Take Discovery Survey

Wall Street Bites: the ENDGAME

Rockets are a blazing’ 🚀🚀🚀🚀🚀🚀🚀🚀 after Redditors grouped together to form an activist group that I watched unfold in real-time.  It all started for me, when my newbie curiosity of joining Reddit, propelled me to start my own community.  After joining several financial discussion groups, I came across a pretty savvy post from a venture capitalist who was talking about the potential of GameStop (market symbol: GME – NYSE), exactly 10 days ago.  As I typically do when I find an interesting new stock specimen, I sent the symbol to myself to research for the following week.  

After building up some karma on Reddit, I joined r/wallstreetbets to learn how to form a successful financial discussion forum.  Behold the drama: 

From cyberbullying to cyber-bulling.

At first, the community started to complain about activist investors, specifically short-activist investors who identify accounting discrepancies and other issues in a company.  For years, I’ve been following these activist investors and I noticed that they target high-growth companies, usually tech or pharmaceutical related.  Sometimes I questioned their allegations as unfounded and promotional for their own personal gain.  

When these research reports were released, often before the market opened, I viewed this as the Death Star for these targeted stocks.  As an investment professional, I always used to dread the impact on my growth picks from the short selling activist investors, who seemed to be more often than not, immature billionaires trying to sink each others’ companies. 

To my utter delight, amidst the mighty pandemic in the 21st century, a rebellion emerged among the retail investors of brother and sisterhood to form a retaliation against the evil horde of institutional villains.  

I must admit that I was relieved that someone else (r/wallstreetbets) was calling out this ill practice. 

After a long painful recovery from having narrowly escaped the 2008 financial crisis myself, I have a lot of empathy for my fellow millennials who have been disgraced and shamed by the financial system.   

Lashing out at Wall Street Cobra-Kai style will cost you your neck. No mercy. 

But now it’s gone too far and the retail investors are going to hurt. Guys, you won!  Congrats! You’ve brought awareness to lawmakers and the regulators that cyberbullying companies publicly is wrong and that it needs to be stopped.  But please: if you are a beginner investor, refrain from using your life-savings or a chunk of your savings to activate your mission against the “Man.” 

For Pete’s sake, it’s like a repeat of the 2000’s tech bubble when Nortel and WorldCom were cool and with it.  There are no fundamentals to back up these investments. 

This is just a rebrand of the classic “pump and dump” scheme –a crooning Bublé-bubble. What has happened over the last little while was nothing short of a delusional spectacle of people making you feel really, really good about taking your money.  

A pump and dump scheme usually consists of the ability to convince other investors to buy heavily into a stock that is ready to take off.  The person(s) who claim this, have usually invested in the stock themselves to help raise the price. Once other investors have heavily bought into the stock they effectively pump up the price at which point –  the perpetrators dump their shares for a massive profit.  This effectively causes the price bubble to burst and retreat, usually to levels well below the original buy price.Do you remember Leonardo Dicaprio’s role in the Wolf of Wall Street? This was his jam in this practical theatrical example of a typical pump and dump scheme.  Effectively, these are stock Johns making you feel empowered until you lose your shirt.  When that happens, who will you blame?

What happens when Wall Street bites back?  

This is how it will play out: in the short-run, you look like you are winning, because in the short-term, you do have the power backed by the masses.  Unfortunately, this power is not sustainable and volume will dry up.  This action is visible on a volume chart for these stocks for the world to see. 

The big stacks on Wall Street and Bay Street have access to institutional players who can construct synthetic derivatives to annihilate your longs into oblivion.  Selling out of the money puts in the market will allow short-sellers to buy back in to cover their positions.  This is just one of many strategies they have access to.

Retail day-traders playing in this market are individuals with limited resources and time, whereas institutional day-traders have teams of algorithmic high frequency programmers to monitor the market and social media channels for strange volume and activity, with the experience and ability to capitalize on this madness to take arbitrage opportunities out of the market and therefore, profit!  

While your actions may prove heroic (in the short term), there’s a reason why Wall Street is calling this “dumb money.” It’s a trap!  And you, financial friends are basically chasing drones.  

Raging a war by hoarding stocks so that institutional guys can’t short them and forming a cohort of like minded investors is called market manipulation, and, for those who may not know, you might go to jail for that.  The financial institutions, SEC and IIROC regulators can access your brokerage account and can see how much money you made on this GME play. Rest assured, Snoop Dog will not be there to greet you when you come out of prison.  

