Here are my posts for the past two weeks: Mutual Fund Costs not in the Spotlight My Investment Return for 2019 TD to Start Charging More Interest on Credit Cards Here are some short takes and some weekend reading: Jon Chevreau profiles several mutual fund companies offering much better choices than the typical expensive Canadian fund. Canadian Couch Potato makes some changes to his model portfolios.  The biggest change for the better is dropping Tangerine funds.  They’ve always been just too expensive. The Blunt Bean Counter tackles the difficult subject of whether to pay for a child’s wedding.  A good starting point is to control the cost of the wedding no matter who pays for it. Preet Banerjee interviews Justwealth CEO Andrew Kirkland.  If you have questions about Justwealth’s offerings, there’s a good chance Preet asked it in this interview.

Recent reports that TD will start charging compound interest on all personal credit cards are only partially true.  TD was charging some compound interest on these credit cards and will start charging more. The relevant section of the credit card agreement used to read as follows: If interest is charged, it is calculated on the average daily balance of each Transaction from the transaction date until that amount is paid in full.  The total is the amount of interest we will charge you on each statement on the last day of your statement period. The new agreement replaces the last sentence with the following: We add your unpaid interest charge to your balance at the end of each statement period.  As a result, we charge interest on unpaid interest. The difference is in the time from the end of a statement period until the due date for your payment.  During this time on certain personal credit cards, TD is now charging daily interest on the newly accumulated i...

In 2019, my investment return was 15.8%. This sounds good in isolation, but withers when we consider that U.S. stocks were up over 30%. So, is my investment approach a failure? Hardly, as I’ll explain. To begin with, when you diversify, you’ll always have some part of your portfolio that performs better than other parts. Because I can’t predict which investment will work out best in a given year, I’m best off diversifying. So, why did my return trail U.S. stock returns by so much? There were many factors. One is that I measure my returns in Canadian dollars. Because the Canadian dollar rose in 2019, U.S. stocks rose by less than 30% when measured in Canadian dollars. Another factor that reduced my return was that other asset classes didn’t perform as well as U.S. stock indexes. Canadian and foreign stocks didn’t do as well, and I have a small cap value tilt that didn’t do as well. Another drag on my returns comes from the fact that I’m retired and keep 5 years of spendi...

The high cost of having a financial advisor has been in the news lately. A recent example is Jonathan Chevreau’s discussion of the problems with Deferred Sales Charges (DSCs) and the future of financial advice . The banning of DSCs everywhere in Canada except Ontario is reshaping how financial advisors get paid. However, this discussion only covers a fraction of the costs mutual fund investors pay every year. Mutual fund companies silently dip into Canadians’ mutual fund savings every year for a percentage called the Management Expense Ratio (MER). Too often, this is 2% or more. This may not sound like much, but when you lose 2% of everything you have saved every year, it adds up quickly. Over 25 years, about 40% of your money is gone. Out of this MER, mutual fund companies pay financial advisors roughly 1% to choose their funds for investors. The remaining money from the MER goes to the fund company. But what do they do for their money? Most of the largest mutual funds ...

How your credit card company recovers from blocking your legitimate purchases matters: Credit Card False Positives Here are some short takes and some weekend reading: Morgan Housel explains how the world keeps getting better for us even if it seems to be getting worse. Retire Happy gives a nice summary of the high points of managing your financial life well.  He frames it in terms of New Year’s resolutions, but it’s really some easy-to-understand advice that applies any time. At one point, he throws out an interesting statistic: “What I find amazing is that 83% of those that file taxes have unused RRSP room”.  I have recently become part of this 83%. I used to use all my RRSP room each year, but I have no use for the room that arose from my last year working. I actually withdraw a little from my RRSP each year now to reduce lifetime income taxes.  So that last year of RRSP room sits unused. No doubt many retirees who used to use all their RRSP room contribute t...

It’s disconcerting when we find fraudulent charges on our credit cards.  A different type of problem is a “false positive,” which is when a legitimate charge is denied.  After having my credit card denied when trying to check into a hotel, I wished credit card companies would do more to help customers recover from these false positives. It was my Tangerine credit card that wouldn’t allow the hotel charge.  Tangerine certainly could have done more to prevent this problem and to make it easier for me to recover from it. I alerted Tangerine to the dates I’d be traveling and the country I’d be visiting.  I certainly could have given more detail, but all they wanted was “USA.” With more detail, maybe they could have seen that the hotel charge was legitimate. The bigger problem was their response as I tried to fix the situation.  I called Tangerine customer service, but there was no option for “you denied a legitimate purchase.”  The closest I found was an ...

I reviewed Tim Geithner’s book defending his actions during the financial crisis: Stress Test Here are some short takes and some weekend reading: Robb Engen explains how to get lots of inexpensive life insurance. The Blunt Bean Counter explains the steps of a year-end financial clean up.  Big Cajun Man shows how to guess someone’s salary from the date they stop paying CPP for the year.