Thanks to Rob Carrick for a mention in his best-of-the-web roundup of my post It’s Time that Renting Got a Little Respect . Here are this week’s posts including a chance to win a UFile giveaway: Reminiscences of a Stock Operator UFile Review and Giveaway Replying to Email Here are some short takes and some weekend reading: The Blunt Bean Counter has reached the last installment of his series on how much money you need to retire and offers some dollar amounts. In another good post from The Blunt Bean Counter , he explains the bizarre situation where Canadians who hold foreign stocks in their non-registered accounts at Canadian brokerages have to give detailed reports on a T1135 form. I’m all for catching tax cheats, but why such onerous reporting rules for stocks held within Canada by one of our big banks or other well-known brokerages? Financial Crooks encounters some major T5 hassles with a joint PC Financial account. If you can believe it, she was asked to wait a...

I get a lot of blog-related emails. Some of them are interesting questions and comments from readers. Generally I reply to these directly. Here I reply to three emails that I would normally ignore. Dear Christina, Thank you for your newsletter offer. If you know how to profit by anticipating the moves Janet Yellen will make as chair of the U.S. Federal Reserve, why don’t you just go ahead and make yourself wildly rich? I don’t understand why you would share this profitable insight with me. If your motives are altruistic and it’s not too much trouble, please use your knowledge to make a pile of money and send a share of it to me. Sincerely, Michael -------------------- Dear Natalie, Thank you for your offer to give me access to your data about ultra-wealthy investors. While it’s possible that behaving like wealthy people will help make me wealthy, it seems more likely to me that causation is the other way around: becoming wealthy is what leads to behaviours like con...

UFile has generously offered 6 activation codes for their online 2013 tax software to give away to my readers. I decided to go through the exercise of trying UFile’s online tax preparation to see how well it works in addition to giving away some codes. UFile’s online income tax preparation uses the interview method which means that they ask you a series of questions rather than just let you flail away at tax forms. In general, I find this much easier than using tax forms, but I invariably find that some complication or other in my tax situation forces me to look at the detailed tax forms a couple of times to check that all went well with the interview. The online version of UFile does not permit you to see the detailed forms that UFile calculates from your interview answers. I assume the reason for this is that they allow you to fill out your taxes without paying anything. It isn’t until you file your taxes that you might have to pay for an activation code. If they showed you ...

I was somewhat skeptical about a recommendation to read a century-old book about stock trading, but Reminiscences of a Stock Operator (annotated edition) by journalist Edwin Lefèvre is an entertaining and illuminating historical novel. The book is written in the first person about character Larry Livingston and is based mainly on the life of the great trader Jesse Livermore. The version of the book I read was greatly enhanced by journalist Jon D. Markman‘s extensive annotations explaining many terms unfamiliar today and giving many back stories to put Lefèvre’s writing into context. The main character makes a fortune and then loses it again several times over, each time gaining new insights into stock trading. The limited regulation of the time permitted extensive leverage and many attempts to corner markets. Common themes are manipulation of the investing public and back-stabbing among big traders. No doubt the many trading lessons woven into this story would have some usefuln...

I wrote another 3 posts this week: Telling Us What We Want to Hear about Our Retirement Magic Numbers The Double-Up GIC Double-Up GIC – the Catch Here are some short takes and some weekend reading: Canadian Couch Potato answers a reader question about how to find the optimal portfolio asset allocation percentages. Within reason, just about any allocation percentages can work out well if you stick to them. If you keep tinkering so that you’re a closet active investor, you may be headed for poor results. In another good post, Canadian Couch Potato shows how to work out the foreign withholding tax cost of ETFs holding foreign stocks. Fortunately, he works out all the details for many different ETFs. The Blunt Bean Counter has part 5 of his series on how much money you need to retire. My Own Advisor explains why he is keeping his 14-year old car. Big Cajun Man thinks that any income you have to declare on your taxes for bank account interest should be net of bank ...

The point of my Double-Up GIC was to illustrate the tricky rules used in market-linked GICs by taking these rules to the extreme. The advertising of market-linked GICs makes it seem like you have a guarantee to get your money back if stocks fall and can get the market return if stocks rise. This isn’t the case. Market-linked GICs have rules that significantly reduce the return you get if the stock market goes up. The catch with my Double-Up GIC is that each of the 560 linked stocks must go up during all 60 months for you to get your full 100% return. Any excess return for a stock in a month above 0.00206% is wasted, but any drop in a stock counts fully. Across all the stocks there are a total of 560*60=33,600 monthly returns. If all the negative returns compound to a 50% loss, then these losses will completely cancel all the capped positive returns. So, if one-eighth of the stocks show a loss of 1% or more in the first month, you’re already guaranteed to get only your princip...

Canada’s big banks all offer various types of market-linked Guaranteed Investment Certificates (GICs). The idea is that your principal is 100% guaranteed, and if the stock market performs well enough you get higher returns than standard GICs pay. It’s like you can have your cake and eat it too. However, the returns usually have a fairly low cap. I decided to design my own market-linked GIC that I’d be happy to offer to the public if it weren’t for two things 1 . My Double-Up GIC would offer the potential for a 100% gain over 5 years. The big banks tend to offer much lower maximum returns. The interest paid would be linked to the Canadian TSX 60 stocks and the U.S. S&P 500 stocks. However, even if stocks crash, investors’ principal would be 100% protected and would be paid back after 5 years. Here is the detailed calculation of the interest payment. In each of the 60 months we start with that month’s compounded share of the potential 100% gain (1.162%). Then we take the...