The media has likened this story to a superhero coup, but the only losers will be the beginners whose first foray into the market is putting their money in at the top to anticipate a massive gain. Unfortunately, they will be the casualties in this affair.  

The sharks will still eat you alive and take all of the profits, leaving behind all of the guppies to fight for the crumbs.  Please don’t be a gullible guppy.  Instead, consider putting your money to work towards companies that are progressive and doing good, like those curing cancer or towards those making progressive new technologies that are making our lives better.  Or even ESG – why can’t we go back to fighting climate change?

💎 ✋ Diamond hold-up you game boys and girls: before you wind up in Schitt’s creek without a paddle, consider the ramifications of taking part in this parody of stock promotion— also known as market manipulation in its most basic form.  Your actions participating in market manipulation risk bringing on more regulation in an overly-regulated world drowned in conservatism and protectionist policies because the regulators already think the general public do stupid things with their money. People are petrified of risk and now it’s really going to freak out the market. The stock market is an ocean of emotion and waves crash to shore, eventually.  Smart money is already catching the next wave of opportunity.  The harsh reality is that you are not going to stick it to the “Man” on Wall Street. In other words, your rockets may have taken off, but they are all just Challengers.  And we all know how that story ends…

What’s all the hype about Exchange Traded Funds (ETFs) over Mutual Funds?

by Jennifer Schell, CEO and Founder of Finliti

I hear it a lot: I hate mutual funds and I want to switch all of my investments into ETFs.

Okay Investor, but what’s the fact-checked truth? To start, it may be useful to know the key differences between mutual funds and ETFs, (which is an abbreviation for “Exchange Traded Funds.”)

I would say that one of the key differences is “active” vs. “passive” management. Both ETFs and Mutual funds are portfolios and they give you some elements of diversification. Either way, you are giving up the control of selecting the investments that you want in a portfolio and you are buying a broad-based solution.

“Active” vs. “Passive” Management

Active management is when a financial professional, (usually called a PM for Portfolio Manager), is making deliberate choices for your portfolio – whereas passive investments are when the Portfolio Manager licences a replica of an index.

Mutual Funds

Mutual Funds tend to be actively managed. Here are the BENEFITS of mutual funds:


Managed: There are some quality managers who are very good at what they do and who have an excellent performance track record. To track the performance, there is a system called the “Morningstar Rating” that gives a shout-out to the managers who are doing well in any given year. Managers are like all-star athletes… they usually have a period of glory-time and then their strategies fizzle out as the market conditions evolve. Below, I have included a sample of the Fund Fact document, which illustrates the pertinent facts about the mutual fund. ETF’s have one too.

One key advantage is that active mutual fund managers try to manage the downside risk of a portfolio so that when the market falls, your investments will not fall as hard. Contrary to the media, some managers do outperform the market. In this case, it’s worth paying the extra money to them for proper management.

Busy people and for those who dislike investing: Mutual funds are ideal for busy people, people who have advisors and for those who dislike investing. This is one way where you can set it and forget and let the strategies act for themselves.

Calculation: Mutual funds have an end-of-day calculation, so you can only track the performance at the end of each trading day. They are valued according to the Net Asset Value (NAV) which represents the fund’s market value per share. The NAV is calculated by dividing the total value of all the cash and securities within the fund’s portfolio of investments, less any liabilities (such as trading costs, foreign exchange fees, interest costs from borrowing, etc.), by the number of outstanding shares. The NAV essentially indicates how much one share of the fund is worth. This is important, because when you buy into a mutual fund, your transaction is held until the end of the day, once the markets are closed and the NAV price is set. A mutual fund transaction is between the client and the fund company, directly.

Emotional Control:
Investing is an emotional process and making emotional decisions about the stock market can make or break you. Leaving it up to a manager with a process in place can reduce the emotional ups-and-downs that come with investing. This is why mutual fund investing is encouraged by the industry – it’s to avoid liability and losses from emotional decision making on behalf of inexperienced or irrational investors.


Poor Performance: The problem with some mutual funds is that they can be mass-produced and not properly monitored. This occurs when a company has too many offerings and not enough people monitoring the solutions. It takes time to monitor and track a portfolio of holdings and sometimes, a lack of performance can be blamed on an old school manager who refuses to adapt to change.

