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Canadians creating their Twitter and LinkedIn cosmologies

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Is social media growing in Canada?

For Canadians, it’s often easier to get information on the digital landscape through our neighbour to the south (for obivous reasons). But what of digital Canada?

In Social Cosmology: Social media is creating its own multiverse, I blogged about the potential for social media as it accelerates into the future. You’ll find some interesting Twitter stats. In SocRev: The social revolution and its potential to revolutionize the corporation, I referenced similar statistics on LinkedIn.

Digital Canada

comScore just did a report on the Canadian digital space (or is that “Canadian digital space?”).

In Canada, with respect to unique visitors:

  • Twitter grew 27 per cent
  • LinkedIn grew 38 per cent

comscore slide

While Facebook’s growth has slowed, Twitter and LinkedIn are two growing portals in social media defining their positions in the social media multiverse. Twitter and LinkedIn have been growing at a rapid pace in Canada (and abroad), and they continued that trend in 2012.

Pinterest (especially) and Tumblr grew faster, but will they have the longevity Twitter and LinkedIn promise?

RBC did a study reporting that use of social media amongst small businesses is almost as popular as websites. *

Some say there’s no place for social media …

Have they been speaking to Canadians?

Find the report here.

Follow me on Twitter, by RSS or sign up to receive posts via email, top sidebar to the right.

The social multiverse at work?

A friend of mine sent me the following, startled at how similar the beginning of it was to my pieces on the social multiverse. Interesting …

How Twitter Is Reshaping The Future Of Storytelling



Written by johnrondina

March 6, 2013 at 12:13 pm

Part Two: You don’t need to listen to Warren Buffett* (if you’ve allocated your investment portfolio properly)

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In Part One of this post, I left off saying I’d discuss why having a plan benefits you when it comes to asset allocation within your portfolio.

Markets keep on moving

Investors have to be conscious of the fact that the markets are never static. No one knows exactly what’s going to happen in the markets.

Since markets change, and taking into consideration recent events, here are three points we should consider:

  • Are investors now overweight bonds?
  • Do investors miss out by trying to time the markets?
  • Can you achieve your investment/retirement goals by holding (supposedly) low-risk investments?

The bond blackhole 

It’s highly probable that some investors are overweight bonds. If this movement to bonds is related to short-term fear rather than long-term planning, it’s a mistake.

Consider an older retiree who’s heavy in bonds. That same retiree holding a large fixed income component in his portfolio is going to suffer in a bond correction.

Still, these older retirees need the safety fixed income investments provide them. But retired investors need to weigh the potential in equities long-term over the safety in bonds or GICs and allocate accordingly.

Equities, inflation and long-term hedges

Here’s an interesting article from The Economist discussing Canada’s pension plans.

Ask yourself: Why do professional pension fund managers include equities in their investments? Are they about to abandon stocks?

Without growth an investor’s going to be in trouble when they begin withdrawing investments in retirement. Equities have done best over the very long-term against inflation, even during recent superb bond outperformance.

So, what’s happened to stocks? Why all the noise?

Of course, it’s generated by abuses leading up to the financial crisis, and investors who’ve been spooked by the big correction of 2008-2009. But here’s the thing:

Stocks have undergone a period that will go down in history as one of the largest corrections most investors have seen. Equities then had a larger than average correction last year.

Since that time, if you’d focused on the opportunity presented, you’d have had some nice returns. Stocks may correct again since they’ve had a march upwards. Companies have increased dividends focusing on what looks like better times with strong balance sheets.

Are stocks a better value than bonds?

In Part One, you can find solid reasoning on why they are.

Don’t want to be glued to your portfolio?

What’s the easiest way to take advantage of market swings that favour different investments at different times — without becoming a burden on your personal time resources?

Proper asset allocation.

Despite the volatility, stocks have done pretty well

As the chart above shows, stocks and bonds have still done pretty well over the long-term. Amidst all the volatility, stocks and bonds have performed. U.S. stocks may not have done as well for Canadian investors, but they picked up enormously in 2011.

Avoiding equities? It’s going to cost you in the long-term

The S&P/TSX 60 is made up of sixty of the largest companies in Canada. These dividend-paying stocks have done well over the ten years above despite the correction during the financial crisis.

Since equities have had a couple of major corrections in the last five years, they continue to show value especially in the face of historically low interest rates. U.S. equities are showing even more value relative to those in Canada. But they’ve also had a nice increase lately.

Believe in your plan

The stock and bond markets have shown an amazing ability to outwit retail investors. It’s hard to know what the markets will do. Don’t worry about it.

The secret is focusing your energy in a pro-active plan:

That long-term plan will help keep you focused.

