Canadian Dollars Blog

Well, January was certainly a volatile month. We ended 2007, at around 90K in networth. How did we do in January? RRSP: $33800 CASH: $22156 STOCKS: $36942.67 (outside RRSP) ------------------------------------------- TOTAL: $92898 What this means is that for the month of January, my networth actually increased 3%. My savings rate would have been even higher had it not been for the numerous dips that we experienced in the past few weeks. Overall, I am still relatively happy about the month despite the fact that many of my defensive stocks took minor nose dives. I stress that these are paper losses, as I have not sold any of my current holdings. I am in the market for the long term and I believe that those that are patient and who buy defensive stable stocks, will be rewarded wonderfully in the long run. The key thing is to stay disciplined and continue holding solid dividend paying stocks. Lets hope that the month of February is more prosperous. Thanks again for reading the Canad

I received the following in my mailbox today: Dear canadiandollars, We want to remind you of some changes that have taken place this week. Our 'Quiz Quest' promotion, where members could win daily or weekly PiggyPoints in our different Zones has now come to an end. The quizzes that are affected by this change are the Shop & Earn Quiz, Sports Quiz, Travel Quiz, Movie Quiz and the Quirky Quiz. Now that 'Quiz Quest' is over, we will no longer be awarding everyone PiggyPoints for getting the right answer. But don't worry; the quizzes aren't going away completely. You can still answer the quiz questions and be entered into a weekly draw to win 1,000 PiggyPoints for each quiz. This change was meant to take place as of Monday, January 28th, but due to a small problem with the website, you may have noticed over the weekend that you didn't get your PiggyPoints when you were supposed to. Please note that we will be crediting all members who completed quizzes over

I was looking across the board for techs and retail since I feel those are going to be hit the hardest if there is a recession to come and didn't see any hot deals yet. Pretty much most of them are priced with recession fears already built in, except maybe LULU, NILE and UA. LULU doesn't report until well after the Feds make a decision, so best to wait and see before spending (read: gambling) on LULU. UA, I noticed that they are sponsoring all the real world stars on Gauntlet 3 or 4 (whichever is current) with all UA apparel. Now, Gauntlet is a MTV show, so I can't imagine it being cheap (it's not a matter of we'll throw in free clothing). Gauntlet was already filmed a while ago, so that advertising spending will be reflected either in this earnings, the previous or next. I am starting to understand why the analysts were fearing UA advertising overspend. Anyhow, more research here is needed. AAPL, P/E at 28 ... I still think that's a steal, but again I'm not

There's a long lineup at my local library in the mornings at 9am. On weekends the lineup can extend to 30 or more people. Why are these people lining up? Are they eager to pick up some books? Are they there to see a famous author? Sadly, no. They're there for the free newspapers. You see when the doors finally open 90% of the people in line head straight for the free newspapers in the magazine section. It can appear like a madhouse in that area as people of all ages scramble in a somewhat uncivilized manner to get their newspapers. As quick as they arrive, 90% of them leave almost immediately too (within 5 minutes of entering). They want their free newspaper and nothing more. I think it has to do with the social interaction that some people (especially older members in line) enjoy. You see a lot of these people that go for free newspapers appear to be regulars and they know each other. To them it's a social thing. It allows them to talk with like minded other peo

Today McDonalds stock dropped 5% due to lackluster last quarter earnings. Sales in the USA were flat and as s result, the street punished the stock. Many view McDonalds as a defensive stock even in tough times. Why? I believe the rationale goes like this. People have to eat (even in tough times nonetheless). But here are two main reasons why I don't believe McDonalds is a truly defensive stock. 1. Few people purchase the higher margin healthy items. I haven't been to a McDonalds in ages, but last time I checked their healthy choice menus are considerably more expensive than their sandwich of the day or value menus. In tough times, people are less likely to be eating the higher priced healthy items? Why? It's a simple issue of cost. $5-6 for a salad? You thow in a drink and that 'value' meal at McDonalds is almost a $10 meal once you factor in taxes. People prefer the normal fries, pop and burger combination. They are cheaper and arguably taste better eve

