It’s become fashionable in recent years to discount stock picking and market timing as exercises in futility. However, there are the anomalies such as stock-picker extraordinaire, Warren Buffett. And in Canada, there is CIBC World Markets’ Peter Gibson, who not only called the financial crisis, but has regularly won No. 1 rankings in the Brendan [...]

3/10/2010 10:47:15 AM

I was listening to the radio in the car when an ad came on urging listeners to hurry and sign up with a renovation firm before the HST came into effect in Ontario. Beat the 8%, the voice said. This view assumes that the 8% will be automatically passed onto consumers after July 1. I’m not [...]

3/9/2010 1:43:46 PM

Being mutual funds with capital-income guarantees, segregated funds have an appeal to older persons for retirement and estate-planning purposes. So much so that Canadians owned about $140-billion worth of the funds last year, which is about one-quarter the size of mutual-fund assets (according to Toronto Star columnist Ellen Roseman). It`s rather peculiar, though, that most segregated funds [...]

3/8/2010 10:07:20 PM

As the number of exchange-traded funds (ETFs) multiplied in the U.S., so did the number of financial firms and blogs specializing in ETFs. The same thing seems to be happening in Canada. Here are some of the start-ups: 1. The Canadian Couch Potato blog by Dan Bortolotti, an author and professional journalist who contributes to MoneySense [...]

3/5/2010 6:42:48 PM

Yesterday I was in the budget lock-up at the Conference Centre in Ottawa, combing through Budget 2010 documents for measures that could affect the personal finances of Canadians. There weren’t any big, sweeping initiatives but there were plenty of smaller, targeted ones. My post on them appears on the MoneySense.ca website. One of the more intriguing [...]

3/5/2010 10:36:49 AM

The federal government releases its 2010 budget today. Yesterday, I chatted with Andrew Dunn, Deloitte Canada’s National Tax Leader, about what the impact might be on the personal finances of Canadians.  “There is not much elbow room this time around,” said Dunn. “The fiscal deficit is $56 billion.”* If there are any changes impacting the personal finances of [...]

3/3/2010 5:12:35 PM

I recently did some research into Canadian royalty trusts regarding the sustainability of their high yields after Jan.1, 2011 (when they are scheduled to be taxed like corporations). After I handed in my report, one of the sources called in. But since the report had already been submitted (with a firm deadline), his comments couldn’t [...]

3/3/2010 2:51:11 PM

It’s expected the Bank of Canada will begin raising interest rates in 2010. But how much will they go up? The C.D. Howe Institute recently issued some recommendations in that regard. The Monetary Policy Council (MPC) of the C.D. Howe Institute is content to let the central bank abide by its commitment to hold the overnight rate [...]

3/2/2010 6:29:04 AM

A previous post noted that fixed-income strategist Hank Cunningham was advising clients to go into high-yield bonds. Last week, Gluskin Sheff economist and strategist David Rosenberg joined the chorus. He observed that the average 9% paid out by high-yield bonds was 415 basis point higher than the average for U.S. investment-grade bonds. When the economy is [...]

3/1/2010 5:36:40 AM

A reader launches a broadside at the CMHC: 1. Canada Mortgage and Housing Corporation (CMHC) was insuring 0% down 40 year mortgages in recent years pouring gasoline on a housing market that was already on fire. Vancouver has become one of the most unaffordable cities in the world as a result of CMHC’s leadership in insuring speculative [...]

2/27/2010 5:51:06 AM

One of the more important indicators to follow for a sense of where the global economy and financial markets are headed is the yield curve. It’s defined as the difference between yields on ten-year and two-year U.S. government bonds. There are times when the two-year yield exceeds the ten-year yield – a condition known as the [...]

2/26/2010 12:00:23 PM

TNS Canadian Facts has just released a survey of attitudes toward the Canadian retirement system (employer pensions, Canada Pension Plan, and registered savings plans). Respondants were 50 years old or older. Highlights from the survey: 46% lacked confidence in the retirement system 67% though the system met needs “not well or not very well” 47% believed some reform was [...]

2/26/2010 9:39:16 AM

Standard & Poor’s released today the Standard & Poor’s Indices Versus Active Funds (SPIVA) Scorecard for Canada. It shows how Canadian mutual funds fared against market indexes in 2009 and for the last three and five years. A main finding was that only 12.5% of actively-managed Canadian equity funds outperformed the S&P/TSX Composite Index over the [...]

2/25/2010 1:25:12 PM

The Teranet–National Bank House Price Index came out today and shows a 1.2% month-over-month jump in December to an all-time high. That’s rather out of sync with the economy, to say the least. According to Stats Can figures, the rest of the economy is still in the doldrums: • unemployment was 8.3% in January, still far above the pre-recession [...]

2/24/2010 5:22:59 PM

I never understood why stock markets respond so dramatically to earnings reports. Why should a company’s stock experience sharp moves in price whenever it beats or misses analysts’ expectations by a penny or two per share? After all, anyone with a passing knowledge of accounting rules knows how much scope they allow for reporting financial results — especially [...]

2/24/2010 11:51:37 AM

The Task Force on Financial Literacy was created by the Federal Minister of Finance in June 2009. Its mandate is to develop a national strategy to improve Canadians’ financial literacy and deliver it to the Federal Minister of Finance by December 2010.” Today, the task force released a consultation document, Leveraging Excellence, which explores “key issues [...]

2/22/2010 11:23:11 PM

Yesterday’s post was about picking RRSP (or non-RRSP) investments with risk and diversification in mind. Another point to make is that we may want to think of diversification in a broader sense than just financial assets. Specifically, as York University professor Moshe Milevsky has urged in his writings (latest book is Your Money Questions), you may [...]

2/19/2010 11:48:48 AM

Whatever investment you are planning to add to your RRSP portfolio, some consideration should be given to how it fits in with the rest of your holdings. Is it likely to move in the same direction as an already dominant holding, thus increasing volatility and risk? That’s not good. It would be better if the new holding [...]

2/18/2010 9:15:26 AM

There is an informative article by John Heinzl of the Globe and Mail on the Canadian exchange-traded funds (ETFs) tracking U.S. high-yield bonds. I’ve been wondering which would be the best choice and it appears the answer is the iShares U.S. High Yield Bond Index Fund (XHY) — whose index has an average yield to [...]

2/17/2010 1:08:32 PM

Today is the first day of trading in the Claymore Gold Bullion ETF (CGL). It’s “Canada’s first physical gold bullion ETF,” says Som Seif, President of Claymore Investments Inc. The gold is stored in the vaults of ScotiaMocatta, a division of the Bank of Nova Scotia. Other features of the ETF include: hedged to the U.S. [...]

2/16/2010 10:27:52 AM