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The Frugal Fund Way Norm's Articles Carl's Articles  Small-Fee Small Caps  Bargain Bonds  Dependable Dividends  Thrifty Trusts  Disciplined Value  Frugal Fixed Income  Striking the Right Balance  America For Less Than 2%  Mawer Canadian Equity  Mawer U.S. Equity  Median Mutual MERs Newsletter Archive Q1/6 Focus on ETFs Q4/5 LW Canadian Equity Q4/5 Saxon High Income Q3/5 Saxon Small Cap Q3/5 BG Income Q2/5 Trimark Canadian Q2/5 MB Fixed Income Q1/5 BG Canadian Intrinsic Q1/5 MB American Equity Q1/5 Mawer N.C. Closure Q4/4 Mawer Cdn Equity Q4/4 Mawer Balanced RSP Q3/4 Sceptre Equity Growth Q3/4 Saxon World Growth Q2/4 BG Small Cap Q2/4 Mawer U.S. Equity Q1/4 PH&N Cdn Growth Q1/4 Leith Wheeler US Eq Q4/3 iShares S&P500 Q4/3 BG Canadian Equity Q3/3 North Growth US Eq Q3/3 HSBC Mortgage Q2/3 MB Cdn Eq Growth Q2/3 Batterymarch US Eq Q1/3 Saxon Stock Q1/3 BG Balanced Q4/2 Mawer New Canada Q4/2 Perigee T-Plus Q3/2 PH&N Dividend Inc Q3/2 PH&N Bond Q2/2 Leith Wheeler Cdn Eq Q2/2 Perigee Diversifund Q1/2 PH&N Cdn Equity Q1/2 Mawer U.S. Equity	Article Archive An annuity can brighten your golden years Submitted by Norm 4:27 PM EST 08/19/06 Taxes "As Canadians get older, two of the biggest challenges we face are memory loss, and how to generate income. I can't help much with the first problem. But let me share an idea that might just result in more income for you in retirement. This idea is a cousin to the idea I shared in my article on July 15 that applied to those with holding companies. This idea is called a "back-to-back prescribed annuity" because it involves buying an annuity and insurance "back-to-back."" Uncle Sam wants you ... to file Submitted by Norm 1:50 PM EST 08/14/06 Taxes "When it comes to U.S. citizens living in Canada, many have bad memories -- or simply don't want to remember -- about tax obligations south of the border. Since there are so many of you, let me remind you of some of the rules you should be aware of." The bankruptcy boom is back Submitted by Norm 1:47 PM EST 08/14/06 Debt "A tough 2005 law initially slashed the number of filings, but the numbers are rising again because the root causes of unpaid debt were never addressed." Clients deserve to know annual rate of return Submitted by Norm 10:42 AM EST 08/05/06 Brokers "A Toronto financial consultant is leading a campaign to have investment companies fix a ridiculous deficiency in the way they show clients how much money they're making or losing." The time's come for full disclosure on return rates Submitted by Norm 10:40 AM EST 08/05/06 Brokers "Certainly, the vast majority of firms do not disclose to clients how much money their portfolios are making or losing each year. This is scandalous when you think about it and yet another example of how the investment world sometimes treats its clients like infants." Seeking sanity amid a market of ETF mania Submitted by Norm 10:38 AM EST 08/05/06 Indexing "There's a slightly crazed, peak-of-the-market feeling to the gusher of new exchange-traded funds being issued these days." Split share ownership can be a capital idea Submitted by Norm 10:36 AM EST 08/05/06 Taxes "Sharing can save you money, and particularly income taxes, if you're willing to share ownership. Let me explain." Index funds are more subtle than you might think Submitted by Norm 10:31 AM EST 08/05/06 Indexing "Some things are meant to be simple. The world really doesn't need purple ketchup, blueberry vodka or talking toasters. But if you're an index investor - a wonderfully simple investment strategy - it might be time to add new types of index funds to your portfolio. We're not talking about funds that track Andorran utilities or large-cap binocular manufacturers. But some index funds measure the market in more subtle ways than traditional index funds do, and they're worth looking into." Stay off the taxman's hit list Submitted by Norm 10:25 AM EST 08/05/06 Taxes "Last November, an Auditor-General report shed light on how the Canada Revenue Agency (CRA) chooses tax returns for verification, which can be helpful in assessing the likelihood that your return may be selected. Here's the highlights." Your small business has woes? Here's how to protect yourself Submitted by Norm 10:23 AM EST 08/05/06 Taxes "It's the same feeling many Canadians have experienced when investing in a small private business, only to be disappointed that the business has failed. You get your hopes up, then you realize the dream has fallen apart. From a tax perspective, what next?" Life insurance can be a saviour if you own a holding company Submitted by Norm 10:20 AM EST 08/05/06 Taxes "The truth is, life insurance can be an effective tool. Today, I want to look at a "corporate insured annuity," which can make sense for those with holding companies." Financial infidelity is rampant Submitted by Norm 11:59 AM EST 07/13/06 Thrift "Is it cheating if you lie about where the money went? Yep. And it's every bit as damaging to your relationship as the physical kind." Is seg fund security worth the high cost? Submitted by Norm 2:31 PM EST 07/11/06 Funds "In most cases a segregated fund will mimic a regular mutual fund. You name the asset class and it's likely there are several mutual fund companies with a corresponding segregated fund. When it comes to MERs, the difference between segregated funds and their twin non-segregated fund is often huge." Flow-through shares produce charitable bonanza Submitted by Norm 10:00 AM EST 07/11/06 Taxes "You'll also be entitled to a donation tax credit for the $10,000 value of the shares, which will save approximately $4,600 in tax. So, you paid $10,000 for the shares, got $4,600 back in tax savings from the deduction, and $4,600 from the donation tax credit, leaving a net out-of-pocket cost of just $800. That is, a $10,000 donation to charity cost you just $800. That's what I call charitable arbitrage." Protectednotes may leave you exposed Submitted by Norm 9:56 AM EST 07/11/06 Funds "Principal-protected notes (PPNs) have long been one of those "have your cake and eat it too" financial products that -- in my view anyway -- just didn't cut it for average investors." Bing's secrets to a happy retirement Submitted by Norm 10:43 AM EST 07/02/06 Retirement "The truth is, those who intend to have a happy retirement must deliver the goods on the human aspects of the issue as they do on the fiduciary ones. Unfortunately this takes the kind of cogitation that you, as a reader of this magazine, are no longer set up to do very well. You've been in business so long that your mind is accustomed to a fine blend of wishful thinking and can-do attitudinizing on subjective subjects. "It's gonna be great!" you tell yourself. "Wake up at noon every day like I did when I was a teenager! Have a bagel! Play 36 holes! Couple of drinks at the 19th green! Wake up and do it again the next day! That's what I call living!" Right. Have you thought about what 25 years of that will be like?" What price college admission? Submitted by Norm 10:41 AM EST 07/02/06 Education "Even valedictorians are finding it hard to land spots at the nation's most-selective colleges, so "Ben" wasn't about to take chances. Over the past four years, the New Jersey father of two has spent about $30,000 for guidance from Michele Hernandez, a Lake Oswego, Ore. college counselor who charges up to $36,000 per student for advice on everything from what courses to take to how to spend summers." Naming the kids' guardians is no child's play Submitted by Norm 10:34 AM EST 07/02/06 Taxes "If you're the parent or guardian of minor children, here are some thoughts to keep in mind about naming guardians for your children." When writing your will, make sure your intentions are clear Submitted by Norm 10:50 AM EST 06/25/06 Taxes "Things can move from mere confusion to costly legal battles if you leave your heirs uncertain about your intentions when you're gone. And few things can cause greater problems than joint ownership." The study of the decade Submitted by Norm 3:59 PM EST 06/23/06 Brokers "Over the next few years, you will be hearing a great deal about a ground-breaking new study that is just now starting to receive nationwide attention. The only notice of it that I have seen in the public media just appeared in a popular money magazine: "A new study compares the cost and performance of more than 4,000 mutual funds--some sold by brokers, some selected by people on their own--from 1996 to 2002. The people won." In other words, do-it-yourselfers outperform financial advisors." Assessing the costs and benefits of brokers Submitted by Norm 3:58 PM EST 06/23/06 Brokers "Exploring these dimensions, we do not find that brokers deliver substantial tangible benefits. In short, while brokerage customers are directed toward funds that are harder to find and evaluate, brokerage customers pay substantially higher fees and buy funds that have lower risk-adjusted returns than directly-placed funds. Further, brokered funds exhibit no better skill at aggregate-level asset allocation than funds sold through the direct channel. This analysis implies that any benefits that exist must be found along less tangible dimensions." Who cares about fund categories? Submitted by Norm 3:28 PM EST 06/22/06 Funds "Investor advocates believe innovative fund marketeers have hijacked the fund business from the portfolio managers. The reason so many fund categories are required is that the marketing departments have created all manner of funds, many of little real value to retail investors. Whatever happened to basic bread and butter investing?" Real estate is risky business Submitted by Norm 2:05 PM EST 06/18/06 Real Estate "Though U.S home-price gains have slowed, prices still far outstrip fundamentals, according to Yale economist Robert Shiller. Speaking Friday at a press conference in New York, Shiller, the author of "Irrational Exhuberance" and co-producer of the Case-Shiller real estate indexes, pointed to several measures he tracks.In justifying his pessimism, he pointed out that price increases have far out paced rises in construction costs, rents and income. In addition, inventory levels are up, as are interest rates and real estate holdings as a percentage of the gross national product." Estate planning for the wise Submitted by Norm 2:03 PM EST 06/18/06 Taxes "Another challenge of aging is deciding how to deal with your children in your will. Some of your kids may disappoint you, some may have special needs, and some may have no idea how to handle money. Today, I want to talk about dealing with your children in your will." Today's graduates face a world that is seriously tougher Submitted by Norm 1:54 PM EST 06/17/06 Thrift "Many older people believe that young people are spoiled and self-indulgent. Worse, they are blissfully unappreciative of how difficult things were in days of yore. In lots of ways, if not most, the reality is just the reverse: Many older people are unaware that today's college graduates face a world that is seriously tougher." Even the managers won't buy these funds Submitted by Norm 11:13 PM EST 06/10/06 Funds "Always be wary of a fund whose strategy sounds more like a marketing pitch. Get exposure to stocks without any of the downside. That's the pitch of principal-protection funds, and it sounds pretty compelling. If you just hold the funds for five years you'll get your principal back, as well as possibly some price appreciation to boot. Principal-protection funds buy stocks to give you market exposure, but they also guarantee your principal by buying bonds and possibly an insurance wrapper. At the risk of causing you to feel a little weltschmerz, I have to tell you the funds don't live up to their promise." Understand the rights of your spouse upon your death Submitted by Norm 11:06 PM EST 06/10/06 Taxes "Fact or fiction, it kind of makes you want to have some fun in your own will, doesn't it? Just be careful. Your beneficiaries may have certain rights. Today, let's talk about your spouse." Life is less expensive for older couples Submitted by Norm 8:01 PM EST 06/07/06 Retirement "Imagine two couples. They live side by side in virtually identical houses. The Youngs have two children in their early teens. The Olds have lived there forever and are retired. Now guess the income the Olds would need to have the same standard of living as the Youngs" Investors choose high-fee index funds Submitted by Norm 11:39 AM EST 06/04/06 Indexing "Investors appear to have a poor grasp of the fee issue, failing to minimize fees even when the benefits are presented in a clear and incontrovertible disclosure. "Most investors don't understand the importance of mutual funds' fees," Madrian notes. To zero in on the issue, the researchers asked test subjects to choose among a variety of index-style funds with identical stock holdings but different fees." Curse of the cold hand strikes Submitted by Norm 9:40 AM EST 05/30/06 Funds "Nothing chills congenial feelings between a money manager and his investors faster than a cold streak. Years of admiration and satisfaction can fade in an amazingly short time when the manager's performance falters -- even if the reason is nothing more substantial than a temporary shift in market conditions." Landscaping may be beheld in the deductibles Submitted by Norm 8:43 AM EST 05/30/06 Taxes "Tax deductions can be like chocolate. The more the better -- if we can get away with it. Sometimes Canadians misunderstand the rules around certain deductions. Landscaping comes to mind. Sometimes these costs are deductible, sometimes they're not." Best off-season summer resorts Submitted by Norm 1:48 PM EST 05/21/06 Travel "Here are some getaway spots around the world where you can vacation like a millionaire without shelling out big bucks" Donating securities isn't easy Submitted by Norm 1:19 PM EST 05/21/06 Taxes "Finally, the charity's broker needs to be well-rehearsed in how to hand-hold a donor and his or her broker through the donation process. This process will typically require the donor to provide his or her broker with a letter of direction and information related to the charity's brokerage account and the securities to be donated, in order to make the donation happen." The spending question Submitted by Norm 1:18 PM EST 05/21/06 Retirement "What will you really shell out in retirement? Maybe not as much as financial planning calculators tell you." Commodity wary? Try custom indexing Submitted by Norm 12:13 PM EST 05/14/06 Indexing "Just remember that with indexing, you're buying the market. Where the S&P/TSX composite index is concerned, you have an approximate 45-per-cent weighting in energy and materials, which includes metals and gold stocks. With the S&P/TSX 60 index of big blue chips, you have 41-per-cent exposure to commodities. For investors willing to sacrifice a bit of upside to limit downside, this is too much." Unbundling Canadian ETFs Submitted by Norm 12:12 PM EST 05/14/06 Indexing "Consider two options for the truly long-term index investor. The first option is to purchase an iUnit ETF and the second option is to buy the index's stocks directly. At first glance, the choice between buying a low-cost exchange-traded fund that holds many stocks or buying each of the stocks directly appears to be obvious. The exchange-traded fund is likely to be the better bargain. However, buying the stocks directly may be better for some investors because the Canadian stock market is very small and it is dominated by a few big names. As a result, one might reasonably approximate an index fund by holding only a few stocks." Zero taxes and help a favourite charity Submitted by Norm 12:07 PM EST 05/14/06 Taxes "This week, I want to share with you one idea that will: (1) allow you to eliminate all the tax on an investment you've decided to sell, (2) make a potentially generous gift to charity, (3) keep much of the sale proceeds for yourself, and (4) prove that I am more of a math geek than I thought." ETFs: 5 smart strategies Submitted by Norm 3:26 PM EST 05/07/06 Indexing "Exchange-traded funds can cut your investment costs, lower your tax bill and simplify your life. Just make sure you handle them with care." Welcome to the dead zone Submitted by Norm 3:12 PM EST 05/07/06 Real Estate "Real estate survival guide: The great housing bubble has finally started to deflate, and the fall will be harder in some markets than others." The budget's tax-saving measures Submitted by Norm 3:02 PM EST 05/07/06 Taxes "The federal budget this week was full of incentives. That is, measures to encourage certain behaviour. Some of these measures provide real opportunities if you know what to do with them. Today, I want to take a look at a few of the measures, and suggest how best to use them to save tax." New home sales soar Submitted by Norm 11:46 AM EST 04/30/06 Real Estate "But economist Bob Brusca of FAO Economics said last month's drop in new home prices is a sign that the market for new homes isn't nearly as strong as the jump in sales would suggest. He noted that the report showed an unusual drop in prices from both February and a year earlier, which could be a sign that home builders are cutting prices to move a large supply of new homes now on the market. "New homes sales sprang back to life like a zombie in a cheap horror flick," Brusca said. "And like that zombie, housing really is dead. Don't let all that twitching fool you."" Before you claim a deduction make sure it's legitimate Submitted by Norm 11:07 AM EST 04/30/06 Taxes "Now, the Canada Revenue Agency is not in the habit of telling folks what the government is looking for when it decides who should be audited. But it's not difficult to figure out the flags that could lead to the CRA taking a closer look at your tax return. This is a partial list of things that, based on an informal survey of tax professionals and a couple of friends at the CRA, you should be aware of." Barclays announceschange from iUnits to iShares Submitted by Norm 1:05 AM EST 04/30/06 Indexing "Barclays Global Investors Canada Limited ("Barclays Canada") announced plans today to change the name of its Toronto Stock Exchange-listed family of exchange-traded funds (ETFs) from iUnits to iShares. Leveraging the strength of the iShares product line around the world, Barclays Canada will be aligning its ETF brand identity with its global counterparts." Stave off old-age poverty Submitted by Norm 12:26 PM EST 04/23/06 Retirement "Although few elderly Americans are officially poor, 75% live on less than $26,777 yearly. Even a tiny amount stashed in investments and savings make a difference in old age." Active traders: On-line brokers want you Submitted