Archive for May, 2006

Buy Gold! Buy Gold!

May 14, 2006


A full-page ad for gold coins is often featured in The National Post these days with the headline “GOLD BLASTS PAST $644/oz! BUY NOW – EXPERTS NOW PREDICT $2,000 – $3,000 per oz”. It is quite true that gold has been on a tear recently reaching multi-decade highs. However, gold is a very poor investment: it costs a lot to buy and sell, it costs money to store, it pays no interest or dividends and over the long-term, it keeps pace with inflation and offers no growth. While gold does offer some diversification benefits as it has negative correlation with other asset classes, it is still a poor bet for most long-term investors.

Virgin Mobile Disappoints

May 11, 2006


I use Virgin Mobile’s prepaid service and have been very impressed with their 120-day expiry period for top-ups of $15 or more. I referred many friends to their service and now find that Virgin Mobile has significantly shortened their expiry periods. While Virgin Mobile continues to offers the best value for occasional users, I would hesitate to recommend their service to anyone as they can just as easily cut back on their still respectable expiry periods.

Here’s how the pre-paid cellphone service from the major players compare:

  • Bell Canada: 30¢/minute for the first two minutes of a call and 5¢/minute thereafter; $25 for 60 days; 75¢ per month 911 fee.
  • Rogers: 33¢/minute; $10 per month; 911 fee applies.
  • PC Mobile: 20¢/minute; $25 for 60 days.
  • Virgin Mobile: 25¢/minute for first five minutes each day, 15¢/minute thereafter; $15 for 45 days or $25 for 90 days.
  • Telus Mobility: 40¢/minute; $25 for 60 days; 50¢/month 911 fee.

I posted sometime back that President’s Choice cell phone service doesn’t have any attractive features. Perhaps the latest move by Virgin Mobile is an opening for them to gain some new customers.

Investing: Getting Started

May 10, 2006

Comments are Disabled

Recently, I received the following query from a reader:

I am new and very interested in learning everything I can about investing. Where and how do I learn at a new baby level? We are getting to be middle aged and the fear is setting in for us. We don’t want to be left behind. Thanks.

Investing need not be very complicated. For instance, check out my benchmark Sleepy Portfolio, which is made up of ten components but provides ample diversification. An even simpler example is this portfolio, which has only four funds that track different asset classes. Here’s how you can construct your portfolio:

  1. Set Your Target Asset Allocation: My benchmark portfolios follow an asset allocation that is suitable for me. Depending on your age and circumstances, you may choose a different allocation model. For instance, someone who is more risk-averse would want to allocate more money to bonds. Once you decide on a target allocation, buy index funds to track the various asset classes.
  2. Rebalance: In a year or so, your portfolio probably has deviated from your target allocation. Sell the funds that exceed the target and buy the ones that have fallen below the target (or add more new money to the funds that have fallen to bring them back to target).

If the above sounds complicated, you may want to get some advice from a fee-only financial planner. I highly recommend the book A Random Walk Down Wall Street for someone new who wants to learn about investing.

Related Posts:

  1. The Lazy Man’s Portfolio
  2. Another Lazy Portfolio
  3. Couch Potato Portfolio
  4. The Original Couch Potato Portfolio

Disclaimer: Caveat emptor. I am not qualified to give financial advice. All information provided on this website are for informational purposes only.