Beare

Becoming a self-managed investor is

easier than ever

     

Knowlton Thomas

t is easier now than ever for

people to educate themselves.

With the advent of the internet,
a wealth of knowledge is readily
available at any time, any place, to
anyone. Financial information is no

different, yet it seems to _ vastly
underused, considering the average
Canadian household debt and lack of
savings.

Those willing to put in the time
and effort will be duly rewarded
with a financial edge, especially
students who have the ultimate
advantage when it comes to investing
and savings: time. Below are a few
simple tips as you work your way
to becoming a wise, self-sufficient
investor.

Cut out the middleman

These days, it’s easier than ever
to cut out the middleman. Not just
for finances, of course, you can fly
without a travel agent, and sell your
house without a realtor. Just like
in those cases, you’ll save costs by
assuming more responsibility and a
little more work.

Use discount e-brokers like
Questrade instead of trading stocks
through stockbrokers. Open a self-
managed mutual fund with a smaller
financial to reap the benefits of lower
manage expense ratios (fees). And
use the internet to scope out credible
investment advice instead of hiring
costly advisors.

Smart diversification

Finding a balance of investments
in your portfolio that align with your
personal goals is crucial, but not
too difficult. Obviously, diversity
in general minimizes risk without
sacrificing return potential, so it’s
hard to argue against this tactic.

Almost any financial institution’s
website will have an online quiz
that analyzes basic things like
your tolerance for risk, your desire
for growth, and your investment
knowledge. Said quizzes are short,
free, and will help you get a general
overview of what you may want to
consider, plus make you think about
your portfolio from different angles.

16

Of course, each individual is
different and you’ll need to tweak
any quiz’s suggested investment
allocation to exactly your preference.
Down the road, it’s a good idea to
reflect back on old quiz results to ©
determine whether your portfolio
needs to be rebalanced as finances
change.

Maximising tax efficiencies

Fill up your Tax-Free Savings
Account (TSFA) to the brim before
considering anything else. Then,
fill up your Registered Retirement
Savings Plan (RRSP) to the brim
before considering anything else.

The TSFA is completely tax-
free, an amazing benefit that cannot
be underestimated, and the RRSP is
tax-deferred, which can translate into
big tax savings over the long term.
And both accounts can hold almost
any type of investment, from basic
savings to GICs to any type of mutual
fund.

Both types of accounts are
available at any financial institution,
even online ones like ING Direct.
And if you have money leftover
after filling up both your TSFA
and RRSP. ..well, then you’re one
wealthy student and probably don’t
need my advice.

Ladder your GICs

Unless you are positive that the
economy is in a decline, laddering
your guaranteed investment
certificates will maximise returns and
the availability of your money.

What’s laddering? Say you have
$5,000. Instead of locking all of it
away for five years at one interest
rate, a ladder approach would see it
divided into five $1,000 GIC’s: one at
five years maturity, one at four years
maturity, etc. After each one matures,
they are all re-invested for five years.
(This can be set up automatically, but
doing so manually is recommended.)

What laddering accomplishes
is that, at the end of any given year,
you have the opportunity to cash in
one-fifth of your investment if you
need it for other purposes. It also
lets you get the most up-to-date
interest rates, which, considering
our current economic forecast will
prove beneficial down the road.

This strategy can be executed with
anywhere from two to five GICs.

 

 

The Top 10 Gadgets for the holidays

A peek at the must-have gadgets for this holiday season

By TK Kwon

Apple iPhone 4

Apple’s newest rendition of the iPhone
line boasting the beautiful Retina Display and a
powerful A4 processort to make using the device
a quick and satisfying experience, although the
lack of 4G support is a shame (don’t be fooled
by the name, this device only supports 3G)
MSRP: 16GB - $159.95/32 GB - $269.95 ona
3-year contract (Rogers, Bell, & Telus)