by Norm 12:22 PM EST 04/23/06 Brokers "Hard-trading stock jocks are suddenly getting the VIP treatment from the big on-line brokerage firms. At least five major brokers have in the past few months introduced cut-rate commissions for active traders, a term that is commonly defined as placing at least 30 buy or sell orders per quarter. These discounts can take regular commissions of as much as $29 per trade and reduce them to as little as $9.95, which means they offer substantial savings." These tips can help trim your tax bill Submitted by Norm 12:15 PM EST 04/23/06 Taxes "When it comes to saving tax, there's more than one way to skin a cat. Today, let me share a few last-minute tips that could still save you money as you file your 2005 return." ETFs: The cheap, the dear and the fairly valued Submitted by Norm 12:19 PM EST 04/16/06 Indexing "Looking for bargains in a fairly valued market? Look beyond Asian and real estate stocks and toward mega-cap equities. And though energy stocks don't seem as overvalued as they were at the end of 2005, they still aren't a great deal." Final paycheck gets ever farther away Submitted by Norm 12:12 PM EST 04/16/06 Retirement "It's getting harder to quit. By some measures, Americans are richer than ever before. Yet it is proving increasingly difficult to amass enough money to retire in comfort. What's the problem? We face a fistful of them -- including these seven." Got a bone to pick with the taxman? Submitted by Norm 11:48 AM EST 04/16/06 Taxes "Taxpayers aren't immune to making mistakes either. And the Canada Revenue Agency (CRA) makes mistakes on a regular basis as well. The result? Disagreements over how much tax you really owe. Taxpayers are now starting to receive their notices of assessment for filing their 2005 tax returns. If you happen to disagree with your assessment, what are your options to ensure that your opinion has been fully considered?" Why so many grads 'fail to launch' Submitted by Norm 10:55 AM EST 04/08/06 Thrift "Many 20-somethings find themselves moving home to live with Mom and Dad, just like the movie 'Failure to Launch.' Blame it on the inertia -- and some very real challenges." Are you really self-employed? Submitted by Norm 9:34 AM EST 04/08/06 Taxes "Each year, thousands of Canadians report self-employment income on their tax returns because of the tax deductions available. The real question is whether these people are really self-employed, or are they more akin to employees who are just trying to gain tax breaks?" It's better to do it yourself with ETFs Submitted by Norm 9:31 AM EST 04/08/06 Indexing "A persuasive case can be made that indexing as carried out with ETFs is an ideal strategy for do-it-yourself investors. By tracking the major indexes and avoiding the advice costs folded into mutual funds, it's possible to make returns that compare favourably with most mutual funds. But the appeal of indexing is diminished, if not nullified, when the cost of advice is added in." Foreign ETF Fee-ver Submitted by Norm 1:51 PM EST 04/03/06 Indexing "EWW is not cheap; it's a stretch to call it "diversified;" and its two biggest holdings can be bought on the New York Stock Exchange. I even wonder how much it has to do with Mexico. Cemex, for example, is a wonderful cement company, but its operations are so global these days that I'm not sure I'd call it a "Mexican" company, except with respect to its history and domicile. EWW seems like an investment product desperate for an identity." Good news for those with shareholder loans Submitted by Norm 12:02 PM EST 04/02/06 Taxes "Since those decisions last October, there have been four other court decisions on the issue of GAAR. The score? Taxpayers 3, CRA 1. The most recent case provides an interesting planning opportunity for business owners. Let me explain." Mild-mannered Francis Chou Submitted by Norm 11:42 AM EST 04/02/06 Funds "He has only a grade 12 education and used to labor as a Bell Canada repairman. He has never worked for a big bank or a mutual fund company. He largely shuns the Courvoisier-chugging Bay Street set. But if you're searching for the best mutual fund manager in Canada, you'll find it difficult to avoid quiet, shy Francis Chou." RBC announces massive fund overhaul Submitted by Norm 9:08 PM EST 03/31/06 Funds "The RBC O'Shaughnessy U.S. Growth Fund will be capped effective June 30, 2006, to allow the fund's management to deploy the large amount of capital gathered recently. The move affects only new investment, and pre-authorized investment plans set up before the end of June will not be affected." Extreme savers: meet the parkers Submitted by Norm 1:53 PM EST 03/31/06 Thrift "The Parkers know all about scraping by, even though they make plenty of money. Michelle, 33, and Rob, 34, were high school sweethearts, they got married in college and managed on only $8,000 in income for the first year of their marriage. Fourteen years later the couple makes a combined $128,000 but their love, and thrifty lifestyle, has stayed with them." At long last, a new home sale slump Submitted by Norm 4:42 PM EST 03/25/06 Real Estate "Sales in February drop more than expected, as median price falls and supply grows. Is the real estate bubble bursting?" Aggressive tax plans can fall foul of the law Submitted by Norm 4:34 PM EST 03/25/06 Taxes "I can recall one situation where a man had been accused by the Canada Revenue Agency of tax evasion. "I know the evidence is strongly against me, but I have $250,000 to fight the case," the man said to his lawyer. The lawyer replied: "As your attorney, I assure you that you'll never go to prison with that amount of money." And he didn't. He went to prison broke. Tax evasion and some legal fees will do that to you." Making the most of Vanguard's VIPERs Submitted by Norm 2:48 PM EST 03/25/06 Indexing Given its indexing expertise, Vanguard is a natural fit for the ETF market, which is a focus of growth for the firm. To attract more interest, Vanguard has broadened its slate of VIPERs to 23, and more are certainly on the way."" 5 mistakes investors just can't afford Submitted by Norm 12:42 PM EST 03/25/06 Thrift "Research shows that investors are generally irrational and overly impressed with their acumen. Here are 5 rules to help you head off your worst investing impulses." Shopping abstinence a liberating experiment Submitted by Norm 9:53 AM EST 03/22/06 Thrift "Judith Levine is a freelance writer, earning about $45,000 (U.S.) a year and dividing her time between homes in New York and rural Vermont. An avowed environmentalist, she couldn't figure out why she had a four-figure credit card balance - perennially unpaid - and owned so much stuff. So, she tried an experiment: Stop shopping for a year." You want a piece of me? Pay Submitted by Norm 6:58 PM EST 03/19/06 Taxes "Soon your tax preparer, like other businesses, may start selling your financial information to the highest bidder. Why not demand a cut?" Let's have some discipline Submitted by Norm 6:49 PM EST 03/19/06 Taxes "The fact is, filing a tax return beats life in prison. And it's not just filing a tax return that matters. Filing on time, claiming all the deductions and credits you're entitled to, and implementing tax strategies, will leave you wealthier in the long run. But too few of us take this to heart." PPN offerings are sorely lacking Submitted by Norm 1:46 PM EST 03/14/06 Brokers "What a sweet deal the financial industry has going in its star product of the moment, principal-protected notes (PPNs). There are estimates that as much as $7-billion are invested in PPNs, double the level of two years ago. And yet, these notes are as loosely supervised as any investing product out there. Securities regulators need to get on this, fast." TERs tell you the exact cost of owning a fund Submitted by Norm 10:18 AM EST 03/12/06 Funds "I know, I know. MER means zzz to many of you readers. Consider this snooze factor noted as the brand new sibling of the management expense ratio, or MER, is introduced. It's called the trading expense ratio, or TER, and it finally gives us investors a way of telling exactly how much it costs to own our mutual funds." More Americans are losing their homes Submitted by Norm 12:08 AM EST 03/12/06 Real Estate "Risky borrowing is catching up with a number of homeowners across the U.S. Foreclosures rose 45% in January compared to a year ago, and experts only expect the pace to accelerate." Getting your adjusted cost base in order Submitted by Norm 11:55 PM EST 03/11/06 Taxes "I'd like to suggest another course: Saving tax by knowing your adjusted cost base. Okay, so it doesn't sound enthralling, but a lot of Canadians are losing out because they aren't calculating their adjusted cost base (ACB) correctly. The higher your ACB, the less tax you'll pay on the eventual sale of an asset. Before filing your 2005 tax return, make sure you've properly calculated your ACB on assets sold in 2005." DIY investors can save BIG with discounters Submitted by Norm 11:52 PM EST 03/11/06 Brokers "Rule One if you're a do-it-yourself investor who uses mutual funds is to never pay a cent in purchase commissions." Perils in online real estate Submitted by Norm 11:50 PM EST 03/11/06 Real Estate "Buffalo has been particularly hard hit by online flipping, as the city's persistent population decline and high foreclosure rates have created a glut of some 20,000 vacant houses. "Ninety-nine percent of these online ads have some kind of fraud or lies," said Tracy Krug, a building inspector in Buffalo. "They paint a nice rosy picture: 'on a bus line, near a nice market.' They don't tell you you're going to be across the street from a crack house."" The best of the Internet calculators Submitted by Norm 7:35 PM EST 02/25/06 Retirement "There's a problem you should be aware of with some of those handy calculators available on the Internet to help ensure you're saving enough for retirement. They're kind of useless on the whole, especially the ones offered by companies selling financial products." Kids: Bad investments, big returns Submitted by Norm 7:23 PM EST 02/25/06 Thrift "A potential mom does a detailed cost-benefit analysis of what having a child will mean and nearly scares herself to death." Canadian snowbirds can build a messy tax nest Submitted by Norm 7:08 PM EST 02/25/06 Taxes "Snowbirds understand the desire to head south too. And many snowbirds spend in excess of four months each year in the United States, which can cause tax filing issues. Let me give you an overview of what to consider if you're one of these folks." Divorce can scramble nest eggs Submitted by Norm 11:10 AM EST 02/19/06 Retirement "Once the emotional wounds from a divorce start healing, newly single people begin to grapple with the other big aspect of the damage -- the financial trauma. Nothing underscores the new reality as much as RRSP season." You're not going to live forever Submitted by Norm 11:04 AM EST 02/19/06 Taxes "Naming a beneficiary for your Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) seems simple enough, doesn't it? Well, not so fast. Here are some tips and traps to consider when it comes to naming beneficiaries." The depressing truth Submitted by Norm 3:25 PM EST 02/18/06 Retirement "Ask a wage slave what he'd like to accomplish. Chances are the response will be something like "I'd start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I'd practice the piano for three hours. I'd become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I'd really learn how to handle a polo pony. I'd learn to fly a helicopter. I'd finish the screenplay that I've been writing and direct a production of it in HDTV."..." The myth of the $1 million retirement Submitted by Norm 12:33 PM EST 02/16/06 Retirement "Ignore the experts who say you'll need a vast sum to ever quit working. How much you need to retire is really entirely up to you." The fantasy - and reality - of your own business Submitted by Norm 11:20 AM EST 02/12/06 Thrift "According to the latest figures from the Internal Revenue Service, the average sole proprietor (i.e., non-farm businesses that filed a Schedule C) reported net receipts of about $53,272 in 2003. The average net profit: About $11." How to manage your retirement Submitted by Norm 11:06 AM EST 02/12/06 Taxes "When drawing on your investments for income in retirement, should you withdraw from your registered retirement savings plan or your non-registered investments first?" Is marriage cost effective? Submitted by Norm 6:33 PM EST 02/11/06 Thrift "Ebenezer Scrooge should have reserved his scorn for St. Valentine's Day. The typical American is going to spend about $100.89, according to the National Retail Federation. That's up from $97.27 last year. A pricey holiday getting pricier thanks to the notion -- inspired by gobs of advertising -- that you will spend your life alone and unloved if you don't pony up lavish gifts and cheap sentiment on Feb. 14." 3 rules for a happy retirement Submitted by Norm 11:25 AM EST 02/05/06 Retirement "Research reveals it's how you manage your time and money that counts, not just how much you've got." More nickel-and-dime fees to fly? Submitted by Norm 11:29 AM EST 02/05/06 Thrift "We've become accustomed to paying a buck or two for soda or a bag of nuts, but such charges are going to get much more common. And that may not be a bad thing." Put gold in her purse for Valentine's Day Submitted by Norm 11:01 AM EST 02/05/06 Taxes "That's it. I decided that if I'm going to buy gold, I'm going to make it tax deductible. Forget the ring. I'm getting Carolyn gold bullion bars for Valentine's Day. Tax deductible? You bet -- as long as she allows me to buy it inside her registered retirement savings plan and doesn't try to wear them." So many RRSP choices. What to do? Submitted by Norm 12:03 AM EST 01/29/06 Indexing "ETFs are beyond simple to use, but they're also a durable, sensible building block for RRSPs. Their ongoing ownership costs are a small fraction of what comparable mutual funds charge, and they deliver the returns of the indexes they track, minus fees. If you compare the returns of mutual funds to those indexes, you'll find that many underperform in the short or long term, and sometimes both." Pay attention to your RRSPs Submitted by Norm 4:24 PM EST 01/28/06 Taxes "if you're one of the thousands of Canadians who is separated, divorced, or thinking about it, take the opportunity to think about who you've named as beneficiary of your registered retirement savings plan. After all, it's RRSP season and your plan may be top of mind. And be mindful of the Gaudio court decision. Let me explain." The middle class on the precipice Submitted by Norm 1:35 PM EST 01/28/06 Economy "During the past generation, the American middle-class family that once could count on hard work and fair play to keep itself financially secure has been transformed by economic risk and new realities. Now a pink slip, a bad diagnosis, or a disappearing spouse can reduce a family from solidly middle class to newly poor in a few months." The antiquity of tax law Submitted by Norm 11:53 AM EST 01/22/06 Taxes "Apparently, Ottawa doesn't trust the judgment of doctors in this country very much. You see, Canadian tax law refuses to allow a medical expense tax credit in a growing number of situations, even in cases where a doctor has prescribed a medication or substance. This area of our tax law is in need an overhaul -- and quick." Frugality: You get it from your kids Submitted by Norm 11:50 AM EST 01/22/06 Thrift "Having children can devastate your ability to save. But look at it another way: parents need less in retirement because parenting cleverly trains them to live on less." New dividend rules could change your strategy Submitted by Norm 8:27 AM EST 01/19/06 Taxes "The dividend tax credit has been increased under the new proposals so much that the credit will not only offset the tax owing on the dividend received, but will go further and will reduce other income you have as well. For example, a taxpayer in Ontario earning $60,000 annually will pay $13,703 on that income (2005 tax rates). Add $5,000 of eligible dividends to his income, and his total tax bill drops to $13,653. Did you catch that? The marginal tax rate on those dividends is actually a negative number. Now, once your income hits a certain level ($61,940 in Ontario at 2005 tax rates), your eligible dividends will increase your taxes -- albeit at a lower rate than other income." If it sounds too good to be true . . . Submitted by Norm 8:24 AM EST 01/19/06 Taxes "Withdrawing money from an RRSP is not the big problem -- although there are definite drawbacks to dipping into your retirement savings early. The problem is that too many Canadians have tried to get money out of their RRSPs without paying any tax at all. And many of these people have fallen prey to elaborate RRSP schemes being promoted by unscrupulous individuals who are trying to make a fast buck." Uncle Sam cracks the whip on students Submitted by Norm 8:21 AM EST 01/19/06 Debt "The stakes on student loans just got higher: Not only have rates soared, but the debt can haunt you all the way to the grave." Luxuries you can live without -- and should Submitted by Norm 12:56 PM EST 01/01/06 Thrift "$200 jeans? $800 sheets? Paying a premium now for image and brand cuts into our real quality of life down the road." Barclays Canada announces four new ETFs Submitted by Norm 3:24 PM EST 12/24/05 Indexing "XTR will replicate the performance of the S&P/TSX Income Trust Index. XDV will replicate the performance of the Dow Jones Canada Select Dividend Index. The fund will focus on investing in stocks with higher yields and proven dividend growth and sustainability. XRB, which is designed to proved fixed income investors with inflation protection, will replicate the performance of the Scotia Capital Real Return Bond Index." Act like a saint but think like an investor Submitted by Norm 10:58 AM EST 12/18/05 Taxes "TD Economics released a paper in October that provides a novel way to think about charity. The idea? Think about your giving as you do your investing. And why not? It can mean more meaningful and effective giving. Here are some highlights from that paper." You're worth $135,500 Submitted by Norm 12:09 PM EST 12/16/05 Thrift "The country's net worth reached $4.4-trillion at the end of the third quarter, valuing Canadians' net worth at $135,500 per capita, Statistics Canada reported Friday." ETFs are performing well at a lower cost Submitted by Norm 10:17 AM EST 12/12/05 Indexing "Name a mutual fund category and I'll show you its slimmer, more athletic alter ego." TD plans to terminate ETFs Submitted by Norm 10:10 AM EST 