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TD Direct Investing Upgrades Investor Education Calendar

One of Canada’s largest discount brokerages continues to chip away at improving its website for investors. TD Direct Investing has quietly rolled out the long awaited improvements to their investor education seminar section. As far back as August of last year, we mentioned that something was in the works to improve the delivery of investor education resources however it wasn’t until this summer that the roll out officially took place.

This past year has seen a number of significant changes for TD’s discount brokerage division. In December 2012, TD Waterhouse Discount Brokerage changed its name to TD Direct Investing and the website got a substantial overhaul in the process. One of the laggards, however, was the investor education area, specifically the investor education seminars section.  In terms of the new upgrades, the focus appears to have been on improving the user interface and the organization of the content, both of which should enhance the accessibility of this section for self-directed investors.

Improved Content Structure

One of the first noticeable improvements is the structure they’ve provided to their seminar types.  Previously, seminars and special events lacked descriptions as well as information on what investor experience level the events were appropriate for.  Not having this information made it difficult for investors to determine what a particular seminar was about and whether it was worth attending.

In keeping with the categories they rolled out in December, TD Direct Investing has decided to use the following 3 categories when referring to types of self-directed investors:

  1. New to Online Investing
  2. Experienced Investor
  3. Advanced Trader

Sessions have now been grouped around the anticipated needs of each of these categories of investor (see table below).  For example, for those new to online investing, TD Direct Investing has bundled their platform orientation seminars along with their “Introduction to Investing” seminar to allow users to familiarize themselves with the platform.

From a user experience perspective, the combination of the grouping seminars by experience level and providing seminar descriptions will definitely cut down on time spent evaluating and deciding which seminars to attend. As a bonus, it is now also possible to register online for an event as well as see the availability of spots for the session.

New to Online Investing Experienced Investor Advanced Trader
Introduction to Investing Introduction to Options Trading Active Trader Platform
Introduction to WebBroker Introduction to Technical Analysis Advanced Options
WebBroker: Markets & Research Understanding Margin & Short Selling Options as an Income Strategy
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Songs by or about cash – Episode 2: The Gambler

Six Lessons for Investors from The Gambler

One of the most famous songs by or about cash is Kenny Rogers’ ‘The Gambler’.  While the origins of the song may have been meant for playing card games, such as poker, the lyrics contain insights that apply equally well to speculators of all types including investors and traders alike.

In this song, two travelling fellas find themselves sitting on a train together, staring awkwardly into the darkness outside and at each other.  The gambler, sensing an opportunity finally breaks the silence and proposes a trade: his advice for the last of the traveler’s whiskey.  While it’s tough to say who got the best of that trade, here are six important lessons for investors to ponder that came from that exchange.

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Trader Tools Review: Tickerscores – Redrawing The Map On Junior Mining Research

For do-it-yourself investors, it certainly feels like slim pickings when looking for tools to help do fundamental research on junior precious metal mining and exploration sector stocks.  Of the research tools and websites that do exist, many are based on technical indicators, ‘black box’ systems or only offer coverage on larger, better-known companies.  More often than not, newsletter writers and dense technical research reports are really the only sources of in-depth analysis and ‘filtering’ that investors can access when it comes to junior precious metals companies.

Whether it’s because many of these types of companies aren’t big enough or popular enough with a wide investor base, tracking down quality research tools often involves substantial ‘Googling’, forum hunting, sifting and filtering.  At times mining the investing data feels like almost as much work as mining for an actual mineral or metal itself.

One company, however, is betting that they can help redraw the analysis landscape for investors with their new platform: Tickerscores.

What is Tickerscores?

At the Vancouver Resource Investment Conference this past May, Visual Capitalist, a company known for producing mining and exploration sector infographics, rolled out the beta version of their newest venture and potentially game changing stock analysis platform Tickerscores.

Members of the Visual Capitalist team at WRIC 2013
Members of the Visual Capitalist Team, Rob Fuhrman (left) and Nick Routley(right) at the Tickerscores beta-launch at the World Resource Investment Conference May 2013.

