Featured Articles
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September 4, 2010 Market Outlook
06 September 2010 6:00 AM | No CommentsInterest rates have remained essentially unchanged over the past week. Economic indicators are appearing weaker than previously, so the likelihood of the Bank of Canada raising rates is much lower. Bonds have fallen back while stocks have surged ahead. Bonds are at the same level...
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Canfor Pulp CFX.UN
03 September 2010 6:00 AM | No CommentsThe Facts (as of August 25, 2010) Unit price: $13.85. Book value per unit: $15.35. Market cap: $492 million (medium). Distribution: $0.20 per month or $2.40 per year. Yield: 17.3%. P/E: 9.2x. Debt/equity ratio: 0.21. Payout ratio: 67%. The Story Artis REIT is focused on...
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Investment Risk
01 September 2010 6:00 AM | 1 CommentOver the next few weeks, I’m going to write about robustness. This is an idea that addresses risk in any type of planning. I have found that risk is particularly poorly addressed in market-related thinking. Investment plans discuss risk, but fail to control it. Particularly...
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Archive for January, 2010
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Money doesn’t make you happy
Posted on January 27, 2010 | No CommentsI know a woman whose daughter talked her into buying lottery tickets. She knows that the odds of winning the lottery are lower than the chance of being struck by lightening. But that’s not why she does it. When she asked her daughter, “Why do... -
The Crystal Ball: TSX over the next 3 years
Posted on January 20, 2010 | 1 CommentNobody knows what the TSX will do over the next three years. Certainly not me. But I think that it’s unlikely to crash again like it did in late 2008 and early 2009. Since that’s the case, I feel more comfortable investing. I feel that... -
The Crystal Ball: CAD/USD parity
Posted on January 15, 2010 | 1 CommentAnyone can make predictions. It turns out that educated people are no more accurate in their predictions than the unwashed masses. The problem is that they have higher confidence in their predictions, that is to say, they expect to be right. The reason that may... -
The Myth of Tax-free Compounding
Posted on January 13, 2010 | No CommentsTax-free compounding increases the pre-withdrawal value of a tax-deductible account versus a tax-paid account. After all taxes are paid, assuming a constant tax rate, the results are more similar, although the tax-deductible account still produces a larger value. Tax-deductible accounts are perfect for anyone who will be in a lower tax bracket in retirement. That way, taxes are avoided since the deduction is made at a higher tax rate, and taxes are paid, upon withdrawal, at a lower rate. On the other hand, if the government increases tax rates over time, this expected benefit may be lost or reversed. Even if your tax rate stays the same, different types of income are taxed differently. If capital gains and dividends are taxed at a lower rate than withdrawals from the tax-deductible account, it's possible that the final value of a tax-paid account would be higher. Finally, taking all of this into account, a tax-paid investment account that allows tax-free growth and withdrawals might be most beneficial of all. -
Problems with share ownership
Posted on January 6, 2010 | 1 CommentShare ownership should be an effective way to invest your money. Unfortunately, there are many pitfalls, only some of which can be mitigated. Things seem to go wrong when ownership becomes widely dispersed. All of the problems below affect, to varying degrees, widely-held publicly-traded companies....