In early nineteenth-century London, lamp lighting was a growth industry. The city’s population exploded over the course of the 1800s, rising from roughly one million residents to nearly seven million by century’s end. To make the growing metropolis safer and more navigable, gas lamps lined the streets, and thousands made...
This is one of my favourite charts on the internet: Even adjusted for population size and GDP, the US stock market is massive. There are some good reasons for this: the biggest companies in the world, despite earning revenues internationally, are listed on US exchanges. Americans are also much more...
Summary: AI Spending & The Dot-Com Bubble The world’s biggest companies are making huge bets on AI. Spending on AI infrastructure has been a driving force of positive sentiment throughout the current bull market. Among others, Amazon, Microsoft and Alphabet are dipping into their hordes of cash to fund logistics,...
The classic game of rock, paper, scissors, offers a fascinating analogy for a well known, but often forgotten, adage of keeping your eye on the prize. In this modern world, we are inundated with massive amounts of ultimately useless information, intended to spark a reaction in us and to lure us in. By staying focused on the prize and ignoring the noise, rock, paper, scissors can help us become better investors and professionals!
Many investors are not properly prepared for the psychological rollercoaster that is investing. Mastering patience and staying calm through the volatility and the noise is what will lead you to long term success. Learn how to gain the behavioural edge to become one of the successful investors here...
With a new alignment forming amongst developing nations to try to move away from the US dollar, it begs the question of why the US dollar is so important in the first place. Learn more about the US dollar and the larger role that it plays in stabilizing the global economy...
Many investors have been fooled by blindly following common investment strategies that may seem popular, but ultimately and often lead to them losing money. Use this guide to avoid the common pitfalls to ensure that your money is growing for you over the long term!
What is the exact role that GDP plays when evaluating the health of the economy? GDP, or gross domestic product, is often misunderstood but commonly referred to in the media and the news. Learn more about GDP and how you should be looking at it here...
Have you heard the term "inverted yield curve" and had no idea what it means? The media loves to point to the inverted yield curve as a doomsday prediction of impending pain in the financial markets, however, there's more to the story....
With the collapse of 3 US banks in the month of March 2023 alone, it is clear that there is a significant amount of financial concern about the health and sustainability of US banks in a higher interest rate environment. As Canadians, it likely leaves many of us wondering about the strength and stability of our own banks. Read more here to understand the fundamental differences in system design and function between Canadian & US banks, and why you should be much more confident about our Canadian banks...
The recent bout of inflation that the western world has been seeing is one that is familiar to us following periods of intense economic growth . Learn more about our historical fight against inflation to give more perspective on our current inflation situation...
The recent bout of inflation that the western world has been seeing is one that is familiar to us following periods of intense economic growth . Learn more about our historical fight against inflation to give more perspective on our current inflation situation...
Canadians feel the pinch of exchange rates any time we want to buy something priced in USD. We also are subject to the impact of conversion fees that are present regardless of the level of exchange rates. These conversion fees can be avoided by Canadians by using a strategy known as Norbert's Gambit, named after Canadian investor Norbert Schlenker. Norbert's Gambit allows you to avoid conversion fees when exchanging Canadian for American dollars (and vice versa)....
The recent collapse of FTX is a stark reminder of the infancy of the crypto industry and what can happen when financial institutions are unregulated. This article is a great summary of what happened and provides insight into where the crypto world will likely go from here...
There's a good reason why both of these options exist. The appropriate decision of whether to lease of finance your next vehicle comes down to your personal circumstances. This article will breakdown what you should consider when deciding between lease or finance...
Sacrifice is a requirement for making progress in life. In order to save for the future, you must sacrifice your consumption now. In order to learn to speak a new language or to play a musical instrument, you must sacrifice time relaxing. In order to be healthy, you must sacrifice the temporary pleasure of eating whatever you want all the time. Essentially, there must be short-term pain for long-term gain...
Housing affordability has been a problem in the metropolitan areas of Vancouver and Toronto for decades now. In the past couple of years, the rest of the country has experienced similar spikes in real estate prices, to the point where historically slow-and-steady markets like Edmonton and Winnipeg have seen massive home price appreciation. To make matters worse for prospective buyers, mortgage rates have roughly tripled since 2021, from less than 2% to over 6% for a five-year fixed rate mortgage...
For decades, the stranglehold that De Beers had on the diamond industry was unmatched by any private company operating in any line of business. For a time, De Beers controlled as much as 90% of global diamond production, and they ruthlessly exploited this near-monopoly when dealing with competitors. They encouraged other diamond producers to engage in cartel-like behaviour with them, artificially raising the price of diamonds by constraining supply...
The US dollar made headlines last week when it reached parity with the euro for the first time in nearly 20 years. Perhaps it’s a sign of broader American exceptionalism that this was viewed so favourably. After all, the US dollar has “strengthened” relative to the euro (and all other major currencies) in 2022, and strength is generally cast in a positive light. But currency strength differs from economic or military strength. Not all American consumers and producers benefit from an appreciating dollar...
