If we had had that dialogue two to three years ago, there was arguably, little to be concerned about. We enjoyed ultra-low interest rates, a favorable taxation environment, most asset prices still looked set to rise, political interference at the federal, provincial and even international levels seemed minimal and pro-business and finally, confidence was high.

Contrast that situation to now and we are facing a transformed business and political environment and possibly, the beginnings of a less comfortable economic climate, with threats to productivity and confidence from multiple angles. If you knew three years ago what the prevailing conditions would be like now, would you have made the same investment decisions back then?

I am not predicting that we are facing a situation akin to 2008, or that a down turn is imminent, far from it.  What I am advocating for is being prepared for the possibility that asset prices can be dynamic beyond expectations and that putting one’s wealth in a position where its owners can create the direction, rather than be driven by it, is what is key to long term success in wealth generation and preservation.

I can recall many times in the past few years where clients have chosen not to follow sound planning advice provided by advisors they appointed to create outcomes such as de-risking, optimized tax structures and to diversify wealth to achieve long-term growth and stability for generations. There is often so much noise that competes with sanity.

In general, allocating wealth to long-term investments and receiving growth is about being able to stay the course, as well as take advantage of new opportunities that present themselves along the way.

In 2009, investor sentiment was low. In the years that have since followed, long-standing and prudent Canadian insurance companies have experienced incredibly high demand for Participating Whole Life insurance contracts as they were one of the only assets where values or growth did not decrease because of the financial crisis.  Why did it take the events of 2008 to trigger a collectively larger focus on investing in tax efficient and stable asset classes?  Those with Whole Life policies in force long before 2008, would likely have had cash surrender values that could have been leveraged to make subsequent investments in newly undervalued assets, the value being created by fearful investors, or those forced to sell.

Those that aren’t prepared or misunderstand risk, create the opportunity for those that are prepared and can take calculated risks at their discretion.

Given these points and looking ahead to the next one to five years, are your investments adequately diversified? Is your tax planning optimal? And, do you know where in your portfolio you will look to take advantage of opportunities that may present themselves?