Author Archives: Jworthy

Bitcoin investing

Why Bitcoin Is Being Taken Seriously As An Investment

When Bitcoin first emerged on the scene, it was introduced as a currency. Some even referred to it as the currency of the future, meant to move transactions into digital form and potentially supplant the likes of the dollar and euro. But over time the idea that Bitcoin’s primary purpose as a functional currency was called into question and in September 2015, the U.S. CFTC even went so far as to officially designate Bitcoin as a commodity.

That decision didn’t have any practical impact, but it classified Bitcoin more along the lines of silver or crude oil than the dollar or euro. And in some ways it was the big signal people needed to ask the simple but vital question: is Bitcoin a good investment opportunity?

Fast-forward nearly two more years, and the answer to that question has been yes. That’s not to say Bitcoin is necessarily a wise investment right now, but it certainly would have been at the time of the CFTC’s ruling, and investors have been piling on ever since. More and more people seem to be buying Bitcoin not to use in everyday transactions, or even occasional ones, but rather to store for the long-term in the hopes of selling for a profit. But this isn’t just because of the CFTC designation. There are a few other factors playing into why Bitcoin is being taken seriously as an investment as well.

Soaring Prices

The main reason more people are looking into Bitcoin investment is simple: they regret not doing it sooner. Bitcoin’s price has been soaring for quite some time now, and has already reached highs around $3,000 that some never thought it would see. Just recently a stock analyst predicted it could reach $50,000 in another decade. That might be a particularly outlandish prediction, but it’s a also a good snapshot of how people are viewing the commodity. They’ve seen lucrative growth particularly in the last year, and they can envision more in the years to come.

Increased Usage

We’ve seen brick-and-mortar and online merchants alike hopping aboard the Bitcoin train sporadically for a few years now, but recently larger industries and even nations have been facilitating more usage (which drives up value). Late last year, we saw licensed online casino platforms beginning to accept Bitcoin in a move that could ultimately lead to millions of players using it for transactions. More recently we’ve seen countries like China and Japan lighten restrictions on the use of Bitcoin, which could bring large portions of their populations to the table. Developments like these make cryptocurrency seem more like a lasting asset and less like a passing trend.

General Familiarity

There’s also the fact that people are starting to get used to Bitcoin, and in this case that’s probably a good thing. For a while, a lot of people viewed it as a temporary blip on the radar, or at best a legitimate asset with limited appeal. But Bitcoin has stuck around longer than some thought it ever would, and that has inevitably given it an air of legitimacy and stability.

Again, none of this means that Bitcoin is necessarily a good investment at this moment. There are other factors involved, and it’s important to do your due diligence if you’re considering buying in. But if you’ve been surprised even at how seriously it’s being taken, these are a few reasons behind the shift in attitude toward the world’s leading cryptocurrency.


What is a Credit Score & How Does It Work?

The following is a guest contribution by Patrick Ward:

Whenever you make an application for loans, one of the factors that will be used for qualifying you is the credit score. A credit score is the number that is used to determine the risk associated with lending money to you. This is the number that tells the banks, credit card companies, and other financial institutions whether you have the ability to pay off your debts.

In the United States, the most common credit scoring system used is called FICO. FICO scores range from 300 to 850. The scores are classified as follows

  • Excellent credit: This is anything above 720
  • Good credit: Between 690 and 720
  • Average credit: Between 630 and 690
  • Poor credit: anything under 630

The other credit scoring system used is the vantage score

Several factors determine the FICO credit score. Here is how credit scores are arrived at. They include:

  1. Payment history: Making payments on time results into a higher credit score. Payment history accounts for 35% of credit score.
  2. Amounts owed and available credit: The amount owned in relation to available credit accounts for 30% of the score.
  3. New credit: When you open a new account, it proves that you are creditworthy and thus improves your credit score. This accounts for 10%
  4. Type of credit: With a mixture of different types of credit, you improve your score. It accounts for 10% of the credit score.
  5. Recent credit: Your open accounts and account activity account for 15% of the credit score.

Application of credit scores:

  • Leases

A landlord may check the credit scores of a tenant to help determine how much money they will charge them.

  • Approval for financial products

Financing bodies will look at your credit score to determine if they will approve your loan application.

