Android or iPhone? The Infamous Question.

I am sure that everyday Google receives thousands of searches asking, Android or iPhone?  I am hoping that one of those searches landed you here and I can shed some light on your question.

Let me give a little background information about myself before I delve into the pros and cons of each of the phones.

Background

I have only been in the smartphone market for four or so years now. My first phone was the iPhone 3GS followed by an iPhone 4S two years later. I then got into mobile development and needed to purchase an Android phone. I bought the Galaxy Nexus and actually intended on only using it for development purposes. After about a month of using the Nexus I gifted the 4S to the wife and have never asked for it back.

iPhone 5 (iOS 6)

*disclaimer - I have limited experience with iOS 6 (wife's phone) and have absolutely no first hand experience with the iPhone 5 but do have lots of experience with previous generations.

iOS 6 - Really no Different from iOS 5 (Except it crashes a lot)

The iPhone 5 / iOS 6 package has got to be one of the most disappointing product releases I have seen from Apple. While the numbers on paper look really good (benchmarks on the processor) and LTE is a nice but necessary addition, everything else is a huge let down. The OS is really no different from iOS 5 (except for facebook integration and passbook .. lame). The screen is larger but not by much and only in one dimension. The camera is the exact same and I really couldn't care less about the weight loss.  You can't wait two years for a phone upgrade to really not change anything in the process.  I was hoping by issuing the iPhone 4s that they were saving something special for the iPhone 5.  I was wrong.

Lack of Innovation

Apples big problem is that they are no longer in the front of innovation. They've gotten boring ... quick.

I think a recent ad I saw for the Samsung S3 sums it up.  The iPhone is no longer a phone for us. Its a phone for our parents (the type of people who wouldn't find this blog). The phone is safe, reliable and absolutely boring. Apples need for absolute control has killed the creative process and left a product without excitement.  The innovation on this phone stopped a long time ago.  When I see my students at school with Android phones, they're excited ... They brag about them.  My students with iPhones just use them.

Cloud Computer on the iPhone

Another big downfall with Apple is their iCloud.  I don't know how many of you have used it, but I find it to be an absolutely horrible product.  Trying to share documents / photos without a file structure or web interface is a nightmare.  All I want to do half the time is send a link to a friend so they can download a file I have, good luck trying to do that with iCloud.  I feel like I have absolutely no control of the product.  In the process of trying to make cloud computing available for the masses, they have completely destroyed all control I have over the situation.  I once had photostream on and found it to be slow and got annoyed that every photo I took became part of my photo albums.  I take a lot of dumb photos with my phone, the last thing I need is every one of them to be part of my photo collection.  I could spend a whole article talking about the downfalls of iCloud, but don't want to make that the focus of my article.  

While the iPhone served me well for almost three years, the lack of change and innovation has turned me off.  There's nothing fun or excitement left.  It

Pros

• Very fast processor (best feature on the iPhone)
• Slightly larger screen (however still much smaller than other android phones)
• Reliable (once again, not as reliable as it once was ex. maps)
• Lot of options for music/video in the iTunes store

Cons

• Nothing new (Boring)
• No Innovation with the software
• Lack of freedom in app design

Android - Galaxy Nexus, Samsung S3, etc (Jelly Bean 4.1.1)

Android is a software platform that is capable of running on many different devices.  I personally own the Samsung - Galaxy Nexus so will be commenting on that specifically.  However, the comments that I make are relevant to any of the Android phones running Jelly Bean (newest Android operating system).  

I hesitated buying an Android phone for the longest time.  I heard from many people they were complicated, ugly, slow and unreliable.  I do have to agree that at one point they were.  However, I've seen HUGE improvements in the android operating system over the last year.  Ice Cream Sandwich (version 4.0) was a huge upgrade and the newest version Jelly Bean (4.1) has just made the Android experience even better.  Every time an update gets issues by Google, my phone gets more reliable, more stable and gains a whole load of new features.  