Samsung Galaxy S Vibrant

Undoubtedly iPhone 4’s strongest
competitor on the market, and for good reason.
Designed with Samsung’s popular Super
AMOLED display for vibrant colors and the
sister model of the iPhone’s A4 processor (which
is also manufactured by Samsung) for blazing
speed, the Vibrant is one of the flagship models
running Google’s growing Android platform.
MSRP: 16GB - $149.95 on a 3-year contract
with Bell (Note: storage is expandable up to
32GB via microSD card)

LG Optimus with Windows Phone 7

Joining the iOS versus Android fray is
Redmond’s newest mobile platform contender,
the Windows Phone 7. Created under
Microsoft’s rigid specification requirements,
this device is all about speed and accessibility.
Knowing Microsoft’s market dominance in the
computer market, it seems like they are ready to
re-enter the market they failed to nurture with
Windows Mobile with a feature list including
Microsoft Office, Zune, and XBOX Live.
MSRP: 16GB — $99.99 on a 3-year contract with
Telus (Note: storage is NOT expandable)

XBOX 360 Kinect

It’s gimmicky, expensive, and slightly
racially biased! It’s everyone’s favourite motion
sensing gaming accessory, the Kinect! I’ll be
blunt, I thought this device was going to fail
the first time I heard about it, but apparently
the masses seem to like it, so you’d better add
this to your favourite nephew’s list. This device
uses dual cameras to detect motion to immerse
the player into a variety of games that actually
require you to get off the couch.
MSRP: stand alone - $149.99, 4GB XBOX 360
bundle — $299.99, 250GB XBOX 360 bundle —
$399.99

PlayStation Move

What happens when you run out of ideas?
Easy, you blatantly copy one of your fiercest
competitors. Using motion sensing controllers
similar to Nintendo’s Wiimote controller, the
PlayStation Move lets players punch, shoot, and
move with the flick of the wrist. Some reviewers
on the web are going as far as calling this “the
Nintendo Wii for grown-ups.” So if you want
your dad to lose some of that post-Thanksgiving
weight, you know what to get him.
MSRP: motion controller — $49.99, navigation

controller — $29.99, 320GB PlayStation 3 bundle
— $399.99

Apple iPod

Love one of your friends more than
another? Show them your friendship hierarchy
by giving them different models of the iPod line
up, nothing says BFF like giving one friend a
Touch and another a Shuffle. With four different
models to choose from, Shuffle, Nano, Classic,
and Touch, you won’t be short on options for
that perfect gift.
MSRP: List is too long; please visit Apple.ca for
pricing details

Apple TV

Rent, buy, and stream media from the
comfort of your couch with the Apple TV.
Explore Apple’s extensive media library from
feature films to your favourite Beatles song. This
is a great gift idea for your family couch potato.
Don’t worry this is the last Apple product on
this list, but what can I say, people seem to love
Apple.
MSRP: $119.99

Asus Eee PC 1215n

For your favourite on-the-go student, the
Asus Eee PC 1215n, offers the best netbook
performance in the Canadian market. Featuring
a dual core Atom processor and Nvidia’s ION2
graphics, this netbook is one of few that can
handle 1080p full high-definition media and
light gaming. Also, implemented is Nvidia’s
Optimus software that will make sure this 12-
inch beast will conserve as much battery life as
possible.
MSRP: $529.99

Nvidia GTX 580

Don’t know what to get that geek freak
who’s always glued to the computer? How
about Nvidia’s newest flagship video card, the
GTX 580? Designed using a brand new cooler
aptly called the “Vapor Chamber” this card is
guaranteed to run cool and quiet, while pumping
out the industries best performance numbers.
If this sounds like a perfect gift for that special
someone, you'd better ask Visa for a higher
credit limit.
MSRP: $529.99

Samsung 46-inch 3D-Ready LED Television
(UN46C7000)

Are you rich? No? Then you’d better stop
reading. If you are still reading, you are one of
the few consumers this present applies to. With
stereoscopic 3-D making waves in the market,
there’s a good chance that your family’s home
theatre system could use one of these fancy 3-D
compatible TVs. Armed with LED backlighting,
this television is designed to deliver stunning
colors, consistent backlighting, while saving
energy. Excited? Don’t be, I haven’t told you the
price yet.

MSRP: $2499.95