I’ve noticed over the last few days there’s a colder breeze in the air, and the large maple in the front yard is beginning to drop its leaves. The end of summer is nearing, and fall is on its way. There is also the weight on people’s shoulders, of that inevitable return to work after the Labour Day weekend. Everyone is winding down from summer fun getting prepared for the inevitable 9-5 grind. And for kids and teens, it’s back to school. That last point is especially important to me, since I just purchased a position in Staples Inc. (SPLS-Q) and looking forward to seeing back to school profits on the next earnings report. So you know where I would like you to buy your kid’s back to school supplies!
The Financial Blogger Conference
It’s only a month until the first annual Financial Blogger Conference begins. I can’t begin to tell you how excited I am to go to this conference. Philip has done a really exceptional job of organizing, promoting, and putting this huge event together. In fact, there are now 250+ registered attendees who are all quality financial bloggers. It’s going to be a great opportunity to connect with others who are like minded, learn some good tricks of the trade, and have fun at the same time! LOL this is going to be fun!
I’m delighted to have my second article published with the Canadian MoneySaver in their September 2011 edition. I just received my copy in the mail a few days ago, and once again I’m honoured to be able to contribute. The article is titled – What Happened to the Income Trusts? – Part 1. It’s a review of how Income Trusts started in Canada, and why they ended up with such high-yields. I also review how they handled their conversions into corporations from 2010 to 2011, and cover a few of the most popular of these previous trusts. This article, with permission from Canadian MoneySaver, will be reposted on the Dividend Ninja after September 15th. The second part continues in the October issue, time permitting.
The Permanent Portfolio
Back in my mid 20’s when I started reading investment books, I came across Harry Browne’s Inflation Proofing Your Investments. Browne suggested dividing your money equally among four asset classes: stocks, long-term government bonds, gold and cash. Each asset class (or more than one class) flourished in a different economic cycle. He called it the Permanent Portfolio.
In my 20’s I was hardly interested in asset allocation, and unfortunately I wasn’t smart enough to adopt this investing idea. Since then, this has been a top performer over the years, and during the different economic cycles and market swings we’ve experienced. With this portfolio there is always a given that 25% or more of your portfolio is in a top performing asset class. And if bonds, stocks and gold should be losing assets at any given time, then you have 25% of your portfolio in cash – times like those Cash is King. While I wouldn’t want to be buying gold bullion at these levels, gold has been a stellar investment over the years (see chart). The Permanent Portfolio has obviously been a winner over the last decade.
The Canadian Couch Potato wrote three superb posts this week on the Permanent Portfolio, and did a two-part interview with Craig Rowland, who has kept the Permanent Portfolio alive. This is an exceptional series of posts you must read:
- Introducing the Permanent Portfolio
- Peering into the Permanent Portfolio: Part 1
- Peering into the Permanent Portfolio: Part 2
The Weekly Lineup
There were a whole slew of great posts around the blogosphere over the last couple of weeks:
- MoneyCone wrote an exceptional post last week on Buffett’s purchase of Bank of America (BAC-N) in, Following Buffett Blindly Can Be Injurious To Your Wealth. If you remember BAC shares soared, as investors rushed in after Buffett’s endorsement. If you are one of those investors who think Buffett is buying Bank of America because it’s a well run company, think again! This is a pure profit play. Read MoneyCone’s post and you will think twice.
- Rumours are The Wealthy Canadian has a workshop of elves writing posts for his new blog, and that’s why he is able to publish one or two of them almost every day Apparently he pays them with chocolate gold-coins (and not the expensive ones either). According to a recent post, he buys these with his credit card to earn reward points: Buying 1 oz. of Physical Gold (And with my BMO Gold Card).
- Andrew Hallam reminds us that if you rebalance your account by ensuring that you keep your account’s allocation relatively consistent, then you can make a small fortune during volatile markets: The Power of Rebalancing During a Volatile Market.
- Andrew Hallam also points out that Canadians have some of the highest investment costs among the G7 nations, in large part thanks to mutual funds. Most Canadians are oblivious to the fees they are paying in mutual funds and advisors. Andrew covers this in: Canada – The World’s Easiest Place to Beat Investment Professionals.
- Demitri at Sigma Swan asks readers, Is Now a Good Time to Buy Stocks?
- My Own Advisor explains to readers why he drives an 11-year-old car. Actually his car looks brand new, and he is saving a fortune by not buying a new car. It’s a great post, and lots of comments too! MOA also gives us a great list of finance and investing tips, in My simple saving and investing rules of thumb.
- And Dividend Mantra asks readers about the idea of Retiring Overseas. Nice idea Mantra, and you should definitely plan a few trips over there to check it out!
Enjoy your last summer weekend everyone, and don’t forget to shop at Staples (SPLS-Q) and support my dividends. Don’t worry, I’ll be back to investing and dividend articles soon enough!