  • Interest rates

The interest rates you get can also be determined by your credit scores. With a higher FICO score, you are likely to be approved for credit with lower interest rates. However, with a lower FICO score, your chances of being disqualified are high and if you are approved, the interest rates may be raised.

  • Best credit cards and lucrative credit card rewards

If you want to get invitations from the best credit card companies, you should work on attaining a good credit score. Attaining a good credit score is not that easy since you can harm your credit without being aware of it. The bottom-line of this is that you must give importance on your credit score and see to it that it shows good standing; overlooking this can be very detrimental to your financial health. Thus, being aware of how your credit score is calculated is necessary.

Usually, the best cards and reward programs are given to those with very high credit score ratings. Because getting high credit score ratings means lower interest rates, approval of higher limits and more rewards. It results to lower interest rates because a lender takes note of your credit history. Relying on your credit score, lenders will determine what kind of risk you expose them. According to financial theory, increased credit risk entails additional risk premium added to the price of money borrowed. The higher the credit risk, the higher the risk premium added.

Next, it also results to approval of higher limits. Lenders will be more willing to lend you larger amounts of money with a good credit score because they know you have a good credit standing. It does not only help you have greater purchasing power, but it also allows you to potentially raise your credit score.

Moreover, such lenders offer the best cash back, travel points and other rewards. Even some offer dollars worth of bonuses for spending certain amount of money in an allotted time. By following tips and suggestions, you should be able to maintain or improve your credit score. Again, getting approved and garner such perks, however, requires you to have a favorable credit score.

Keeping good your credit score with making wise credit decisions and developing healthy credit habits will lead you into raising your credit score and maintaining it. Because of all the benefits, a good credit score is something to feel good about and to take good care of, since it influences your financial freedom.

Author Bio:

Patrick Ward is a legal researcher specializing in finance, loans and debt analysis, and bankruptcy law. He has a decade of experience in analyzing the legalities involved in the dynamics between local and global financial institutions. He is also passionate in helping individuals overcome their financial challenges. Follow on twitter @blgbankruptcy

A Capitalist’s Lament Book Review

capitalist's lament book reviewA Capitalist’s Lament by Leland Faust is a book about “How Wall Street is Fleecing You and Ruining America.”

For full disclosure, the publisher of this book sent me a copy for free. That said, it did not impact my review.

And by the time you’re done reading, I think you should have a great understanding of what this book is all about, and whether or not it’s the right investment book for you.

One of the interesting things about this book, is that the author is a decided capitalist. It would be one thing to read a criticism of capitalism written by a Marxist. But in this case, the author has been a successful investment advisor featured prominently in the media over the last couple of decades.

Now that you have that background in mind, let’s take a closer look at what this book is all about.

A Capitalist’s Lament – Book Overview:

A Capitalist’s Lament is exactly what the title sounds like. The book is written by a dedicated capitalist, who seems to be legitimately disenfranchised with what our economic system has become.

As the sub-title of the book implies, the contents of the book is all about the many different ways Wall Street takes advantage of it’s customers. And there are many of them.

Some of the topics covered include:

  • Outrageous execution compensation.
  • Why Wall Street has largely become a short-term focused casino.
  • The various conflicts of interest that exist in the financial services industry.
  • The high-fees brokers and bankers often push on their clients.

And much, much more…

The book accurately critiques a variety of things that have gone wrong with our modern form of capitalism. It really is a lament.

In a lot of ways, this investing book has a similar feel to David Stockman’s book The Great Deformation, and the all-time classic, Where Are The Customers’ Yachts?To some degree, I think this latter piece indicates the problems on Wall Street are relatively persistent, and not necessarily something new.

Even though that’s the case, A Capitalist’s Lament was published in October 2016. So there are lots of contemporary examples that make the book interesting and relevant. But there’s one aspect of the book that really stood out to me.

My Favourite Part About a Capitalist’s Lament:

The author of A Capitalist’s LamentLeland Faust, is a successful investment advisor. He’s the founder of a company called CSI Capital Management, which he started over 33 years ago after graduating from Harvard Law School. Today, the company has over $1.5 billion in in assets under management that he supervises. For his role actively managing money, Faust also has numerous awards and accolades. So why does all this matter?

To be honest, given the credentials of the author, I take the criticisms of the book much more seriously. It would be easy for someone outside the system to throw stones. But for someone to have been so successful in an environment, only to turn around and objectively criticize it is very interesting.

