Cutting Through the Noise
June 3, 2014
"Bradley says nobody can call the market in the short term, but here he is with 15% of the fund sitting in cash. Isn’t that market timing?” With cash earning next to nothing and stock markets going up, we’ve been getting a few comments like this about the Founders ...
Read MoreMay 27, 2014
The following chart is a screen shot of our Volatility Meter. The tool gives you the ability to toggle across different time frames and see how different asset mixes performed. The chart below shows the annual returns (1961 – 2013) for an indexed portfolio made up of ...
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 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 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 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
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 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 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 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 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 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 4, 2014
I’ve been remiss in doing a follow-up to an article I wrote for the Globe and Mail a few weeks ago (clients come first). In it I made the point that ETF sales in Canada have been disappointing, despite all the hype and favourable press. As it turns out, the piece ...
Read MoreJanuary 24, 2014
There are times throughout the investment cycle when people want more precision. They want to know what the market is going to do this year, or even this month. These moments most often come in January when year-end investment reports and media coverage are full of predictions for the next year. The need to know also arises after ...
Read MoreJanuary 23, 2014
The improvement in the financial position of our defined benefit pension plans was the biggest economic highlight of last year. As we pointed out in a post two weeks ago, the change has been dramatic. Higher bond yields, healthy stock returns and increased ...
Read MoreJanuary 22, 2014
Don Tapscott, the highly-regarded business thinker and writer wrote an article for Monday’s Report on Business (Note: David is taking me to hear him speak at University of Toronto next week). In it he previewed the annual mixer for the world’s business ...
Read MoreJanuary 20, 2014
Exchange traded funds (ETFs) are the most talked about product trend in the wealth management industry. I’m not sure what comes second, but it’s not even close. An overwhelming majority of commentators and bloggers recommend indexing with ETFs ...
Read MoreJanuary 15, 2014
What a year 2013 was. Everybody’s portfolio was up (or almost everybody), and most were up a lot. It was an unusual year, but not only because of strong returns. For Canadian investors, a barbell shape may best describe the 2013 results. On one ...
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