Friday, January 27, 2012

Short Takes: Hedge Fund Disappointment and more

Blue Hedge Investments are shaking things up in the Canadian investment landscape.  I've had a few people express concern that I've either lost my mind or have sold out to scam artists. The web site is gone now, but trying to "INVEST NOW!" took you to a warning about investments that are too good to be true.

Larry Swedroe reports that hedge funds had another lousy year.

The Blunt Bean Counter warns that new rules could lead to punitive taxes for incorporated contractors who are declared “incorporated employees” by CRA.

Potato has some interesting thoughts on the debate about whether to prepare for financial emergencies with cash savings or a line of credit. He believes that it makes more sense to invest extra cash above one month of emergency savings. I think this depends on your situation in life. As many experienced tech workers with high-paying jobs found out a decade ago, your job can disappear and it can take years to find a new one at just 75% of your previous pay at the same time that your stock investments tank badly. I agree that emergency preparedness should be a combination of cash and a line of credit, but the appropriate cash amount can be very different from one person to the next. My cash buffer varies, but it is rarely under $20,000. When I was in my twenties, I considered a cash buffer of $1000 to be quite a lot.

Retire Happy Blog makes the case for low cost passive investing based on 20 years of experience in the investment industry.

Big Cajun Man is trying to coordinate the federal government and his bank to sort out his pension and RRSP savings. He’s only been at it for a couple of years, so he’s probably got a while to go yet before things settle down.

Million Dollar Journey answers some investing questions from a new grad just entering the job market.


  1. Thanks for the mention! I think you summed it up just right: I think keeping more invested and relying on a LoC is the more optimal strategy, but it's totally fair to be more conservative. It depends on your situation and your personality (for some, a large cash cushion is a needed security blanket, for others, an enticing abstraction just waiting to be turned into "emergency" consumption).

  2. @Mike: I thought the Blue Hedge bit was fun.

    @Potato: I'm not sure that I'm really being much more conservative with my $20,000 vs. a much smaller figure for a young person. I'm paying the way for 4 people, 3 of whom I'm paying tuition for as well. If I lost my job and stocks went south, I could be forced to sell very low. My financial obligations are much higher right now than they were when I was in my twenties.

  3. Thanks for the link Michael.

    Blue hedge - cheeky. ;)

  4. Thanks for the mention. Looks like winter finally arrived in Ottawa :)

    Will be back next week to see what you have in store.