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The Stan Clark Financial Team

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Investing

Address 1285 West Pender Street Suite 400 Vancouver BC, V6E 4B1
Telephone Number (604) 641-4361
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The Stan Clark Financial Team’s Perspectives on

Investing

Key Readings

 

Our stock strategies

Investors who disengage their emotions when they make their investment decisions stand a much better chance of building wealth with returns that outperform both inflation and market averages. To do that, requires strategies based on objective data and the discipline to follow those strategies. As you continue reading, you will discover the nuts and bolts of disciplined, rules-based investing. You’ll also learn how the Stan Clark Financial Team uses these strategies to provide returns to its clients that have beat the indexes over many years.  Learn more

 

Why we use rules-based strategies to invest in equities

Michael Chu talks about how our team uses rules-based strategies to invest in individual stocks

 

Why We Use Rules-Based Strategies to Invest in Equities

[Upbeat music]

[Michael Chu

Portfolio Manager & Senior Wealth Advisor

CIBC Private Wealth – Wood Gundy]

Investors who disengage their emotions when they make their investment decisions stand a much

better chance of building wealth with returns that outperform both inflation and the market

averages.

[Why We Use Rules-Based Strategies to

Invest in Equities]

Hello, I’m Michael Chu and I’d like to talk about why our team uses rules-based strategies to

invest directly in individual stocks.

Historically, the stock market has generated a better return than almost any other investment,

providing opportunities for individuals to participate in the profits of a wide range of businesses.

[Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation.]

Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation. But many investors have not achieved these returns.

One of the main reasons is that investors generally use a subjective approach to investing. As our

client you’re familiar with Stan’s monthly Perspectives articles on Behavior Finance where he

emphasizes research that behavioral finance has taught us about the drawbacks of using a

subjective approach. A subjective approach is susceptible to emotions and biases, which can

lead to traps like relying on “gut feelings”, “hot tips” and following the crowd. This results in lower

returns over the long term.

Stan has also created a video on this – if you haven’t seen it be sure to check it out.

[In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.]

In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.

[There are three main types of objective factors:

VALUE

MOMENTUM

QUALITY]

There are three main types of objective factors: value, momentum and quality.

[In the graphic, VALUE is highlighted with the bullet points:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend]

Stocks with good value are generally those which have low prices compared to underlying

company fundamentals such as:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend

[In the graphic, MOMENTUM is highlighted with the bullet points:

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.]

Stocks with good momentum are generally those that have surprised by doing better than

expected. For example,

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.

Stocks with good quality are generally those with strong profitability, growth and safety.

[In the graphic, QUALITY is highlighted, with the bullet points:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.]

Examples of quality measures are:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.

Research has shown that stocks with good value, momentum or quality tend to produce returns

averaging several percent above the market average. And if you combine various factors, the

results are even better.

[The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.]

The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.

[Canadian Strategies

- High Yield (HY)

- Income (In)

- Value (VL)

- Multi-Screens (MS)

- Predictable Growth (PG)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

U.S. Strategies

- High Yield (HY)

- Asset Value (AV)

- Value (VL)

- Earnings Value (EV)

- Multi-Screens (MS)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

International Strategies

- Developed Markets

- Emerging Markets]

We created eight separate strategies for Canadian stocks, eight specifically for US stocks and two

for international stocks.

Each strategy uses a different combination of factors.

[In the graphic, Income (In), Predictable Growth (GP) and Multi-Screens (MS) are highlighted]

For example, our Income Strategy focuses on dividend yield, our Predictable Growth Strategy

focuses on price-to- earnings ratios, while our Multi-Screen Strategy combines a wide range of

factors.

Using 18 strategies is like having 18 money managers to choose from, each having a good longterm track record, and each having a different approach for evaluating stocks. Diversifying by

strategy, helps produce more consistent results and reduces risk.

Each strategy provides us daily with its ranking of stocks and which ones it recommends to buy,

hold or sell. When we put together your portfolio, with 18 strategies to choose from, we are able to

create a well-diversified portfolio for you while choosing the top rated companies from any

strategy.

[Animation showing 3 folders in a line that have the titles, U.S. Strategies, Canadian Strategies

and International Strategies. A fourth folder below these is labelled “YOUR PORTFOLIO”]

For example, we could create a 40 stock Canadian portfolio by picking 5 top rated stocks from

each of our 8 Canadian strategies.

