Canadian Personal Finance News | November 2016

"At some point in their lives, investors may receive a large sum of cash, such as a pension payout or inheritance. Finance theory and historical evidence suggest that the best way to invest this sum is all at once according to an investor’s asset allocation. Many investors nevertheless choose to put the money to work over time, a systematic implementation plan that is commonly referred to as dollar-cost averaging. We explore the benefits of both strategies, quantify the costs, and reach three conclusions that can guide decision-making"

Double dipping is where “advisors” and/or their firms charge investors, with fee based transaction accounts, a fee on their accounts at the same time as taking commissions and other transaction returns on the underlying investments.  Since these accounts are meant to swap payment of transaction remuneration on securities held within the accounts for a simple annual fee that favours those with high levels of transactions, knowingly taking commissions and other transaction returns on investments held within these accounts would be a fraudulent act.

Introductory blog post from Justin Bender of PWL Capital for his series on building a DIY portfolio at any one of the major discount brokerages. Youtube videos are here: https://www.youtube.com/channel/UC3AXuQUdd-oBmMseUu2VFHg/featured

"The only way bond investors are going to earn higher long-term returns is if rates rise so they can reinvest maturing bonds or new funds at higher yields"

"This is not an exercise about what you want to spend on, or save for. Structure is all about mechanics… the actual moving from place to place. And it can’t be based on some ‘ideal way of using money’.

It has to be based on how you already use money.

By taking a look at your day to day behaviour you can build a process that actually makes your life easier… instead of trying to change your day to day behaviour to match the ‘ideal system’."

"But don’t compound your error by hanging on to an investment you never should have bought in the first place. Doing so is what gamblers call throwing good money after bad."

"The overwhelming sense with respect to many regulatory initiatives has become one of maintaining appearances"

"Diversification may be the only free lunch in finance, but it’s not magic."

"A bad year in the high quality, intermediate maturity bonds is typically the same as a bad day or week in the stock marke"

Maybe all that financial illiteracy the personal finance world keeps complaining about... is actually our fault. I think we're talking about money wrong.