Tickerscores is a web-based tool that provides in-depth analysis of mining and exploration companies by looking at the common components used to assess the overall health and promise of a company and/or its projects.  For the moment, the universe of stocks covered will be in the junior precious metals mining and exploration space, with market caps typically underneath $1 billion.   The goal for the platform, however, is to include all precious metal mining and exploration companies listed on the TSX and TSX Venture exchanges.

Slated to launch in September 2013, Tickerscores aims to help investors interested in mining and exploration stocks crunch important data quickly and deliver it in a visually appealing, intuitive format.  While pricing has yet to be officially determined, the projected subscription range is forecast to be between $25 to $60 per month.

A video walk-through of the Tickerscores site is available at the end of the post (or you can click here to access it directly).

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Commission-Free ETF Trading at Canadian Discount Brokerages: A Clever Lure or a Good Deal for Investors? Part 4

In the final part of our series on commission-free ETF trading at Canadian discount brokerages, we look at the offers from Virtual Brokers and Questrade and conclude the series with some lessons learned from researching commission-free ETF offers.  If you missed the earlier parts of the series, click here for part 1, here for part 2 or here for part 3.

Commission-Free ETFs at Virtual Brokers

While Virtual Brokers started offering commission-free ETF trading on a limited set of ETFs, in 2012 they rolled out commission-free ETF purchases on all ETFs.  Because they have two “commission-free” ETF offers going concurrently, a great deal of confusion appears to have been caused with investors.  As such, it bears repeating that at Virtual Brokers, all ETFs can be purchased commission-free but only a certain set of ETFs can be purchased and sold commission-free.

Screenshot of Virtual Brokers' Commission-Free ETF page
Wording of Virtual Brokers’ commission-free ETF offers (circled in orange) is a bit confusing.

Committing to a list of 100 ETF funds by 17 different fund providers is a bold undertaking within the ETF space.  Because funds change according to market forces, staying on top of which funds are still functional proved to be a challenge for Virtual Brokers.

An interesting discovery that was made when looking into the list of 100 ETFs advertised by Virtual Brokers was that their list contained a mixture of duplicate names, miscategorized ETFs and ETFs that had been discontinued.  For example, the XID (iShares S&P CNX Nifty India Index Fund) appeared twice in the list (see below); CEW is the ticker symbol for both the WisdomTree Dreyfus Emerging Currency Fund and the Claymore (now iShares) Equal Weight Banc & Lifeco ETF however both were listed as being on the Canadian market (the WisdomTree ETF is listed on the NYSE); four ETFs were identified in the advertised list that had been discontinued for months: DENT, HAG, HIF and XRO; and lastly, many of the ETFs branded as Claymore had yet to be renamed to their new iShares titles.

Commission-Free ETF list duplicate entry

To Virtual Brokers’ credit, when these issues were pointed out to them, a senior representative confirmed that they would be corrected and after several emails, the list was updated and corrected within 24 hours.  The new list has addressed the issues identified above with Virtual Brokers committing to keep their list of commission-free ETFs at 100.  ETFs that have been added to replace the discontinued group include First Asset Canadian Convertible Bond ETF  (CXF), Horizons Alphapro Balanced (HAA), First Asset DEX Government Bond Barbell Index ETF (GXF), First Asset DEX Corporate Bond Barbell Index ETF and the SPDR Barclays Short Term Treasury ETF (SST).

The fact Virtual Brokers faced a challenge keeping up with their own offers should serve as a lesson to investors. The ETF landscape is highly dynamic and the more specialized ETFs or those that might be more ‘exotic’ are also more prone to being discontinued from lack of investor interest.  It would be wise to double check the availability of an ETF on the commission-free list ahead of placing any trades.

Break down of commission-free ETFs at Virtual Brokers

Despite the number of ETFs offered commission-free, the majority of funds (>60%) are equity-focused.  Unlike the other two discount brokerages’ ETF selections, however, Virtual Brokers’ pool contains a couple of leveraged & inverse-leveraged ETFs which more active traders might find more appealing.  Of the three discount brokerages offering commission-free ETFs, Virtual Brokers is also the only one that includes several BMO ETFs.  While Virtual Brokers has a more diverse offering of ETF providers (17 providers), over 75% of the commission-free ETF pool comes from only three of those providers.

