The holy grail of investment products for many investors would be something that delivers both protection of principal and delivers high yields/returns (I would define high yield as over 5-6%. The demand for these types of products always exist but tend to increase greatly during time of market uncertainty. The issue is that, while some of these products work as advertised, many fall short of the expectations.

But, banking on the short-term memories of the investing public, the investment industry resorts to financial innovation to replace one generation of failed product – good bye principal protected note- with another generation- hello “factored structured settlements” or funds promising both capital preservation and high yields.

Regardless of the name or marketing quirk, there are always a few things to remember about products which attempt to protect principal while promising yield/return.

You can’t have your cake and eat it too. To quote Larry MacDonald on the same topic: “A fundamental principle of investing is that there is generally a trade-off between risk and return. If you want safety of principal, you have to accept a lower yield; if you seek a higher yield, you need to take on more risk.” This is not to say that one cannot invest in a product that aims to protect principal and provide high yield/return but…

You get what you pay for in life. Principal protection products  are generally achieved in one of four ways: (i) insurance (the principal protected note method); (ii) active management through constant re-balancing of a portfolio or purchasing of derivative instruments (options, shorts etc.); (iii) relatively heavy costs involved in setting up a structured product; or (iv) a combination of all three. In other words, there’s a cost to protecting the principal side not to mention the usual costs of delivering high yields/returns; in hindsight, it is possible to have your cake and eat it too but it will be one expensive cake.

Liquidity is a concern. Logic dictates that a manager of these products would have a hard time delivering on principal protection and even modest returns if investors are selling the products constantly. The need to maintain cash to meet redemption requests may either result in: (i) not enough money left to purchase instruments to protect principal; or (ii) leaving little to invest in yield/return. The manager’s simplest solution then is to prevent, or severely limit, redemption of the product. You can’t fault the manager for this but it should alert an investor not to buy any products if they require cash in the short to medium term.

These types of products are neither good or bad in the abstract. They are created to fill a need but there’s a cost to everything in life. As usual, investors need to be aware whether there is a sufficient trade-off between potential benefits and those costs.

For the DIY crowd, Preet previously outlined how to create you own principal protected note. Please feel free to share if you have other principal protection strategies.

Good luck.

Dual class shares refers to a company that has two different classes of shares: one sold to the public and another class which is tightly controlled by the founding families or insiders. Dual class shares are generally panned by the blogsphere since dual class shares tend to perform worse than their peers, controlling shareholders tend to run roughshod over the minority shareholders and, as we are seeing, the unwinding of dual class share structures can be a very painful and expensive process at the expense of the investing public.

Specifically, automotive parts company Magna International Inc. is attempting to unwind its dual class structure by converting the Class B shares held by the Stronach Family Trust into Class A voting shares; Class B shares represent approximately 0.6% of shares issued but control 66% of the votes. The terms are pretty generous to the Class B shareholders. The conversion is at a 1800% premium plus a $300 million cash payment. After the proposed conversion, the Stronach Family Trust would be the largest single shareholder of Class A shares after diluting the Class B shareholders by over 11%.

However, the regulators have halted the proposed vote, which was supposed to occur earlier this week, for lack of full disclosure to the shareholders on how the share premium was arrived at, the dilution effect and how the payout was determined.

What has come out of the regulator proceedings though is how expensive it is generally to unwind dual class structures. A report commissioned by Magna found in a sample size of 15 the shareholders are diluted anywhere from 0% to 3.04%. The premium paid for the shares being converted averaged 30%. When a director was asked about negotiating the terms of the conversion deal, the answer was basically he had no leverage to force something more reasonable. The alternative to negotiating conversion was the status quo which was more oppressive to the shareholders.

While the Magna story may represent the more extreme side of converting dual class shares, it does raise, yet again, why investing in dual class shares is not ideal. Some day, the controlling family/shareholders will want a liquidity event and it will generally occur on the backs of the other shareholders. The only question is how bad will the deal be. In some cases, the conversion came at nominal costs but the potential to craft a deal which affects the shareholders and company adversely always remains.

… yet, strangely, 57% of all shareholder voted in favor of the Magna conversion which has now been halted by the regulators. However, if one assumes your choices are bad deal or even worse status quo, you hold your nose and vote for the bad deal.

No posts until Monday. Enjoy the rest of the week.

