Investing

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Options Gurus Set Up Paid Educational Website

I use options in my own portfolio but only rarely write about them. I will try to write more option-related material in the future, but for those who are interested in learning more right away you might be interested in a new site set up by some of the top option bloggers on the internet. [...]

14Mar2010 | Preet | 0 comments | Continued
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Questrade Promotion: $50 in Free Trades

Note: this is an affiliate program which means that any time someone signs up for this offer, I will potentially receive monetary compensation in the future. I’ll explain my thoughts on why I accepted participation in this affiliation below…
If you do just a bit of searching on the web you’ll find lots of useful reviews [...]

14Mar2010 | Preet | 4 comments | Continued
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CanadianCouchPotato.com

There is a new blog on the internet called CanadianCouchPotato.com. In a nutshell, the purpose of the blog is to help investors who are thinking about dumping their advisor to start investing on their own, without making it a part-time job. The “couch potato” term refers to the fact that the portfolios are very low [...]

3Mar2010 | Preet | 2 comments | Continued
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iShares Now Commission-Free For Yanks with Fidelity

I just saw an ad on TV for Fidelity’s trading accounts (available in the United States only). What was interesting is that they are now offering commission free trading on 25 of some of the most popular iShares ETFs.
Charles Schwab also offers commission-free trading on their own lineup of proprietary ETFs, but I don’t believe [...]

22Feb2010 | Preet | 2 comments | Continued
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New Firm Focusing On Reducing Currency Conversion Fees For Canadians

Canadians can pay as much as 2.5% in currency conversion fees which are hidden in what is known as “the spread”. If you are a small business and you convert $5,000,000 per year between US dollars and the loonie, a 2.5% spread means your bank earned roughly $125,000 before costs (which I think we can [...]

15Feb2010 | Preet | 8 comments | Continued
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Home Bias

I was speaking to some American financial advisors once and we started talking about geographic diversification. I mentioned that it wasn’t uncommon for Canadians to have extreme home biases, and many Canadians only invest in Canadian stocks. They said the same thing for American investors.
Considering that the US has traditionally been 50% of the world’s [...]

9Feb2010 | Preet | 14 comments | Continued
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Guest Article: DSC Index Funds

This is a another guest article by Jim Stark. Jim Stark is a pseudonym for a practicing Canadian financial advisor.
Why are there no DSC Index Funds?  On one hand, pretty much any advisor knows that there is no such thing as a DSC index fund and why that is so.  On the other hand, many [...]

8Feb2010 | Jim Stark | 2 comments | Continued
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Research or Marketing Gimmick?

This is a another guest article by Jim Stark. Jim Stark is a pseudonym for a practicing Canadian financial advisor.
So I hopped on to my computer one morning and typed in the phrase “scientific method” into my search engine to see what came up. Click here for the  definition that our friends at Wikipedia use. [...]

2Feb2010 | Jim Stark | 2 comments | Continued
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Severing The Link Between Price And Weight Part IV

Last post on this topic (at least for a while). Click on the following links for Part I, Part II, and Part III.
The final thoughts I wanted to share with you about this refer to the assumptions under which market cap-weighting an index suffers a drag when linking portfolio weight to price. We have already [...]

1Feb2010 | Preet | 2 comments | Continued
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Hedge Fund Gating

A hedge fund can decide to suspend the redemption rights of investors, usually whenever it feels it is necessary, which means you won’t be able to get your money out until a later date. The hedge fund would be considered to be “gated” at this point.
Why would they do this? It is a provision in [...]

31Jan2010 | Preet | 2 comments | Continued
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Severing The Link Between Price And Weight Part III

Continuing from Part I and Part II…
Actually, tonight I`m going to share some thoughts that struck me in the shower this morning when I was thinking about inverse cap-weighting a slice of the market (as reader Jordan had suggested to avoid market capacity constraints). Another reason this won`t work in practice is that you are [...]

27Jan2010 | Preet | 1 comment | Continued
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Severing The Link Between Price and Weight Part II

In the first part of this series we discussed the impracticality of inverse cap weighting (also note Michael James’ comments at the bottom of that post.) In this part we will look at what needs to be done to sever the link between price and weight so as to avoid overweighting overvalued stocks and underweighting [...]

26Jan2010 | Preet | 1 comment | Continued
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Severing The Link Between Price and Weight Part I

In a recent post about market-cap weighted fixed income indices, it was noted by reader Xenko that one way to overcome overweighting overvalued companies and underweighting undervalued companies (counter to what a rational investor would desire) could be to inversely weight constituents of an index. While the original post was about fixed income indices, I’m [...]

25Jan2010 | Preet | 15 comments | Continued
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Warren Buffett Exists Because He Has To Exist?

People point to Warren Buffett as proof for how and why active stock picking works, but they don’t understand that it might just be that he has to exist.
Click here for a little primer on Warren Buffet if you are not familiar with him.
The argument here is that his performance is nothing more than a [...]

24Jan2010 | Preet | 8 comments | Continued
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Efficient Market Hypothesis

Regular reader Jordan mentioned he was interested in my personal opinion on what is known as EMH, or Efficient Market Hypothesis. From a 30,000 foot perspective, EMH basically means that the market is efficient enough that it is very hard to outsmart. It doesn’t preclude the notion that people can beat the market, but that [...]

19Jan2010 | Preet | 3 comments | Continued
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