Table Of Contents

    Key points

    It happened in Toronto. It happened in Vancouver. Transit ground to a halt at the worst possible moments. And, if you read the tweets and forum posts from active investors and traders, it occasionally happens to discount brokerages, major data providers and stock exchanges across the information superhighway. When technology that carries people or financial […]

    It happened in Toronto. It happened in Vancouver. Transit ground to a halt at the worst possible moments. And, if you read the tweets and forum posts from active investors and traders, it occasionally happens to discount brokerages, major data providers and stock exchanges across the information superhighway. When technology that carries people or financial information goes offline, it seems that the new normal is for people to turn online (are you taking notes #SnoopforCEO?). For many discount brokerages, the issue of how to navigate this tech-fueled new normal filled with hyperconnected ‘millennials’ as well as their expectations of how things ought to run is an all too familiar challenge. Alas, there is no turning back.

    In this week’s roundup we try to get things ‘on track’ by first looking at one discount brokerage-sponsored investor challenge that wrapped up and what it means for investors looking to learn about investing. Next, we take a look at an important announcement from the Federal Government on their strategy for improving financial literacy. Following that, we report on the quick scan of the small screen that yielded some interesting segments on ‘guys chatting about investing’ followed by the conversations about DIY investing in the discount brokerage tweets of the week. Finally we close out with the upcoming investor education events, forum chatter and one very cool internet video that highlights the importance of paying attention to the big picture.

    And it was supposed to be a slow month…

    It Pays to Play

    Successfully timing the market has always been met with some degree of skepticism. That’s real life. Still it is a fascinating exercise to observe what happens when contestants using ‘virtual money’ are challenged to perform as best as they can.

    This past week, the “Biggest Winner 5” trading competition from Horizons ETFs and National Bank Direct Brokerage announced that Calgarian Daniel Tsang was crowned the champ for netting a 20.99% return over the course of the six-week contest. First prize in this ETF-only virtual stock market challenge was $7,500 followed by the second prize of $2,500 which went to Nancy Kelly of Cobourg, Ontario who reached a healthy 18.68% return.

    So what was the secret to scoring the quick wins? According to Howard Atkinson, President of Horizons ETFs, it was the “effective use of leveraged ETFs.” Indeed, when the focus is short term, it is the combination of luck, timing, volatility and leverage that many professional traders recognize govern their fortunes. Of course it also helped that junior’s university fund was not on the line when making some of the big directional bets on oil and natural gas that provided a large portion of the results.

    While the prize money and recognition were potent incentives, it was great to see that over 1600 individuals took part, including a continuing trend of increased participation by women investors.

    It would have been interesting to see what the average performance was over that time, especially considering the performance of various benchmark indices, as well as what the distribution was of the 20,000 or so trades that were made.

    Regardless of the outcome, the good news for DIY investors is that paper trading is a great way to learn and practice different investment strategies. Several discount brokerages such as Interactive Brokers, RBC Direct Investing, and TD Direct Investing (specifically the US Trading Platform aka ThinkOrSwim) even offer practice accounts which can be used to test and learn. That said, the Biggest Winner contest offers up a number of cash prizes which just makes getting it right that much more fun. Congrats to the winners and participants!

    Making Financial Literacy Count With #CountMeInCA

    This past week the Federal Government formally announced the launch of their National Strategy for Financial Literacy called “Count Me In”.

    As has increasingly been the case since 2009, resources are continuing to be committed to improving financial literacy across the general population and specifically to vulnerable populations. While the formal commitment by government agencies has taken time to mobilize, other organizations and individuals have been filling the void.

    Fortunately many of the resources have been organized into a database on financial literacy (explained also in the following video).

    For quite some time and to this day, however, DIY investors have relied upon Canadian investor forums such as the personal finance section of Reddit, RedFlagDeals, Canadian Investor Forum or the Financial Wisdom Forum as well as sites such as and a host of independent personal finance writers to help navigate the world of investing online.

    Discount brokerages have also recognized the need and opportunity in providing investor education on specific areas of interest related to investing. Four of the biggest providers of investor education include Desjardins Online Brokerage, National Bank Direct Brokerage, Scotia iTrade and TD Direct Investing.

