Weekend Reading – Great Aeroplan changes, hitting financial independence, Brookfield Asset Management news and more!
Welcome to my latest Weekend Reading edition where I share some of my favourite articles from the week that was across the personal finance and investing blogosphere.
If you missed last weekend’s reading material on the big tech boom (making many people wealthy) check that out.
This week, I found articles about Aeroplan, nailing financial independence in your 30s, the parent company Brookfield of Brookfield Property Partners (BPY, BPY.UN) making an offer sheet (and what to do about it), how to calculate your adjusted cost base (in a taxable account of course), an update on our Canada Pension Plan investments, and more!
Enjoy and see you on the site!
I offered some looks into the future with this post recently – what does our post-pandemic future look like?
Liquid Independence from Freedom Thirty Five Blog has hit his crossover point before age 35 – see below! Congratulations on reaching your goals!
Wondering how to calculate your adjusted cost base? Million Dollar Journey has you covered.
I enjoyed Mike’s take (aka The Dividend Guy Blog) on the Brookfield Asset Management offer sheet to tender Brookfield Property Partners (BPY.UN) shares – although with his investing thesis on the BPY.UN company itself. You can check out his short YouTube video on this below. I hope to have Mike on the site for a feature in the coming months.
Nice to see Air Canada listen to the voice of their customer and revamp their long overdue Aeroplan program with a bunch of great changes. Here are the highlights as I see it:
- With family sharing the points – they will add up. As of November 8th when the program launches, up to eight family members can pool their points for redemption.
- The combination of points and cash will be available for all flight rewards. Also, you will be able to book every Air Canada seat, in every cabin class, with points.
- Use your points for perks during travel – like upgrading to a higher cabin class. (We hope to do that in the coming years for some major international trips.)
- With the new program, points will cover the cash surcharges on flight rewards with Air Canada, so there will be more transparency at time of checkout.
- Earn status without flying – since come January 2021 “Everyday Status Qualification” will become a permanent feature of the revised program.
- Flight rewards will be booked right at aircanada.com or on the Air Canada app – simple as it should be!
Also, recently effective July 20, 2020, Air Canada / Aeroplan started waiving the current expiry provisions so that you will have an additional 6 months added on to the points expiry date. So long as you keep your account active (and I will), points won’t expire at all – and staying active is as easy as earning or redeeming a single point within 18 months.
I’m striving to have a 6-figure Aeroplan points balance soon that should be worth a few trips or a nice long-distance business class flight in a few years. Onwards and upwards!
Our Canada Pension Plan (CPP) investments are doing rather well I think, with a 10-year return of over 10% from the article I read.
- “Net assets increase by $24.8 billion
- 10-year net return of 10.7%
- $22.9 billion in net income generated for the Fund.”
My friends at 5i don’t believe gold is going back under $1,700 – again. Read on here!
Reader question of the week (adapted slightly for the site)
What’s your take on bonds these days? I recall you don’t own them anymore based on this asset location post and how to invest in various accounts? Thoughts?
Thanks for your readership and question.
Interestingly, I got a few emails from readers about this over the last couple of weeks. I don’t know if that’s because it’s the gold run-up, the tech-stock boom of late or other, but folks don’t seem to be fans of bonds these days.
Here are some snippets from other reader emails to me on this subject before my answer:
“I don’t understand the purpose of cash except for monthly contributions for short periods.” On bonds:
“Why own bonds at near zero return? Especially if you pay a MER.”
“Mark, I own a few one and two-year GICs and 6-months of expenses in cash. I’ve been retired for 10 years and I live off part of my dividend income. I see absolutely no reason for bonds at these prices or rates for the coming 30 years. Good luck to people who own them!”
“I figure if I have a long investment time horizon, as in decades, beyond some cash I see no reason to hold bonds. I’ll just buy equities over time thanks very much.”
Cool insights. When it comes to my answer, I think you should consider owning bonds for these key reasons:
- If you need help with your investing behaviour – bonds can help – riding out stock market volatility.
- Bonds can be used to rebalance your portfolio; to keep your portfolio aligned to your investing risk tolerance (say 70% equities and 30% bonds). Buying bonds or selling bonds can help you adjust your asset allocation back to its target.
- Bonds can actually be used for spending purposes – when equities have tanked and you don’t want to sell stocks at tanked prices for your living expenses.
- They may help protect against deflation – since inflation is a killer for bonds long-term.
The main reason I would keep any bonds (and I don’t right now) in my portfolio is if you’re saving for a major purchase in a few years and would like rely on some form of fixed income between now and then to help with that purchase. Otherwise, an interest savings account in the short-term will do that and GICs in retirement with a bias to stocks should work just fine.
I absolutely believe you should learn to live with stocks for long-term wealth building.
You can also read up about my plan to own this much cash in our upcoming semi-retirement, and how I’m striving to structure my portfolio for continuous income in the coming years.
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