Archive for November, 2008

This and That: The BCE saga continues…

November 28, 2008

7 comments
  1. To celebrate our Fourth Blogiversary I’m giving away ten copies of Findependance Day by Jonathan Chevreau. Don’t forget to enter your name in the giveaway as the contest closes tonight at 8:00 P.M. EST.
  2. The leveraged buyout of BCE is almost dead over a little-known clause in the deal. This Globe and Mail story takes you behind the scenes of why the deal collapsed.
  3. It is true that recent stock market returns have been terrible but some of the claims about past performance are flawed.
  4. Money Grubbing Lawyer offers his take on the Canada Revenue Agency going after eBay PowerSellers.
  5. Four Pillars says that reports of the death of indexed investing are vastly exaggerated.
  6. Unfortunately, a weak economy means lay-offs and job searches. Squawk Fox has put together a list of resume no-nos.
  7. Blunt Money on ending over-the-top gift exchanges and having a peaceful holiday.
  8. Mike wrote a guest post on spreading investing knowledge around.
  9. Money Ning says that if you have time for a shower, you have time for personal finance.
  10. Million Dollar Journey took the Moonjar, a new-age piggy bank for a test drive.

What is Market Timing?

November 27, 2008

19 comments

Don’t forget to enter your name in the 4th Blogiversary Giveaway for a chance to win one of ten copies of Findependance Day. Contest closes tomorrow at 8 P.M. EST.

Responding to an earlier post, a commenter asked why a momentum strategy should be called market timing and asked for a definition. In Unconventional Success (read review), David Swensen has the following definition for market timing:

Market timing represents a short-term bet against well-articulated long-term asset-allocation targets. Market timers hope to underweight prospectively poorly performing asset classes and overweight prospectively strongly performing asset classes, employing tactical moves to enhance portfolio returns.

Most individual investors would fall under two types of market timing: (1) Chasing recent performance by buying recently “hot” asset classes or (2) Letting their portfolio drift from target allocation by not rebalancing. A momentum strategy that bets on recent strong performance continuing is, by definition, a market timing strategy.

I have to confess to practicing a mild form of market timing because when I think an asset class is overvalued, I don’t hesitate to keep any new money intended for that asset class in cash waiting for a suitable buying opportunity. But once I’m invested, I’m in for the long haul, except for occasional rebalancing.

Book Review: The 4 Little Pigs

November 25, 2008

18 comments

The 4 Little Pigs is a children’s book designed to teach little ones the basics of budgeting. The author Jeanette Ramnarine, who has two young children of her own, believes that children should be taught the basics of handling money wisely. In this book, young Caleb receives four little piggy banks labelled Saving, Spending, Sharing and Schooling and learns to divide his weekly allowance between the piggies. The book and a set of four piggy banks are available through the author’s website.

I read the book to our 3-year old boys who have a tenuous grasp of the concept of money, let alone dividing it and they were far more interested in the pictures. I’m guessing that the book will appeal to kids who are at least a couple of years older.

Interestingly, the book suggests giving a child an allowance of one dollar per year of their life starting at three. We don’t give our kids any allowance for very good reasons: they’ll treat it as a shiny toy and throw it around, put it in interesting places like heating ducts or lose it in their daycare. Do other parents really start an allowance for such young children?

Note: Don’t forget to enter your name in the 4th Blogiversary Giveaway for a chance to win one of ten copies of Findependance Day.