At all times, my outlook on the market is short-term agnostic and long-term bullish. Investing with a bullish long-term outlook is logical: the test of time has proven its viability. Market corrections, such as the one we have been experiencing, are often looked back upon as incredible buying opportunities...
There’s a running joke in the investment management space that the Harper government did the Canadian public a great disservice by going with the name Tax-Free Savings Account instead of Tax-Free Investing Account. This subtle descriptive difference has caused many to use their TFSAs as little more than an additional bank account when it should be a primary means of compounding wealth for retirement...
Bear markets are both dangerous and full of potential. They have fooled many investors and will continue to. With that said, they present an incredible investment opportunity for long-term investors. Learn more about navigating a bear market here...
For those unaware of the details of the purchase arrangement, Musk put forth a tender offer to take Twitter private at a price of $54.20 per share, for a total purchase price of $44 billion. When the offer was accepted on Monday, April 25, Twitter stock (TWTR) was trading around $51, so it represented a premium to its current stock price (Musk had earlier purchased 9% of the company, and Twitter stock is up more than 40% since that initial buy). As of market close on April 28, Twitter stock is trading at $49.11. This leads some to ask: why shouldn’t I just buy Twitter stock now, knowing that I’ll make a quick profit when it’s taken private at $54.20 per share....?
The recent sharp increase in mortgage rates caught many Canadians off guard, especially after the tremendous economics years of 2021 and 2022. In November of 2021, it was quite standard to get a 5-year fixed mortgage below 2.2%. Today, that rate is closer to 3.9%...
The way in which gas prices move with crude prices has a name in the industry: rockets and feathers. When oil prices rise, gas shoots up like a rocket. When oil prices fall, gas drops like a feather. Learn why this happens...
Money is a stressful topic. A survey of married couples conducted by the Bank of Montreal in 2014 found that fighting over money would be their top reason for divorce, followed by infidelity1. Those at both ends (and in the middle) of the income spectrum fight about money, so it isn’t just about not having enough. Conflict also arises when partners have different outlooks on household finances that lead to disagreements on how funds should be spent or saved and on how expenses should be split...
Some financial resolutions take considerable time and dedication: upskilling to improve employment prospects, developing a strategy to pay down debt, reducing the fixed costs associated with home and vehicle ownership. But there are also opportunities to improve at the margins with a relatively low degree of effort. Here are a handful of financial New Year’s Resolutions that you can accomplish before the motivation starts to wear off...
The architects behind Web 3.0 are working toward the same goal as cryptocurrency enthusiasts: disintermediation. We love the interaction afforded to us by Facebook and other Web 2.0 era internet companies, but some believe that personal privacy is too high a price to pay. The reason why Google, Facebook and the like are free to use is because the data that users provide is itself a product that can be monetized. The primary objective of Web 3.0 is allowing individuals to retain control of their own personal data...
For a lot of Canadians, this is the only time of year that much thought is given to RRSPs. RRSPs have traditionally been the primary means of saving for retirement in a tax-advantaged way. Despite this, operational complexity of RRSPs prevents many from taking maximum advantage of these accounts. As more and more pension plans shift from defined benefit to defined contribution, effective use of RRSPs will be crucial for fulfilling retirement goals...
NFTs have implications beyond just owning digital art. Ownership rights that are currently codified in physical form, like deeds to houses, can instead be minted as NFTs. When you sell your home, the deed can be transferred at close of sale via the blockchain. This could have significant ramifications for the title insurance industry. In effect, an NFT can be minted to digitally record your ownership of any physical good, theoretically improving ownership rights for physical assets as well as digital ones. The old adage says that possession is 9/10 of the law. Not so in a world where NFTs can be used to prove ownership...
I recently paid $61.81 to fill up my Toyota Corolla. At the onset of the pandemic in March of 2020, I filled my tank for about $30. From trough to peak, prices at the pump increased about 100% in a year and a half. Clearly a worrying sign...
The Dow is a relic of another age and it is truly remarkable how heavily its movement influences the market news cycle. It has been around since the late 1800s, when Charles Dow and Edward Jones decided that they needed a more efficient proxy for the broader stock market so that investors could have a rough idea of how the markets were performing (it wasn’t quite as easy to get real-time market data back in those days).
Beyond being tax-deductible, RRSP contributions are also able to grow tax-free as they aren’t subject to tax on capital gains, dividends, or interest. The goal of an RRSP, as the name implies, is to provide a tax-efficient vehicle to encourage Canadians to save for retirement. However, the CRA eventually wants to be able to collect tax on all the funds that have accumulated in your RRSP, so by age 71 it must be converted to a RRIF (Registered Retirement Income Fund). Think of a RRIF as the butterfly that emerges from the cocoon that is an RRSP.
Human beings, like all living organisms, are vulnerable to a risk that we eventually fall victim to: mortality. This risk is more acute when there are others who depend on you for their livelihood. In the animal kingdom, this takes the form of baby birds relying on their mother for nourishment and protection. Among people, the reliance is generally financial.
