I managed only one post in the past two weeks, a book review: The Best Investment Writing Here are some short takes and some weekend reading: Jason Zweig explains how many of Benjamin Graham’s brilliant insights are still very relevant today. This includes one case where birds do better than people in a probability-based test. Doug Hoyes explains why bankruptcy is a business decision and is not morally wrong. Canadian Couch Potato interviews Rob Carrick in a wide-ranging interview. One topic they cover is whether we should blame DIY investors for paying trailing commissions on the mutual funds they buy from discount brokers who offer no advice. The two sides of this debate aren’t really disagreeing with each other. Why can’t the DIY investors be wrong for not learning enough, and the discount brokers be wrong for charging for a service they don’t provide? Of course, blame is pointless. I think we’re getting the right outcome with the rule that discount brokers must s...

When I saw a book called The Best Investment Writing , edited by Meb Faber, I couldn’t resist reading it. The book contains about 30 well-written articles, mainly on topics related to active investing. As an index investor who has given up trying to beat the market, this book served as a test of whether I might change my mind. I didn’t. There are too many articles to comment on all of them, so I’ll just pick out a few parts I find interesting or feel the need to comment on. Jason Zweig discussed how markets have become more efficient: “If you’re applying the tools that worked so well in the inefficient markets of the past to the efficient markets of today, you are wasting your time and energy.” That’s the conclusion I came to several years ago. Gary Antonacci gets many people looking to tap into his 40 years of investment experience. I found one typical question and answer both wise and funny: Question : I just looked at my account, and it is down. What should I do? Res...

I managed only one post in the past two weeks about a “zero-interest” loan with high “fees”: 0% Interest Here are some short takes and some weekend reading: Justin Bender and Jason Heath disagree on whether to hold stocks in your RRSP or taxable account. Properly accounting for taxes, Justin is right; stocks are better in your RRSP. Boomer and Echo report that Vanguard is entering the Canadian mutual fund market with 4 funds whose MERs are below 0.5% per year. It seems likely that Vanguard will do more to help Canadian investors than the Canadian Securities Administrators (CSA). Tom Bradley at Steadyhand says the Canadian Securities Administrators’ failure to ban embedded commissions in their recent reforms caused “A bad day for the Canadian investor.” The Blunt Bean Counter shares his experience and advice on giving money to your adult children or your parents. Don’t miss part 2 where he covers the reasons for money requests: need, seed, and greed. Big Cajun Man...

Does a 0% interest loan sound too good to be true? You can get a 12-24 month installment loan from Brim Financial, and they claim to charge 0% interest. Not many borrowers will truly believe the cost is zero, but few will guess how expensive these loans really are. Brim replaces “interest” with “fees”. There is a one-time installment fee of 7% of the loan amount that you have to pay in the first month. Then there is a 0.475% monthly processing fee. This fee is based on the original loan amount, not the declining balance owed. Suppose you borrow $1200 for 12 months. The monthly payments before fees are $100. In the first moth, you pay the 7% installment fee ($84 in this example). You also pay a monthly processing fee of $5.70. In total, you pay $189.70 in the first month, and $105.70 for the remaining 11 months. The internal rate of return works out to 2.00% per month, and this compounds to $26.9% per year. So, these carefully crafted loan terms combine 0% interest with ...