12/12/05 Indexing "Effective December 13, 2005, subscription orders for new units of the Funds will no longer be accepted. Redemption orders for baskets of shares and for cash will be processed until termination date, on or about March 13, 2006. The outstanding units of the Funds will continue to be listed and posted for trading on the TSX. Units may be purchased or sold on the TSX in the ordinary course of business until the close of market on the termination date, either through registered brokers or participating dealers." Your holiday present Submitted by Norm 10:20 AM EST 12/11/05 Thrift "Commercialism runs rampant this time of year and while this type of consumerism is good for the economy and makes all those malls seem like the place to be it also usually means that January and February - when the bills start arriving - can be pretty tight financially. This is made worse by the fact that some many people wait until then to do their RRSP contribution as well." Bankruptcy law backfires on credit card issuers Submitted by Norm 8:38 PM EST 12/10/05 Debt "The industry muscled through tough changes that were supposed to make more filers repay some of what they owe. But that isn't happening." When status has too high a price Submitted by Norm 8:15 PM EST 12/10/05 Thrift "Dr. Shaun Saunders, a researcher at the University of Newcastle in England, studied more than 1,000 people and found materialistic folks who try to keep up with the Joneses are more likely to be angry, depressed, frustrated, and anxious." The true cost of changing careers Submitted by Norm 1:21 PM EST 12/04/05 Debt "Just getting the education your dream job requires can cost a bundle. Consider all the trade-offs before taking out your student loans." Healthy planning Submitted by Norm 1:18 PM EST 12/04/05 Retirement "Though the standard age for retirement is 65, only 64% of people age 55 to 64 are employed. The other 36%, not yet eligible for Medicare, either have to be married to someone with employer health insurance or have to scramble to find coverage. The scrambling is occasioned by two things. One is that, even for healthy people, medical insurance is fearsomely expensive. Employers have seen their costs climb 63% over the last four years, says personnel consultant Towers Perrin, and will spend an average of $14,500 next year on insurance for a family of four. The other is that individuals trying to buy insurance on their own confront a difficult marketplace whose providers don't particularly want their business, especially if they have a preexisting medical problem." Dividend-oriented funds make sense Submitted by Norm 1:13 PM EST 12/04/05 Funds "Not to worry. Political uncertainty shouldn't cause investors to shy away from dividend-paying stocks or Canadian dividend funds. In all likelihood, the next federal government - of whatever stripe - will confirm the promised tax cuts. Besides, dividend mutual funds are less sensitive to this type of tax change than you might think. Except for a handful that emphasize preferred shares, which generally pay higher dividends than common stock, dividends are a secondary source of returns for Canadian dividend funds." Avoid paying someone else's taxes Submitted by Norm 1:11 PM EST 12/04/05 Taxes "Sorry to tell you, but pleading ignorance is just as ineffective with the tax collector and the courts. One particular situation comes to mind -- and it's easy to get caught in this trap." Income trusts still the better tax deal Submitted by Norm 11:26 AM EST 11/27/05 Taxes "But theory is never perfect. In this case, there will still be a tax advantage to income trusts. Consider an an Ontario resident, in the highest marginal tax bracket in 2006." E*Trade slashes its fees in bid to shake up market Submitted by Norm 10:28 AM EST 11/23/05 Brokers "Discount broker E*Trade Canada is to announce today that its minimum commission for trading stocks on the Internet will fall 26 per cent effective Jan. 10. The new rates are to be $19.99 for mainstream investors and $9.99 for active traders, down from E*Trade's current top fee of $26.99 and as much as $29.95 at other firms." Walking the line between scrooge and santa Submitted by Norm 9:57 PM EST 11/23/05 Thrift "Here's how to prevent dreams of the Sugar Plum Fairy from becoming a nightmare when the credit-card bill arrives: Develop a holiday spending plan." End the tax year right Submitted by Norm 2:41 PM EST 11/19/05 Taxes "We're quickly coming to the end of 2005. And people can get pretty creative with their spending to create last-minute deductions. (Hey, sometimes deductions seem so logical you'd swear they must be legal.)" Norshield receiver finds little money Submitted by Norm 2:39 PM EST 11/19/05 Funds "Retail investors in the failed Norshield Group of companies, which include Norshield Asset Management and Olympus United Funds, may only get back $8.5 million of the $132 million they placed in Norshield funds, according to the second report of receiver RSM Richter." 3 big reasons couples fight about money Submitted by Norm 4:41 PM EST 11/14/05 Thrift "Arguments about money are often really struggles for power. Managing these issues can smooth out the bickering." When index funds go bad Submitted by Norm 10:33 AM EST 11/14/05 Indexing "The results indicated that, as with most active funds, investors' timing decisions were costly when it came to index funds. The dollar-weighted returns for virtually all large-cap index funds were worse than their official returns for the trailing 10-year period through the end of the third quarter 2005. As the table below shows, poor timing cost Vanguard 500 shareholders 2.7 percentage points of returns per year over the past decade." Don't wind up divorced and destitute Submitted by Norm 6:42 PM EST 11/06/05 Thrift "The worst thing you can do is to ignore money matters while you're married. Here are 9 ways to divorce-proof yourself now." ETFs provide access to the world of bonds Submitted by Norm 6:38 PM EST 11/06/05 Indexing "It's never easy to buy bonds in small, retail-sized amounts without getting hosed a couple of points in commission. It's not that dealers are trying to rip you off, it's just that it costs a dealer about $50 just to write a ticket; so on, say, a $5,000 bond purchase, the transaction costs alone are a point, and your broker, er, account executive, needs to get paid something, too." Volatility, thy name is bonds Submitted by Norm 6:37 PM EST 11/06/05 Funds "Bonds are supposed to protect against the sort of stock market treachery we saw this October, but you'd never know it from what actually transpired. As stocks fell, bonds gave them a run for their money." Test yourself Submitted by Norm 6:31 PM EST 11/06/05 Taxes "So you think you're smart when it comes to tax issues? How about taking the Mackenzie Financial Great Canadian Tax Test? This week, the mutual fund company released the results of a test given to 1,565 Canadians. Over all, Canadians get a "C" grade." Save big on a tiny income Submitted by Norm 6:48 PM EST 10/23/05 Thrift "19 ways -- and counting -- to save when you make next to nothing." Tax Evasion Submitted by Norm 4:34 PM EST 10/23/05 Taxes "My grandfather always had words of wisdom for me. He used to say: "Tim, if at first you don't succeed, skydiving is not for you." I think it's interesting that skydiving is a lot like tax evasion. If you do it once and you're successful, you'll want to do it again. And each time you succeed, and reap the personal benefits, you'll try it over and over. But let me tell you, when things go wrong, they can go very wrong." Bay St.'s rich secret: churning income trust funds Submitted by Norm 11:43 AM EST 10/17/05 Trusts "Some day, investors will realize that they will get richer if they avoid turning over their trust investments every year. You don't churn your mutual funds because you don't want to pay the fees, so why would you churn your trust funds? Avoid it and you'll save the agent's fee year after year. Add it all up and you're talking real money. Churning your trust fund is even more ridiculous when you realize that the new fund you bought at the end of the year might look pretty much like the one you just sold." Rush to file for bankruptcy Submitted by Norm 7:36 PM EST 10/16/05 Debt "For the week ending Oct. 8, bankruptcy courts reported a total of 102,863 filings, up from the previous record high of 68,387 the week before, according to data from Lundquist Consulting. Year-to-date, the number of filings has grown 19.4 percent compared with the same period in 2004. Based on preliminary data, Lundquist researchers are expecting to see more than 200,000 personal bankruptcy filings for for the week ending Oct. 15, said Jane Truch, senior manager of research and analytics at Lundquist." Barclays muscles in to zap TD's last advantage with ETFs Submitted by Norm 7:24 PM EST 10/16/05 Indexing "Barclays dominates the ETF business in Canada to the extent that TD is very close to invisible. But while Barclays has offered ETFs for investing in the blue-chip S&P/TSX 60 index, it had nothing for investors who wanted to buy into the much broader S&P/TSX composite (200 stocks versus 60). Now, Barclays is about to neutralize TD's one small advantage." Canada Savings Bonds buyers are selling themselves short Submitted by Norm 7:21 PM EST 10/16/05 Bonds "Old habits die hard -- that's the polite explanation of why people waste their time and money buying Canada Savings Bonds." Trailer fees: a vitamin or toxin? Submitted by Norm 12:16 PM EST 10/09/05 Funds "Most investors don't understand trailer commissions and the inherent conflicts-of-interest they cause. Many don't know they exist despite the many articles that have been written on the topic. Now that you know they exist, ask your adviser to disclose them and make sure you get your money's worth." RRSP overcontributions can boost your nest egg Submitted by Norm 12:07 PM EST 10/09/05 Taxes "When it comes to the last year for making contributions to your registered retirement savings plan, a little creativity can help you boost the final value of your portfolio. Here is one approach to take." Is your kid a spoiled brat? Submitted by Norm 3:53 PM EST 10/06/05 Thrift "Instead of an iPod nano, give your kids the tools they need to be financially independent adults." Blogging toward financial sanity Submitted by Norm 11:07 PM EST 10/03/05 Thrift "I was skeptical about starting a blog, but then a real community emerged -- and together, we're bucking up our fiscal resolve to battle spending and debt." Think before giving a child the title to your home Submitted by Norm 11:26 AM EST 10/02/05 Taxes "There are four key lessons to learn from this story: Parents should always talk to their kids about their estate planning. Mr. D and the others had no idea that they were on the title as owners of the property. They may have been able to do some planning to minimize the ultimate tax hit. Always get proper tax advice when doing estate planning. The lawyers involved in transferring the title to the children did not appear to understand all the tax implications. Think twice before putting a child on the title on your home. In most cases, all you'll save are probate fees, but the potential tax (and other) problems you create will far outweigh these fees." 8 financial train wrecks you can avoid Submitted by Norm 11:33 AM EST 09/30/05 Thrift "'Just because they say 'I love you' doesn't mean they'll pay you back' -- and other tales of money misery. Watch. Learn. Take notes." Too broke even to declare bankruptcy Submitted by Norm 11:28 AM EST 09/30/05 Debt "One of the indignities of going broke is that filing for relief is expensive and getting more so. Here are six ways to scrape up the cash." Saxon fund keeps it simple Submitted by Norm 11:25 AM EST 09/30/05 Funds "Howson believes his value-investment style has also contributed to his success. He emphasizes the adherence to his style - the fact that he applies it consistently - and points to his outright rejection of technology stocks for Saxon Balanced fund over the past five years as an example of that discipline leading to strong results over the long term." Changing income trust rules could crack nest eggs Submitted by Norm 2:11 PM EST 09/25/05 Taxes "Let's put this whole concern in perspective. In 2004, $300-million in tax revenue was "lost," according to the Department of Finance. Actually, not true. This claim ignores the fact that many of those dollars will be collected in the future. Income trusts typically result in a tax deferral rather than an elimination of tax. But let's not argue over such trivial details. It's also important to realize that $300-million represents just 15/100ths of 1 per cent of Canada's $195.8-billion in revenue in 2004-05. That's the equivalent of a $50,000-a-year income earner giving up $75. Heck, the income trust market has plenty of room to grow before deferred tax revenue should be a concern. A word to Mr. Goodale: Take a Valium." Steer clear of 'flood cars' Submitted by Norm 1:35 PM EST 09/25/05 Thrift "Hurricane Katrina swamped hundreds of thousands of new and used cars. Some of them will be polished up and sold in used car lots near you. Here's how to protect yourself." Protect your wallet in a divorce Submitted by Norm 1:30 PM EST 09/25/05 Thrift "Making plans to preserve your assets in case of a divorce may not be very romantic. But with half the population headed for divorce court after a trip down the aisle, it's not such a bad idea." Crazy loans: Is this how the boom ends? Submitted by Norm 9:07 PM EST 09/18/05 Debt "Lenders are pushing risky loans with low payments. Desperate home buyers snap them up. Worried yet?" Your six biggest money fears Submitted by Norm 8:01 PM EST 09/18/05 Markets "We all worry about money. Problem is, we're scared of the wrong things. Find out why your biggest money worries may be misplaced -- and start building an action plan for the events that should really concern you." Family trust can be an educational building block Submitted by Norm 8:56 PM EST 09/18/05 Taxes "If you're a successful business owner, you can use the profits of your business to help fund the cost of your child's primary or post-secondary education. There's more than one way to skin this cat, but the idea of a family trust can make sense." How teens get sucked into credit-card debt Submitted by Norm 10:55 AM EST 09/11/05 Debt "Card companies are now soliciting high school students, who too easily find themselves buried in red ink." Allegations aside, Norbourg a plain dumb investment Submitted by Norm 10:44 AM EST 09/11/05 Funds "And now for a short seminar on crummy mutual funds, courtesy of Norbourg Asset Management. You know Norbourg -- it's the Montreal money manager alleged to have embezzled $70-million in client money." Always evolving BMO wins again Submitted by Norm 10:37 AM EST 09/11/05 Brokers "BMO InvestorLine is just such a broker and that's why it came out on top in The Globe and Mail's annual on-line brokerage rating for the fourth consecutive year. Other top brokers this year are E*Trade Canada and TD Waterhouse." Tax treaty could help prevent a nasty bite Submitted by Norm 7:05 PM EST 09/04/05 Taxes "I once heard that the definition of a tax pro is someone who tells you about problems you didn't know you had, then fixes them in a way you don't understand. This has never been truer than in the area of U.S. estate taxes. Most Canadians aren't aware that they could be subject to U.S. estate tax." Labour funds reel as Ont. axes tax credit Submitted by Norm 7:04 PM EST 09/04/05 Fund "The Ontario government is axing its 15-per-cent tax credit for labour-sponsored funds, dealing a severe blow to the recovering sector. Fund executives were stunned by the move, predicting that this jeopardizes the future of the LSF business in Ontario, its largest market. It's the latest setback for the asset class in Canada. In June, Winnipeg's Crocus Investment Fund became the subject of a criminal probe by the RCMP." Turnround hope can be bad for you wealth Submitted by Norm 10:07 AM EST 08/30/05 Funds "Mutual fund managers sometimes grumble that investors are too focused on short-term returns but hanging on to a poorly performing fund for too long is a far more common problem." Are fund investors protected? Submitted by Norm 3:48 PM EST 08/27/05 Funds "Allegations that about 42 per cent of reported assets have been embezzled from two Quebec mutual fund families have sent shivers across Canada. "If such a thing could happen at one mutual fund company, what protection is there for my mutual fund investments?" many investors are wondering. Well, there's none at the moment, apart from the capital and public reputation of the owner of the fund management company itself." Five ways to be prepared for U.S. estate tax laws Submitted by Norm 3:46 PM EST 08/27/05 Taxes "Today, let's talk about planning ideas for U.S. citizens and permanent residents. Next week, I'll finish off this topic with planning ideas for Canadians with U.S. situs property." IFIC chairman Michel Fragasso steps down Submitted by Norm 9:59 PM EST 08/25/05 Funds "The chairman of the Investment Funds Institute of Canada stepped down Thursday after RCMP and other police officers swooped down on several offices in Montreal and Toronto as part of a major fraud investigation against his company, Norbourg Asset Management Inc. Michel Fragasso, a senior vice-president of Norbourg, resigned late Thursday as chairman of the national association for the mutual fund industry in the wake of the Norbourg police investigation." The three myths of condo investing Submitted by Norm 7:01 PM EST 08/21/05 Real Estate "The growth in condo-investing mythology may be more worrisome than the risk of overbuilding. Here are three whoppers that need reality checks." Three reasons you could end up paying U.S. estate taxes Submitted by Norm 6:58 PM EST 08/21/05 Taxes "You see, there are three categories of people who will be subject to the U.S. estate tax -- and you could be counted here: (1) U.S. citizens, (2) permanent residents of the United States, and (3) those who own "U.S. situs property."" Hang on for a tidal wave of bankruptcies Submitted by Norm 10:34 AM EST 08/18/05 Debt "There's an Oct. 17 deadline looming: Changes in bankruptcy law will make erasing debts more difficult. But many who rush to file may find their troubles are worse later on." Piggy bank -- or house of cards? Submitted by Norm 6:07 PM EST 08/14/05 Real Estate "The debt-research firm collected data nationally on 2 million debt-financed purchases of owner-occupied homes from 2004 and more than 600,000 through roughly May of this year. It found that 95.1% or more