Investing

Four things investors (even Warren Buffett) just have to accept they know nothing about — and one new thing

Anne

Oh, how we should have listened to her. According to John Hopkins University which keeps updates on the numbers, the worldwide tally of COVID-19 virus events as of June 19 was 8.5 million cases and 455,000 deaths worldwide.

As Charlie Munger has said, you simply throw it into the “too hard” pile and move on

Circle of competence is an essential concept in investing, and in life in general. Separating the knowable from the unknowable is vital. Many people buy companies with only limited information, certainly not nearly enough to say they see all the advantages of the business and, more importantly, not enough to see the critical pitfalls.

Knowing you don’t know something important and, therefore, avoiding the investment should be viewed as a huge positive. As Charlie Munger, vice-chairman of Berkshire Hathaway, has said, you simply throw it into the “too hard” pile and move

… Read More
Investing

Will Apple and Tesla make stock splits great again?

Anne

“I can’t recall them commenting on a stock split or considering it in any way,” Romanoff said.

A reason why Shopify may want to keep its current price level, he said, is to actually avoid some retail investors, particularly day traders, so that the stock can be a little less volatile.

One positive for companies to consider is the immediate boost to share prices that an announcement has proven to generate. Apple is up nearly 20 per cent since it announced the split. Tesla is up more than 18 per cent.

A split doesn’t alter the value of an investment. What it does do is drive up more interest from investors who believe that once Apple’s stock is split and begins to trade near US$100 again, the group of retail investors that bemoaned their ability to buy shares at levels above US$400 will finally have their chance.

… Read More
Investing

The market has given investors a gift. Now it's up to you not to waste it

Anne

You’ve been given a gift. The stock and corporate bond markets have had an eye-watering recovery, and the housing market is showing strength too. You now have an opportunity to do a thorough portfolio review from a position of strength instead of during a market meltdown like we had in March.

I’m offering a series of questions that will hopefully inspire you to act, and to guide your thought process.

Is there any reason to change my strategic asset mix (SAM)?

SAM is the mix of assets (cash, bonds, stocks and real estate) that fits your objectives, financial situation and personality. It’s a long-term target around which your portfolio revolves.

The word strategic refers to the fact that it doesn’t change very often. It will need to be altered gradually due to aging (less risk, more income), or if your personal circumstances change significantly (i.e. job loss, inheritance), but otherwise, … Read More

Investing

Dave called it: Why Rosenberg saw a downgrade in Canada’s future

Anne

So Canada in aggregate doesn’t have a AAA-rated balance sheet to begin with and now Ottawa has to somehow shoulder a good chunk of these liabilities.

In the end, it doesn’t matter what the rating agencies do, in any event, as we saw with the inconsequential U.S. debt downgrade in the summer of 2011. It has to be remembered that, prior to 2002, the Canadian federal government was frequently rated as an AA-credit by at least one of the major agencies. I’m not sure anyone cared or even noticed… as much as it may be a source of national pride. Remember that in 2002, when the Canadian government was an AA-credit, the all-in debt-to-GDP ratio was more than 100 percentage points lower than it is today. And we also have to keep in mind, especially now that Ottawa is being forced to backstop everyone, that the national

… Read More
Investing

‘Political posturing’: Why escalating U.S.-China tensions are not rocking markets

Anne

“And when you get the second wave, the mystique is gone,” said Mordy.

China, Mordy said, also doesn’t appear ready to up the ante. Chinese officials have been “biting their tongues” in the current dispute because their top goal is to preserve economic growth, Mordy said.

Even China’s state-backed media has begun to reflect this strategy. The Global Times, a mouthpiece of theChinese Communist Party, published a column on Sunday arguing for restraint because the latest U.S. measures were only attempts to gain traction in the election.

“If we ignore those actions and meet them mainly with ridicule, then we might gain more international support than be directly confronting them,” the editorial said.

That’s why Toronto-based Purpose Investments chief investment officer Greg Taylor recommends that investors continue doing what they have so far in response to the building tensions: “Keep your head down,” he said.

… Read More
Investing

Three ways you can use lockdown to make your finances ‘antifragile’

Anne

Only 39% of adults are confident in their ability to retire, which is down from 54% prior to the pandemic

All of this worry can be avoided by undertaking a thorough review of one’s overall situation via a financial plan which will map everything out including the potential risks. Then stress test the plan to see how it will impact your overall lifestyle under different scenarios. This will be incredibly helpful in the event there happens to be major change in one’s life including the death in the family, an illness causing disability, a divorce, or the loss of a job.

Review your will and estate

A proper financial plan will also flush out actionable steps such as ensuring your goals and objectives are properly reflected in your will. This couldn’t come at a more important time as we find it shocking that only 49 per cent

… Read More