How to Find a Good Financial Expert

The Barenaked Ladies sang, "If I had a million dollars." In the song they talk about buying homes, fur coats (but not a real one because that's cruel), and Kraft dinner with fancy ketchup.

Nowhere in the song did they talk about investing their money. Real estate doesn't count as a secure investment unless you've been living under a rock for the last two years.

So where does a person put his or her money? The journalists at Report on Business magazine spoke to some of the top investors in the country and learned a few things.

The experts they spoke to are Rohit Sehgal, Normand Lamarche, Irwin Michael, Eric Bushell, Stephen Jarislowsky, Peter Cundill, Kim Shannon, Eric Sprott, Tye Bousada, Mark Mobius and Bob Tattersall. These people deal with billions of dollars and are some of the most experienced investors in the world.

All of them have preferred investments - some like the old-school investments of precious metals, copper, and nickel, some go for oil and gas, others prefer agriculture. But despite their choices they all have something in common, and that something is discipline.

John Daly, a reporter for Report on Business says, "They have a world view and they stick to it."

Another thing all the experts do is educate themselves about stocks, funds and commodities. The problem is, most Canadians aren't doing these thingsl.

So why isn't the average Canadian following this path to wealth? While Daly and I were talking, he mentioned his doctor. Calling him a "very sophisticated guy," Daly said that his doctor told him he doesn't max out his RRSP contributions and doesn't really invest.

He's not the only one. Daly says that most Canadians just don't have the time to really learn all the in-and-outs of investments. This is where a expert can be useful. But before you hand over your hard-earned cash (Hello Bernie Madoff), Daly suggests asking them a few questions.

"Ask them tough questions and basic questions. Questions like "Why do you have such faith in stocks" would be a good one," he says. "Most find them annoying but some should be able to defend their own [investment] strategy and why other strategies won't work."

A good financial expert should be able to answer your questions. He or she should also honestly tell you that they aren't able to predict the future of the economy but going back to the difficult questions, they should be able to defend their strategy.

Daly says, "Ask five annoying questions. Not deliberately annoying but questions about where your money is going."

After all, it is your money.

Daly does caution investors to be aware of fees. Too many fees can eat up any potential earnings.

Report on Business is online and on newsstand now. If you read the article, you might find yourself calling your financial advisor to discuss your investing options. I know I did.

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