of the purchase price was borrowed in 38% of all transactions so far this year. That was up from 34% of sales in all of 2004. In other words, over a third of buyers have little or no equity in their homes at the time of their purchase." S&P/TSX index outpaces managed funds Submitted by Norm 6:03 PM EST 08/14/05 Indexing "Annual management expense ratios of 2.5 per cent "are a huge hurdle for any manager, no matter how skilled they are, to consistently have to overcome to deliver value-added over and above what a[n] . . . indexing strategy delivers," Mr. Silgardo said." 7 ways to fight off bankruptcy Submitted by Norm 1:54 PM EST 08/08/05 Debt "Single women -- and particularly single moms -- have a tenuous hold on financial security and face a serious risk of bankruptcy." Hardly in the public interest Submitted by Norm 1:06 PM EST 08/07/05 Government "mutual fund investors now have to act much more quickly if they feel they've been a victim of financial assault. For unsophisticated investors, seniors, retirees, widows, non-English-speaking immigrants and others the new Act can spell economic disaster." When a trust, by any other name, is just a stock Submitted by Norm 1:02 PM EST 08/07/05 Trusts "Leslie Lundquist owes her fame in money management circles to income trusts. As the lead manager of two income funds for Calgary's Bissett Investment Management, being a doomsayer on the trust market isn't her shtick. So perhaps when she admits to getting nervous, we should pay attention. And Ms. Lundquist is skittish on the latest crop of trusts -- not because they're bad companies, but because "there's no conceivable reason why they should be trusts instead of stocks."" The top 10 items the taxman will query on your return Submitted by Norm 12:57 PM EST 08/07/05 Taxes "Today, I want to share with you the top 10 items on tax returns that were most often questioned by the Canada Revenue Agency (CRA) last year. These come from an informal poll of tax specialists at my alma mater, accounting firm Deloitte, and appears in the firm's newsletter "Tax Breaks."" It's crucial that executors understand all their obligations Submitted by Norm 12:56 PM EST 08/07/05 Taxes "The fact is, being in someone else's will doesn't always mean you're going to get an inheritance. You might, for example, be named the executor of the will and not a beneficiary, in which case you won't exactly be cashing in. In fact, the executor's job comes with a number of responsibilities." Dying without a will can cost Submitted by Norm 12:55 PM EST 08/07/05 Taxes "When it comes to your estate, failing to prepare a will may save you legal fees in the short term, but could cost your family later. Dying without a valid will is called "dying intestate," and it's rife with problems." Using debit is better than paying ABM fees Submitted by Norm 11:25 AM EST 07/22/05 Thrift "With almost every financial institution charging non-customers up to $1.50 to use its automated banking machines, the number of transactions where people used ABMs from other financial institutions fell to a 10-year low last year. Meanwhile, usage of direct payment notched yet another year of solid growth. The numbers are a confirmation of a growing recognition that the cost of using any old bank machine is one of the biggest wastes of money in financial services today, whereas debit represents one of the best values." Confessions of a compulsive shopper Submitted by Norm 10:18 AM EST 07/22/05 Thrift "Maxed-out credit cards, more than $50,000 in shopping-related debt and the slow realization that she chatted more with other Gymboree-obsessed moms than she did with her own family finally convinced Rogers that she needed to kick her habit." Leith Wheeler doesn't buy 'new era' Submitted by Norm 9:59 AM EST 07/22/05 Funds "The investment team doesn't buy the idea that oil has entered a "new era" in which oil prices stay at $60 (U.S.) a barrel or higher, and so applies a "very conservative" price of $34 a barrel three years from now when valuing oil and gas producers. "We believe that over time more supply will come on stream and demand will stabilize," Mr. Palfrey said." Who killed Richard Cullen? Submitted by Norm 11:16 AM EST 07/21/05 Debt "I tell Lord Griffiths about Richard Cullen's suicide, and he sighs. "I had a friend," he replies. "A clergyman. I met him for dinner one night. He was suffering from cancer. He broke down over dinner and confessed to me that he had 32 credit cards. He said he was using each card to pay off the charges on the others. He told me about the shame he felt. You could just sense the emotional pressure. I'm no doctor ... " Lord Griffiths pauses, then says, "He died soon afterwards." Then he says that a friend of his recently compared the credit card industry to slavery - that the lenders are the new slave masters and the borrowers the slaves." Advisors and clients should be on the same team Submitted by Norm 2:47 PM EST 07/18/05 Brokers "Aligning client and advisor interests should not be that tough a challenge. From a client's perspective, the ideal relationship is a "fiduciary" one, where the advisor makes a written commitment to act exclusively in the client's best interests." Consider the easy way out Submitted by Norm 12:28 PM EST 07/17/05 Taxes "When it comes to dealing with your cottage in your estate planning, sometimes the best approach is taking the easy way out." Housing markets pricing out middle class Submitted by Norm 9:58 PM EST 07/10/05 Real Estate "The red-hot housing market in booming cities across the country has made the dream of owning a home out of reach, not only for low-income families but also for white-collar professionals." The hidden costs of moving Submitted by Norm 9:40 PM EST 07/10/05 Real Estate "Not only is moving one of life's most stressful and exhausting experiences, it can cost more than you ever imagined. Here's why." Use put options to defer your tax payments Submitted by Norm 9:24 PM EST 07/10/05 Taxes "The dilemma? You're concerned about a stock dropping in value, and want to sell it right away, but you don't want to trigger a significant tax bill today by making the sale." How a single mom makes it on $31K Submitted by Norm 9:50 PM EST 07/03/05 Thrift "While I admire the folks who were born smart about money, my true heroes are the ones who had to struggle to find that precious commodity I call financial sanity." Hedge funds: a wild quarter Submitted by Norm 9:18 PM EST 07/03/05 Funds "The once-high flying funds are struggling to make money as market conditions have gotten tougher." Make sure your sale of home isn't AINT Submitted by Norm 9:04 PM EST 07/03/05 Taxes "Some tax questions are equally tough to answer. Such as: If you buy a home, fix it up and sell it for a profit, how will that profit be taxed? As a capital gain, or business income?" Protect your funds from an oil spill Submitted by Norm 4:11 PM EST 06/26/05 Funds "Maybe you're prepared for your energy mutual fund to fall in value if oil prices snap back, but what about your Canadian equity fund, your dividend fund, your balanced fund, your income trust fund, your U.S. equity fund and your global equity fund? Each of these categories is home to fund managers who have loaded up on energy stocks. Combine their funds in just the right way and you might find that 25 per cent or more of your portfolio is living and dying by oil prices. For even moderately conservative investors, that's too much." Fund firms plan to give investors a break Submitted by Norm 4:07 PM EST 06/26/05 Funds "A fee-cutting revolution has broken out in the mutual fund industry. CI Mutual Funds, the country's third-largest fund company, said yesterday that it will ask its clients to vote on a proposal that will cut fund ownership fees across the board, then lock them in as of the beginning of September." CRA gives your home a break Submitted by Norm 4:03 PM EST 06/26/05 Taxes "Just because you start using part of your home as an office for your business does not mean you'll have to pay tax on that part of your home when you sell it later. You can continue to call the entire property your principal residence as long as you meet the three conditions outlined by the CRA above." The arithmetic of mutual fund investing Submitted by Norm 9:38 PM EST 06/22/05 Indexing "Most of you are likely familiar with the EMH - the Efficient Market Hypothesis - that suggests that most stocks are fairly valued, most of the time. But the relentless rules of humble arithmetic remind us of something both more certain and more profound than the EMH. I call it the CMH - the Cost Matters Hypothesis - the iron rule that investors as a group must always lose to the stock market by the amount of the costs they incur." Be careful how you donate through your will Submitted by Norm 7:07 PM EST 06/19/05 Taxes "But "generous" is a good way to describe many Canadians, as an increasing number of us are leaving gifts to charity in our wills. But if you're not careful, the tax relief you're counting on from your gift to charity may not materialize as hoped. Let me explain." Shifting patterns in the load universe Submitted by Norm 1:38 PM EST 06/17/05 Brokers "A further issue, Investor Economics says, is that, while de facto advisors are going fee-based, they have not embraced the unbundling of fees. "Although unbundling fees is economically neutral from a client and advisor perspective," Insight says that several of the industry people interviewed for the report "suggested that the idea of sending a bill to clients for services rendered remains an unappealing option for many advisors."" Getting stiffed on a loan? Submitted by Norm 9:29 PM EST 06/12/05 Taxes "The question is this: When you lend money and the loan goes sour, is there tax relief available? The answer depends on the type of loan. Let me explain." Variance among U.S. equity indexes Submitted by Norm 1:12 PM EST 06/08/05 Indexing "Financial planners often are called upon to select equity market indexes against which their clients' portfolios might be measured. As will be shown in this paper, the choice of which equity market indexes are chosen as benchmarks can make a sizable difference in the comparison of performance. In light of this, one should be aware that "benchmark index shopping" is a potential hazard in a world where comparison of performance is widespread. More bluntly, it is possible that a mutual fund company (or financial planner) might shop for a benchmark that had the worst performance relative to their fund or portfolio, precisely to make their own fund(s) or portfolio(s) look better." Market-timing your RRIF withdrawals Submitted by Norm 9:58 AM EST 06/06/05 Taxes "You might be cringing at the thought of market-timing RRIF withdrawals. But this involves less risk than regular market timing because you're not changing investments. You're simply choosing when to pay tax on the withdrawals." Zero to a billion in two years flat Submitted by Norm 3:27 PM EST 05/27/05 Crime "Bob Rusko got an eerie feeling when he first stepped into the office of Portus Alternative Asset Management Inc. It was midnight on Friday, March 4, and Rusko's team had been trying to get into the company's two offices in downtown Toronto all evening. Portus had been put into receivership by an Ontario court that afternoon and Rusko, a senior vice-president at KPMG Inc., was named receiver. Things had gotten off to a bad start. The landlord at the company's main office wouldn't let Rusko's people in. Another team had gone over to Portus's other office, located a few blocks away on the 69th floor of First Canadian Place. This time no one stopped them. Rusko joined them. When he opened the door, he couldn't believe his eyes. The place had been stripped bare. There were no phones, no computers, no paper. Even the paintings had been ripped from the walls, leaving small gouge marks where the nails had been. Just about the only thing left behind was an empty tequila bottle." Set your financial house(s) in order before getting married Submitted by Norm 3:21 PM EST 05/29/05 Taxes "It's the season for weddings, and so I want to share some financial advice for those getting married this year -- particularly those who already have some income and assets." Special favors for high-fee funds Submitted by Norm 12:45 PM EST 05/27/05 Funds "In recent years we have heard about several dubious practices within the mutual fund industry. Highlights include "market timing" (allowing hedge funds to buy at old unit prices) and "front-running" (fund employees buying stocks for their personal accounts ahead of big orders from the fund company). Now a new concern. It involves conflicts of interest within mutual fund families. In particular, it can be claimed that the interests of unitholders in the lower fee funds of the family are sacrificed to those in the higher fee funds (as part of the process of maximizing profit within the fund group)." Put stock in trusts, or trust in stocks? Submitted by Norm 9:00 PM EST 05/22/05 Trusts "First, there are oil and gas royalty trusts. They're trendy, they're pleasant to own because of their generous payouts of cash every month or quarter and they've shown some serious horsepower in the past few years. Crashworthiness is uncertain, however. If oil prices were to plunge, these babies could do some damage." Royalty trusts offer tax benefits Submitted by Norm 8:56 PM EST 05/22/05 Taxes "Now, if you're looking for a real hot tip, consider a royalty trust. There are more than just a couple of tax reasons to look at them." PH&N to launch higher-fee funds for clients seeking advice Submitted by Carl 10:36 AM EST 05/17/05 Funds "Personal advice has its price, even at Phillips Hager & North Investment Management Ltd., the Vancouver-based no-load fund firm that is well known for having some of the lowest management expense ratios in the business." Fund fees: Silver lining has a big dark cloud Submitted by Carl 9:55 PM EST 05/15/05 Funds "Recent signs are encouraging, but the industry can do better." The cost of AA programs Submitted by Carl 9:52 PM EST 05/15/05 Indexing "For about a decade now, various investment companies have been cranking out marketing material quoting the academic work done in the 1980s and 1990s done by a team of researchers led by Gary Brinson and studying asset allocation and variance for large US pension funds. Most get it wrong." Beware options in private companies Submitted by Norm 9:45 PM EST 05/15/05 Taxes "First, always get tax advice before exercising stock options. Second, stock options in a private company aren't always a good idea if your PUC is very low, unless you can sell those shares to someone other than the company later. Private companies may want to consider setting up a "market-maker" trust to buy shares in these situations." Words of wisdom Submitted by Norm 11:42 PM EST 05/11/05 Funds "Last month, the 2004 Annual Report of the Chou Funds showed up in my e-mail box and I wasted no time in reading his current views on investing. As usual, they were thoughtful, practical, and on-target." Investors get break on costs of mutual funds Submitted by Carl 3:06 PM EST 05/09/05 Funds "Mutual fund costs borne by the investor are falling and more declines are expected, an industry study has found." Mutual fund price war Submitted by Norm 7:19 PM EST 05/08/05 Funds "The question is whether CI's discount move is a publicity stunt or the opening shot in a fund war that could see the high-cost players capitulate." Notional pension plans a tax option Submitted by Norm 7:15 PM EST 05/08/05 Taxes "This week I want to discuss a creative idea called a notional defined contribution plan" Start with saving Submitted by Norm 7:14 PM EST 05/08/05 Thrift "It's a lot like the old personal finance chestnut, "Pay yourself first," but I like it because it indirectly forces you to start spending less. And that's what we humans need." The diversified dividend aristocrats Submitted by Norm 6:59 PM EST 05/08/05 Indexing "Since the passage of the 2003 dividend tax cut, investors have flocked to dividend funds and indexes like pigeons to popcorns. Consider the iShares Dow Jones Select Dividend Index Fund (DVY): Introduced in November of 2003, DVY has been one of the fastest growing exchange-traded funds (ETFs) of all time, and now boast assets of over $6 billion." The index to end all indexes? Submitted by Norm 12:31 PM EST 05/01/05 Indexing "the ratio between equities and fixed-income investments varies widely over time. At the heart of the equities boom (March 2000), equities made up 67 percent of the index; at the depths of the recent bear market (March 2003), they represent just 43 percent of the index." The sins of the advisers when it came to Portus Submitted by Norm 12:28 PM EST 05/01/05 Brokers "Three commandments dictate the responsibilities that investment advisers owe their clients and at least two of them were trampled when investors were put into Portus hedge fund products." Some points to consider after filing your return Submitted by Norm 12:26 PM EST 05/01/05 Taxes "On a scale of one to 10, the fun derived from preparing your tax return rates about a one -- on par with a root canal. But the process shouldn't end when you drop your tax return into the mailbox or hit the "submit" key to file electronically. There are a number of things to keep in mind after you've filed your tax return that can help you to save tax and minimize future problems with the tax collector. Here are seven ideas." Are seniors gambling away their retirement? Submitted by Norm 11:44 AM EST 04/25/05 Thrift "With casinos, slot machines and poker parlors on seemingly every corner, a growing number of seniors find themselves addicted -- and losing their nest eggs." Making it to the top Submitted by Norm 8:17 PM EST 04/24/05 Debt "It's never easy, but getting rich is still being done every day. All it takes is leverage." A failure to negotiate Submitted by Norm 8:14 PM EST 04/24/05 Thrift "Although women have certainly made plenty of progress in the workplace over the past three decades, the glass ceiling remains firmly in place at many companies -- especially when it comes to compensation. But some experts now suggest that the wage imbalance between the sexes could have as much to do with women's failure to negotiate well as any other factor." Self-employment a great shelter Submitted by Norm 8:08 PM EST 04/24/05 Taxes "Self-employment is one of the last great tax shelters, but 2004 has passed so it's too late for self-employment for 2004. Or is it?" The origins of mutual funds Submitted by Norm 11:37 AM EST 04/17/05 Funds "Mutual funds emerged as early as the second half of the 18th century in The Netherlands. The