Archive for January, 2011

ETF Asset Allocation Portfolio

ETFs

ETF Asset Allocation Portfolio

As with many investors, I like trading ETFs. This is probably the most flexible investment product you can find on the stock market. And I guess this is probably its biggest disadvantage too; you have so many options that it is hard to build your ETF asset allocation within your portfolio. It’s like being a kid in a toy store; you want it all but in the end, you won’t be able to play (handle) with all those toys. John Brennan, CEO of one of the biggest ETF manufacturer Vanguard, even said that the ETF market has become dangerous for the investor. This is why I wanted to discuss asset allocation with ETFs.

ETF Asset Allocation Micro Version

I think you can look at ETF asset allocation with 2 theories which I call the micro and macro approaches. The micro approach will encourage an investor to pick specific sector and buy ETFs according this strategy. The US market is well diversified and has great companies in many industries. You can easily build an ETF portfolio by choosing a few sectors that you believe they will outperform the overall market. For example, the financial and techno sectors have indications they may outperform the stock market in the upcoming years in my opinion. As well, you can decide to ignore other sectors in order to “optimize” your asset allocation.

I know that there are investors who think they can beat the market by selecting specific ETF sectors instead of going with indexes for example but I don’t agree with them. Most of the time, when an investor beats the market over 1 or 2 years, he will make an important mistake later on that eats-up past performance. Therefore, it’s hard to find someone who beats the market over a long period of time such as 10-15 even 20 years. This is why I would rather use an ETF asset allocation based on a macro model.

ETF Asset Allocation Macro Version

I like using a macro approach when establishing an ETF asset allocation. It makes my life as an investor much easier as I only care about the global asset allocation instead of adding time and energy on researching the “supposed” best sectors in the upcoming years. I think that following markets and indexes will produce a better return overall. However, then again, the numerous ETFs in each categories makes choosing the right asset allocation difficult. Here’s a quick list of my favorite markets to follow:

US Market

SPY, IVV, QQQQ, VTI, IWM

Canadian Market

EWC, XUI (on Canadian Market)

International Market

VWO, EFA, FXI (China), EWZ (Brazil), VEU

Real Estate (REIT)

VNQ, IYR, RWR, RWX, URE

Bonds

TIP,LQD,AGG,BND,CSJ

We could easily add several other asset classes or specific ETFs to this small list but adding too many rhymes with complicated ;-).

Considering Commodities in your ETF Asset Allocation

In the ETF asset allocation with a macro approach, I suggest to look at natural resources as a whole. Some people will disagree and prefer to hit specific commodities. We all know that oil was very popular between 2003 and early 2008. Now, the “flavor of the moment” is the yellow metal. In 2011, I believe that we will have a growing interest in silver and uranium. Silver being undervalued compared to gold and uranium represents a great energy alternative to oil.

What About ETF Currency Asset Allocation?

As I mentioned before, we can never stop adding other categories to an ETF asset allocation. Another mainstream issue is the weakness of the US dollar. In order hedge your portfolio against it; some people will use a currency ETF in their asset allocation. Following the Canadian dollar seems like an interesting move at the present time. Considering their economic strength (compared to the US) along with the humongous amount of natural resources on their territory, the loonie might climb past parity with the US dollar for a few years.

More thoughts on ETF asset allocation in your portfolio

In the upcoming post, I will make a list of some ETFs that can be traded in your portfolio in order to balance your asset allocation according to your needs. If you have any questions or requests, please feel free to comment ;-)

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Finance Your MBA – How to Get it For Free

MBA topics

financing mbaCongratulations! You have made a great decision in your life; you want to do an MBA. But there is only one problem standing in the way of your career path; How do you get financing for your MBA? This is often the main obstacle to getting an MBA; COST! It is pretty rare that you have 25K lying under your bed to pay for tuition fees. This is why it is imperative to find a way to finance your MBA.

I want to share something with you; I did my MBA for free! In fact, there is a very easy way to get free financing for your MBA, here’s my step by step method:

Financing Your MBA Step #1: Be a Good Boy

You are the guy who keeps on whining about your boss in the cafeteria? Stop biting the hand feeds you and start acting like an MBA candidate. Employers can be motivated to finance an MBA for promising employees. If you really don’t like where you work, forget about having your MBA paid by your employer.  You are better off choosing a company where you see yourself working for several years. Then, you just have to behave like you belong at this corporation and want to improve it. Being a good employee, going the extra mile, will eventually lead you to a financed MBA ;-).

Financing Your MBA Step #2: Let Your Boss Know

You may be the best employee ever, if you don’t let your boss and the people above you that you want to get an MBA, nobody will pay for it. You want your employer to finance your MBA? Simply ask for it. However, there is a time and a place for every thing. Personally, I had waited a year where I got an “outstanding” employee evaluation at year end. I discussed how I wanted to go higher and that I was willing to put the effort into it. Then, I asked if they were open to pay for my MBA.

Financing Your MBA Step #3: Be Specific

When I ask my boss to finance my MBA, I didn’t ask it bluntly. I built my case with reasons why I wanted to get an MBA and how it could help my company. The point was showing them that paying for my courses was an investment in their own corporation and not just some money thrown on a eager GEN Y so he can fly off once he’s done. I told them which MBA program I wanted to do and how this kind of knowledge will help me become a better employee. If you come with a school name and program specification, it shows that you are serious about doing your studies.