It would be difficult to name a company that seen as great of success from such depths as Apple.  Apple has sold 3  million iPad’s in its first 80 days of the products release; meaning a unit was purchased almost every second. The stock has risen 30% this year and now trades at or near its 52 week high. Yet, despite such tremendous and deserved success, has Apple peaked and is it time to sell Apple stock while the going is still good?

This is not to suggest Apple is a bad company. In fact, it is quite the contrary. It is a company to be admired. But is the gushing media praise, and corresponding market expectations, justified given recent stats? Specifically, North American mainstream media continue to focus on the iPhone’s steady erosion of RIM’s market share. However, Smartphones powered by the Android operating system has or will soon surpass the iPhone as 2nd in market share in the U.S. according to most studies.

Given that Android phones are sold by various vendors and various carriers (as opposed to the iPhone which  is exclusively carried by AT & T in the U.S.- for now), it takes a little digging to see that Android phones may pose a larger threat to Apple than RIM. But it tends not to make as compelling a story since it is a bunch of vendors nibbling away at Apple rather than a head to head battle of one company vs. the other.

One wonders if the one carrier strategy in the U.S. will serve the iPhone well in the long-term when Android has many champions in different carriers (distribution being a key component in the Smartphone wars- see below). Android is also Google’s operating system- Google is not going away any time soon.

The practical result is that Apple’s growth may revert to the mean which tends to bring a high flying stock back to somewhat more normal valuations (as a side-note,  how can a company with $40 billion in cash and relatively low R & D spending can be considered investor friendly- how about a stock buy-back or a dividend Mr. Jobs?). To be clear, it may still make good products but it may not be a fantastic growth stock for too much longer if it keeps losing market share (lest I offend any Apple product lovers).

On the iPad front, Apple has the starter’s lead but, again, Google and Verizon are thinking of launching a competing tablet computer to the iPad with the Android operating system. What is worth noting is Verizon has had the largest mobile subscribers in the U.S. so a competing product may have better distribution channels. Plus, if Google and Verizon align, Verizon does not necessarily have to sell iPhones even if it is modified for Verizon’s network. Again, this has the effect of slowing Apple’s growth.

The iPhone 4 may will boast earnings again. However, lest one forget, the longer technology is around, the less impact a new generation has the ability to wow people. Ask Microsoft about the declining wow factor of each new operating system.

This is not the say that Apple will not continue to be a model company. I hope it continues to be so. However, it is difficult for any company, much less one in discretionary consumer products, to maintain its lead for long. Over time, it does revert back to the mean and one wonders if its time to cash out now.

It is easy to find victims of bad or unscrupulous investment advisors and write articles about how the industry is stacked against the individual investor. While the financial industry has its fair share of bad apples (and which industry does not?), what is often not reported on is the business of being an investment advisor and how this impacts on you and I.

I am not an investment advisor so I do not pretend to speak from first hand experience. I can, however, observe from analogy from the legal profession (another industry with bad press, erosion of monopolistic knowledge due to the internet and members conducting a lot of navel gazing at a business model in need of updating) and from the comments of many friends and colleague in the investment industry.

First, simple observation tells you that the smart money is moving financial intermediaries up the food chain, t0 clients with more assets under management and requiring more holistic approach to personal finance. Generally, this has resulted in leaving the retail market to lower paid and lower skilled staff located at branch level or your pure sales person cloaked as an “advisor.” As you may have observed, most bank branches now have multiple staff who can sell mutual funds. When I first started investing more than a decade ago, it was rare to have more than one staff qualified to sell mutual funds in branch.

Also observe recent mergers and acquisitions pattern of the larger financial institutions. RBC bought Philips, Hager & North, known for more upscale clients and managing institutional pension plans. Manulife purchased Berkshire -TWC Financial Group, a niche wealth management firm. There is a pattern to these acquisitions: the shrewd financial institutions (Manulife’s recent problems aside) are chasing the high end of the market and leaving the lower end of the market to be serviced, but not necessarily advised, by front-line sales staff rather than advisors.

There may be many reasons for this shift. Certainly, the concentration of wealth in generally older households means bulking up staff to chase those markets. Discount brokers have created a race to the bottom on retail pricing. But the other mostly unspoken reason is financial institutions do not make enough money servicing the middle class household and this is as much a comment on the financial institutions as it is on the general public. Statistics Canada reports only a third of all households contribute to their RRSPs with the total amount contributed constituting only 6% of total contribution room available.