paper traces the history of mutual funds from the development of securitization in the 17th century to the invention of depository receipts in the 19th century. The apparent motivation for organizing the first mutual funds was to provide diversification for small investors." Tough bankruptcy law passes Congress Submitted by Norm 11:24 AM EST 04/16/05 Debt "The most sweeping overhaul of bankruptcy laws in 27 years is on its way to an enthusiastic President Bush. It's far tougher on debtors than before." Crossed the foreign content line? Here's help Submitted by Norm 11:13 AM EST 04/16/05 Taxes "The growing vulnerability of the minority Liberal government poses a potentially expensive problem for people who jumped on a budget measure allowing unrestricted foreign investing in registered retirement savings plans." Changes that help, changes that hurt Submitted by Norm 11:10 AM EST 04/16/05 Taxes "Tax expert Tim Cestnick lists the key tax changes that took place for 2004. Some changes will help you when filing your 2004 tax return, but some will hurt. One thing's for sure: These are changes you shouldn't ignore." Here's one good reason to fire yourself Submitted by Norm 7:37 PM EST 04/10/05 Funds "Better performance would be nice. Unitholders have had it rough. If you invested $10,000 in the fund in February, 2000, you'd have about $950 left. That's a loss of more than 90 per cent. How did that happen? "The idea is you go in and find stocks where there's earnings momentum and revenue momentum and you own them and you don't own resources because it's a growthy portfolio . . . and it just hasn't worked." So you've fired yourself?" Free money on tap for green card holders Submitted by Norm 7:35 PM EST 04/10/05 Taxes "It's estimated that there are hundreds of thousands of Canadians who are also U.S. citizens or green card holders. If you're in this boat, you probably don't file a U.S. tax return annually, although you should. Now there's an even greater incentive to file. You see, the U.S. government introduced a tax credit in 2001 that could mean cash in your pocket if you qualify, and file a U.S. tax return." Advisers can have knack for making grass look greener Submitted by Norm 12:16 PM EST 04/08/05 Brokers "The insidious thing about portfolio transformation is that you have little or no recourse if things work out badly. Just try going to a firm's branch manager and complaining that your perfectly fine portfolio of blue chips was broken up to invest in a lame wrap account. The party line will be that such a move is sound investing because the wrap offers broader diversification and professional management. Compliance departments at firms and investing industry ombudsman offices won't disagree because, in theory, wraps and pooled funds do offer benefits. In real life, these benefits are sometimes illusory or tangible only to the adviser and her firm, which may pocket more in fees." 1040 Plunder Submitted by Norm 12:51 PM EST 04/05/05 Taxes "In a week I will be a reluctant recipient of plundered property. The modern day Robin Hood purloined the cash last year on my behalf and without my knowledge. Technology comes into play too. Using a piece of sophisticated software, my computer and a phone line, $646 will be wired directly to my bank account. The software? Turbotax. The confiscator? The Internal Revenue Service." The trust dilemma: Is it time to buy? Submitted by Norm 1:32 PM EST 04/03/05 Trusts "The second annual spring correction in the income trust sector is under way, but the price markdowns are nothing to get excited about unless you're open to some contrarian thinking." Watch out for U.S. tax Form 8891 Submitted by Norm 12:58 PM EST 04/03/05 Taxes "Form 8891 is new, and my guess is that many Canadians living in the United States, and U.S. citizens, are going to give it a try this year. There are many who had better file Form 8891 to avoid problems with the IRS. Let me explain." Low-cost, low-tech ways to protect your home Submitted by Norm 1:29 PM EST 04/01/05 Thift "It doesn't have to cost a fortune to make your home safer. Here are some deterrents to thieves that are simple and work." Sharpen the pencil when picking ETFs Submitted by Norm 9:47 AM EST 03/29/05 Indexing "Index investors, it's time to review your use of two exchange-traded funds that provide easy access to the U.S. and international stock markets." No need for foreign equities in Canadian funds Submitted by Norm 11:50 AM EST 03/27/05 Funds "Now that the foreign content limit has been eliminated, the rationale for putting foreign securities into domestic funds evaporates along with it." Renting is the real bargain Submitted by Norm 11:28 AM EST 03/27/05 Real Estate "Potential home buyers increasingly are facing a difficult economic and emotional quandary: Soaring housing prices in many parts of the country have made renting a bargain." Think twice before deducting Submitted by Norm 11:27 AM EST 03/27/05 Taxes "When filing your tax return, the temptation will be to claim every possible deduction in order to minimize your taxes for 2004. Yet, it can make sense to defer claiming certain deductions until a future year in some cases." Could you be hit by the 'jock tax'? Submitted by Norm 11:26 AM EST 03/27/05 Taxes "Athletes and entertainers pay millions every year to the states they visit. Now some states are tracking down CEOs and others who earn money on the road." How much is enough? Submitted by Norm 8:07 PM EST 03/21/05 Thrift "I came into a tidy little windfall, and my first thought was . . . I want more. But working the numbers helped me realize I might already have enough." 21 Ways to jump start your career Submitted by Norm 5:13 PM EST 03/20/05 Work "Letting your job become routine is hazardous to your salary. Here's how to give your career a jolt." Getting the most out of your tax return Submitted by Norm 4:34 PM EST 03/20/05 Taxes "Okay, no need to beat around the bush. Let's jump right into six clever tax filing tips that will save you money, potential time in prison, and the need to lick a bad tasting stamp this tax season. Here we go." The lies we tell Submitted by Norm 4:46 PM EST 03/14/05 Thrift "Be honest, now: Have you ever told your spouse you paid less for something than you really did -- say, a great pair of shoes, or maybe that very cool 52-inch TV now gracing the family room?" There are better ETFs than the snappy i60 Submitted by Norm 4:11 PM EST 03/13/05 Indexing "Meantime, there are several ETFs that have delivered much stronger returns over the past three years and thus deserve some attention. One of the most appealing -- with some reservations -- is TD Select Canadian Value, which has a very solid three-year average annual return of 12.4 per cent. The comparable Canadian equity fund averaged 9.1 per cent in the period." What should investors be doing? Submitted by Norm 3:27 PM EST 03/13/05 Taxes "Now that the foreign content restriction is gone, what should investors be doing?" Fund firms moving to kill clones Submitted by Norm 10:46 AM EST 03/11/05 Funds "With the federal budget passing a third and final parliamentary vote on Wednesday, major mutual funds companies are starting to act on Ottawa's decision to eliminate the foreign content rule." Blame lenders, not thieves, for identity theft Submitted by Norm 10:23 AM EST 03/11/05 Crime "Now that intruders have raided a second big consumer database, we're bound to hear lots more calls for increased federal oversight of the companies that buy and sell our personal information. What will get far less attention, unfortunately, is the fact that these incursions wouldn't be so incredibly damaging to consumers' finances if lenders didn't make that information worth stealing in the first place." Vanguard to introduce international VIPERs Submitted by Norm 11:30 AM EST 03/10/05 Indexing "The new VIPER Shares will feature expense ratios as low as 0.18%, which are considerably below the expense ratios of the 43 international exchange-traded products available on the market today." Social Security problems start sooner than you think Submitted by Norm 1:06 AM EST 03/06/05 Retirement "Alan Greenspan puts the date to really start worrying at 2008. That's because he's looking at real cash flow, not fancy government accounting that puts the problems with Social Security decades away." The relentless rules of humble arithmetic Submitted by Norm 3:37 PM EST 03/03/05 Indexing "Warren Buffett's crusty but wise partner, Charlie Munger, is disturbed by the commitment of so many exceptional people to the field of investment management: "Most money-making activity contains profoundly antisocial effects. (As high-cost modalities become ever more popular), the activity exacerbates the current harmful trend in which ever more of the nation's ethical young brain-power is attracted into lucrative money-management and its attendant modern frictions, as distinguished from work providing much more value to others." As Mr. Munger recognizes in the field of money-making, as far as the interests of clients go, there can be no net value added, only value subtracted." Dirty dozen tax scams Submitted by Norm 3:43 PM EST 03/01/05 Taxes "Don't get scammed by someone who thinks you can dupe the tax man." Confusion dogs foreign content change Submitted by Norm 11:42 AM EST 02/27/05 Retirement "This week's budget eliminated the 30-per-cent foreign content limit for registered retirement savings plans and pensions, effective immediately. However, a federal finance department official said yesterday that the budget must be passed in the House of Commons for its provisions to become law." A tale of three options for your RRSP dollars Submitted by Norm 11:37 AM EST 02/27/05 Retirement "Let's suppose you have $7,500 after taxes available to invest each year. I want to compare three options for that money: 1) Contributing that amount to your registered retirement savings plan if you have the contribution room; 2) Investing that money in an open (non-registered) account; or 3) Using that money to cover the interest cost on an interest-only loan to invest outside an RRSP." Eliminating foreign limit? It's about time Submitted by Norm 11:36 AM EST 02/27/05 Retirement "Finance Minister Ralph Goodale did investors a favour in yesterday's budget by ending the 30-per-cent limit on foreign assets for pension plans and RRSPs. What's less obvious, but more important, is that he placed the economy on a stronger footing by removing a crutch that served to help to prop up uncompetitive companies." Suddenly single Submitted by Norm 9:19 PM EST 02/24/05 Thrift "When her husband died suddenly at 58, JoAnn Russe found she knew little about her family's finances." Can frugal living make you happier? Submitted by Norm 1:02 PM EST 02/22/05 Thrift "Without conventional pensions, it's hard to shake the nagging anxiety of geezerhood: Will we outlive our money? A New Yorker cartoon hanging on our refrigerator says it all. A man tells his wife: "If we take a late retirement and an early death, we'll just squeak by."" Luxuries you can live without -- and should Submitted by Norm 5:57 PM EST 02/20/05 Thrift "Correct me if I'm wrong, but it wasn't that long ago when the mere concept of Williams-Sonoma (or Restoration Hardware, Crate & Barrel, et. al.) would have struck most folks as . . . nutty." Your pension may be worse off than you think Submitted by Norm 4:50 PM EST 02/20/05 Retirement "Arcane accounting rules often hide pensions' real financial picture. One expert calculates that pension liabilities have outpaced assets by 50% over the last 5 years." History is taxing Submitted by Norm 4:35 PM EST 02/20/05 Taxes "So, if digging through your shoebox of receipts to prepare this year's tax return doesn't drive you to drink, raise a glass to the Whiskey Rebellion or, at the very least, to the Boston Tea Party." Greed fuelling energy trusts' inevitable meltdown Submitted by Norm 5:29 PM EST 02/15/05 Trusts "When the energy trust sector finally blows up -- and it will -- there's going to be plenty of blame to go around." Investors and advisers stick up for income trusts Submitted by Norm 5:29 PM EST 02/15/05 Trusts "The great thing about writing columns on the question of whether income trusts are alarmingly overvalued is that you never have to resort to writerly hyperbole to keep things on the boil." Social Security: the worst-case scenario Submitted by Norm 2:09 PM EST 02/15/05 Retirement "Just how bad can it get? If you're age 20 now, you can expect a 50% decrease in your Social Security benefits. But even that may be too optimistic." Funds: The limits of indexing Submitted by Norm 2:08 PM EST 02/15/05 Indexing "Index funds are efficient, cheap and easy, but they aren't perfect." RRSPs show clear advantages Submitted by Norm 11:10 AM EST 02/13/05 Taxes "Yet, the RRSP should form the cornerstone of any retirement savings plan if you're the average Canadian. Today, let's compare RRSPs to open accounts (non-registered savings) on six fronts." When not to buy an RRSP Submitted by Norm 3:50 PM EST 02/11/05 Retirement "about 80% of the time, the RRSP makes sense. So what happens the other 20% of the time? When does it not make sense to buy RRSPs?" Making RRSP withdrawals is seldom a good idea Submitted by Norm 12:55 PM EST 02/11/05 Retirement "There seems to be some confusion about one of the top commandments in financial planning, which is to have an emergency fund containing ready cash. This money is supposed to sit in a money market fund or high-interest savings account. It's not supposed to come from your registered retirement savings plan." Forget the luxury hook; fund makes promises it can't keep Submitted by Norm 12:45 PM EST 02/11/05 Funds "Many people believe that if you rub up against money, some of it will rub off on you. Sometimes, they forget that the heat of the friction makes it easy to get burned." Revenge for the small-portfolio investor Submitted by Norm 9:01 PM EST 02/06/05 Brokers "Suggested solution for small accounts looking to set up a registered retirement savings plan: Open a self-directed RRSP at an on-line broker. If you have the time, the inclination and the knowledge to drive your own retirement savings plan, then an on-line broker can be a great vehicle. Or not. Open an account at the wrong on-line broker and you may feel as used and abused as a client of an indifferent adviser." Handle your RSPs properly when leaving Canada Submitted by Norm 9:00 PM EST 02/06/05 Taxes "If you're contemplating taking up permanent residence in the United States, there are some things you should know about how to handle your registered retirement savings plan or registered retirement income fund." Don't bite off too much house Submitted by Norm 5:04 PM EST 02/02/05 Real Estate "The classic formulas for mortgage affordability could lead you to disaster. Here's how to get a better handle on what you really can afford." Health costs spur bankruptcy Submitted by Norm 4:55 PM EST 02/02/05 Debt "Half of all U.S. bankruptcies are caused by soaring medical bills and most people sent into debt by illness are middle-class workers with health insurance, researchers said Wednesday." Vanguard's switch Submitted by Norm 8:31 PM EST 02/01/05 Indexing "Vanguard said its preliminary analysis indicates the transition to the MSCI benchmark is not expected to result in capital gains distributions for shareholders, although transaction costs will be incurred as a result of turnover. "Vanguard picked a good time to do this," said Jim Wiandt, publisher of IndexUniverse.com. "The move won't have big tax consequences because the fund is sitting on losses from the past few years." "If Vanguard waited and there was a big run in the market, it would be more difficult to do without triggering tax consequences," Wiandt added. Over the past five years through Jan. 31, Vanguard Total Stock Market Index fund has lost 1.1 percent annually, according to investment research firm Morningstar." Vanguard's new target benchmark Submitted by Norm 8:22 PM EST 02/01/05 Indexing "The MSCI US Broad Market Index includes equity securities with primary listing on the New York Stock Exchange, American Stock Exchange, and Nasdaq. The index incorporates Vanguard's view of "best practices" in index construction" Win the fight against fat fund fees Submitted by Norm 2:36 PM EST 02/01/05 Funds "Investors and regulators are teaming up to drive down mutual fund costs, and B-share fees are the latest to fall. For you, those lower expenses can mean bigger returns." Indexing makes sense -- but not with mutual funds Submitted by Norm 10:21 AM EST 01/30/05 Indexing "The trouble here is not the concept of index investing. We can argue forever about whether it's better to own actively managed funds or funds that track the major stock indexes, but indexing does makes sense. Unless you use index funds. Costly to own, they're a distant second choice behind exchange-traded funds as a way to put the indexing strategy to work." Spend now, suffer later Submitted by Norm 7:44 PM EST 01/28/05 Debt "It's easy to price a vacation. As for your retirement plan, you probably don't even want to answer because you probably don't have one. Why is it so hard?" Slim statements Submitted by Norm 3:56 PM EST 01/26/05 Brokers "It's a bit scandalous how bad most investing account statements are. Too often, they just throw some numbers at you that illuminate your situation only after you hunt down previous statements or grab a calculator to exercise your flabby math muscles." Understanding your account statement Submitted by Norm 3:54 PM EST 01/26/05 Brokers "It's not always easy to understand all the information on your investment account statement. So we've teamed up with Dalbar, a research firm specializing in account statements, to develop this program to help you" Manager Monitor: Richard Howson Submitted by Norm 3:21 PM EST 01/21/05 Funds "A long-time value investor and manager of the $337.2-million Saxon Stock, Richard Howson uses a three-pronged process to identify and profit from attractive companies." Canadians deeper in debt, vulnerable to economic shocks Submitted by Norm 4:22 PM EST 01/20/05 Debt "A new report from CIBC World Markets warns that Canadian households are deeper in debt than a year ago and are vulnerable to any economic shock." O'Shaughnessy sticks to the numbers Submitted by Norm 4:20 PM EST 01/20/05 Funds "With so many mutual funds built and sold on the premise that knowing how the underlying companies are run is key, it's interesting to meet an investment manager who doesn't interview company executives at all. If past performance is any indication, the computer-driven, numbers-only approach works." A fund for '05 