Cutting Through the Noise
May 20, 2014
I read a lot in this job, out of both necessity and interest. I often find it refreshing to take a break from the likes of The Wall Street Journal, The Economist, the Report on Business, etc., to read something lighter, inspirational, controversial, or just offbeat ...
Read MoreMay 14, 2014
In a post last month, I gave my not-so-subtle view about borrowing money to invest – it’s possibly appropriate for a miniscule number of investors, and totally inappropriate for the rest. Last week I heard Cliff Asness speak. He is one of the founders of ...
Read MoreMay 12, 2014
You may have heard the phrase "Sell in May and go away". It’s an investment strategy that involves selling your stocks in May and repurchasing them in the fall. It’s based on the premise that stocks have historically performed better during the months of ...
Read MoreMay 8, 2014
When I headed west to join Phillips, Hager & North in 1991, I had to learn about bonds, and fast. My background as an equity analyst wasn’t going to cut it with the balanced pension clients I’d be working with. Fortunately, PH&N was already one of Canada’s ...
Read MoreMay 5, 2014
Investment fees reduce returns. This much is obvious. What isn’t so clear, however, is what constitutes reasonable fees. A number of variables play a role, such as whether you work with a full-service advisor, follow an active or passive (indexing) investing ...
Read MoreApril 24, 2014
An investor’s long-term mix of stocks, bonds, cash and other investments that will provide her with the best opportunity to achieve her objectives. It should take into consideration an investor’s goals, risk tolerance, and investment time horizon. An investor should not alter her Strategic Asset Mix unless she experiences a change in her personal circumstances such that her investment objectives, risk ...
Read MoreApril 22, 2014
I’ve grumbled in this space numerous times that the mutual fund industry is stuck in the dark ages. Its automatic response is to resist change and improvement. Meanwhile, the world moves on and clients find other ways to invest (ETFs being one example). While ...
Read MoreApril 17, 2014
TD ran a large ad in the Report on Business yesterday. It shouted: Get up to 300 free “I’m feeling more confident” trades. Are you kidding me? 300 trades. I’m not sure I’ve done 300 trades in 31 years in the business. Is this a reflection of where we are in the cycle (I’m feeling more confident) or is TD encouraging its clients to do some high frequency trading of their own. 300 trades. Really?
Read MoreApril 16, 2014
David Toyne (our Toronto guy) pointed me to an interesting story the other day about doing a job right. David’s a fan of Terry O’Reilly and his radio series Under the Influence. He was listening to a recent episode in which O’Reilly was reciting stories from some of ...
Read MoreApril 14, 2014
Roughly one-third of our Income Fund is currently invested in stocks. Equities add both diversification and yield to the portfolio, which can be particularly beneficial in today’s low interest rate environment (10-year government of Canada bonds are yielding a paltry 2.4% ...
Read MoreApril 11, 2014
From our Quarterly Report: Looking to the future, the advice we’re giving our clients has increasingly focused on risk management. Rising stock prices have resulted in increased valuations and a renewed thirst for risk assets. The current stock market run ...
Read MoreApril 10, 2014
There has been a lot in the news over the past day or so about the Heartbleed bug. We were alerted to the issue on Monday evening, the same day the bug was announced on heartbleed.com. That evening we checked all of our major systems, including our ...
Read MoreApril 9, 2014
di∙wor∙si∙fi∙ca∙tion (noun). The practice of owning too many securities or investments such that a portfolio starts to look very similar to the broad market and has no sense of direction. Also known as Overdiversification. The term is taken from The Steadyhand Dictionary, which is a collection of investing terms and colloquialisms. Some are widely used, some aren’t used enough, and some are seen ...
Read MoreApril 7, 2014
Over the last couple of weeks we’ve met with two prospective clients who were dealing with unpleasant situations related to investment loans. In one case, the loan proceeds were used to purchase mutual funds with deferred sales charges. (I haven’t quite ...
Read MoreApril 2, 2014
Set up a long-term investment plan and stick to it. It’s easy to say and difficult to do. What makes it so hard are the inevitable market extremes, which range from “I can retire today” euphoria to “I hate the stock market” depression. At both ends of the spectrum, it’s ...
Read MoreMarch 31, 2014
Are you passionate about helping Canadians be better investors? Do you want to help change the landscape in the wealth management industry? If you can say yes to ALL these questions, you should check out this job posting for an Investor Specialist ...
Read MoreMarch 31, 2014
BRIC is an acronym for Brazil, Russia, India and China. It was created by Jim O’Neil, the Global Economist at Goldman Sachs (who became a celebrity in the business press as a result). BRIC was meant to symbolize the shift in economic clout from the developed ...
Read MoreMarch 27, 2014
“The potential growth rate has fallen to 7-8 per cent, partly because of a shrinking labour force; excess capacity has become massive even by Chinese standards; financial risks have risen, driven by excessive local authority borrowing, housing bubbles and growth ...
Read MoreMarch 25, 2014
short term∙i∙sm (noun) (1) To focus on short-term market moves, economic news or company fundamentals. (2) To act on recent events without considering the longer-term implications. (3) To veer off course from an investment plan based on prevailing trends or fads. (4) Investors plagued by short-termism often damage their portfolios by buying high and selling low. (5) A chronic condition ...
Read MoreMarch 24, 2014
I generally don’t go through prospectuses of new issues. Scott put one in front of me last week, however, and it made me wonder if I’ve been missing out. The document, which was related to the PIMCO Global Income Opportunities Fund, had all kinds of ...
Read MoreMarch 20, 2014
The sun is shining. Flowers are blooming. And ideas are sprouting. It’s the first day of spring in Vancouver, and as our local brewery says (Granville Island), it’s good to be here. Leading thinkers, innovators and communicators have swarmed the city for the TED ...
Read MoreMarch 17, 2014
Remember the days of trotting down to the video store to rent a movie? You’d hope the flick you wanted to see was still available, then grab a copy of the box, wait in line at the counter, whip out your membership card, grab a bag of Twizzlers and fork over ...
Read MoreMarch 13, 2014
In the Report on Business on Monday, there was an article on a case playing out in the U.S. courts that involved RBC. It reinforces my previous comments with regard to the sliding standards of conduct that exist in the investment banking arena ...
Read MoreMarch 12, 2014
“Your investment philosophy is very interesting. What you’re saying about investing, does that apply to how you live your life?” I was asked this question at the end of a media interview. My response: “Hell no. They’re very different. If I lived my life the way ...
Read MoreMarch 11, 2014
clo∙set in∙dex∙ing (verb) The practice of a fund manager building a portfolio that closely resembles an index for fear of losing assets or his job if performance fails to stay close to the index. Associated with low conviction, low active share, and underperformance. The aforementioned term is taken from The Steadyhand Dictionary, which is a collection of investing terms and colloquialisms. Some are ...
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