Proprietary trader vs. retail trader

More from Dennis Dick's article - Staying a Step Ahead:

The world of day trading has had quite a shake-up in the past few years thanks to high frequency trading (HFT) by computers, which can respond in milliseconds and can process thousands of orders per second. It's been especially hard for retail traders vs. proprietary traders - The difference is the former is the average individual, while the latter is a firm, such as a large financial institution.

There are a number of reasons why retail traders have been struggling in this environment while proprietary traders are still enjoying some success. The list reads as follows:

1. Training;
2. Access to capital for trading strategies such as 'opening only' and 'market on close';
3. A different commission structure which allows for 'scaling' into or out of positions;
4. Direct market access which prevents flashing;
5. Access to information.

Proprietary traders enjoy a number of advantages over the retail trader, but the majority of proprietary traders struggle to make it in the HFT world; it's even harder for the retail trader.

If you'd like a copy of this article visit yourlifeyourplan.ca.

GB

Can traders survive high-frequency trading?

I thought I'd share an interesting article by Dennis Dick, CFA which was featured in the latest CFA Institute Magazine - Staying a Step Ahead. It's an insightful article into the world of day trading, and if you'd like a copy, visit yourlifeyourplan.ca:

The world of day trading has had quite a shake-up in the past few years; the reason - high frequency trading (HFT) by computers, which can respond in milliseconds and can process thousands of orders per second. Is this the end for humans in the world of day trading?

Humans can still stay a step ahead, because a computer can only do what it is programmed to do. It is important that traders continue to develop new strategies, and invest in training and education - The focus should be on psychological issues from behavioral finance, which will help traders match the consistency of HFT.

Traders must constantly adapt to a dynamic trading environment in order to succeed. It takes time and dedication, and there will always be setbacks, but if a trader is willing to work hard and to develop new strategies, the astute trader can still stay one step ahead of the machines.

GB

Inflation Indicators

Q: We are hearing inflation numbers are low at this point. Everything I buy seems higher than it was a few years ago. Why are the inflation numbers being reported low yet I am spending more not less?

A: There was an interesting article in the Economist on that called "Overcooked, undercooked" What do burger prices tell us about the reliability of official figures? It argues that some governments are fiddling their inflation figures, and the true rate is much higher than officially reported. The best way to measure consumer-price inflation is a hotly contested debate among economists. Why not rely on burgernomics? Like the Big Mac index which measures whether currencies are under or over valued, it can be used to look at inflation. They have compared Big Mac prices over the last 10 years vs reported inflation in a number of countries around the world. There was a discrepency between reported and Big Mac price increases over the last 10 years. CPI is a based on a basket of goods and maybe isn't a good representation of our reality.

Wealth Management

Q: We hear terms like financial planning or wealth management thrown around alot. What is involved in wealth management? What type of credentials should you look for?

A: 1st of all I should distinguish between the two. Financial planning everyone can and should be doing on a regular basis. Financial planning is a component of wealth management. The key distinction is that you have to have wealth to manage to do wealth management. Some of the issues we tackle as wealth managers are financial planning to address spending, budgeting & saving, debt management, protection against liability, death & disability, establishing your net worth (assets vs. liabilities), education planning, investment & retirement planning, trust & estate planning, charitable giving & business succession planning. Obviously tax and legal considerations are a big part of your wealth management and should involve your legal and tax professionals as part of your planning team. Professional designations that are important to have are CFP or CFA.

Chateau Brent

There's an interesting article in the latest print of The Economist titled Fluid logic - Here's the gist of it:

"A bottle of Chateau Petrus '82 can cost over $5,000, whereas the equivalent volume of crude oil sells for less than 50 cents. Wine experts usually explain price movements by supply-side factors such as the effects of the weather and age, but research by two economists at the IMF, finds that supply has only a small impact on prices.