Those that read this blog regularly, know that I am a very frugal person. When it comes to finding the best deal on a product, I usually go out of my way (within reason of course) to get the best price for an item. When I say within reason, I mean that I won't drive half way across the city just to save 50 cents on some granola bars. It's simply not worth the time or effort. If I am debating between purchasing two products with one costing slightly more but is better quality than the other, I will often pay the premium for the better quality. For example, if I go to a discount grocery chain to purchase red peppers, and all of them are mushy (ready to expire literally any hour from now) but they are dirt cheap, I will walk away and go to a better grocery store and pay more for better quality red peppers. Or, if you're not picky and don't need a specific vegetable, you could always buy an alternative vegetable that is in season and save the trip to the other store al

This was my first year attending the financial forum expo. Not sure what to expect, I managed to get down to the expo around 1pm. I gave my registration slip to the registration desk and they printed out a badge for me. I'm not a big fan of badges, so I mostly kept the badge in my bag except when asked by booths to scan it. As you can see by the above picture, the expo was a lot smaller than I had originally envisioned. I've been to many conferences and events at the Metro Convention Centre in the past and this was definitely one of the smaller events. I think in total there were less than 100 booths. The Canadian Banks with relatively strong wealth management solutions were present: BMO, TD Bank and Royal. Absent were CIBC and Scotia. Given the trouble that CIBC has been having with managing their own investments, it's probably wise of them to sit this one out before giving out advise to would be clients. Also present were a lot of brokerage houses like ETrade, ING

As per my earlier post about the Financial Forum Expo (Canada's Leading Forum for Savings, Investments, and Trading Stocks) , today is the final day of the forum. I've never attended a financial forum before, so I'm not sure what to expect. Admittedly, I am quite excited to attend as savings, investments and trading stocks are three things that I enjoy a lot. Yes - I still like the idea of trading stocks, despite the massive correction that we've experienced in the last couple of weeks. There are a few interesting keynote presentations that I hope to have a look at. I'm guessing that there will be a lot of freebies (pens, pads, magnets, newspapers) with lots of booths trying to pitch their products. If anyone has been to any of these Financial Forum Expos in the past, please leave me a comment. I'd love to hear about what to expect. On Sunday, I'll do a full review of the expo and assess whether it's truly worth attending or not in the future.

Earlier this month, I wrote a post about the benefits of obtaining one's credit rating . As a user of bzzagent, I was recently invited to take advantage of a Capital One Credit Card. Initially, I was skeptical about the promotion. When I read that if a bzzagent is approved for a card, they will receive a $75 credit on their credit card. I quickly debated the pros and cons. Did I really want another credit card for a mere $75 gain? I thought about it and decided to apply for the card early last week. Just today I received a piece of mail from Capital One. Unfortunately, the letter seemed kind of thin. It definitely didn't have a credit card inside. No worries, I said to myself -- maybe they just need more information before they could approve my credit card. Instead, what I read shocked me. In the letter they told me that they were unable to grant me credit at this time because of my credit standing. I was shocked. This was the first time I had ever been turned down

What do you consider a good day in the markets? When a stock rallies up 30%? How about 5% for the day? Not bad for a single day right? What if you found a stock that rose 10 billion percent in a day? Yes BILLION. Sounds crazy to be true right? Well anyway, I was looking at Google's top winners and top losers for the day and by accident, I stumbled across this top winner (click the image to enlarge) To put things in perspective, if you purchased this share yesterday, you'd have 8 billion in your pocket today. Obviously this is a typo on Google's error. It looks like they caught it pretty quickly. In less than 10 minutes, the problem was totally fixed and the stock showed the correct price. In any case, I'm glad that I was able to grab a screen capture of the error! :)

Well folks the party is officially canceled at Apple. Head for your coat. The door to the left is the exit. I was hoping that AAPL would pop a bit after earnings, but it looks like the drop came much earlier than I had originally thought. In after hours trading the stock is down 17+ points. Why? They guided slightly less than what the street was expecting. With Yahoo reporting today that they are laying off a sizeable amount of their work force, it makes you wonder - is the party over in general?

