Three Tips from one of Canada's Top Institutional Investors

In a piece titled “How to Invest Like a Canadian,” Fortune Magazine offers three lessons from the Ontario Teachers’ Pension Plan, one of the world’s most successful pension funds.  It suggests:

  1. Keep Fees to a Minimum – Teachers “cuts outsiders out of its process” and small investors can imitate this by investing in passive funds and calculating whether hourly fees or annual payment through a percentage of assets makes more sense for paying your financial advisor.
  1. Hunt for Cash Flow – Teachers and other “Canadian-model plans love a long-term cash stream,” such as their investment in the Chicago Skyway toll road that will provide inflation-indexed toll income for 88 years. Fortune 28reports that small investors can look to funds such as the Proshares S&P 500 Dividend Aristocrats ETF, which owns shares that have increased dividends for at least 25 consecutive years.
  1. Wait for a Cheap “Softball” – Teachers declines opportunities that it deems too expensive and small investors can do this too.