Between 1998 and 2010 there was a correlation of over 90% between changes in oil and wine prices. Emerging economies have accounted for more than 100% of the increase in global oil demand since 2000, while oil consumption in rich countries has declined; likewise, rising incomes in emerging economies have spurred wine drinking, whereas consumption in Europe has fallen. China overtook Britain last year as the biggest export market for Bordeaux wines.

In the West, investing in fine wine instead of equities, bonds, or commodities has become something of a faddish way to diversify one's portfolio; but, if wine prices closely track traditional commodities such as oil, buying wine will not reduce overall risk. In contrast, much of the increased demand from Asia is for imbibing, not investment."

GB

Russell Investments Asset Mix in Retirement

Q; What is the most appropriate asset mix in retirement? Why is it important?

A: An old standard is 100 - your age determines your equity exposure. Ie. 100- 70 would mean 30% in equities. Studies have shown that historically, a mix of 35% equity/65% fixed income is optimal from a volatility & growth standpoint or a risk and return standpoint.

Why is your asset mix important. Russell has another rule I didn't mention yesturday. The 10/30/60 Retirement Rule. Your total capital to fund your retirement is typically made up of 10% from pre-retirement money saved, 30% from pre-retirement investment earnings and 60% from post-retirement investment earnings. Given that 60% of your capital to fund your income throughout retirement is derived from post-retirement earnings,deciding on the most appropriate asset mix in retirement is vital!

Russell Investments 3 Rules for Retirement

1. Equity Investing is still important after retirement. So don't retire from investing. Invest for retirement. If you don't feel like doing it hire someone.

2. Retirement spending should be segmented by needs, each with an appropriate investment strategy. For example an estate pool where assets are set aside for inheritance, charity, etc.. A lifestyle pool. Funds set aside for entertainment, travel, etc.. and an essentials pool to fund your income for life.

3. It takes approxiamately $20 to fund $1 of annual post retirement spending. For example if you have $1 million, it should provide $50,000 income.

Asian Markets Advance

Most major Asian markets rose overnight, with South Korean shares climbing on news of faster-than-expected economic growth last quarter, while Chinese stocks were led higher by a rise in resource companies.

But Japanese stocks declined as news of another major vehicle recall hit shares of Toyota Motor, while Eisai tumbled after suffering a setback in the development program of a drug to treat sepsis.

The Shanghai Composite rose 1.2% to 2708.81, South Korea's Kospi added 1.1% to 2110.46, and Hong Kong's Hang Seng Index edged up 0.2% to 23843.24, its first gain in five sessions. Singapore's Straits Times Index gained 1.2% to 3220.78. The benchmark indexes in Thailand and Indonesia each rose 2%. Japan's Nikkei Stock Average, however, fell 0.6% to 10401.90.

Australia's markets were shut for Australia Day, and India's markets were closed for Republic Day.

Storms Ahead

Alright, we're almost finished Neil Howe's and Richard Jackson's - Global Aging and the Crisis of the 2020s:

A number of demographic storms are now brewing in different parts of the developing world. Consider China, which may e the first country to grow old before it grows rich. China's coming age wave may weaken the two pillars of the current regime's legitmacy: rapidly rising GDP and social stability (by 2030 it will be an older country than the US). By the 2020s, Russia, along with the rest of Eastern Europe, will be in the midst of an extended population decline as steep or steeper than any in the developed world. Of course, some regions of the developing world will remain extremely young in the 2020s.

Meanwhile, many fast modernizing countries where fertility has fallen very recently and very steeply will experience a sudden resurgence of youth in the 2020s. The echo booms will be especially large in Pakistan and Iran, countries whose social fabric is already strained by rapid development. One country teeters on the brink of chaos, while the other aspires to regional hegemony. One already has nuclear weapons, while the othe seems likely to obtain them.

GB

9th Annual Okanagan CFA Forecast Dinner

Q: Tell us about it.