With the subprime worries and realities growing out of control, it's not surprising to see a lot of stable Financial and Insurance companies taking massive hits across the board. Just last week, Citigroup wrote off a colossal 18.1 billion amid the subprime fallout. Is the worst already out there? Will things get worse? The short to medium term outlook is muddy at best. The economy and the markets have taken some massive hits in the past week with recession concerns. In fact, some analysts even claim that we are in the midst of a recession right now. Will they do better? With all this negative buzz out there, does it make sense to try to understand a stock like Citigroup? Let's look at some fundamentals. Their P/E is at an almost all time low of just 7.1. Their price to book ratio is 1.11. At these prices, I'm sure a lot of value investors are salivating. But hold on, with all the turmoil due to sub-prime difficulties, are things going to get better or do you thin

First off, I think Apple is a great company. It's been a phenomenal turnaround story but in the short term, I think Apple will be in for a very bumpy ride. I will attempt to explain why. As you might have noticed, Apple got punished this past tuesday (-5.45%) and especially after-hours (-3.57%) despite all the product announcements from Steve Job's keynote at MacWorld. In past MacWorld events, it would generate a nice intraday pop for the Apple stock. Read on and you'll find out why this didn't happen this time around. First a little primer. A long time ago, I dated a girl for a short time who said and did some of the dumbest things you could imagine (not quite the calibre of Britney Spears, Paris Hilton or Lindsay Lohan, but still up there). She had this "what can you do for me right now (or in the future)" way about her which I think is pretty stupid socially, but when you're looking at stocks,strangely enough her way of thinking has great merit. Wi

With the average person spending more than they make, it's important to identify which areas of your spending are needs vs. wants. Narrowing down all the wants that you're spending your money on may reduce your spending, but believe it or not, there is still a way of cutting back. You can look at your needs, and look at ways to specifically cut back (without changing your lifestyle) Here's a few quick tips. Heating is a necessity especially in those cold months when you can't just leave your pipes unheated. Doing so may cause your pipes to freeze which will cost you more money in repairs in the long run. So how does one save on heating (which is a need)? Try lowering your thermostat 3 degrees in the winter. Put on an extra sweat shirt or sweater to give yourself the much needed warmth. With the cold winter months here, we opt to eat out much less than usual. Instead, we invest more time in doing grocery shopping so that we can make wholesome meals at home to ea

A friend of mine who recently started investing called me up the other day and asked for advice. I immediately reminded him that I'm not a financial advisor nor am I a financial planner but could provide him with advice on what I would do if I were in his situation. To summarize the call, my friend was basically panicking the whole time. He had been watching cbc news the last 3 days with the TSX and DOW dipping every single day. With staggering losses across the board, you'd be hard pressed to find a balanced portfolio that wasn't affected. He asked me bluntly. Is now a good time to sell? I don't want to lose any more money, he said. As I knew about his situation from before (he's specifically saving for retirement), I told him to hang in there and be disciplined. In times like this one of the most important things to remember is too stay disciplined and keep a long term strategy (provided you are investing for the long run) and understand that there are bli

Here's a pretty decent article on what's going on with the market . Unlike this post, the article is a little on the medium-long side, but very insightful. The sell-off came as Federal Reserve Chairman Ben Bernanke called on Congress to pass, as soon as possible, an economic stimulus package that would include a tax rebate and possible tax breaks for new investments. The White House indicated it supported a stimulus package as well, but one worry was that disputes over whether to make the 2001 and 2003 tax cuts permanent could derail the process. I encourage everyone to give it a good read. Thanks again for reading the Canadian Dollars Blog.

A payment that is often overlooked by many that have mortgages is the sneaky little bugger known as the mortgage life insurance premium. If you were pressured into signing up for this emotionally, as most people are, don't feel as though you are alone. The way mortgage life insurance works is it automatically pays off your mortgage in the event that you die. While on the surface this sounds good for your dependents, probing deeper you realize that this insurance can often cost upwards of $50 a month per 100K of mortgage principle. If you do the math, you will find out very quickly that after 15 years, you've paid regular monthly insurance premiums and your mortgage may have been reduced to 25,000. While the principle has obviously dropped, the monthly premium has not. What does this mean? Well, when and if you die, it will generate a relatively small payout to your dependents or heirs. The other sad part is that you've lost the opportunity to invest that money. So wha

Coupons are everywhere these days. You get them in your mailbox. You get them in your newspapers. You can even get them on the Internet. With all the choices available to us, how do we maximize our savings with coupons? In today's post, I will discuss some great strategies for helping you to lower your food bill through coupons. Tip #1: Organize your coupons If you're like me and get tons of coupons from multiple sources, you really have to organize them thoroughly. Some might laugh and say why are you organizing coupons for $0.50 off? What's the point? Here's the point. Each individual coupon may not save much in the grand scheme of things, but think about all the coupons you use in your lifetime. If you use tons of them, you can get some serious cost savings. As soon as coupons come in, I organize them as such: If it's a coupon I can definitely use, I will keep it. If it's a coupon I don't need (eg. cat food) I usually toss it. This is what

