Diversified Investment Holdings

You will often hear traders use the term trading range, when referring to either an entry or exit point of when to buy or sell a stock. What they mean by the trading range is the high and low price over a certain time period. The bottom end of the range is a support price, and when traders would want to purchase securities. The upper end of the range is a resistance level and where traders would want to sell securities. A strategy that follows this technique of trading is

Put options are a contract which gives the buyer the right but not the obligation to sell a specified amount of an underlying security within a time range at a specific price. Conversely if you are the seller or writer of a put option you have the obligation to buy the security at a predetermined price within that time range from the buyer. So, for example let’s say shares of ABC Corp are currently trading for $100 per share. Investor A is bearish on ABC Corp., so they buy

Making investment decisions can be confusing amid constant conflicting information from news headlines. Often making decisions based on news headlines can actually result in poor portfolio performance. There are several reasons for this. Firstly, news media is successful based on their ability to get viewership or readership. This makes them prone to exaggerate or sensationalize news stories either intentionally or unintentionally. Fear in media sells and there are severa

The purpose of diversification is to minimize correlation risk within your investment portfolio. In a simplified example say you had two Investments A and B. If investment A went down 10% in a given year you don’t want investment B to be correlated to investment A such that it also goes down proportionally. Ideally you would want Investment B to be negatively correlated or at least correlated to a lesser degree such it doesn’t go down on a 1:1 ratio. This should firstly b

Investing in Real Estate in a Competitive Market can be challenging. It is common to have multiple offers on most appropriately priced properties, and it becomes increasingly important to craft your offers in a way they stand out from the rest. Off course offering more money is the easiest solution, but there are other things you can do to improve your chances of purchasing that next investment property. Write a personalized hand written letter to the seller. This helps br

Conventional wisdom is that diversification in a portfolio is a good thing, and is a common mantra according to modern portfolio theory. Financial advisors will often preach the benefits of having a “well diversified portfolio”. That said many famous investors such as Warren Buffet and George Soros have created wealth through concentrated strategies not diversified strategies, and their approach has been supported by several empirical studies. According to Buffet: “Diversi

Fixed income investments can be a great way to provide a floor for you investment portfolio and to preserve your capital. One popular way of investing in fixed income is through the bond market. The size of the bond market in Canada as of December 2014 was $2.4 trillion (face value) and to give some perspective the size of the TSX at that time was $2.511 trillion (market cap). Though the bond market is very substantial it doesn’t get nearly as much press as the stock marke

Value investing is the concept of purchasing investments at a price that is below their intrinsic value. Modern analysis involves projecting free cash flow, discounting cash flows by the risk free rate to determine the value of the company, and then dividing the value of the company by the number of outstanding shares to determine what the price of a share “should be”. Ideally the price paid for the stock should be less than this with a margin of safety to allow for estimat

All Registered Retirement Savings Plans (RRSP) are required to be converted into Registered Retirement Income Funds (RRIF) by December 31st of the year in which you turn 71. Some financial institutions will do the conversion automatically, as RRIF accounts can hold the same investments as an RRSP account. However, you do have the option to convert to an RRIF any time before then. The difference between an RRSP and RRIF is that an RRSP allows you to make contributions as l

The decision on whether to invest in RRSPs or TFSAs can be a tricky proposition. Most people don’t have enough money to maximize both contributions. RRSPs allow you to deduct your contribution from your income, which earns a tax refund. The entire amount including interest income is taxable when you take the amount out. Meanwhile the TFSA is the reverse. There are no tax deductions when you make a contribution, but you don’t pay any taxes on interest income when you take

Your self-dialogue can have a direct impact on your perception of the world. When you have a “set-back” in your life do you see the “set-back” as a problem, or as an opportunity for improvement? Do you take “bad news” as “bad news”, or do you take the “bad news” as a “challenge” to overcome? The difference between successful people versus unsuccessful people is often the words they select to describe such situations. The key is to select positive words that inspire you ra

The process of finding an Investment Realtor can be challenging. There is no such thing as the perfect Realtor like there is no such thing as the perfect spouse! While looking you may actually find there are some Realtors who are unwilling to work with investors entirely. This may not be completely rational, but there are some underhanded investors who waste the time of Realtors. If you get this response just dust yourself off and keep your Realtor search going. Below is

Maximize your chance of Real Estate success by making your investment process boring and predictable. If you’re looking for something exciting go skydiving or take a trip to a foreign country. Why do I suggest this? When you know what you’re doing there isn’t that sense of excitement that comes from jumping into the unknown. When using a proven investment system you will have predictable results and that will inevitably result in boredom. If your investing is filled with

Many investors say the key attribute of a successful investor is to make decisions based on the facts and not emotions. There is definitely some truth to this, but this does not mean to ignore your intuition completely. If used correctly your intuition can provide important clues to assist you in the due diligence process of real estate investment. A few years back when I was less experienced, I purchased a distressed property that the previous owner was trying to rehab ove

One of the main benefits of real estate investing over stock market investing is control. For example when you purchase a stock you or your financial adviser have no control over the performance of the company. If the performance of the company deteriorates and the stock price goes down the only decision available to the average investor is to either sell or hold their shares. Meanwhile, if you have an under-performing real estate investment control allows to take actions s

Whether you are looking to tighten your purse strings or have a financial make over mobile applications can be helpful in the process of household budgeting and saving money. Ultimately the benefit you receive from mobile applications will only be as much as much as you use them consistently. Below are my top 3 personal finance applications to set and maintain a household budget and save on your household expenditures: Mint Mint is a free money management application made b