This Week in Business ended with a thud, as S&P dropped the ratings of 9 European countries. France and Austria lost their AAA status, as the problems of the peripheral countries have now come squarely home to the core economies of the continent. Germany's top rating was reaffirmed, but Spain and Italy dropped 2 notches, and all of the downgraded countries remained on negative watch. This indicates significant risk of further downgrades. As Europe continues to struggle with its crisis, this is not good news, as these countries are likely to face higher interest rates in future. The Euro dropped dramatically as rumours hit the market prior to the announcement. The Euro fell to multi month lows against the US and Canadian dollars, while the loonie weakening only slightly against the greenback. Commodities and stocks also fell on the news. Tensions over Iranian nuclear ambitions continue to rise, much to the chagrin of oil consumers around the world.
Despite all these concerns, Toronto finished a fairly solid week at 12231, while the Dow ended at 12422. The Nasdaq finished at 2711, and the S&P finished at 1289. Oil fell to 98.30, gold finished at 1639, and the Canadian dollar fell to 97.70 Despite European weakness, early indications coming from multinational quarterly results are pretty positive.
In this week's Beyond Funds Market Weekly, I discussed income generating investment alternatives for 2012. Click here for the podcast. http://www.am980.ca/BeyondFundsPodcasting.aspx
Monday, January 16, 2012
Tuesday, February 8, 2011
This Week in Business
This is Jeff Wareham, with This Week in Business. Another week, and more signs that the U.S. Federal Reserve is determined to add debt far into the ongoing U.S. recovery. Canadians need to pay attention to this for at least two reasons. First, it will continue to drive the surging loonie higher, or at least the greenback lower. Second, it will continue to impact the price of commodites, assets, food, and even bonds.
North American markets stretched higher this week. Toronto's TSX finished the week at 13792. The Dow in New York finished at 12092. The Standard and Poors index finished at 1311, and the Nasdaq finished at 2769. Asian and European markets joined the party, ending broadly higher. Oil fell through the week, ending at 89 dollars, Gold fell as investors seemed less concerned by uncertainty in Egypt well. The loonie recovered to 101.20 against the US greenback. Events in the Middle East dominated the news, leaving domestic economic news literally in the dust. Unemployment numbers in Canada were very positive, with a drop in local and national rates. In fact, the employment level exceeded the high point prior to the downturn. U.S. unemployment dropped dramatically, but over a million discouraged workers simply stopped looking, and only 36000 net new jobs were created. Further negative housing data broke, and 3 more U.S. banks failed. Visit my blog at www.am980.ca, follow @beyondfunds on twitter, or tune in to Beyond Funds Market Weekly, Saturdays at 12:30 for further information on the market.
This is Jeff Wareham, with This Week in Business. visit my blog at www.am980.ca, follow @beyondfunds on twitter, or tune in to Beyond Funds Market Weekly, Saturdays at 12:30 for further information on the market
Friday, January 21, 2011
This Week in Business
This is Jeff Wareham, with This Week in Business. It was an up and down week for global markets, with investors obviously struggling to decide whether the bull market run will continue, or if it is time for a correction. Toronto’s TSX finished the week at 13289, down for the week, while the Dow in New York finished the week at 11871. The Nasdaq was down for the week, finishing at 2689. Oil finished a rough week at 89.14 per barrel, but the Canadian dollar held it’s own versus the US greenback, off slightly on a weekly basis, but still above par at 100.6 cents US. Gold got hammered, finishing the week at 1342 per ounce.
It was an interesting week for technology investors, with numerous changes, planned and unplanned, at the helm of major technology companies. Energy and mining stocks were hit by falling commodity prices. Canadian banks held their own in the face of changes to lending regulations. Global investors watched with interest the meeting between Presidents Obama and Hu Jintao of China. Tune in to Beyond Funds market weekly Saturday at 12:30, visit www.am980.ca for up to date business news, or follow @beyondfunds on twitter for further market information.
Tune in this week, as | discuss investing like a pension or a hedge fund.
Wednesday, January 12, 2011
New Time, and Some New Ideas for 2011
Over the next few weeks, I will be reviewing eleven themes for 2011.
1) Yield matters. Look at dividends, corporate bonds, and trusts.
