By 2 Cents on February 7th, 2011 | Category: Investing |  [T]hose who live by numbers can also perish by them and it is a terrifying thing to have an adding machine write an epitaph, either way.
~George J.W. Goodman, The Money Game
This is an excerpt of an article that was originally published yesterday on Seeking Alpha as premium content. You can read the entire article there.
PIMCO’s Call to Arms
Is it just me or did Bill Gross just pull the pin on the bond vigilante grenade and lob it in the general direction of the Federal Reserve? I haven’t read any analysis of his recent investment outlook (Devil’s Bargain) that pointed this out directly, so maybe I’m off-base here. I’ll go over what I read and what I understood it to mean. I’m sure someone will be more than happy to correct me if I’m wrong.
It seems to me [...]
Read on and enjoy … PIMCO’s Battle Call to Bond Vigilantes
By 2 Cents on January 7th, 2011 | Category: Planning |  Year’s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us.
~ Hal Borland
Update: This article was included in the Carnival of Financial Planning #170 posted at The Skilled Investor.
Objectively, there’s nothing magical about the beginning of a New Year. Midnight on January 1st is just another minute. But it does serve as a reminder to us that time marches on and that it’s a good idea to look at where we’ve been and where we might be going. We’ve been doing that this week, and we finish off today by zooming in on some more specific themes that will continue to evolve in 2011. Many of these themes will serve as hinges for the markets and the economy: a swing in one direction is bullish, while a move [...]
Read on and enjoy … 2011: What to Watch
By 2 Cents on November 3rd, 2010 | Category: Investing |  Everybody is a genius. But, if you judge a fish by its ability to climb a tree, it will spend its whole life believing that it is stupid.
~Albert Einstein
Update: This article was included in the Canadian Personal Finance & Investing Carnival #9 at Investing Thesis. Thanks!
Last week I wrote about what it would take to get me to invest in the markets again. My friend Jim Yih challenged me with a really great question in the comments section and I promised to answer it in full this week. I’ve heard the same question on occasion from others as well, so I’ll do my best to address it today.
I’m not currently invested in any stocks or bonds except for a small position in an inverse ETF. I won’t go over my rationale again, as I’ve covered it [...]
Read on and enjoy … What Is a Balanced Portfolio?
By 2 Cents on October 15th, 2010 | Category: Economics |  In my opinion, the crisis and the sharp recession of the past two years and the subsequent rescue packages around the globe did not provide the necessary catharsis that recessions need to bring to economies.
~ George Athanassakos
Update: This article was selected for the Best of Money Carnival #73 posted at Redeeming Riches. Thanks!
I chose a recent article from the Globe and Mail for today’s Friday Food for Thought. This one is by George Athanassakos, a professor of finance. He has been wondering about what the rise in both bonds and gold means for a couple of years now and provides some updated insights in this article: Who Is Right? Bond Bulls or Gold Bugs?
Usually a rising gold price indicates that investors see inflation coming. Rising bond prices, and the accompanying lower yields, usually portend slowing [...]
Read on and enjoy … Can Gold and Bonds Both Be Right?
By 2 Cents on October 7th, 2010 | Category: Investing |  This is just a short post to let you know that discount brokerage Questrade is now offering commission-free GIC and bond trades. This issue came up during a discussion in the comments section of my 2010 Financial Plan Update for the third quarter. I’ve updated the comments with some of this information, but I just thought I would pass it along in case anyone else is interested.
Holding our sons’ RESP money in cash has been an issue for us for a while. It’s earning zero in a brokerage account, but I hesitated to buy a GIC because my brokerage (Questrade) charged about $30 for each purchase. It hardly seemed worth it with interest rates so low. Further, we may need some of that money within 3 years, and those rates are even lower than the 5-year rates. Unlike the GICs we have in our [...]
Read on and enjoy … Questrade Offering Bonds and GICs with No Commission
By 2 Cents on October 1st, 2010 | Category: 20 Cents | Another month has passed all too quickly and it’s time to round up a few of my favourite articles from September. How quickly 2010 is slipping away! It seems like just yesterday I was writing up a few ideas on 2010 What Ifs for the New Year. Now it’s time to start thinking about what 2011 might hold!
I read a lot of great articles everyday. I can’t include all of them here, but I usually highlight them on Twitter. You can follow me @BalanceJunkie.
1. Canadian Finance Blog has recently launched Money Index, a website that aggregates all kinds of financial content for you. It’s a great resource for anyone interested in personal finance and investing. I’ve added a widget to get you there on the right sidebar. In case you’re interested, you can find Balance [...]
Read on and enjoy … 20 Cents from September 2010
By 2 Cents on September 29th, 2010 | Category: Investing |  Advice to children crossing the street: damn the lights. Watch the cars. The lights ain’t never killed nobody.
~Moms Mabley
As adults, we often remind our children to watch the traffic lights when crossing the street. That seems like good advice, but it won’t necessarily guarantee that our kids will be safe. If the drivers on the road don’t pay attention to the signals, if they make a mistake, or if the signals malfunction, crossing on a green light or “walk” signal will be of no help whatsoever. In the end, we need to actually look at the reality on the street. You don’t walk into oncoming traffic – no matter what the lights say.
If you’ve been reading Balance Junkie for a while, you’ve likely become accustomed to my bearish leaning on the markets and the economy. I have consistently remained cautious on both due to the huge [...]
Read on and enjoy … The End of Free Markets: A Great Reason to Buy Stocks
By 2 Cents on September 22nd, 2010 | Category: Investing | Life is the sum of all your choices.
~Albert Camus
Update: This article was included in the Carnival of Wealth #6 posted at Personal Dividends. Thanks!
Many have described the current economic and investing environment as uncertain and confusing. Indeed, individual investor sentiment as tracked by the AAII survey has flip-flopped from decidedly negative at the end of August to extremely positive during the latest survey. The Investor’s Intelligence survey, which tracks the sentiment of investment advisors, is not quite so bullish. Pragmatic Capitalism compared the two.
Many investors may be shifting their sentiment based on whether they believe inflation or deflation is the primary economic influence. As we discussed Monday, however, there is a distinct possibility that we may experience biflation for some time. That means commodities and services may experience inflation even as prices in real estate and [...]
Read on and enjoy … Investment Strategies for Biflation
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