Quill and Quire

Gordon Pape

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Author Profiles

The secret of his success

Knowledgeable and plain spoken, Gordon Pape adapts to what his readers want

Best-selling business book author Gordon Pape wrote his first book for his children back in 1987. Building Wealth, now out of print, was meant as a primer in grown-up responsibilities for his daughters, Deborah and Kim, and son, Ken, who at that time were in their early 20s and about to set out on their own. It covered all the bases, from how to get a mortgage to how to start investing in an RRSP. “It was everything I wished I had known right out of college,” he says, and an opportunity for them to learn from his own youthful mistakes. It was not, he thought, the sort of book he would ever write again.

Gordon PapeBut that changed one recent summer morning when Pape received a phone call from his son-in-law, Tim, explaining that he and Kim were in serious financial trouble, owing almost $50,000 in credit-card debt. “I was shocked,” says Pape. “My heart just sank when I heard about it. There were no trouble signs, they just kept it to themselves, and all I could think was, ‘Oh my God, what are they going to do?’”

What they did was sit down with Pape, who helped them devise a plan to take advantage of low interest rates and increase their mortgage and then use the resulting cash to pay off their credit cards. It was a good solution, but it got Pape thinking about how many other Canadian families were in the same position with no one to turn to for help. And so, he wrote Get Control of Your Money, an updated and revamped version of his first book, meant to help Canadians struggling with debt and who need a refresher course in the basics of personal finance.

The book, which was published in October by Penguin Canada, is a keen illustration of how Pape has become a mainstay in the fickle market of Canadian business books. Five years ago, bookstore shelves were lined with titles on how to day-trade your way to a million bucks. Today, those books are mostly gone, but Pape continues to publish two or three books a year. He is arguably the best-known and best-selling business author in the country, thanks primarily to a knack for delivering expert advice in a personal, plainspoken way and an intuitiveness for what his readership wants.

Although his name is now synonymous with mutual fund investing in Canada, Pape didn’t start out as a personal finance guru. He got his start as a political reporter at Montreal’s The Gazette in 1962 and later moved into senior editorial positions at the Financial Times of Canada and The Canadian magazine. In the late 1970s and early 1980s, he wrote three novels with oenophile and writer Tony Aspler, but didn’t publish his first business book, Building Wealth, until 1987.

Since then, he has witnessed the full range of the business cycle, from the lean years of the recession of the early 1990s to the tech boom and subsequent bust of the late 1990s and early 2000s. Regardless of the economic climate, Pape says people always crave investment advice – the trick is figuring out what advice to focus on and when. Over the years, he has covered it all, from his popular Buyer’s Guide to Mutual Funds, co-written and updated annually since 1991 with Eric Kirzner, to Low Risk Investing in the ’90s and Retiring Wealthy in the 21st Century.

Pape says the past five years have been particularly tough for most investors. Many pulled out of the stock market after the technology bust, and many more may do so in the wake of recent scandals involving allegations of improper trading practices at a number of high-profile U.S. mutual fund companies. Pape says it’s too early to predict how the scandals will play out among Canadian investors, but since no companies here have been indicted in the allegations, he expects most Canadians to keep their money in mutual funds. They remain the easiest way to invest in a range of equities, he says, and “investors are more sensitive to the stock market than anything they read in the news.”

Still, it is a daunting climate in which to make a living writing about mutual funds and investing. Pape says sales of his mutual fund books have fallen in the past two or three years, but so has the entire market. While the majority of his competitors’ books have disappeared from the shelves, his own investing books continue to be updated. “There are still lots of people interested in investing and who want guidance and advice,” he says.

One of the ways Pape has remained relevant during these tough times is by adjusting to the changing needs of investors. In 1991, for example, his Buyer’s Guide to Mutual Funds took an encyclopedic approach and looked at all the different mutual fund products available to Canadian consumers. Since the 2002 edition, however, Pape has become more focused, choosing to include only the most reliable performers.

From a stock picker’s perspective, he says a bearish equity market isn’t necessarily bad, as it helps weed out the bad funds. “In the case of conservatively managed funds, which are the ones we tend to favour, they really stand out in the crowd,” he says.

Pape says the lasting appeal of his books is likely due to the fact that he has never championed trendy short-term investment schemes, like putting all of one’s savings into technology stocks or a day-trading account. Although he has suggested different strategies over the years, depending on the state of the markets, his core advice has always remained constant. “My picks are quite conservative and low-risk by nature, which appeal to a wide cross-section of Canadians,” he says.

When it comes to mutual funds, Pape has always had three key pieces of advice: to judge a fund by its long-term performance and consistency over a number of years; to understand the fund manager’s expertise and track record of delivering profits; and to lower one’s risk by investing in different types of funds, such as bond and equity funds, since they tend to perform inversely to each other.

Before he settles in to the work of updating the next editions of his RRSP and mutual fund guides, Pape is taking some time out to work on a different type of project – a non-fiction Christmas book that Penguin Canada will release in fall 2004. Although he is reluctant to explain the exact nature of the book at this point, he says it will be a totally different approach to the holiday season that can be enjoyed by both children and adults.

“It is a time of year that is so rich in tradition and myth and personal reminiscences, and my family has always been steeped in Christmas traditions, so it’s been a real labour of love,” he says. “Money is always a fascinating subject to me, and I’m not downplaying money by any means, but it’s nice to do something else for a change.”