This and That: Interest rates, Rob Arnott and more…

1. The Bank of Canada increased interest rates by 1/4 per cent this week. The Prime Rate to which the interest rate on variable-rate mortgages and lines of credit are tied to was also bumped up by a similar amount to 2.5%. The direction of interest rates is uncertain as the Bank noted that there is “considerable uncertainty” in its outlook.
2. Fortune magazine profiled Rob Arnott, whose firm offers a number of “fundamental indexes”.
3. The “flash crash” of May 6 revealed a major weakness of ETFs. Many ETFs traded momentarily at prices much lower than their NAV. This Wall Street Journal article offers five trading rules for ETF investors.
4. In theory, rebalancing is an excellent idea. In practice, writes Larry MacDonald rebalancing has a huge problem.
5. The recently renamed Money Smarts Blog offers suggestions on how to avoid RESP withdrawal penalties when a child doesn’t go to school.
6. Michael James points out that people respond to garbage bag taxes but not in the way we might expect.
7. Million Dollar Journey featured a guest post on the importance of paying attention to financial statements.
8. Promod Sharma on the 13 questions to ask of an investment that sounds “too good to be true”.
9. Tom Bradley of Steadyhand funds pans the new BMO ETFs for their narrow focus.
10. Holy Potato takes a stab at estimating if BP is a value play after the beating the stock took in light of the Gulf of Mexico disaster.

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