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  • Monkey See. Monkey Do. - Private Wealth Canada
    So what is the difference between an ape and a monkey Actually there are a number of differences including that apes are larger and have a larger brain to body size ratio so higher intelligence but the most visible difference is that apes do not have tails There are only six types of apes orangutans gorillas chimpanzees bonobos gibbons and siamangs Actually there is a seventh We humans are classified as great apes and share 96 4 per cent of our genetic makeup with orangutans Camp Leakey is only accessible by boat on the Big Sekonyer River which narrows as you motor slowly upstream with dense jungle and mangrove and palm trees lining the banks From the dock at the camp there is a sturdy 656 foot long boardwalk above the swamp to the camp itself and a feeding platform for the orangutans It was on this boardwalk where we encountered Ursula a seven year old female orangutan who was lazing on the planks We approached her cautiously but she was not the least bit scared of us and allowed us to get right next to her which was awesome and the highlight of our entire six week trip through Borneo Java and New Guinea I was very fortunate to get many amazing photos and seemingly she even posed for some While my wife Linda was taking a shot of me next to her Ursula reached over and grabbed my leg with a very strong grip and started pulling me towards her and the edge of the boardwalk For such a small animal I d say she only weighed about 50 pounds she had an incredibly strong grip but she did not hurt me She is obviously quite habituated After lunch we walked back to watch the 2 p m

    Original URL path: http://privatewealthmagazine.ca/articles/MonkeySee.php (2016-04-26)
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  • Setting Up Protection From HFT Predation - Private Wealth Canada
    require in the dark in order for the amounts to stay relevant across different securities When sending passive orders take an active role in specifying marketplaces in order to maximize your fill potential jumping ahead of HFT participants in many cases Strategically choose execution venues recognizing that marketplace fees are typically embedded in the commissions paid to the executing broker Route orders like retail traders as much as possible to help mask your trading footprint Executing brokers should be carefully selected based partly on their technological know how customization options and general market structure savvy Closely monitor developments in the Canadian market micro structure to ensure that you are aware of new marketplaces and order types that can be used to improve preserve execution quality Actively engage with Canadian regulatory bodies to ensure that the best interests of you and your clients are considered in the formulation of market structure regulations Examples of Some HFT Strategies Deemed as Predatory Strategy Type Description Order anticipation Directional Detecting and trying to trade in front of what is expected to be large trading interest by using publicly available exchange data price volume bid ask Dark order signaling Directional Detecting and trying to trade in front of what is expected to be large trading interest by using dark pinging strategies or by using publicly available dark execution data Momentum ignition Directional Initiating a series of order and trades in an attempt to ignite a rapid price move either up or down and incite others to trade at artificially high or low prices Layering Directional Placing multiple large orders to push the book away which could temporarily create artificially low or high prices that can be acted upon by incoming orders Latency gaming Structural Anticipating orders via the use of speed through co location to

    Original URL path: http://privatewealthmagazine.ca/articles/ProtectionFromHFTPredation.php (2016-04-26)
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  • Common Biases Of Goalkeepers And Portfolio Managers - Private Wealth Canada
    confidence years of training and the crowd s expectations further contribute to this sub optimal decision If the goalie dives then he feels that he did his best to stop the ball and so does almost everyone else Investment managers often fall into the same trap of action bias trading frequently with confidence that this action adds value And whether the trades ultimately prove to be right or wrong the manager who trades frequently looks like he s doing something to generate results This is one of many behavioural traits contributing to widespread short termism in the markets In recent years the average holding period for a stock has dropped to about seven quarters 2 All too often the concept of buy and hold investing has been subsumed by short term trading strategies Many of these trading strategies which rely on top down macro economic calls are often no better at predicting the future direction of the market than the goalie who tries to guess which way the shot is going Such a short term bias creates an enormous time horizon arbitrage opportunity for individual and institutional investors who are willing to take a long term view Over very short time periods say one week the average difference between the best and worst performing stocks usually comes down to a few percentage points Move out to one year and you will begin to see stocks that significantly outperform in any given year However as they say there is no free lunch and many of these high flying stocks will often see market sentiment turn against their lofty valuations and find themselves at the bottom of the league tables the following year Quite Meaningful By contrast if you look at the performance dispersion between the best and worst stocks over a