Do you still believe in your plan? Are you comfortable with the amount of risk your taking?

If you believe in your plan and you are comfortable with the amount of risk you’re exposed to, make sure you apply the following to your investment portfolio:

  • A well-balanced mix of suitable assets
  • Evaluate your portfolio regularly
  • Stick to your plan
  • Rebalance your portfolio
  • Diversify with respect to the assets you hold, as well as the geographies you hold them in
  • Contribute regularly to your plan in order to take advantage of market volatility

Stocks have a lot going for them at the moment, but they’ve had a great run over the last few months. Will they correct?

Bonds have performed very well since the financial crisis. Will they correct?

Whether there’s a market correction or not in either asset category isn’t important. What is important is that you have a long-term plan that takes advantage of outperformance at different times in both stocks and bonds.

A good manager will make use of market volatility.

So can you.

Need more information?

Click below for more about asset allocation and reallocation strategies:

Get the balance right

A simple way to arrive at the right asset allocation for your portfolio

Plan like a pension fund manager when it comes to your investment portfolio

Let’s think about assets

Asset allocation: Diversification is king

How’s Warren Buffett’s long-term stock-picking record?

Chart source: Globe Investor


*While using proper asset allocation may reduce your need to listen to Warren Buffett about the stock markets, listen to him, anyway. Few have been as successful as Buffett in stocks.

The title of my blog post is a poke at his critics. Even fewer of them have had the same long-term track record as Buffett!

Market volatility: Why and how to make it work for you

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Freaked out about the markets? You’re not alone.

This year’s market volatility has rattled investors. While nobody loves market volatility, the wealthiest members of society seem to tolerate it better than the average Canadian or American. At least, they don’t seem to cash out of their investments after large market drops, and, according to studies, many investors do.

What separates the wealthy from the average investor? What is it that causes Joe and Josephine Average to be less successful as investors than they could be?

Recent research on young people and financial literacy shows that fin lit is an area where young people need help. Kids aren’t alone. Many adults don’t understand financial markets. In “Kids and money: What kind of financial legacy are we leaving our children?”, you can find some startling information on adults and financial literacy.

Investing (and financial literacy generally) is a major factor separating the poor from the wealthy in Canada and the U.S. While this is obviously not the only factor determining household wealth, it is a large contributor.

The media’s been saturated with stories about the “1 and 99”. Awareness about the 1 per cent and the 99 per cent of society in the U.S., and about why the 1 per cent hold so much more wealth than the 99 per cent is high right now. The Occupy movement has gotten a lot of attention in the media despite criticism that the movement’s message is somewhat muddled.

Some facts about the extremely wealthy in Canada (the richest 1 per cent of Canadians who capture 32 per cent of all income growth, according to StatsCan):

  • They own an enormous proportion of our society’s wealth
  • They are major holders of stock, bonds and real estate
  • They tend to be well-informed when it comes to investing, or they seek out experts to assist them with their financial planning strategies
  • They understand market volatility much better than the average investor does (again, they seek out experts more than the average investor does)

Up down and all around

Market volatility has put terror into more than one heart. Especially that of the novice investor. The danger here is that fear will stop the average investor in his tracks.

But don’t the 1 per cent face market volatility as well?

The volatility during the last five years has been extraordinary. The market has undergone two of its most extreme periods of volatility starting in 2008 and ending in 2009 and then beginning again this year. And, yes, we’re still in the midst of it. We may be closer to the end of the current period of volatility, but that’s difficult to know given the number of variables involved.

In Part Two, I’ll discuss why market volatility is your friend, and how changing the way you look at volatility leads to superior returns.

Kids and money: What kind of financial legacy are we leaving our children?

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When I graduated with a BA in English, the only thing I knew how to do financially was a budget. I loved literature, but financial literacy?

I knew land could be good. I’d learned about budgeting and land from my parents.

During my first year of work, it didn’t take long for me to learn that there were a lot of things I didn’t know a whole lot about.

The stock markets had just crashed. (It was a great time to buy.)

Every day as I rode the TTC, I read about things I couldn’t begin to understand. For a pretty smart guy, I felt stupid. That year, I read everything I could about investing and financial planning and gave myself the expertise I needed to understand the events in the newspapers.

I have never regretted that investment.

It’s been part of my active research ever since.

Financial literacy is on the move this year. The $5 million Task Force on Financial Literacy released a report with a host of recommendations. November is Financial Literacy Month in Canada. Non-profits are collaborating on monthly events.

Why do we need this focus on Financial Literacy?

