My journey to creating sage investors - By Aman Raina
You know you should be investing….but where do you start?
You’ve been thinking for a while that you need to take more action in growing your savings so you can meet your long-term financial goals. Your friends, family, and colleagues have repeatedly told you the importance of investing.
You’re hesitant because you’ve seen people in your circle lose some or all of their savings after trying to invest and don’t want that to happen to you. You press on and start slowly dipping your toe into learning more by surfing the web, maybe taking some evening courses, and even visiting your local bank. You feel like you’re doing the right thing and are on the right path to taking control of your money.
Then you finally sit down and start trying to figure out what stocks to buy.
Your head spins trying to figure out what all these investing terms mean. Debt/Equity ratio? Profit Margins? Dividend Yield? Why does investing have to be this confusing?
You have impressive-looking slick charts, graphs, and reports you bookmarked from the Internet but have no idea what they mean or how to use them to make investment decisions. You feel overwhelmed by the mountain of information.
You put it off and keep saying to yourself that you’ll get around to figuring out this investing thing...someday.
Someday is today…and I can help
Hi I'm Aman Raina and I help new investors who want to be financially independent but feel intimidated and confused about the investing world. They don’t know what the right investing path is for them or where to begin. I teach and engage investors on how to make educated investment decisions so that they can achieve financial freedom in their lives with confidence.
My investing journey
My investing journey began where most people often begin to learn something...a classroom. I was working towards my Business Degree in Finance and Accounting. In my last year I took a course on portfolio management where we had to do an individual project on a specific investing concept. In the library, as I was searching through various Fortune magazines, I came across an article on a financial valuation method called Economic Value Added or EVA. As it turns out, EVA is a more accurate way to determine if a company is creating tangible wealth, thus it can help you determine if that company’s stock is worth buying or selling buying. After reading the article, I decided to analyze a few companies using the model and write a report. I got the report back and I got an A- grade and a comment from a my professor saying, “Nice analysis about the model. Too bad it won’t amount to anything”. I thought OK, no big deal and moved on. Little did I realize at the time how this little term project was going to influence my life...
The crash of the “It” stock ignites my investing passion
Fast forward a few years and I got my first “real” job working at the Toronto Stock Exchange at a time when the trading floor still existed. I was on the floor on that fateful afternoon when a stock of a high-flying and popular mining company named Bre-X traded from $10 to 50 cents within milliseconds after it was revealed that the company was falsifying its records about a new gold mine they discovered. Instantly many people’s life savings were wiped out. It was a sobering moment that reminded me how investing in stocks is risky. Bre-X was the “It” stock and many people were buying it without doing any homework. Working in that environment motivated me to elevate my knowledge of investing beyond the Finance textbooks I read in university. Alas, I was disappointed to not be able to find any credible and unbiased investment information that the general public could use to help them make successful investment decisions.
One day I was doing research in the library when I stumbled upon a financial journal that had an article on the EVA investing model. The article said that EVA is one of the most accurate and credible methods for measuring the financial performance of a company. I looked to see who wrote the article and it was my Finance professor! The one that said it wouldn’t amount to anything!
Did I just get trolled? Did he steal my gig? WTF!
The episode got me wondering whether I could use this model to help me invest. So, over the next year or so, I spent many evenings and weekends working to better understanding the EVA model and using it to analyze companies. I invested in a few stocks that were scoring high on the model and I was able to make some decent money. On my job, I was doing some programming and creating databases so I took what I knew and applied it to creating my own website that could search a database of my research. I kept refining and practicing my skills in programming and financial analysis to develop a database of Canadian investment research using that same EVA financial model. I had included almost 300 companies that you can search through! Malcolm Gladwell would be proud knowing I've stampeded over his "10,000 hours of practice" rule!
Several years later, I took the plunge and started my own consulting business. I founded AKR Capital Research and began providing portfolio managers and individual investors with independent investment research.
Something’s not right
Over the years, I have met numerous investors who have shared their stories about how financial institutions have failed them in providing appropriate guidance for their investment portfolios. Many have gone on to lose significant portions of their savings, leading to financial and emotional hardships, while the institutions that should have been helping them are instead enjoying massive profits. I believe that there is a serious disconnect here and this is not healthy for our society.
My A-Ha Moment
In 2011 I was in Hong Kong on a project as part of my MBA program and I was at a function on one of those exclusive clubs in the financial district. The keynote speaker was the CEO of Nomura Securities, one of the big investment banks in South East Asia. He talked about the financial crisis and the stresses the bank was facing. He outlined in great detail all the initiatives they took to navigate the firm through the crisis and to save jobs for its people. As I was listening I wondered, “What about the customers?” He didn’t mention anything about the customers. What did the company do to help its customers through this difficult time?
Later the same evening when a few of us were chatting it up, the gentlemen came over and met with us and asked us if we had any questions about his speech. I thought, hey maybe I can ask him about how they helped their customers during the crisis. So I asked him and I still remember his response to this day. He said,
“Aman there is one thing investors need to know, and that is every 10 years or so there will always be a financial crisis or a major correction in stocks. People who are investing need to know this. It comes with the territory.”
At the core, he’s right. Losing money is an occupational hazard with investing. However, I found the lack of any level of empathy for his customers, the people that pay his salary and sustain his company, to be quite striking. That’s all he said and moved on. Really.
It was at that point that an a-ha moment clicked with me.
I realized at that moment that investors are being abandoned by the financial service industry…to the detriment of society
It shouldn't be this way.
My call to action
I began to realize that these big banks and financial companies I was doing work for really don't need my help. They will make their money no matter what happens. The people that I saw requiring the most assistance were hard working people, who after several stock market meltdowns want to take control of their financial destiny.
Sage Investors is Born
After investing for 20 years, I really believe that investing is a lot easier than what the industry makes it out to be. I believe that any person can become really good at investing if they have the right education, motivation, and support. With that I transformed my practice into Sage Investors with a goal of creating an army of empowered and successful Sage Investors!
I've seen it first hand in the people I've worked with. My first clients knew nothing about investing, but with hard work and commitment to learning the mechanics and emotional aspects of investing, I see them now as confident investors who are building a meaningful nest egg for their future on their own.
I see them happy that their hard earned savings are growing meaningfully for them.
They have hope.
They have hope that that they have a good chance of having some financial flexibility to achieve their own personal and family goals.
I have gained so much admiration in watching people making more successful investment decisions and greater satisfaction in knowing I have played a role in helping these hard working people achieve some level of financial freedom in their lives. The best part is when I help someone on their investing journey, I am learning something new about investing that helps me. What a win-win!
Click here to get started on unleashing your Inner Sage Investor!
Sage Investors is based out of Toronto, Canada