The fine print on the Virtual Brokers commission-free ETF offer is reasonably straight forward.  Two key points to keep in mind for this offer are that in order to be eligible for commission-free ETF trading:

  1. ETFs must be held for at least one business day
  2. ETF trades must be placed via the WebTrader platform

There is no minimum purchase amount required so this is positive news for individuals with more modest portfolios.  Also a positive feature, no commissions are charged at the time of purchase (and where applicable at the time of sale).  In certain instances, other discount brokerages will deduct a commission fee at the time of the trade then issue a refund for the commission usually within a few days of the transaction.

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Songs by or about Cash: Episode 1 – (Ghost) Riders in the Sky

If you wanna save your soul from hell, or ridin’ on our range
Then cowboy, change your ways today, or with us you will ride
Tryin’ to catch the devil’s herd
Across these endless skies…

With US stock market indices riding red hot through to new highs, many market observers cannot believe their eyes.

The timing, however, couldn’t be better to launch the first in the SparxTrading.com “songs by or about cash” series.  This series will hopefully show do-it-yourself investors that there are nuggets of investing wisdom that can be uncovered in some well known tunes.

As luck would have it, there happens to be a song about an unbelievable bull-run called ‘(Ghost) Riders in the Sky: A Cowboy Legend’ (by Stan Jones) that (luckily) was covered by “the man in black” Johnny Cash.

The story goes like this. An old cowboy out for a ride stumbles across something surreal: A heard of phantom bulls stampeding across the night sky followed by some equally unearthly phantom cowboys in flaming hot pursuit.

So what’s an old cowboy to do? Chase the heard or let them pass by (or adjust his meds)?

Staring at these markets, it’s not hard to see the value of asking the question – does one chase this hot market or simply just step aside?   For those already in, should they keep going?

With no overhead technical resistance in the major US markets and fundamental indicators on the US economy shifting from awful to ‘less bad’ it may look like an exciting time to saddle up and get caught up in the frenzy.

For traders on the sidelines or those thinking of jumping into trading because the markets are hot, the following ominous warning uttered by one of the ghost riders provides an important cautionary tale:

If you wanna save your soul from hell, or ridin’ on our range
Then cowboy, change your ways today, or with us you will ride
Tryin’ to catch the devil’s herd
Across these endless skies…

Chasing an ephemeral heard is a never ending endeavor. Markets will always be moving, and there will always be those willing to chase them. While your soul may not face eternal damnation, perhaps your portfolio might.

For investors not in the chase, it may all seem pretty exciting. Before jumping in, however, asking yourself whether you want chase a market that can never be caught might not be such a bad thing. For some it’s what they live for but for others, it seems eerily crazy. Yippee-I-Yay.
iTunes Canada

 

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Commission-Free ETF Trading at Canadian Discount Brokerages: A Clever Lure or a Good Deal for Investors? Part 3

In the first two parts of this series we touched on the different types of commission-free ETF trading being offered by discount brokerages and provided several tips for investors to keep in mind when considering these types of offers. (Click here to read part one or here to read part two)

In part three of this series, we compare the three providers currently offering commission-free buying and selling of ETFs (Qtrade, Scotia iTrade and Virtual Brokers) and look in detail at the offers from Qtrade and Scotia iTrade.

In the next part of this series, we will look at the offers from Virtual Brokers and Questrade in detail as well as the lessons learned from researching commission-free ETF offers at discount brokerages.

Comparing Commission-Free ETF Trading OffersCommission-Free ETF Overview

Even though Qtrade, Scotia iTrade and Virtual Brokers have limits on which ETFs are eligible to be bought and sold commission-free, the pool of ETFs offered by each brokerage is still sizeable with 60, 50 and 100 ETFs being offered respectively.

Between these three discount brokerages, there are 132 unique ETFs being offered by 17 different ETF providers. Interestingly, all three discount brokerages offer 30 of the same ETFs commission-free. For investors this means that a discount brokerage’s fee structure may be more of a factor to consider than which ETFs they offer.

