Friday, September 25, 2009

Short Takes: Sideline Money, Emotional Bond Investors, and Pointless Pennies

1. Rob Carrick reports that Canadians have too much money in low-yield savings. He says that with $65 billion in money market funds and another $60 billion in savings accounts, people are “missing a chance to participate in the stock market recovery and they're wasting opportunities to pay down debt.” I definitely agree with the paying down debt part. Unfortunately, cash on the sidelines has already missed a big part of the stock market recovery.

2. Canadian Capitalist points out that it is not just stock investors who underperform indexes; fixed income investors get lower returns than the bond indexes as well.

3. Big Cajun Man has a video from 1985 explaining how pennies are a waste of time. It’s sad that we still use pennies even though they’ve been near worthless for a generation.

4. Larry MacDonald reported on new research into mutual fund fees (although for some reason the post seems to have fallen off his blog). The authors of the paper The Relation between Price and Performance in the Mutual Fund Industry claim that funds with worse before-fee performance tend to charge higher fees than better-performing funds. One explanation they consider is that poor funds spend more on marketing.

5. At Where Does All My Money Go?, guest writer Daniela Garritano has some tips on maximizing the sale price on your home.

6. If you’ve ever had to pay income tax in instalments, you likely found the three options for the amount that you have to pay confusing. Million Dollar Journey explains the three options for income tax instalments.

7. Canadian Financial DIY brings us some research indicating that financial advisors do not bring enough value to offset the fees they charge.

8. Moneygardener has an amusing rant about pundits incorrectly predicting that the stock market recovery would falter. I suppose they will be right eventually, but who knows how far stock prices will rise before they falter.

6 comments:

  1. Thanks for the mention have a wonderful weekend.

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  2. Thanks for the link! Daniela has some good points as usual. Have a great weekend! :)

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  3. Thanks for the mention. I find it strange that retirement savings are counted as "spending" in Statistics compiled on the savings rate. Not sure why that is.

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  4. Installment payments are fun! ;) Thanks for the mention and enjoy the weekend.

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  5. MJ
    Regarding the missing post on my blog converning the research study on the relationship between mutual fund fees and performance, I removed it to put it in with a larger post that appears at
    http://blog.canadianbusiness.com/do-you-need-a-financial-advisor/

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