It’s one thing to see sensationalist headlines about the misgivings of majors banks and the financial fees they pay. But when it’s supported by this educated and informed critique, it really makes you stop and think. And I think in large part, that’s what this book delivers. For me, it was the author’s seasoned and respectable perspective that really made the book sing.

On the other hand, there was one part of his tone I didn’t love.

Where A Capitalist’s Lament Comes Up a Little Short:

Overall, A Capitalist’s Lament does a very effective job summarizing the problems, conflicts and fees plaguing investors. The book rightly shines a light on the fact hat most individual investors are getting fleeced.

And I also realize that the book is titled a lament. So in some regards, this slight criticism might not even be warranted. But as a reader, I would have appreciated a little more focus on potential solutions.  While awareness of the issues certainly matters, it isn’t enough on it’s own.

To that end, the book does have some recommendations on next steps and questions to ask of your investment advisors and product dealers. I think this kind of information is very helpful, and I would have appreciated it if some of these ideas were sprinkled throughout the book a little more. Overall though, I really did enjoy the approach in this book. So let’s finish this book review up.

A Capitalist’s Lament – The Final Word:

By now, I hope you have a good understanding of what A Capitalist’s Lament is all about. The book does a good job accurately summarizing the problems facing Wall Street, and the general investing public. For this reason, it may be of interest and I recommend taking a closer look at the book on Amazon.

I also encourage you to check out the short video book review. After that, you’ll have everything you need to know about A Capitalist’s Lament.

A Capitalist’s Lament – Video Book Review:


Commerce in the Modern Era: Trading Online Worldwide

The following is a third-party contribution:

It has become increasingly clear in the past few years that economic markets are volatile and nothing should be taken for granted. We have seen fluctuations in markets across the globe that have proven that even the most diversified and well invested portfolio is not immune to market changes.

While traditional stock and bond trading remains a relatively popular investment option, new trading markets have evolved. One of those is the currency market, also known as the forex market. This market has grown exponentially over the years and is closely linked to the growth of the internet.

For a deeper explanation about trading on the currency markets and trading online worldwide, visit this page.

Online Currency Trading: What It Is and How It Works?

While you may have a real thorough understanding of stocks and how the stock markets work, you may have never even heard of online currency trading. The basic idea behind the market is relatively simple; like stocks, the values of currencies fluctuate over time based on supply and demand.

Traders buy and sell these currencies, making profits by buying low and selling high, just like stocks. The tricky part to forex trading is that you have to understand how currency markets are likely to react to different events, circumstances, and the results of trading online worldwide.

For example, the recent presidential elections in the United States had a huge impact on the value of the Mexican Peso, United States Dollar, Japanese Yen, and many other currencies. Traders that had an inkling about these changes had the opportunity to make a lot of money by purchasing or selling the right currencies at the right time.

Trading Online Worldwide with Major Brokers

The nicest part of the forex markets is that they enable trading online worldwide since the market is decentralized and accessed via the internet. This means that traders do not need to move from their couch in order to perform a trade.

A lot of people like the level of freedom that online trading awards them because they can trade whenever they have some free time or a spare moment. It doesn’t matter whether you spend your weekend trading or take a moment off during work to make a few quick trades, since the market is accessed from the web, it is extremely easy to access and execute trades.

The largest brokers are the best to use when trading forex online because they offer a handful of benefits that can’t be found anywhere else. For example, most of the major brokers are regulated by international agencies. This ensures that you are protected as a consumer and that you won’t be scammed out of your investments.

Lastly, the best brokers offer you a treasure trove of information to help educate yourself about the forex markets and how to successfully trade on them. You need to have a good understanding of online trading if you want to truly be successful, meaning that you need to invest time and effort into learning about the industry.

Overall, if you are looking for a different trading option that doesn’t involve stocks and the traditional markets, look to forex trading. Who knows, may even make it big and hit the jackpot by trading currencies online.

Financial Services in Canada: Fintech vs. The Bank

Ernst & Young is out with a new report about Canadian consumer banking highlights. I really think the Canadian financial services landscape is at a very interesting point. On one hand, the big banks are making record profits.  But on the other…

Financial technology (fintech) companies are nipping at their heels like never before. I don’t think financial services in Canada have been this ripe for disruption in a long time. One of the key drivers, as shown below, is that Canadians are (finally) getting more comfortable with digital banking and online financial services. Can the banks adapt?

