Higher interest, rising bond prices

U.S. interest rates are heading up, and bond prices are rising. Here's why security pays

The ominous Chinese greeting, “may you live in interesting times,” has arrived in Canada. We face declining energy prices that are dragging down the entire economy to nearly zero growth. Canadian stocks are accordingly dismal. Our partner to the south, the U.S., has a soaring currency that will inhibit its exports. As a result, the […] Read more

stock market display

The difference between mutual funds and exchange traded funds

This look inside mutual funds and exchange traded funds shows how each of these investment types work, and how each of them handle risk

How do mutual funds really work? At the ground level, they are diversified collections of assets, usually stocks or bonds — sometimes both — in balanced funds, picked for their ability to generate income and/or capital gains. The key word is “diversified,” for that is their distinctive advantage. They are usually actively managed to seize […] Read more


Making the best of inflation

Government taxes what it creates. Here are some strategies for making the best of it

Making capital gains is the essence of investing. Yet many gains are nothing of the sort. They are only the illusory repricing of goods and incomes. Government drives inflation, then taxes stocks and bonds, incomes, house prices and even farms that are part of the repricing. If you think that this is unjust, you’re right. […] Read more

bonds

Why should you invest in bonds?

Bonds no longer offer interest above dividend rates, 
but they are an insurance policy for market mayhem

Readers often ask why and how one should buy bonds. The reason used to be to get interest at a rate above what stocks pay as dividends. That does not work anymore, for bank stocks and big telecoms, for example, pay four to five per cent. Ten-year Government of Canada bonds pay 2.5 per cent. […] Read more


paperwork on a desk

Protect your off-farm investments

The bull market we’ve been living with could be nearing its end. 
Keep your capital intact through the downturn

It is a principle of finance that people will pay almost anything for what they don’t know. Stocks with dubious futures can soar in price when investors, fearful of being left out, jump on the bandwagon. Voices of caution are few and far between. Yet now they are being heard. In New York, where you […] Read more

Farm financial planning: Trusts can increase family trust

Trust avoids family infighting for retiring Manitoba couple aiming to keep 
their land in the family, but also keep their kids still talking to each other

In south central Manitoba a couple we’ll call Harry and Ella, both 64, face the challenge of transferring their 3,500 acre mixed grain and 400 cow operation to their three children. The problem is that two of the children, each in the 30s, don’t want to farm. It’s a good business worth about $4 million. […] Read more


Guarding Wealth: Buying risk, paying for liquidity

Guarding Wealth: Buying risk, paying for liquidity

Price-earnings ratios are a useful way to analyze your investment decisions

What do you get when you invest in capital markets? You might say stocks or bonds, mutual funds or units in real estate investment trusts. That answer is both true and false. You do get ownership of those things, but in a more analytical sense, what you are really getting is risk — any stock […] Read more