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New ETNs Allow Investors to Profit on Market Volatility… or not

Posted by Preet on Apr 1, 2010 | 8 comments

UPDATE: THIS WAS AN APRIL FOOLS PRANK! Gotcha! Many writers and experts have commented on the proliferation of bad ETFs as manufacturers cash in on the caché of the ETF name. We’ve seen leveraged ETFs, niche sector ETFs, and alternative strategy ETFs pop up and uninformed investors flock to them still. (For the record, I don’t have anything against leveraged ETFs or sector ETFs and the sort, I take issue with uneducated investors/advisors not knowing how to use/sell them properly). I attended a press conference yesterday on a new company launching some pretty wild ETNs, and ironically I ran into the author of the Canadian Couch Potato blog, Dan Bortolotti....

Is Your Brokerage's Bond Desk a Profit Centre?

Posted by Preet on Mar 30, 2010 | 5 comments

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...

Growing Active ETF Market Means Mutual Funds Should Consider Allowing F-Class Units For Sale Through Discount Brokerages

Posted by Preet on Mar 23, 2010 | 3 comments

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...

Mutual Funds: Great for portfolios up to $100,000

Posted by Preet on Jul 28, 2007 | 0 comments

I suppose many financial advisors licensed to sell ONLY mutual funds will cringe at this information. First, I want to say that if you have more than $100,000 in your portfolio it does not automatically mean that it is time to get out of mutual funds. But certainly once you pass this threshold you will want to look at alternatives to mutual funds as your options open up (based primarily on the fact that buying in bulk reduces your trading costs). If you remember in my first post on Mutual Funds we defined mutual funds as being the ideal investment for SMALL investors because trying to build your own diversified portfolio would cost too much in trading commissions. So...

What is a Mutual Fund? A basic understanding…

Posted by Preet on Jul 26, 2007 | 0 comments

I suppose this should be one of the first posts seeing as how most people are invested in mutual funds (and have no idea what they are, what the differences are between them, and what kinds of mutual funds there are out there). It is also of note that many investors might be better off getting out of mutual funds at a certain point… but I’ll get into that in another post! A mutual fund is a means for small investors to pool their money together (MUTUALLY) with other small investors so that they may hire a Mutual Fund Manager to take the collective funds and create a diversified investment portfolio that is invested on behalf of all the small investors....

What are you going to learn from this site?

Posted by Preet on Jul 24, 2007 | 0 comments

If you’ve read the “How to use this site” section you will have noticed that there are going to be various levels of information presented here with respect to knowledge levels. But since that in itself is quite vague, I though I would write a post describing some of the things I will be talking about (In addition to what you guys ask about!). In addition to defining some of the terms I think everyone should know, I’d like to explore how many different types of financial advisors there are out there and specifically how each operate and are paid. There is a HUGE spectrum. And the right fit for one person might not be the right fit for...