Investing Can Be Simple: Do What Works
Picking the best mutual fund is a difficult task, writes Peter Watson. You would hope for two things: The mutual fund would stay in business, and the fund will outperform its benchmark. In 2001 there were 2,900 US-based equity mutual funds. Twenty years later only 41 per cent of those funds were still in existence. […]
Tax Avoidance Hurts Us All
It is unfair that most Canadians pay their fair share of taxes while some of the rich and famous do not, writes Peter Watson. The world has just had another glimpse of how the privileged have avoided taxes. This round of tax avoidance has been named the Pandora Papers. The International Consortium of Investigative Journalists […]
Investing and Sports Both Include Competition
Let’s compare investing with sports. In both cases you want to win. It gets more complicated when you consider investing. For every stock trade there is a buyer and seller. The buyer wants a low price, the seller a high price. In stock trading terminology there is a bid and ask. Then the two parties […]
Understanding Inflation is Important to Investing Success
Should investors worry they may receive poor stock market returns if inflation rates rise? Historically, that has not been the case. Assume the stock market gained 10 per cent during a year that inflation was three per cent. The first three per cent of return is needed to account for inflation. An investor needs to […]
Investing – Measure Twice and Cut Once
An Investment Policy Statement helps reduce common mistakes investors make, writes Peter Watson. People make mistakes. That can be costly. There is a popular expression used when doing carpentry work. Measure twice and cut once. This is just another way of saying be careful not to make a mistake. Making a mistake with your investments […]
Successful Investing Requires a Long-Term Approach
Investors are advised to take a long-term approach to investing writes Peter Watson. Patience, patience, patience. That is a key to successful investing. Over the years I have heard many stories of people making investment decisions that ended up to be very damaging to their investment returns. In hindsight, their decision to buy or sell […]
Is It Time to Re-Balance Your Investment Portfolio?
Re-balancing your investment portfolio is needed when stock and bond values fluctuate, writes Peter Watson. Do you own too much stock? Recently, because of the rising stock values as opposed to bond values, your asset allocation between stocks and bonds has likely shifted. Let’s look at a simple example. The starting point of developing a […]
Will the US Election Affect Stock Values?
Fama/French Total US Market Research Index 1929 to 2020 shows the increasing value of US stocks. The political party of the President has not been a significant influence on stock market performance. Will the US election outcome affect the value of your US stocks? This is a question that investors are asking these days as […]
Speech From The Throne: Our Path Forward
The Speech from the Throne outlined the federal government’s plan to deal with COVID-19 and the financial support it intends to offer Canadians, writes Peter Watson. Last week, the Liberals gave Canadians the equivalent of a Business Plan. The Speech from the Throne provided a strategic direction for the government. The main objective is COVID-19 […]
Employment Insurance logic needs to be fixed
Employment Insurance logic has to align its goals with the recipient, writes Peter Watson. Today a story. But first a common business principal. Anytime you have a business relationship it is to your advantage that all parties are hoping for the same outcome. For example, if you work for a company a bonus could be […]