2) Think like a hedge fund or a pension.
3) Don't fight the Fed. Watch the impact of QE II on commodity and bond prices.
4) Avoid any actively managed Canadian Balanced fund. High fees, low returns.
5) Get a second opinion.
6) Consider flow through shares as a planning strategy.
7) Consider ETFs for diversification
8) Invest like a business owner. Buy great balance sheets and great income statements.
9) Use convertible debt in your portfolio.
10) Invest in assets that interest you.
11) Get out of wraps.
Tune in to AM980 Saturday at 12:30, and find out how these ideas can help you in 2011.
Thursday, October 14, 2010
What is new at MGI?
When spider webs unite they can tie up a lion.
-African Proverb
What is new at MGI?
Jeff Wareham and Anne Milne are teaming up together to create the Wareham Milne Group. Quite simply, we are both believers in the “team” approach, and our partnership offers the unique opportunity for us to focus on our unique skill sets. It will broaden and deepen the financial advisory experience of both of our clienteles.
As advisors we personally work with clients to provide financial and money management advice throughout their evolving life circumstances. Customized investment solutions are tailored for each family’s goals and needs.
Please allow us to introduce ourselves…
Anne Milne, BA, CIM, CFP
Anne has a unique and diverse career experience; she has been a social worker, a vocational counselor and an entrepreneur in women’s fashions. At the University of Western Ontario she studied sociology and has combined that background with economic studies to give her a unique perspective on the investment process. Her specialty is observing the ‘herd’ not only as it relates to stock market activity, but also how we as humans engage in herding behaviours for most social activities, including investing.
Jeff Wareham, BA, CLU, CFP
Jeff’s degree is in English and Economics. That means he can give you an economic forecast in language you can understand! Jeff focuses his time on helping investors achieve their financial goals using time-proven, “common sense” investment strategies. Jeff is also the host of Beyond Funds Weekly on AM980, a show dedicated to the needs of investors who may seek alternatives to traditional mutual funds. His show covers a wide range of current investment news and topics. He lives in London with his wife Ann Martin and their children. Ann joined his team in September 2008 as an Administrative Assistant.
-African Proverb
What is new at MGI?
Jeff Wareham and Anne Milne are teaming up together to create the Wareham Milne Group. Quite simply, we are both believers in the “team” approach, and our partnership offers the unique opportunity for us to focus on our unique skill sets. It will broaden and deepen the financial advisory experience of both of our clienteles.
As advisors we personally work with clients to provide financial and money management advice throughout their evolving life circumstances. Customized investment solutions are tailored for each family’s goals and needs.
Please allow us to introduce ourselves…
Anne Milne, BA, CIM, CFP
Anne has a unique and diverse career experience; she has been a social worker, a vocational counselor and an entrepreneur in women’s fashions. At the University of Western Ontario she studied sociology and has combined that background with economic studies to give her a unique perspective on the investment process. Her specialty is observing the ‘herd’ not only as it relates to stock market activity, but also how we as humans engage in herding behaviours for most social activities, including investing.
Jeff Wareham, BA, CLU, CFP
Jeff’s degree is in English and Economics. That means he can give you an economic forecast in language you can understand! Jeff focuses his time on helping investors achieve their financial goals using time-proven, “common sense” investment strategies. Jeff is also the host of Beyond Funds Weekly on AM980, a show dedicated to the needs of investors who may seek alternatives to traditional mutual funds. His show covers a wide range of current investment news and topics. He lives in London with his wife Ann Martin and their children. Ann joined his team in September 2008 as an Administrative Assistant.
Friday, July 9, 2010
Top five vacation destinations for your money
Top five vacation destinations for your money
With the lazy, hazy days of summer upon us, it may be the ideal time to send your money on vacation. The summers of our childhood may have been filled with risky adventures, but as we age, a quiet lakeside cottage, or even a leisurely evening on our deck, may be the high point of the summer. Similarly, I believe this summer will be a wonderful time to seek a secure, comfortable, peaceful destination for our money. In fact, with the many unsettling issues and potential events around the world, it may be a great summer to consider a “staycation.” The turbulence of our daily lives, which makes the quiet vacation destination so attractive, is also a compelling argument for seeking a safe harbour for the summer. Let’s take a look at my five ideal vacation destinations for our money.
