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With Money Never is Better than Late?

Are there times when Never is better than late financially? That question comes up in finances all the time. FOMO or Fear of Missing Out is a strong driving force for some.

Spoiler Alert, no, is the answer to the above queries (except the last one, that is up to you).

Now I am most certainly not talking about paying off debt. In the case of debt late is better than never. Being on time, however, is the correct answer.

Better late than never?
Time Waits For No One But Sometimes NOT Doing it is Better!

In investing being “late to the show” can be problematic. Sometimes it is better to just ignore it, and try to find something else.

If you bought into the Tech Boom in 1999, you most likely lost your shirt, if you didn’t bail out. Some folks, however, who were in at the ground floor, might only have been lightly singed by the great drop. If you got into Debt Financing in 2007, again, maybe should have given it a pass.

If your friend invites you over for “just a party” but you get wind of it being an Amway recruiting party, never is a better choice.

Certainly with Ponzi Schemes Never is better than Late.

The Fear of Missing Out (FOMO) can make us jump into things at the wrong time. Better wait than late, is a better view.


Stock Picks 2018

For my regular readers you must be shocked by this title, but a new year brings some new ideas and concepts. For the first time in a while, I will be putting out my stock picks for 2018. Hey if I can put out swag Financial Predictions for 2018, I can do this.

Yes, I have espoused Index Investing for a long time, but if you really want to make big money you will need to take some big risks. Some might tell you that Bitcoin is your way to sure money, others might say that Marijuana is a sure-fire money maker in the coming year, but I am here to say they are missing the boat. You buy that stuff and all you’ll have is bad-parity and a craving for Chips and Brownies.

I give you the portfolio that you should have for 2018.

Stock Picks

📈 Click here to unlock this amazing stock tip 📈

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Robo-Advisors a God Send to Investing ?

Robo-advisors Are They That Smart?

Robo-Advisors are a hot topic that has come up many times lately, and I think I (as a former programmer and current IT person) have a unique perspective on this topic (having a journeyman’s understanding of financial matters as well). Are Robo-Advisors something new, or just old tricks wrapped in technology?

A simple explanation of this investing vehicle from Wikipedia is:

Robo-advisors are a class of financial adviser that provides portfolio management online with minimal human intervention.

Robo-Advisors god send or the hand of the devil
Hand of God ?

What qualifies as a Robo-advisor? Pretty much anything is a very loose set of heuristics and ideas, along with some technical flimflammery. My first piece of advice is if anyone says they have a Robo-Advisor taking care of their investments, ask them if they understand what they are using. Handing your money over to an (allegedly) automated system you don’t understand is just as bad as handing it to a Human Advisor with little or no talent in investing. A task is poorly done by technology, or a human is still a task poorly done.

An important thing to remember is the Robo-advisor simply does what it is programmed to do. It “decides” based on what it is told to do (it does not learn or diverge from its programming). Many marketing blurbs speak of expensive algorithms that assure maximum investment performance, but I am skeptical.

A key thing to understand in this area is the investing philosophy the Robo-advisor will follow. Here is a simple philosophy and method to go with it.


Passive Investing with Quarterly Balancing

Philosophy: set up a diverse portfolio with the following configuration:

  • 25% Canadian Index Fund
  • 25% US S&P 500 Index Fund
  • 25% International Index Fund
  • 25% Canadian Bond Fund

You recognize that as a simple couch potato configuration. Buy low mgmt fee ETFs or Index Funds.

Algorithm: Every three months, compare holdings percentages, and if any position is greater than 5% off 25% (plus or minus) rebalance using existing funds.

This is what a Robo-Advisor might do for you (note you can do this as well, you are simply automating it). From a simple point of view, this seems like a relatively good way of doing things, or does it?

What the philosophy doesn’t say:

  • What funds or ETFs should be used, so what stops the programmer of the Robo-Advisor to have you buy funds with a company that might pay them a fee? This kind of “buying bias” is already being seen in the marketplace.
  • What stops the program from suddenly changing funds and churning your money (i.e. losing it to purchase fees and such)?
  • How much are you going to pay for the service? Are you paying for something you could just as easily do yourself (yes, I realize many folks don’t want to do this, but that does not mean they should be paying through the nose for the privilege either).

These are just some very simple questions to ask.

I’d really like to see some kind of regulation or standards in the area of Robo-Advisors, but I suspect specific regulation may not occur until there is a scandal of some sort (in the area).


A Great Financial Understatement

I spend a fair amount of time reading and reviewing some of my older posts, mostly to check the awkward writing style, and to repair broken links and such. I tripped across a classic understatement I made in the summer of 2008

Bad Day on the Market

That was the day after the market meltdown that eradicated a great deal of wealth in a few short days. Remember that the real obliteration of wealth happened on September 20th, 2008, but this was a start (thanks to me being laid off I was a little preoccupied, so I didn’t write about the huge market drop on that day).

In a short paragraph I stated:

Figured I’d add my 2 cents to the fray of Bloggers talking about the problems on the Stock Market these past few weeks. Is this an opportunity to buy? Should we be selling? Is it time to crack open skulls and eat the goo inside? Don’t ask me, I am standing pat for now, and we shall see what happens. My portfolio is down a fair amount, but my feeling is, now is the time, just to “Not Look”. Remember most of my stock holdings are in an RRSP, and thus aren’t a short-term investment either. I am watching TD with intent.

I do like the line, “…Is it time to crack open skulls and eat the goo inside? …” (I stole that from Kent Brockman on the Simpsons), but I was a man of my world, I didn’t touch my holdings (and at the time I still held Nortel, that had not gone bankrupt quite yet). This market apocalypse did lead to my Best Financial Decision Ever, but only because I had money from my Severance Package to invest.

Always interesting to review the past, wonder when the next Stock Market Apocalypse will happen? Hope not soon.




How Class B Shares Cured Me of Stock Picking

When I was young I invested in individual stocks, I watched trends and I tried to read the Yearly prospectuses. It was thanks to reading the original WWE IPO (after I’d bought some of their stock) that I was cured of stock picking of “interesting stocks”. Unfortunately it didn’t cure me of investing in Nortel, which I worked for at the time, but again, that is my own damn fault.

Treasures in the Prospectus

class b shares
The Market Where You Need to Know All the Rules
Image courtesy of audfriday13, at FreeDigitalPhotos.net

To outline what I found out when I read the stock prospectus I found a very interesting explanation of the Shares I was going to buy here:

WWE has a dual class share ownership structure, which includes Class A and Class B stock.  The McMahons own a de minimis amount of Class A stock and all of the Class B stock.  The two classes have equal economic rights and unequal voting rights, meaning that each Class A share is entitled to one vote and each Class B share is entitled to ten votes.

Class B Shares ?

So if I owned say 100 shares of WWE, I was allowed to vote on yearly proposals at the shareholder meetings and such, but at the end of it all the McMahon family owned enough stock to do whatever the heck they wanted (almost like in their wrestling matches), and this meant my purchase of the initial stock was effectively loaning the McMahon’s money, as I would have no say in how the firm was to be run. I do realize that I will never own enough stock in any company to be able to actually impact the ShareHolders meetings, however, I know a stacked deck when I see it as well.

This one sticks out as a huge example of what can happen if you don’t read the documentation available to you, about where you are putting your money, and this made me get out of individual “interesting” stocks. With Index Funds, and with ETFs that use Indexes, at least I know that I am not relying on a single stock, and assume that the folks who devise the mix for the Index have taken into consideration any “Class B” or any such derivative Tom-Foolery, into consideration.

Are there other Stock Peculiarities folks have noticed after reading the yearly prospectus from the company?


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