Ability to Run Applications in the Background

Imagine a computer that couldn't run programs in the background.  As I type this article on my computer I probably have about 5 different things going on.  One of the major advantages of the Android is that it allows you to run processes in the background.  I can create an SSH tunnel in leave it running in the background so that I can have a secure connection with my home computer.  I can have Google Plus running in the background so that when I take a picture, it is automatically uploaded to my account.  The possibilities are infinite.  There is always the possibility that these background processes might slow down or ruin the phone experience, but the reality is these phones are like computers nowadays, they have the processing power to do multiple things at once.

Customization

One of Android's most powerful features is its ability for customization.  I can use widgets, select which icons I want on my home screen, run custom launcher applications so I can change my home screen experience.  Everyday I come across new features that allow new possibilities on my phone.  I just recently downloaded the NOVA launcher and it is an absolutely amazing launcher.  Has completely given my phone a new feel with just a single download.  

Complete Integration with Google Products

I don't know about you but I use Google products for just about everything.  I have everything from email to this blogging site all done through Google.  With the android phone all of this is completely integrated into the phone.  I can feel confident my phone will not be removing Google maps for some other junk product (see iOS).  Google Now is a new product that has just been released and is integrated with Jelly Bean.  It is an amazing tool that alerts me to many things including when I need to leave in order to make my appointments on time.  Google Now is the future of mobile software and I recommend you check it out if you haven't heard about it yet. 

Performance

Android phones have typically been ahead of the game when it comes to all measures of performance (cpu, memory, screen size, etc).  I will concede that the iPhone 5 has a fast processor but that will be short lived.  I give it one month before an Android phone jumps ahead and then Apple will be behind the game again for 11 months.  Apple brags about the new screen size on their phone, this is still much smaller than most Android displays.  I find it ridicules they made no effort to increase the width of the phone.  That was a really lazy solution on their part.  

Pros

• Performance is always ahead of Apple
• Customize all aspects of the phone
• Run background services
• Integrate with Google products
• More Innovative Apps

Cons

• Less apps available in the store (this is slowly become less true everyday)
• Can be a little battery hungry
• Caution is required as there is more possibility for malware
• Learning curve might be a little more difficult than Apple

Conclusion

After reading my article I hope I've convinced you to jump on board with an Android.  Don't get me wrong, I do think the iPhone is the right choice for some people (my parents).  It's just that if you've done enough research to get to this blog, I imagine you want a phone with options and innovative products.  Android will definitely meet if not exceed all your expectations in a phone.

 

Getting Started with Investing - Mutual Funds

There are probably quite a few of you out there who know they should be starting to invest money for their future but just keep putting it off for another day.  Now is the time to get started with your investment portfolio and there is no better way then starting with a solid mutual fund.

Why Mutual Funds?

If you're just getting started with investing, I'm going to go out on a limb and assume you're probably not a millionaire.  Trying to buy/sell stocks can be time consuming, expensive and a very risky proposition.  Mutual funds are cheaper, more reliable and can be as risky as you would like.  While stocks need to be watched, mutual funds are professionally managed and you can set back and let a paid professional do all the hard work.

What is a Mutual Fund?

A mutual fund is a professionally managed fund of pooled money from many investors that allow opportunities that might not be available if you were investing just your own money.  Let's say for example a company needed to raise money for expansion and wanted to issue a bond (take out a loan) for 10 million dollars in order to do so.  On your own you wouldn't have the money or the connections to lend 10 million dollars.  However, by getting involved in a mutual fund, your money could go towards that cause and get you a nice little return.  The same logic is applied to stock purchases (no way are you going to buy hundreds of stock with your small monthly investments), but by purchasing mutual funds you now have that option because you are pooling your money with many others.

How to Pick a Mutual Fund

It can be very intimidating trying to pick a mutual fund in which to invest with.  There are many factors that you need to take in to consideration.  A financial advisor might try to have you invest with many mutual funds to try and balance your portfolio, I don't think this is necessary in the beginning and I believe they are only doing this to try and up their own commission a lot of the time.  I personally think you are just better off buying a balanced mutual fund in the first place.

