Thursday, July 24, 2014

It's Still Not Rocket Science





Free eBook.Plain English advice for managing your investments.Very well written and basic concepts explained. Read the book here

Tuesday, July 22, 2014

Risk profiling : Art and Science ( Canadian Edition )

This excellent paper ( 20 pages )  explains risk profiling in detail and in plain language . It is prepared by a leading firm in the business,  Australia's Finametrica. A MUST read 

How are Investment decisions made? Professor Richard Deaves


This report presents the results of two surveys of investors designed to investigate how investment decisions are made in Canada. Issues of interest include the knowledge level of investors and the extent to which they are subject to behavioural biases; what information, whether mandated corporate disclosures or information provided by third parties, is used; and the openness of investors to electronic disclosure. Read the research paper 



Wednesday, July 16, 2014

Empirical analysis linking a person's risk tolerance and financial literacy to financial behaviourr

This is a very interesting piece of research  Read the paper 

Kenmar speaks out against Dealer reps as Executors

Kenmar responded to the IIROC request for Comments. Proposed Personal Financial Dealing amendments: Summary of nature and purpose of proposed
Rule  We do not support the proposal due to the potential conflicts of interest and potential for abuse. Read our Submission 

Monday, July 14, 2014

Study by Schulich professor reveals securities fraud still largely undetected in Canada and the U.K. | Schulich News & Events

Statistics reporting litigated cases of fraud on an exchange-by-exchange basis are not
readily available to investors. This paper introduces data from three countries with multiple
exchanges operating under different listing standards, – Canada, the United Kingdom and the
United States – to show litigated cases of fraud significantly vary by country, and the different
exchanges within the country. Comparisons are also made to Brazil, China and Germany to
assess out-of-sample inferences. The data examined suggest there are significant differences in
the nature of observed fraud across exchanges within the United States; by contrast, outside the
United States there appears to be a comparative lack of enforcement. The data also suggest
policy implications for the ways in which fraud should ideally be reported to improve investor
knowledge, market transparency and market quality.. Read the study 

Sunday, July 13, 2014

Regulatory arbitrage impairs investor protection

Investors face arbitrage issues they may not be aware of. Mutual fund dealers work under different rules than investment dealers ; banks and insurance companies have their own sets of rules . The investor protections you have varies greatly between jurisdictions . Read this ALERT to better understand the threats you face .

How much does the Financial Services Industry add to GDP ?

From a U.S. research study:


“The finance industry of 1900 was just as able as the finance industry of 2000 to produce bonds and stocks, and it was certainly doing it more cheaply. But the recent levels of trading activities are at least three times larger than at any time in previous history. Trading costs have decreased (Hasbrouck (2009)), but the costs of active fund management are large. French (2008) estimates that investors spend 0.67% of asset value trying (in vain, by definition) to beat the market.In the absence of evidence that increased trading led to either better prices or better risk sharing, we would have to conclude that the finance industry's share of GDP is about 2 percentage points higher than it needs to be and this would represent an annual misallocation of resources of about $280 billions for the U.S. alone.” Read Rethinking Finance

What is my risk tolerance?

Risk tolerance is a key consideration when making investment decisions. Try completing this risk tolerance questionnaire from Vanguard Note that other aspects of risk assessment include " Do I need to take any risk? and your Risk Capacity  , the ability to absorb losses without destroying your financial plan ( your financial health).

ALERT :Equity Crowdfunding

Canadain regulators are about to approve Equity Crowdfunding, allowing small investors to invest in startup companies.A whole new set of considerations and risks come into play. Read our ALERT