Short Takes: Empty Return Promises, Asset Allocation ETFs, and more

I came across yet another case of a furious investor whose advisor had promised a minimum return, but the portfolio lost money.  There is a lot wrong with this picture.  On the client side, they often believe that advisors have some meaningful level of control over returns and that advisors can somehow steer around bear markets, which is nonsense.  Advisors can choose a risk level.  The only way to guarantee a (low) return is to take little or no risk.  On the advisor side, I can only assume that many advisors are under so much pressure to land clients that they make promises they know they can’t keep unless they get lucky.  All the while, the management above these advisors know full well what is going on.

Here are my posts for the past four weeks:

Giving With a Warm Hand

The Case for Delaying OAS has Improved

Here are some short takes and some weekend reading:

Robb Engen at Boomer and Echo sings the praises of Vanguard Canada’s Asset Allocation ETFs.  Owning these ETFs is a great way to invest.  If only investors could focus on how many ETF units they own instead of the day-to-day price quote.

Squawkfox warns us about the downside of rewards programs.  “Canadians should be wary of loyalty programs — not enticed by them.”

New research shows that happiness increases for incomes up to $500,000 instead of only $75,000 as previously believed.  In this case, what I find interesting is how widespread the news of the $75,000 limit on happiness travelled.  Because most people make less than $75,000 per year, we tend to like the news that richer people aren’t happier, and news outlets make more money when they report news we like.  This is why I tend to be suspicious when a news story tells me something I’m happy to hear.

Justin Bender explains foreign withholding taxes on emerging markets ETFs.