[Animation shows cursor selecting the ‘Canadian Strategy’ folder which duplicated into 8 other

folders, with the labels, HY, In, VL, MS, PG, SY, QL, Mo. The cursor selects the HY folder, pages

appear from the folder with the title “5 TOP-RATED STOCKS’. The pages then move across the

animation into the ‘YOUR PORTFOLIO’ folder]

[In the same animation, pages then appear out of the 7 remaining folders and are moved into the

‘YOUR PORTFOLIO” folder.]

[40 TOP-RANED WELL-DIVERSIFIED STOCKS IN YOUR PORTFOLIO]

If we had only one strategy, we’d need to go down to the 40th ranked stock to get the same

diversification. We would call that de-worsification. Stocks are also replaced according to

specific rules. When a stock is no longer well-rated, perhaps its price has risen or its

fundamentals have deteriorated, it’s replaced with a top-ranked stock from one of our strategies.

The important thing is to buy and sell according to the rules after verifying that the signals make

sense

[This aligns with our core principles of behavioral finance and not be swayed by our all-too-human

biases.]

Again, this aligns with our core principles of behavioral finance and not be swayed by our all-toohuman biases.

Our strategies back tested average compound growth over the past 30 years surpassed

comparable market indexes by over 3% per year. The strategies back tested returns have also

consistently beaten their benchmarks over most rolling three-, five- and ten-year periods. They

have also had considerably fewer losing periods – in keeping with our goal to deliver exceptional

growth to our investors during up markets, while softening the blows and easing the stresses of

down markets.

[In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.]

In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.

I invite you to learn more about these strategies and how we incorporate our unique pillars of

Financial Planning, Asset Allocation and Behavioral Finance to grow and protect your wealth. You

can find more on all of these, including summary videos on each by Sylvia, Tom and Stan on the

“Our Perspectives” section of our team’s website.

And please contact us by phone or email if you have would like to discuss how any of this applies

to your specific situation

[CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries,

including CIBC Wood Gundy, a division of CIBC World Markets Inc. The CIBC logo and “CIBC

Private Wealth” are trademarks of CIBC, used under license. “Wood Gundy” is a registered

trademark of CIBC World Markets Inc.

This information, including any opinion, is based on various sources believed to be reliable, but its

accuracy cannot be guaranteed and is subject to change. CIBC and CIBC World Markets Inc.,

their affiliates, directors, officers and employees may buy, sell, or hold a position in securities of a

company mentioned herein, its affiliates or subsidiaries, and may also perform financial advisory

services, investment banking or other services for, or have lending or other credit relationships

with the same. CIBC World Markets Inc. and its representatives will receive sales commissions

and/or a spread between bid and ask prices if you purchase, sell or hold the securities referred to

above. © CIBC World Markets Inc. 2025.

The contents of this video are for informational purposes only and are not being provided in the

context of an offering of a security, sector, or financial instrument, and is not an endorsement,

recommendation, or solicitation to buy, hold or sell any security.

Michael Chu is a Portfolio Manager and Senior Wealth Advisor with CIBC Wood Gundy in

Vancouver. The views of Michael Chu do not necessarily reflect those of CIBC World Markets

Inc.

If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.]

Why We Use Rules-Based Strategies to Invest in Equities

[Upbeat music]

[Michael Chu

Portfolio Manager & Senior Wealth Advisor

CIBC Private Wealth – Wood Gundy]

Investors who disengage their emotions when they make their investment decisions stand a much

better chance of building wealth with returns that outperform both inflation and the market

averages.

[Why We Use Rules-Based Strategies to

Invest in Equities]

Hello, I’m Michael Chu and I’d like to talk about why our team uses rules-based strategies to

invest directly in individual stocks.

Historically, the stock market has generated a better return than almost any other investment,

providing opportunities for individuals to participate in the profits of a wide range of businesses.

[Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation.]

Over the past 150 plus years, the market produced compound annual returns over 9 percent,

which works out to 7 percent above inflation. But many investors have not achieved these returns.

One of the main reasons is that investors generally use a subjective approach to investing. As our

client you’re familiar with Stan’s monthly Perspectives articles on Behavior Finance where he

emphasizes research that behavioral finance has taught us about the drawbacks of using a

subjective approach. A subjective approach is susceptible to emotions and biases, which can

lead to traps like relying on “gut feelings”, “hot tips” and following the crowd. This results in lower

returns over the long term.

Stan has also created a video on this – if you haven’t seen it be sure to check it out.

[In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.]

In contrast, many studies have found that simple objective factors, used with discipline, lead to

better than average returns.

