Canadian Personal Finance News | January 2015

Instead of listening to the gurus this year, try a different tactic. Build a portfolio with a mix of stocks and bonds based on your ability, willingness and need to take risk. On the equity side, hold Canadian, US, international and emerging markets stocks at all times, and don’t try to guess which will be next year’s winner. With your fixed income, choose bonds or GICs according to your time horizon and your tolerance for volatility, not based on where you think interest rates will be next year.

“Investment wisdom begins with the realization that long-term returns are the only ones that matter.” – William Bernstein Now that 2014 is in the books, I’m starting to see the usual flood of annual performance reviews to show what worked … Continue reading →

In late 2014, the federal government introduced enhancements to the Universal Child Care Benefit for Canadian families. This video explains the changes, and shows how and when the increased benefits will be phased in.

Following my last post on the historical performance of long-term treasuries, a few people asked me if I was implying that bonds have no place in a portfolio at these interest rate levels. That was definitely not my intention. Even at ultra-low interest rates around the globe, bonds deserve a place in a portfolio for a number of reasons.

Call off the hounds: I have finally updated my model Couch Potato portfolios for 2015. Full details appear on the permanent Model Portfolios page, but here are the new versions in downloadable PDF format: Option 1 - Tangerine Investment Funds Option 2 - TD e-Series Funds Option 3 - Vanguard ETFs You'll notice some significant changes this year: I have dropped the Complete Couch Potato and Über-Tuber from the lineup.

"Plans are useless, but planning is indispensable," Dwight D. Eisenhower once said. He was talking about planning military battles, but his point is instructive for finances, too. This is because people have to be flexible when it comes to their actual plan, because circumstances can change.

Last week, a conversation with a friend reminded me how easily we can confuse actual risk with our own exposure to that risk. My friend travels a lot for work, and I asked him where he planned to go this year. His answer surprised me. "I don't know," he replied.

Research Affiliates' Chris Brightman is out with a piece dealing with their return expectations over the next ten years. In the course of making their assumptions, RA takes a look back at the last ten years and calculates the annualized return of a classic 60% equity / 40% fixed income portfolio versus 16 pure asset classes on their own.

Sometimes you find clues of your kids' financial education progress in the strangest places. "Dear Santa" - began my seven-year-old daughter's letter, published in our local newspaper - "May I have more money? I will save it to buy a house or car." (I know. I still can't believe she wrote it, either.)

It's been 6 months and 20 days since I started my yearlong shopping ban. That's 204 days of not buying clothes, shoes, books, notebooks, electronics, household items, nail polish... or takeout coffee (other than when I'm travelling).

If you live in a big city, you can save a few cents per litre on gas by travelling to the boonies. But you also understand that it doesn't make sense to burn $10 of fuel driving out of town so you can save $8 on a fill-up.

Last week you read that upon your death, you are deemed to have disposed of your assets for income tax purposes (unless you leave them to your spouse). Today, you'll get a closer look at these rules.

A recent Fidelity poll of financial advisors found that their biggest worry right now is rising interest rates over all else. It's ironic that so many people are worried about rising rates when all rates continue to do is fall.