    Original URL path: http://privatewealthmagazine.ca/articles/CommonBiases.php (2016-04-26)
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  • Recession? What Recession In Collector Car Market? - Private Wealth Canada
    At an average of 78 000 there were vehicles hammered down for all budgets Barrett Jackson also set the world record for a Corvette for the 1967 L88 that sold for 3 85 million Another unique offering was the 1998 Ferrari F300 Formula 1 allegedly Michael Schumacher s own test car No doubt the precarious state of Michael himself following his tragic ski accident contributed to the 1 9 million sale price 1967 Corvette L88 Gooding Company realized US 52 5 selling 101 out of 104 lots at an astounding average of 519 727 a car a healthy 31 per cent increase over 2013 Top sale was a 1958 Ferrari 250 GT Series 1 Cabriolet at 6 160 000 Also of note was a 1997 McLaren F1 GTR Longtail racecar at 5 28 million Seven cars went for over 2 million each and an even dozen at over a million dollars New All time Record RM Auctions sold 85 per cent of its 125 automobiles offered with 10 going for in excess of a million dollars All told 107 cars went for 45 5 million in their two day event for an average of 420 560 each better bring a good line of credit here also Setting a new all time record at the Arizona Auctions was a 1958 Ferrari 250GT LWB California Spider at 8 25 million One no sale was the fabled ex Jim Hall Chaparral 1 which did not meet its reserve at 1 75 million Vintage racing has its price too Bonham s the most recent entry to the Scottsdale auction scene in only its third year achieved almost 25 million in 86 sales proving its competitiveness Yet again a Ferrari in this case went for the most a 1951 212 Export Coupe at 3 19

    Original URL path: http://privatewealthmagazine.ca/articles/NoRecessionCollectorCarMarket.php (2016-04-26)
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  • Supplemental Pensions And Key Employee Retention - Private Wealth Canada
    company sponsored SERP can therefore be an important retention tool It is a win win Employees executives receive greater retirement security in a more favourable tax structure The company has more stability in the key employee with a longer retention horizon Target Benefit SERPS Utilizing the retirement compensation arrangements RCAs provisions of the Income Tax Act a group RCA is established for the key employees executives The company makes annual deductible contributions to the Group RCA segregated internally relative to benefits for each employee A corporate trustee is appointed so all Group RCA funds are held separately from the company providing full security There are three benefit selections which the company can elect These can vary by employee group and can be integrated with a group RRSP or other pension plan if desired Full Integration based on two per cent times years of service of final average compensation three five or best five of 10 with no cap and integrated with other pensions 50 per cent plan based on one per cent times years of service with no integration Guaranteed Level Benefit 2 000 to 5 000 monthly cannot exceed 70 per cent of average earnings adjusted for time value of money to retirement and indexed thereafter Key employee executives enjoy the comfort of knowing they will receive guaranteed or adequate retirement benefits to provide them with living money in retirement Other investments provide play money Vesting Owners gain the advantage of structuring a vesting agreement that will ensure that key employees executives remain with the company until retirement It becomes increasingly expensive for another company to match benefits for senior employees as they get closer to retirement Since succession or sale arrangements often hinge on the retention of key employees and executives the advantage of a supplemental pension plan s vesting agreement is attractive If it is a family business the children gain the advantage of retaining the expertise of key executives for a period of time Mitigation Of Funding Cost The third option is one of the most sought after by employees If they are in a money purchase pension they have great fear that their RRSP group RRSP or MPPP will not provide adequate minimum retirement benefits Employees want need at least some level of guarantees similar to what would be received from a defined benefit pension plan The concern over DB is the investment risk to the employer and the liability for increased funding This is why they have declined in popularity Registered pension plans are not allowed to own a mortality component on plan members but a group RCA can The long term investment risk is eliminated from the mortality guarantees on the individual contracts holding each member s share of contributions Insurance companies today provide policies that can be structured to be used for retirement purposes providing both investment and mortality components the latter for survivor benefits and funding mitigation In group RCAs some members will live longer others die short New members are