A: We started this event in 2002 and had about 125 people out and last night they sold 215 tickets. The money goes toward charity, specifically post secondary education. Each year we have 2 defenders who made their forecast last year and
3 Forecasters. They have to predict the value of the Dow, the TSX, the Cdn $ and a long and short stock pick on December 31st, 2011.

Q: Who would be so foolish to stand up there?

A; This year the defendenders were Gareth Watson who recently changed jobs but was Director, Canadian Equities for Scotia from Toronto and a local portfolio manager, Bruce Campbell. Both went long on what they should have shorted and shorted what they went long on. As always they had good justification for it and they explained it was just a timing issue. They key is execution.

The forecasters were William Hoyt from Boston, portfolio manager with Fidelity. Steven Holm a 3rd year finance student from TRU in Kamloops and Dr. David Bond who is now retired but had a distinguished career including being a professor at several Canadian Universities,the President of the Canadian Association of Broadcasters and the Cheif Economist for HSBC Canada.

Q: What did they predict?

A: All said the TSX and the Dow would be up anywhere from 8% to 23.82%. By the way it was the American who was most bullish about the TSX. The Canadian dollar up 1.03 to 1.06. Long picks were the Sterling British Pound, Potash Corporation & CPR railway. The shorts were Technology, Gold and LuLu lemon.

Retirement Planning Thursday Jan 20, 2011

CBC featured a special report on The National "The Bottom Line: Are you ready for Retirement?" What was the message?

With personal debt on the rise and workplace pensions disappearing, Canadians are finding themselves unprepared for retirement. They reported, "Roughly 70% of the working population of Canada does not have a pension. The average Canadian needs income of about $50,000 per year in retirement. Most people would only cover the 1st year with what they had saved." This is a looming crisis in Canada.

What is our key take away?

The Canadian Auto Workers representative suggested the government should take care of it but I wouldn't hold your breath on that one. You will need to either get help from a financial planner or take matters into your own hands. The key take away is to start saving today, pay yourself 1st, make it a priority, make it automatic no matter what stage you are at in your working career. You need a plan that allows you to project your needs, track and measure your progress and adjust when needed. If you are not going to the CFA forecast dinner tonight, they will have a panel giving examples of how people are prepping for retirement and the attraction of small communities as retirement destinations.

Foreigners love affair with Canada

Yesturday you forecasted that Canada would outperform the US. What's so great about Canada?

In the last 12 months foreigners have scooped up over $118 billion in Canadian securities. Scotia Capital believes this trend will continue because Canada has sound finances. They are also recommending an overweight position in Canada.

What about the US? Aren't they going to determine what happens in Canada?

Bloomberg reported that inflation is surging in the US so that could be something that drives asset prices higher there, but if anything that will add fuel to the foreign support for the Canadian market fire.

Perilous Transitions

"Although the world's wealthy nations are leading the way into humanity's graying future, aging is a global phenomenon. The demographic outlook in the developing world, however, is shaping up to be one of extraordinary diversity. Notwithstanding this diversity, some demographers and political scientists believe that the unfolding of the transition is ushering in a new era in which demographic trends will promote global stability.

The thesis may be flawed. More fundamentally, the demographic peace thesis lacks any realistic sense of historical process. Economists, sociologists, and historians who have studied the development process agree that societies, as they move from traditional to the modern, are buffeted by powerful and disorienting social, cultural, and economic crosswinds.

Along with the economic benefits of rising living standards, development also brings the social costs of rapid urbanization, growing income inequality, and environmental degradation. The demographic transition can trigger a rise in extremism. Ethnic tensions can also grow. There's only one historical example of a large group of countries that has completed the entire demographic transition - Today's (mostly Western) developed nations." - by Neil Howe and Richard Jackson.

GB

2011 Forecast

CFA dinner coming up Thursday.
Do you have any insight into the coming year.

By all accounts our financial house is in order
Interest rates to remain low – no increase today
Mfg up
Exports net plus
Automotive sector on rebound
Commodities strong

What do you forecast?

