Premium Artisan Automated Investing Profiles™

This seems to be the only thing that has not been used to try to get folks interested in the alleged new FinTech world.

Artisan Weaving Investments

Beautiful Artisan Investing Looms
Image courtesy of worradmu at

What do I mean by FinTech? Well you might ask, let’s go with Wikipedia’s view:

Financial technology, also known as FinTech, is an economic industry composed of companies that use technology to make financial services more efficient. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software.

Artisan Investing™ would imply: Individual or customized (and naturally highly researched), investing plans and everyone likes to feel like they are not just one of the unwashed masses. Your investing would be taken care of in an Artisan way, using only the best techniques, methodologies and investing concepts. The ETFs used in your profile would only be of the highest quality, and only invest in companies that create the highest quality products.

However, if we view the term Artisan as meaning:

a worker in a skilled trade, especially one that involves making things by hand.

then the concept of Artisan Investing™ is completely ludicrous (of course), since FinTech implies automated or “… not made by hand”. FinTech implies using technology to do things well, since Artisan implies using “tried and true old school methodologies”.

Artisan does seem to be getting tacked onto all sorts of products and services, why not “new” financial technologies, as well?


Financial Web Page Usefulness

After checking out yet another Mutual Fund web site I ended up putting together this interesting Ven Diagram of the information I was able to discern from the site:

Mutual Fund Venn Diagram

So Many Terms So Little Information

I realize most web sites are rarely full of useful information (some might say the same of this site), but a little more information might be helpful.

{ 1 comment }

Ideal Portfolios?

That is one of the questions that I have been asked by many folks, and as most of my regular readers know, I am not that sophisticated when it comes to investing, so I borrow ideas from folks who seem smarter than me.

The first sample portfolio I started with and the one I base a few of my Investment Vehicles on, is the Sleepy Mini-Portfolio which I first read about on the Canadian Capitalist. This is an easy enough portfolio to start with, but you need to open either an account with TD/Waterhouse or an E-Series Mutual Fund account with TD.  The basis of this is the following TD Mutual Funds

TDB909 – TD Canadian Bond Index (e-Series)
TDB900 – TD Canadian Index (e-Series)
TDB902 – TD US Index (e-Series)
TDB911 – TD International Index (e-Series)

As the CC mentions in his article:

The initial asset allocation will be quite simple: 20% bonds, 20% Canadian equities, 30% US equities, 30% International equities.

Now that is a very simple portfolio for those who really don’t know much, but want to start learning about investing. Do you have to follow those breakdowns ? Of course not but if you don’t know your elbow from a hole in the ground this is a nice ground floor Couch Potato Like passive investment portfolio. Re-balance in some fashion every year and that’s it. Also note that the CC has moved on to BMO Investorline as his investment house.

Think that is sissy kids’ stuff, you could look at the CC’s Sleepy Portfolio which has more aspects to it, and does rely on having a real trading account. It uses Exchange Tradeable Funds (ETF’s) but follows the same kind of Couch Potato concepts.

Other folks have their ideas too, friend of this site Larry MacDonald has his own One Minute Portfolio which he boasts only needs about a minute’s attention every year (fighting words in the investing world). What is in this Miracle Portfolio? To quote Mr. MacDonald (noted former Economist and current Financial Writer):

Consisting of just two exchange-traded funds (ETFs), one tracking stocks and the other tracking bonds, the portfolio requires little time or effort.

Sounds simple enough that even I might understand it!

What’s that you said, these portfolios are not Macho enough for you? Go visit our old friend Mr. Dan Bortolotti at the Canadian Couch Potato.  He has remodeled many of his Couch Potato Portfolios for 2014, and has a plethora of different choices:

  • Global Couch Potato
  • Complete Couch Potato
  • Or the Ultra-Macho Uber-Tuber Portfolio

Really all you need to do if you want to start DIY investing is look at a few of the better writers out there, who specialize in Fund Analysis and Portfolio discussions and start with one of their examples, you would be surprised how much you will learn just from doing this. You can even “Ask the Spud” a question if you wish (Dan will answer, most of the time).

