Archive for December, 2011

Merry Christmas 2011

December 23, 2011


As you may have noticed, things are slow around here on the blog. The main reason is that I’ve been busy on a book project that I’m working on with a few other bloggers. I’m hoping that it is mostly out of the way now and I can go back to my regular posting schedule in the New Year.

Thank you to all the readers who entered in the Quicken Home and Business 2012 Giveaway. The winner, chosen at random is Philip S. I’ve contacted Philip with instructions on where to download Quicken. If you really, really must have a copy of Quicken, Intuit is selling it for $49.99 ($60 off the list price of $109.99) at participating retailers such as Staples, Best Buy and Future Shop between Dec. 26, 2011 and Jan. 6, 2012. (Thanks to gene for sharing this deal with readers.)

Before I sign off for the year, I want to take a moment to wish you and your loved ones a very Merry Christmas, Happy Hanukkah, Happy Holidays and a very Happy New Year. May 2012 bring joy and happiness and prosperity and I’m keeping my fingers crossed that the Mayans, like most forecasters, were entirely wrong in their predictions.

Bloggers for Charity Update and Quicken Giveaway

December 16, 2011


The Bloggers for Charity initiative attracted a top bid of $5,000 (Five thousand)! A big thank you to Concentra Financial — the winner of the auction.

Quicken Giveaway

If you use Quicken money management software to track your finances or you want to give it try, this giveaway is for you. Thanks to Intuit, I’m offering one (1) download copy of Quicken Home and Business 2012 that has a list price of $109.99 to a reader of this blog. As always, entering the giveaway is super simple. Just leave a comment in this post and don’t forget to include a valid e-mail address. If you are reading this through your favourite RSS Reader or via-email, you have to click on the headline, get through to the website and scroll down to the bottom of the page and type in your comment.

Some quick rules:
(1) No purchase necessary. A skill-testing question may be required.
(2) Deadline for entries is 8 p.m. EST on Thursday, December 22, 2011.
(3) One entry per person please.
(4) I treat your privacy very seriously. Your email will be used for the sole purpose of contacting you if you happen to win.
(5) I’ll pick one entry at random and announce the winner after the deadline. Thank you for entering and good luck!

iShares DEX Floating Rate Note ETF (TSX: XFR)

December 15, 2011


[The top bid in the Bloggers for Charity initiative is $400 by Straight Talk Investing’s Dr. Dale Rathgeber. The deadline for sending in your bids is tomorrow, so if you want to outbid Dr. Dale, you may want to hurry and contact me directly.]

iShares recently introduced a Floating Rate Note ETF (Factsheet, Prospectus) that mostly holds federal and provincial bonds that pay a variable coupon that is referenced to a specified market interest rate and adjusted regularly. iShares says that the rationale for owning floating-rate securities is to minimize losses in the bond portion of the portfolio in a rising interest rate environment. The ETF’s management fee is 0.20% and iShares will be waiving the management fees for an introductory period.

Traditional fixed income securities typically decrease in value when interest rates rise and increase in value when interest rates decrease. Floating-rate bonds, on the other hand, are less sensitive to interest rate fluctuations but the income stream from floating-rate securities will fluctuate based on prevailing interest rates. Currently, XFR sports an yield-to-maturity of 1.46% and the duration is just 0.13 years (duration is a measure of the sensitivity of a fixed-income security to interest rate changes). In other words, XFR offers cash like exposure.

Given XFR’s cash-like risk/return profile, it seems to me that investors have better options. High Interest savings accounts offered through discount brokers currently offer an yield of 1.25%, which is pretty much exactly the same as XFR’s yield of 1.46% less the management fee of 0.20%. However, unlike an ETF, the high interest savings accounts can be bought and sold without incurring a trading commission.