Friday, April 17, 2009

Short Takes: Taxes on MERs, Energy Marketing Abuses, and Bogus Price Matching Claims

1. Wealthy Boomer continues the discussion of harmonized sales taxes on mutual fund MERs (the web page with this article has disappeared since the time of writing). Although he mentions both sides of this issue, by calling the HST a “wealth tax” in his headline, he is decidedly on the side of the mutual fund industry on this one. I just don’t see this as a wealth tax. The tax is applied to the outrageous fees charged by mutual funds and not investor portfolios directly. Investors can eliminate most of the MER and taxes on these MERs by dumping mutual funds and buying index ETFs.

2. Ellen Roseman is calling for a ban on door-to-door sales by energy marketing firms. She has been hearing many complaints about deceptive sales practices. I’ve had my share of liars at my door trying to trick me into buying an overpriced energy contract.

3. Big Cajun Man finds that some price matching promises from Best Buy and Future Shop aren’t worth much.

4. Four Pillars explains the dangers of post-claims underwriting (the web page with this article has disappeared since the time of writing). Many people don’t realize that for some types of insurance, the company doesn’t check if you qualify for insurance until after you make a claim. “Sorry ma’am, but your dead husband didn’t qualify for the life insurance he’s been paying for all these years.”

5. Larry MacDonald highlights the economic forecasts of two experts, one a bull and the other a bear. I don’t believe that either one of them knows what will happen in the short term.

6. Preet explains standard deviation of investment returns and how variations are large over just one year, but yearly returns tend to average out over longer periods.

7. MoneyNing shows the devastating effect of high MERs on portfolios using pictures.