I’ve previously blogged on how I loved PH&N - a Canadian investment management firm possessing a terrific reputation. On July 2^nd, PH&N will launch B and F series of their funds. Their elitist minimum investment restriction lowered to $5,000 from $25,000. Compared to its Canadian peers, its funds bear MER costs that are well below the industry standard. Isn’t that a refreshing concept to hear from an investment company?

Solid Performance At A Lower cost
I’m really tempted to drop $5000 and open a PH&N account myself. Though I’m a stock picker at heart, I also engage in some mindless mutual fund dabbling for the portions of my portfolio I don’t want to fuss about. It’s my way to diversify by style; to ensure that I don’t totally ruin any chances of future retirement through bad trades. And no, I don’t suffer from lack of confidence if you haven’t noticed. Ha-ha..

No grand arguments here about how PH&N have the best funds. But you should take a look at the fund performances they boast - solid across the board. The majority of these funds fit my criteria: long history, steady / above industry peer performance, no extreme dips and swings in style, performance and management. Most mutual fund investors aren’t the types to constantly worry about their funds. The PH&N principals have proven they’ve got what it takes to give you that piece of mind with their conservative yet winning style. And why not also offer it at a lower price than most of their competitors?

A Strategic Shift - Paying Advisors
If you had a Canadian financial advisor who was recommending PH&N funds to you before, chances are that’s a good advisor who’s not in it for the money as PH&N never paid advisors. Accordingly, if PH&N wants to reach a larger investor population with its offerings, partnering up with these distribution channels was a no-brainier decision.

Reading the article above, you might also be curious about “trailer fees“. These are how most financial advisors get paid. Advisors don’t simply draw commissions from your initial investment load fee, but are also paid a tiny % of the MER annually for their continuing service of your accounts. This is precisely why many advisors want to build a large investment capital portfolio under their management because these trailers are their version of “passive” income.

Will More Follow?
Taking the high road served PH&N for quite a while, but coming down to help the common man is its own rewards. By leveling the playing field and making its services more accessible to Canadian investors. PH&N is only helping to rebuild the battered image of mutual fund companies. I’m hoping that more companies will follow PH&N’s example and rethink their marketing strategy, and MER cost structure.

I couldn’t express my feelings on this any better than Mark Evans. Mark has been writing about the telecom industry for years. He lays out very nicely talkiing points that mirror my sentiments of this proposal.

But one thing is certain, in the age-old market system of buyers and sellers, both groups are always hoping to outmaneuver each other. To put it plainly, a buyer buys in hopes of profiting, so why would a seller sell if there are such expectations? Optimally, a seller sells because there are no foreseeable upside on the further horizon, so why would a buyer take this risk? It becomes a game of who is the sucker.

Why Buy And Sell Then?
I am definitely omitting some of the more intricate details that help determine a buy or sell decision. Does one party know something that the other doesn’t? Do they have a different goal than the other party? Sometimes, it boils down to a matter of convenience. Here’s an example: if your family needs to move out of the city, the biggest priority may not be about how much you can profit from selling your house, but how quick / smooth the process will be.

My concern is the reaction of the investing crowd to this “announcement”. I wish more people would be cynical enough to question why the board does not believe its own company enough to keep running it. What is their selling motivation? It goes without saying that they wish to divest their ownership at the highest price possible. Sure they need to publicize a deal of this magnitude. But why are you helping their hype machine?

I can understand if existing shareholders are excited. I would too if somebody is working on my behalf to help me sell out at a comfortable price point. I’m just wondering why new buyers would be excited as well to justify the supply / demand imbalance? What has changed fundamentally with the BCE business? What hope do you have that any new management will do a better job than the existing management? Why do you like the business now at this high price that you did not like at its low price?

I often irk at the investor reaction to buyout announcements. Actually, I irk at market maker reactions to these announcements and I chastise investors for blindly following the jacked-up bid / ask prices. I guess that’s why I’m naturally an investing contrarian.

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But why is it a “season”? Why worry about it only this time of the year? Shouldn’t we treat it with an around-the-year preparation attitude? I guess one person simply can’t change the mass hysteria around this topic. But one man is doing his best to help you out — Stephen Colbert. He has the funniest solution to all your tax deduction needs. If you find yourself contemplating the implementation Stephen’s 401K idea, check yourself into the looney bin. Tax avoidance should never be the deciding factor on whether to have kids, and it is probably the least effective solution. The video is right after the jump.