• Average debt to household income has increased in Canada

And it’s not so-called good debt (where you can write-off the interest payments). Our burgeoning debt alone should prove the need for financial literacy.

The B.C. Securities Commission, in a survey of more than 3,000 17-to-20-year olds, released the following last week:

• They expect to be making $90,000 a year by 30. Three times the national average.

• Three-quarters think they’ll own homes at that age. Government data estimates 42 per cent of 25-to-29-year olds are homeowners.

• Many students graduate with “weak financial skills and little knowledge of the financial realities they will face.”

Those stats should give parents and concerned members of Canadian society great pause. During a time when credit-binging has led to some brutal consequences in the U.S., Canadians have loaded up on debt. Some people have warned of our own inflated housing prices … Low interest rates are making this housing price boom long. Too many people think housing will go up forever.

There are always exceptions, but the statistics are overwhelming. Kids are out-of-touch with financial reality.

The digital universe is changing so fast some can practically feel the wind blowing them back into their chairs. Information has more channels than most can keep up with. Plugged-in like never before, but disconnected from financial reality, kids need help understanding debt, budgets and saving.

Add to this:

• Baby boomers are aging

• Europe and the U.S. are having their issues with taxes, debt and political infighting

• Though Canada’s doing comparatively well, the crisis of 2008-2009 illustrated how global markets and economies are interconnected , and how poor the average person’s understanding of market volatility is

Of Canadians in general:

• One in three is struggling or can’t keep up with their finances

• One in four is weak in key areas of planning and budgeting

• 30 per cent are not preparing for retirement

• Millions of Canadians won’t have sufficient retirement savings and no pension plan other than the CPP/QPP and Old Age Security

• People have very low tolerance for market volatility (and without being able to process market volatility, it’s pretty hard to be an investor. Without becoming an investor, it’s hard to get ahead.)

While there are great agencies doing their part to raise awareness and make lasting and effective changes to our education system, parents need to teach their kids about debt.

The consequences to our economy and economic future of financial illiteracy are immense. Championing long-lasting positive changes in the way schools teach financial literacy is no longer optional.

It’s our future. It’s their future.

A simple way to arrive at the right asset allocation for your portfolio

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What’s your piece of the pie? 


Instant asset allocation

Asset allocation can be as complicated as you want to make it. But since many investors don’t have time to get overly complex about assets in their portfolios, here’s a simple look at how to allocate.

Financial planners used to say subtract your age from 100:

  • The remaining percentage is what you should have in stocks

So, if you’re 30, keep 70 per cent of your portfolio in stocks. If you’re 70, keep 30 per cent in stocks.

The best asset allocation for your age

Canadians can look forward to living longer. Because we’re living longer, we have to take this into consideration when it comes to our portfolios. Some recommendations are suggesting the number used should be increased to 110 or 120 minus your age reflecting our greater longevity.

If you’re living longer, you need to make your money last longer. You’ll need the extra growth that stocks can deliver.

Many experienced investors find that adjusting the number to suit their risk tolerance after a large correction, say, like 2008-2009, a good metric. Large corrections can get you in touch with your investor psyche pretty quickly. But be cautious about selling when the mood has reached maximum pessimism. It rarely turns out well.

In “Plan like a pension fund manager when it comes to your investment portfolio”, I discussed the benchmark for the average diversified fund manager. The important thing is to choose an asset allocation you think you can be comfortable with.

For example, if you had a 50/50 portfolio split, you could expect that your stock holdings would move a lot less than a broad index like the S&P/TSX 60 in Canada, or the S&P 500 in the U.S. While you may be tempted to think it’ll move half of one of these indices, it will depend on how close the equity component of your portfolio correlates to either of these indices. If your stock allocation is geographically diversified, this will also change things.

When you compare the S&P/TSX 60 (60 of the biggest companies in Canada) with a balanced fund that is geographically diversified, we’d expect, generally, to see:

  • Less volatility because of the fixed income component in the balanced fund
  • Less volatility because of the geographic diversification in stocks and bonds in the balanced fund

This is exactly what happens when you graph the S&P/TSX 60 and the Claymore Balanced Growth Core Portfolio (TSX:CBN). The Claymore portfolio is based on the Sabrient Global Balanced Growth Index. Roughly an 80/20 balance between growth and income-oriented ETFs holding stocks and bonds.

Diversification reduces volatility

The S&P/TSX 60 shows more volatility than the Claymore ETF. There are reasons for this.

The S&P/TSX 60 is made up of sixty of the biggest stocks in Canada – one country with a big presence in financials, energy and materials.

The Claymore ETF is geographically diversified. It holds stocks from all over the world. It also has a fixed income component. Its equity and fixed income allocations are further diversified. They hold different investments that perform somewhat differently depending on market/economic conditions.

