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moneysense.ca, 18/12/09
This and That: Mark Carney’s wise counsel and more…
- In recent remarks, Bank of Canada Governor Mark Carney reminded Canadians of their responsibility to ensure that when current low interest rates are unwound, they can still service their debts.
- Globe & Mail columnist Rob Carrick asks the mutual fund industry to take the high road and give Canadians a break on fees, instead of simply whining about the HST.
- ’twas ever thus. Investors are once again chasing returns by stampeding into gold ETFs, while jewelers — you know, the guys who actually use the stuff — are dreading the increase in prices.
- We need more guys like Graham McMillan, whose tireless efforts were instrumental in shutting down the IFFL scam. Larry MacDonald finds out how Mr. McMillan broke up the Ponzi scheme.
- It sounds so harmless: a 2.5 fee to invest your money. Michael James has pictures to show how those fees drag down returns.
- Squawk Fox has some last minute gift ideas: books on money.
- Thicken My Wallet wrote a two-part post on the financial lessons he learned in 2009. Part 1 is available here.
- Kathryn is annoyed with retailers hitting you for a buck or two for their favourite charity. Instead, she carefully selects the charities she wants to support.
- Preet ran a scoop on the cell phone plans available from Canada’s newest operator: Wind Mobile.
- Paul Samuelson passed away this week. Larry Swedroe posted some words of investing wisdom from the noted economist.
I’m unable to highlight all the articles worth checking out in my weekly round up but you can check them out through my Twitter feed. Hope everyone had a great weekend!
moneysense.ca, 18/12/09







Thanks for the link Ram – have a great weekend and happy holidays!
As much as sites like this condemn mutual funds, because of the distribution channels they aren’t going away anytime soon. As Rob Carrick notes in his article, sales of mutual funds outside the money market category are near peak levels.
One of the four “P”s of marketing is place and ETF’s aren’t going to be recommended in the typical distribution channels (financial salespeople (aka advisors) and banks). For many who are entrenched in their ways, it is far easier to stay the course than to disrupt their relationship with their advisor and switch from mutual funds to ETF’s.
Fred
Thanks for the mention, CC. I think Fred is probably right that people who use an advisor to buy mutual funds will probably continue to do so. Maybe there is more hope for the generation just starting out with investing.
CC- Thanks for the mention. All the best to you and your family this season.
Hi Ram! Thanks so much for the linky mention. I do believe that many Canadians are waking up to the return-eating-fees charged by their mutual funds. With the explosion of new ETFs onto the market, I’d have to wager that there’s a market for a new type of investor.
Have an awesome weekend!
@Fred: Yes, there is no mass movement from investing in traditional mutual funds through an advisor to indexing yet. But more investors are figuring out the high cost of traditional mutual funds. And now there are advisors offering passive investment, so there is hope
I think your first link is broken. And I’d like to read it
Melanie: Thanks. I’ve fixed it but here it is anyway:
http://www.bankofcanada.ca/en/speeches/2009/sp161209.html
On the whole mutual fund issue, I’d have to say that if the financial advisor that was assigned to me by my employer in the Group RSP plan put me in mutual funds that didn’t continuously underperform… I would probably still be part of the general public that doesn’t really care too much about what investments I’m in…
About 15 yrs ago, I generally only looked over my statements every month when I received them and after a couple years of seeing my funds go down when the markets went down – then when the markets went up my funds still went down… That’s when I really started to ask a lot of questions and prompted me to eventually dump my mutual funds, dump my advisor, dump the Group RSP plan and grab hold of my own financial destiny.
As a result, I can actually kind of relate a bit to the apathetic crowd out there who just dump money into mutual funds set up for them by an advisor and never think twice about it – as I used to be one of them! It is easy to just want to “leave it to the experts”, so to speak, so that you can concentrate on your own career rather than to have to research and trade stocks and bonds and closely watch the direction of interest rates and inflation and all that stuff. I can imagine that activity while sitting on top of the stresses of a non-financial industry career, plus stresses on the home front and family and friends all taking its toll and making people want to just throw their hands up in despair and leave it to the so-called “experts”.
Thanks for highlighting Kathryn’s article!
Some great posts to review… thanks!
Thanks for fixing the link. I’ve never followed Bank of Canada publications before and I’m pleasantly surprised to see that it’s quite accessible.