Investments

Diversification is over-rated

If diversification is the only “free lunch” investors have, then what is over-diversifi cation? A sub-par meal at an expensive restaurant? Our industry has gone way too far with the diversifi cation mantra. We have run steadily and without constraint to a point where clients today own hundreds, and in many cases thousands, of stocks […]

By Tom Bradley |June 1, 2009

3 min read

Transforming, not eliminating, risk

One of the great lessons of the current credit crisis is that risk is indestructible. When capital is invested in a long-term asset, risk exists, since the asset will provide value to its owner over a long period, while involving non-trivial acquisition costs. Investment in long-term assets necessarily involves forecasting, and the vagaries of forecasting […]

By James I. Hymas |June 1, 2009

7 min read

Equities vs. bonds

As the last vestiges of a rather cold winter come to an end, I wonder if the chilling price drops in equity markets may at long last be ready for recovery. At the end of February 2009, the S&P 500 index was 50% below where it was in March 2000. Since then, March came in […]

By John Nicola |June 1, 2009

4 min read

The impact of fees on portfolios

If you held the fixed-income fund that had the worst performance in Canada over the last year, you’d likely be disappointed by its 3.4% loss. But you’d certainly be more upset if you held Canada’s worst performing high-yield bond fund (which lost 34.7%) or Canadian equity fund (down 45.4%). With these returns in mind, it […]

By Esko Mickels |June 1, 2009

4 min read