Anyone who runs a business knows there are two primary ways to make money: (i) high quantity,  low profit margin, short sales cycle, poor customer service due to low margin; or (ii) low quantity, high margin, high sales cycle, good customer service. The investing market is bifurcated between retail and high net worth/institutional. You cannot apply the same product and pricing model to both markets.

Thus, if a financial institution wants to play both markets, it has to pursue two different business models. For the retail market, the natural inclination to put more sales rather than advisory staff to sell product (and pumping product is key) since you have, relatively speaking, a high quantity, low margin market (there are exceptions to the rule. There are wonderful advisors who remain in the retail space). For the high net worth market, the natural inclination is to retain highly-skilled advisors to sell advice; many high end investment advisory firms actually do not manage client money. They outsource that to professional managers and they earn their fees engaged in the planning process, hand-holding clients and providing advice.

The situation is not dis-similar in the legal industry. How many people buying or selling a house have spoken to their lawyer more than once or twice during the course of the transaction? Typically, a vendor/purchaser deals mostly with the law clerk. This is because providing real estate services for the retail market is a high quantity, low profit margin business and most clients receive service accordingly (at least in large urban regions where competition is fierce and with frequent price wars). A lawyer once remarked that he lost money if he had to speak to a client more than two times during the course of a transaction. You get what you pay for in life.

What this means for the average investor is, even if an advisor is used, one should be more self-reliant and self-educated about personal finance since, despite the rhetoric, the industry understands that the retail market is a low margin market (relatively speaking) and will deploy resources and staff accordingly.

Is this situation unfair? Of course it is not. Ideally, everyone should be accorded the same level of service and advice regardless of assets under management. But you can’t regulate fairness (despite the government’s best attempts). For us non high net worth households, perhaps the solution is to look at investment advisors more as partners than a top-down advisory relationship. Use them as sober second thoughts on investment ideas. Demand they review your investment ideas. Ask for research. In other words, be active in your own personal financial lives.

Why do people buy stocks? Fundamentally, it is because they believe in the underlying future value of the business being run. Why do people buy gold? This is a much more difficult question to answer since gold is not a business but a commodity and a small portion of its price can be attributed to economic performance of the commodity (unlike copper which has a myriad of industrial applications).

With all the market uncertainty about sovereign debt, a lot of average investors have begun to invest in gold.  Since buying gold is not a purchase of an underlying business, it is difficult to determine when a good time to buy the commodity. In a business, you may buy its stock because it had a good quarter, increased the dividend, is a growing business etc. But how can you tell when it is a good time to buy gold?

From a quantitative analysis, it may be useful to look at the Dow/Gold ratio. Quite simply, the Dow/Gold ratio measure how many ounces of gold it would cost to purchase one share in the Dow Jones Industrial Average (which is a proxy of large companies based in the U.S.). If the Dow traded at 10,000 and an ounce of gold cost $1,000, the Dow/Gold ratio would be 10. The higher the ratio, the more capital is in stocks. The lower the ratio, the more capital is in hard assets (gold being the proxy for hard assets). The Dow/Gold ratio currently hovers at approximately 9.

To give some historical context, the Dow/Gold Ratio hit 1 twice (which means an ounce of gold was worth exactly a share in the Dow) in 1932 and 1980. It peaked at approximately 45 during the Dot Com boom.

Here is the interesting thing: the Dow/Gold Ratio has been declining (money moving into hard assets) since the early 2000′s (see Figure 1 graphing the Dow/Gold Ratio). In other words, moving into gold now may means one could be buying towards the end of the appreciation curve for gold. Traders far smarter than you and I may be promoting gold to take profit as the latest trendy investment to buy.

More to the point, why would any average investor want gold to continue to raise? Cheering for gold to appreciate means one is cheering for: (i) higher than tolerable inflation; (ii) massive government debt; (iii) instability in their own economic lives; or (iv) the end of days. I am not sure how taking gains in gold stock would be considered a win if one lost their job or had to pay higher taxes at the same time.

Hozizon Alpha Pro is offering a product called the S&P/TSX 60 130/30 Strategy Index which is basically an exchange traded fund (ETF) which tracks the TSX 60 but with an overweight in 10 stocks and an underweight in 10 stocks (trades under the symbol TSX: HAH). In other words, this is an ETF tracking broad based Canadian equities index with an active management feature to it at a MER of 0.95%- high for a ETF but low for a mutual fund. Or, to look at this another way, this product is basically a closet index equities mutual fund with lower fees.

