Weekend Reading – Healthy living, smart beta, ETFs as WMDs and #money stuff

Weekend Reading

Welcome to my latest Weekend Reading edition where I share some of my favourite articles from the personal finance and investing blogosphere.

Earlier this week I decided to share some random ideas about copycat investing – how it could make you wealthy eventually or how it could make you poor in trying.  Have you tried to follow another investor’s lead?  If so, how did that work out for you?  Instead of copying another investor, what have you learned from others in order to tailor your own financial path to freedom?

Enjoy these entertaining and informative reads and I’ll see you here again next week.

Last but not least – Happy Father’s Day Dad.  See you this weekend.

Andrew Hallam shared some keys for a wealthy life.  Although I enjoy running this blog and reading about money stuff ultimately I believe a wealthy life has absolutely nothing to do with money.

This article suggests many financial advisors are falling short on providing Canadians with adequate tax planning advice.  This includes tax management advice associated with assets inside RRSPs, RESPs, TFSAs and more.

This MoneySense article provided readers with an overview of smart beta funds.  In reading this article, folks might be surprised to learn about 1/3 of Vanguard’s total assets under management are actively managed.  I learned more about smart beta funds myself thanks to this Q&A with David Barber, Vice President of National Accounts at First Asset Management.

Are ETFs weapons of mass destruction?  Certainly not yet.

Budgets Are Sexy listed some reasons why he doesn’t own a house.

Investing guru Norm Rothery highlighted these (safer) dividend paying stocks of the TSX.  The list is below:

Safer Dogs

Some crazy but interesting stats from this Canadian Business article – Canadians’ household “wealth” is increasingly serviced by debt.  

Apparently Canada’s millionaire club is growing.

Thanks to Finance Blog Zone for including my take on the best type of investment.

Mark Seed is the founder, editor and owner of My Own Advisor. As my own financial advisor, I've grown our portfolio from $100,000 to well over $500,000. Our next big goal is to own a $1 million investment portfolio for an early retirement. Come follow my saving and investing journey by subscribing to my site. Delivered by Subscribe Here to My Own Advisor

14 Responses to "Weekend Reading – Healthy living, smart beta, ETFs as WMDs and #money stuff"

  1. Overall a nice list of stocks on the Safer Dogs, but Look at the 10 yr chart and dividend history of POW, & SLF. SJR.B has not increased their dividend since May 2015.

    Problem with “Safer Dogs of the TSX” is that they only look at Current Yield and a Short term.view. Investing should be viewed for the Long Term, Current Yield and Dividend Growth History.

    Reply
    1. @cannew
      I was noticing the same thing. There has been no growth for the past 10 years in those stocks. It’s a safe dividend for income only.

      I prefer to look at the chowder rule now. It’s also a simple concept that can include the parameters you describe.

      Reply
      1. @DE: Have you eliminated “Comments” at your site? I do visit often though I may not comment too often, but read and enjoy what others have to say.

        Reply
    2. True. If interest (ever) rise, dividends increases from POW and SLF will go along with it. Safer Dogs also has criteria – so some companies like CU, ENB, FTS and others don’t make the list. Own those ones myself 🙂

      Reply
  2. re: “…I believe a wealthy life has absolutely nothing to do with money.”
    I second that emotion, Smokey.

    re: “..some reasons why he doesn’t own a house.”
    For every opinion there is an equal and opposite opinion. I could list some reasons why I do own a house and how it’s increased my knowledge, skill, and financial wealth (among other things).

    re: “Canadians’ household “wealth” is increasingly serviced by debt.”
    I’d reword that to “Global wealth…”, Canada just happens to be at the current apex almost 40 years in the making.
    The most ugly stat being “28 per cent borrowed [on HELOC] for debt consolidation”. That’s all kinds of bad for many reasons.