    Fortunately, the number of resources for learning about investing (as a component to personal financial literacy) continues to grow and with the appointment of a Financial Literacy Leader and the formation of a concrete strategy, it appears even more resources will be mobilized and coordinated to bring the awareness of personal financial literacy into the everyday purview of most Canadians.

    Given the high levels of personal debt, irrational housing prices and demographical shifts there is clearly a need and urgency to better educate and empower Canadians to manage their finances wisely.

    It comes as little surprise, therefore, that the three primary goals of the National Strategy on Financial Literacy are to help Canadians:

    1. Manage money & debt wisely
    2. Plan & save for the future
    3. Prevent & protect against fraud and financial abuse

    For those beginning on their journey into learning about personal finance and investing, or for those who get asked by beginners about some good resources, it is encouraging that in addition to the good books about investing, forums and websites that there are now going to be some better resources to turn to.

    To keep track of the latest developments of the “Count me in” strategy, follow the hashtag #CountMeInCA or visit the Financial Consumer Agency of Canada website here.

    Channel Surfing

    There’s just something about two guys talking about investing – or so it seems that it was the case with a pair of video clips that caught our attention.

    The first is a commercial for Interactive Brokers’ new ‘marketplace’ which we mentioned in last week’s roundup. In the commercial there’s an amusingly scenic moment of two guys fishing in a river set to some wholesome ‘folky’ music.

    Getting back to the theme of financial literacy, the second clip is from a BNN interview featuring Doce Tomic, President & CEO, Credential Financial discussing financial literacy tips for millennials.

    Over the past few years and increasingly over the last few months it seems that “millennials” has become the buzzword of choice to describe a new category of being. Like the Gen Y’s, Gen X’s and Baby Boomers, the millennials have become a talking point, especially in the world of finance, where there has been lots of energy expended trying to understand, cater to and capture the business of this demographic cohort.

    The Google Trends graph below shows just how ‘hot’ a topic millennials have become. Interestingly, the stock charts of several companies that cater well to this demographic also seem to follow a similar trend, which may help explain why the discount brokerages and financial services firms are hoping to find the right recipe for connecting to this group very quickly.

    #DiscountBrokerage Tweets of the Week

    In this week’s tweets, there was an interesting shift in the pattern of the past few weeks. While there were definitely a handful of questions relating to customer service issues, there were a number of not so flattering conversations that Scotia iTrade found themselves the center of. While the social media representative handled the exchanges professionally, it was revealing to see what some of the concerns were with this online brokerage.

    Event Horizon

    Here are the upcoming investor education seminars and webinars for the week ahead:

    June 16

    Scotia iTRADE – Volatility – Friend or Foe with Pro Market Advisors

    June 17

    TD Direct Investing – Technical Analysis – Candlestick Charting

    TD Direct Investing – Introduction to Fundamental Analysis

    Scotia iTRADE – Building Diversified Portfolios Using ETFs with iShares

    June 18

    TD Direct Investing – Introduction to Investing in Options

    Scotia iTRADE – Charts and Patterns 101

    From the Forums

    Shorts Weather

    In this post from the Canadian Money Forum, one user highlights some of the challenges encountered with going short on a stock at Scotia iTrade. Check out what the community had to say about some of the other alternative discount brokerages mentioned and why having a brokerage that has a big inventory can make the difference on a quick trade.

    Interesting Gambit

    One of the more popular techniques for exchanging Canadian funds into US funds is via Norbert’s Gambit. This past week there were a couple of interesting threads concerning the importance of keeping track of any interest charges that may be incurred as well as the shift that might be taking place with one bank-owned brokerage now potentially charging a little more to get that done.

    Into the Close

    That does it for this edition of the roundup. Hard to believe that the middle of June is almost here but with it come the (gasp) finale of Game of Thrones for another season. Of course, there’s lots to do outside but for those that would rather watch other people outside do entertaining things, this tribute to television theme songs is good training for that day you end up on Jeopardy. Have a great weekend!