Raghuram Rajan has a very interesting essay on why the west can’t borrow and spend its way to recovery. He argues that for decades our prosperity has been driven by increasing debt and that this is unsustainable; we have to find a path to real growth. Hat tip to the Stingy Investor for pointing me to this one.
Larry Swedroe has an excellent way to explain the problem with not owning enough stocks: “a few big winners (e.g., Google) cause the average return to be above the median return. As a result, there are more stocks that have below ‘average’ returns than there are stocks with above ‘average’ returns. This makes the purchase of individual stocks a loser’s game.”
Tom Bradley at Steadyhand has a very interesting list of 5 things that need to change in the wealth management industry.
Canadian Mortgage Trends gives a thorough discussion of Flaherty’s musings about privatizing CMHC. I don’t know enough about the issues here to have an opinion one way or another, but I am skeptical of CMHC’s stress tests that “imply a 1 in 200 probability of insolvency.” I just don’t believe that this can be measured accurately.
Canadian Capitalist reports that RBC Direct Investing is simplifying its administration fees.
Preet Banerjee launched a new weekly podcast series called Mostly Money Mostly Canadian. I love the cartoon image of Preet.
Million Dollar Journey’s latest net worth update is filled with conservative accounting. It make sense to be conservative with the value of your home or pension, but I have to wonder if he’s just trying to put off the day when he hits a million dollars and has to shut down his blog :-)
Big Cajun Man wants to start a new television show to dish out tough love to people who use payday loan services. Do we get to hit them with bats, too?
My Own Advisor explains why he wants to have a $10,000 emergency fund. This in combination with access to some available credit seems like a good idea.
Retire Happy Blog highlights the differences between pension splitting and CPP splitting.
Canadian Couch Potato reviews Alan Fustey’s book on the shortcomings of financial models.
Money Smarts says that to truly win a house bidding war, sometimes you have to walk away.