    Original URL path: http://privatewealthmagazine.ca/articles/supplementalPensions.php (2016-04-26)
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  • An Industry That's Lost Its Way - Private Wealth Canada
    for the caretaking of underlying beneficiaries Deeper investment in compliance and risk management A fresh and honest look at leadership span to ensure strong internal control Simple and transparent financial product design and communication Firm wide public commitment to an ethical code of conduct and education Of course the public and the individual investor have an obligation as well It s not enough to wait for the industry to change itself If investors around the world take it upon themselves to ensure that their financial services professionals are ethically grounded and deeply competent the shift to a fiduciary culture will only accelerate It all starts by talking with your financial adviser As always make sure to keep your adviser apprised of any changes to your risk tolerance return expectations or financial situation but more importantly be sure to address the nature of your relationship Can it be strengthened Do you feel you trust your adviser and his or her firm The best way to get the conversation started is to encourage your adviser or broker to adopt the Statement of Investor Rights The statement outlines what you should expect from them at minimum such as transparency effective reporting clear communication independence and objectivity The statement is a great way to uncover any potential issues that may be lurking beneath the surface of your relationship Ask your adviser about his or her standards of care or professional codes of conduct to which they are bound by virtue of their employer or affiliation with the professional association If your adviser is unable to speak fluently or concretely about such codes of conduct investigate further Then engage in a discussion about how your adviser will be rewarded If your adviser s and your incentives and motivations will periodically be misaligned how will he

    Original URL path: http://privatewealthmagazine.ca/articles/IndustryThatsLost.php (2016-04-26)
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  • Look Outside Canada For Equity Opportunities - Private Wealth Canada
    while the MSCI EAFE Index rose 32 per cent The S P TSX Composite gained 13 per cent We believe U S stocks will achieve strong gains this year possibly even in the high single digits The U S housing market has bounced back from the depths of 2009 Housing debt has fallen dramatically with 14 per cent of Americans financially underwater with respect to their home debt situations where home value is less than mortgage value in 2013 nearly half the level of the year before This translates into five million more Americans who will be able put more money into the economy which could boost the home building financial technology and healthcare industries On top of this evidence suggests overall corporate earnings and balance sheets remain strong Looking abroad European and emerging market economies appear to be on the road to recovery In the Eurozone the worst case scenario appears to be in the past now that countries like Greece and Ireland seem to have solved their sovereign debt problems Some concerns remain though such as Italy s debt burden although its 10 year bond yields have fallen Europe is roughly where the United States was several years ago in terms of recovery with improvements in GDP unemployment and export data But we feel the best long term investment opportunities are to be found in emerging markets Multi national companies continue to invest in these countries and they remain the strongest growth prospects Consumer wealth is growing there as well and we expect this to boost the consumer discretionary financials and telecommunications sectors The good news in the U S and overseas is in contrast to the situation here at home We think Canadian real estate prices have been too high for some time and it s possible

    Original URL path: http://privatewealthmagazine.ca/articles/LookOutsideCanada.php (2016-04-26)
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  • Private Wealth Canada
    resist a sexy sales pitch You know the drill and you probably receive frequent solicitations by investment professionals eager to tout their services These may range from the sedate traditional fee based products to the sensational investments that promise fantastic returns with little risk Do you think it s likely you ll be able to turn that down and are you sure you know how to evaluate the risks and potential rewards of an investment opportunity Do you understand your risk tolerance As Warren Buffet explains risk comes from not knowing what you re doing This is especially true for self directed investors and is best measured by one s ability to handle investment loss Unfortunately risk is a fundamental part of investment management As a self directed investor you need to understand the level of risk potential loss you are willing to take in the hope of longer term gains What do you want your money to do Investors sometimes invest to meet their goals and they sometimes invest to exceed normal market performance As you accumulate more and more money it becomes increasingly tempting to try and outperform the market something that has proven quite difficult to accomplish in recent years If this is your goal it s important to make sure you re not at an analytical disadvantage Investment houses hedge funds and brokerage firms all around the world employ countless professionals whose job it is to study very specific areas of the market If you are trying to compete with them for outperformance you will need to consider getting some outside help Investors seeking to manage strategies targeting outperformance need the benefit of experience and a specialist set of skills ranging from accounting and corporate finance knowledge to plain old wisdom Do you know how to ask for help The number of services available to investors is vast and highly varied Some like advanced advice on choosing between complex investment service providers are highly optional and focused on increasing your upside Others like tax trusts and estate planning can help avoid very costly mistakes and are neglected at your peril It s essential that self directed investors consider all aspects of their finances and not just the exciting world of investment markets If tax or succession design is not your thing then bring in an expert Do you know how to measure success Many investors don t have the skills or understanding to do this Make sure you are capable of monitoring your progress towards your goals so you can stay on track with your overall financial plan This may be more difficult for self directed investors and is one of the core services that financial advisers provide What s truly important when you have more money than you could ever possibly spend If after reading all these points if you are still up for the challenge of managing your own wealth you should consider how your money will continue to work for you build your

    Original URL path: http://privatewealthmagazine.ca/articles/self-directed.php (2016-04-26)
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