Cutting Through the Noise
April 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 ...
Read MoreMarch 6, 2014
Timing the market is a mug’s game. You might get it right once or twice, but over the long term, switching in and out of funds based on recent returns and ‘expert’ forecasts will likely do your portfolio more harm than good. The proof? Look no further than Morningstar's ...
Read MoreFebruary 26, 2014
Ballast /bal•last (noun)/ Any heavy material used to stabilize a ship or airship. Also: weight, bulk, stabilizer, balance, counterweight, counterbalance. In a recent post I suggested that one reason clients are resistant to re-balancing their portfolios is that our ...
Read MoreFebruary 25, 2014
Fortune magazine got a scoop on Warren Buffett’s annual letter. In an exclusive excerpt, Mr. Buffett writes about the basics of investing in a way nobody else can do, including real life examples (purchases of a farm and commercial building). For those of you ...
Read MoreFebruary 24, 2014
Exchange traded funds (ETFs) have become a popular investment option in Canada, as they offer simplicity, low fees and market-like returns. Yet, there are important tradeoffs with these products that investors should be aware of. In an updated paper, we ...
Read MoreFebruary 20, 2014
The benefits of diversification - no explanation required. The table was inspired by a blog from Canadian Couch Potato.
Read MoreFebruary 19, 2014
I see it all the time – people unwilling to invest in stocks because of the debt situation in the United States, Europe, China or Canada, the economy’s dependence on central bank stimulation or China’s slowdown. Their hesitation may pay off one day, but ...
Read MoreFebruary 18, 2014
Morningstar recently updated our Stewardship Grade for 2013. Once again, we scored an ‘A’, and were one of only three firms to receive the top grade. Morningstar is a leading provider of independent investment research. They first introduced Stewardship ...
Read MoreFebruary 17, 2014
We wrapped up our cross-country client presentations this month after visiting five (very cold) cities. If you weren’t able to attend one of our sessions, or are looking to revisit some of the themes we touched on, we’ve produced a summary of the presentation ...
Read MoreFebruary 14, 2014
I just came out of a team meeting in which the question was asked - How are client conversations going with regard to re-balancing? For clients who have not touched their portfolio in a year or more (and aren’t in the Founders Fund), it’s likely that their ...
Read MoreFebruary 13, 2014
From a post I did in October: Whenever I go through a government budget document, I’m always struck by how similar governments are to low (profit) margin, debt burdened companies. Small changes to the inputs into the budget calculations can have ...
Read MoreFebruary 12, 2014
It’s a great time to be a homer. Who isn’t pulling for Canada to do well in Sochi – Alex and Mik, the sisters, 3-2 over the Americans this morning ... Canadians have lots of experience being homers, because they’ve done it for a decade now in their investment portfolios. Even though Canada accounts for only 4-5% of the value of the world’s stock markets, it makes up the vast majority of individuals’ portfolios ...
Read MoreFebruary 11, 2014
The banks are running lots of cute, reassuring ads these days. To Bruce, they’re as painful to watch as his sinking Canucks. But they’re a reminder to him that it’s RRSP season. Bruce contributed $6,500 to his account back in June and plans to add another $10,000 this week. His wife Courtney also intends to contribute $10,000. With the strong run in the markets last year, they’re not sure where to invest the money, so they stopped by the office for some advice. We reviewed their ...
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