Why would I buy a whole bunch of chocolate bars on their own when I could just buy a variety pack? (get the analogy?)

I am going to list the different factors you need to take in to consideration when you buy a mutual fund and then go through them one by one as to how I handle them.

1. Risk
2. Size
3. Cost
4. Reliability

Risk

The majority of mutual funds are going to be made up of a combination of stock (ownership in a company) and bonds (loans).

The general rule is that stocks are riskier, but a better long term investment and that bonds are more reliable but not as good in the long run.  I once read in a book that the younger you are, the more stock you should own (more return in the long run).  To figure out how much stock you should own, subtrack your age from 100%.  For example, I'm thirty so 100%-30% = 70%, I should own 70% stock and 30% bonds.  The reason this works is that the older you are, the less risk you can take on and so you want to be more weighted towards bonds.

Now, I'm based out of Canada so I will be using Canadian sources for my Mutual Funds.  If you're out of a different country, you should be able to find the same information but just on a different website.

Let's look at a sample mutual fund I use, CIBC Monthly Income Fund

The CIBC Monthly Income Fund is about a 50/50 mix between stock and bond.  This would be a good starter mutual fund with a medium risk.  The bond will act to stabilize the price against changes in stock prices while still maintaining a nice return.  If you look at a further break down of the equity (stock) you will see its broken up into many different sectors.  This will prevent you from being vulnerable to any particular sector.  Very good for a first mutual fund.

Now lets look at a mutual fund that might be more risky, CIBC Energy Fund

This one is mostly stock (93%) and happens to be focused only on the energy sector.  While you might get lucky and score big with this one in the long term, it is a risky venture in the short term.  This fund is actually down 28% on the year. A further look into the equity breakdown and you see it's 87% in the energy sector, leaving you vulnerable if the sector drops in price.

If you want to take your risk analysis to the next level, you should all look at the company size of the stocks that are being bought.  If they are large companies (ex. Apple, Walmart, etc etc) there really isn't much chance for huge fluctuations in price.  If they happen to be small to medium companies then there will be more risk as the stock price is more susceptible to large variations.

Size of the Mutual Fund

The size of the mutual fund is also important to me.  A larger mutual fund means that it will have more buying opportunity.  A larger mutual fund also means that the expenses will be kept lower.  If there's more money in the pool, they don't need to spend as much on trades and paying managers.  Also, if there's lots of money in the fund, then there's got to be people with money throwing it into there and people with money usually make smart decisions.

Before I make a decision as to which mutual funds I'm most interested in, I'll look at all the mutual funds available at my bank and see what the Total Assets are.  I usually spend more time looking into the ones with more money.

Cost

The total cost of the mutual fund to you should be a large factor in whether to buy it or not.  There are many places along the line where you will be paying so you need to investigate all factors.  

The first thing you need to check is if there is a price to buy/sell the mutual fund.  Some companies do have costs to buy and sell.  I prefer to deal with those that don't but then again you might get a good deal on the management fee if you do pay to buy and sell so keep that in mind.

The other big cost you need to look at is the MER (Management Expense Ratio).  This tells you the percentage of your money that will go to pay for management and trades.  You want to keep this value as low as possible!  Even a small percentage will make a difference in the long run.  

The CIBC Monthly Income Fund I mentioned earlier has a MER of 1.48%.  That means that every year 1.48% of the total amount invested will go to fees.  This can add up pretty quick so make sure to keep this as low as possible.

Last Words of Advice

Depending on your country, you might want to register your investment as a retirement plan or a tax-free savings account.  This will provide further tax benefits to your investment.  Myself being located in Canada has the option as registering a mutual fund as a Tax Free Savings Account.  Most people aren't aware that investment accounts can be registered as tax free.  That means that I can invest $5000 a year into mutual funds or whatever account I choose and pay absolutely no tax on the income.  That is hugely important and if you are in Canada, I recommend you make use of the tax free savings account.

Hopefully this provides a bit of a starting point for you into the world of buying your first mutual fund.  I'll edit this post as time goes on to try and provide a little bit more information.

Please feel free to leave any comments or questions!