Archive | November, 2016

Podcast 1: Are You Ready for DIY?

Welcome to the debut episode of the Canadian Couch Potato podcast.

Every two weeks I’ll be releasing a new episode of the podcast and announcing it here on the blog. You can stream the most recent episode using the player below, or you can subscribe via iTunes or Google Play, or using your favorite podcast software, such as Stitcher, Pocketcasts or Overcast.

This inaugural episode features my friend and colleague Justin Bender. In our interview we reflect on our experiences developing our unique DIY Investor Service, where we helped clients build ETF portfolios they could manage on their own. Here are some links related to that interview:

Renovate Your Portfolio appeared in MoneySense in 2012. Written before I joined PWL Capital, this article featured three of the original clients of the DIY service.
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In his continuing efforts to support investors, Justin has just launched a YouTube channel called DIY Investing with Justin Bender. The first series of videos includes tutorials on how to place ETF trades at Canada’s largest online brokerages.

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The Canadian Couch Potato Podcast is Here

I’m excited to announce that on Wednesday, November 30, we’ll be launching the Canadian Couch Potato podcast.

Each episode will feature an interview with a guest expert who will chat about a specific investing topic, and then I’ll review some takeaway messages from the discussion. I’ve also created a segment called “Bad Investment Advice,” where I poke fun at a specific bit of unhelpful commentary in the financial media. Finally, I wrap up with an Ask the Spud segment where, with the help of my PWL colleague Amanda Dalziel, I answer investing questions from listeners and blog readers.

(By the way, I’m always looking for new ideas for these segments, so if you’ve read or heard some crappy investment advice, or if you have a question related to index investing, please let me know.)

Our first episode will feature my friend and colleague Justin Bender. We reflect on our experiences developing our unique DIY Investor Service, where we helped clients build ETF portfolios they could manage on their own. That service (since discontinued) helped well over a hundred families and we received consistently great feedback. We learned a lot about what it takes to be a successful DIYer—but also what can go wrong.

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Ask the Spud: Reverse Share Splits in ETFs

Q: I noticed the unit price of some iShares ETFs changed radically last week. For example, the iShares MSCI Singapore ETF (EWS) shot up from around $10 to $20 overnight on November 7. Another fund went from $14 to over $28. What’s going on here, and how would it affect investors? — Chris

If you wake up to find the unit price of your ETF doubled overnight, you might be tempted to think you just scored a 100% return while you slept. But unless you’re an eternal optimist, you’ll probably realize that isn’t the case. What’s happened here is called a reverse share split, or consolidation. Although the price per share of these iShares ETFs doubled (or in some cases quadrupled), the total value of each investor’s holding hasn’t changed, because they now own correspondingly fewer units.

If you’ve ever traded stocks, you’re probably more familiar with a regular stock split, whereby a company increases its number of outstanding shares by some multiple, reducing the price of each share by a proportional amount. A company with one billion shares trading at $100 might undergo a 4-for-1 split, creating four billion shares trading at $25.

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Tangerine Expands Its Lineup

The Tangerine Investment Funds have long been part of my model portfolios, as they’re a simple way to build a broadly diversified index portfolio with a single product. With a management expense ratio (MER) of 1.07% they are not the cheapest option, but they offer a lot of convenience for investors who aren’t ready to manage a portfolio of individual index funds or ETFs.

This month the Tangerine family grew for the first time in five years with the launch of the Tangerine Dividend Portfolio.

As with the existing members of the Tangerine lineup, the Dividend Portfolio includes a mix of Canadian, US and international equities. But whereas the older funds track traditional indexes of large and mid-cap stocks, the new one is focused on yield. It tracks three MSCI indexes that screen for companies with dividend payouts at least 30% higher than average, as well as “quality characteristics” that suggest these yields will be sustainable.

The MSCI Canada High Dividend Yield Index currently holds 22 stocks, including the usual suspects such as Fortis, TransCanada, Telus, and the big banks.

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