I see Mark Carney didn't raise rates today. The Bank of Canada said the global recovery is “proceeding at a somewhat faster pace” than policy makers had anticipated last fall, though “risks remain elevated.”

I will give you the Scotia Capital Economic Forecast:

BOC Overnight Rate 1% currently 1.5%
90 day t-bill rate 1.05 currently 1.05%
10year Canada 3.5% currently 3.12%
Canadian dollar 1.04 currently par

My prediction for the:

Dow break 12,500 currently 11,852 up 6%
TSX breaks 14,500 currently 13,500 up 7.5%

Diminished Stature

"The impact of global aging on the collective temperament of the developed countries is more difficult to quantify than its impact on their economies, but the consequences could be just as important, or even more so. We may also see increasing pressure on governments to block foreign competition. This shift in business pschology could be mirrored by a broader shift in social mood.

We know tht extremely youthful socieities are in some ways dysfunctional, prone to violence, instability, and state failure. Meanwhile, the rapid growth in ethnic and religious minority populations, due to ongoing immigration and higher-than-average minority fertility, could strain civic cohesion and foster a new diaspora politics. In Europe, the demographic ebb tide may deepen the crisis of confidence that is reflected in such best-selling books as: France Is Falling by Nicolas Baverez, Can Germany Be Saved?

Over the next few decades, the outlook in the US will increasingly diverge from that in the rest of the developed world. The US faces serious structural challenges, including a bloated health care sector, a chronically low savings rate, and a political system that has difficulty making meaningful trade-offs among competing priorities. Ye, unlike Europe and Japan, the Usnited states will still have the youth and the economic resources to play a major geopolitical role. The real challenge facing the US by the 2020's may not be so much its inability to lead the developed world, as the inability of the other developed nations to lend much assistance." - Neil Howe and richard Jackson.

GB

Gov't tightening Mortgage Rules

Flaherty has tightened mortgage rules today – a follow through I guess on his warnings about too much Canadian household debt.

Any comments? How important is household mtge debt in the scheme of things in the wealth accumulation department?

1.The Finance department is expected to announce that they will stop backing amortization periods longer than 30 years.
2. Reduce government backing for home equity lines of credit by clamping down on the insurance that CMHC offeres to lines of credit.
3. Limit the amount that you can draw to 85% vs 90%.

Rational is making sure you can manage your debt payments when interest rates rise or if you lose your job.

My perspective - Although not tax deductable, we would consider mortgage debt to be a good debt vs bad debt for personal consumption which is usually the category the line of credit debt falls into. With most canadians their home makes up a large part of their networth and serves a purpose beyond just the financial wealth accumulation. It's just This shouldn't have a significant impact on most people except at the margins. The average debt per household in 2009 reached $96,100 and 146% of personal disposable income.

Okanagan CFA Forecast dinner is this Thursday if you want some opinions on where interest rates are headed. You can visit our website and click on events.

Greying Economies

Continuing on with Global Aging and the Crisis of the 2020's by Neil Howe and Richard Jackson:

"Although population size alone does not confer geopolitical stature, no one disputes that population size and economic size together constitute a potent double engine of national power. The expectation that global aging will diminish the geopolitical stature of the developed world is thus based in part on simple arithmetic. Economic performance, in fact, is more likely to deteriorate than improve.

Economies with graying workforces are also likely to be less entrepreneurial. At the same time, savings rates in the developed world will decline as a larger share of the population moves into the retirement years. Even as economic growth slows, the developed countries will have to transfer a rising share of society's economic resources from working-age adults to nonworking elders. Yet the old-age benefit systems of most developed countries are already pushing the limits of fiscal and economic affordability.

Faced with the choice between economically ruinous tax hikes and politically impossible benefit cuts, many governments will choose a third option: cannibalizing other spending on everything from education and the environment to foreign assistance and national defense."

To be continued ....

