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Market-linked GIC looks good on surface but fails scrutiny
A prospective client recently brought an index-linked guaranteed investment certificate (GIC) to our attention – an investment that he found very attractive. He asked for our thoughts on this product. This GIC that pays interest linked to...
Illiquidity may be floating rate funds’ biggest risk
Floating Rate Debt (FRD) is getting an increasing amount of attention. Over the past year, several new products have been launched focusing on floating rate debt such as leveraged loans and so-called senior loans. All pay floating rates of...
Expect more distribution cuts from monthly income funds
I have been writing about Monthly Income funds for more than a dozen years. In my 20-year career, none of my articles or comments have generated as much feedback (or as much anger) as my critiques of Monthly Income funds. Capital market activity...
Regulatory initiatives may not solve this fee transparency problem
Securities regulators have a lot on the go. Among the many proposed regulations is the requirement for financial advisors to show clients how much they pay in fees and the amount of commissions they collect from the client’s investments. I...
PIMCO Global Income Opportunities: enthusiasm vs reality
Tom Bradley just posted a smart analysis of a new closed-end fund. PIMCO’s newly-launched Global Opportunities Income fund attracted $600 million – the top end of its target. That’s a very warm reception to say the least. I...
Making sense of experts’ picks for your RRSP
There are seemingly more ‘experts’ picks’ columns for the first 60 days of this year (i.e. RRSP season) than in previous years. In the Globe & Mail alone over the past month, there have been 5 articles giving readers ideas...
Long-Term Thinking: 1800-2013
Long-Term Thinking died on Tuesday. He was 213 years old. Long-Term Thinking lived an illustrious life since the start of the Industrial Revolution, when for the first time, people could think about more than their next meal. But poor incentives and...
Five years on – the lesson from market extremes
Five years ago today, the investing world was frozen with fear. Stocks markets had collapsed; Lehman Brothers had slid into bankruptcy several weeks earlier; and discussions were accelerating regarding letting GM and Chrysler do the same. Fear...
Industry risk rating failing investors of floating rate note funds
Floating rate note (FRN) funds are gaining in popularity because of their marketed ‘promise’ to protect capital during periods of rising interest rates. In Canada since the mid-2000s, FRN funds invest mainly in corporate loans bearing...
Predictions, Stocks Markets & the Weather Rock
I had the pleasure of dining with a group of friends recently at one of the fine wineries along Lake Erie. Near the entrance was a rock hanging from a chain – i.e. a “weather rock”. One of our friends explained how it works. ...
