Posts made in March, 2010
2010 Q1 Stock Picking Contest Results
A few personal finance bloggers decided to have a friendly stock picking contest for 2009 and we decided to do it again for 2010. We had made our picks back in December of 2009 and the plan was to track the calendar year performance of four picks (equal weighted for the sake of determining portfolio performance). As alluded to in my post that discussed my picks initially – don’t take these contests too seriously. A one year horizon is nothing more than gambling. This year I decided to pick stocks at random, well… kinda. I picked some random words and then found the ticker symbols to match those words and that was basically it! Here were the words I picked: FUN,...
Read MoreIs Your Brokerage's Bond Desk a Profit Centre?
Not a question a lot of people ask, but it’s an important one. As an investor, if you buy a bond from your advisor or discount broker you see the price you are offered, but how far off is that from the price the brokerage paid to get it for you? Bond desks can either be run as profit centres or not. When I was at ScotiaMcLeod and I wanted to buy a bond for a client, I would call up the bond desk downtown and get the price for what was in inventory and it was nice to know that our bond desk was NOT run as a profit centre. Ultimately it means the client gets a better price and therefore a better return on their money. Some bond desks, however, are run as profit...
Read MoreBuying ADRs to Avoid Stamp Duty
Coincidentally, I was talking to the portfolio manager of our index funds today and part of the conversation was surrounding tracking error and the use of ADRs and GDRs. In a post from last week I had mentioned how using ADRs and GDRs could be a source of tracking error, but there is more to that conversation lest you think you should always avoid depositary receipts. One reason is political risk. For example, our global and emerging markets index funds try to hold the direct stocks on their foreign exchanges as much as possible, but for the case of Russian stocks there is enough concern that getting your money out of the Russian stock exchange might not always be...
Read MoreNew Canadian Small Cap ETF Available
IndexIQ has launched a new ETF which attempts to give investors exposure to small cap Canadian stocks, but as a Canadian you will probably want to avoid this particular ETF for now. It trades with the ticker symbol CNDA. 1. The ETF is listed in the US While you won’t have to monitor the currency fluctuations while invested, but you will have a forex drag as you would have to convert your money into USD before purchasing the US-listed ETF. Vice versa, you will have to switch it back when you want to sell your investment and spend the proceeds. 2. The MER is higher than what’s available already The MER is 0.69% for CNDA, but iShares has an ETF with Canadian...
Read MoreA Lap Of The Blogs
If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also sometimes include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world. NOTE: you have to visit the...
Read MoreIndex Fund Tracking Error Sources
NOTE: I’m scrambling to write this before I get on a plane and my laptop battery is near death, so pardon any typos for the time being – I’ll edit it tomorrow, and may even re-write it! It’s good to be my own editor…. :) Not all index funds are created equal. Some actually track their indices pretty well, and some do a poor job. Most people think that tracking an index would be a relatively simple thing but you know what they say, “in theory, theory and practice are the same but in practice they are not.” Some sources of index fund tracking errors: 1. Resampling (Or Optimization) If an index has 500 constituents, then it is...
Read MoreGrowing Active ETF Market Means Mutual Funds Should Consider Allowing F-Class Units For Sale Through Discount Brokerages
This past Monday I had a guest post about how Actively Managed ETFs will signal a threat to the staying power of mutual funds as portfolio stalwarts. In the face of mountains of evidence supporting indexation strategies, actively managed mutual funds with embedded financial advisor compensation have flourished. The author essentially argues that the mutual fund structure is being challenged as now investors can access active managers while bypassing the financial advisor as an intermediary. For more, please make sure to read the guest post here. Today’s post title would be the logical reaction to the “threat” of actively managed ETFs. By allowing the...
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