GB

Global Ageing and the Crisis of the 2020's - Introduction

I thought I'd make the next few days story time. There's a great piece by Neil Howe and Richard Jackson titled Global Aging and the Crisis of the 2020's which was featured in the latest Outside the Box. Both Neil and Richard work with the Center for Strategic and Interntional Studies on the Global Aging Initiative. When they write, it pays to pay attention. Global aging is likely to have a profound effect on economic growth, living standards, and the shape of the world order. So here's an introduction:

"From the fall of the roman and the Mayan empires, to the Black Death, to the colonization of the New World, and the youth-driven revolutions of the twentieth century, demographic trends have played a decisive role in many of the great invasions, political upheavals, migrations, and environmental catastrophes of history. For the world's wealthy nations, the 2020's are set to be a decade of rapid population aging and population decline. Falling birthrates are not only transforming traditional population pyramids, leaving them top-heavy with elders, but are also ushering in a new era of workforce and population decline. These trends threaten to undermine the ability of today's developed countries to maintain global security.

Rising pension and health care costs will place intense pressure on government budgets, potentially crowding out spending on other priorities, including national defense and foreign assistance. The weakening of the developed countries might not be a cause for concern if we knew that the world as a whole were likely to become more pacific. The risk of social and political upheaval could grow throughout the developing world, even as the developed world's capacity to deal with such threats decline."

... to be continued.

GB

Canadian Dollar

Loonie at $1.02 yesterday. Who cares and why should we? What effect on Investment planning if any?

Well I care. The Canadian dollar tends to move in the same direction as the stock market because the US dollar tends to be negatively correlated or moves in an inverse direction to the stock markets. For example today the markets are down and so is the loonie. In terms of investment planning, if the loonie continues to rise, it's a double edged sword. It's great for importers and snowbirds and for exporters it drags on their profit because of the increased prices of their wares or goods they are selling abroad. Especially if it rises quickly because business owners can't prepare for it. We are very relient on the world economy and so in the long run it will hamper growth in Canada and therefore potentially reduce your return expectations unless you adjust for it.

Next Wednesday January 19th the local CFA society is hosting their annual forecast dinner. One of the topics they will forecast on is the Canadian dollar. If you would like to attend give me a call and I can get you a ticket.

Where's oil heading?

To start the year, the oil prices turned south thanks to profit taking and weaker than expected employment reports.

However, some new events have turned the market around:
First, there was a fire on Jan. 6 at an oil sands upgrader, which forced Canadian Natural Resources Ltd. to shut production at its 110,000 barrels per day Horizon oil sands project.

Then, the Trans Alaska Pipeline, had to shut down on Saturday Jan. 8, after a leak was discovered at Prudhoe Bay.

Last but not least, several OPEC members are increasingly talking about how the Cartel would not act unless crude crosses $110 a barrel. This new tightened supply picture, couple with OPEC talks will most likely turn crude oil to move on its own momentum. So likely higher.

Wednesday Jan 12 - Maintain and Update the Plan

Q: How often should you be reviewing your retirement plan?

A: As a general rule, your retirement plan should be reviewed at least annually. You want to make sure your retirement income goals are being met. That may seem obvious, but you would be surprised how many people I see, don't know the answer. In addition, unexpected events can come up and force new turns in life. Some examples of events that can throw a wrench in your plan are: Death of a family member, unexpected expenses, a change in heath, or shortened worklife through disability or layoff. The main point is that life changes so your plan needs to be dynamic, which requires you to maintain and update your plan regularly.

Friday January 14th we are hosting a wealth management discussion featuring retirement planning. We have a few spots open so if you would like to attend call us at 868-5525 or visit our website at yourlifeyourplan.ca.

AM 1150 Radio Rallies & Reversals

Here's your economic calendar lineup for this week:

In Canada, we've got housing starts data tomorrow; new housing prices on Wednesday; and merchandise trade balance on Thursday.

In the US, there's wholesale trade tomorrow, but Friday gives us CPI, capacity utilization, consumer sentiment, and business inventory data.

