We know about investors' psychology. We know how the herd can overturn a single stock in a single day, whether it is a budding IPO or an old-timer. How about risk? How do we perceive it? Do you perceive risk the way that I do? Did I perceive it the same way that I perceived it a decade ago? Will I perceive it the same way that I do a decade hence? Some reflection on these questions is necessary ... for inevitably, your responses will differ from mine. #creditrating #financial

When cash outflow is not expensed entirely in the month of its occurrence, there could be various reasons. Insurance, dues and subscriptions, event planning for conferences, software. These are all instances of cash outflows that need to be divvied up over the months of the year. This is due to the fact these are termed prepaid expenses or prepayments on the current asset section of the balance sheet. The reason these are "assets" is that the business has paid for these in ad

As a small business owner, it is important to study our business financial statement package on an ongoing basis: it could be monthly (preferably) or quarterly. The annual audited statements that are provided by the accountant are extremely important, but if we wait for an entire year before analyzing our cash flow, budgetary variance and profit, it might be too late to prevent a ship from floundering. The financial statement package consists of two important documents: the b

Fixed assets on a Balance Sheet are not exactly fixed. A laptop is mobile, and so is a tablet or a high-end smartphone. Vehicles when used for business purposes are termed fixed, with a sub-category to expedite depreciation calculation. Emoji copyright Trusha Desai Innovation Management Inc. The Canada Revenue Agency has different classes for fixed assets and schedules have to be carried forward from year-to-year so that the accumulated depreciation reconciles on the T2 tax r

The assets on the Balance Sheet of a business are not always current. There are long-term assets which include investments that are owned or held by the company for a period longer than Art copyright Trusha Desai Innovation Management Inc. a year. These could be GICs (Guaranteed Investment Certificates), Stocks, Mutual Funds, ETFs (Exchange-Traded Funds) and Bonds. When we evaluate the long-term assets, we need to bear in mind the risk tolerance of the business owners and rel

Image courtesy indiereader.com Three weeks into 2017, and 2016 is old hat. The bubbly is flat, the credit card bills are due. And as for New Year's resolutions? My monumental one to give up chocolate (O! Tom Hanks would've so hated that one) was broken on the fifth of January. What happens in our personal lives also sometimes translates into business. When resolutions are broken, when budgets-variance analysis is negative, when cash flow croaks, what do we do? As budgets can

Chart courtesy webbroker.td.com Yes, we know the adage “Health is Wealth”. Yes, the common cold sends us rushing for antihistamines (maybe, or just a box of Kleenexes) let alone the Zika virus. What do we do on a roller-coaster day of healthcare shares on $DOW? It had to be a Friday: a weekly options day. If we had $MRK, we would be rich. Wealthy, and maybe healthy too. If we had purchased $BMY and were in a buy-and-hold strategy, we might be neither, if we were anxiety-prone

Image courtesy diyprojects.ideas2live4.com It’s almost August. We’re in the midst of summer. And we’re off to the races. Those who actually do sport hats and hairdo’s and go off to Derby or PNE or the Mahalaxmi Race Course, may do so. And there are others, those who simply ride, as in the Mounties ~ not a simple ride, that but a safe-keeping security-ridden ride. Or those who ride as in Pemberton and find little endearing fillies that will take them along trails and paths tha

However logical, analytical and research-oriented we may be, there is always at least one stock in our portfolio to which we have formed an emotional attachment. It is like a first love, a first kiss, or may be just someone special. And so, that stock stays with us, whether it is heavyweight or under-performs. Why are we emotional about our investments? I guess, if we buy art, we would only buy a Picasso (if we had the millions plus jingling in our pockets) if we liked it. If

Chart copyright Trusha Desai Innovation Management Inc. Buying a call option is an effective investment strategy in a bullish market. However, are we always certain of the direction of the market or the underlying? Even if we study the fundamentals and technical, read the insider reports, estimate the earnings, trend the dividend growth and peruse the analysis reports for good measure, there is no certainty in life. I guess Warren Buffett will definitely tell you that, for Be

Chart courtesy optionstradingbeginner.blogspot.com If you have an investment strategy of buying calls, it suggests that you are bullish on the stock. What would your strike price be? What would your expiration date be? Keeping in mind the Greeks, such as theta (time value) and our understanding thereof, we may decide to buy calls that expire three months, six months or a year from the current date. We needs must remember that call options that have a twelve-month expiration p

As we are almost at the six-month mark of 2016, we can look at the past fifteen years of this millennium, and pause: did the hype of the year 2000 and all its resultant technological ramifications come to pass? Or did we just wing it, thanks to the like of Microsoft, Google and hundreds of thousands of computer programmers around the world? Perhaps this is why we need to put pause on our worries for tomorrow. What we really need to do is plan, target, and achieve. It may not

Chart courtesy thismatter.com When the stock market is in a bullish frenzy, we are all in the game of nabbing capital gain (so that at the end of the year we can write off losses ~ if that is our protocol). We ignore the dividend yield and dividend growth strategies that we had carefully crafted, for gain is instant gratification while dividends are only a quarterly or monthly (or perhaps an annual) phenomenon. For who knows whether the dividend yield that is posted will chan

Something that millennial millionaire investors may not know about is the phenomenon called Sell in May and go away. For we do not know go away. Not per se as in the olden days of vanishing off the face of the earth for a week or more: incommunicado, out of bounds, no mail, no phones. And of course, before the advent of email. Now, whether we are at a beach or at the cabin in the mountains, we are perennially in touch. God forbid if we do not instantly respond to that email t

As the Canadian personal tax deadline approaches, if we haven't gathered our receipts for the year, there is no time like the present. An ideal way of ensuring that all receipts are always on hand when required, is to keep an annual tax folder, and as receipts arrive in the mail, they should be tucked away in the folder. What do we do about electronic receipts? Receipts for donations, and other claimable expenses are frequently provided online when we pay by credit card. Thes