Have You Remembered All of Your Gifts?

As parents we delight in giving gifts to our children because we love them and want to bless their lives. Our delight is doubled when we see their eyes and hearts light up with joy. Our delight is tripled when we hear from their lips words of gratitude and appreciation.

Our heavenly father delights in blessing us, but his joy and our own joy at receiving his gifts, is not complete until we express our sincere thanks from the depths of our hearts.

“A spiritual gift is given to each of us so we can help each other. To one person the Spirit gives the ability to give wise advice; to another the same Spirit gives a message of special knowledge. The same Spirit gives great faith to another, and to someone else the one Spirit gives the gift of healing. He gives one person the power to perform miracles, and another the ability to prophesy. He gives someone else the ability to discern whether a message is from the Spirit of God or from another spirit. Still another person is given the ability to speak in unknown languages, while another is given the ability to interpret what is being said.  It is the one and only Spirit who distributes all these gifts. He alone decides which gift each person should have.” (1 Corinthians chapter 12 verse 7-11)

It’s important to know and recognize our gifts and our graces. That is, it’s important to know what we are really good at - our fundamental abilities that would bring to bear in any kind of task. It’s also important to know what special abilities God has given us.

You have all that the greatest of men have had

Two eyes, two ears, two hands, two feet

You have all that the greatest of men have had

Whether they were explorers or scientists or builders or speakers or motivators

They came here with no more or no less than you

The difference between the mighty and the mundane

Is what you do with what you have.

In the book The Ultimate Gift, author Jim Stoval writes, life is a gift that has been given to us. The way we live it and maximize it is our gift to those around us. The following is a list of just a few of life’s gifts that we all can enjoy:

1. The Gift of Work: He who loves his work never labours

2. The Gift of Money: Money is nothing more than a tool. It can be a force of good, a force of evil or simply be idle.

3. The Gift of Friends: It is a wealthy person, indeed, who calculates riches not in gold but in friends.

4. The Gift of Learning: Education is a lifelong journey whose destination expands as you travel.

5. The Gift of Problems: Problems may only be avoided by exercising good judgment. Good judgment may only be gained by experiencing life’s problems.

6. The Gift of Family: Some people are born into wonderful families. Others have to find or create them. Being a member of a family is a priceless membership that we pay nothing for but love.

7. The Gift of Laughter: Laughter is good medicine for the soul. Our world is desperately in need of more medicine.

8. The Gift of Dreams: Faith is all that dreamers need to see into the future.

9. The Gift of Giving: The only way you can truly get more out of life for yourself is to give part of yourself away.

10. The Gift of Gratitude: In those times we yearn to have more in our lives, we should dwell on the things we already have. In doing so, we will often find that our lives are already full to overflowing.

11. The Gift of a Day: Life at its essence boils down to one day at a time. Today’s the day!

12. The Gift of Love: Love is a treasure for which we can never pay. The only way we keep it is to give it away.

13. The Ultimate Gift: In the end, life lived to its fullest is its own Ultimate Gift.

As we come to the end of the year we should take the time to remember and reflect on all of the things that we have to be grateful for. When we were sad, God sent a comforter. When we were sick, he was our healer. When we were alone, he was our friend. When we are confused, he is your counselor and guide. When our heart was lost in sin, he sent his son to save us.

Hope you have a very great Christmas holiday and a Happy New Year.

Till the next time

Bruce

A Radical New Approach to Personal Investing - Part 2

For the last 10 years, investors have not made any headway in increasing the value of their investment portfolios, in fact the last ten years (2000-2010) is now commonly being referred to as “the lost decade”. This has led many investors to become disillusioned with the stock markets and their financial advisors.

The following excerpt is taken from a recent post by The American Association of Individual Investors (AAII) does a good job of explaining why this has happened.

“Diversification benefits have become harder to achieve. Increased similarities in the performances of asset classes have raised risk levels and made it more difficult to achieve improved risk-adjusted returns by relying solely on asset class and sector selection skills.

At issue is asset class correlation, a term that describes how close the total return of one asset class (e.g., large-cap stocks) is to that of another (e.g., commodities). A correlation of 1.0 means returns are identical, both in terms of the direction and the degree of the change. A correlation of -1.0 means returns are mirror opposites. The lower the correlation ratio is, the higher diversification benefits are. In a perfect world, you want investments that zig when your other holdings zag.

Unfortunately, the world is far from perfect and correlations are moving closer to 1.0 instead of further away from it. Sam Stovall, Standard & Poor’s chief investment strategist, quantified this shift in a report published earlier this year. This shift means asset classes are now more likely to move in the same direction than they historically have.

The table below shows his calculations.

If you are among those who feel like they’ve been doing everything right but aren’t making any headway, this merging of correlations may help to explain why. As asset class returns have more closely mimicked each other, it has become harder to reduce risk by combining a variety of investments within one’s portfolio. In more blunt terms, a downward move by domestic large-cap stocks now has an increased chance of dragging down emerging market stocks, REITs and commodities with it. Thus, it is harder to hide from the market’s dark side.

The performance bonus from minimizing risk for a given level of return (a key tenant of modern portfolio theory) has also been reduced. This, in no doubt, is driving professional portfolio managers nuts.

As gloomy as this all sounds, realize that diversification still a good thing. As the numbers published by Stovall show, returns are not completely correlated. It’s just that the distance has become considerably shorter than it historically has been”.

I am sure you have seen this merging of correlations when stock markets around the world rise and fall due to the globalization and linking of the world’s economies.

So, what do you do about this?

First, accept the fact that we are in a difficult investing environment.

Second, realize that times have changed and a new approach to how you invest in stocks is required. Based on this point I have written a research paper called “How Value Averaging Adds Value – Achieving Investment Goals in Tough Economic Times”.

Based on the research and investment strategy developed by former Harvard university professor Michael Edleson, I conducted a study with regards to how investors would have done had they used the value averaging strategy to save for their investment goals. In order to conduct the study I created a powerful web-based software system that allows me to back test the value averaging investment method, over any time frame, using historical data for any North American Stock, ETF or US based mutual fund. The program also compares the results of Value Averaging against Dollar Cost Averaging.

The results of the study has revealed that if investors were using the value averaging strategy over a 5 to 10 year time frame, there is a high probability that they would have achieved their savings or retirement goals while outperforming the market indexes. This would have been possible even with the high volatility and declining stock markets over the last 5 -10 years.

In the new year we will look at rolling out a portfolio management service that will teach investors how to use this investment method in order to meet their investment savings goals.

To read the research report click here

To learn about the software click here


Till the next time.


Bruce