On Thursday, we'll here from the Bank of England and the European Central Bank regarding their monetary policy, respectively.

Last week in the US, we got the latest read on the Institute for Supply Management's Non-manufacturing index, which came in at 57.1 for December. Anything above 50 means expansion, but it's the trend that matters. This was the index's fourth consecutive increase, and puts it at its highest since the middle of 2006.

GB

K96.3 FM Canada Home of the Future Radio Spot Thursday

A Washington Times editorial today says Canada is The Home of The Future.
Points to our fundamental soundness – stable banking system, limited debt …stable housing market…commodities and our good manners and says our future is bright.

I would like to add one to that list and that's a great hockey system. Despite our loss last night I think we still shine in the development of great hockey players. Obviously I wasn't one of them so I will stick to wealth management.
Canada definetly has a role to play in the world economy and I think one of the keys to the sustainability of this is our immigration policy and it's contribution to productivity. I also think another strength to Canada is that we are well balanced in terms of our social, political and economic policy. Why this is all good for people living here is that if you are looking at your personal wealth this is the land of opportunity.
Next Friday January 14th we are hosting a wealth management discussion featuring retirement planning. We have 12 spots open so if you would like to attend call me at 868-5525 or visit our website.

Radio Rallies & Reversals

The 'buy the dip' theme continues - US futures were indicating a strong open this morning, following strong gains in both Europe and Asia during their regular sessions, and in addition, street wide volumes remain robust; now as I speak, North American stock indexes are in the green with the exception of the TSX Composite index thanks to gold.

The economic calendar is light today and much less important than tomorrow's highly anticipated Non-farm Payrolls data. We did get this morning the report of weekly jobless claims which was up, as expected, but not enough to suggest a reversal to the recent downward trend. The reading came in at 409,000 for the week ending January 1, up from 391,000 the previous week.

The US economy has shown some strength with the exception of labor and housing. Given the strength in yesterday's ADP figures, which were well above forecast, tomorrow's number will need to be very strong in order to support recent market strength.

GB

Tuesday Jan 11 - Filling the Gaps in Retirement

Q: Okay so all this retirement planning is great but what if you come up short?

A: Hopefully you aren't already in retirement otherwise it may be too late. There are options to fill those gaps and extend the number of years your money will last. Some of those options may include postponing CPP or other pensions, working part time or creating additional lifetime income by repositioning existing assets. Never the less a little planning can go a long way.

Friday January 14th we are hosting a wealth management discussion focussing on retirement planning. We still have a few spots open if you would like to attend give me a call at 868-5525 or visit our website.

Monday Jan 10 - Retirement Income Distribution

Q: When should you start drawing income from your RRSP's?

A: You are required by law to convert your RRSP's into a RRIF at the age of 71. You can delay that to the end of the calender year and have your first payment come out in the following year. However, if you are considering doing it before that time, asset liquidation order is important. Conventional wisdom says to liquidate taxable assets first, then tax sheltered for income. But it is important consider your own circumstances and tax considerations.

Friday January 14th we are hosting a wealth management discussion featuring retirement planning. We have a few spots open so if you would like to attend call me at 868-5525 or visit our website.

Retirement Planning Risks Topic

Q: What are the risks retirees face today?

A: 1. Longevity Risk. The likelihood you will outlive your financial resources. 2. Inflation Risk. The likelihood your standard of living will drop due to inflation. 3. Health care Risk. The likelihood that medical expenses will consume a greater % of your budget. 4. Investing Risk. The likelihood that your investment performance will suck. The key is to identify and manage these risks.

We are hosting a wealth management discussion on Friday January 14 with a focus on retirement planning. We have 12 spots left so if you are interested in attending you can call me at 868-5525 or visit our website.