Curious to learn more? Check out the executive summary. Or take a look at the infographic below…




Investing In Alternative Trading

The following is a third-party contribution:

You have to face facts – the currency market is becoming more difficult for traders. The markets are battling to make money as liquidity is drying up and investors are reluctant to take risks, which amounts to quicker currency terms. Where it once took weeks and sometimes months for prices to adjust, now in 2016 it is happening very quickly, creating stress for traders.

This is why it is so important to choose your broker carefully. In forex trading, for instance, there are a host of issues that confront traders. A trader therefore wants their broker to have a responsive customer service department – those who will attend to your requests promptly.

The Potential to Make Profit with Falling Market Prices

With spread betting you want answers and CMC Markets, a UK-based financial derivatives dealer, offers online trading in spread betting, a tax-efficient way of leveraging the financial markets. CMC Markets will predict where a price of anything will stand at a specified time in the future. The prediction is in the form of a spread which is the range between low and high estimates. The trader than bets on those prices, buying at the high price if they believe the price will rise from current levels and selling at the low price if they believe it will fall.

Spread-betting profits aren’t liable for capital gains tax, but spread-betting losses can’t be set against other gains to reduce tax.

A financial spread bet is known as a derivative – it isn’t regarded as live share. Traders can take a position against the value of an underlying financial instrument moving down- or upwards in the market place. With spread betting, the trader doesn’t actually own the stock they are betting on – they simply speculate on the direction that the spread of the price of that stock will move.

Trade on Wide Range of Markets

The advantage in this is that the trader can also make money on a stock that goes down. With spread betting, apart from stocks and shares, there are other money market instruments like currencies, indices, gold, oil etc that have spreads to bet on.

The main benefit is being able to bet on things going down – to make money during the good and the bad times. Spread betting offers leverage or margin so that when placing a bet, you don’t have to put down the full value of the bet – you only have to put down a fraction of the total value of the transaction. What this does is it frees up the rest of your money to spend as you wish elsewhere. You can therefore have many bets placed at the same time, as opposed to having all your money put on one single action. Spread betting allows for potentially greater gains.

You can make a bet without taking down the full value of the position. Your funds are not tied up in one trade, and you can use the rest for other investments. Some other benefits of spread betting are:

  • spread bets are designed for short-term trading. They gave advantages over normal dealing such as the ability to trade on margin and the ability to go short.
  • no fees or commissions
  • thousands of markets to trade online
  • 24 hours dealing
  • mobile trading – apps give you an advantage to trade from anywhere.
  • spread betting providers are regulated
  • limit your losses – a risk management system means you’re able to manage your account easily. The simple order functionality means that limiting losses and maximising returns is as easy as ever

Spread bets are a simple but effective way to invest in financial markets. It is particularly attractive for those investors who don’t have pots of risk-capital available. Its advantage lies in that fact that it offers trades a stake in a larger number of shares, meaning the gains can be far higher than if they just bought the actual shares.

Get Going – without Large amounts of Money

If you’re new to trading and still getting into trading, spread betting is a great way of gaining trading experience. This is one of the huge benefits of spread betting for beginners – simply it doesn’t require you to bet with large amounts of money.

How Do Gold, Bitcoin and the US Dollar Stack Up?

Rosland Capital recently released an informative infographic which I posted below. It shows some of the ways that Gold, the US Dollar, and bitcoin compare based on information from their page on precious metals IRAs. Given the big moves in gold and the growing prominence of bitcoin, it makes sense to try and learn get educated about them, especially with the US Presidential coming. Enjoy!



What’s the Difference Between Spread Betting and Stock Investing?

The following is a 3rd party contribution:

If you look at spread betting and traditional stock investment casually, it might be difficult to understand the difference. In reality, these two investment types couldn’t be more different. They both have their place in the life of the smart investor, but it’s important to understand what the differences are so that you can include them in your portfolio appropriately.

First of all, spread betting and stock market investment may have a lot of the same stocks involved, but this doesn’t mean that they are the same thing. With stock market investment, you are buying up small pieces of different companies. With stock, you are a real owner of a portion of a company. With spread betting, there is no ownership whatsoever. You are making financial speculations about the way a stock’s value is going to change (spread betting also included things like currencies, indices, commodities, and other financial entities).

