February 28, 2009, 8:56 am

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling

I’m OFF!!! I survive my first RRSP campaign as a financial planner. It was a lot of work this year since I am still working out my book in order to gain client’s trust. Nonetheless, it was a great campaign and I am quite ahead in my numbers. I can’t wait to see if I’m top 10 in Montreal as it is one of my goal for 2009!

Speaking of which, I’m taking two weeks off to study for my MBA exams (the second week is actually to work on my blogs and my web company 😉 ). This would definitely help to reach to of my financials goals (getting my MBA with honor and double my company income).


Here’s what caught my attention this week:


Four Pillars takes a deeper look into TFSA Strategies. Do you have yours?

There is so much fluctuation in the stock markets that Intelligent Speculator doesn’t know what to trade. Find out what happen when investing becomes a big gamble. Nonetheless, He closed his last trade with a profit of 21%!

The Dividend Guy is listing his top 20 investing books of all time.

The Personal Financier also wrote about rationalization. Does it make you feel better?

Million Dollar Journey is talking about an interesting strategy: holding a mortgage within your rrsp. Find out about the pros and cons.

Thicken My Wallet says: “Money Matters”… hell yeah!

Even though money matters, there is an additional stress if you live a super sized lifestyle (by Money Ning).

Find how to buy ETFs and make trade orders at ABCs of Investing.

Carnival:

Carnival of Personal Finance

Carnival of Financial Planning

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February 27, 2009, 6:00 am

How NOT to treat customers – Lesson from Baton Rouge restaurant in Laval

by: The Financial Blogger    Category: Miscellaneous

I’m always amazed when businesses don’t treat their customers with the best possible care and it happened to me last weekend while I was having dinner at Baton Rouge, an excellent steakhouse that has a few restaurants. I personally had a reservation for the one in Laval (15 minutes away from Montreal). It started off quite well as we made a reservation for 6 a couple of weeks in advance through the internet website, very convenient!

We then received a call confirming the reservation and notifying us that we would have the table from 5:30PM to 7:30PM, not ideal but understandable for a Saturday night. That’s when things turned bad.

First, the day before, we got a call asking to confirm the reservation. Is it me, or does confirming a reservation twice start to become a bit excessive. They also had another message… here is the conversation:

-Good morning, we wanted to confirm that you would still be 6 for tomorrow night’s reservation
-Yes, no change, thank you.
-Please note that you will not have your table until all 6 of you have arrived
-Ok, but one of us is 83 years old, would we be able to get a table if something happens?
-I’m sorry but no.
-Ok but he also has diabetes, he might need to eat at a specific hour
-We will reconsider if an urgent situation occurs

Urgent situation? How about having my grandfather dropping dead in the restaurant? Would that be considered an urgent matter?

Ok, seriously? Not the type of conversation that makes it very exciting. Either confirms only the day after the reservation is made, or only the prior day. And if you confirm that we will be 6 people, no need to keep us standing if one of us runs into traffic or some other problem, I’m sure the 5 others would wait while ordering a few drinks.

On Saturday, we get to the restaurant, announce ourselves, and are told once more the two conditions (must be 6 to be seated and must be out by 7:30PM). And yes you guessed it, one out of us 6 arrived 15 minutes late… So finally, when the six of us had arrived, we were shown to our table, while once more being told we had the table until 7:30PM… Are they going to give us the time to cook each meal in order to not be late if we order the ribs?

How many times do we need to be told that we need to get out of here? Oh and did I mention that a minute later we were asked to change tables, because apparently we had been shown to the wrong table. It’s understandable, after all, there must be a reason why a table for 6 cannot sit a group but can site another… People who have designed their table assignment process probably have PhD in rocket science!

Once we were seated everything went well and we had great food. The good news is that they didn’t kick us out by the sound of the alarm at 7h30 ;-).

But considering the poor service and experience surrounding our evening, we were left with a very sour taste and certainly did not feel like Baton Rouge had lived up to its name. Don’t you think it would be easy to find a solution? I live in Montreal (15 minutes away), and when restaurants are expected to be full, instead of taking reservations and then hassling the clients, they simply do not take reservations… simple enough?

In this era of social networks, blogs and internet, one simple bad experience can reflect poorly and reach a much larger amount of current and potential customers, something to consider strongly….

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February 26, 2009, 6:00 am

For a Better Diversification in my Smith Manoeuvre Strategy

by: The Financial Blogger    Category: Smith Manoeuvre

I have not been writing much about The Smith Manoeuvre Strategy for the past months because I was simply too lazy to make some modifications to my investment portfolio. I was aware that I had to do some tweaking for my investments strategy.

I am heavily concentrated in financials (National Bank dividend fund) and in oil and other natural resources (Sprott Canadian Equity Fund). But the most important part: I am 100% in the Canadian market.

Now that the market is down and that everybody is selling the stocks cheap, it is the perfect timing to buy more shares of good mutual funds. I would rather go by trading indexes but since I am injecting money on a monthly basis into my portfolio (and it doesn’t show much these days 😉 ), I have no other choice but to pick funds instead of indexes.

So I cancelled my $400 periodic investment into the National Bank dividend fund and decided to split this amount among 4 funds. On top of that, since I am paying a very low interest rate and that I have enough cash flow to afford it, I decided to increase my monthly investment to $500.


$100 in Altamira Canadian Index Fund

I wanted to keep of my monthly investment into Canadian equity as I think that the Canadian market will go up over the long run. There are several good undervalued companies that will pick up on the next economic boom. On top of that, the Altamira MER’s is only 0.53%. So I will be almost on the target to follow the index.