Financing Your MBA Step #4: Accept Compromises

It’s not always easy to get someone else to pay for your studies. As your parents might have put some conditions on the table while you were in college, your employer is more likely to bind you with a contract in exchange of financing. Personally, I signed a 3 year contract with my employer that links me to them for 3 years after I have completed my MBA program. 3 years may seem long at first, but I can tell you that time flies! I have done 1 year already and I don’t feel that staying another 2 years would be such a pain.

The other thing I had to do as a compromise was to keep my full time job while completing my studies. I wasn’t given much time off to work on my MBA assignments. They gave me one day off per course upon my final exam. The rest of the time had to be taken on my evenings and weekends.

Other ways to finance your MBA

If you don’t have an employer ready to invest in your career, there are also MBA grants and government help. Depending on where you live, you can also have access to programs allowing you to withdraw from your retirement funds in order to finance your courses. However, I still think that getting your employer to finance your MBA is the best solution :-D.

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MBA Programs in Canada

MBA topics

mba programs in canada

mba programs in canada

When I first thought of completing an MBA, I wanted to get the right one for my needs. There are plenty of MBA programs in Canada and with technology, there are some MBA programs you can get from home. For example, when I was looking at Financial Services MBA programs, I found out that Dalhousie was offering an online MBA program!

Get The Right MBA Program Before Looking at the School

The very first step when you are thinking of starting an MBA program is to look what different specialities are available. Most people ignore what an MBA is and this is why you may be disappointed if you don’t pick the right one upfront. A general MBA program is good for someone who doesn’t have a bachelor degree in commerce. Engineers, lawyers or entrepreneurs will look into such programs because they don’t have much marketing, finance, or human resources knowledge. However, if you have your bachelor degree and you enter into a general MBA program, you probably won’t learn much.  So before you look at which school you want to go to, look at all the specialities.

Why I wanted to do an MBA

I can’t speak of what I don’t know, so I won’t talk much about the MBA programs in the states. However, I had been looking carefully into several MBA programs in Canada before making my final decision. When I had decided to start the MBA, there were 3 reasons why I did it:

I wanted to start a Network

I think that the biggest strength of any MBA program resides in its ability to grow a huge network of contacts. This is where you make connections with influential people in several other companies. In my case, I had decided to take the financial services MBA program since I wanted to know people in the banking industry. I work as a financial planner so knowing several managers in other banks couldn’t hurt ;-).

I think you should spend a lot of time with everybody in your class. Try to organize cocktails or outside MBA activities. While it will require more time, this is where you will get the highest ROI from your MBA.

I wanted to upgrade my knowledge

I didn’t want to go to school to listen to teachers telling me what the new trend in management is. What I wanted was to learn from my team members’ work experience. MBA programs in Canada are designed in a way where you will touch on several topics but not won’t become an expert in any of them. As I had been working in marketing and finance already, there wasn’t much academic stuff that I had to learn. On the other hand, each MBA session included times when people exchanged their best practices and past experiences. These were the moments when I was taking the most notes of the day!

I wanted to get the darn paper ;-)

Believe it or not, an MBA diploma is not a minimum requirement for any job. This doesn’t make you shine; it only puts you equal to or ahead of other candidates while applying for a better career opportunity. Getting into an MBA program was the easiest and simplest way to access to better paying position. If you are a good employee and you have the right diplomas, employers are calling you to give you a job. This is what I wanted; the chance to interview employers instead of being interviewed by them.

MBA Programs in Canada List

I have gathered information from several MBA schools across Canada to make a list with all the links to their programs. I hope this will be helpful if you are looking for a specific MBA program:

MBA Programs in Canada
Athabasca University MBA Programs Simon Fraser University MBA Programs
Brock University MBA Programs University of Alberta MBA Programs
Cape Breton University MBA Programs University of British Columbia MBA Programs
Carleton University MBA Programs University of Calgary MBA Programs
Concordia University MBA Programs University of Guelph MBA Programs
Dalhousie University MBA Programs University of Lethbridge MBA Programs
First Nations University of Canada MBA Programs University of Manitoba MBA Programs
HEC Montreal MBA Programs University of New Brunswick-Fredericton MBA Programs
Lakehead University MBA Programs University of New Brunswick-Saint John MBA Programs
Lansbridge University MBA Programs University of Northern British Columbia MBA Programs
Laurentian University MBA Programs University of Ottawa MBA Programs
Vancouver Island University MBA Programs University of Quebec at Montreal MBA Programs
McGill University MBA Programs University of Regina MBA Programs
McMaster University MBA Programs University of Saskatchewan MBA Programs
Memorial University of Newfoundland MBA Programs University of Toronto MBA Programs
Mount Saint Vincent University MBA Programs University of Victoria MBA Programs
Queen’s University MBA Programs University of Western Ontario MBA Programs
Royal Military College MBA Programs University of Windsor MBA Programs
Royal Roads University MBA Programs Wilfrid Laurier University MBA Programs
Ryerson University MBA Programs York University MBA Programs
Saint Mary’s University MBA Programs