Yes, you can go to a financial analyst if you wish, but you might end up with a similar portfolio, or worse a bunch of funds with much higher MERs, in areas that you don’t understand.



Trader Terminator

The lovers of Science Fiction already know the perils of allowing machines to do too much in our world (i.e. Skynet and the Terminator series), yet I continue to hear more and more cool ways that automated systems are making our lives better (and will improve overall lifestyle).

Currently many trading systems have automated heuristics out there to deal with situations on the Equities markets. A lot of these are simple rules like, if BCM (a strong equity) goes below $12/share sell or if BCM trends upwards buy (as bad examples), however, thanks to very smart programmers, these rules and systems have become much more complex, and with complexity comes opportunities. I have worked on early “artificial intelligence” systems, but the heuristics these days are quite extraordinary (in my simple understanding of them).

Eniac was at the time the greatest piece of technology, now my digital watch has more computing power than this marvel of technology. Technology always evolves.

The interesting question is, even with really advanced “thinking” systems, will it make things better for me (the individual investor), us (the collective that holds a mutual fund) or we (all investors in general)?

Say I design an automated trading system (call it the XROB2013) which I created using as many cool and exciting algorithms and ideas that I read about and learned from various traders out there (there are very few “secrets” as we have learned form Mr. Snowden). The XROB2013 could be quite an exciting and new way of doing things, if (as the designer) I chose the right algorithms and heuristics to go with, and it would be easy to test it against all the old data from the market to see how our trading system might do (in a test environment).

I launch my XROB2013 Mutual Fund, which uses these algorithms to buy and sell the best stocks to hold (at the time) and for argument sake, we’ll say the axis we worry about is growth (i.e. we’ll ignore dividends and such). If my XROB2013 is successful, suddenly I have many folks wanting to buy shares in the Mutual Fund and the Fund Maxes out and might be declared “best in show” for a while (is best in show a real investing fund award?).

What happens next? Looking into my technology history books, there is no such thing as a secret and since Patent’ing a trading heuristic isn’t likely, there will be “rip offs” of XROB2013 that might appear (that maybe have lower MERs or such, to make them more attractive (it would be cheaper because there was no R&D, it was simply a rip off)). Suddenly XROB2013 loses its lustre for a lot of investors, and worse still the algorithms now are working against each other creating an orthogonal change in trading ideas, so the XROB2013 rules would need to be changed or there might be further erosion of the value of the Mutual Fund.

All of this to say, that no matter how great an automated trading/investing system anyone puts together, the market ends up finding ways to lower the impact of any new idea in a very short time and going back to a relative level of stasis. Don’t be enticed by claims of “the next big thing” in market trading, unless you are sure it’s going to work.

{ 1 comment }

If You Have Credit Card Debt Don’t Invest

This is one of the great “to the point” statements about investing in a Business Insider’s article that Michael James sent me.

The clarity of that one statement is astonishing to me, it cuts through all the garbage and gets to the actual point. So the real quote is #35 on the list:

“If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.”

Read more if you wish.

Is that just so stunningly clear that it can’t be ignored? It is for me.

I can hear the nay sayers with their commentaries already:

  • No Credit Card charges 30% right now, most only charge 20% or less. So what? That just means you are earning a little less when you invest in paying the debt down (and it should pay down faster).
  • The Stock Market is paying over 8% a year, you’d be a fool not to take advantage of it. Pardon my arithmetic, but 8%, 10% or even 18% is not 20%, now is it?
  • If you don’t put money away now, it won’t have time to grow. Conversely if you pay down debt now, it won’t have time to grow, now will it?
  • You always need an emergency fund, why not invest it? Wow, that’s astounding, an Emergency fund is to be there if you need it, investing it is just not a good idea (IMHO). Why not “invest” that money in having no debt, so when the Emergency happens, you aren’t worrying about paying off debt at the same time?

Why don’t investment professionals espouse paying down debt first? I have heard some actually do (or at least send people away), but honestly there is no money for an investment professional telling anyone to pay down debt (unless they get paid by the visit).

I await the comments of how I am being simple (or worse obtuse), have at it commenters.


%d bloggers like this: