BUS 100 Lecture Notes - Clearly, Asiatic Lion, Mutual Fund

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Published on 3 Oct 2012
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Asian Lion:
1. Pro-business and growing fast, Singapore is an ideal gateway to south-east Asia for Canadian
entrepreneurs. World Bank ranked Singapore easiest place in the world to conduct business.
2. In 2006, Coastal Contacts enthusiastically acquired Singapore-based AsianZakka Pte. Ltd., whose annual
online sales of contact lenses in East Asia were $10 million.
3. Singapore government encourages growth in specific sectors with information technology, biotech and
medical technology
4. Lion city is pro-business government, highly efficient infrastructures and tax advantages for foreign firms
5. Its port has a well-earned reputation for fast and efficient customs clearance and handling of foreign
6. Singapore’s economy posted stunning growth, 14.5%, the highest rate in Asia
Gusher of reasons to buy energy funds:
1. Since equity markets bottomed out two years ago, Canada’s S&P/TSX Energy Index has shot up by a
whopping 70%.
2. Governments that induce inflation make debit easier to pay; harmful to savers but is good for long-term
debtors-lowers the real value of the interest payments
3. People stock up on commodities to hedge against inflation, which leads to even higher prices, and thus
inflation continues to rise
4. Energy stock-japans’ nuclear crisis- energy has become unattractive, both politically and environmentally;
alternative is natural gas that will replace nuclear energy to generate electricity
5. Political uncertainty in the Middle East 1 third or worlds oil supply pushed oil prices 120$/barrel
6. S&P/TSX is more than 25% energy stocks or buy energy fund; found in natural resources funds
concerns include foreign currency and if you want the fund with small cap or large-cap focus
Institutionalize yourself:
1. Retail investors get high fees and taxes own errors in judgement; School Management in Yale 2008
track cash flow in and out of mutual funds to measure investor sentiment, the research found that retail
investors direct their money to funds which invest in stocks that have low future returns
2. Plan your Future don’t pick an investment product or stock that has been popular recently; dollar-cost
3. Diversify, then Rebalance Retail investors can work to maintain a diverse portfolio by employing asset
allocation strategies that force holders to maintain set percentages of different assets; balances risk and
4. Confront your Risks take minimum amount of risk necessary to achieve your financial goals; a few big
mistakes can undo years of hard work
5. Lose Less to Fees income-producing investments like bonds belong in tax-free or tax-deferred registered
accounts to protect against the high tax on interest
6. Act Unemotionally, or Don’t Act – don’t let feelings like fear and freed infect your judgement
Canada’s private sector insurers to pool risks from high-priced drug coverage:
1. A group of 23 Canadian insurance companies have come up with a plan to spread the expense of high
priced drug treatments
2. The Canadian Life and Health Insurance Association say the insurers are trying to avoid a situation where
employers face a sharp jump in premiums due to big claims for extremely expensive drugs.
3. Industry is developing a pooled system of coverage that will allow insurers to exclude the cost of certain
high-cost drugs when setting premiums charged to employers; no Canadian should face the prospect of
losing their drug coverage due to rare but very expensive drugs costs
4. Certain drug treatments for disorders and cancer treatments can cost $50000+
5. The association said Tuesday that one-third of companies polled for it recently by Leger Marketing indicated
they would drop their drug coverage if premiums jumped by 25 per cent or more.
6. 100 per cent of the carriers that offer supplementary drug coverage have committed to the setting up a joint
industry pool that will spread the costs for very large, recurrent prescription drug claims.
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