If you had invested $10,000 at the beginning of 1981, it would have been worth about $780,000 by the end of 2020. However, this statistic doesn't really tell the full story. This is why it's important to understand sequence...
"I believe in blockchain technology, but I'm not a fan of Bitcoin." I heard this alot when Bitcoin made its first run up above $20,000 USD in 2018 (I was guilty of saying it myself). In some ways this is an ago defence mechanism as belittling an asset is easier than admitting that you don't fully understand its use case...
Prioritize the big things in life and let the little things fill in the cracks. If you waste your time on the little things, then the big things don't fit. This is all too true when it comes to the world of personal finance. Focusing on the big ticket items (house, cars, electronics, etc.) is the best way to set yourself up for future financial success...
Individual pension plans are ideal for business owners and incorporated professionals who may not otherwise have access to a pension plan through work...
Inflation is a general upward trend in the price level over time, meaning the same amount of currency buys you less stuff than it used to...
Buybacks are a tool for returning value to shareholders. When companies post a profit at the end of the year, they have some options for what to do with the cash...
Speculation is mounting that capital gains inclusion rates could increase significantly, perhaps including 100% of capital gains as income. The question is, how would this change impact investors?
I never have too much to say about the technology underlying cryptocurrencies. People much smarter than I am firmly believe that blockchain technology represents a new frontier for digital ownership rights, and it accomplishes this without a central authority...
Cathie Wood is the latest in a long list of investment managers to be put on a pedestal on the strength of recent performance or one fantastic call...
For the first time in years, Blackberry, Nokia, and AMC are in the news. Trading activity has brought a number of once-great monoliths back from the grave, none more so than GameStop – the brick and mortar video game retailer, which traded as low as $3.94 in late July 2020, hit an all-time high of $483 on January 28, 2021 amidst a frenzy of retail trading...
Although personal finances are important in your every day life, school doesn’t teach basic finance. You graduate high school and you’re forced to navigate the world of finance on your own – the good, bad and the ugly. So why don’t schools teach basic finance?
When it comes to succeeding in long-term investing, winning pretty much boils down to not losing. If there’s one thing history has taught us, it’s that the stock market’s long-run projection is inevitably upward...
Helpful guidance and insights when determining whether to invest cash or to use it to pay down debt...
I often hear people say something along the lines of, “To think of all the money I’ve wasted on rent over the years”. This view inappropriately frames the argument of renting or buying. After all, a place to live ranks pretty high on the list of basic human needs, so in that sense rent isn’t, by definition, a waste of money. You need to live somewhere, and paying rent allows you to accomplish this goal...
In many ways, stock picking is a lot more like betting on sports and displays a lot of the same psychological biases...
When it comes time to get a new vehicle, consider the pros and cons of buying and leasing as they relate to your personal situation, but most importantly, make sure that the car you choose fits into your budget. A vehicle is a huge convenience but it is still discretionary. A budget should never be blown on discretionary items...
The primary reason companies split their stock is to increase the liquidity of their shares. Take Apple for example. As of market close on August 4, Apple’s stock is trading at $438.66 US (about $584 CAD). For a beginner’s investment portfolio, a single share of Apple stock may prevent adequate diversification...
Dividends are derived from a company’s excess cash flow (i.e. the money left over after a company has met all of its obligations, including administrative expenses and debt payments). After obligations are met, a company is left with the option to either retain that excess cash for future investment or pay it out to shareholders...
The appeal behind timing the market is tied to the age-old adage of buy low, sell high. History has proven that investing for a sufficiently long time frame, no matter the start and end points, will accomplish this goal...
Fixed income is comprised of the debt of corporations, governments, and individuals (in the form of mortgage-backed securities). Given that debt holds a senior position to equity and is therefore safer, the returns on fixed income are lower (and less volatile) than the returns on equities...
When it comes to investing, knowing a little bit is much more dangerous than knowing nothing. When I first started learning about trading, I thought that I could learn everything I needed to know to make profitable trades in a matter of weeks. I didn’t realize the extent of my own ignorance, as I somehow believed that every piece of information I consumed was available only to me and I could simply outsmart all other market participants...
Given the high stakes involved with stock market participation, countless investment strategies have been developed to try to outperform the market. These range from fundamental analysis of financial metrics to tracking the patterns that are produced when a stock’s price is plotted on a line graph...
The Little Book of Common Sense Investing is an ideal starting point for anyone wishing to expand their financial literacy. There are no get-rich-quick proclamations or vague anecdotes presented as “proof” of successful investment strategies. Instead, Bogle’s presents a clear message: the vast majority of investors should target the market return and ignore the cost-laden, inconsistent strategies preached by active fund managers...
Making wise decisions results from good process. Develop your process, follow it, and let everyone else worry about the noise. Use these 4 investing tips when the market drops...
If you are just starting to invest, you likely don’t have a huge pool of financial assets at your disposal. On top of this, given the cap placed on TFSA contributions, you would have to invest small sums of money into numerous individual positions in order to earn the benefit of diversification within a TFSA account. All of these small positions will add to transaction and monitoring costs...
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