“The pain of discipline is far less than the pain of regret.” -Sarah Bombell
“If you want something different You Gotta do something different.” – Nathaniel Williams
We love to read and share – here’s some notable things from the last week covering life, investing and financial planning.
Perspective
Your Choices to Make – gailvazoxlade.com – “Often when people look at the choices they must make, they focus on what they must give up. I have always kicked my own ass and turned my face to what it is I’m trying to achieve. In making the choices I make, it isn’t about what I won’t be able to have. I consciously choose to focus on what it is that I will be able to have.”
Investing
A Christmas letter from the fund industry – The Evidence-Based Investor – “2015 has certainly been challenging on the work front. We don’t mean beating the market — most of us gave up on that years ago — but the constant downward pressure on fees, the calls for greater transparency and the mounting evidence from all over the world that we, as an industry, extract far more value from the investment process than we add.”
New Year’s Play | Jason Zweig – “The lessons of the calendar are clear: The right time to invest is when you have cash to spare. The right time to sell is when you need the money or want to adjust the riskiness of your portfolio. Any other attempts at timing are no better than superstition.”
Wall Streets Biggest Lies – “And I think the big lie on Wall Street and in the financial-advisor community is a sentence that begins kind-of like this: “You’re going to need to earn higher returns so we’re going to buy you some of these…” Well, it doesn’t matter what you need. You could need a 20% return, you could need a 15% return, you could need a 10% return, but the stock market doesn’t know and doesn’t care what return you need.”
Say goodbye to your $10,000 TFSA, but here’s why it’s not so bad | Financial Post – “Is a $5,500 annual TFSA contribution as good as the $10,000 amount — which, incidentally, was not going to be indexed to inflation? Obviously not. But savers are still far better off than they were before the Tories gave us the TFSA in 2009, and it’s the most important elements of that legacy that live on.”
Diversification for Canadian Investors – it’s never too late! – “Of course now we are getting questions about whether perhaps it’s too late to try to diversify, or whether at this point one should stick around for the rebound and therefore stay concentrated in Canada. The evidence suggests that kind of effort to chase market returns is a sucker’s game. Diversify now and look forward to a better long term investment experience.”
The only reason to read annual market forecasts – The Evidence-Based Investor – “The media knows this (besides, how else are they going to fill all those pages when the markets are closed?) and, more to the point, so does the fund industry. It knows that the more predictions it makes, the more we’re going to turn our portfolios over. And the more we do that, the more fees the industry earns.”
Jack Bogle owns more bonds than stocks – MarketWatch – “I have reduced my equities a little bit this year, largely in view of the fact that I’m at a time in life when I am a little more interested in preservation than growth.”
9 Common but Terrible reasons to choose an investment | Chalten Blog – “There are some really good reasons to choose an investment. When we hear things like, “it’s low cost, liquid, diversified, fits with my risk profile and is complementary to my other portfolio holdings”, we shout bravo! Unfortunately we hear lots of other reasons that aren’t so good – here’s a selection”
Financial Planning
Reasons to Use Your Emergency Fund – Money We Have – “Saving isn’t very sexy, but at least you won’t stress out when it you need to draw on those funds in emergency situations.”
Emergency Fund – a good idea in all situations | Chalten Blog – “So again, we don’t like to think about the situations that might necessitate the use of an emergency fund and as a result many choose to ignore it in the same way they might ignore sensible life insurance, however it’s there to protect our families when we need it so is more than worthwhile.”
In light of the U.S. Fed hike, it’s time to revisit debt loads – “Above all, adjust your thinking on debt. Even with the rate risk muted here in Canada, we now have proof that interest rates won’t stay at current lows forever.”
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