Avocado Report

You just received a $10,000 bonus. Your financial advisor suggests maxing out your TFSA immediately. Your friend says rates might go higher—wait a few months. Your credit card balance sits at $8,000 with 19% APR. Which move costs you the most money? This isn't a trick question, but the answer reveals why most people struggle with wealth building. Understanding the time value of money isn't academic theory—it's the difference between building wealth and watching opportunities evaporate while you wait for the "perfect" moment. The core idea is simple : wealth is not primarily built by picking the perfect investment — it is built by putting money to work as early as possible and keeping it there. TL;DR A dollar today is worth more than a dollar tomorrow because time, not talent, drives wealth. Money invested earlier compounds longer, while delays quietly destroy future wealth through lost returns, inflation, and high-interest debt. Starting early with small...

In November 2024, I wrote about concerning S&P 500 valuations , noting that " the market appears to be trading at relatively high valuations based on the current P/E ratio of 30.47, which is well above historical averages. " Those concerns seemed validated when the market experienced a sharp 21% selloff in March 2025, triggered by the Deepseek AI announcement and sweeping global tariffs from the new US administration. However, what followed was remarkable: a 42% rebound from the April lows, propelling the S&P 500 to a fresh all-time high on October 29, 2025. The index currently trades at 6,877, up 17.66% year-to-date. With the market at new highs and investors feeling euphoric, this is precisely the time to step back and assess where we stand from both fundamental and technical perspectives. A Historic Bull Run: The Numbers  The S&P 500's performance from 2020 through 2025 has been extraordinary. Here's the year-by-year breakdown with total returns (includ...

Most people believe success follows talent and discipline. We love to think outcomes reflect skill. But as book "Fooled by Randomness" reminds us, the world runs on probability, not certainty. Much of what we praise as "brilliance" is often luck — and much of what we call "failure" may simply be bad timing. This isn’t a pessimistic view. It’s a practical one. When you understand how randomness works, you stop judging results too quickly and start focusing on what really matters: process, risk, and emotional control. Here’s a few key ideas from Fooled by Randomness — timeless lessons about luck, judgment, and how to make decisions that last. 1. The world runs on probability, not certainty We love stories that make success sound logical: a bold call, a clever analysis, a disciplined plan. But randomness quietly runs the show. Take financial markets. Thousands of traders make bets daily; a few will inevitably strike gold through sheer luck. Those few are cele...

In an email to his clients, Andreas Clenow once wrote " Perhaps the most absurd claim in finance is the ability to see the future. To some extent, skill, experience, and hard work can help you tilt probabilities slightly in your favor — but nobody sees the future. " He continued: " It’s easy to get pulled into the crystal ball business. It’s tempting to give an answer when the media asks where the S&P will be a year from now. The good news is that you don’t need to predict the future. ". Clenow’s words highlight a crucial truth often buried beneath headlines and expert forecasts: markets are inherently unpredictable. Financial news, analyst opinions, and flashy investment ideas often create the illusion that with enough data, charts, or experience, one can accurately forecast market moves. But in reality, markets are driven by an intricate and ever-evolving web of factors — macroeconomic shifts, political events, human behavior, innovation, and randomness. Eve...

What is a Dividend and How Does It Impact Share Price? A dividend is a portion of a company’s earnings distributed to shareholders, typically in cash or additional shares. Companies that generate stable profits often pay dividends as a way to reward investors. Impact on Share Price When a company declares a dividend, the stock price typically drops by the dividend amount on the ex-dividend date. This happens because the cash paid out is no longer part of the company’s assets.  What is the Ex-Dividend Date? The ex-dividend date is the cutoff date set by the stock exchange that determines which shareholders are eligible to receive the declared dividend. If you buy the stock on or after the ex-dividend date, you won’t receive the upcoming dividend. Instead, the dividend is paid to the seller of the stock.  For example: If a stock is priced at $100 and declares a $5 dividend, its share price will likely adjust to $95 on the ex-dividend date. The investor’s total value remains the ...

" Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it. " Compound interest is often called the eighth wonder of the world, a term attributed to Albert Einstein. He famously stated, " He who understands it, earns it. He who doesn't, pays it. " While this might sound like an exaggeration, the math behind it reveals its profound truth. Compound interest occurs when the interest earned is reinvested, allowing the investment to grow exponentially over time. This phenomenon, often referred to as "interest on interest", accelerates wealth accumulation and has been celebrated by great minds throughout history. Benjamin Franklin famously remarked, " Money makes money. And the money that money makes, makes money. " Similarly, Warren Buffett likened it to rolling a snowball (investment) down a long hill, where time and consistency lead to exponential growth. Let's now explore this concept...