While the product may have been designed as a mutual fund killer, its potentially positive effects in eroding one product, mutual funds, may be partially cancelled out on its potentially negative effects on another sector, the ETF.

Some time ago, I started accusing the ETF industry of catching mutual fund-itis. The disease is the Wall Street disease of more- more product, more fees, more greed. As with any financial product, there appears to be a direct correlation between its popularity and crappy product. Triple leveraged ETFs, ETF tracking small niches, actively managed ETFs are variations of product that have brought nothing but noise over the initial advantages of the product- broad coverage, low fees, easy liquidity. No wonder ETFs are starting to scare financial planners.

I suspect part of the problem is the blogging community itself. We have often used ETF as short-hand for broad coverage and low fee fund tracking an index which trades on the stock market (unlike mutual funds which are sold back the issuer). The financial industry has been quick to pick up on the simplistic analysis of ETF = good, mutual fund = bad and used it as a marketing tool. ETFs and mutual funds are neither good or bad. In and of themselves, they are just types of products. How it is designed becomes key rather than the concept itself.

There has been such an overlap between certain ETFs and mutual funds that it is too simplistic to say “I want to invest in an ETF.” Instead, the analysis should start with “what type of equities and fixed income exposure do I want,” which is a strategic question, as opposed to “what about this ETF,” which is a tacticial/product question and the type of question that plays right into the financial industry’s hands.

As always, the deeper one digs into the analysis, the better off one is. Canadian Couch Potato would be an excellent start for anyone who wants to understand the ETF industry better.

As for HAH, the mutual fund industry is hardly quaking in its boots. The average daily volume of the product is 2,000 shares.

There is a saying among the DIY community to buy the issuer and not the product. In other words, you are better off profiting from the investment follies of others than to become a fool yourself. It has also been a long standing opinion that the financial industry is rifle with conflicts of interest. What happens when these two concepts collide?

William Bernstein in his excellent book, The Investor’s Manifesto, looked at the performance of mutual funds issued by publicly traded, private and nonprofit firms. He tabulated the percentage of mutual funds which received 4-5 stars by Morningstar (a good rating) and those which received 1-2 stars (a bad rating).

Of the 18 firms he profiled, 5 were not publicly traded. They placed 1st, 2nd, 3rd, 6th and 9th. Positions 10-19 are littered with big names like Goldman Sachs, ING, AIM Invest and John Hancock; likely big names because they sell high-fee product delivering poor performance to the investor but with large profile margins to the issuer. Putnam, the much troubled shop owned by Power Financial, placed dead last.

The lesson being not to buy mutual funds from publicly traded firms.

The explanation is straight-forward. Take a look at all the stakeholders a mutual fund issuer has to deal with on a daily basis: regulators, shareholders, debt-holders and customers.  Short of fraud or regulatory non-compliance of a material nature, who has the ability to hire or fire the directors and officers of a company?

Right- it is the shareholders. So who’s interest will a mutual fund company tend to first? The shareholders by delivering profit quarter after quarter. In and of itself, this fact is not good or bad. It only has a bad meaning if one happens to be a customer being sucked of every dollar the company can part from you. It has good meaning if one owns the stock but not the product. If one happens to own both the stock and the mutual fund the company issues, essentially, one is taking money from the right pocket to place in the left pocket and things more or less even out although with a love/hate relationship as shareholder/mutual fund holder.

Lest a ETF supporter beat his chest proudly and declare “another reason to pick ETFs over mutual funds,” we stand at an interesting point in history. Those who have followed ETFs for the last 3-5 years are slowly watching an industry being eroded by the excesses of the industry.

As the mutual fund industry goes sideways, more financial service firms are simply buying ETF issuers or becoming one themselves spreading “mutual fund-itis” with symptoms such as fee creepage, overly exotic products and an over- emphasis on the intermediary’s interest rather than the investors.

The remedy to mutual fund-itis is to be educated, aware and keep things simple.