Second, stock investing and spread betting are totally different in the risk incurred when waiting for that return. With stocks, prices can and do fluctuate very quickly. But most sound investors don’t invest in just one or two stocks at a time. Instead, they diversify, so that if one stock tanks the other ones’ growth balances out that loss. Spread betting is totally different. Since there is no ownership, diversification doesn’t matter in the same way. No matter how many stocks you are focused on (you might be betting on the whole stock market!), you are only concerned with a single price: does it rise or does it fall, and did the value change in the direction that you picked?

Third, stock market investment and spread betting take place in entirely different platforms. Trusted spread betting platforms like ETX Capital allows you to trade on Forex as well as commodities and indices, but (again) they’re not actually selling you ownership in anything. As such, they are regulated completely differently than traditional stock brokers are. If you want to buy stocks, you’ll have to go through a company that is licensed and regulated for the sale of stocks and bonds.

Finally, stocks take time to make money for their investors, especially if the investor is well diversified. Some people strike it rich by picking winners in the stock market, but most people know that this is extremely risky and opt instead for diversified funds. These usually take decades to grow to great levels. On the flipside, spread betting investments can resolve in minutes, hours, days, or weeks. The time period is almost immaterial because you are just concerned with the direction the price changes, beyond the limits of the buy and sell spread.

At the end of the day, stock market investment and spread betting couldn’t be more different, even though they both focus on many of the same financial options. There are investors who prefer one or the other, and many who like both. Both investment forms have their place. At their best, spread betting can provide fast growth and stock investment can give sure, steady growth. Why not try both?

Investing in Running

Investing and running might not seem like similar pursuits. One is physical, the other is mostly mental. But I think there are important complimentary qualities.

For instance…

Running and investing both take discipline. You set goals, come up with a plan to achieve them and then push yourself to execute. In running, you compete against the clock. Investors fight against the market. Both are objective benchmarks. And at the end of the day you’re primarily competing with yourself and your own insecurities.

I think running helps my investing in other ways, too. I hate to sound cliché, but running is meditative. If you can’t think your way through an investment problem during a 2 hour run, then you’re probably never going to get there.

Running gives me time to think about investments, listen to trading podcasts and take in new stimuli which can provide fuel for future stock ideas.

So although I’ve never written about it here, running has become a bigger and bigger part of my life in recent years. When I’m not busy working or researching new stock picks, I’m probably going for or recovering from a run.

For these reasons (and many more) I wanted to let you know I’m further increasing my investment in running by launching a new website. Announcing:!

So if you’re a runner, or a Torontonian, I highly encourage you to check it out.

So what should you expect? Well, I’m going to be updating this running blog regularly with my own running exploits, as well as tips, tricks and resources to help others run faster, farther and easier.

Finally, I’m planning to check out the numerous running clubs across Toronto and report back with my findings. I think it will be a fun project that helps keep me excited about running and documents what I’m learning. So check it out!

Stock Market Variability and Volatility in 2016

One of my favourite weekly read is the updates from 361 Capital’s Blaine Rollins. The other day, when reading the most recent edition, there was a graph that jumped out at me. I’ll share it with you in a second.

But first, let me set it up for you.

Think about your stock portfolio. And in particular, think about how much it swings around on any given day. Does that get a reaction from you? Should it?

Well, as I was saying, I saw an interesting graph (source)…


Do you see what that means? Essentially, in the US, over 70% of daily price movement in equity markets is due to macro variance. Talk about correlations!

Basically, that means it doesn’t matter what stock you pick. 7 times out of 10, your fate is going to be dictated by something outside the company.

And while we’re at it, here’s another interesting chart from Eddy Elfenbein at Crossing Wall Street that shows volatile days are not spread out. When it rains it pours.

screen-shot-2016-09-13-at-9-49-03-pm So what does it all mean? Is it actionable? Well, not really.

First of all, I think it’s Just something to be aware of. When times get crazy, it’s not necessarily because you’ve done anything wrong. It’s just the way it goes. Emotions take over, everything moves in a convoy and it all happens at once.

The other thing that’s not mentioned is magnitude: If during the 30% of the time your stocks are moving on their own accord they are steamrolling higher by huge margins, well, then maybe this isn’t so horrible after all.

As with everything in investing, there are nuances, quirks and