Despite there being 17 different ETF providers, most of the funds come from only a handful of companies. In fact, four ETF providers contribute 78% of the commission-free ETFs available at Canadian discount brokerages with BlackRock alone offering slightly less than 50% of all the commission-free ETFs.  Horizons, BMO and Vanguard respectively make up the rest of the top four commission-free ETF providers.

We’ll now take a look at the offers from Qtrade and Scotia iTrade in detail. In the next part of this series we’ll look at Virtual Brokers’ offers in detail as well as Questrade’s offer and conclude with important lessons learned from researching commission-free ETFs.

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Commission-Free ETFs at Canadian Discount Brokerages: A Clever Lure or a Good Deal for Investors? Part 2

In part one of this series, we looked at which Canadian discount brokerages are currently offering commission-free ETFs as well as why commission-free ETF trading has started to become so popular. In part 2 of this series, we take a closer look at the types of commission-free offers available and provide some tips for investors who might be considering commission-free ETFs as part of their discount brokerage comparison research.

There’s commission-free and then there’s commission-free

While the term “commission-free ETF” does suggest a no cost transaction, in reality there are a couple of different interpretations as to what “commission-free” actually means.

Company Number of Commission Free ETFs Minimum Trade Amount Hold Period (minimum) Details Link
All Canadian ETFs (>250) $5000 1 business day National Bank Direct Brokerage Commission-Free ETF Plan
60 $1000 1 business day Qtrade Commission-Free ETF Plan
All ETFs* (only buys are commission-free) $0 None Questrade Commission-Free ETF Plan
50 $0 1 business day Scotia iTrade Commission-Free ETF Plan
All ETFs* (only buys are commission-free) $0 None Virtual Brokers Commission-Free ETF Plan

As the table above shows, there are several ETF commission models being offered by Canadian discount brokerages.

First, there are those discount brokerages that offer a limited selection of ETFs that can be traded commission free – as in commission-free to buy and commission-free to sell.  The brokerages that offer this type of pricing are:

  • Scotia iTrade (which offers 50 ETFs commission-free)
  • Qtrade (which offers 60 ETFs commission-free)

Thus the trade-off is that there might be true ‘commission-free’ ETF free trading but only on a handful of ETFs. There are also minimum amounts of time (often at least 1 business day) that an investor needs to hold the ETF in order to qualify for commission-free status.

Another variation on ‘commission-free’ ETFs are from discount brokerages that allow purchases of any ETF commission-free but will charge the normal commission charge on the sale of the ETF.  Thus, only the purchase of the ETF is commission-free. The discount brokerages currently offering these types of commission-free ETF purchases are:

The offer from National Bank Direct Brokerage is slightly different in that it allows for unlimited commission-free ETF buying and selling but only of Canadian ETFs and only for a limited amount of time.   Although commission-free ETF trading at National Bank Direct Brokerage is currently part of a promotional offer, depending on the response they receive from prospective clients, their promotion could turn into a standing offer in the future.

Whatever the model being used, it is clear that with any ETF commission deal from the Canadian discount brokerages, there are certain strings attached. For self-directed investors, it is important to understand the terms and conditions attached to the ETF commission pricing and be vigilant about the strings that come attached to these offers.

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Commission-Free ETFs at Canadian Discount Brokerages: A Clever Lure or a Good Deal for Investors? Part 1

Every day increasing numbers of self-directed investors are either turning to exchange traded funds (ETFs) to meet their investing goals or are learning more about how ETFs could help lower their investing costs.   Given the interest in these products by self-directed investors and the commission costs that are associated with buying and selling ETFs, Canadian discount brokerages have not only taken notice but have also sought to leverage this interest to their benefit.

In the first of this three-part series, we briefly review the landscape of commission-free ETF trading in Canada. In part two we’ll look at what types of “commission-free” ETF trading options investors have as well as provide investors with several tips to keep in mind when considering these types of ETFs with a discount broker.  Lastly we’ll be taking a look at each discount brokerage’s commission-free ETF offering in detail to see what the pros and cons are of each.

