Munro:

After being on the front lines and making our own mistakes, we are here to tell you that investor behaviour, like the foundation of a skyscraper, is the cornerstone of sensible wealth cumulation and staying wealthy. We are also here to remind you that true wealth comes from peace of mind, which is an attitude that must be learned. Peace of mind can be gained by recognizing and taking to heart this basic truth. Markets go up, markets go down, and markets historically always recover to new all-time highs.

Ian Munro:

Why does such a simple, powerful concept continue to be panned by most as irrelevant? Because humans are emotional. We are not computers. We like to think we make decisions just with our own heads. But our gut feelings often get in the way. We are prodded by the media daily, about worries of get rich quick schemes, followed by stories of fear, both of which continue to resonate the most, as unfortunately, no one wants to hear the boring truth about good investing.

Ian Munro:

What is the antidote to this itch to do something and the key to good investor behaviour? Establish a wealth plan, review it, and stick to it, and stay disciplined. Take a media fast, take the news with a grain of salt, and avoid reactive decisions based on fear or greed. Be a long range optimist. Things just work out and we don't have to understand how it's going to happen. It just does. And know this truth, if you feel you must do something right now that contravenes your wealth plan, walk away and let cooler heads prevail.

 

Back to Video
 

The Buckets

"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves." - Peter Lynch

Worry Free Wealth Management begins with focusing on what you can control, and that starts with knowing when you need to spend the money you are accumulating and investing it accordingly, not in trying to time the markets.

Bucket One: Money you will spend in the next year or two. Always keep it liquid, i.e. in cash and short-term cashable GICs, with no risk of fluctuation.

Bucket Two: This is money you don’t need for three to five years. This money can be in balanced portfolios that include stocks, investment grade bonds, high yield bonds or income notes. These funds can have modest fluctuation because you do not need to access the capital for at least three years.

Bucket Three: This is the money you don't need for five years out or more. This is the money that needs to grow at a rate greater than inflation to meet your long-term goals like lifetime retirement income. This money should be invested in disciplined stock portfolios that you should expect to fluctuate in the short-term and grow for the long-term.

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We Manage Your Money With the Care and Purpose it Deserves

What makes us special to our clients?

  • We're in tune with their goals and aspirations, both emotionally and financially
  • We're independent, disciplined and fully transparent

What makes our portfolio management unique?

  • We manage eight investment strategies, from conservative to more aggressive, that are unique to R&R Investment Partners.
  • We select the strategy or strategies that fit your investment goals, tolerance for risk, and investment time horizon.
  • Our investment process is disciplined, rigorous, and thoughtful.
  • Because we manage portfolios on your behalf, you are involved in the overall planning, yet have the freedom from day-to-day investing decisions and details.
  • We make it easy for you to monitor your portfolio's success: top-notch quarterly performance reporting and gain/loss summaries for tax reporting.

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A Note on Performance

A note on performance: We are proud of our performance, but will not lead with it. Most investors are frustrated with being enticed with the latest hot fund or latest top-ten stock list. We have no interest in that. Most important financial goals are long-term in nature and require success over that time period. We are happy to discuss how to do that, in detail, and how sound behavior is a large contributing factor. Past strategy performance that is applicable to your risk profile is provided in a full proposal package for prospective clients that go through our six-step wealth management process.

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