Submitted by Norm 12:24 PM EST 01/20/05 Funds "The Mawer organization is unfamiliar to most people, but it is one of the best boutique houses in Canada , with a number of top-quality funds. The Canadian Equity Fund, managed by Jim Hall, has an above-average performance record over all time frames, with a better-than-average risk rating." - A long-time Frugal Fund Suits contend funds fail to collect Submitted by Norm 11:40 AM EST 01/20/05 Funds "In a 2002 law review article, Mr. Cox reported on a study he undertook with a colleague, finding that of institutional investors eligible to file claims for part of settlement proceeds, only about a third actually do so. He estimated that in the aggregate, institutional investors leave more than $1 billion unclaimed each year." To sell Or advise? Submitted by Norm 5:32 PM EST 01/16/05 Brokers "What do you suppose is the primary role of a financial advisor? Would it come as a surprise to you to know that mot financial advisors earn their living by selling financial products that the prevailing culture in the financial advice business is more like that of a real estate agent than that of an accountant? Real estate agents make money by selling whereas accountants make money by advising." RRSP mistakes can be costly Submitted by Norm 12:08 PM EST 01/16/05 Taxes "This time of year, thousands of Canadians will make some big mistakes of their own -- with their registered retirement savings plans. Let me explain." AGF introduces low-load option Submitted by Norm 11:31 AM EST 01/12/05 Funds "GF Funds has begun re-tooling its operations in an effort to reverse a lengthy spell of net redemptions. The first step, announced today, is a low-load purchase option on its mutual funds. The change means there will be no upfront sales charge and a shortened redemption fee schedule (three years) on the bulk of AGF's funds." Assante latest fundco to cut fees Submitted by Norm 11:30 AM EST 01/12/05 Funds "As a result, 11 Artisan portfolios now have a new management expense ratio (MER) of 2.86% in the class A version and 1.79% MER in the class F version. Toronto-based Assante advisor John De Goey says the cuts are a step in the right direction, but are too little to really benefit consumers." Young, carefree . . . and deep in debt Submitted by Norm 4:00 PM EST 01/10/05 Debt "This member of 'Generation Broke' is 26 and has a good salary and few obligations. But she's amassed $12,000 in credit card debt in just four years." Strategies for tsunami donations Submitted by Norm 12:18 PM EST 01/09/05 Taxes "In fact, thousands of individual Canadians have made a difference by donating more than $50-million to the tsunami relief effort. Tax savings are not the real reason most people have donated. But if you're looking to help, there are some things to keep in mind this week." Social Security flunks the fairness test Submitted by Norm 2:33 PM EST 01/08/05 Government "When Social Security is put to a common ethical test, it fails on all four measures, including the inherent unfairness of increasing future generations' tax burden by raising benefits now." The costly myth of dollar-cost averaging Submitted by Norm 10:35 AM EST 01/04/05 Markets "Popular wisdom says scheduling your investments is the best way to make money. But it's actually a sales gimmick to wheedle over time what you won't commit up front." It's time for investing spotlight to shine on ETFs Submitted by Norm 3:41 PM EST 01/02/05 Indexing "Fee cuts by Fidelity and others in 2004 are welcome and they'll do good things for investors. But if attention is being focused on fees in general, then ETFs get the glory because of their exceptionally low management expense ratios. You can get into the S&P/TSX 60 or composite indexes through ETFs with MERs of 0.17 per cent and 0.25 per cent, respectively, or pay an average 2.4 per cent for a widely held Canadian equity fund." Make a New Year's resolution on taxes Submitted by Norm 3:37 PM EST 01/02/05 Taxes "Make it your New Year's resolution to implement one profitable tax strategy in 2005. To make this easy, let me suggest a few options to consider" Taking stock of the two dividend ETFs Submitted by Norm 1:41 PM EST 01/01/05 Indexing "The Smith Barney research - "DVY vs. PEY - What's the 'Div'erence?" - highlights the three major differences between the indexes: their size, weighting system and qualifying criteria." Free land in the heartland Submitted by Norm 4:12 PM EST 12/26/04 Thrift "Small towns in Kansas, North Dakota and other states are rolling out the red carpet for newcomers." Charitable donation deadline looming Submitted by Norm 4:06 PM EST 12/26/04 Taxes "Clients wanting to make a charitable donation are running out of time, if they want to claim it on their 2004 tax filing. Perhaps a gentle reminder is in order, pointing out that New Year's Day will be too late." Scrooge and your CRA taxman have much in common Submitted by Norm 4:02 PM EST 12/26/04 Taxes "If you're looking for some holiday cheer this year, don't ask Canada Revenue Agency (CRA) to provide it. Scrooge might as well have been a tax collector. In Dickens' story, Scrooge acted a lot like CRA today." Francis Chou flies quietly under the industry's radar Submitted by Norm 2:23 PM EST 12/20/04 Funds "Chou prefers to take substantial positions (3%-5% of fund assets on one stock), on the basis that good ideas are few and far between, so when you find one, you have to make a decent-sized bet to have a meaningful effect on the overall portfolio. With that in mind, he plans to cap the fund after the next RRSP season, in late March." Some funds don't serve your interests Submitted by Norm 11:37 AM EST 12/19/04 Funds "Investors in AIC's funds should be especially outraged. They've seen precious few gains in recent years. Most have lost piles of money. But market timers trading in AIC's funds realized about $127 million in profits from 1999 to 2003. That's more than short-term traders earned in other companies' fundsand certainly more than long-suffering investors earned. This is undignified and demeaning behaviour from a company with the advertising slogan: "Buy. Hold. And prosper."" Man, it's cold -- a great time to discuss the cottage Submitted by Norm 11:31 AM EST 12/19/04 Taxes "As I contemplated the gifts of the wise men this week, it occurred to me that wise men and women today will take the time this holiday to look after the family cottage. After all, it's not often that the entire family is in the same place at the same time. So, use your holiday gathering to talk about the cottage. Here are some tips to help that discussion." Mutual-fund giants pay price of betrayal Submitted by Norm 1:43 PM EST 12/17/04 Funds "The settlement spotlights an amoral attitude among certain players on the Street. It's an attitude that says if there's no law forbidding an activity, and that activity earns us a profit, then it must be fine to do it, right? Because the paper trail here is clear. Most money managers resolutely refused to allow the market-timers in the door, on the grounds that their activities would garner higher returns than long-term investors, which just wasn't fair. A few firms left the doors wide open, or took great pains to ensure that such trading could take place." Scotia announces management fee changes Submitted by Norm 1:18 PM EST 12/17/04 Funds Warning: Scotia Canadian Dividend Fund to increase its management fee by 50%! Fundcos to refund millions to investors Submitted by Norm 9:33 PM EST 12/16/04 Funds "Every penny of the $156.5 million will go to the people who were negatively affected by the frequent trading market timing" iUnits Canadian Bond Index Fund Submitted by Norm 9:21 PM EST 12/16/04 Indexing "This change will give the Fund a more diversified exposure to the broad Canadian investment grade bond market. We believe that this approach will reduce the degree of fluctuations of the Fund's returns over time and provide the potential for more favourable performance during periods of rising interest rates. Additionally, under the new investment objective, we expect that the Fund will be able to make quarterly rather than semi-annual distributions." New ETF brings you the whole bond universe Submitted by Norm 9:18 PM EST 12/16/04 Indexing "It looks like there's a nice little holiday season present on the way to index investors." Getting a fix on broken trusts Submitted by Norm 12:57 PM EST 12/12/04 Trusts "Valuations are so high that many of these trusts are likely to get slaughtered once interest rates move up. And rates will go up eventually. What's a trust investor to do?" Tax schemes can come back to bite you Submitted by Norm 12:54 PM EST 12/12/04 Taxes "Now, many people will think they're safe in buying these tax shelters because: (1) the shelter has a CRA identification number, and (2) they actually receive a refund in April. But neither is an endorsement of the tax shelter. The identification number will allow the CRA to track the users of the tax shelter later, and the CRA has three years from the date on your notice of assessment to reassess you." Deadline looms for RESP grants Submitted by Norm 12:52 PM EST 12/12/04 Thrift "In a survey conducted for Heritage Education Funds, Decima found only 15% of parents realized the RESP contribution deadline is December 31. Unlike the RRSP deadline, which allows for contributions within the first 60 days of the new year, RESP contributions must be made within the calendar year to qualify for the federal grant." Successful investing starts with saving Submitted by Norm 12:10 PM EST 12/07/04 Thrift "To profit as an investor, you need to regularly divert money into your investment account. Here are ways to save -- and the best ways to invest the cash." Beware funds bearing gifts Submitted by Norm 1:49 PM EST 12/06/04 Funds "Investor advocates, who've long griped about high fund fees, are understandably delighted by Fidelity's initiative. It's worth remembering, however, that this is a defensive move, born out of a mounting sense of desperation in the industry. Fidelity's fee cut is not about generosity, it's about ensuring long-term survival. And it shows just how far the fund sector has fallen, and how fast." Money for nothing Submitted by Norm 1:44 PM EST 12/06/04 Indexing "Should you care about the near-futility of active management? If your time horizon is only a few years, no. Over this period, the cost drag won't amount to much, and you might as well play a few spins of the active-management roulette wheel (some funds do beat the market, and hope springs eternal). If you're investing for the long term, however, you should care a lot. On average, active funds underperform passive funds by about a percentage point a year (or more). Over 20 years, assuming 10 percent annual appreciation, this difference will eat nearly a fifth of your return. Over 40 years, it will gobble almost a third." S&P index versus active funds scorecard Submitted by Norm 1:32 PM EST 12/06/04 Indexing "The Standard & Poor's Index Versus Active (SPIVA) methodology is designed to provide an accurate and objective apples-to-apples comparison of funds' performance versus their appropriate style indices, correcting for factors that have skewed results in previous index-versus-active analyses in the industry. SPIVA scorecards show both asset-weighted and equal-weighted averages, include survivorship bias correction to account for funds that may have merged or been liquidated during the period under study, and show style consistency for each style group across different time horizon" S&P launches Canadian fund scorecard Submitted by Norm 1:26 PM EST 12/06/04 Indexing "Survivorship bias can significantly skew results as funds liquidate or merge. The five-year survivorship is 71.5%, 67.7% and 70.1% for Canadian equity, U.S. equity and Canadian small-cap mutual fund categories, respectively. For example, only 71.5% of the mutual funds offered five years ago in the Canadian equity category in Canada remained at the end of the period- the other 28.5% were either wound up or merged with other funds." Chou named fund manager of the decade Submitted by Norm 1:23 PM EST 12/06/04 Funds "Chou, the manager of several top-performing mutual funds received major recognition at the Awards for the second straight year. Chou RRSP Fund had a 10-year compound annual return of 17.3% at Oct. 31, compared with 7.8% for the Morningstar Canadian Equity Mutual Fund Index." Bank-sold wrap accounts don't live up to sales pitch Submitted by Norm 7:00 PM EST 12/05/04 Funds "The sales pitch for bank-sold wraps is that they're an easier, more intelligent, more personalized approach for investment know-nothings than using individual funds. The reality is quite a bit more mundane, according to Prof. Milevsky. "Finance academics look at these things and they say, 'wrap account, what is this?' It's just another mutual fund."" Give with a passion and get the best tax relief Submitted by Norm 6:46 PM EST 12/05/04 Taxes "It's the time of year when many of us consider giving to charity. This year, I'd like to discuss giving with a passion, and how to gain the most tax relief from giving." 4 ways to simplify your life and save Submitted by Norm 5:51 PM EST 11/29/04 Thrift "Alas, most people have seen the same tips a thousand times: * Live on less than you earn. * Track your spending so you can see where your money goes. * Never buy anything new. * Whenever possible, slaughter your own livestock, etc." Make the most out of capital losses Submitted by Norm 1:00 PM EST 11/28/04 Taxes "If you're like many investors and have some losers in your portfolio, do your best to make lemonade out of those lemons with the following tips on dealing with capital losses." 15 worst holiday gift ideas Submitted by Norm 12:58 PM EST 11/28/04 Christmas "You're sweating, panicked. You're about to recycle an old gift, buy a weight-loss book for Aunt Josephine or grab the Victoria's Secret catalog. Stop! Break the cycle of Holiday Gift-Shopping Syndrome!" Who are the low-cost leaders? Submitted by Norm 12:56 PM EST 11/28/04 Funds "None of these companies, Fidelity included, poses any serious competition to no-load companies such as Phillips Hager & North, Saxon, McLean Budden, Beutel Goodman and Mawer. These firms have much cheaper MERs than the big guys, but they don't register with most investment advisers because they pay little or nothing in the way of commissions (that's why their fees are so low)." Borrowing to invest backfires badly Submitted by Norm 12:55 PM EST 11/28/04 Debt "In 2001, she added $50,000 to her $45,000 mortgage in order to buy stocks within mutual funds that she hoped would produce capital gains sufficient to pay off her mortgage and the new loan. She wound up with a $17,000 loss. Today, she doubts it was wise to make bets on the stock market. She wants to recover financially -- pay down her enlarged mortgage, cut her investment risk, and put the losses behind her." Income trust myopia could be a dangerous thing Submitted by Norm 4:13 PM EST 11/23/04 Trusts "An epidemic of self-destructive performance chasing has broken out among mutual fund investors. They're selling equity funds, notably global funds, and moving into income-oriented funds that hold dividend stocks, bonds and, of course, those ever-enticing income trusts." A how-to guide on capital gains Submitted by Norm 5:10 PM EST 11/22/04 Taxes "Sometimes investors have to take the bad with the good. The good? Sometimes you make money. The bad? Sometimes you don't. My next two articles will talk about my top dozen year-end strategies for dealing with capital gains and losses. Today, let's start with tips on capital gains." Fund companies tinker with sales charges Submitted by Norm 5:08 PM EST 11/22/04 Funds "The problem is all those fund sales in the nineties are now coming off the DSC schedule. Fund companies keep the details under lock and key but it is safe to say that every month, there's less incentive for billions of investment dollars to stay put. It's created a mess of competing interests." New ETF brings you the whole bond universe Submitted by Norm 11:26 AM EST 11/21/04 Indexing "Barclays Canada, the company behind the iUnits series of Canadian exchange-traded funds, announced yesterday that it wants to convert its 10-year government bond exchange-traded fund into a new product that tracks the Scotia Capital Universe Bond Index." Too patient with your funds? Submitted by Norm 11:24 AM EST 11/21/04 Funds "You have a money-losing mutual fund on your hands, but you're sticking with it. Are you a sensibly patient investor or a patsy?" The high cost of smoking Submitted by Norm 3:06 PM EST 11/18/04 Thrift "Add it up: cigarettes, dry cleaning, insurance, breath mints. And the toll doesn't stop there." Retirees don't have to be so frugal Submitted by Norm 5:25 PM EST 11/17/04 Thrift "Maybe you don't have to order the early-bird special after all. Many retirees have trimmed their spending during recent years, and it isn't just because of plunging bond yields and tumbling stock prices. Instead, they have been reacting to dire warnings from Wall Street, cautioning them that their portfolios can't sustain the sort of withdrawal rates that used to be considered safe. Feeling pinched? Don't resign yourself to a lifetime of scrimping and saving just yet." Destination disaster Submitted by Norm 5:24 PM EST 11/14/04 Thrift "Did I ever feel saddened by the loss of those students who did not return after my depressing lecture? Not at all. If they were sufficiently discouraged in just two hours to abandon their fledgling aspirations, I helped save them time and money and spared them a trip down the road to failure. It's far less costly to abandon a business in the classroom or on paper than in the dog-eat-dog atmosphere of the real world." P&C industry agrees to full compensation disclosure Submitted by Norm 5:06 PM EST 11/14/04 Brokers "Canada's property and casualty (P&C) insurance industry has agreed to provide full disclosure of how brokers are compensated, beginning in the new year. But it's too early to say if the life and health side will take similar steps, according to an industry spokesperson." Unlucky in riches Submitted by Norm 2:58 PM EST 11/10/04 Thrift "For a lot of people, winning the lottery is the American dream. But for many lottery winners, the reality is more like a nightmare." Cheap home loans today, trouble tomorrow Submitted by Norm 1:11 PM EST 11/07/04 Real Estate "Anyone with a pulse can now get a home loan. But higher interest rates in the future will mean fewer buyers and surplus inventory." First families, second marriages Submitted by Norm 1:02 PM EST 11/07/04 Trusts "If you're in a second