1) Consider a “Staycation”
In a volatile world, there may never be a better time to seek the safe haven of the Canadian Domestic economy. We have a great government balance sheet, relatively business friendly economic policy, and a wealth of resources unmatched in the western world. We are readily accessible to the booming economies of the Far East, and we still have the best trade relationship with the US of any country in the world. The market may be turbulent on the low volumes of summer, so the opportunity may emerge to pick away at great Canadian companies with solid balance sheets and growth in revenue.
Take a Staycation. Buy Canada.
2) Avoid the roller coasters
The Flash Crash of May 6th remains largely unexplained. Europe is essentially bankrupt. The states in our southern neighbour are worse off than the EU. Global markets have recovered about half of the losses they experienced through the catastrophe of 2008 and early 2009, but have broken many important technical trend lines over the last couple weeks. The market reminds me of Space Mountain, the great dark roller coaster. You really don’t know what is coming next, you can’t see it, but you know it is going to be wild. I love roller coasters, but I think money belongs on the sidelines when the ride looks wild. Ultimately, the majority of long term equity returns have come from dividends, so why not look for stability, with a steady pattern of dividend growth.
Avoid the roller coasters. Buy dividend growers and lower volatility stocks.
3) Go somewhere boring
In January of this year, I took a very strong stance in favour of corporate bond funds. Virtually every advisor I knew was bearish on bonds. I took some heat for this stance, but I was right, and I continue to think the broad based hatred of bonds is misplaced. There is a lot to be said for return of your money trumping return on your money. In fact, even government debt has rallied recently, but I prefer corporate bonds over government bonds. Corporate bonds pay better interest than government bonds. Most Corporate balance sheets are far superior to those of governments. If the economic recovery continues, corporate will benefit from upgrades, and may even earn capital gains despite the fact that global yields on government debt will rise. If the economy stumbles, corporate bonds are much more likely to hold their own than stocks. Get paid to sit on the sidelines, whichever way the economy goes.
Go somewhere boring. Buy corporate bonds
4) Go somewhere unloved
Halloween of 2006 may have been the last time you considered the great, unloved, and dying segment of the Canadian investment market, the income trust. In their glory days, they were the darling of Bay Street. The beneficial tax treatment is disappearing. Investment dealers provide little research. If you held them in O6, they hurt you. Many are busted businesses, with busted capital structures, yet I believe they deserve a second look. With this painful environment, it is tough to own the trusts, but there are some real gems among them, with eye popping, often double digit distributions. I love income payers, so these unloved companies are on my radar.
Go somewhere unloved. Buy income trusts.
5) Consider a seasonal retreat
One of the most impressive interviews I have conducted was of Brooke Thackray, the author of a number of books, including an excellent guide on seasonal investing. Brooke has brought out an Exchange Traded Fund (ETF) that tracks the seasonal nature of the market. This ETF has been outstanding so far. If you want a copy of his book on the subject, let me know. If you want to put your money on autopilot for the summer, why not consider his ETF?
Consider a seasonal retreat. Buy the seasonal ETF.
With the lazy, hazy days of summer upon us, it may be the ideal time to send your money on vacation. The summers of our childhood may have been filled with risky adventures, but as we age, a quiet lakeside cottage, or even a leisurely evening on our deck, may be the high point of the summer. Similarly, I believe this summer will be a wonderful time to seek a secure, comfortable, peaceful destination for our money. In fact, with the many unsettling issues and potential events around the world, it may be a great summer to consider a “staycation.” The turbulence of our daily lives, which makes the quiet vacation destination so attractive, is also a compelling argument for seeking a safe harbour for the summer. Let’s take a look at my five ideal vacation destinations for our money.
1) Consider a “Staycation”
In a volatile world, there may never be a better time to seek the safe haven of the Canadian Domestic economy. We have a great government balance sheet, relatively business friendly economic policy, and a wealth of resources unmatched in the western world. We are readily accessible to the booming economies of the Far East, and we still have the best trade relationship with the US of any country in the world. The market may be turbulent on the low volumes of summer, so the opportunity may emerge to pick away at great Canadian companies with solid balance sheets and growth in revenue.