The recent marketing wars between the mutual fund industry and supporters of exchange traded funds adopts a rather dogmatic characterization of the two products akin to the Star Wars movies. The mutual fund Empire, inherently evil and a scourge to all low-fee loving citizens of the galaxy, is a lumbering giant weakened greatly by some clumsy attempts to sell its mutual fund way of life; akin to the Stormtroopers weak defense an Ewok attack (yes, this makes personal bloggers Ewoks in my analogy; I have the full geek press on). The rebellion, forces of good and lovers of all low fee loving products, are devoted to the cause of setting the investing world free by the ETF force.

There seems to be a problem with pitting mutual funds vs. ETFs this way. Both are created by the same industry and, to quote Jason Zweig: “Sooner or later, Wall Street turns every good idea into a bad one.”  More accurately, Wall Street turns every good idea into a self-serving execution of the idea. The idea of both mutual funds and ETFs are, stripped of industry excess, both fine. The issue is that where the execution of mutual fund products are now awash in high fees for low service, the ETF industry is now awash in too many products.

But variety is good right?

The problem is that when the ETF market becomes so fragmented and specialized, the investor may end up with similar issues as buying a mutual fund (often referred here as mutual fund-itis). Take, for example, the much criticized Dent Tactical ETF, a high fee and actively managed ETF with an investment strategy based on Harry Dent Jr.’s analysis on future trends (who recently admitted he’s having a rough 2009 on the prediction front). On November 6, its trading volume was 1,791 shares.

ETFs with thin trading volumes tend to suffer from larger than normal bid-ask spreads leading to distortions in “true” pricing, issues unwinding large positions and potentially higher trading costs by being forced to sell in tranches due to limited demand. Generally, many experts believe any ETF should have a trading volume of over 100,000 shares a day to be a viable ETF in the long run.

The problem is not as isolated.  As the Wall Street Journal reported in August of this year, the ten largest ETFs account for approximately 40% of assets under management and 2/3 of all trading volume. In other words, the law of averages dictates that the more ETFs one holds, the more likely they will own an ETF that accounts for 90% of product issued but a mere third of trading volume. In real numbers, over 200 ETFs had such small trading volumes that their bid-ask spread was 0.5% or over; this spread is so high that it negates the cost advantage of an ETF over a mutual fund (Claymore Securities in the US seems to be particularly bad- 7 of 34 ETFs had a bid-ask spread of over 2% in August of this year; in essence, you de facto bought a high fee mutual funds if you equate being on the wrong side of a spread with MER).

Thinly traded ETFs can be caused by several reasons: over-specialization, high fees, poor investment strategy and, as Preet pointed out, an ETF with too few holdings to properly diversify (incidentally, that ETF, zeb.to, is also thinly traded at under 40,000 share on November 6). The problem becomes more pronounced over time as new market players- BMO and Charles Schwab to name two- begin to pile on and need to differentiate themselves from existing ETFs by issuing more exotic offerings.

As the number of thinly traded ETFs grows, the options of an ETF issuer typically are: (i) do nothing and let the investor suffer in the market; (ii) wind up the ETF and redeem at net asset value (possibly triggering an unintended tax consequence); or (iii) merge the ETF with a larger ETF and report the better results of the large ETF, resulting in survivorship bias in returns.

Exotic products issued at the industry’s peak that few people bought. Hard to liquidate product. Hidden costs. Unintended tax consequences. Many new market participants. Survivorship bias in returns.  Sounds awfully like the mutual fund industry doesn’t it? Of course it does. The same people who created one are now creating the other.

The moral of the story is that no product should be generalized as good or bad and buying an ETF does not necessarily mean you bought a better product than a mutual fund (as several writers have commented rightly though this is not an apples to apples comparison). The devil is always in the details  and a knee jerk mutual fund = bad, ETF= good is an overly simplistic analysis to take.

As for a solution, ETFs work best when they are broadly based with low fees. Canadian Capitalist, who is a ETF Jedi, ran an excellent series comparing global equity mutual funds with broad based indexes. But note his methodology- he used as his basis of comparison broad indexes. His approach, and mine, to ETF investing is to stay out of the excess of the industry and invest in ETFs which are broad and low costs which is the underlying reason for investing in an ETF in the first place.

Picking a small business banking account can be like eating at a buffet. There is something for everyone but it is hard to tell which offerings are the best for you given that they are so diverse. The issue is compounded by the fact that small business banking is not like personal banking. A small business typically requires a lot more services than personal banking and there should be, from the customers’ perspective at least, there should be a balance between paying the lowest small business banking fees and deriving value.