High Fees: The mutual fund most likely charges a fee called an MER, which includes the operating expenses, the manager’s compensation and also compensation to your advisor or bank. Mutual funds can charge fees from 0.85% up to 3.75% in some cases. If you’ve ever run into segregated funds (insurance), these fees may even range up to 5% in any given year. You can imagine how frustrating it is when your fund doesn’t perform and you are left paying fees that erode your capital for nothing in return.

Early redemption Fees (DSC) Deferred Sales Charge: Please be hypervigilant of these fees.

When you purchase a mutual fund, there are often fees assigned for early redemption, called back-end fees. In addition, if you change your mind, there can be an early redemption fee, starting at 1% of your full investment amount. Even if it’s a fee-based mutual fund, there might be an early redemption charge if you sell in less than 90 days.

Terms vary: some countries and financial institutions have eliminated DSC fees entirely, but many have not. When you have an advisor, this is something you should ask them about. DSC charges were created to prevent you from selling out of a mutual fund and were meant to encourage you to “stay the course.” Your financial advisor is also compensated by these fees.

The disadvantage is that your investment may be locked-in with one company for up to 7 years.

There is a DSC schedule that should always be provided to you… As time goes by, the fees reduce to zero. (Please note that In Canada, DSC fees will be banned as of 2022, except in Ontario.)

Tax inefficiencies with year end distributions: If you buy a mutual fund at the end of the year, you may be subjected to taxes on year-end distributions. This is especially annoying if you have a non-registered account that is taxable. When mutual funds distribute earnings, even though you only just bought in, you could be on the hook for paying others’ taxes on the distributions.

Limited Transparency: If you pull up the Fund Facts document online with the name of your desired mutual fund – into a google search— you can usually see the top 10 holdings of the portfolio. As mentioned, the funds are calculated at end of day using an “NAVPS” calculation.

What this means is that the value of the stocks, bonds or other type of equities are recorded to give you a report of the value of your mutual fund investment that day.

Exchange Traded Funds

Exchange Traded funds gives you part ownership of a basket of securities that usually track a specific market index, such as the S&P/TSX, Nasdaq or even a specific sector, like silver commodities. Most ETF’s are passive, but there are many that are also managed by a Portfolio Manager.  These are considered “active strategies.” 


Transparency: The key difference is that the holdings are transparent.  You can see exactly which equities, being stocks, bonds or other assets that you hold at any given time. 

Usually lower cost, (but not always): ETFs are a vehicle that aim to provide a lower cost structure to a basket of equities, such as stocks or bonds. Contrary to popular belief, some ETF providers charge fees comparable with some mutual funds.   Pay attention to the fees on an actively managed ETF, because they do exist.  Pull up the Fund Facts to view these charges.  The passive ETFs are cheap and sometimes free.  

Tax Efficient: It can be easier to track the accounting of these ETFs and although they have dividends, some of the dividends are built in and don’t pay out – which can be beneficial for non-registered accounts. Also, because of their passive nature, there are less transactions occurring in the ETF and therefore, less capital gains are triggered.  Depending on your country of residence, a domiciled ETF provider may provide additional tax advantages that prevent additional foreign taxes from being incurred.


Dangerous: Some ETFs can have weird structures and are specific for day-traders or fund managers to hedge their risk.  Be mindful of highly-leveraged ETFs that can cause violent ups and downs on any given day.  Other ETFs with fancy names, such as bear-market ETFs, are “reset” at  the end of every day.  This means that if you don’t get rid of your investment that day, your entire investment will eventually erode to zero over time. 

Liquidity: The bid and ask spread can be very far apart.  When you buy an ETF, you may actually be buying it from a market maker, who’s job is to provide liquidity and pricing to your ETF.  This sometimes leads to arbitrage opportunities for institutional firms, which negatively impacts ordinary clients.  On inactively traded ETFs, the bid and ask spread may mean that you pay more for a holding or you may receive less than the true underlying value if there is no market or if it is a thinly traded position.

Limited Down-Side Protection: ETFs are little pictures of the real market.   When the market takes a tumble, so do you.   When the market is hot, so are your portfolios, but when the market gets moody and decides to retract, your investments can fall with it. 

Demystifying the TFSA

How do I maintain the integrity of my TFSA? 

