Gold Investor: Risk management and capital preservation

Gold’s recent price weakness and the sizeable outflows from gold-backed ETFs have rekindled speculation about the end of gold’s bull run and generated comparisons to its 1980s decline. We discuss the limitations of the most common arguments and contextualise gold’s price pullbacks. We examine structural shifts that the gold market has experienced over the last decade resulting in a robust set of demand factors, very different from that seen during the 1970s.

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The Weekly Bottom Line - April 19, 2013

Canada

  • The widespread sell-off in commodity prices this week led the S&P/TSX to fall to a 5-month low.
  • The Bank of Canada left the overnight rate unchanged and downgraded its forecast for Canadian economic growth in 2013 to 1.5% (from 2.0% previously).
  • Several factors, including lower commodity prices, economic underperformance vis-a-vis the U.S., and the anticipated unwinding of quantitative easing stateside, augur for a lower Canadian dollar. We have significantly revised our forecast, with the loonie hitting a low of 90 US cents in early 2014.

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The Weekly Bottom Line - April 5, 2013

Canada

  • Canada’s labour market shed 55,000 jobs in March, the largest monthly decline since the recession.
  • But while shocking, the trend pace of job creation is actually now more in line with the underlying growth picture in Canada. Job gains have consistently outpaced the broader economy since mid-2012.
  • Labour market performance has been uneven between sectors. While areas like manufacturing are facing considerable weakness, others more tied to the domestic economy, such as wholesale and retail trade, show little sign of slowing.
  • Going forward, we anticipate better alignment of industry performance with general shifts in the economy. Moreover, an acceleration in economic growth in the coming quarters should lead to a slightly stronger, and more sustainable pace of job growth after today’s loss.

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Global Insights - April 2013

Another European test confronted global financial markets in March as tiny Cyprus threatened to plunge the region back into crisis. Markets were on edge until it became clear a plan to restructure Cypriot banks would emerge.

Similar to previous European episodes, the risk was never Cyprus per se—it only represents 0.2% of eurozone GDP—but whether the country’s banking stress would weaken the eurozone system as a whole.

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Understanding and tracking your adjusted cost base with ETFs

Why you should track your ACB

One of the most complicated and tedious tasks investors must do is calculate the adjusted cost base (ACB) for each security in their taxable accounts.
Your ACB is the original cost of your investment, adjusted upwards for any new purchases (lump-sum buys, reinvested dividends, or reinvested capital gains distributions) and downwards for any sells or return of capital (ROC) distributions.
While calculating your ACB is complex and time-consuming, it’s extremely important. If you neglect to adjust your ACB upwards, you’ll pay too much tax when you sell the security. If you neglect to adjust it downwards, you’ll pay too little. Although the latter may sound appealing, the Canada Revenue Agency is not likely to share your enthusiasm.
Reporting your ACB would be easier if your brokerage kept the records for you. Unfortunately, they do not always do this accurately. 

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Market Indices, Asset & Risk Management Numbers: April 2013

Great summary of investment performance - monthly, quarter, Year to date and 1-year stats. Updated performance data: stocks, bonds, mixed portfolios, etc.

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