I have a strong belief that Microsoft (MSFT) could acquire Facebook. This might seem like a crazy idea, but please hear me out. Pattern: Large company makes a significant investment in another company that is potentially distressed, later to acquire that other company entirely. As we saw today, Bank of American (BAC) is set to acquire Countrywide Financial (CFC) and I believe we'll see this with Microsoft (MSFT) acquiring Facebook. Here's why this fits our pattern AND makes sense for Microsoft: #1: For one, they are trying to compete with Google, not just on the search frontier, but now the entire Web frontier. One of the two (sorry Yahoo (YHOO), sorry Al Gore) wants to "own" or be the web and to do that they a majority of the user base (to sell to) and they really need to own the web experience (to keep them coming back). #2: It's no secret that Microsoft is making serious efforts to compete with Google (GOOG). They've already showed their hand, and opened

For those of you that drive a lot in winter, there are a lot of myths and misconceptions out there about what the best configuration for winter tires is. Some people with front wheel drive cars claim that one should optimize their winter driving by only replacing the front two wheels with winter tires. People with rear wheel drive cars have also suggested only replacing the rear two wheels. Well, you know what? Both these theories are wrong. While the idea of only replacing two of the four tires may sound desirable in terms of storage and saving money, it is a bad idea in practice. This is because if you use two dissimilar types of tires on your vehicle, you'll have a vehicle that has a "split" personality. One end of the vehicle won't react and perform the same as the other in the dry, wet, slush and snow conditions you'll encounter before the end of winter. The biggest danger comes in emergency situations. With different tire configurations, your vehicle wi

One of my readers, Josh recently sent me an email asking for my advice. Here's what he wrote to me: I'm a self-employed male in my mid 30's, no kids and no debts. RSP is already maxed out. Currently, my major assets are as follows: House is worth $330K RSP portfolio is $65K Non-RSP portfolio is $40K Savings is 35K Total of RSP and Non-RSP portfolio is $105K, which is composed of 25% bonds, 25% Cnd. Index, 25% S&P 500 Index and 25% International Index. I gross around $70K a year from my job. However, I don't see myself working in the near future since it is really a dead end job. I don't have a company pension so I'm trying to create a nest egg on my own. What I like is to have some sort of investment that will provide a steady stream of income once I stop working one day. $20k a year would be the minimum. Any ideas? So what Josh is looking for is a minimum of 20K a year. For those that are totally risk adverse, I would say one would need to save about 5

With many people struggling with credit card debt issues, prepaid credit cards are rising in popularity. Although physically very similar to a credit card, there are some significant differences that may make them useful for certain groups of customers. First off, prepaid credit cards do not actually offer any sort of loan or credit facility. How these cards work is that the card must first be loaded up with money before it can be used. The traditional ways of filling up a card are usually through bank transfer, debit machine, internet or telephone. When the money is added to the card, one is free to spend up to that amount on the credit card. You might be asking yourself, if I have to go through the hassle of loading up a card by filling it up with my own money, what, if any benefit is there in doing this? Well, one of the main advantages is that it allows one to use a credit card in transactions where credit cards cannot be used. An immediate example I can think of is e-commerce

I'm paying about $30 a month for my gym membership. I had thought about canceling it and just using the mini gym in my apartment more, but decided against it because I love the gym that I go to and everything that it offers. While some people may say that some gyms are big type scammers, I disagree. They are only scammers in the sense that they make or encourage you to sign up for a year long contract. Unfortunately most people that join in January stop going after February. These are the people that usually complain that the gym is scam. To everyone out there that is thinking about signing up for the gym, make sure you read the fine print. In addition, make sure that you are only signing up for the plan that you need. If you don't plan on using the personal training sessions, don't pay extra for them. Alternatively, if you don't plan on using the tanning machine, why pay extra for that? Make sure you know all your options. Most gyms will give you a week o

