Evelyn Jacks: Risk management, a prerequisite for trusting the markets

Facebook's recent public offering captured the dreams of many, who ó upon seeing imagination and innovation translate into riches ó enthusiastically invested. By the end of its first week of trading, however, it was clear it takes a strong stomach to play in today's volatile markets. Yet, if you are to avoid the eroding effects of inflation and future taxes on your wealth, you need to invest in equities. That means managing risk ó and embarking on your investment journey with a strategic plan firmly in hand.

There is no doubt that, given the global financial crisis and the unprecedented volatility of global markets in recent years, we are in uncharted waters. Navigating the many hazards requires discipline and skill ó and a plan. That's why the theme of this year's Distinguished Advisor Conference (DAC) is Navigation: Charting a New Financial Course. It is all about managing risk by planning.

An annual event from Knowledge Bureau, DAC focuses on educating financial advisors from all specialties in the most recent trends in and solutions for sustainable wealth management. This year risk management is the focus and an outstanding lineup of knowledgeable speakers will address the elements you should consider when charting your course. (To view the preliminary agenda for the conference, click here.)

For example, Patricia Croft, an independent economist whose area of expertise is global macro economic analysis, will make the case that re-entry into the markets is necessary to make progress in building wealth. It is understandable, says Croft, a Day 1 speaker, that shell-shocked investors, weary of the financial crisis, should be extremely shy of equities. Croft, the president of Croft Consulting, will examine the global economic environment and its implications for Canadians' asset-allocation strategies. Voted one of the top economists in Canada, Croft is especially bullish on the Canadian dollar and will explain why.

It's Your Money. Your Life. Investment risk takes many forms: political, economic, legal, tax, security, to name just a few. Successful captains set course with a plan that takes into account the anticipated risks before steering their ships into rough seas. For investors and their advisors, that makes risk management a key element in joint decision-making.

Evelyn Jacks is president of Knowledge Bureau and founder of the Distinguished Advisor Conference, now in its ninth year. This annual event attracts hundreds of top advisors from across Canada to discuss the most recent trends in economics, tax, investment, retirement and estate planning.