Here are our stock picks for 2011:

APKT – Acme Packet. It is our stock pick for cloud-computing. We believe that cloud computing is the future and Acme Packet is a strong play in this area. Their technologies enable service providers to deliver real-time multimedia sessions across IP network.

LVS – Las Vegas Sands. This company operates a couple of big casinos around the world, including Las Vegas, Macao and recently Singapore.

MELI – MercadoLibre. It is the e-bay of Latin America. We pick this stock as a play for Latin American market.

YONG – Yongye International. It is a Chinese biotechnology company that research liquid and powder nutrient compounds for plant and animal products. We pick this stock because we are bullish on agriculture sector.

You can follow live-performance of our stock picks in this link. You can see how our stock picks compared to S&P 500 and Nasdaq. We are going to include stock picks from other bloggers once they have revealed theirs.

As you can see, our performance was not that good for last year. Our return was only –7.05%. We couldn’t even beat the benchmark, S&P 500, which returns more than 12%; and Nasdaq, which returns about 17%.

First of all, happy new year to all of you!

It’s been a while since we updated this blog. Yes, we were so busy in the second half of 2010. First of all, we bought a resale house in Ontario as our primary residence. After that, we did a little bit of renovations to our house. Then, our tenant in British Columbia told us that they also bought a house. This means we have to either find a new tenant or sell the property. We finally decided to sell the property.

Finally, we are now in the new year of 2011. We hope that we can write blog more often this year. Finger crossed…

(Picture is from stock.xchng.)

Now, we realized that it is not true that house price will always go up. The Big Picture has shown a chart of global housing price. It compares housing price in a couple of countries from 1997 – 2008.

As you can see in the picture below, Germany and Japan has been experiencing decline in house price in the last 10 years or so. To me, it is really scary.

Is 1-800 toll-free number is always free? We just learned today that it is not the case. We put a copy of our last payment in the screenshot above. As you can see we paid some amount of money to call 1-800. For example, the first line shows we have to pay $2.80.

How can it be? We called Rogers, our mobile provider, to check what’s going on here. Apparently, calling 1-800 numbers is considered an air-time. Currently, we have 250 minutes air time; so once our air-time exceeds 250 minutes, we have to pay for 1-800 numbers.

It is really a good lesson. We have to be really careful now…. call 1-800 number only when it is really necessary. We are not sure with other operators in Canada though.

Last week, news were starting to talk about end of the world, double-dip recession, etc. This week, we saw a big rally, it was the best weekly gain in nearly a year.

ETFGuide.com has a guide on how to bear market proof your portfolio. Although we had a big rally this week, we personally think we might have a bear market ahead.

The Financial Blogger had a couple things to consider when buying real estate. Property is, of course, always number one. What else?

The Intelligent Speculator had a tips on how to setup a dividend portfolio with as little as $5,000.

Canadian Capitalist was asking why we invest our own money. Should we just use professionals to manage our money?

• Index funds are usually has lower management fees compared to actively manage funds.
• Many actively managed funds cannot beat index funds in the long term.

Recently, we questioned ourselves, can find actively managed funds that can beat the index in the last couple years? If yes, should we switch some of our money to these actively managed funds.

We ran a simple query on Funds Filter from The Globe and Mail; searching for Canadian equity funds that have MER lower than 2% and no load. We found a couple of interesting actively managed funds, i.e.:

• Mawer Canadian Equity (MER: 1.26%)
• PH&N Canadian Equity D (MER: 1.11%)
• RBC O’Shaughnessy Canadian Equity (MER: 1.47%)

Then, we did the same charting to what we did recently with index funds, i.e. comparing the return of these funds to S&P/TSX in the last 10 years.

Links

• Comparing Canadian Index Funds

As you might know, that our Lazy Portfolio currently uses CIBC Canadian Index. It is not really the best option to invest in Canadian index, as we discussed in our previous posting, Comparing Canadian Index Fund.

Why did we choose CIBC Canadian Index fund then? It is just a historical reason. When we first came to Canada, we opened our first bank with CIBC. The reason is because CIBC has a “small branch” in Singapore, where we used to live. We opened our bank account when we were still in Singapore. Since then, we have been happily doing all our financial needs with CIBC. This includes investing our money in CIBC’s index funds.

Recently, we tried to do a simple calculation. Currently we have about $20K invested in CIBC index funds. We pay a little bit more than 1% of management fee. It means we have to pay about $200 every year to CIBC for managing our money.

If we looked at TD e-series funds; most of them have management fee of less than 0.5%. It means we can save more than $100 every year just to convert our investment to them.

If we look further, there is a performance difference between CIBC Canadian Index and TD Canadian Index. CIBC Canadian Index is lagging by more than 5% compared to TD Canadian Index in the last 10 years. Although it doesn’t mean that TD Canadian Index will always outperform CIBC Canadian Index; we think that paying less fees is still better.

Links

• Comparing Canadian Index Fund

As we have mentioned a couple of times, we are currently looking for a house in Ontario, Canada. We just moved to Ontario last year and have been renting our place for more than 1 year now.

We are getting really close to make our decision. We have found a location that we like. There is a nice resale home there. It needs a small renovation; but it should not be a deal breaker. It has a good location and nice neighbourhood. It is very close to a good school too (although we don’t have kids yet).

We also found a new construction home nearby. The base price is even cheaper than the resale home for similar size. The construction has not been started yet because the builder is still waiting for permit from the city. However, they are confident that their schedule will be on time.

Now, we have to make our decision whether we should go for resale home or new construction home. We tried to list advantages and disadvantages of new construction home vs. resale home.

Advantages of new construction home:

• It is just “brand” new.
• We are able to choose the design and color that we want.

Disadvantages of new construction home:

• There is no guarantee that we see is what we get. Of course, the builder has a model home, but they have done a lot of upgrades. If we buy just standard home, we have no idea how good the quality is.
• There will be very high closing cost at the end. We need to spend money to pay for utility hook-up, landscaping, home warranty, buy window covering, install a fence, etc, etc. In fact, we have no clue how much money we will need at the end.

Advantages of resale home:

• What we see is what we get. No surprise at the end.
• The neighbourhood has been well-established. No more construction going on when we move-in. It may take a couple of years to build a community from an empty land.

Disadvantages of resale home:

• We have no control over the design. It is given. We can still change the color though, by just applying a new paint.
• Some resale home, like the one that we want, needs a small renovation. It means more $$$.

(Picture is from stock.xchng.)

It’s time to update our stock picks. So far, we are behind S&P 500 and Nasdaq Composite Index. It’s been proven that it’s not easy to beat the index.

• ASIA: –28.87%
• CAGC: –23.12%
• ITC: +0.5%
• PEGA: –8.68%
• Total: –15.04%

Here is the return of our benchmark:

• S&P 500: –8.30%
• Nasdaq: –7.82%

There have been also a stock picks competition among Canadian bloggers. Here is the result for first half of 2010.

• Dividend Growth Investor: +3.62%
• The Wild Investor: –8.61%
• My Trader’s Journal: –11.41%
• 1stmilliondollar.net: –15.05%
• Four Pillars: –16.69%
• Zach Stocks: –17.08%
• Million Dollar Journey: –17.08%
• WhereDoesAllMyMoneyGo.com: –17.20%
• TheFinancialBlogger.com: –19.41%
• Intelligent Speculator: –19.76%