Friday, November 6, 2020

Short Takes: Simplifying Investing, Owning Bonds, and more

My printer saga from two weeks ago ended with me replacing my HP thing (is it a printer if it doesn’t print?) with a Brother laser printer that a family member no longer needs.  The only amusing part of the installation is that the default printer driver caused black and white to be reversed so that every printed page was almost solid black.  It’s all fixed now after some wrestling with printer drivers, but the test pages drained all the toner.  I guess that works well for whoever sells toner.

Here are my posts for the past two weeks:

The Elements of Investing

Owning Today’s Long-Term Bonds is Crazy

How to Really Ruin Your Financial Life and Portfolio

Your Money’s Worth

Here are some short takes and some weekend reading:

Robb Engen at Boomer and Echo describes how he invests his own money using VEQT.  The big advantage of his approach is its simplicity.  It makes sense to spend some time figuring out how you’ll run your portfolio.  But for most of us, once we have a strategy, we’d like to spend as little time as possible maintaining it.  Robb definitely achieves this goal.  It’s tempting for me to simplify my portfolio using VEQT, but the amount I save using U.S.-listed ETFs and making careful asset location choices saves me an amount each month equal to a little less than 4% of my current retirement cash flow from my portfolio.  The modest amount of extra work is worth it to me to keep this money.  As I spend down my portfolio in retirement and the savings decrease, I may revisit this decision.

Jonathan Clements looks at the different possible reasons for owning bonds and ends up at the same conclusion I came to for retirees.

The Rational Reminder Podcast has an interesting interview with Moshe Milevsky.  On the 4% rule, Milevsky gave a very easy to understand explanation of why it makes no sense to be inflexible in your planned annual retirement spending.  It occurred to me, though, that this criticism doesn’t necessarily carry over to William Bengen’s work that led to the so-called 4% rule.  Even if you plan to be flexible in your retirement spending in case your investment returns don’t match expectations, it makes sense to do some backtests to check the likelihood that you’ll have to make painful spending cuts.  So, you may choose to see how an inflexible plan might work out, even if you plan to be flexible.

Doug Hoyes explains what joint debt means in this short video.  Hint: if you cosign for someone else, you’re not “secondary” and your liability isn’t limited to 50% of the loan.  If payments aren’t made, the lender will come after you if you seem to be a better bet to get the money back.

Morgan Housel
asks himself a few tough questions.  These interesting questions could be about investing or just about anything else.

Rate Spy takes a swipe at the big 6 banks for trying to trick people into renewing mortgages at rates 3 percentage points higher than they can get elsewhere.  They have an actual renewal letter and lots to say about it.

Canadian Couch Potato gives us some ETF pairs for tax-loss selling.  This allows ETF investors who have investments in taxable accounts to defer capital gains taxes.  In my case, it’s been a while since I added new money to my taxable accounts because I’m retired.  My ETFs have built up some capital gains so that even when the markets dip, the ETFs don’t go into a loss position.  So, I can’t do any tax-loss selling.

Tom Bradley at Steadyhand
explains why you shouldn’t believe everything you see on TV when it comes to investing.

The Blunt Bean Counter says that there may be a silver lining to the COVID-19 cloud for small businesses: a better price for an estate freeze.


  1. Hi Michael, thanks for the mention and I appreciate your comments on simplicity versus cost savings. Definitely not an easy decision.

    Adopting the U.S. listed ETF approach now would mean moving my RRSP (again) from WS Trade to a broker that would allow same day Norbert's Gambit, otherwise all cost savings could be lost to opportunity cost / currency movements.

    Furthermore, at this time I will be withdrawing dividends from my business rather than taking a salary, which means no future RRSP room (for now, but that may change) and less opportunity for cost savings.

    1. Hi Robb,

      It all comes down to the cost numbers, including valuing one's time. In my situation, the costs tip the decision in one direction, but in yours, the other direction.