On a side note… where have I been for the past month? It certainly feels good not to be pressured into blogging. Ranting and raving about investment media should, and is still a passion / hobby rather than a day job. I know my quality would be diluted should I ever haphazardly contrive opinions about things I have no opinion about. And that is what will happen if I force myself to blog more frequently. What I’m trying to say is that, I’m thanking my loyal readers for their patience and promising to deliver only the straight goods and unfeathered opinions on issues I truly feel compelled to open my big mouth.

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And while most people just got over the excitement of the Academy Awards, I’m staying excited to recommend another movie for you! The movie isn’t even out yet, but the theme and inspiration for the movie will certainly add another dimension to the debate of money vs. happiness. I do not believe that money begets happiness, and feel it’s always important to prioritize what’s truly important, even as we choose to accumulate wealth. On March 9th, you may feel the same as me after watching “The Ultimate Gift“. What’s so good about the film’s message?

The Message
To understand the message is to understand how the movement came about.

A few years back, a little book started something very big. A message that has already prompted people to give to others, connect with friends and family, and help those in need like never before. Every one of us has powerful gifts to share, now we all have the added inspiration, resources and opportunities of a full-fledged movement. Each day, the momentum grows and the impact widens, as The Ultimate Gift continues to inspire thousands, if not millions, of others to share the gift and change the world.

The Story
The inspired movie will make for a good family movie night. Couples who are searching for the answer to what they would like to find in their lives, in each other. Even if you are single, a young adult or even just a kid, this can be life changing event that helps in your search for the significance of your being.

When his wealthy grandfather dies, trust fund baby Jason Stevens anticipates a big inheritance. Instead, his grandfather has devised a crash course on life with twelve tasks – or “gifts” – designed to challenge Jason in improbable ways, sending him on a journey of self-discovery and forcing him to determine what is most important in life: money or happiness.

Sometimes, we got to stop and smell the roses, it cannot be about dollars and values all the time. There are things in this world which no one can put a dollar value on, could analyze or take for granted.

The Trailer
Thanks to YouTube, you can check out the official movie trailer right here on Investorial.com!

Honestly, do you like these movie recommendations? It’s definitely not the usual topics that we tackle here on Investorial, but I believe that before we get into the nitty gritty of investment and finance, we should be honest about why we are pursuing such knowledge. There is a reason, and that reason ultimately resides in how we want to interact and be remembered by the people we love.

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But it’s not just profit-hungry creeps who exploit this. Even venerable bloggers such as Free Money Finance (update: or Ramit Sethi) can stoop to an eye-grabbing headline once in a while. For argument’s sake, we’ll follow with the shallowest definition of being rich and poor - money! I assert that knowledge is not the obstacle that you have to overcome, but 3 simple human qualities you should be striving for.

Knowledge Is Not The Key!
The biggest obstacle gapping the rich and the poor is not knowledge! I can think of a few other qualities that come to mind first. Yet, my experience as well as those of others keep telling me that knowledge is a constant commodity of wealth — bought, sold and dispensed everywhere like a “secret formula”. You can ask a wall street broker for a stock tip, or pay a fund manager who’ll tell you to stay invested in the market for the long term. But tell that to the grandmother who did nothing but save diligently, hoarded her assets in certificate deposits (or GICs for Canadians) and leaving hunderds of thousands to charities or cats. Was she market savvy? Did she possess knowledge over those who aren’t as rich?

1. Sense Of Responsibility For One’s Own Situation
We live in an entitlement society, where hardly anybody is willing to take ownership for their own situation. That’s why I really admire bloggers who blog and follow through about reducing their debt situation. They’re displaying a sense of responsibility for their own situation. And with that sense comes along a motivation to acquire the necessities to reach your goal. It might be knowledge, it might be some other quality… but it’s the very first step!

Too often do people accept the handout of social welfare. Too rarely do people blame nobody but themselves for their financial predicament. Too often does bankruptcy seem a short step away from discarding undesirable responsibilities. Too rarely do people beaten up, down and out fight their way back like champions. Too often, everything out there is there to “get you”, from governments, to wall street, to banks, to creditors, to your employers. When are we taking responsibility for our actions and inactions? Isn’t it time to realize that nobody but ourselves have the most vested interest in our future well-beings? And that ultimately, a dim future was because WE dropped the ball when it comes to making it work!

