January 2010

Book review: Why Are We So Clueless About The Stock Market?

Posted by on January 28, 2010 in Misc.

Mariusz Skonieczny asks a question that many pondered in late 2008: why are we so clueless about the stock market? Written during at the height of the great recession, Skonieczny dissects the fundamental problem with most unsuccessful investors: they fail to understand the difference between stocks and businesses. Stocks are evidence of ownership but such [...]

How risky is starting your own business?

Posted by on January 27, 2010 in entrepreneur

The conventional wisdom on starting your own business is that the odds are against you. The frequently cited statistic is that 75% of all businesses fail within the first 5 years. However, the devil is in the details. The typical methodology of measuring business failure is to tabulate the number of employer accounts opened with [...]

Questions you should ask in a job interview

Posted by on January 26, 2010 in Jobs

One of my goals this year is to be a better employer. I have had a lot of conversations with people who recruit or hire more employees than I do about this issue. I can boil their advice down to the following: find employees who are good fits first and foremost rather than looking for [...]

Do homeowners need more bonds or cash?

Posted by on January 25, 2010 in Investment Information

Larry McDonald raised an interesting question last week: do homeowners need a greater allocation of bonds? The rationale for such an asset allocation is that housing and stocks are similarly affected by the economy and an allocation of bonds would, theoretically speaking, would not be correlated with the return on housing/stocks. It is an interesting [...]

What do you do with your credit card offer?

Posted by on January 20, 2010 in Misc.

I have noticed lately I am receiving a lot of credit card offers. The offers are for new credit cards or cheques to be drawn down on my existing credit cards. When I pick up the mail in my condo, there are recycling bins by the mailboxes. My first instinct is to toss the offers [...]

Will income trust conversions lead to yield chasing?

Posted by on January 19, 2010 in Dividends

In August 2008, I mused that the implementation of a 31.5% tax on previously tax exempt Canadian issued income trust would force many income trusts to convert to corporations before January 1, 2011 (the day the new tax regime is effective) and lead to distribution cuts in the range of 40-75%. In a January 15 [...]

What is a realistic expectation of return for stocks and real estate?

Posted by on January 18, 2010 in Dividends, Investment Information

I wrote earlier this year that New Year’s resolutions tend to fail because goals are set which ignore the realities of the market. Many commentators have also wondered how perfectly intelligent people can buy into Ponzi schemes promoting unrealistic returns. Therein lies the problem. Most average investors have no conception of what an “average” return [...]

Common Misconceptions and Mistakes when buying term insurance

Posted by on January 14, 2010 in insurance

I am pleased to introduce my guest-post today from Brian Poncelet from Right Insurance. Brian is a Certified Finance Planner who specializes in Life Insurance, Critical Illness Insurance and Disability Insurance. Brian takes his time today to write about common misconceptions and mistakes when buying term life insurance. MISTAKE: Failing to buy enough insurance while [...]

The 2 largest external factors eroding your net worth

Posted by on January 13, 2010 in Taxes

There is justifiably a lot of attention paid to the effects of fees on investment returns particularly MER charged on mutual funds and ETFs. While in no way should it provide a defense to high-fee products, this focus, taken to a myopic level, can obscure the two largest external factors eroding your net worth. Taxes [...]

Effective negotiating tactics: stop talking!

Posted by on January 12, 2010 in Negotiations

If you follow sports long enough, a certain pattern emerges in any league. One person is anointed the franchise of the league (think Michael Jordan, Wayne Gretzky and, um, until recently Tiger Woods); they can do no wrong and the league does anything and everything within their power to maintain this image. Every league has [...]