Ah, the mystery of the TFSA…  It’s like a secret code for something magical and we all know it’s special. But why? You aren’t alone if you don’t know what it is or how to use it. It’s your right as a Canadian to use the TFSA to your advantage. 

TFSA stands for Tax Free Savings Account, also known as a: NO TAX ZONE. 

Yes, it sounds too good to be true, but it is not! A Tax Free Savings Account is a place where you can park your cash without incurring taxes: sans tax. Let’s repeat: no tax!  The TFSA was introduced by the Canadian Government in 2009 to encourage Canadians to save and invest.

TFSA Restrictions: a Reality Check: 

  • No tax on withdraws, potential tax on over-contributions. You may withdraw your money, tax-free at any time. You do not pay tax on withdrawals, even if you doubled your money.
  • There is a limit to how much you can contribute. 
  • If you overcontribute, you will pay tax and a penalty of 1% per month on the excess.
  • You need to have turned 18 and have a valid social insurance number. 
  • You need to establish residential ties to Canada. 

I opened up a TFSA, now what? 

Now that you opened a TFSA, you need to fund it with some money.  It’s like a piggy bank or any other account that you have opened at a financial institution.  There are exceptions, but for the majority of Canadians who use this account properly, you can rest assured that any money going into the TFSA can be invested into ETFS, Mutual Funds, GICS, Stocks and or bonds.

What are the benefits of the TFSA, eh? 

  • With few exceptions, you can invest to earn capital gains, dividends and income tax-free.  
  • Withdrawals are tax-free. 
  • Won’t affect other government benefits, such as retirement income, OAS, CPP etc. 
  • You can hold: Stocks (Canadian and International) listed on a designated stock exchange, Bonds, Options, Mutual Funds, GICs, Cash, Gold and Silver Bars, certain shares of small business corporations.
  • You can name a beneficiary.

For a full list of TFSA particulars, visit: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html#P44_1121

What’s the point of a TFSA?

It’s to get you to invest into the stock markets and to fund business operations so that you can contribute to our growing economy.  When you invest money into businesses by buying shares or issues of a company, you contribute to jobs, products, services and you raise the GDP of our Country and raise the standard of living for Canadians, everywhere.  You also depend less on government resources.  

What if I liquidate my TFSA to buy something?

If you withdraw all of your money, you have to wait until the next year to re-contribute.  Contributions are like birthday cakes.  You have one Birthday and one cake.  You have to wait the following year before getting a birthday cake again. 

Can I write off losses on my TFSA or can I deduct anything on my taxes? 

No, you cannot.  That would be rich!  A Tax Free Savings Account is a safe place to grow your capital free from taxes. Interest, dividends and capital gains that you earned while in the TFSA are tax-free for life!

What’s my TFSA limit?

This is how you can find out your TFSA limit: 

  1. Manual calculation: Using the table below, calculate the room you have available. For example, if you were born in 1994, you would have $54,500 available TFSA room.
  2. Did you take out money from your TFSA?
    1. If yes, add that number back to your contribution amount.
    2. If no, your contribution room is $54,500.
  3. Add that number back to your contribution amount.
 YearContribution LimitYear to Receive TFSAContribution Limit 
20206,0002002 6,000
TFSA Maximum Contribution


Login to CRA from your desktop or through the mobile application: 

Desktop – CRA My Account

Mobile – MyCRAApp

  1. Login to CRA by selecting Option 1 or Option 2
  2. If you don’t have the passwords, you can sign in through one of your bank cards. 
  3. Click on the Tab that reads “TFSA”
  4. Click “Contribution Room”
  5. Look for your TFSA contribution room for 2020 TFSA.  If you made contributions during 2020, these will not be reflected in this number. You will need to add them in. 


Whatever you do, do not overcontribute and do not put yourself in a position where you might overcontribute. The TFSA is a gift. 

  • Maintain one TFSA account with one institution. The government knows how many TFSAs you have opened.
  • Track your withdrawals and contributions in a spreadsheet.
  • Withdraw excess contributions and refer to the CRA for further guidance.

If you don’t use it, you lose it.  Do you want to learn how  to take full advantage of the TFSA?  Join our Finliti Newsletter – click here.

Have Questions? Contact us!

Follow Finliti

Terms of Use

Privacy Policy

About Us

Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Consent to display content from Youtube
Consent to display content from Vimeo
Google Maps
Consent to display content from Google