February 9, 2008, 7:32 am

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling
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I’m very excited today as I slowly realize that I will be hosting the Carnival of Personal Finance on Monday the 18th! A little more than a week and I’ll have the opportunity to host this famous carnival. I will start receiving the articles after next Monday and I am already thinking about how I will post them. I’m sure you are going to like it 😀


I am slowly getting into my new job, learning more and more every day. When you start a new job, everything you have to do is very demanding. You don’t know the procedures, you don’t know the people, you don’t know much! Fortunately, I do have a lot of technical knowledge and I should get used to my new work environment in no time. It is a stressful period of time but it will surely worth every second of it in 6 months!

Economists claim that we will avoid the recession in Canada. They think that our economy is strong enough to survive even if our southern neighbours are having a rough time. A few more drop in the interest rate and we should be good. Having a HELOC depending on the prime rate, I can only be happy about it!

There are good news for the US as well. When we look at the statistic, over the last 8 plans of action made by the USA to help their economy, 7 of them were introduced as the economy was already restarting. Since they are in a middle of applying their 9th plan, things should get better by fall. It is now time to put money aside and shop around.

With the recent drop in the market, many Canadian Banks saw their stock loose 10,15 even 20%. Therefore, they became very attractive due to their high dividend. Most of them are paying 5% right now, which is quite incredible. Is it too good to be true? Unfortunately yes. Chances are that they will decrease their dividend this year in order to get back to the more regular 3-4% that we are used to see. I hope they won’t but it’s not Christmas anymore either!

 

Carnival Picks

Since everything was crazy with my new job, my MBA weekend and my family being sick, I only submitted to one carnival this week (shame no me!!!).

 

Carnival of Everything Finance at Everything Finance.

Why Financial Planner will be the hottest job in 2008 (YEAH!!!!) at KCLau.

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Comments

I currently have a financial planner who has been generating 2% return for me in the past 3 years. I am not happy with this, as I think my returns should have been more, especially over the past two years. My friends have mentioned forgetting the financial investor route and go solo with i-index. What are your thoughts on this?

by: The Financial Blogger | February 10th, 2008 (6:08 pm)

Hum… 2% doesn’t seem very good to me either 🙁

However, it may depends on your investment profile. If you are highly conservative and wishes to invest only in GIC’s, you may end up with smaller return. If you feel comfortable with the markets and want to try an I-Index, it is a good way to start investing on your own.

BUT, this doesn’t mean that you will earn better returns. In fact, your investments will fluctuate accordingly with the index your shares are related too.

Look at what most markets did since Jan 08 and you will notice some major fluctuations. Then, you have to ask yourself if you are ready to live with these kinds of market swings…

Thanks for your input. I will start looking at the market more seriously.

by: The Financial Blogger | February 10th, 2008 (8:47 pm)

Dom,
You can also try to create a virtual portfolio by using Yahoo finance or globeinvestor.com virtual portfolio. With this tool, you can fake your trades for a while and see how you would be doing on the real market as well 😀

by: moneygardener | February 11th, 2008 (9:35 am)

Did you just say that you think Canadian Banks will cut their dividends this year????

I strongly disagree. What are you basing this on?

by: The Financial Blogger | February 11th, 2008 (9:33 pm)

Let just say that I don’t think that banks will do any better in 2008.Therefore, they might be tempted to decreased their dividend rate in order to increase their liquidity.

The National Bank and CIBC recently issued notes in order to cover for their “financial misadventures”.

by: moneygardener | February 12th, 2008 (12:00 am)

I would be floored if any of the following cut their dividends:

Royal
TD
BNS
BMO

by: The Financial Blogger | February 13th, 2008 (7:18 am)

MG, I hope you are right 😉

But keep in mind that BMO has one of the highest distribution ratio among all banks…

Anyway, we will see in 6 months 😉

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