[There are three main types of objective factors:

VALUE

MOMENTUM

QUALITY]

There are three main types of objective factors: value, momentum and quality.

[In the graphic, VALUE is highlighted with the bullet points:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend]

Stocks with good value are generally those which have low prices compared to underlying

company fundamentals such as:

x low price-to-earnings

x low price-to-cash flow

x low price-to-sales

x low price-to-book value, or

x low price-to-dividend

[In the graphic, MOMENTUM is highlighted with the bullet points:

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.]

Stocks with good momentum are generally those that have surprised by doing better than

expected. For example,

x analysts are raising their earnings estimates

x the company is reporting better than expected earnings, or

x the company’s stock price is moving up much faster than average, suggesting higher than

expected results.

Stocks with good quality are generally those with strong profitability, growth and safety.

[In the graphic, QUALITY is highlighted, with the bullet points:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.]

Examples of quality measures are:

• High return on equity, high profit margins, strong cash flows

• Growing earnings, margins and cash flows

• Low price volatility, low earnings variability, low debt/equity.

Research has shown that stocks with good value, momentum or quality tend to produce returns

averaging several percent above the market average. And if you combine various factors, the

results are even better.

[The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.]

The Stan Clark Financial Team built and refined a collection of 18 proprietary rules-based

strategies, unique to our team, to help us identify and invest in stocks with good value,

momentum and quality.

[Canadian Strategies

- High Yield (HY)

- Income (In)

- Value (VL)

- Multi-Screens (MS)

- Predictable Growth (PG)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

U.S. Strategies

- High Yield (HY)

- Asset Value (AV)

- Value (VL)

- Earnings Value (EV)

- Multi-Screens (MS)

- Shareholder Yield (SY)

- Quality (QL)

- Momentum (Mo)

International Strategies

- Developed Markets

- Emerging Markets]

We created eight separate strategies for Canadian stocks, eight specifically for US stocks and two

for international stocks.

Each strategy uses a different combination of factors.

[In the graphic, Income (In), Predictable Growth (GP) and Multi-Screens (MS) are highlighted]

For example, our Income Strategy focuses on dividend yield, our Predictable Growth Strategy

focuses on price-to- earnings ratios, while our Multi-Screen Strategy combines a wide range of

factors.

Using 18 strategies is like having 18 money managers to choose from, each having a good longterm track record, and each having a different approach for evaluating stocks. Diversifying by

strategy, helps produce more consistent results and reduces risk.

Each strategy provides us daily with its ranking of stocks and which ones it recommends to buy,

hold or sell. When we put together your portfolio, with 18 strategies to choose from, we are able to

create a well-diversified portfolio for you while choosing the top rated companies from any

strategy.

[Animation showing 3 folders in a line that have the titles, U.S. Strategies, Canadian Strategies

and International Strategies. A fourth folder below these is labelled “YOUR PORTFOLIO”]

For example, we could create a 40 stock Canadian portfolio by picking 5 top rated stocks from

each of our 8 Canadian strategies.

[Animation shows cursor selecting the ‘Canadian Strategy’ folder which duplicated into 8 other

folders, with the labels, HY, In, VL, MS, PG, SY, QL, Mo. The cursor selects the HY folder, pages

appear from the folder with the title “5 TOP-RATED STOCKS’. The pages then move across the

animation into the ‘YOUR PORTFOLIO’ folder]

[In the same animation, pages then appear out of the 7 remaining folders and are moved into the

‘YOUR PORTFOLIO” folder.]

[40 TOP-RANED WELL-DIVERSIFIED STOCKS IN YOUR PORTFOLIO]

If we had only one strategy, we’d need to go down to the 40th ranked stock to get the same

diversification. We would call that de-worsification. Stocks are also replaced according to

specific rules. When a stock is no longer well-rated, perhaps its price has risen or its

fundamentals have deteriorated, it’s replaced with a top-ranked stock from one of our strategies.

The important thing is to buy and sell according to the rules after verifying that the signals make

sense

[This aligns with our core principles of behavioral finance and not be swayed by our all-too-human

biases.]

Again, this aligns with our core principles of behavioral finance and not be swayed by our all-toohuman biases.

Our strategies back tested average compound growth over the past 30 years surpassed

comparable market indexes by over 3% per year. The strategies back tested returns have also

consistently beaten their benchmarks over most rolling three-, five- and ten-year periods. They

have also had considerably fewer losing periods – in keeping with our goal to deliver exceptional

growth to our investors during up markets, while softening the blows and easing the stresses of

down markets.

[In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.]

