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moneysense.ca, 27/08/09
This and That: Money Mistakes and more…
- Our emotions play havoc with our investments. We hold on to losers too long hoping they would break even, confuse luck with skill and allow hindsight to play tricks on our minds. Meir Statman wrote a column in the Wall Street Journal about these and other investment mistakes we make, why we make them and what, if anything, we can do about it.
- It is very common to hear claims that portfolios dropped 40% (or whatever number) in the bear market. Such claims ignore the reality that a few asset classes — notably bonds — performed their role in providing ballast to a portfolio, says Tacita Capital’s Michael Nairne (via Wealthy Boomer).
- Tax expert Tim Cestnick penned a couple of columns the drawbacks and opportunities of tying the knot from a tax perspective.
- The Star’s Ellen Roseman has tips for Canadian investors interested in Florida real estate.
- Larry MacDonald reports that policymakers are considering changes to money market funds that could make these funds less attractive to investors.
- Kathryn wrote a guest post on whether rewards points are worth the trouble.
- Michael James feels that the prevailing rules for estimating the maximum mortgage a homeowner can afford leave little margin for error.
- Preet is trying his hand at video blogging and is giving away a copy of Benjamin Graham on Investing (watch for my review next week).
- The Globe and Mail’s Chaya Cooperberg debates the costs and benefits of a nanny.
- The Dividend Guy featured a guest post on saving money on travel.
Have a great weekend everyone!
moneysense.ca, 27/08/09
Thanks for the mention. The Statman article is quite good, although I’m not sure I agree that most investors are “neither irrational nor insane”. But, saying this probably draws more people into reading the article.
Thanks for the link CC!
On #1: For me, almost every stock I buy pays me to hold onto it – some sort of distribution whether it is a dividend or interest. So, as long as the credit quality stays relatively strong and they continue to pay, why shouldn’t I continue to hold it? That said, I do have a few stocks that suspended distributions and dropped 90% of their value because of it, but that’s what happens in a recession. I’m still not too worried as long as they remain solvent, they will rebound when economic conditions improve. It just doesn’t make any sense to sell them because I don’t have any more capital gains to write off and I still like their business.
On #4: I recently had a long lunch conversation about that subject. The advice given to me was that if I’m only planning to buy a place where I’m going to spend 2 or 3 weeks of vacation a year, it makes absolutely no sense to buy a vacation property – I’m better off just booking a hotel or resort. The only time when it might even START to make financial sense is if you or your family spend at least 6 months of the year in your vacation property…
@Phil: I’m not a huge fan of vacation properties either. It’s not just the expense — I’m pretty sure that I’ll be spending even more free time on maintaining another property. Of course, those who love that sort of thing would beg to differ but I’d rather take a nice vacation every year.
Thanks for the link CC!