What investors have to remember is that while volatility is reduced when fixed income products are added to a portfolio, it also reduces the upside of the portfolio when markets turn around. A geographically diversified portfolio with fixed income products added into the mix isn’t going to perform as aggressively as the broader stock market.

Most investors can tolerate less upside for less downside. As we’ve recently seen, it’s the drops that make people a little shaky in the knees.

Remember, should you want even less exposure to stock, there are plenty of products out there that are closer to a 60/40 split between equities and fixed income.

Asset allocation is going to affect performance and risk. You can always use systems (like the simple ones above) to come up with a benchmark for your portfolio, but in the end, your portfolio’s going to be slightly different because it won’t have exactly the same investments.

Opportunity abounds in down markets. Part of the opportunity of market volatility is figuring out your risk tolerance. If this last correction gave you palpitations, maybe you have too much stock.

But consider:

  • The markets have corrected. This graph is from September 2010 to September 2011. If you sell investments now, you may be selling near the bottom.
  • Having an asset allocation system in place is going to be the best benchmark for rebalancing your portfolio. If you haven’t had such a system in place, think, and act now.

There may be opportunity out there. In fact, the last few days in the markets have seen some extraordinary upward movements in equities. September is often the cruelest month in markets, but October has ended a lot of bear markets historically. Bad news travels fast and furious, yet the sounds of optimism often appear within the pessimism and noise.

*ETFs used here are for illustrative purposes

Why you should consider new investments now

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Thinking about contributing to an RRSP, a TFSA, an RESP or other investment account? Now may be one of the best times since 2009 to fund any of these accounts, especially if you have over ten years for your investment to bear fruit.


Because, at the time of writing:

  • In Canada, the S&P/TSX Composite is down 20 per cent over six months
  • In the U.S., the S&P 500 is down about 17 per cent
  • Any good news out of Europe causes some nice upward movement on Canadian and U.S. equity prices, suggesting there may be some upward momentum if Europe gets its act together regarding a solution to the debt crisis
  • As the two most common areas for Canadian investors to put their money to work, Canada and the U.S. present compelling values for stock investors compared to six months ago
  • The S&P/TSX Composite is down about 10 per cent over one year
  • The S&P 500 is down about 5 per cent over one year
  • The iShares DEX Universe Bond Index is up over 7 per cent since its low within the last year

While nobody wants negative returns (unless you’re looking to buy at cheaper prices!), this current equity correction doesn’t look as bad over one year, and looking at returns over that time frame provides some perspective. Over one year, the declines don’t look as dramatic, and that takes some of the fear out of equities.

Fixed income has outperformed. Looking at this outperformance in a rebalancing context, shows stock is currently cheaper.

No one is sure what the future holds, but what is sure is that stocks are a better deal than they were, and bonds aren’t as attractive.

Do yourself a favour: If you’re nervous about markets do some gradual, strategic buying. If you don’t have a plan regarding your asset allocation, get one.

Fear of losing may keep you from winning. Fear is a motivator, so if fear is keeping you from being a strategic investor, consider that fear should also keep you focused on your plan.

Investors have to accept that they will never know exactly what the market is going to do — and then plan accordingly.

Take comfort in the fact that someone like Warren Buffett recently invested $4 billion in the stock market.

Markets will either go up, down (or sideways) in the short-term. If you stay with a balanced portfolio, you have limited downside risk. But if you stay completely out of the market, expecting the four horsemen of the apocalypse, you may be disappointed if the horsemen don’t arrive.

A good long look at a stock chart after the 2009 market bottom (and such a chart can be found in one of the above links), might help you steel yourself, too. Markets had quite an increase until the latest correction began.

The planning you do now will serve you well when the market next moves into a bull phase and increases.


Feeling some panic?

What’s a TFSA?

In times of volatility, you might want to focus on conservative dividend-paying investments

Part Two: Cash, corrections, the end and feeling fine

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It`s the end of the world as we know it -- or is it?

In my last post, I discussed cash on corporate balance sheets, whether all that cash on balance sheets is the best use of corporate funds, and what companies will do with that cash (hopefully, sooner than later).
Onward …

Squabble, squabble, squabble: What happened to collaboration?

We’ve watched U.S. and European politicians do little. Squabbling doesn’t really count as a productive activity these days. Playing politics looks pretty selfish. Procrastinating looks plain stupid. The crisis in Europe is a serious issue that requires a serious response. Most probably, one that involves world-wide collaboration.

