Friday, December 12, 2014

Short Takes: All-Weather Portfolio, Credit Card Problems, and more

Here are my posts for this week:

Which Group RRSP Costs are Worth Paying?

Life Insurance: Permanent vs. Term

Money Rules for Investing

Here are some short takes and some weekend reading:

Barry Ritholtz says the “All-weather portfolio” from Anthony Robbins is based on the peculiarities of investment returns over the last few decades. Ritholtz believes his portfolio would be better over the next 20 years and offers Robbins a $100,000 bet based on whose portfolio gets higher returns. I have to agree with Ritholtz. The all-weather portfolio is very heavy in bonds, gold, and other commodities. It’s a very backward looking portfolio.

Ralph Nader explains why he doesn’t have a credit card. This thoughtful piece takes a 1000-foot view and puts the problems with credit cards into perspective.

Canadian Couch Potato explains why three funds following the MSCI EAFE index show very different returns.

Tom Bradley gives his take on the coming new mutual fund disclosure rules known as CRM2. It should be interesting to see what will happen when investors start seeing how much they pay for investment advice.

Justin Bender says that the benefits of Dividend Re-Investment Plans (DRIPs) is mostly a myth. There may be behavioural advantages from not letting cash accumulate and tempt people to spend, but there isn’t much difference between DRIPing and periodically investing cash. Personally, I treat accumulating cash as part of my emergency savings that I’d have anyway.

Jason Zweig explains very clearly how some professional money managers use different forms of “window dressing” to make their performance look better than it really is.

Robb Engen at Boomer and Echo has decided to switch from dividend investing to indexing. Among his reasons is his understanding of behavioural biases.

Mr. Money Mustache does a case study of a two-income family trapped in a high-cost life with full-time jobs they don’t want. I didn’t think the obvious improvements that occurred to me would make a big impact, but Mr. Money Mustache showed how to transform their lives.

Preet Banerjee starts up his podcasting again with an interview with Frank Wiginton who specializes in educating employees of various companies about finances and investing.

SquawkFox says impulse buying is the Achilles heel of saving money. She has a prescription for recognizing your weaknesses and dealing with them.

Big Cajun Man tweeted out a vintage post taking pot shots at financial bloggers. Here ‘s my addition: “Blogger process = navel gaze, extrapolate own experience to world.”

My Own Advisor gave a dividend income update that included the following quote: “Part of being an investor is making sure you do what you can to stay out of your own way.” This is so true, but I only understand it now looking back on past mistakes. I wasn’t at all aware that I was getting in my own way while I made the mistakes.

Potato (a.k.a. John Robertson) announced the official launch of his new financial book The Value of Simple. See my review here (but the associated draw is now over).

4 comments:

  1. Thanks for the inclusion, I did enjoy the responses from Kerry and Preet on Twitter with videos and everything! Have a tremendous weekend.

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  2. Thanks for the mention Michael. I have to believe you've done very well at staying out of your own way and limiting mistakes over the years.

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  3. Thanks for the mention, Michael!

    I said I would let you know when the book broke even, and it broke even this week!

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