This past week has been a real test for investors. Particularly those that are long term investors. With the markets showing deep red the last couple of days, it's easy to lose sight of your long term goals. Before hitting the bail button and selling all your stocks and moving to money markets, one should carefully assess what their objectives are. If you are a short term investor, you should be well aware of the risk of placing money in the markets. If capital preservation is the main concern, a money market fund or fixed income would be the best choice at the expense of growth. Those with a longer term investing horizon should still think long term and should avoid feeling down. Everything will be fine in the long term. Just hang in there especially if you have solid stable blue chips in your portfolio. If your portfolio is filled with hot stock tips and penny stocks, I can't offer much advice except to say - be prepared to weather the extreme highs and the extreme low

It's the beginning of the new year and what better way than starting off the new year than to fulfill one of my new year's obligations immediately. I just filled out my credit report request and have mailed it off. Today I will talk about the benefits of obtaining one's credit score/report. There are two major credit bureaus that will do this for you in Canada: TransUnion and Equifax. Provided that you fill out the correct form and provide two pieces of identification (the details are specified on their websites), you can obtain your credit report for free. Not that if you wish to receive your credit report online, there is a nominal fee for this service. If you're like me, and love a good deal, just submit your request through snail mail. It'll only cost you a postage stamp. So what is a credit score and why does it matter? Credit reports are important because of what's listed. If your credit score is really low, this could be the result of an unclean cre

If you're like me and live in a big metropolitan city, you spend a lot of time commuting to and from work. On most days I can be spotted either reading a book or listening to my ipod. Depending on my mood, when I'm listening to my ipod I'm either listening to music or podcasts. In today's post, I will discuss some of my favourite financial podcasts (in no particular order): 1. The Economist A brief 10-15 minutes in length and updated weekly, I enjoy this podcast because it is very direct and is a no-nonsense summary of the week's economic news. The global scope of the topics they discuss is very refreshing when compared with my reading my local newspaper. I used to be a subscriber to the Economist, but discontinued my subscription due to not having enough time to read it from cover to cover. However, whenever I am at the library, I always pick up the latest copy to read because it is that good. 2. The Disciplined Investor Hosted by Andrew Horowitz, I really

Just last week, I blogged about Intel hitting $30 . Today Bank of America downgraded Intel. The stock dropped 6%. "Bank of America analyst Sumit Dhanda said in a note to investors that his previous bullish outlook on the company was predicated on sales growth, margin improvement and an attractive share valuation. But his analysis now suggests that these factors have limited power in the near term, he said." Here's why I think the move is ridiculous. While others are out there panicking, I decided to take advantage of this buying opportunity. As I stated in my previous posting , Intel has a huge competitive advantage over AMD, who is crippled with debt. In my opinion, the downgrade is strictly a move to lower the price of the shares so that they can accumulate more. I strongly believe that technology still has legs and should continue to steam ahead in the short term. As a result of this, I picked up some more shares of Intel (INTC) this morning as this was an extrem

Well, it's the beginning of another year and it's time once again to think of and write about some New Year's resolutions. In the past, I've told a lot of my close friends my resolutions, but never bothered to write them down. As a result, half way through the year, I tend to forget some of them and just carry on with my day to day life. This year things will be different because I am planning on writing all my resolutions down in my blog so that I can come back and review the goals later. Without further ado, here are some of my top financial goals of this coming year. 1. Grow my Overall Net Worth by 25%. This should definitely be achievable if I continue to live frugally and stay focused on my long term goals. Based on the my year end net worth , I am hoping to save approximately 25K to reach this goal. I plan on doing at least one trip in 2008, so I have been saving money for it. Despite this and the fact that a recession might be looming, I am still very focu

If you're like anything like me, you love a good freebie. When an opportunity arises for one to take advantage of a freebie online, I always think about the ethical implications of requesting a sample. A lot of retailers are luring people by offering freebies to not only drive traffic to their website but to also convert the traffic into potential customers. As a result, smaller companies will usually have a finite number of free items to give out. With all the freebies available on the Internet, it is the responsibility of the customer to do so wisely and ethically. The following are a list of ethics that I personally follow. 1. Only Order what You Need This is pretty much common sense. Only order things you genuinely have a need for or use. If you're lactose intolerant, there's no need for you to request a free sample of 2% milk. Alternatively if you don't own a Blu-ray player, there's absolutely no reason for you to request that Blu-ray demo! 2. Read the F