Recently, with what seems like the whole world, the stock markets have been in disarray. Just today, we had 200 point drops in both the TSX and the Dow. Actually, even the Nikkei is down 200 points as well. Welcome to the global economy!

Experts are predicting that the next few months or so will be pretty choppy. And of course, we all know these are just little bumps in the road. Nothing to get alarmed about. So where am I going with this?

Recently, I seem to be hearing lots of talk about where you should put your money in these ‘uncertain times’. And more frequently than usual, I am hearing experts say “Pay down your debt.”

Continue reading this post…

My story as to why I don’t try to time the markets.

On April 3rd, I wrote an article  about my current asset allocation and my new proposed allocation.  They were almost identical except that I decided to add in some emerging markets exposure (I know you know where this is going!).

Anyways, my new allocation called for 2% of my portfolio to be in emerging markets.  So, I went out an purchased some units of the CIBC Emerging Markets Index.  That felt good.  My new asset allocation mix was in place.

What happened next?  Emerging markets got hammered!  I swear.  It was the day right after I made my purchase!  My emerging markets is now down 13.65% in the last few weeks.

Oh well.  This is my new asset allocation model, so I am sticking with it, but I just thought I would share my little story.

Most of the banks (well, at least the ones that I own), have released their quarterly numbers and the great news is — they all increased their dividends! The beauty of increasing dividends is that it helps set the floor price for the stock. So as long as the dividend keeps increasing, the price of the stock should also increase.

The banks that I own and drip increased their dividends as follows:

Bank of Nova Scotia (BNS) up $0.03 to $0.39. Increase of 8.3%.

Bank of Montreal (BMO) up $0.09 to $0.62. A whopping increase of 17%!

CIBC (CM) up $0.02 to $0.70. An increase of 3%. Even that is pretty amazing after the whole Enron fiasco!

If you check out Mergent’s Dividend Achievers, you will see that BMO, BNS, CM, NA (National Bank of Canada), RY (Royal Bank) and TD (TD Bank) are all on the list.

If I could only own one stock, it would most definitely be a bank stock.

I have been using Quicken 2000 since, well, I guess 1999 roughly.  I upgraded from Quicken 98 because of all the Y2K hype.  It has always done everything that I needed it to do: keep track of my bank accounts and my investments.  It was definitely worth the money that I spent on it considering how much I use it!

So, I thought, “Hey!  I should probably upgrade to the latest and greatest version.”  Don’t ask me why that idea just popped in my head.  I don’t know.  Anyways, I went over to FutureShop, picked it up and paid $100 plus tax.  This also included a copy of QuickTax (which is valued at roughly $40).  Strangely enough you could either buy Quicken XG 2006 for $100 or the Quicken Suite which includes Quicken XG 2006 AND QuickTax 2005.  Go figure.
Anyways, I get home, install it and guess what?  Other than the prettier interface, it basically does the same thing that my Quicken 2000 does.  I am rather disappointed.

Quicken is obviously a mature product so they are really grasping at straws by trying to release yearly versions.  There just isn’t that much more they can possibly add to it.  Well, I have learned my lesson.  Although I love my Quicken, I do not plan to upgrade ever again.

Having slightly revamped my asset allocation, I decided that I would list the securities that I use to fill that asset allocation.

Equities (60%) made up of:

Canadian Equity (25%)
- Barclays iUnits S&P/TSX 60 Index Fund XIU (MER 0.17%)
- Altamira Precision Canadian Index fund (MER 0.54%)
- TD e-Funds Canadian Index (MER 0.31%)
- 14 Canadian DRiPs

I add to my Altamira Canadian Index fund regularly. Once it gets large enough to offset my brokerage cost, I roll that money into my iUnits ETF to take advantage of the super low MER. If I need to rebalance, I move money in and out of the mutual fund. I never touch the iUnits. This is my basic strategy of using the ETFs and mutual fund combo.

All my e-Funds are in a taxable account. My DRiPs are also in a taxable account letting me take advantage of the dividend tax credit. These are long term holds. Continue reading this post…