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Canada's main stock index headed higher in early trading, boosted by gains in the health care sector which included the volatile marijuana space. The Toronto Stock Exchange Broadcast Centre is shown on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent ElkaimThe Canadian Press

Canadians who bought a house in the early 2000s in the normal course of their lives made a great financial decision. My parents, on the other hand, bought a home in the Toronto suburbs in 1976, with a 19 per cent mortgage rate that meant they didn't make a dent in the principal for a decade.

Recent homebuyers have every right to be pleased with their decision but they have to be very careful about considering themselves geniuses of financial planning as a result. As Morgan Housel outlines, it is very important to know the difference between luck and risk,

"Paul Tudor Jones is successful because he understands risk. And he understands risk because he understands luck. Luck is the flip side of risk. You cannot understand one without appreciating the other. If risk is what happens when you make good decisions but end up with a bad outcome, luck is what happens when you make bad or mediocre decisions but end up with a great outcome…

Risk and luck are different sides of the same coin, but we treat one as critically important, and the other like it doesn't exist – at least for you, when you succeed."

Simply stated, when an investment succeeds – whether real estate, equities, or business - it is important to understand how much of it was the result of skill, and how much luck was involved.

Working in finance I came across a host of maddening people for whom outsized wealth was definitive proof of superior talent and character. Some of them just happened to be in the right place at the right time.

This is not, at all, to say that all successful people are like Mr. Magoo, blindly bumbling their way into fortunes – hard work, skill and ability are definitely correlated to success in the majority of cases. But, the ancient Greek Aeschylus was accurate when he wrote that "a prosperous fool is a grievous burden" and, for investors, this is a trap to avoid.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Open Text Corp. Last quarter, the company handily beat the Street's expectations sending the share price up nearly 13 per cent. The stock is currently trading at a reasonable valuation with room for multiple expansion. The stock has 13 buy recommendations and one 'underperform' recommendation. Jennifer Dowty profiles the stock.

The Rundown

Canadian stocks aren't the bargain they're cracked up to be

Are Canadian stocks a safer, cheaper alternative to their U.S. cousins? Many people, judging from my e-mail inbox, appear to believe so. They're completely invested in the domestic market and have no interest in venturing outside Canada's borders. But Ian McGugan takes a closer look at the evidence, and finds there's a lot more to the story.

The TSX's biggest gainers of the past nine years will probably surprise you

As one of the developed world's laggards since the market turned, the S&P/TSX Composite Index has advanced by a relatively paltry 105 per cent in the nine years up to the end of last week. This list of Canada's biggest movers over that time sheds some light on the cause of the underperformance.

Why the Choice-REIT deal is likely to be a long-term winner for investors

In February, one of the stocks in John Heinzl's model Yield Hog Dividend Growth Portfolio – Canadian Real Estate Investment Trust (REF.UN), or CREIT – found itself on the receiving end of a $3.9-billion (excluding debt) offer from Choice Properties REIT (CHP.UN), the real estate arm of the Loblaw Cos. Ltd. grocery empire. John explores the benefits of the deal and explains why, assuming the transaction is approved, he'll happily exchange the CREIT units in his model portfolio for units of a bigger and better Choice.

Why financial planner Shannon Lee Simmons is using a robo-adviser to invest her money

Shannon Lee Simmons is the owner of a Toronto financial-planning business that provides advice to a range of clients, especially women and millennials. She is recognizable to many Canadians as a personal-finance expert thanks to her regular appearances in the media, which include the CBC News Network (On the Money), the Cityline TV talk show, the Toronto Star (Money Makeover), BBC Capital and Coral TV (Money Awesomeness). She recently wrote the book Worry-Free Money: The Guilt-Free Approach to Managing Your Money and Your Life. We asked Ms. Simmons how she invests and manages her own money.

Market volatility may be back, but with a whimper more than a vengeance

"Volatility is back," the Bank for International Settlements reckons, and speculators are betting big on its return. But after a brief and dramatic appearance earlier this year, volatility in fact seems to have slunk back into the shadows. Hedge funds and speculators have had a poor start to the year, crushed by the spike in volatility in the first week of February and failing to recover since. What's also curious is the inability of stocks and other risk assets to fully regain their upward momentum despite the reduction in volatility. Jamie McGeever from Reuters explains.

Three stocks that pass the value and momentum model tests

The trick to value investing is finding cheap stocks of well-run companies that are about to rise but haven't yet caught the attention of investors. It is in some ways the opposite of investing based on price movements, or momentum, a strategy that involves picking stocks that are already on an upswing with the expectation they have further to run. John Reese looks at how to combine the two strategies.

Bitcoin's cultural spotlight fades as regulators dull the chaos

Suddenly, Bitcoin seems a bit boring. It might be hard to believe. But after the 1,400 percent rally of 2017, with wild swings along the way, the great crypto craze has cooled, at least for now. For the past month, Bitcoin's price has stalled between $8,000 and $11,300 -- a minuscule range by its standards. And internet searches for "Bitcoin" have plunged, suggesting public interest has, too.

Investor says selling gun stocks is a failed strategy

John Streur leads one of the oldest firms devoted to socially responsible investing. He's heard the drumbeat for investors to sell gun stocks following last month's shooting at a Florida high school that left 17 people dead. But after years of advocating for aligning investor portfolios with their values, the chief executive officer of Calvert Research & Management has come to a sobering conclusion: divesting gun makers is a flawed strategy. More funds than ever shun the companies yet school shootings have only increased.

Top Links

Top 'fresh money' stock picks from Morgan Stanley


Thursday's Insider Report: Companies insiders are buying and selling

Wednesday's Insider Report: Companies insiders are buying and selling

Number Crunchers

Fifteen U.S. stocks set to benefit from rising interest rates

Twelve Canadian stocks with low correlation to the TSX Composite

What's up in the days ahead

Should you buy Enbridge shares now that they are trading at more than five-year lows? Three fund managers will weigh in.

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Gillian Livingston

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