Take a Staycation. Buy Canada.
2) Avoid the roller coasters
The Flash Crash of May 6th remains largely unexplained. Europe is essentially bankrupt. The states in our southern neighbour are worse off than the EU. Global markets have recovered about half of the losses they experienced through the catastrophe of 2008 and early 2009, but have broken many important technical trend lines over the last couple weeks. The market reminds me of Space Mountain, the great dark roller coaster. You really don’t know what is coming next, you can’t see it, but you know it is going to be wild. I love roller coasters, but I think money belongs on the sidelines when the ride looks wild. Ultimately, the majority of long term equity returns have come from dividends, so why not look for stability, with a steady pattern of dividend growth.
Avoid the roller coasters. Buy dividend growers and lower volatility stocks.
3) Go somewhere boring
In January of this year, I took a very strong stance in favour of corporate bond funds. Virtually every advisor I knew was bearish on bonds. I took some heat for this stance, but I was right, and I continue to think the broad based hatred of bonds is misplaced. There is a lot to be said for return of your money trumping return on your money. In fact, even government debt has rallied recently, but I prefer corporate bonds over government bonds. Corporate bonds pay better interest than government bonds. Most Corporate balance sheets are far superior to those of governments. If the economic recovery continues, corporate will benefit from upgrades, and may even earn capital gains despite the fact that global yields on government debt will rise. If the economy stumbles, corporate bonds are much more likely to hold their own than stocks. Get paid to sit on the sidelines, whichever way the economy goes.
Go somewhere boring. Buy corporate bonds
4) Go somewhere unloved
Halloween of 2006 may have been the last time you considered the great, unloved, and dying segment of the Canadian investment market, the income trust. In their glory days, they were the darling of Bay Street. The beneficial tax treatment is disappearing. Investment dealers provide little research. If you held them in O6, they hurt you. Many are busted businesses, with busted capital structures, yet I believe they deserve a second look. With this painful environment, it is tough to own the trusts, but there are some real gems among them, with eye popping, often double digit distributions. I love income payers, so these unloved companies are on my radar.
Go somewhere unloved. Buy income trusts.
5) Consider a seasonal retreat
One of the most impressive interviews I have conducted was of Brooke Thackray, the author of a number of books, including an excellent guide on seasonal investing. Brooke has brought out an Exchange Traded Fund (ETF) that tracks the seasonal nature of the market. This ETF has been outstanding so far. If you want a copy of his book on the subject, let me know. If you want to put your money on autopilot for the summer, why not consider his ETF?
Consider a seasonal retreat. Buy the seasonal ETF.
Wednesday, May 12, 2010
The Canadian Success Story to Watch
Last week, I visited a wonderful, hospitable province, which, in my opinion, is the Canadian success story of the 21st century. It is almost hard to fathom that there is a province which;
-supplies 1/3 of the world’s potash
-supplies 1/4 of the world’s uranium
-is the 2nd largest oil producing province
-is the 3rd largest natural gas producing province
-is the 3rd largest coal producing province
-has significant oil sands potential
-has the world’s largest diamond exploration project (Shore Gold)
-has significant base and precious metal finds (zinc, copper, gold)
-has the largest rare earth minerals find in North America
-has significant potential for helium and associated gases
(Excerpted from “The World is Watching Saskatchewan” -49 North information brochure)
Few Canadians give much thought to Saskatchewan...but you should. After years of overtly anti-business sentiment, an entrepreneur friendly government has risen to power. Resource development is no longer a dirty word in Saskatchewan, and the result has been swift and dramatic. Major mining company regional head offices are scattered around downtown Saskatoon. The decades old population bleed has been stemmed, and the province grew by 30,000 last year. Graduates who fled their homeland to Alberta, BC, and Ontario, are returning. House prices have doubled. Investment dollars are flowing in, and opportunity abounds.
Over the next few weeks, my show will concentrate on this growing investment opportunity. Stay tuned...it really is an exciting opportunity.