AM 1150 Radio Rallies & Reversals

Here are Dennis Gartman's top three trades for 2011:

1. Long gold
2. Long the Aussie dollar
3. Long Agriculture

Gold is basically a psychological trade, but if there is one fundamental reason to own gold it's that countries like China will likely continue to increase their reserves of gold; relative to commodities, the US$ is likely to continue to fall so own the Aussie dollar; and based on supply fundamentals, own agriculture. On the other side of the trade, the sovereign debt issue will continue shadow the EU so short the Euro.

GB

K96.3 FM Radio Spot

Q: What age do most people really start to think about retirement? And what should they be asking themselves?

A: Most people start to get their act together and really start thinking about their retirement at 50.

Research shows a continuing anxiety among Canadians with regard to funding their retirement - and often that concern is highest among mid and higher income earners used to more extravagent lifestyles than someone making $40,000 a year.

A good question is "Do I have a written plan forecasting income and expenses in retirement, to ensure I don't run out of money?"

In addition, a research study commissioned by Scotia bank revealed almost 70% of people expect to work after retirement so it depends how you define retirement. Maybe it's you work because you want to not because you have to or maybe the other way around.

AM 1150 Radio Rallies & Reversals

At number 14 on the top investment stories of 2010 by Advisor Analyst readers is David Rosenberg's Themes for 2011:

Now David is taking a bit of a contrarion stance, which means he's a little less bullish on stocks and a little less bearish on bonds. Emerging markets may struggle as policy makers try to manage inflationary pressure, and the US dollar should outperform on a relative basis, at least against the Yen and Euro. One big risk factor is another leg down in US home prices.

In general he recommends you hold more non-cyclical, out of favor, dividend paying stocks such as utilities, pharma, and food products.

GB

K96.3 FM Radio Spot

Happy New Year David.

A new year. SO what do you see in store.
Seems things are on the up ….spending, manufacturing, capital investment, commodities…
Interest rates still low, inflation modest….is this going to be a good year?

Happy New Year Guys! Things certainly appear to be started on a good note. January can be a good predictor of the year. On average, if January is up so is the year.
The Annual Okanagan CFA Forecast dinner is slated for January 20th at the Capri Hotel. Analysts stand up and give a prediction for the year and defend themselves the following year. I may have a better read after that however, I was reading the CFA Newsbrief this morning to get caught up on the world of investing. Some headlines caught my eye. 1. Despite unemployment in the US of 10%, an over heating economy has replaced fears of a double-dip recession 2. According to the Economist predictions of a further US housing crash are far-fetched. 3. Stimulus has been supporting market growth and the end is in sight, so we will see what happens when the life support comes off. 4. According to bond experts, sovereign debt issues are the biggest risk in the US and Europe 5. Market watchers wonder whether exchange traded funds might be about to pop. Lastly,Gas prices could climb with rising crude oil prices making the cost of air travel more expensive. That may be offset by a rising Canadian dollar which happens to be above par right now. Oh yeah the Canadian Juniors will take the gold.

Happy New Year!

First off, I want to wish everyone a happy new year. To my surprise, 2010 was a good year for investors. I wish I could say the same for the roughly 10% official unemployed and the other unofficial 10-20%.

So, what's in store for 2011? The CFA Okanagan's Annual Forecast Dinner is coming up Thursday, January 20, where some of the industry's brightest will share their insights into the investment horizon. This is the Okanagan's premiere financial event and you don't want to miss it, but tickets usually sell out so don't wait.

Advisor Analyst has highlighted the top 15 stories of 2010 as picked by readers. At number 15 is Bill Gross' Investment Outlook from November: If you recall the U.S. was facing mid-term elections while the Federal Reserve was building the stage for QE2. While he was generally supportive of Ben Bernanke's diagnoses, the current prescription is kind of like trying to cure a hang-over with tequila shooters - over $2 trillion dollars worth. So far, investors are taking their medicine.

Keep tuning in the mornings and afternoons while we round out the remaining top 14 stories of 2010, then we'll get into 2011.

GB