1. The Bank of Canada increased interest rates by 1/4 per cent this week. The Prime Rate to which the interest rate on variable-rate mortgages and lines of credit are tied to was also bumped up by a similar amount to 2.5%. The direction of interest rates is uncertain as the Bank noted that there is “considerable uncertainty” in its outlook.
  2. Fortune magazine profiled Rob Arnott, whose firm offers a number of “fundamental indexes”.
  3. The “flash crash” of May 6 revealed a major weakness of ETFs. Many ETFs traded momentarily at prices much lower than their NAV. This Wall Street Journal article offers five trading rules for ETF investors.
  4. In theory, rebalancing is an excellent idea. In practice, writes Larry MacDonald rebalancing has a huge problem.
  5. The recently renamed Money Smarts Blog offers suggestions on how to avoid RESP withdrawal penalties when a child doesn’t go to school.
  6. Michael James points out that people respond to garbage bag taxes but not in the way we might expect.
  7. Million Dollar Journey featured a guest post on the importance of paying attention to financial statements.
  8. Promod Sharma on the 13 questions to ask of an investment that sounds “too good to be true”.
  9. Tom Bradley of Steadyhand funds pans the new BMO ETFs for their narrow focus.
  10. Holy Potato takes a stab at estimating if BP is a value play after the beating the stock took in light of the Gulf of Mexico disaster.

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This article has 8 comments

  1. Thanks for the link CC. “Estimating” is probably being overly generous. It’s more like an order-of-magnitude since I get a huge “interesting enough to consider” range of about $30-40. With all the uncertainty (and the ethical queasiness factor) I want a big, big margin of safety, so I probably won’t look too hard until the lower end of the $30 range, but it looks like a number of vultures started sweeping in the last few days!

  2. The Wall Street Journal ETF article had useful information, but also seemed designed to scare people away from ETFs. I can see that it can make sense to use limit orders for protection, but I don’t see any major issues for someone who sleeps through the next set of crazy price swings.

  3. Thanks a lot for the link Ram!

  4. Pingback: This and That: Interest rates, Rob Arnott and more… | MoneySense

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  6. Michael James post was amusing, providing another example of the law of unintended consequences. In addition to his source, Freakonomics, I’d recommend Hazlitt’s book “Economics in One Lesson.”

  7. Also in this week’s news, Wal-Mart has been given final approval to offer retail banking services in Canada.

  8. The talking heads on TV attribute the Bank of Canada’s less committed view of the future to the fact that they got burned the last time they started to raise interest rates. They started to raise interest rates the last time and then was blind-sided by this latest economic storm that originated from outside our borders. They speculate that the current problems in Europe will become a contagion which will eventually spread to our shores…

    The link to Canada is derived from our contributions to the IMF / World Bank and therefore is complicit in giving away free cash to all of these irresponsible socialist countries whose governments are spending money like drunken sailors. All those government just get addicted to raising taxes and hiring more civil servants as a method to reduce their unemployment rates, but they don’t see the fact that it’s all spiraling out of control. At some point, everything will start to give and you won’t have any industries left to tax and your deficit will be totally out of control.