Comments on: The Amateur Investor Manifesto, Part 3 http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: My Exchange-Traded Fund Wishlist | MoneySense http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-265292 My Exchange-Traded Fund Wishlist | MoneySense Mon, 20 Sep 2010 13:58:44 +0000 http://www.canadiancapitalist.com/?p=1553#comment-265292 [...] The Amateur Investor Manifesto, Part 3 [...] [...] The Amateur Investor Manifesto, Part 3 [...]

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]]> By: Jordan http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176573 Jordan Mon, 29 Dec 2008 20:33:18 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176573 As a follow up to my last comment, here is some information I sluethed up on the Vanguard Group in Canada. The website bylo has been pushing an email letter writing campaign to suggest Vanguard come to Canada. Check it out and if your inclined email them too, I will be. http://www.bylo.org/emailvan.html As a follow up to my last comment, here is some information I sluethed up on the Vanguard Group in Canada.

The website bylo has been pushing an email letter writing campaign to suggest Vanguard come to Canada. Check it out and if your inclined email them too, I will be.

http://www.bylo.org/emailvan.html

]]> By: Jordan http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176550 Jordan Mon, 29 Dec 2008 20:08:18 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176550 @EconStudent I had the same thought, I think if Vanguard came to Canada it would really shake up the industry and give us some much need low cost competition. Does anyone know why they haven't entered our market? Is it possibly too small? @EconStudent

I had the same thought, I think if Vanguard came to Canada it would really shake up the industry and give us some much need low cost competition.

Does anyone know why they haven’t entered our market? Is it possibly too small?

]]> By: EconStudent http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176540 EconStudent Mon, 29 Dec 2008 18:46:56 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176540 20p Mike: I entered 2008 with a 50% equities/50% money market and I have to tell you that 2008 has been very, very painful. I am going to believe that leverage would be very painful. However, if the person used margin to short stocks, it must of been a sweet year. One needs a more aggressive market timing methodologies if one wants to leverage. Double the consequences whether good or bad. In Canada, keep expenses low tend to be a major problem with all the trailing fees, advisor fees, etc. The number of low cost of mutual fund families can be counted with one hand. I know that people think this is impossible, but I am trying to propose for Vanguard to come to Canada. 20p Mike: I entered 2008 with a 50% equities/50% money market and I have to tell you that 2008 has been very, very painful. I am going to believe that leverage would be very painful. However, if the person used margin to short stocks, it must of been a sweet year. One needs a more aggressive market timing methodologies if one wants to leverage. Double the consequences whether good or bad.

In Canada, keep expenses low tend to be a major problem with all the trailing fees, advisor fees, etc. The number of low cost of mutual fund families can be counted with one hand. I know that people think this is impossible, but I am trying to propose for Vanguard to come to Canada.

]]> By: 2op mike http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176382 2op mike Sun, 28 Dec 2008 18:19:36 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176382 To Temple: My comments are very generic. I think too many people look at equities as a guaranteed long term winner. There have been decades where that has not been the case. Check out "Juggling Dynamite" for a view that says the markets will go sideways for up to 17 years a cycle. The fact is, we can all support our positions or anybodies position with the variety of books out there by some what reputable sources. Being old fashioned, I gravitate to basics such as: - pay down all debt as quickly as is reasonably possible - broadly diversify across at least 5 asset classes - keep expenses low - its OK to have an advisor for their expertise in security selection but never give an advisor control over how your money is invested i.e. style, strategy, asset allocation - if you want to take a flyer on a hunch (and we all do at some point) take the funds out of your core investment account and create a "satelite" account Having said that, I also think others have just as strong a belief in their system, and while I might disagree I still wish everybody success with whatever they try. A last comment might be, did the leveraging to over 100% equities make sense 24 months ago and are there folks out there who did it and would share thier thoughts? To Temple: My comments are very generic. I think too many people look at equities as a guaranteed long term winner. There have been decades where that has not been the case. Check out “Juggling Dynamite” for a view that says the markets will go sideways for up to 17 years a cycle. The fact is, we can all support our positions or anybodies position with the variety of books out there by some what reputable sources.
Being old fashioned, I gravitate to basics such as:
- pay down all debt as quickly as is reasonably possible
- broadly diversify across at least 5 asset classes
- keep expenses low
- its OK to have an advisor for their expertise in security selection but never give an advisor control over how your money is invested i.e. style, strategy, asset allocation
- if you want to take a flyer on a hunch (and we all do at some point) take the funds out of your core investment account and create a “satelite” account

Having said that, I also think others have just as strong a belief in their system, and while I might disagree I still wish everybody success with whatever they try. A last comment might be, did the leveraging to over 100% equities make sense 24 months ago and are there folks out there who did it and would share thier thoughts?