-supplies 1/3 of the world’s potash
-supplies 1/4 of the world’s uranium
-is the 2nd largest oil producing province
-is the 3rd largest natural gas producing province
-is the 3rd largest coal producing province
-has significant oil sands potential
-has the world’s largest diamond exploration project (Shore Gold)
-has significant base and precious metal finds (zinc, copper, gold)
-has the largest rare earth minerals find in North America
-has significant potential for helium and associated gases
(Excerpted from “The World is Watching Saskatchewan” -49 North information brochure)
Few Canadians give much thought to Saskatchewan...but you should. After years of overtly anti-business sentiment, an entrepreneur friendly government has risen to power. Resource development is no longer a dirty word in Saskatchewan, and the result has been swift and dramatic. Major mining company regional head offices are scattered around downtown Saskatoon. The decades old population bleed has been stemmed, and the province grew by 30,000 last year. Graduates who fled their homeland to Alberta, BC, and Ontario, are returning. House prices have doubled. Investment dollars are flowing in, and opportunity abounds.
Over the next few weeks, my show will concentrate on this growing investment opportunity. Stay tuned...it really is an exciting opportunity.
Tuesday, May 11, 2010
The Greek Debt Crisis
I have been struggling with the recent response to the Eurozone debt crisis. Quite simply, the EU has made it evident that they will print money to pay the debt of a member that is in trouble. Although this may seem reassuring in the short term, a basic problem exists. With much of the EU counties' debt denominated in Euros, this fundamentally ensures the devaluation of the Euro, to the detriment of global investors. By allowing debtor nations to pay back the debt with essentially devalued currency, the EU does little to ensure the fundamental economic reforms will happen in the weaker member nations, referred to as the PIGS (Portugal, Italy, Greece, and Spain, with honourable mention to Ireland).
We have seen how well received Greece's austerity measures have been. Less notice has been given to the electoral rebuff dealt to Angela Merckel on the weekend. Reforms will be unwelcome in both the weaker, and stronger states of the Euro.
If that is not troubling enough, read this Financial Post article (CLICK HERE) on the emerging sovereign debt crisis in the US.
Stay tuned. This story is far from over!
We have seen how well received Greece's austerity measures have been. Less notice has been given to the electoral rebuff dealt to Angela Merckel on the weekend. Reforms will be unwelcome in both the weaker, and stronger states of the Euro.
If that is not troubling enough, read this Financial Post article (CLICK HERE) on the emerging sovereign debt crisis in the US.
Stay tuned. This story is far from over!
Saturday, May 1, 2010
Seasonal Investing Interview
This morning, I am interviewing Brooke Thackray, author of several books, about his work on seasonal investing. Tune in to hear his thoughts on the following;
What is seasonal investing?
What causes the seasonal fluctuations in the market place?
Does it always work?
Does seasonal investing only work in the stock market?
What are some of the seasonal trends at this time?
Are there any seasonal investments in the summer time?
How long does the average seasonal trade last?
How can an average investor profit from seasonal investing?
If you would like a copy of his book, I have a limited supply available...send me an email with your name and address!
What is seasonal investing?
What causes the seasonal fluctuations in the market place?
Does it always work?
Does seasonal investing only work in the stock market?
What are some of the seasonal trends at this time?
Are there any seasonal investments in the summer time?
How long does the average seasonal trade last?
How can an average investor profit from seasonal investing?
If you would like a copy of his book, I have a limited supply available...send me an email with your name and address!
Wednesday, April 14, 2010
Loonie Soars
After flirting with parity for weeks, the Loonie closed the deal, ending above par with the greenback for the first time since 2008. This is another step in the apparently ineviitable march higher of our currency. In fact, the surging Loonie has meaningful implications for global investment choices by Canadian investors. Tune in this week, for Beyond Funds |Market Weekly, and I will discuss investment alternatives in a world where the strength of our currency may work against you
Tuesday, April 6, 2010
Why Bonds May Still Be Good For You
The Current & Future Environment For Fixed Income Markets & Investors:
Most new investment dollars put into mutual funds last year went to bonds. Most bonds across the board (provincials, corporates, high-yields, short-term, long-term, real return) rallied to a significant degree during 2009 due to a lowering rate environment, a contraction in credit spreads and lower than anticipated bond defaults. The outlook for long-dated federal, provincial and high-quality corporate bonds will be poor if we experience rising interest rates The Bank of Canada overnight lending rate has been drawn down to 0.25% - most analysts are expecting the rate to be upwardly adjusted in small increments during the years to come beginning Q3 of this year. With interest rates due to rise, what should an investor do?
