Before we jump into this week’s collection of articles, a quick reminder to those who wanted to hear Larry Swedroe speak in Ottawa that the talk is scheduled for Monday, June 20, 2011. I’ve already sent you an invite via e-mail. If you haven’t received it, let me know and I’ll resend it.

The TSX is now officially in correction territory and investors are naturally nervous about the stock market. I have no idea whether stocks will continue to fall or will rebound sharply but recall that in the spring of last year, the market was worried about the debt situation in Greece but it went on to stage a vigorous rally in the Fall. The point is since we don’t know what the future holds, we should try and stay the course as long as we have an sensible investment plan that we are comfortable with and we have enough savings put away to tide us over tough times.

  1. In a recent article in The New York Times, Richard Thaler explores the annuity puzzle — the reason why more people don’t buy annuities with a part of their retirement portfolio.
  2. In his recent column, Avner Mandelman urges investors to take their computer security seriously by entering hard to guess passwords and changing it frequently.
  3. Million Dollar Journey featured a guest post that offered a primer on money market funds. These days I find parking money in high-interest savings accounts at discount brokers to be equally convenient.
  4. Money Smarts Blogs says that while Group RESPs may be a very convenient way to set up a RESP, there are better alternatives.
  5. Canadian Personal Finance Blog offers a few tips on what not to do when attending a job fair.
  6. I’ve been following the Sino-Forest (TSX: TRE) saga of late. Sino-Forest is a China-based forestry company whose stock has plummetted from $19 to $3 in wake of allegations that the company is a fraud by a short seller. Blessed by the Potato, who was unfortunate enough to own the stock, explains the homework he did before purchasing the stock. The smart folks at Canadian Money Forum weigh in with their opinion on the latest Sino-Forest developments in this thread.
  7. Pretty much the first mistake I made as an investor was buying a venture capital fund for the tax breaks. The investments turned out to be total dogs even after accounting for the tax break. The Blunt Bean Counter reminds us of other situations where avoiding taxes results in other unpleasant side effects. Michael James picked up on the theme and offered one more example of being penny wise and pound foolish.
  8. The David Sokol affair may have somewhat dimmed his lustre somewhat but Warren Buffett remains an investing legend. Financial Uproar put together a list of videos in which Warren Buffett shares his wit and wisdom.

That’s it for this week. Have a great weekend everyone.

And for the Dads out there, Happy Father’s Day!

This article has 6 comments

  1. Thanks for the link CC. I think I bought the same VCF, I am still only allowed to sell a certain number of shares a year, a constant reminder of that mistake.

  2. All the ECB did last fall was “kick the can” that is the Greek sovereign debt crisis / Irish banking liquidity crisis / Portuguese sovereign debt crisis further down the road. Today is the “further down the road” part where they either have to kick the can again, or else finally meet the problem head-on.

    I have no illusions that the Irish and Portuguese situations will not re-surface at some point. And from what I understand, Spain and Italy are still both in danger of sinking under their debt loads as well – they’re definitely not in the clear yet.

    Closer to home, I think some US states and Canadian provinces may go bust. Whether it’s sooner or later, I don’t know but they can’t run budget deficits and refinance their debt forever. I suspect that when interest rates some day goes up, that is what will separate the men from the boys.

  3. Great roundup – I liked Bean’s article too. I was a big LSIF fan back in the day (for a little while). 😉

  4. I’m not sure why more people don’t buy annuities, but my own experience with insurance salespeople hasn’t exactly been pleasant. Hopefully my experience has been atypical. Thanks for the mention.

  5. Great links. I always look forward to reading your Friday post.

  6. @The BBC, @MoneySmartsBlog: Fortunately, I was able to redeem the units I had purchased. I guess I should count my blessings. 🙂

    @Phil S: It is indeed looking pretty grim out there. I can’t think of a major economy without problems. China, which was hot for so long seems to be cooling as well. That doesn’t bode well for a commodity-driven economy such as ours. Having said that, for all I know, all this information may already be baked into asset values.

    @Michael: Apparently, there isn’t all that much commissions to be had in straight annuities, so it is possible salespeople incentives are a factor.

    @Cal: Thanks for your note.