Investing

Capital gains are profits you earn through buying and selling capital assets.  These include, but are not limited to, stocks, mutual funds and bonds. In the US, the IRS estimated that it was losing $11 billion per year in tax revenue by taxpayers misreporting their capital gains.  As a result, in 2011 they implemented new…

Some people have become disenchanted with conventional investments.  With uncertain stock returns and low interest rates many are switching to such unconventional assets such as art and collectibles. Is art an asset or investment? Art as an investment has been considered an interesting and profitable alternative.  Art sales are thriving, with buyers eager to own…

I haven’t always been a DIY investor.  Like many Canadians, I started investing in mutual funds through a financial advisor at my bank. I was getting matching RRSP contributions from my employer, up to 2% of my salary each year, but in order to get the match I had to invest through a specific bank…

One of the most important things to understand about yourself when it comes to finances and investing is your risk tolerance. Your risk tolerance is basically a measure of how much risk you can handle.  This includes your financial ability to handle risk, as well as your emotional ability to understand risk. You need to…

Last week I asked, can you trust advice from your bank?  The bottom line is you should be wary of any advice you receive from someone who can profit from your actions. That doesn’t just hold true for banks and financial advisors, but the same goes for real estate agents, mortgage brokers, insurance brokers and car salesmen. I received…

Investing isn’t rocket science, but our irrational behaviour often leads to poor returns.  For the 20 years ending December 2010, the S&P 500 Index averaged 9.14% a year, but the average equity fund investor earned only 3.83% a year. This happens because we tend to buy after the stock market goes up, and bail when…

The United States, Britain and Australia have recently introduced legislation to strengthen the legal rights of investors and put in place a professional standard for investment advisors. Unfortunately, Canadian standards are far inferior.  They rely on self-regulatory organizations such as the Mutual Fund Dealers Association, the Investment Industry Regulatory Organization of Canada and the Canadian…

When I started looking for some dividend stocks to add to my TFSA, one of the first places I went was the TD Waterhouse markets and research section.  I was looking for a stock screener to help me narrow down my selections. I’ve held my RRSP, TFSA and RESP accounts with TD Waterhouse since I…

Most people don’t consider using a fee only financial planner when they’re ready to start investing.  The first step is usually to meet with a financial advisor at your bank.  The advisor assigned to you guides you through a basic risk assessment profile and then, based on your assessment, suggests the appropriate investments. Commission Based…

An investment dog is an underperforming stock or fund.  Typically, investment dogs have dropped in value, sometimes substantially, and then stagnated.  Belief in the asset itself, that its value will rebound and the desire to recoup the original investment keeps investors hanging on. Emotional Attachment Making the decision to sell low is quite often painful…