GICs – The Problem With Playing It Safe

GICs - The Problem With Playing It SafeThe Problem As a 59-year-old training administrator for a mining company, Heather is a member of her company’s defined contribution pension plan. She’s also mortgage-free. But in 2008 she suffered a 40% loss in her stock portfolio and has since slowly sold off all her high-fee mutual funds, putting her 100% in cash. “I have to pay more attention,” says Heather, who has started managing her own finances. After reading…

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The Investing Case for Canada

The Investing Case for CanadaCanada has always had to play second fiddle to our neighbours to the south. The Great White North just never seems to get the respect it deserves, whether it’s the frequent lag in products arriving on our soil, the border, tax and currency concerns among athletes and entertainers, and, of course, the weather. From an investing standpoint, it’s true that Canada was the place to be during the commodity supercycle…

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The Invisible Correction

The Invisible CorrectionFrom Black Monday, Oct. 19, 1987, to the September 2008 crash caused by U.S. financials’ exposure to toxic subprime loans and credit default swaps, it’s no wonder that, when autumn nears, so do investors’ fears of stock-market routs. During the 2008 collapse, which was the last major market crash aside from the flash crash of 2010, U.S. equities lost 21% of their value in a week and continued to crater until…

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Why Investors Can Still Find Bargain Stocks in Canada, U.S.

Why Investors Can Still Find Bargain Stocks in Canada, U.S.The number of warnings about overvalued markets seems to be quickly ratcheting upward and no wonder. Stocks in the U.S. closed their best August since 2000, with the S&P 500 up 3.77% for the month. And with a 1.92% return for the TSX during that time, the rally has left equity valuations on both sides of the border sitting at multi-year highs. The S&P 500 currently has a price-earnings ratio…

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5 Reasons Not To Watch For A Stock Market Correction

5 Reasons Not To Watch For A Stock Market CorrectionRecord high markets have our customers asking us questions every day such as: When will there be a correction in the market? What can I do to protect myself from it? First of all, this sort of thinking can be detrimental to your portfolio. Corrections are part of the market, just as rallies are. Trying to predict a correction is more or less impossible, but it also automatically puts you…

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How to Beef Up a Liquid Investor Diet

How to Beef Up a Liquid Investor DietMany alternative investments, whether in the area of real estate, private equity, hedge funds, infrastructure or more complex structured products, require investors to tie up their capital for periods ranging from four months to 10 years or more. In most cases, there is no secondary market for these securities, so investors lack two elements key to the broader public capital markets: transparent pricing and liquidity. Pricing and liquidity are tied…

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Markets, Dollar, Rally on EU Crisis Plan

Markets, Dollar, Rally on EU Crisis PlanStocks, the Canadian dollar and commodities all soared Friday in the wake of an agreement among European leaders to a set of prescriptions for their debt crisis. But analysts questioned how long the rally would hold. In Toronto, the S&P/TSX composite index closed up 171.86 points, or 1.5 per cent, at 11,596.56. In New York, the Dow Jones industrial average jumped 277.83 points, or 2.20 per cent, at 12,880.09. The…

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Markets Finish Higher

Markets Finish HigherThe Toronto Stock Exchange finished Friday with a 50-point gain, leaving it up about 290 points on the week. In the U.S., however, markets surged, pushing the gain for the Dow Jones to about 425 points on the week, the S&P 500 to 45 points and the NASDAQ to 63 points. The S&P gain left that index ahead on the year since Dec. 23, 2010. The Dow was already ahead,…

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Stocks Expected to Fall as Economy Expectations Plunge

Stocks Expected to Fall as Economy Expectations PlungeThe resource-heavy Toronto stock market could be headed for another week of losses as commodity prices adjust to much lower expectations for economic growth. And while economic data this week is expected to show that the Canadian economy continued to grow in early summer, investors aren’t expected to find encouragement in the numbers as the economic outlook likely worsened in August. “Buckle up” for a rough ride, advised John Stephenson,…

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Index Investing Becoming a Victim of Its Own Success

Index Investing Becoming a Victim of Its Own SuccessToo much of a good thing can end up being bad. That includes using a benchmark index as the basis for an investing apparently. In the July 2010 paper (download here from SSRN; acknowledgement to Stingy Investor where I found the link) On the Economic Costs of Index-Linked Investing, NYU prof and NBER research associate Jeffrey Wurgler reviews some research results that are disquieting for investors who follow a passive…

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