Friday, June 5, 2020

Short Takes: Ken French Interview, Tighter Mortgage Rules, and more

Over the past two weeks, I started four different posts, but they were all leaning too negative to publish. It’s tempting to write about the various types of bad financial advice I see, but it’s better to hold up examples of good advice. Hopefully, I’ll have something to say in the coming fortnight.

Here are some short takes and some weekend reading:

The Rational Reminder Podcast interviews Professor Ken French of the well-known Fama-French 3-factor asset pricing model.

CMHC is tightening their mortgage rules as of July 1. One change is to reduce the Gross and Total Debt Servicing ratio limits to 35% and 42%, respectively. These percentages still seem very high to me. I would never want to live that close to the edge.

CDIC has extended their coverage to foreign cash and term deposits of more than 5 years. Unfortunately, the coverage limit remains $100,000, where it’s been for 15 years.

The Blunt Bean Counter explains financial and estate issues with blended families.

Moshe Milevsky argues that COVID-19 has increased uncertainty in how long we’ll live, and that this increases the economic value of annuities. This makes sense. The risk of dying soon is higher, and it seems plausible that the dispersion in our remaining lifetimes is higher. However, the Canadian annuity market remains opaque and without options for indexing to the Consumer Price Index (CPI).

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