It’s so Hard Being Popular

The case for investors embracing ETFs is relatively simple to make. Essentially, with ETFs investors get most of the benefits of a mutual fund (the two primary ones being professional management and diversity in composition) but at a fraction of the management cost.  Beyond the diversity and low management costs of ETFs, one of the biggest attractions for many investors has been the fact that ETFs, unlike their mutual fund counterparts, trade on stock exchanges the same way ‘normal’ stocks do.

The freedom to buy or sell them short, to take options on ETFs and to enter and exit with relative ease has meant that investors of all kinds have a very versatile tool in their wealth creation toolbox to work with.

Ironically, it is the popularity of ETFs that might be their undoing.  Data from the Canadian ETF Association (CETFA) shows that ETF landscape in Canada contained 257 ETFs from 6 distinct providers as of May 2013.  While their data does show strong demand and interest in ETFs with self-directed investors as well as with institutional investors, a recent article about the state of ETFs suggests that the ETF craze might be plateauing. Data from the US suggests that the sheer number of ETFs may have exceeded the interest and capital that can be allocated to them.

In short, it appears that there are hints of an oversupply of ETFs relative to demand for them. The consequence  is a predictable downward price pressure and intense competition.

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Special Series: Dalbar Canada’s Direct Brokerage Service Award – Part 2

In part 1 of this series, we took a brief look at how self-directed investors typically access information about discount brokerage customer service and introduced Dalbar Canada’s research in this area.  Specifically, Dalbar’s Direct Brokerage Sales Effectiveness (DBSE) program measures the performance of client service teams at discount brokerages.

In this part of our series, we take a closer look at the evaluation itself to see how Dalbar measures quality customer service, how the evaluations are conducted and what the implications are for self-directed investors when comparing customer service at discount brokerages.

Knowing what counts

Given the number of evaluations being conducted to try and find ‘the best’ Canadian discount brokerage, it is increasingly important that self-directed investors be clear on exactly how a measurement of a discount brokerage is structured.  To avoid falling victim to clever marketing, whenever Canadian investors see a discount brokerage ranking, the following three questions are worth keeping in mind:

  1. What is being measured (ranked)?
  2. How was it measured?
  3. Does the measure actually measure what it says it does?

In the case of Dalbar Canada’s Direct Brokerage Service Award, what is being measured is “quality” of the customer experience when interacting with a particular discount brokerage’s customer service agents.  Of course, how “quality” is defined can be highly subjective so readers should keep this in mind when considering the explanations below.

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Caution, Cunning and Competition: Three Investing Lessons from Game of Thrones

Set against the backdrop of epic conquests, bloodthirsty barbarians and Machiavellian-style manipulation, Game of Thrones is capturing imaginations across the globe.

At times the investing world seems a lot like the savage and cruel arenas characters from the story find themselves in.  Even though the story takes place in a mythical land, it focuses on a very familiar theme for those in the real world: power.  As in their world, wherever there is power to be had, money is not far behind.

The tactics and strategies about how best to come out on top in the Game of Thrones are probably just as appropriate in the stock market as they are in the mythical forests and deserts (minus the broadswords and beheading).

Here are three lessons every player in the markets and the Game of Thrones needs to know in order to avoid having their heads handed to them:

#1: Watch your back

Risk management is a tidy euphemism for making sure you’re in control of your exposure to loss.  While you may not be toppled from a fiefdom anytime soon, taking outsized risks with your portfolio can leave you feeling stripped of title and wealth.

#2: Use your size to your advantage

In the stock market, performance is all relative. Large pools of capital have a much tougher time outperforming the index than do smaller investors.  The advantages of being small are that you can be nimble with your entries and exits as well as having more flexibility in terms of the size and type of companies you can consider.

#3: Play to win

The most important investing lesson in the Game of Thrones is to be tactical. Everyone else in the market is vying for victory so knowing your competition is as crucial as knowing whom to support.  In the investing world, your capital is your strength. Every dollar you capture can work for you and every dollar you lose weakens you so as the commander of your capital, choose your battles and your alliances (investments) thoughtfully.