marriage and you want your kids from your first marriage to eventually inherit what you leave behind, you had better plan for this to happen." Getting government money from your RESP Submitted by Norm 12:59 PM EST 11/07/04 Government "The Registered Education Savings Plan (RESP) has become the cornerstone vehicle for saving money for children and grandchildren's education." JasonZweig.com Submitted by Norm 3:14 PM EST 11/05/04 Indexing "When it comes to investing, there's a world of difference between good advice and advice that sounds good. The vast majority of personal finance commentary, both online and in the "dead-tree" world, certainly sounds good enough -- "put all your retirement money in stocks," or "aggressive growth funds are the place to be," or "small stocks return more than large stocks." But there's something odd about this kind of advice: It's always asserted as if it's true, and yet its truth is never proven. Unfortunately, you can't afford to take investing advice on faith. To prosper in the long run, you've got to be able to separate the good advice from the advice that just sounds good. My goal here is to help you do that." Index funds best way to go for a little Americana Submitted by Norm 3:13 PM EST 11/05/04 Indexing "Whether you're rejoicing or retching over the U.S. election results, there is one investing fact that stands out: Accounting for just over half of the global stock market, the United States is a must-have in your portfolio." A reality check on your financial fantasies Submitted by Norm 3:03 PM EST 11/01/04 Thrift "Waiting for the lottery or for Prince Charming to come and wipe away all your personal finance woes? It's time to stop dreaming and face reality." Six frightful scenarios for a scary Halloween Submitted by Norm 12:02 PM EST 10/31/04 Halloween "All those ghosts and goblins coming to your door can be a real treat. But the trick could be on you. Without proper care, you could find yourself booed by a hooligan or sued by a ghoul." Receiving Social Security? Thank 9 workers Submitted by Norm 11:56 AM EST 10/31/04 Government "It takes nine minimum-wage or one highly paid worker to cover the cost of the average monthly Social Security benefit. Now which kinds of jobs should we be trying to create?" Can active management beat index funds? Submitted by Norm 5:26 PM EST 10/26/04 Indexing "The best course may run counter to popular thinking." Insurers getting dragged out of disclosure stone age Submitted by Norm 4:44 PM EST 10/26/04 Brokers "Badger someone in the mutual fund industry about fees and disclosure and you'll often hear muttering along the lines of "yeah, but you should really should take a look at the insurance business." Too true. Compared with insurance, mutual funds have the transparency of freshly Windexed glass." What to do when mom's money runs out Submitted by Norm 11:45 PM EST 10/25/04 Health "Nursing-home costs can vaporize an elderly parent's life savings and many boomers are being caught off guard. Here are some resources to help." Bank offers affordable way to make endowment Submitted by Norm 11:40 AM EST 10/24/04 Taxes "Donating a sculpture, tree or other landmark is not the only way to leave a reminder of yourself. A sum of money invested on your behalf could fund good works for years after you are gone." Most expensive colleges Submitted by Norm 11:35 AM EST 10/24/04 Thrift "Quick: What will $36,750 buy you? Only a year's worth of tuition at the country's most expensive college, not including room and board." Battle your budget back into shape Submitted by Norm 8:29 PM EST 10/23/04 Thrift "Household budgets don't run themselves. When yours begins to break down, don't run away -- roll up your sleeves and start getting it back into condition." The best idea is to toss those credit card cheques Submitted by Norm 8:00 PM EST 10/23/04 Debt "For a glimpse of the big banks at their worst, just open your monthly credit card statement. If you think this is a rant against credit card interest rates, you're only partly right. Card rates are high, but immaterial if you pay your balance off in full every month. What's objectionable is the way some financial institutions try to circumvent this fact. They do it with an odious little device that presents itself as a cheque that you can write to anyone and have the money applied to your monthly credit card bill." Fast-forward and grow rich Submitted by Norm 3:57 PM EST 10/16/04 Thrift "If you consider the 61 hours of ads the average American sees each month, there's nothing more expensive than free TV. Here's why the alternatives pay off." Canadian residents face tax on U.S. rental income Submitted by Norm 3:55 PM EST 10/16/04 Taxes "We would like to purchase a condo in Florida to spend our winters down south. In the summer months, we would like to rent out this condo. How will income from this condo be treated from a Canadian and U.S. tax perspective?" Discount brokers are good for trading stocks, not bonds Submitted by Norm 2:28 PM EST 10/14/04 Brokers "Mr. Brownridge believes spreads are so high at discount brokers that investors are effectively paying a similar cost to the one charged on bond mutual funds through their management expense ratios. Ironically, the type of investors who buy bonds directly are the sort of people who fancy themselves too savvy to buy bond funds." Grant strategy can provide immediate education cash Submitted by Norm 2:23 PM EST 10/14/04 Taxes "I then shared with Gerry a clever strategy using a registered education savings plan (RESP) that can provide a tidy sum of cash, almost immediately, to help pay for Jared's education costs." Build wealth in any market Submitted by Norm 11:20 AM EST 10/11/04 Indexing "So many investors -- maybe even you -- bought into some wild notions about stocks in the headiest days of the bull market. Today, perhaps a bit poorer, you're certainly wiser." Direction of distributions creates two classes Submitted by Norm 12:36 PM EST 10/09/04 Trusts "It's also a lesson in the new hazards of being a trust investor. Income trusts were originally created as an investment vehicle for nice, stable businesses to pay nice, stable dividends to blue-rinse grannies who wanted monthly income with no headaches. Three years after the boom in business trust IPOs began, a new pattern has emerged. There's a stratification of the market: lots of little winners, and a growing bunch of very big losers. Avoiding the junk has become critical to your portfolio's health." Gurus want your money Submitted by Norm 4:47 PM EST 10/04/04 Real Estate "Among those making money on real estate are the gurus selling (expensive) words of wisdom." The worst kind of debt Submitted by Norm 4:46 PM EST 10/04/04 Debt "A whopping balance used to be evidence of a shopping frenzy or luxurious trip. Now, we're paying the rent with plastic. Survival debt is a bad, bad sign." Sleazy new debt-collector tactics Submitted by Norm 4:40 PM EST 10/04/04 Debt "It may not be your debt, but it could be your problem. Collection agencies are bullying blameless consumers into paying debts they never owed." From debt to wealth on $10 a day Submitted by Norm 3:33 PM EST 09/27/04 Thrift "How would you like to be free of credit card debt? To have a financial cushion to fall back on?" Regulators miss the real fund scandals Submitted by Norm 11:31 AM EST 09/26/04 Funds "The big problem is skewed advice dispensed by advisors who recommend products geared to pad their personal retirement accounts instead of their clients'. In the long run, this is far more destructive than the practices the OSC is fretting over." Seniors victimized, group says Submitted by Norm 12:50 PM EST 09/23/04 Brokers "Canadian seniors are being victimized by abusive mutual fund sales practices, excessive fees and lax regulators, a report by the Canadian Association of Retired Persons says." Don't tell them what I make Submitted by Norm 12:48 PM EST 09/23/04 Brokers "A purer alternative is true fee-only planning, which entails paying a la carte for services like designing financial plans, or paying for truly objective advice by the hour -- with no compensation paid from the sale of financial products. This is normal practice in most professions -- clients expect to pay a fee each time they engage a lawyer, dentist, plumber or mechanic." Canadian fund firms should follow U.S. lead Submitted by Norm 12:46 PM EST 09/23/04 Indexing "Fidelity Investments, the largest U.S. fund company, recently took a run at indexing powerhouse Vanguard by slashing the management expense ratios on five index funds to 0.10 per cent from between 0.19 and 0.47 per cent. The on-line broker E*Trade then made things even more interesting by lowering the MER on two in-house index funds to 0.09 per cent. If you follow index funds in Canada, you'll want to weep. The largest Canadian index fund by far, CIBC Canadian Index, has an MER of 0.96 per cent, while second-ranked TD Canadian Index is at 0.85 per cent and third-ranked RBC Canadian Index is at 0.84 per cent. The best bargain available is the "e" version of TD's fund -- it has an MER of 0.31 per cent but is available only over the Internet directly from TD." OSC can still turn investigation into victory Submitted by Norm 12:42 PM EST 09/23/04 Funds "The next stages of fund industry reform should stick to fees as well, specifically additional disclosure of how much investors are paying. Fund companies still don't spell out the sometimes significant amounts they pay in trading fees, even though almost every other fee is accounted for. As well, investors need to be shown in dollar terms exactly how much they've paid in fees each year." OSC strike against fund industry Submitted by Norm 12:39 PM EST 09/23/04 Funds "There have always been people who believed they were smarter than everyone else, could jump in and out of the market, exploit loopholes, make the fast buck. There always will be. That some of these people reside on Bay Street instead of Wall Street, and that Canadian mutual fund companies took their money, is neither a shock nor a grave scandal." Tax competitiveness Submitted by Norm 5:22 PM EST 09/22/04 Taxes "Today, as Canadians look to governments to fund health care, education and infrastructure, it is too easy to lose sight of the important role that taxation can have on competitiveness and growth prospects for a country. Federal and provincial governments now collect $475 billion annually in revenue almost $16,000 for each adult and child by far the biggest hit on a typical family's budget. However, as I hope to make clear, I do not mean that only the level of taxes matters to competitiveness. What is also critical is the structure of taxation the degree to which we rely on inefficient taxes that inhibit economic growth, create unfairness, and cost Canadians dearly by forcing them to comply with onerous rules and regulations." Taxes gouge investors Submitted by Norm 5:21 PM EST 09/22/04 Taxes "Under the current system, an Ontario resident in the top tax bracket -- 46.4% -- must earn $1,866 in order to clear $1,000. If this is invested in a bond paying 6% a year, that is taxed again at the top marginal rate, year after year. So on top of the $866 taxed on the original earned income, Ottawa taxes the $60 a year in interest income at 46%, leaving a net $32 for the saver. Factoring in inflation over 20 years, taxes would consume 95% of the real return, pension actuary Malcolm Hamilton calculates." Homeowners should not think they're bubbleproof Submitted by Norm 3:58 PM EST 09/19/04 Real Estate "The Canadian housing market is a bubble-free zone right now, but let's not get complacent about it. With concern about housing bubbles now cropping up in the United States, Britain and Australia, you have to wonder how long homes here can continue to deliver the plus-sized gains of the past few years." Rich Man, Poor Man Submitted by Norm 3:51 PM EST 09/19/04 Thrift "But here's the ironic part of it. If, from the beginning, the little guy had adopted a strict policy of never spending more than he made, if he had taken his extra savings and compounded it in intelligent, income-producing securities, then in due time he'd have money coming in daily, weekly, monthly, just like the rich man. The little guy would have become a financial winner, instead of a pathetic loser." The best debt is still no debt Submitted by Norm 3:41 PM EST 09/19/04 Debt "Me, I like to keep it simple. The best debt is no debt at all." Bubble trouble Submitted by Norm 3:33 PM EST 09/19/04 Real Estate "Forget book clubs and poker nights. America's property craze has spawned a new social network: the real estate investment club." Ethics course has brokers on right track Submitted by Norm 2:18 PM EST 09/16/04 Brokers "It's easy to dismiss this initiative as mere cosmetics, but that would be unfair. Applied Ethics in the Securities Industry, as the CPH course module is enticingly titled, has an unambiguous, do-the-right-thing message that the financial sector's rookies would do well to absorb." Making money Submitted by Norm 6:11 PM EST 09/12/04 Crime "Counterfeiting is on the rise in Canada. And nobody did it better--or did more damage--than Wesley Weber, the man who crippled the $100 bill" Make student debt more manageable Submitted by Norm 6:05 PM EST 09/12/04 Debt "I've got three pieces of advice for those who are considering student loans, or have already borrowed for an education." Don't be hooked by the Internet's biggest fraud Submitted by Norm 2:53 PM EST 09/08/04 Crime "They call it 'phishing:' Crooks use official-looking e-mails and fake Web sites to get your personal data, then steal from you. Here's how to protect yourself." Top funds at fire-sale prices Submitted by Norm 4:18 PM EST 09/07/04 Funds "Fidelity has cut fees on some of its index funds, making it easier for investors to make money and putting pressure on rival Vanguard." Time to hedge on hedge funds? Submitted by Norm 4:17 PM EST 09/07/04 Funds "New research shows that returns are sliding, and some don't help you diversify" Bond fund risks outweigh rewards Submitted by Norm 3:50 PM EST 09/07/04 Funds "Bond funds are generally poor investments, with fees that are far too high, wiping out much of their returns and making them not worth the risk for the average investor, according to one prominent mutual fund analyst." Fund your kid's schooling Submitted by Norm 2:29 PM EST 09/05/04 Taxes "I want to talk to those of you who are business owners today. A loan from your corporation to your child can really help to pay for that education." Stability ratings help spot bad tomatoes Submitted by Norm 2:26 PM EST 09/05/04 Trusts "It was Attack of the Killer Tomatoes week in the income trust world. The fun began on Tuesday when Hot House Growers Income Fund announced that an unprecedented drop in tomato prices has forced it to suspend its monthly distribution. In the ensuing carnage, Hot House units lost 43 per cent of their value." Women's guilty secrets about spending Submitted by Norm 2:26 PM EST 09/03/04 Thrift "It's a hidden bit of behavior so many women share: They don't want the men in their lives to know how much they spend on clothes." Vanguard shuts out int'l small-cap investors Submitted by Norm 2:24 PM EST 09/03/04 Funds "By closing its International Explorer fund to new investors, Vanguard has thrown another significant roadblock in the path of investors who want their money to work as hard as possible for them." Chou's straight talk Submitted by Norm 2:19 PM EST 09/03/04 Funds "On plain white paper, Mr. Chou gives you straight, unvarnished talk about his results, the markets and the business of running a fund. By comparison, most standard fund industry annual reports have the feel and depth of insight you usually see in new car brochures." How many funds are too many? Submitted by Norm 3:41 PM EST 08/29/04 Funds " The reality is that I'm not sure it is about how many funds you have but rather the types of funds that you own. Far too often, I see 5 to 7 funds in a portfolio that do the exact same thing. When one moves up, so do the other six. And when one moves down, so do the other six. In fact, someone has coined the term DIWORSIFICATION." 22 ways to foil credit card thieves Submitted by Norm 3:10 PM EST 08/26/04 Crime "You probably won't end up paying the bill, but a stolen credit card can still cost you big in time and aggravation. Here's how to protect yourself online and off." CFP designation is consumer's first line of defence Submitted by Norm 5:12 PM EST 08/24/04 Brokers "As absurd as it sounds, anyone outside the province of Quebec can call themselves a financial planner without any qualifications. The Certified Financial Planner designation is your first line of defence against the amateurs out there." Negotiating a new job? Think outside the tax box Submitted by Norm 5:10 PM EST 08/24/04 Taxes "Be creative in asking for non-taxable benefits that can amount to tax-free compensation" Your financial secrets are headed overseas Submitted by Norm 5:55 PM EST 08/22/04 Crime "More credit, mortgage and tax files are being handled abroad. Nothing suggests your data are more vulnerable -- but an identity thief 10,000 miles away is virtually untouchable." Battling fund myths Submitted by Norm 5:51 PM EST 08/22/04 Funds "A recent release by Mackenzie Financial Corporation has sparked all kinds of public and private debate. It rebutted the media's persistent pro-indexing message with performance comparisons aimed to showcase active managers' superiority - which was reported in a recent National Post column. Rebuttals proliferated and it became clear that not only is Mackenzie's comparison flawed, but that even rebuttals had holes." Just the Facts Ma'am Submitted by Norm 5:50 PM EST 08/22/04 Funds "Deciding which investments to own - whether traditional mutual funds or ETFs - is a key investment decision, so having the pertinent facts is critical for investors. We believe the article lacked sufficient balance in exploring all the relevant facts, and we are particularly concerned that the article stated facts and based conclusions on what we believe to be some very questionable data and comparisons." Exploding fund myths Submitted by Norm 5:49 PM EST 08/22/04 Funds "David Feather, president of Mackenzie Financial Services Inc., is fighting back against publicity that he believes is unfair to mutual funds in relationship to the exchange-traded funds (ETFs) with which they compete." There are alternatives to funds with high MERs Submitted by Norm 2:04 PM EST 08/18/04 Funds "These are smaller, lesser-known fund management companies that charge less than the industry giants. Names include Phillips, Hager & North; Beutel Goodman; McLean Budden; Saxon; Sceptre; and Mawer." Internet fraud Submitted by Norm 12:30 PM EST 08/15/04 Crime "The scams usually begin with an e-mail telling you that you urgently need to address some matter in one of your financial accounts. Here's how to avoid becoming a victim." Preaching a steady course Submitted by Norm 3:56 PM EST 08/15/04 Bogle "John Bogle, founder of the $730 billion Vanguard mutual fund empire, has seen a lot of investment cycles come and go: the "Nifty 50," the "go-go 1960s," the stock drought in the 1970s." Are we saving too much? Submitted by Norm 3:45 PM EST 08/15/04 Thrift "I have to admit this isn't a question I get every day. In fact, I've never gotten it before. Given the spendthrift habits of most Americans, it's just not something that's ever come up. Saving too much? It's almost like asking whether someone can be too rich or too smart." OSC highlights questionable scholarship plan sales tactics Submitted by Norm 3:21 PM EST 08/15/04 Brokers "A recent Ontario Securities Commission report highlighted some very disturbing findings about how scholarship plans are sold in several provinces across Canada." Homes fall prey to identity thieves Submitted by Norm 3:15 PM EST 08/15/04 Crime "With a record, hot real estate market, the scum -- often in organized rings -- have set their sights on our homes." 