Short-Term bonds and bond funds that were widely sold as money market alternatives may be a liability since while their durations are short, the quality of the issues is extremely high and thus more liable to rate increases.
How Can We Make Money in the Bond Market this Year and Years to Come?
Interest rates will be adjusted upward when overall economic conditions improve and GDP growth is also on the rise. At 0.25 percent, there really is nowhere to go but up, once the economic recovery gains traction. As we experience better overall economic conditions and improved GDP growth, defaults within high-yield bonds will decline. In relation lower credit quality investment-grade bonds, improved GDP growth and better overall economic conditions will mean credit qualities improve.
This means that the potentially negative effect of rising interest rates may well be off-set by the positive effect lower default rates have on high-yield bonds and the progression in credit quality, lower quality investment-grade corporate bonds experience, spurred by improved economic conditions.
Yet another consideration is that under these circumstances: It is anticipated that many high-yield bonds will become investment-grade (going from BB to BBB ratings) and become eligible for purchase by a variety of institutional purchasers (Pensions, Endowment Funds, Corporations etc...) increasing demand volume.
In other words, corporate and high yield bonds may be the ideal fixed income alternative in an improving economic environment.
Most new investment dollars put into mutual funds last year went to bonds. Most bonds across the board (provincials, corporates, high-yields, short-term, long-term, real return) rallied to a significant degree during 2009 due to a lowering rate environment, a contraction in credit spreads and lower than anticipated bond defaults. The outlook for long-dated federal, provincial and high-quality corporate bonds will be poor if we experience rising interest rates The Bank of Canada overnight lending rate has been drawn down to 0.25% - most analysts are expecting the rate to be upwardly adjusted in small increments during the years to come beginning Q3 of this year. With interest rates due to rise, what should an investor do?
Short-Term bonds and bond funds that were widely sold as money market alternatives may be a liability since while their durations are short, the quality of the issues is extremely high and thus more liable to rate increases.
How Can We Make Money in the Bond Market this Year and Years to Come?
Interest rates will be adjusted upward when overall economic conditions improve and GDP growth is also on the rise. At 0.25 percent, there really is nowhere to go but up, once the economic recovery gains traction. As we experience better overall economic conditions and improved GDP growth, defaults within high-yield bonds will decline. In relation lower credit quality investment-grade bonds, improved GDP growth and better overall economic conditions will mean credit qualities improve.
This means that the potentially negative effect of rising interest rates may well be off-set by the positive effect lower default rates have on high-yield bonds and the progression in credit quality, lower quality investment-grade corporate bonds experience, spurred by improved economic conditions.
Yet another consideration is that under these circumstances: It is anticipated that many high-yield bonds will become investment-grade (going from BB to BBB ratings) and become eligible for purchase by a variety of institutional purchasers (Pensions, Endowment Funds, Corporations etc...) increasing demand volume.
In other words, corporate and high yield bonds may be the ideal fixed income alternative in an improving economic environment.
Sunday, March 21, 2010
Building a New Strategy
Tune in this Saturday, to Beyond Funds Market Weekly, as I wrap up my ten themes for rebuilding your portfolio after the lost decade. Learn how you can strategize, with an advisor, to implement new and fresh ideas after the devastating markets of the first decade of this century. Your investment strategy may need to change after the lessons we have learned from the two major market meltdowns of the last ten years. Tune in next week to determine if you can benefit from a new and different approach to your financial future.
Learn how these 10 key themes matter to you;
1) Diversification means more than just stocks from around the world
2) Move up the balance sheet…consider bonds
3) Learn about convertible debentures as a stock alternative
4) Seg funds make sense to keep you in the market and secure your retirement income
5) Guarantee your principal with a strip bond
6) Look at ETFs as a mutual fund alternative
7) Buy at least one fun or interesting stock this year
8) Use covered calls to generate income
9) Look at a hedge fund for diversification
10) Take a serious look at the cost and performance of your mutual funds
Learn how these 10 key themes matter to you;
1) Diversification means more than just stocks from around the world
2) Move up the balance sheet…consider bonds
3) Learn about convertible debentures as a stock alternative
4) Seg funds make sense to keep you in the market and secure your retirement income
5) Guarantee your principal with a strip bond
6) Look at ETFs as a mutual fund alternative
7) Buy at least one fun or interesting stock this year
8) Use covered calls to generate income
9) Look at a hedge fund for diversification
10) Take a serious look at the cost and performance of your mutual funds
Saturday, March 13, 2010
Today's show
Key topics from today's show
I discussed the subject "What is a Hedge Fund?" and "Why Invest in Hedge Funds?"