I have used 5 different banks and 1 credit union for small business banking. As a lawyer, I have dealt with all the major banks on either transactions or written nasty letters on behalf of clients to these same institutions. From all these experiences I would make the following observations about picking the right small business bank account.

Not all small business bank accounts are built the same; every bank has a niche. As one of the comments in Million Dollar Journey’s  linked post noted, every bank has a professionals division (banking for doctors, dentists, accountants, lawyers etc. etc.) or some type of niche they serve. The plans for these types of industries are different than other businesses. Lawyers, for example, need to have no holds trust accounts (for example, a real estate lawyer has to be able to deposit mortgage funds in trust for a purchaser and then immediately pay it out to the vendor soon after deposit).

Some banks are great at servicing these types of industries (Scotiabank is traditionally the leader for servicing doctors and dentists; RBC is very active in this same industry). Others have a particular niche; TD is still my favorite for banking on-line. HSBC is a very good bank if you have business internationally (there is an extremely long hold period if a USD cheque is deposited from a non US bank; HSBC has a plan that avoids this issue). The key is to ask around and see who does what well because…

You need a good account manager. Forget purely a narrow focus on fees. Ask instead what someone is going to do for you for those fees. Most entry-level tellers have limited clearance; for example, most cannot process a deposit  over $500 without a supervisor signing off. This is not a large deposit for a business.  In other words, the person you see on the other side of the counter has limited authority to solve your problems.

A good account manager can authorize deposits with typos on them, release holds, transfer money from one account to another (with your authorization) if your account goes into the negative, waive fees (yes, it happens if you ask nicely), shift you from one fee schedule to another periodically and refer you clients (if you tell them what you want). I have requested or experienced every one of the above. The key is to maintain the relationship. Since an account manager’s compensation is partially based on their book of business, they have a vested interest in seeing you succeed as well.

Branches actually make a difference. There is a particular branch from a particular bank that consistently dropped the ball on client transactions: great bank, bad branch. Years later, I met an entrepreneur for the first time who complained about their bank. Sure enough, it was that same branch! Your analysis should not stop at the institution but the branch you are using.

My personal experience is avoid a large branch unless you have huge accounts. You are just another number and you are probably pretty far down in the pecking order of your account manager. Co-ordination is also an issue; right hand often does not know what left hand is doing in large branches. Avoid the small branches or credit unions with overwhelmingly personal accounts.  Small branches or these type of credit unions are not use to larger deposits, frequent deposits and withdrawals (they think you are kiting because they don’t understand cash flow of businesses) and what small business needs from their financial institution.

As a side-note about credit unions, they are good alternative to the traditional banks but not all credit unions are built alike. For smaller to modest sized accounts, they can be good choices but some credit unions are not built to service the small business account.

Picking the right branch comes down to word of mouth. Who are your neighboring businesses using? As everyone knows, there always 2-3 banks at every major intersection. But, if a large number of people are using the same bank and have nice things to say about it, it means that branch is doing something right.

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Obviously, there will be certain small businesses that do nothing more than a few deposits and a few withdrawls each month. In this context, a focus on minimizing fees is warranted. But, for those requiring other banking needs, I would focus on the above in picking your small business bank account.

I bought a silver coin this week as a small token of appreciation for someone. Having never done it before, here’s a quick and dirty of my experience. I don’t remotely pretend to be an expert in buying and selling precious metals so please feel free to comment if you have anything to add to buying silver or physical gold.

I bought my coin at Scotiabank’s main branch at Scotia Plaza. They have a separate foreign exchange and precious metals desk. If you are not a customer of the bank selling you a silver or gold coin, you will have to bring two pieces of id (one of them has to be photo id). I am sure you have to pre-order for much larger orders (there is an item in the bill for “armoured car” charge; I wonder how much gold or silver you have to buy to be charge with that charge!).

I bought a 1 oz silver maple coin. Here is the catch. Even though the coin is Canadian (hence, a maple coin), the price is quoted in U.S. dollars. I am told bullion and coins are quoted in USD no matter the country of issuer. In other words, factor in the exchange rate.

The price per oz was $20.41 that day. Exchange as at 1.115%. Commission is $5.00 up to $2,000 then, according to the employee behind the desk, from $200.01 to $5,000.00, commission is another quarter of a percent and then an eighth of a percent above $5,000.00.  Sales tax of 8% was also charged. The total ended up being $30.60.