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moneysense.ca, 26/07/07
This and That
- The biggest news this week is of course the plunge in stock markets. There was no place to hide – Canadian, US and international stocks all fell sharply. I don’t know if this is a short sharp correction or the beginnings of a bear market but it is important to remember that stocks move both up and down. In that spirit, Money.com offers tips to survive falling stock prices.
- The Vanguard Europe Pacific ETF (Ticker VEA), which tracks the MSCI EAFE Index started trading today. I’ll be replacing EFA (MER is 0.35%) with VEA (MER of 0.15%) in our personal portfolios.
- Jon Chevreau wrote a column in The Financial Post about a survey that showed that 70% of Gen Xers have a savings plan. The survey is interesting because it contradicts Statistics Canada data that only 55% of Canadians aged 25 to 34 have some sort of a pension plan. Only 43.5% have a RRSP and the median value is just $7,500.
- Rob Carrick reports on the nominal reductions in MER by various mutual fund companies. While any reduction in fees is to be welcomed, it is hard to get excited about fee cuts of 0.1% when the MER is 2.5%.
- As part of her Money 401 series, Toronto Star columnist Ellen Roseman explains the factors that affect automobile insurance premiums.
moneysense.ca, 26/07/07
[...] Roseman explains the factors that affect automobile insurance premiums. article continues at Canadian Capitalist brought to you by insurance and [...]
I’m glad VEA is finally here since I’ve been waiting to convert my rrsp to ETFs until it I could buy it.
Mike
This morning’s radio news said that the carry trade is unwinding. Meaning that people who borrowed money in Japan at 1% interest rate to buy investments in Canada or the USA have been dumping their investments in order to pay back all the money they borrowed in Japan. That also explains why all of our currencies are tumbling vs the Japanese Yen. So, in general, it seems as though all of the risk averse traders are now stampeding for the exits.
For me, although the market plunge has been painful as I’ve lost maybe $20K from my net worth just this week… I’ve had 30% of my portfolio in cash and short term securities. As a result, I’ve found the markets to be overpriced and have been waiting for a significant pullback just like the one we’re starting to see – even after this week’s pullback, I still wouldn’t say that there are any screaming bargains out there. The only real question is just exactly how many more “risk averse” investors are out there who will be hitting the “sell” button? I think we’re going to reach the point where we’re going to, as the expression goes, separate the “men from the boys”, an inflection point as technical traders might say.
Just wondering how you get the MER and other info on the ETF’s you use in your portfolio’s. I’ve tried the globe and mail, and internet searches but I can’t seem to find a goot ETF research site..
Eric: MER data on Canadian iShares can be obtained from http://www.ishares.ca/.
For US-listed ETFs, I use the ETF Connect website or those of the providers themselves: Vanguard and iShares.
I can’t remember the source, maybe a book or an online article, but it mentioned the fact that markets swing up and down, and you really only gain or lose when you crystalize that gain/lose by selling. So the value of your portfolio on a random day is irrelevant unless you plan on selling then.
Heck, don’t sell, buy more, you owned it before, own more! It’s on sale!
Why worry, be happy. -McFarrin.
If you are a Canadian citizen who buys US ETF’s, are you not subject to tax withholding on the dividends? If so, would this not complicate the mer comparison between US ETFs and Canadian based ETF’s? I am an American, so I know my question is probably common knowledge to you.