All posts by Financial Independence Hub

Q&A with Mawer’s Jim Hall: Deflation and rising interest rates

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Cameron Webster

By Cameron Webster, CFA
Institutional Portfolio Manager, Mawer Investment Management Ltd.

Special to the Financial Independence Hub

At Mawer, we spend a great deal of time asking and answering the question: So What? A company’s share price is down 6% … so what? A central bank moved interest rates up … so what?” Google re-named itself Alphabet … so what?”

It is not always an easy question to answer and often leads us to ask even more questions in an effort to develop key investment insights.

“So what?” is one of the questions that can lead us to investment action (or inaction) in our process of building well-diversified, resilient portfolios. In an effort to pass on our “so what” learnings, I interviewed our Chief Investment Officer, Jim Hall, with specific questions pertaining to his views on risks in the current environment.

Cameron Webster: Jim, Mawer conducts a quarterly risk review, rating macro risks on both probability of occurrence and degree of severity. I see a few with 9/10 on probability but lower severity and a few with the opposite profile, high severity, lower probability. Help us understand the way Mawer is viewing some of the broader risks at the top of the list right now.

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Jim Hall

Jim Hall: It is not enough to just look at the rankings. We need to ask ourselves is it something we need to do something about? Is this something upon which we need to act? Is it a biggie? Is it important? That’s the value in evaluating these risks on both probability of occurrence and severity of consequence.

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How to make money from the Internet without getting audited

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David Rotfleisch

By David J. Rotfleisch

Special to the Financial Independence Hub 

Are you a retailer who uses eBay as a virtual storefront to move a lot of products? Or, are you merely an occasional seller? Or, do you use Kijiji and Craiglist to empty out your basement, storage locker or Aunt Mildred’s apartment after she moved to a nursing home? Perhaps you rent out your house, apartment or cottage using FlipKey and Airbnb?

Do you do graphic design using sites like Fiverr? Or, do you have a website or a YouTube channel that makes you tens of thousands of dollars in advertising revenue? Do you drive for Uber?

Making money on the internet is easier than ever. And there are millions of sellers. CRA knows this. So, starting with returns filed in 2014 for individuals and 2015 for corporations, Canadians have to report internet sites used by them for income earned from the Internet. This will allow the tax man to check the information that the taxpayer reports with websites advertising products and services and to audit internet vendors who do not report their web based revenues. Continue Reading…

Sensible Investing TV: How to win the Loser’s Game, part 8

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Screen Shot 2016-02-23 at 10.22.29 AMSensible Investing TV has posted part 8 of its How to Win the Loser’s Game series of videos, which you can view by clicking here.

Does it make sense for the average investor to invest in an active fund? The active investor who does invest in an active fund has to expect to lose relative to a passive strategy.

If an active investor chooses to overweight some stock then at least one other active investor has to underweight that stock. One might win by overweighting; but if he wins, he loses by underweighting. So it’s a zero sum game before we start thinking about costs.

What we see over and over again is that active trading costs money and active managers charge a lot for their services. One of them might have been brilliant but to the extent that one of them is brilliant, another person must have been whatever the opposite of brilliant is here …  Minus brilliant.

After watching the video if you want to learn more, download the free guide, 12 Essential Ideas For Building Wealth.

 

paul_2-1500x994“If you are serious about investing and building wealth the video documentary series ‘How To Win the Loser’s Game’ is a must-see. It’s excellent.” — Paul Philip, Financial Wealth Builders Securities

Examining some uncomfortable truths about ETFs: Ottawa 2016

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Yves Rebetez, ETF Insight

By Yves Rebetez, ETF Insight

Special to the Financial Independence Hub

An uncomfortable truth … and the reason to examine Regulation; Technology Disruption; and Convergence – the topic of ETFinsight’s upcoming Mar 3+4 Ottawa event.

In the movie The Big Short, Steve Carrell’s character, Mark Baum, is a hedge fund specialist coming at the world with a cynical take: “Let me understand how I am being screwed,” can’t believe what he hears and sees… The fact is … conducting some out-of-the-box and on-the-ground due diligence that will guide whether he bets against US Housing … that things are way worse than he ever fathomed, and unbelievably so, everyone seems to be in on it.

Perhaps on a more serious note – while not suggesting the Great Recession we are still struggling to fully recover from wasn’t , despite several scenes in the movie easily drawing out cynical laughter … I recently attended a presentation at the Ontario Securities Commission, speaking to the topic of Advisor Compensation & Investor Outcomes, as well as Mutual Fund Fees, Flows, and performance. Continue Reading…

Our values about money are changing and millennials are leading the evolution

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Jay Acharya

By Jay Acharya,  Capital One Canada

Special to the Financial Independence Hub

When my wife and I bought our house, it felt like a massive achievement for us as we had diligently saved our money for the down payment.  When we told people about it, they were full of questions about the neighbourhood, the kitchen and how many bedrooms there were.

We were so proud of ourselves for accomplishing this milestone that we eagerly shared pictures and every detail about our new home.  The funny thing is, no one asks you to tell them the story about how you saved up to buy the house in the first place.  That is where the real drama and the value of the conversation is – then again, you can’t take pictures of the restaurant meal you skipped or the stay-at-home vacation you took and post them on social media.

New car, new house, new clothes – the idea that owning bigger, more expensive things has traditionally been valued by our society as a symbol of status and accomplishment.  Now enter the millennials: the demographic that is challenging the status quo in many areas, including what we value.

Capital One Canada recently hosted the C1NDX, a consumer index roundtable and study that included six of Canada’s leading journalists and industry experts. With a specific focus on the impact of the sharing economy, we dove deep into how the financial values and spending habits of consumers have changed and are continuing to evolve.

We discovered that when it comes to how and why consumers spend their money, the values of many Canadians, particularly millennials, are shifting.

Experiences Are the New Luxury

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