2. Taking Action
Here’s my little joke for you: “If you can do and have knowledge, yours is the world and everything in it. If you can do but have no knowledge, you’ll hits lots of bumps but you’ll get there eventually. If you cannot do, but have knowledge, don’t worry you can become a teacher / professor somewhere”. This is not a shot at the noble teaching profession, but ever wonder why people say it’s “noble”?

A lot of wealthy people got there by running their own business. Many have to choose business because they have nothing else to rely on. They do not have the knowledge to get a job, but they have the will to get a job done. When I was in University, I offered wondered how many of the people around me will actually be using the knowledge they’ve learnt to its fullest potential?

When I look at all the CFAs, CAs, CPAs and all the other designations out there, I wonder is it really just an exam? I wonder why some of the bloggers I’ve known have more sense than some so called professional experts. I’ve talked circles about tax laws with accountants who don’t have a clue about simple taxation issues, saw through the advice given by so-called financial advisers as those that their trainers taught them to say. But I’ve never gotten formal education about it. I learnt the old-fashion way, by making mistakes.

Now you’re right, learning from other’s mistakes, other’s knowledge sure beats having to swallow your own pride. But I’m not talking about that. I’m referring to the people who keep accumulating knowledge but never turning it into action. What’s the use? The bottom line is that by taking action, you will gain knowledge sooner or later. It sure beats getting all that knowledge and never taking action! What are you waiting for? More knowledge? Guess what, it’ll never be enough!

3. Discipline
There’s a reason why many lottery winners don’t keep their wealth beyond 5, 10 years. For those who dream about winning, they’ll always think that a big amount of money is life-changing and something that can ripple throughout the generations. Yet when they’ve won, their life doesn’t change that much.The next generation seldom see a penny. Why?

Truly, discipline is doing the thing that’s hard to do. But that’s why the contrarian in me is telling me that I should do it! I’m not telling you to be an uptight anal retentive person. I’m talking about having the guts to follow through on a course of action that you’ve decided is right to take. If you won the lottery and want to make it last, what’s stopping you? If your goal is to save a portion of your paycheck per month, what’s going to shake you off course? If you want to reduce your debt, how much hardship will you endure? If you are following a system for investing, will you be rattled by surprises and fall off the wagon? When your startup business is going through tough times, where will you turn and run to?

Nobody’s perfect, even the rich take their lumps and have their bad days along the way. But the difference is evident in this quote: “The measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” It doesn’t take much to stay in your comfort zone, but it takes courage and discipline to get out and stay out of it.

Look Within Yourself!
Not everyone of us can be He-man, but we all have the power! Don’t you think while striving to achieve those 3 simple human qualities, that whatever knowledge you felt was lacking would fulfill itself? Start by acknowledging that you have all that it takes to get there. You’re not rich or poor because of what you know. Your sense of responsibility, willingness to take action and discipline to persevere will dictate where you are going to be. The question is, “Do you believe it now?”

Update: Ever since this article was mentioned in The Feb 28^th Carnival Of Investing, I’ve been eating humble pie because of my grammatically incorrect title. Thanks for the lesson!

Hopefully everything was upgraded safely. If you happen across any broken links or site features that don’t seem to be working correct, please let me know.

I’ll be back shortly this weekend with a few new articles; and as always with the same “fire” that you’ve seen before at Investorial!

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50% off isn’t always a good thing! Fellow Blogging Stocks contributor Sheldon Liber and I have been scratching our heads about high payout yields from energy trusts battered by the decision from the Canadian government to tax trusts. On the surface, examining the energy trusts’ financials make it seem possible for them to sustain payouts at current rates, but for how long?

Well, income investors didn’t have to wait long. Energy trusts shareholders will be in for a rude awakening to start the week. Last week, many notable energy trusts delivered bombshells by cutting their payouts - in a big way too!

Last Thursday, Shiningbank Energy Income Fund trimmed its distribution for the third time in the last 12 months. This only served as a prelude as a slew of cuts flew in last Friday. Enterra Energy Trust (NYSE:ENT) slashed its monthly payout by 50%. Precision Drilling Trust (NYSE:PDS) followed suit, reducing its distribution by almost 40%. Advantage Energy Income Fund (NYSE:AAV) would complete the hat trick, cutting its monthly payout by 17%.

Are you among the investors reeling from these announcements? If you feel inclined to blame the Canadian government, please take a closer look first! What are the wind-shifts in the industry outlook have caused these reductions, rather than the proposed tax levy?