$150 in Altamira US index fund

Based on the same reasoning regarding the MER’s, Altamira indexes funds are pretty cheap and the US fund is hedged against currency risks. I wanted to start diversifying my risk with another country. As the American market took at good kick in the teeth in 2008, I think it’s a perfect timing to buy an American index fund.

$150 in Omega preferred shares

Canadian preferred shares are mostly issued by financials, insurance companies and resources companies. Since they took a major hit in 2008, we have great chances to see this type of class coming back with great strength. In addition to that, the Omega preferred shares (managed by ING) is the first Canadian fund of being 100% invested in preferred shares.

$100 in Omega American consensus

Why am I putting more money into the American market? Because I love the way the Omega American consensus picks its stocks. To learn more about the trading model developed by Validea capital, you can click here and read about my review of their Omega funds. Their trading method is based on mathematical models and, therefore, gets rid of all kind of emotions in the trading equation.

I decided to pick American consensus instead of international for 2 reasons. I truly believe in the American market capacity of coming back stronger than international equity. The second reason is based on the fact that many great American companies make a lot of their revenue outside the United States. Therefore, I am still expanding my diversification a little bit to the international market.

Disclaimer: I am buying those funds but this post should not be considered as any kind of recommendation of buying or selling any of the above. Please trade carefully ;-)…and at your own risk!


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February 25, 2009, 6:00 am

4 Reasons Why Money Brings Happiness

by: The Financial Blogger    Category: Personal Finance

I have had this discussion several times with several people. Especially in our province, we have strong culture roots that let older generations to believe that money was the fruit of evil and that if you make money, you obviously screw people or exclude some of them in order to become rich.

Some people might see me as an evil capitalist; I think I am just being realistic 😉


Money relieves stress

I’m not inventing anything here; most couple arguments are about money. If you are having a hard time paying your bills, let me tell you that you are more sensitive to anything that happens in your life. The way your spouse filled in the dishwasher can be enough to have a good discussion about all the other things that bug you (including the fact that you are late on your electricity bills).

I saw my parents going bankrupt when I was young and I can tell you that it puts pressure on the whole household. I was lucky as they did everything so I don’t really feel it but even then, we all knew that we didn’t have much money. Definitely, being short on money sucks!

Money gives opportunities

When you have money on the side, you are always ready to jump into investing opportunities. How many times do you hear about someone had the opportunity to invest in something but didn’t have the money (or the guts!) to do it?

I’m glad to have money aside as I was able to invest it in a right timing (or so I think 😉 ). If my thoughts are right, I’ll be a very happy camper in a few years as I will be able to do whatever I want, whenever I want! Money not only gives opportunities, it gives you freedom of action.

Money creates great moments

I was in Bruges (Belgium) a few years ago. If you haven’t been, this is a must if you like medieval architecture. It’s a beautiful city!

Me and my girlfriend went up the tower in the middle of the city. At noon, all churches around started ringing their bell. We could hear a song that was brought to our ears by the wind and this is when I get on my knee and proposed my girlfriend with a I ring that I purchase in the mountains of Salzburg (Austria) a few months before. I could have surely buy the ring at the shop on the corner of the street and proposed my girlfriend at Christmas in front of the three and we would still be married today. However, this story, this special moment, will be carved in my heart and soul for the rest of my life. The setting made this moment so magical and intense, I will always remember that day.

Without money involve, it would have been nice, the result would have been the same, but the magic would not have been the same.

Money cures people

Now that I have children, I realize how important being healthy is. If I ever get sick, I hope to get the best treatment in the best hospital and be in the best conditions for my last days on earth if I can’t survive my illness. Money can bring all of this. Even though I live in a place where we have free healthcare, it doesn’t mean that it’s the best and fastest service on earth. On the other side, if I have 200K to get better, I’m sure that I will put all the chances in the world on my side.

What about you? Do you think that money can bring happiness?

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February 24, 2009, 6:00 am

The Danger of Rationality

by: The Financial Blogger    Category: Investment, Market and Risk

When I was in college, I took a lot of psychology classes since I wanted to understand what people think and what lead them to think this way. Later on, I did my bachelor degree in finance and marketing because I really enjoyed marketing classes such as consumer behaviours (yup, marketing is as evil as to make research to know what you really think in order to sell more 😉 hehehe).

While I’m now working in the finance industry, I still believe that my psychology classes apply to my job. I actually found something very interesting while reading the business newspapers for the past two years:

2 years ago, every business journalists were listing all the good reason why oil would reach $200, why China will lift the global economy on their shoulders for the next 100 years and why stock options and other derivatives were created to protect investments and were not more dangerous than any other financial products.

I remember reading tons well written articles on the fact that we will lack of oil in no time as the economic growth will become astronomical.

What happen to all of this? How come we are not missing oil anymore? How come the barrel dropped to $40 while it was at $150 last summer? Where all the Chinese go?

Nothing really happened. All of this was the curious creation of what we call human rationality. Human beings have a tendency to explain things that are going on based on what they know and making links where there are none. We now know that the barrel of oil increase that much because of highly speculative hedge funds more than anything else.

We also know that Chinese economy still depends on the North America and Europe spending habits. Nothing has changed, really. It is just that we now see the real cause of our economic boom and why this couldn’t last forever.

So now that we have found out that our economy wouldn’t outperform for ever (remember, the very same thing happened during the techno bubble; internet was the source of a new, more powerful and indestructible economy), we are turning back and we are looking to find reasons why this crisis would be the worst ever, that we all going to lose our job and that the Dow Jones will hit the mark of 1,000 points by the end of 2009.

Is it really going to happen or are we just using our brain to make “rationale” links between events and facts that are not necessarily connected?

Unfortunately, I don’t have the answer. I just make this observation thinking that history always repeats itself as human beings make the very same mistake each time…


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