The markets are going to force politicians to get their acts together. This isn’t the time to think regionally. The global economy is here, like it or not. It’s time to act for the greater good rather than protecting one’s own backside.

We live in a global world. Interconnected, with dependencies that aren’t always transparent on the surface of things, a large event in any one country or region has far-reaching consequences. Yet too many politicians are shouting, “Mine!” Toddlers in daycare show more skill in sharing and thinking about their larger community.


Warren Buffett’s belief that increasing taxes on high income-earners is the way to go has become popular with many people. There seems to be a growing feeling of community amongst some individuals. A feeling that it’s time to share the wealth, and that tax cuts for the wealthy have gone too far.

Agree or disagree with Buffett’s belief on taxes, he`s a man that’s been, to understate the obvious, fairly successful at what he does. No wonder he has something like superhero status amongst Berkshire Hathaway’s shareholders and the followers of what’s become the “cult of Warren”. Not to mention that he’s one of the biggest philanthropists in history. He also advocates that the wealthy should follow his example. He counts Bill Gates amongst his admirers and a fellow in philanthropic efforts.

Project Band-Aid: (It’s [not] just a flesh wound)

Solutions in Europe have been largely plastic. But Band-Aid’s are short-term. Germany is coming under increasing pressure to be a leader in Europe rather than dwelling on its own self-interests. Take a look at the share prices of German banks or the MCSI Germany Index down 28 per cent year-to-date.

The market’s telling us you can’t have your cake and eat it, too. You can’t create markets, sell to them and leave them, according to investors. Not without paying for the engagement ring, at least. And the price tag is more than three months’ salary.

What investors would really like to see is a unified Euro bond. Perhaps leadership in Germany (and Europe broadly) needs to think more about the greater good (including Germany) rather than more national self-interests.

After all, why create a broader community in Europe if when crises appear leadership is going to become nationalistic? Marriages are for better or worse. If any one nation in Europe thinks it’s going to skate away from the Europen crisis, it’s sadly mistaken. The fact is the interconnectedness of financial instituitons, financial transactions and myriad moving parts is not going to ignore Germany. It’s punishing its stock market along with those of other European countries. And inaction and lack of adequate response will make this situation worse.

President Obama’s under pressure as well. American politicians have looked just as ridiculous as their European counterparts. The inability to collaborate, to forge solutions and move forward is getting a lot of press. Markets gave the Operation Twist strategy a big thumbs-down within moments, and today’s activity in the markets reinforces that.

So, wait a minute … Where’s opportunity?


  • Corporate profits are near record levels
  • Corporations are in better shape than some governments
  • Corporate bonds look better than some nations’ bonds
  • Global housing bubbles have burst already (largely)

In Canada, we are fortunate to have a strong bond market, but in the U.S. and Europe, there are more than a few questions regarding bonds. However, during the last few days’ extreme market volatility, investors still threw their money into the U.S. dollar and Treasuries – liquidity foremost in their minds.

Bonds and dividend yields

Bonds have done exactly what they were supposed to do in this correction. They have provided income and have risen dramatically as investors ran for cover. With bonds yielding very low rates of return (despite functioning as insurance in portfolios) in both the U.S. and Canada, the situation seems better and better for strong dividend-paying stocks long-term. Recently, we saw the S&P dividend yield rise above the 10-year Treasury.  In Canada, dividend yields have also risen dramatically. Your dividend yield is paying you to wait. Not bad.

The economic situation may be deteriorating; still, it’s hard to imagine that GICs are going to be worthwhile as an investment for anything other than short-term concerns in the current environment of low interest rates.

Hopefully, many investors have been following a strategic protocol of rebalancing their portfolios.  If they have, they don’t need to worry as much about the volatility in today’s markets. They may have to wait for better returns, but at the same time, they’ll get paid to wait knowing they own solid companies with a history of dividend payments.

Holding dividend-paying equities is really important because it’s the end of the world as we know it. But it’s been the end of the world as we knew it so many times before. Past is prologue. Perspective is very persuasive.

In the end, dividends provide what more speculative investments can’t:

  • A solid income stream

While the pain created by the Financial Crisis, and the current crisis in Europe is serious, investors who’ve followed prudent rebalancing strategies will be able to:

  • Count bond and dividend payments as they sleep

And that’s probably the best measure of whether your portfolio accurately measures your ability to tolerate risk … being able to sleep at night.

It’s the end of the world as we know it (like so many times before), but from an investor`s perspective, a solid income stream might help us feel fine.


As if on cue, Warren Buffett announced today that Berkshire Hathaway would buy back its own shares.

Warren Buffett bought $4 billion worth of stock in the third quarter as markets slid, investors worried and pessimism gathered steam.

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