Inventory Surplus
Everybody loves to blame the weather. I’m not sure how many new believers Al Gore will induct into his earth-saving crusade. But this past winter’s unexplainable quirkiness have resulted in less demand for oil and gas. As inventory builds, demand to drill rig services (such as those provided by Precision Drilling) have been scaled down. Maintaining a high payout despite bleak short-term outlooks would be corporate suicide.

Speculators Are Out!
When speculators rushed to boost oil and gas prices last year, they did so on the justification of the middle-east turmoil, the North Korean threat, and the various reported incidents at oil fields around the world threatening supply. Yet nothing happened! Investors aren’t willing to price in such risks again. The middle-east turmoil continues, but by now the market is used to it. The current concensus is that oil and gas will rise again, but not in the short term. How many investors are willing to wait it out?

Individual Company Weakness Start To Show
During the good times, it doesn’t matter if you are a below average oil and gas stock. These companies rose just as their peers did. Now that the lights are turned on, and the party nears its end, we’re going to see some of the ugliness behind those financials in this upcoming quarter. It’s better to play safe with a lower payout, then be caught pants down when things get rough.

Tech Is Back!
In case you didn’t notice, tech has replaced oil and gas as the sector to be in. Since July 2006, tech has soared with notable names such as Intel (NASDAQ:INTC) (up 16%), Apple (NASDAQ:AAPL) (up 30%), Google (NASDAQ:GOOG) (up 27%), Microsoft (NASDAQ:MSFT) (up 29%). Attention span? That’s hardly a word for those who move with the herd.

What are some of the other names being thrown around by Wall Street and Bay Street where cuts might be looming? Names like Fairborne Energy Trust, Trilogy Energy Trust and PrimeWest Energy are likely candidates to curtail their high yields.

The contrarian investor in me is very tempted to keep monitoring this situation, but then I’m in the minority. Just like Sheldon, I don’t like following the crowd. Heck, I still don’t understand why so many people insist on hanging onto Jim Cramer’s every word!

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Two opposition parties, the Liberals and Bloc Québécois are trying to force special parliamentary hearings to probe the controversial tax — even though Parliament is not sitting — to vote on whether to call witnesses as part of a reconsideration of the tax. Though there is little chance that the numbers in the House of Commons will work in favour of this interference, political pundits are speculating that the Senate may hold its own hearings to aid in the cause.

Who Are The Witnesses?
You might see line-ups spanning many blocks once it’s confirmed that witnesses are able to be called as part of the tax reconsideration. In particular, the founding members of the Canadian Association of Income Trust Investors (CAITI) including CI Investments, PricewaterhouseCoopers, and Gluskin Sheff + Associates should have many choice words against the proposal.

Lobbying for political change is not as strictly an American phenomenon as most Canadians would like to think. Just the other night, I was having dinner with friends and remarked about the interests I have in such a mechanism in the political system. Investors and private sector, fuming that they have not been consulted or heard from, have been trying to cull political favour from anybody who would listen.

Jim Flarhety declared last month that the Income Trust Taxation issue was no longer up for debate. But it’s exactly that staunch stance of refusal to grant exemptions or listen to investors that have engineered the possibility of this bill’s defeat! Hmm… more spices added to my conspiracy theory pot?

What’s At Stake?
We shouldn’t be happy just because other political parties are looking to put up some roadblocks. What are their political motivations? The Bloc Québécois wish to extend the tax-free moratorium to 10 years, hence their presence. The Liberals are more motivated to make life difficult for Jim Flarhety by challenging his cost assertions of not implementing the tax versus its benefits. The income trust industry have been diligently producing experts to repudiate Ottawa’s tax leakage estimates, but the finance minister has so far rebuffed requests to divulge exactly how it derived those figures.

The X-factor may lie with the NDP, who are thus far non-committal with their support. NDP finance critic Judy Wasylycia-Leis indicated that she’s undecided on whether to back the Liberal bid. But if Judy agrees to back the challenge, she’d use that opportunity to throw some mud on the Liberals at the same time by examining the former government’s role in letting trusts grow unchecked for so many years.

Is March 20th The Date For Conservative Defeat?
The events of the next few days may have a rippling effect on the Canadian political landscape. March 20, 2007 is slated to be the day for the government to table its budget. A budget defeat may trigger a non-confidence vote; putting in motion the possibility of a new election. I really don’t wish to go through an election so soon, nor wish for funds to be put to use for such functions. However, that are part-and-parcel the issues of living in a democratic society.

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