Here are my posts for this week: Getting Fired Vanguard Shifts to Alternative Strategies April Fools? Not Really Here are some short takes and some weekend reading: Larry Swedroe gives brief and clear description of 10 common investor mistakes along with some realistic estimates of future investment returns. The Blunt Bean Counter explains CRA’s position on how to handle exchange rates for capital gains, dividends, and income. I was pleased to find that the way I do my taxes is acceptable to CRA. Whenever I make a trade in U.S. dollars in a non-registered account, I enter the amounts in a spreadsheet along with that day’s exchange rate from the Bank of Canada. For dividends and interest income, I just use the average exchange rate for the whole year. Big Cajun Man has a cautionary tale about a bank’s mistakes when setting up a student line of credit. My Own Advisor has a guest post with interesting takes on some of the crazy things people say about money. Boom...

My previous post about Vanguard’s seeming departure from index funds was written to seem like an April Fools’ joke, but it wasn’t. All this information came from their SEC filing for the Vanguard Alternative Strategies Fund . Vanguard will still have their familiar index funds, but their lineup will also include this much more “exciting” fund.

The long-time pillar of index investing, Vanguard, has decided to embrace alternative strategies with a new Vanguard Alternative Strategies Fund. In this departure from the mission of founder and retired CEO, John C. Bogle, Vanguard plans to short equities, trade currencies, and trade in commodity-linked investments. While Vanguard is known for rock-bottom fees like 0.05% per year, the new fund is expected to cost a whopping 1.10% every year. This is cheaper than some competing alternative strategies funds, but is very pricey for Vanguard. Over 25 years, this amounts to a total cost of 24%. Some of the other strategies Vanguard intends to use include trading in options, foreign currency exchange forward contracts, commodity futures, Treasury futures, and swaps. This new direction will no doubt come as a shock to some long-term Vanguard investors.

I’ve worked in high tech for a long time now and have lived through many rounds of layoffs. I’ve noticed that employees generally handle the possibility and reality of getting fired quite poorly. ( Disclaimer: No, I didn’t just get fired. In fact, my employer of several years seems quite happy with me. But that could change any time. ) Possibility of Getting Fired Employees are mostly complacent about the possibility of getting fired. That is, until a colleague gets fired or their employer announces upcoming layoffs. Then most employees are nervous wrecks until it seems like layoffs are over. Then they slowly transition back to complacency. There are people who don’t follow this pattern, but most do. Whether they are in a period of complacency or fear, few employees do much to prepare for possibly being fired. If you force yourself to confront the reality of what would happen if you lost your job, it becomes self-evident that you need emergency savings and should limit d...

This week I wrote only one post on the reason why trying hard at picking stocks isn’t likely to benefit most investors: Trying Hard at Stock Picking Doesn’t Help Much Here are some short takes and some weekend reading: Justin Bender reports that when RBC Direct Investing tracks the book value of its clients’ holdings, it isn’t converting each transaction into Canadian dollars as required by CRA. Justin doubts that most DIY investors are making proper currency adjustments. Am I one of the few people who looks up the Bank of Canada daily exchange rates to get my taxes right? One thing I’ve never understood is why the Bank of Canada limits their daily exchange rate data to the past 10 years. Why not just give us access to all the data they have? The cost of the extra storage would be a tiny fraction of a penny. Preet Banerjee has a video explaining all the different costs that come into play when you sell a house and buy another one. His conclusion: stay put as much as pos...

In a post that inspired many debates among commenters, My Own Advisor asked why we should bother to buy individual stocks at all . In a rebuttal to indexers, one commenter, Pullingmyselfup, asked the following question (lightly edited): “Why is investing the only job, hobby, or activity where people are told not to try?” It’s true that indexing proponents discourage people from trying to pick their own stocks and suggest they just buy an index of all stocks. Golfers can improve through training and practice; why can’t stock pickers improve? The truth is that we can improve our abilities to analyze stocks. But investing offers an alternative not available to golfers. Imagine if you had the option to receive the average prize at the next professional golf tournament without doing anything at all. Instead of hoping for some natural golf talent, buying equipment, spending years building skills, and traveling to tournaments, you just sit on your couch and collect the average pla...

Here are my posts for this week: The One-Page Financial Plan What Interest Rate is Your Annuity Paying?  Here are some short takes and some weekend reading: Dan Hallett reports that many financial advisors are churning their clients’ assets into Deferred Sales Charge (DSC) funds ahead of the new CRM2 regulations that force disclosure of costs. DSCs are a way for advisors to get paid up front whether clients stay invested for the long term (at high yearly fees) or pull their money out early and pay a penalty. Patrick at A Loonie Saved makes a good point about how someone wanting to mislead with statistics can shop for time periods that support a particular conclusion. The Blunt Bean Counter reminds us that with low oil prices, now may be the time to look into tax planning with flow-through limited partnerships. Canadian Couch Potato looks at the merits of preferred shares. My Own Advisor takes a run at a list of questions most investors don’t ask themselves. ...