Hedge funds can increase portfolio diversification and provide some protection against market downturns. A hedge fund is a private pool of assets with an investment objective to generate positive returns under all market conditions. It employs a wide range of financial instruments and alternative investment strategies. The fund depends less on market direction and more on the skill of the fund manager than long-only portfolios.
I then covered the defining characteristics of a hedge fund. A hedge fund tends to display a low correlation to traditional markt indices. It has an absolute return objective with no benchmark considerations. Typically, it pays a performance-related incentive fee to the fund manager in addition to a management fee. The manager pursues a wide variety of strategies such as concentrated positions, leverage, arbitrage, and stock shorting. These strategies are not for everyone, but are the principal reason hedge funds are able to minimize their correlation to the market.
Typically hedge funds are structured as a limited partnership. Since most hedge funds are privately placed, provincial investment minimums apply. This should be discussed with an advisor. If you wish to discuss one on one, visit http://www.jeffwareham.ca/, or email me at jwareham@mgisecurities.com
I discussed the subject "What is a Hedge Fund?" and "Why Invest in Hedge Funds?"
Hedge funds can increase portfolio diversification and provide some protection against market downturns. A hedge fund is a private pool of assets with an investment objective to generate positive returns under all market conditions. It employs a wide range of financial instruments and alternative investment strategies. The fund depends less on market direction and more on the skill of the fund manager than long-only portfolios.
I then covered the defining characteristics of a hedge fund. A hedge fund tends to display a low correlation to traditional markt indices. It has an absolute return objective with no benchmark considerations. Typically, it pays a performance-related incentive fee to the fund manager in addition to a management fee. The manager pursues a wide variety of strategies such as concentrated positions, leverage, arbitrage, and stock shorting. These strategies are not for everyone, but are the principal reason hedge funds are able to minimize their correlation to the market.
Typically hedge funds are structured as a limited partnership. Since most hedge funds are privately placed, provincial investment minimums apply. This should be discussed with an advisor. If you wish to discuss one on one, visit http://www.jeffwareham.ca/, or email me at jwareham@mgisecurities.com
Saturday, March 6, 2010
Next Saturday's Show
Thanks for tuning in to Beyond Funds Market Weekly.
Tune in Saturday at 9:30 A.M., for Beyond Funds Market Weekly. I will be continuing my discussion on lessons investors may learn from major pension plans. Many of the most important principles of investing are followed by pension plan administrators, and most traditional mutual fund strategies miss some, if not many, of these principles. Real estate, options, managed futures, commodities, and hedge funds are all financial instruments that may improve the overall risk adjusted return of your portfolio. Pension managers understand these principals, but I rarely see individual investors taking advantage of this opportunity to diversify. Tune in this Saturday, and learn how you, as an investor, may improve your returns, and reduce your risks, by following these basic principles..
Tune in Saturday at 9:30 A.M., for Beyond Funds Market Weekly. I will be continuing my discussion on lessons investors may learn from major pension plans. Many of the most important principles of investing are followed by pension plan administrators, and most traditional mutual fund strategies miss some, if not many, of these principles. Real estate, options, managed futures, commodities, and hedge funds are all financial instruments that may improve the overall risk adjusted return of your portfolio. Pension managers understand these principals, but I rarely see individual investors taking advantage of this opportunity to diversify. Tune in this Saturday, and learn how you, as an investor, may improve your returns, and reduce your risks, by following these basic principles..
Sunday, February 28, 2010
Investing Like a Pension Fund
Thanks for tuning in to Saturday's show.