In summary, rules-based strategies make it possible for you to outperform, through diversified,

lower risk portfolios.

I invite you to learn more about these strategies and how we incorporate our unique pillars of

Financial Planning, Asset Allocation and Behavioral Finance to grow and protect your wealth. You

can find more on all of these, including summary videos on each by Sylvia, Tom and Stan on the

“Our Perspectives” section of our team’s website.

And please contact us by phone or email if you have would like to discuss how any of this applies

to your specific situation

[CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries,

including CIBC Wood Gundy, a division of CIBC World Markets Inc. The CIBC logo and “CIBC

Private Wealth” are trademarks of CIBC, used under license. “Wood Gundy” is a registered

trademark of CIBC World Markets Inc.

This information, including any opinion, is based on various sources believed to be reliable, but its

accuracy cannot be guaranteed and is subject to change. CIBC and CIBC World Markets Inc.,

their affiliates, directors, officers and employees may buy, sell, or hold a position in securities of a

company mentioned herein, its affiliates or subsidiaries, and may also perform financial advisory

services, investment banking or other services for, or have lending or other credit relationships

with the same. CIBC World Markets Inc. and its representatives will receive sales commissions

and/or a spread between bid and ask prices if you purchase, sell or hold the securities referred to

above. © CIBC World Markets Inc. 2025.

The contents of this video are for informational purposes only and are not being provided in the

context of an offering of a security, sector, or financial instrument, and is not an endorsement,

recommendation, or solicitation to buy, hold or sell any security.

Michael Chu is a Portfolio Manager and Senior Wealth Advisor with CIBC Wood Gundy in

Vancouver. The views of Michael Chu do not necessarily reflect those of CIBC World Markets

Inc.

If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.]

Back to Video
 

Perspectives articles by topic

Written by the Stan Clark Financial Team

 

Articles about our rules-based strategies

Why rules-based strategies work best   Watch

Low P/E vs. high P/E investing   Read / Watch / Transcript

More evidence favouring low P/E investing (Part 2 of 2)   Read

Picking stocks: More than just P/E ratios and dividend yields   Read / Watch / Transcript

What's more important: Dividends or earnings?   Read / Watch / Transcript

Other variables to consider when assessing stocks   Read

Adding just that little bit of momentum   Read

Dividends above everything?   Read

Active or passive investing? How about the best of both!   Read

Quality is key   Read

Quality is key (part 2)   Read


Behind the numbers

Behind the Numbers: Introduction to a new series on our strategies – and how they work   Read

Behind the Numbers: Price-to-earnings ratio (part 2)   Read

Behind the Numbers: Dividend yield (part 3)   Read

Behind the Numbers: Earnings momentum (part 4)   Read

Behind the Numbers: Price momentum (part 5)   Read

Behind the Numbers: Putting our strategies to work (part 6)   Read

 


Other articles on investing

How Moneyball shows us the value of rules-based investing   Read

Our Moneyball system – and how what it teaches can work for you   Read

More than just our own firm's research analysts   Read / Watch / Transcript

Investing vs. speculating: What's the difference?   Read / Watch / Transcript

What market indexes are – and how they work (Part 1)   Read / Watch / Transcript

What market indexes are – and how they work (Part 2)   Read / Watch / Transcript

Diversify – but don't di-worse-ify   Read / Watch / Transcript

The benefits of investing outside of Canada   Read / Watch / Transcript

Be wary when searching the Internet: Lots of that ‘info' can mislead you   Read / Watch / Transcript

Vancouver real estate as an investment   Read / Watch / Transcript

Copycatting Warren Buffett   Read

Exchange traded funds: They're not all good anymore   Read / Watch / Transcript

Value investing over the long term   Read

The value of value   Read

What ChatGPT is – and how it will impact our lives   Read

 
 
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CIBC Private Wealth” consists of services provided by CIBC and certain of its subsidiaries through CIBC Private Banking; CIBC Private Investment Counsel, a division of CIBC Asset Management Inc. (“CAM”); CIBC Trust Corporation; and CIBC Wood Gundy, a division of CIBC World Markets Inc. (“WMI”). CIBC Private Banking provides solutions from CIBC Investor Services Inc. (“ISI”), CAM and credit products. CIBC Private Wealth services are available to qualified individuals. Insurance services are only available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are only available through CIBC Wood Gundy Financial Services (Quebec) Inc.


CIBC Private Wealth services are available to qualified individuals. The CIBC logo and “CIBC Private Wealth” are trademarks of CIBC, used under license.