Tuesday, February 16, 2010 3:34 PM Why the experts call us ‘dumb money’ David Berman T he next time you try to make a well-timed move into, or out of, a mutual fund, keep in mind that academics have a term for people like us: dumb money. That’s because evidence suggests that little investors like us have a tendency to get wrapped up in the news, pulling the plug on equities when the stock market has already bottomed out and jumping into stocks when they are near a peak, dooming ourselves to poor returns. B ut that’s why strategists remain interested in mutual fund flows – and what’s interesting is that, despite all the fretting over the steep rebound in the stock market over the past year, fund flows suggest that mutual fund investors remain in defensive mode, preferring bonds over stocks. George Vasic, strategist at UBS, has the…

T oday’s top stories from Report on Business : New mortgage rules unveiled Finance Minister Jim Flaherty today unveiled new mortgage standards aimed at stopping housing speculators and ensuring homebuyers can adequately juggle their debts when interest rates inevitably rise. Mr. Flaherty stressed that Canada’s real estate market is healthy, and that the new rules, which take effect April 19, would stop “negative trends” from development. Ottawa moved in three areas: • New qualifying standards will mean borrowers must be able to handle a five-year, fixed-rate mortgage, even though they may opt for a shorter term and lower rate. The government said this test will help homebuyers prepare for higher rates. As it now stands at the major banks, borrowers are income-tested for a three-year fixed rate. Craig Alexander, Toronto-Dominion Bank’s deputy chief economist, said in a research note that the change could influence…

C anadian gold miners are set to report a sharp jump in fourth-quarter profits thanks to record-setting bullion prices, muted cost increases and recovering prices for base metals. With gold GC-FT having hit an all-time high of $1,226.10 (U.S.) an ounce in the final months of 2009, analysts say profits will be driven by a record gap between gold prices and mining costs, despite cost pressure from the weak U.S. dollar. “We believe that the margins will still increase, and hence earnings will be better,” said Paul Burchell, an analyst at Dundee Securities in Toronto. Top miners Barrick Gold Corp. ABX-T and Goldcorp Inc. G-T should both see a doubling of underlying profit for the quarter ended Dec. 31 from the year before, according to Thomson Reuters I/B/E/S. No. 3 Canadian miner Kinross Gold Corp. K-T…

I don’t know about you, but I’ve been burned by the stock market more times than I care to remember! I do all my research and I even do fairly in depth stock analysis (and I was even trained in college to do it correctly!). But inevitably, I just flat out pick the wrong stocks and I lose money… Finally I decided to stop investing in the stock market and look for alternative forms of investment. Gold is particularly nice right now because we seem to be heading into a highly inflationary period, and during those times gold historically does pretty good. But you can’t invest completely in gold because you miss out on quite a bit of growth. So what should you invest in? Many people choose to invest in art and I like the idea of that so I thought I would write a short article on it…

I like to invest in the stock market, but I don’t like to lose money and it seems like I’m always losing money when I invest in the stock market! So I decided to start looking for other places to invest in besides the stock market. I quickly found that you can find all kinds of collectible items for sale at auctions that increase in value over time and are also fun to purchase. The problem is, unless you know what you’re doing, you can lose out to professionals when it comes time to bid for the items at auction. That’s why I decided to write this article today to help you learn the inside tricks to buying collectible items at auction. First always obtained an auction catalog. This seems self-evident but many newbies fail to do this. Read every description for the things that are for sale that…

The Washington state Legislature has proposed a bill that would double the estate taxes for residents. Currently, there is a $2 million exemption in that state, with a 10% tax that climbs up to 19% at $9 million and above. Under the proposed law, the range would jump to a 20% estate tax for more than $2 million, up to 38% at the $9 million mark. If the latest proposal is enacted, 2011 could be a costly year for some Washington residents: Assuming that the federal estate tax, which lapsed at the end of 2009, comes back next year with a $1 million exemption at 55% as scheduled, Washington residents could be paying in excess of 75% in estate taxes, experts said. “This is shocking and disturbing, and has very significant ramifications for the majority of our clients,” said Tom Gores, a partner in Perkins Coie LLP, a…

A federal judge yesterday declined to unseal a March 2007 IRS opinion letter that laid out guidelines for the payment the NASD made to member firms following the 2007 merger with the NYSE. The letter gave a range of permissible payments the NASD could have given to its members, but the dollar amounts have been redacted by court order. Judge Jed Rakoff of the U.S. District Court for the Southern District of New York said he wanted to release the full letter, but was bound by an earlier ruling from doing so. Another U.S. District Court judge, the late Shirley Whol Kram, sealed the letter in 2007, saying that disclosure of the IRS payment range would harm the NASD’s competitive advantage. An appeals court upheld that decision. “If this court were writing on a clean slate, it might disagree with the conclusion” reached by Ms. Kram, Mr. Rakoff wrote. He said…