]]> By: TEMPLE http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176248 TEMPLE Sun, 28 Dec 2008 03:08:06 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176248 Hi 2op mike, just to be clear, in case you are referring to my posts regarding margin, when I am suggesting leverage, I am in no way saying that the market is about to go up and that a person should buy on margin right now. Leverage has nothing to do with market timing. In fact, it goes hand in hand with time in the market by making that time more productive. As such, I am talking more about using leverage long term, as part of asset allocation. Check out "Stocks for the Long Run" for one example of the use of margin over the long term - there is a chart in there with recommended equity exposures - it is interesting to note that for younger investors, the suggest allocation to stocks is greater than 100%. This is the type of situation I am referring to when it comes to the use of long term leverage. Of course, like I have been saying, I haven't done it yet, but I am thinking about it. Just my $0.02, TEMPLE Hi 2op mike, just to be clear, in case you are referring to my posts regarding margin, when I am suggesting leverage, I am in no way saying that the market is about to go up and that a person should buy on margin right now. Leverage has nothing to do with market timing. In fact, it goes hand in hand with time in the market by making that time more productive. As such, I am talking more about using leverage long term, as part of asset allocation. Check out “Stocks for the Long Run” for one example of the use of margin over the long term – there is a chart in there with recommended equity exposures – it is interesting to note that for younger investors, the suggest allocation to stocks is greater than 100%. This is the type of situation I am referring to when it comes to the use of long term leverage.

Of course, like I have been saying, I haven’t done it yet, but I am thinking about it.

Just my $0.02,

TEMPLE

]]> By: 2op mike http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-176247 2op mike Sun, 28 Dec 2008 02:21:48 +0000 http://www.canadiancapitalist.com/?p=1553#comment-176247 It is amazing that so many people manage not to predict the fall in stocks but think they can time the rise in stock markets. The fact remains that equities are risky and the current market is totally unpredictable. I have been hearing folks tell me to leverage up and jump in since last September. Equities will be a great investment over the next ten years in my opinion , but over the next year I refuse to believe anybody who tells me "now is the time". To leverage is just to double the consequences, good or bad. The good would be nice but not necessary; the bad would be a terrible blow to my hard earned nest egg. If I want to maximize leverage and profits I will just spend my dollar on a lottery ticket. I firmly believe its time in the market not market timing, leveraging, or jumping from one asset to another. Simple and low cost diversification is my unbreakable rule. It is amazing that so many people manage not to predict the fall in stocks but think they can time the rise in stock markets. The fact remains that equities are risky and the current market is totally unpredictable.

I have been hearing folks tell me to leverage up and jump in since last September. Equities will be a great investment over the next ten years in my opinion , but over the next year I refuse to believe anybody who tells me “now is the time”. To leverage is just to double the consequences, good or bad.

The good would be nice but not necessary; the bad would be a terrible blow to my hard earned nest egg. If I want to maximize leverage and profits I will just spend my dollar on a lottery ticket. I firmly believe its time in the market not market timing, leveraging, or jumping from one asset to another. Simple and low cost diversification is my unbreakable rule.

]]> By: TEMPLE http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-175983 TEMPLE Fri, 26 Dec 2008 16:49:25 +0000 http://www.canadiancapitalist.com/?p=1553#comment-175983 Interest on money borrowed to invest is also tax deductible, unlike money borrowed for a mortgage (unless you are using the Smith manoeuvre, or so I gather). Plus, while stocks have higher volatility, they also have higher returns than real estate. Hence the risk premium reduces the risk of borrowing to buy stocks over the long term. My point is that borrowing heavily to purchase an asset class that has mediocre returns is viewed as normal (and even safe) by most people, while borrowing to buy an asset class with superior returns is viewed as risky. I think that is wrong. The threat of mediocre returns is, in my opinion, more risky to money management goals than a portfolio with high volatility over the short term. Interesting idea with IGF. I'll check that out, thanks. TEMPLE Interest on money borrowed to invest is also tax deductible, unlike money borrowed for a mortgage (unless you are using the Smith manoeuvre, or so I gather). Plus, while stocks have higher volatility, they also have higher returns than real estate. Hence the risk premium reduces the risk of borrowing to buy stocks over the long term. My point is that borrowing heavily to purchase an asset class that has mediocre returns is viewed as normal (and even safe) by most people, while borrowing to buy an asset class with superior returns is viewed as risky. I think that is wrong. The threat of mediocre returns is, in my opinion, more risky to money management goals than a portfolio with high volatility over the short term.

Interesting idea with IGF. I’ll check that out, thanks.

TEMPLE

]]> By: EconStudent http://www.canadiancapitalist.com/the-amateur-investor-manifesto-part-3/#comment-175775 EconStudent Thu, 25 Dec 2008 18:10:45 +0000 http://www.canadiancapitalist.com/?p=1553#comment-175775 Stocks have high volatility than real estate. (I personally think that Vancouver real estate might fall 50% easily, but that is the exception than the norm.) Margin for stocks has higher interest rates than mortgages. The factors combined suggests that there is definitely higher risk to buying on margin than mortgages. I think the next "hot" sector would be global infrastructure. I am using IGF as the etf to play this sector. Maybe buying IGF on margin or using a line of credit is a good mid term idea? You must control your systematic risk when buying on margin. Stocks have high volatility than real estate. (I personally think that Vancouver real estate might fall 50% easily, but that is the exception than the norm.) Margin for stocks has higher interest rates than mortgages. The factors combined suggests that there is definitely higher risk to buying on margin than mortgages.

I think the next “hot” sector would be global infrastructure. I am using IGF as the etf to play this sector. Maybe buying IGF on margin or using a line of credit is a good mid term idea? You must control your systematic risk when buying on margin.

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