Tune in this Saturday for Beyond Funds Market Weekly, as I discuss investing like a pension fund. Most major pension funds move beyond traditional bond and stock investments, and include alternative investments. Alternative investment classes increase the expected return of a portfolio, while reducing volatility. Do alternative investment classes fit in your portfolio?
Tune in Saturday at 9:30, and find out.
Tune in this Saturday for Beyond Funds Market Weekly, as I discuss investing like a pension fund. Most major pension funds move beyond traditional bond and stock investments, and include alternative investments. Alternative investment classes increase the expected return of a portfolio, while reducing volatility. Do alternative investment classes fit in your portfolio?
Tune in Saturday at 9:30, and find out.
Saturday, February 20, 2010
Next Saturday's Show
Thanks for tuning in to this week's show. Next Saturday, I will be reviewing another strategy for rebuilding your portfolio after the lost decade. I will be discussing the use of covered call writing as a way to keep your portfolio growing through challenging market conditions. Learn how covered call writing is an easy and disciplined way to buy low and sell high. Very few advisors are talking to their clients about this innovative strategy, so tune in Saturday at 9:30, and find out if it is right for you.
Friday, February 19, 2010
Saturday Morning on AM 980
Tune in to Cheryl Weedmark's show tomorrow AM, and you will hear us discuss my thoughts on Finance Minister Flaherty's announcement regarding changes to mortgage rules in Canada. At 9:30, tune in to my show, as I discuss the value of having one fun or interesting stock in your portfolio. Should be an interesting morning!
Wednesday, February 17, 2010
Add an interesting stock to your portfolio
Tune in this Saturday morning, for Beyond Funds Market Weekly. I have been reviewing ideas for rebuilding your portfolio after the lost decade. Many Canadians own individual stocks in the same major Canadian companies, and there is nothing wrong with that. Your portfolio should likely consist primarily of high quality blue chip equities and bonds. However, I believe it is important to add one or two interesting holdings to your portfolio. By investing in unique companies with significant growth prospects, you may increase your returns, and add excitement to your strategy. Tune in Saturday at 9:30, as I discuss working with an advisor to identify unique growth opportunities.
Saturday, February 13, 2010
Today's show
This week, I focused on using ETFs to rebuild your portfolio after the "lost decade." Just because we have seen dreadful ten year results for equity markets, we should not give up on stocks as a meaningful component of a long term investment strategy. In fact, equities have outperformed all other major asset classes, over the long term. For this reason, I feel it is important to disscuss the options available for investing in equity markets. Larger portfolios have more options; individual stocks and bond positions may be used to achieve proper diversification. For smaller, or even moderate sized portfolios, diversification is more difficult. This may drive you to mutual funds. As I frequently discuss on the show, most mutual funds fail to beat the index against which they are measured. In fact, much of the excess returns associated with equities over other assets is chewed up by the 2.5% management expense typical of a Canadian mutual fund.
Exchange traded funds typically track an index, and have much lower management costs than an equity mutual fund. They give diversification at a much lower cost than a mutual fund. Further, there are many new, specialized funds that offer you exposure to individual sectors,or even bearish feelings about a sector, or the whole market..
Unfortunately, many investors do not get exposed to these alternatives, either because their advisor does not recommend them, or is not licensed to sell them. If you are looking to discuss your options, visit http://www.jeffwareham.ca/, send me an email, or call me at (519) 963-8019.
Exchange traded funds typically track an index, and have much lower management costs than an equity mutual fund. They give diversification at a much lower cost than a mutual fund. Further, there are many new, specialized funds that offer you exposure to individual sectors,or even bearish feelings about a sector, or the whole market..
Unfortunately, many investors do not get exposed to these alternatives, either because their advisor does not recommend them, or is not licensed to sell them. If you are looking to discuss your options, visit http://www.jeffwareham.ca/, send me an email, or call me at (519) 963-8019.
Monday, February 8, 2010
ETFs and rebuilding your portfolio
This week, on Beyond Funds Market Weekly, I continue with my series on rebuilding your portfolio after the lost decade. Traditional mutual funds have rarely beaten the return of the market. For that reason, many investors are choosing a low cost alternative, the exchange traded fund, or ETF. ETFs are a great way to get exposure to the market, but not all are created equal. Tune in Saturday at 9:30, as I discuss ETFs as a part of your long term strategy
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