Canadian Personal Finance Blog

In a week where I discussed my investing tactics, balance is the important topic to remember. All things need balance, and ensuring your investments and retirement strategies are in good balance is very important, too much of anything can be a bad thing. 

Random Financial Thoughts

Of the financial bloggers I read, these articles caught my attention:

• The Canadian Capitalist did an update on his Sleepy Mini Portfolio (I base one of my RRSP’s on this set of index funds). Remember the importance of re-balancing in this type of strategy.
• One Caveman is going into semi-retirement (a notion I toy with every month or so these days as well), in Thank You For Joining Me On My Journey.
• Canadian Financial DIY is asking whether Claymore is Being Sneaky about Showing Fees on it’s ETFS? Sounds sneaky to me. 
• Michael James comments on the upcoming Entrust Shareholders Vote on a Takeover where he has a stake in the outcome. 
• Larry MacDonald is Praying for the Vanguard takeover of iShares, which hopefully will bring lower MERs.
• Preet at Where Does All My Money Go, says the Countdown Begins, but this is for a new venture for him on the W Channel, stay tuned!
• Four Pillars wrote about Creating a Fake Reputation and his experience in these areas. Go with your gut, and if it feels bad, it’s bad, is not bad advice.

Looks to be a nice weekend here in Ottawa, get out and enjoy it!

I have written before about how I am a passive-leaning (if not down right lazy) investor.

Yesterday I checked over my investment accounts to see what had transpired in the past month or so, and I saw that some of the few stocks I own in one or two of my investment vehicles had paid dividends, however, I had not signed up for the Dividend ReInvestment Plan (DRIP) for these stocks so I received the dividends in cash.

Getting cash is OK, but I prefer to have dividends reinvested, since it causes me to buy more of the stocks I own for free (i.e. no service or trading charge). The DRIP program I have is with my investment firm (TD Waterhouse) and not the actual DRIP set up by the Company who’s stock I own (there is a big difference, I have been told). The DRIP with TD Waterhouse is simply them taking the dividend and buying as many whole shares of that stock, without charging me a transaction fee.

An example would be if I had 500 shares of Magic Bank and they declared a dividend of 61 cents a share for the period, I would then receive $305 cash into my account, however, since Magic Bank’s share price on the day of declaration was $65, the TD DRIP would have purchased 4 shares for me (at $260) and left me $45 cash, and $0 transaction fee. 

I do not know how actual DRIPs work with specific companies, I believe they allow for the purchase of partial shares (anyone care to comment on this, please feel free).

This methodology allows for more laziness in investing on my part, which is what I strive for. I called TD Waterhouse and had DRIPs turned on all investing accounts that I have, for all stocks that are supported, so now any time dividends are declared, more stock will roll into my account instead of more cash.

When I call myself Passive, I do not hold many Stocks directly, I mostly hold them through index funds, thus the passive-leaning label, but I do own a few stocks directly.

Tomorrow, time to balance!

After watching the Jon Stewart vs. Jim Cramer “Smackdown”, I am amused to declare Mr. Stewart the victor in this “Media Showdown” but it is even funnier to think that this makes Mr. Stewart the hardest hitting interviewer on Television.

Let that one sink in, a man who is a Comedic Actor/Comedian is the toughest interviewer on Television right now. This is a scathing and amusing indictment of the state of “Television News” in it’s current incantation.

When I grew up if we wanted to find out about the U.S.A. we watched the CBS Evening news with Walter Cronkite and from that thome you felt confident you were getting the news and it had a high level of integrity. Fast forward to today where most people in the U.S. get their news from the Daily Show and the Colbert Report? Something is not quite right here.

The Financial Smackdown

The Daily Show played up this showdown well, and made it the main part of the show on Thursday, and it did not disappoint.

Mr. Cramer came out in his traditional rolled up sleeves and open collar, but looked very contrite from the get go. Mr. Cramer continued to hide behind the statement, we (CNBC) didn’t do anything to cause regulators to get upset with us, but Stewart shot back with the nastiest hit of the night:

“…Now why when you talk about the regulators, why not the financial news network? That is the whole point of this? CNBC could be an incredibly powerful tool of illumination for people that believe that there are two markets: One that has been sold to us as long term. Put your money in 401ks. Put your money in pensions and just leave it there. Don’t worry about it. It’s all doing fine. Then, there’s this other market; this real market that is occurring in the back room. Where giant piles of money are going in and out and people are trading them and it’s transactional and it’s fast. But it’s dangerous, it’s ethically dubious and it hurts that long term market. So what it feels like to us—and I’m talking purely as a layman—it feels like we are capitalizing your adventure by our pension and our hard earned money. And that it is a game that you know. That you know is going on. But that you go on television as a financial network and pretend isn’t happening…”

This kind of retort continued with Stewart continuing to ask, “What were you guys thinking?” in many different ways.  (You can see the clip here, unfortunately I cannot embed this clip due to limitations of Comedy Network).

I do include this clip of Lou Dobbs’ celebrating Jon Stewart’s “victory”:

Final Comments

I hope that this lampooning by Jon Stewart sheds some light on the CNBC “coverage” of the Financial Apocalypse (and the stock market in general)  and on Financial Reporting in general, and maybe brings back the Watch Dog portion of the media, but I am not hopeful.

CNBC and most financial shows on TV are pure entertainment and rarely take into consideration what their opinions might do to their viewers. They are paid for by advertisers and answer to those advertisers as well. Until a way that unbiased reporting can be shown on TV, the reporting will continue on the way it has in the past few years (IMHO).

Oh and if you want another place to find interesting information about the Financial Apocalypse, check out Front Line from PBS Inside the Meltdown. It also mentions CNBC as well.

EI Claims Climbing

Stats Canada rolled out some interesting information about EI (employment insurance) claims yesterday:

In December, 538,200 Canadians received regular Employment Insurance (EI) benefits, up 25,000 or 4.9% from November, after seasonal adjustment.

The number of Canadians receiving regular EI benefits rose by 79,100 between December 2007 and December 2008, a 16.6% increase. The number of men receiving benefits went up 21.7% while for women the number increased by 8.6%

So in 1 month the number of claimants jumps by almost 5% and year over year it just almost 17%, which is very worrisome (especially for those of us unemployed). Given the period for claiming EI has been extended, this might mean a larger drain on the EI fund, which has previously been a “cash cow” for the government to draw from.

TSX a Bargoon?

If you are looking at buying into the market is now the time to dive in? Not sure what part of the index you might buy, or maybe buy the whole thing in an Index Fund (or maybe an ETF too?).

Don’t know, but here is an interesting graph to look at:

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Neat eh? Easy to see that we are back to 2002 (like I mentioned yesterday). Just something else to keep in mind.

R-r-roll Up The Rim and Buy?

Tim Horton’s was always an interesting investment idea, but I still can’t see growth, but every year when the Roll Up the Rim to win season rolls in I see the herds of Canadians buying their coffee at the Mecca for Cheap Java North of the Border.

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Will I be buying Tim Horton’s stock? No, I think I am moving away from investing directly in stocks and moving back to a more passive investing technique.

Happy Ash Wednesday

Lent has begun folks, and now is the time to start your Lenten Financial journey, and to maybe drop by your Church and enjoy their Ash Wednesday service as well.

Your journey begins today.