    re: “Best Types of Investments…according to bloggers”
    A solid reminder of why I no longer read PF blogs (other than browsing MOA’s curated selections; thanks for doing my heavy lifting). So much bias and misunderstanding and misinformation, even by some of the uber popular bloggers. Out of 48 responses, the most viable answer is from Todd Tresidder (Financial Mentor): “I don’t offer “top investment recommendations” because the question is based on a false premise…The answer to producing reliable investment results relies on investment process, not product”, a close second from Andrew Henderson (Nomad Capitalist) and Scott Bilker (Debt Smart): “The best type of investment is in yourself.” The rest trumpet (mostly) ETFs and index funds and real estate. Which leads me to think, with but a scant few “best investment” messages, why do we need so many (questionable) messengers? And with an ever growing rank of knowledgable seekers, why do we need the messengers at all?

    re: “Canada’s millionaire club is growing.”
    Sigh…we’d love to believe so because it’s more fun to keep the dream alive than to look at reality. From the analysis: “Private financial wealth includes cash and deposits, mutual funds, listed and unlisted equities, debt securities, life insurance payments, and pension entitlements…”. Thus if we remove the last two forms of calculated wealth — life insurance payments and pension entitlements — which are not ‘in-hand’ and not at all liquid, accessible, or investable, I’m quite sure Canada’s millionaire household rate would drop from 3.5% (485,000) down to the more realistic ~1% I put forth (we also mustn’t forget that a portion of that “growth” is from immigration). A more reasonable wealth report would be the Capgemini analysis, which reports a *reduction* of millionaire households (down 10,000 to 320,000; ~2%). Not only that, but 95% of Canadian millionaire households are valued at $5 million or less, with much of those hovering around the $1 million mark; a more precarious than robust clan. See, more fun to believe in the dream.

    re: “financial advisors are falling short on providing Canadians with adequate tax planning advice.”
    Is this at all surprising? Considering 99% of financial advisors (aka salespeople) have no legally binding fiduciary responsibility…and now you know the rest of the story.

    Reply
    1. Happy to do your heavy lifting… 🙂

      Interesting replies to re: “Canada’s millionaire club is growing.”

      I think the dream is alive and well thanks to house prices going through the roof. Otherwise I suspect we’d have a very different picture…

      As for the financial advivsor failing investors, not surprising at all. I wouldn’t use one unless it was fee-only but then again, my job here with the site is to full-on do my own DIY approach. That includes taxation considerations and estate planning. Hopefully I can pull it off 🙂

      Reply
    1. Agreed. There are others I would put on that list as well but the Dogs/Safer Dogs of the TSX has certain criteria.

      Happy long-term owner of those companies listed though.

      Reply
      1. That’s what I found with many specific strategies, that their criteria eliminated good stocks because they suddenly didn’t meet their criteria. Same with Chowder Rule, Dividend Arist, etc. What I eventually settled on was a List of stocks I’ve evaluated and decided they were the ones I wanted, regardless of Qtr Earnings, Econ conditions, or whatever. Then I bought them, hopefully at a good price and ignored all others. After 2008\2009 I loaded up on the banks when others were taking them off the list because they stopped increasing their dividend. I was getting 6%+ yield on the bank purchases and over time they recovered and started increasing again. In the mean time my average yield on cost was way up.

        Reply
  3. Hey Mark, I read a few of those articles about ETFs being WMD, there was one in the Financial Post recently, and it seems they’re speaking more about the derivative type ETFs that don’t actually hold the underlying stocks but instead track the index through derivatives.

    I find it hard to believe that any ETF that actually holds the stocks in the index they’re tracking can be dangerous. What are your thoughts?

    Reply
    1. Well, there are some ETFs that have very low tracking errors and therefore hug the index they track. I think the question then becomes for investors, should you own that particular fund that tracks a particular index? Certainly not all funds and indexes are created equal. Far from it!

      Reply
  4. Thanks for the shout, brotha!

    I once copied Warren Buffett and bought the same stocks he owned a handful of years ago. It went really well, but then again it was right after the crash and everything pretty much went well then 🙂 (Now I’m lazy and throw all my money into Index funds – so I guess I’m copying the FIRE crew?)

    Reply
    1. All good man.

      Lazy when it comes to investing is good – you know this. Indexing is not a necessarily a FIRE plan but I suspect the way you save and with your blog traffic, well, heck, you’ll get there sooner than most! All the best.

      Reply

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