April 18, 2019 Advanced Investing Personal Wealth The Rational Reminder Podcast Episode 42: IPOs, Indexing and Market-Linked GICs: Weighing Up Their Worth Welcome to this episode of the Rational Reminder Podcast! We’ve decided to tweak the format of the show slightly, so you can look forward to a more focused conversation around current and portfolio topics and much less talk about factors! In our talk today, we uncover the recent popularity of IPOs, giving you a balanced perspective so that you can decided for yourself whether the hype holds enough merit for you to get involved. We also get into the various arguments against indexing, pulling apart all the factors to keep in mind, and then advise you on choosing account types based on your individual financial needs. In wrapping up our talk, we also reveal our pick for the worst advice that we’ve heard in the previous week and why you need to stay far, far away. For all this and more, be sure to join us! Subscribe to the Rational Reminder podcast Key Points From This Episode: How we are changing up the format of the episodes. [0:01:50.0] A closer look at the two Canadian funds with class action lawsuits against them. [0:03:46.0] Investigating the current IPO frenzy and whether there is merit in the hype. [0:07:40.0] How to get an IPO allocation and the possible terms and conditions. [0:11:59.0] A breakdown of the arguments against indexing. [0:13:46.0] Why indexing is risky and the issue of a lack of control. [0:14:24.0] Weighing up the degree to which the skills of fund managers play a role in indexing. [0:19:46.0] Factors to consider when deciding on the type of account that you want to allocate to. [0:23:26.0] The advisable cascading order in which to fill up your accounts. [0:26:37.0] The complexity with market-linked GICs and what the basic premise is. [0:35:50.0] And much more! Tweetables: “But people like IPOs because lottery effect obviously, people are willing to accept the probability of losses for the small potential of a very large gains.” Click To Tweet [0:12:49] “Everybody wants control. I mean that's the main driver I think for having active management. You want to control what you can. Index funds, you have no control.” — @CameronPassmore Click To Tweet[0:16:05] “I think the key is you eliminate downside in most cases, but you cap upside. That's basically the essence of the product, structured notes and market link GICs, you're giving up potential upside for eliminating downside.” —… Click To Tweet[0:37:06] Links From Today’s Episode: Rational Reminder Website — https://rationalreminder.ca/ Ontario Budget 2019 — http://budget.ontario.ca/2019/contents.html RBC Canadian Equity Fund — http://fundinfo.rbcgam.com/mutual-funds/rbc-funds/fund-pages/rbf269.fs TD Canadian Equity Fund —https://www.theglobeandmail.com/investing/markets/funds/TDB3089.CF/ Wall Street Journal — https://www.wsj.com/news/us S&P Total Market Index — https://us.spindices.com/indices/equity/sp-total-market-index-tmi S&P/TSX Composite — https://www.fxcm.com/za/insights/sptsx-composite-index/ FTSE Canada All Cap — https://www.ftse.com/products/indices/Canada-AllCap “The Long-Term Performance of IPOs, Revisited” — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929733 Carhart four-factor model — https://capital.com/carhart-four-factor-model-definition Jeunesse — https://garsumy.jeunesseglobal.com/en-US/countries Fannie Mae — http://www.fanniemae.com/portal/index.html Download the transcript of this episode: The Rational Reminder Podcast Ep.42 – Transcript Share: Facebook Twitter LinkedIn Email IIROC AdvisorReport
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