Short Takes: Active Management Police, Lake Wobegon Research, and more

Here are my posts for the past two weeks:

Pandering to those with too much debt

Helping students handle credit cards well

Some financial policies to look for with a Trump presidency 

Making arguments with made-up data

Jobless Manufacturing

Here are some short takes and some weekend reading:

The Reformed Broker offers a funny piece satirizing the pressure on active management. I think the real pressure is on expensive management. I’d like active funds more if they were as cheap as the passive funds I own.

Allan S. Roth gives a scathing indictment of the Journal of Financial Planning that once again published a flawed study claiming that active mutual funds outperform index funds and that fees don’t matter. One amusing conclusion of the study is that even index funds produce alpha.

Tom Bradley at Steadyhand takes off the gloves in criticizing big banks that “accidentally” double-charged their clients.

 Canadian Couch Potato explains some benefits of reverse share splits in ETFs.

Preet Banerjee explains how to calculate your CMHC insurance premium based on your house down payment (video).

 Boomer and Echo have a good set of tips for negotiating a raise. It’s a good idea to look out for your interests, but it can be taken too far. I’ve worked with a few people over the years who were very good at the politics of getting higher pay and promotions. The trouble came when company fortunes forced layoffs, and these people were prime targets because their pay outpaced their usefulness to the company.

 Jason Zweig reports on a new type of fund called an interval fund. Buyer beware.

Potato has a difficult personal story about failing to get disability insurance.

Insureye has a clear and informative list of insurance myths and facts. It covers insurance for home, car, life, health, critical illness, disability, and travel. I’ve never seen such useful insurance information gathered in one place before.

 Big Cajun Man explains that when it comes to university costs, rent can be a bigger problem than tuition.

 My Own Advisor breaks down his big investment goal into smaller sub-goals.

Million Dollar Journey answers a reader question about Whole Life Insurance for children.

Comments

  1. Big Cajun Man (AW)November 18, 2016 at 8:23 AM

    Thanks for the inclusion this week, if your kids stay at home for University or College, the savings are significant.

    ReplyDelete
  2. My Own AdvisorNovember 21, 2016 at 9:03 AM

    Thanks for the mention this week. Great to see you at CPFC16 Michael. All the best and talk again soon.
    Mark

    ReplyDelete

Post a Comment

Popular posts from this blog

Short Takes: InvestorLine’s HISAs, 24-Hour Trading, and more

I recently moved some cash into BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds.  Their designations are BMT104, BMT109, and BMT114, and they purportedly pay 4.35% annual interest (which they can change whenever they like).  However, the way they report the monthly interest payments is so baffling that I wasn’t able to sort it out in my first 15 minutes of trying.  A further complication is the following text in the HISA description: “The Bank may pay, monthly or quarterly, compensation to your Dealer at an annual rate of up to 0.25% of the daily closing balance in the BMO HISA.”  I couldn’t find any evidence of such a charge, but I haven’t been invested for a full quarter, and I can’t yet say that such a charge isn’t buried somehow in the confusing reporting.  I have more digging to do before I can recommend these HISAs. Here are some short takes and some weekend reading: Preet Banerjee explains the dangers of Robi...
Read more

My Asset Allocation

I’ve resisted discussing my asset allocation for some time, but now is finally the time to describe it and the reasons behind it. I’m not holding it out as a model portfolio; I believe it’s suitable for me and not necessarily anyone else. With that warning, enjoy the discussion and feel free to ask questions or take some pot-shots. The main reason why I haven’t discussed my asset allocation in detail before now is that I don’t want readers to treat it like a model portfolio and follow it blindly. Everyone’s situation is different. The need for variation in asset allocation from one investor to the next usually isn’t huge, but there is no one-size-fits-all portfolio. A secondary reason for keeping my asset allocation to myself is that I can’t be sure I’ll never change it. For example, I recently made the minor change of switching from an ETF of small-cap stocks to an ETF of small-cap value stocks . I don’t have any plans to change my current allocation, but I may think differe...
Read more

What to Do About Crazy Stock Valuations

Image
The last time I had to put a lot of effort into thinking about my finances was back when I retired in mid-2017.  I had ideas of how to manage my money after retirement, but it wasn’t until a couple of years had gone by that I felt confident that my long-term plans would work for me.  I had my portfolio on autopilot, and my investing spreadsheet would email me if I needed to take some action. I was fortunate that I happened to retire into a huge bull market.  I got the upside of sequence-of-returns risk.  The downside risk is that stocks will plummet during your early retirement years, and your regular spending will dig deep into your portfolio.  Happily for me, I got the opposite result.  My family’s spending barely made a dent in the relentless rise of the stock market. However, stock prices have become crazy, particularly in the U.S.  One measure of stock priciness is Robert Shiller’s Cyclically Adjusted Price-Earnings (CAPE) ratio .  In the U.S...
Read more

Archive

Show more