13 ways to live well on less Submitted by Norm 2:15 PM EST 08/13/04 Thrift "Every dollar you spend has consequences elsewhere in your life. Remembering that will change the ways you spend and save." A primer on stock-market averages and indices Submitted by Norm 1:21 PM EST 08/13/04 Indexing "This measure began when Charles Henry Dow, the co-founder of Dow Jones and Company in 1882, devised an average to better see broad-market movements from the daily ups and downs of individual stock prices. The first Dow average appeared July 3, 1884 in the Customer's Afternoon Letter, a two-page market letter first published by Dow Jones in November 1883. At the time, the average was comprised of only 11 stocks, 9 of them railroad-related reflecting the relative importance of the rail industry in the economy at the time." Higher fund fees hurt long-term gains Submitted by Norm 9:42 PM EST 08/12/04 Funds "Mutual funds do better when their costs are lower. That's the conclusion of a massive study that analyzed returns over a period of almost 20 years." A greedy investment advisor may be taking advantage Submitted by JK 6:02 PM EST 08/09/04 Brokers "What are the lessons? First, know enough to trust. In other words, to ensure your parent or you are not being taken advantage of by an unscrupulous broker, you must get yourself educated about investments and learn about the pressures advisors are under to generate commissions." Fair dealing's advisor committee takes summer break Submitted by JDG 5:57 PM EST 08/09/04 Government "Despite his strong beliefs, De Goey concedes that he has lost the argument on outlawing embedded compensation and is now turning his sights on more and better disclosure, suggesting that prospectuses and fund statements contain large warnings about performance and risk, similar in tone to the stark warnings on cigarette packages." Recovering from identity theft Submitted by Norm 10:15 AM EST 08/09/04 Crime "If you suspect your identity has been stolen, act fast as time may not be on your side." Real estate: What could go wrong? Submitted by Norm 10:09 AM EST 08/09/04 Real Estate "I think buying the lot next to my house might be a good investment, but could this be a bad choice?" 7 ways to radically cut your debt Submitted by Norm 10:02 AM EST 08/09/04 Debt "When credit cards are sucking you down like quicksand, paying double or even triple the minimum payment won't cut it. Extreme debt calls for extreme measures." Fund mergers bring tax headaches for unitholders Submitted by Norm 8:03 PM EST 08/08/04 Funds "The net result of mergers is that losses are being lost to the fund. They are more than the capital gains" Employee loans creative benefit Submitted by Norm 6:26 PM EST 08/08/04 Taxes "If your employer is willing to lend you money, you could be better off than borrowing from the bank." Mutual fund taxation Submitted by Norm 6:19 PM EST 08/08/04 Funds "If investors really understood the bizarre tax issues surrounding actively managed mutual funds they might think twice about investing." Let's get fund brokerage fees out in the open Submitted by Norm 1:52 PM EST 07/22/04 Funds "MERs are a great indicator of fund costs, except for one problem. They don't include the commissions the fund pays every time its manager decides to buy or sell some shares." 419ers morph into Murder Incorporated Submitted by Norm 3:41 PM EST 07/19/04 Crime "It's easy to dismiss Nigerian 419 advance fee fraudsters as a bunch of chancers who prey on the gullible and the greedy and occasionally get lucky. After all, a fool and his money are soon parted, and the victims of these scams have brought financial misfortune on themselves, isn't that right?" Buyers of RESPs beware Submitted by Norm 7:50 PM EST 07/17/04 Brokers "Sellers of traditional education savings plans have been condemned for deceitful, high-pressure sales practices, targeting of low-income parents with unsuitable plans, shoddy supervision and training and poor record keeping. The Ontario Securities Commission issued a damning industry compliance report Thursday, a week after putting five dealers on a short leash until they correct deficiencies." The lottery-ticket retirement plan Submitted by Norm 4:05 PM EST 07/16/04 Thrift "You've got better odds of saving a good nest egg than winning one -- but there are ways to improve your chances, if only slightly." From alpha to omega Submitted by Norm 12:06 PM EST 07/16/04 Funds "Such strategies might make money when there are few players and lots of inefficiencies, but they are much less lucrative when there are many funds doing the same thing. Now that there are, for example, some 600 hedge funds specialising in credit (loans and corporate bonds), the inefficiencies on which they feed are much reduced, leaving the managers scratching around for other strategies or taking more risk. Generally, this means leveraging returns by borrowing more." Can we trust the mutual fund industry yet? Submitted by Norm 4:34 PM EST 07/14/04 Funds "Despite the ongoing investigations, Spitzer and top regulators at the SEC have said in recent interviews that the worst of the fund industry scandals probably are now past." The trailer truth Submitted by Norm 10:40 AM EST 07/13/04 Brokers "Furthermore, if advisors are allowed to use misleading terminology to describe their services, I wonder what would happen if we were to re-brand trailers in the opposite direction - perhaps as "independence compromising bribes". Imagine having a financial advisor come up to you and say "I run a bribe-based practice". That would not only add to the frankness of the ensuing discussion, it would also explode the myth that most financial advisors are independent. In fact, most advisors fail to recommend many of the best fund companies' products because they can't bear to hand their clients a bill. In spite of this, they sanctimoniously insist they are independent - even though embedded trailers effectively limit the products they recommend. This arrangement allows some advisors to actually suggest that their financial advice is free, which is patently false." Unbundling Canadian ETFs Submitted by Norm 3:41 PM EST 07/12/04 Indexing "Consider two options for the truly long-term index investor. The first option is to purchase an iUnit ETF and the second option is to buy the index's stocks directly. At first glance, the choice between buying a low-cost exchange-traded fund that holds many stocks or buying each of the stocks directly appears to be obvious. The exchange-traded fund is likely to be the better bargain. However, buying the stocks directly may be better for some investors because the Canadian stock market is very small and it is dominated by a few big names. As a result, one might reasonably approximate an index fund by holding only a few stocks." With this debt, I thee wed Submitted by Norm 7:33 PM EST 07/10/04 Debt "Finally, it's worth mentioning that financial problems are one of the main causes of marital trouble. Olivia Mellan, author of "Money Harmony: Resolving Money Conflicts in Your Life and Relationships," has found that most couples have diametrically opposed spending habits, and it's not uncommon that one spouse enters the marriage with a mountain of debt. She offers one piece of advice: Share all your money secrets, but don't share the money." Even academics make mistakes about hedge funds Submitted by Norm 10:06 AM EST 07/09/04 Funds "One reason is that "if you are in areas where there are too many smart people, the alpha goes away." Instead, managers will seek out areas where they have a specific information advantage, and seek out "return opportunities that don't exist in the traditional world," particularly in emerging markets." Bond mutual funds -- here's the best of a bad lot Submitted by Norm 9:57 AM EST 07/09/04 Funds "If you're buying bond funds today, a low MER is an absolute must. The manager of your bond fund is in a tough enough battle to make you money without bearing the weight of an overstuffed MER." Can't banish budgeting? This software's for you Submitted by Norm 11:28 AM EST 07/07/04 Thrift "One of the reasons for the success of David Chilton's The Wealthy Barber was that it rejected budgeting on the belief that it doesn't actually work. Instead, he suggested the more commonsensical pay-yourself-first strategy, where you invest with money that you take off the top of your take-home pay rather than using what's left over after expenses are paid." When funds have to show their hand Submitted by JK 11:21 AM EST 07/04/04 Funds "While fund companies' actual votes are not yet public, their voting guidelines are. And an analysis of the issues that fund companies care about - or do not - is revealing." Debts on homes rise for elderly Submitted by JK 11:16 AM EST 07/04/04 Debt " As Americans have rushed to borrow at historically low interest rates, an unlikely group has led the charge: the elderly." Why going broke is a fact of life in America Submitted by Norm 11:54 AM EST 07/01/04 Debt "Bankruptcy has become little more than a few months in purgatory, rather than the seven-year ache -- and lifelong disgrace -- it once was." ETF tracking error needs improvement Submitted by Norm 1:12 PM EST 06/30/04 Indexing "iShares ETFs have not performed quite as well as Vanguard conventional mutual funds with the same target index, three new studies show. Vanguard's funds have generally beaten the indexes, while iShares have slightly underperformed them." Debit-card fees sneak up on shoppers Submitted by Norm 2:23 PM EST 06/29/04 Thrift "More banks are tacking on point-of-sale fees of as much as $1.50 -- and aren't adequately warning customers, some groups say. Watch your bank statement to find out." In search of greener grass in the U.S. Submitted by Norm 11:41 AM EST 06/27/04 Taxes "But this raises the question: Will you always be better off living and working in the United States than in Canada? It's an important question, because more Canadians than you can shake a hockey stick at have considered taking job offers in the United States. The "brain drain" continues. The answer as to whether you'll be better off financially really depends on where you're moving from in Canada, and where your destination is in the United States. You've got to consider both tax rates, and the cost of living when making the comparison." The search for low-fee investments Submitted by Norm 11:39 AM EST 06/27/04 Funds "And it happens in the fund world that low fees and good returns often go hand in hand. Some prime examples: Phillips Hager & North, McLean Budden, Beutel Goodman, Saxon Funds, Chou, Mawer, and Leith Wheeler." Seg funds Submitted by Norm 10:59 PM EST 06/25/04 Funds "The cost of owning segregated funds has escalated so quickly since the late 1990s that they have become a luxury many investors can't afford." PHN's entrepreneurial spirit keeps its costs low Submitted by Norm 12:00 PM EST 06/23/04 Funds "It's one of Canada's best-run mutual fund companies -- and one of the most difficult in which to invest." It's not how it performs, it's about commission Submitted by Norm 11:56 AM EST 06/23/04 Funds "When it comes to fees, it's always been thus. Even when its funds boasted red-hot performance, Altamira Investment Services Inc. couldn't catch on with the broker crowd. But when the company struck a deal with Triax Capital Holdings Ltd. that saw advisers earn a 6-per-cent selling fee on a small-cap Altamira-managed fund, it suddenly had a $200-million hit on its hand." How we probed the churn patterns Submitted by Norm 10:00 AM EST 06/21/04 Funds "The aggregate annual profits for the market timers were calculated by attributing all churn in excess of the benchmark standard to rapid in-and-out trading. And finally, we calculated the impact on the funds' assets by applying Mr. Zitzewitz's estimate of 60 to 70 basis points in profit pocketed by the market timers for every round trip." Select few reap unfair gain Submitted by Norm 9:56 AM EST 06/21/04 Funds "Eric Zitzewitz, an assistant professor of economics at Stanford University's business school, whose research has been cited in court documents, estimates that the dilution created by market timers costs average shareholders in international mutual funds 1 to 2 per cent of their assets each year." CRA interest rate cut means opportunity Submitted by Norm 12:01 PM EST 06/19/04 Taxes "You can bet the rate won't stay this low for long. You see, this falling rate presents a great opportunity for thousands of Canadians to save tax on certain loans. I want to discuss spousal loans today." So your cottage is worth a fortune? Submitted by Norm 2:42 PM EST 06/18/04 Taxes "Cottagers, the taxman is stalking you. Beware if you own a cottage that has soared in value over the past few years." Taking your portfolio abroad Submitted by Norm 1:31 PM EST 06/16/04 Indexing "Watch those costs. Pay special attention to expenses and fees, which are generally higher in foreign funds than domestic funds." Reasons to be wary of two popular ETFs Submitted by Norm 1:00 PM EST 06/16/04 Indexing "Judging from fund flows, trading volume, and requests we receive for new analyses, investor interest in a pair of exchange-traded funds, iShares MSCI Japan and iShares Dow Jones Select, is running high. Are these funds worthwhile? Possibly, but investors should make sure they understand what they're getting before diving into either one." 3 steps to slaying your money demons Submitted by Norm 9:00 PM EST 06/14/04 Thrift "If you're bedeviled by fear, confusion and denial when it comes to your personal finances, join the crowd. Here's your head start on an exorcism." The Gipper's forgotten tax victory Submitted by Norm 3:09 PM EST 06/13/04 Taxes "His 1986 tax reforms made the system simpler and fairer. Too bad his successors have allowed the complications to creep back in" Understanding downside risk Submitted by Norm 3:01 PM EST 06/13/04 Funds "By seeing how they perform during the worst times, we have a better understanding of how these investments will react to future periods of stress. By predicting the worst, the investor gains insight." Index fund investment is simple, stress-free Submitted by Norm 2:56 PM EST 06/13/04 Indexing "The perennial gripe against index funds is that they're just average. Would you want to send your kid to an average pediatrician? Or have your transmission overhauled by an average mechanic? What's ironic about index funds, however, is that investors who settle for average market performance will usually end up richer than the investors who stick with portfolio cowboys who aim for shoot-out-the-lights returns." Top 10 investing scams Submitted by Norm 2:44 PM EST 06/12/04 Crime "Someone's always ready to empty the pockets of the investor who's overly eager for outsized returns. Here are the most prevalent schemes." The Kings and Queens of mean Submitted by Norm 11:35 PM EST 06/10/04 Thrift "Here are 20 more rich and famous people who keep a tight grip on their dosh" Joint ownership can lead to problems Submitted by Norm 9:46 PM EST 06/06/04 Taxes "Joint tenancy with right of survivorship is different. The survivorship feature means that when an individual joint tenant dies, the deceased person's interest is automatically distributed to the remaining joint tenants. Think of this as a "winner takes all" game. The asset will pass to the surviving owners outside of the probate process. The result? Probate fees are avoided." Creating sound governance Submitted by Norm 9:40 AM EST 06/06/04 Bogle "Yet corporate democracy is currently conspicuous by its absence from the governance scene. As the legendary Benjamin Graham put it, "in legal rights and machinery, the stockholders as a class are king . . . they can hire and fire managements and bend them completely to their will. But the assertion of their rights in practice is almost a complete washout. Unless prodded violently into action, they show neither intelligence nor alertness. They vote in sheep-like fashion for whatever management recommends, no matter how poor the record of accomplishment may be. . . The leading investment funds could contribute mightily to the improvement of corporate managements . . . but have shied away . . . missing a great opportunity for rendering service to the investing public." And so it remains today." To tilt or not to tilt Submitted by Norm 9:21 AM EST 06/06/04 Indexing "At the end of the day, the gap between low-cost open-end index funds and ETFs is a crack in the sidewalk. The gap between either of these and the average actively managed fund is the Grand Canyon." Two solitudes over disclosure Submitted by Norm 9:17 AM EST 06/06/04 Brokers "Why are fund companies and securities dealers so at odds with investors?" Does past performance matter? Submitted by Norm 12:08 PM EST 05/31/04 Funds "Mutual fund advertisements and prospectuses routinely warn investors that 'past performance is no guarantee of future results,' but that statement doesn't go far enough, according to a recent study." Funds of ETFs leave much to be desired Submitted by Carl 12:04 PM EST 05/30/04 Indexing "These funds of funds have a lot of problems to address, including high costs and questionable strategies, before deserving consideration by investors." When death and taxes are charitably intertwined Submitted by Norm 10:36 PM EST 05/29/04 Taxes "At the time of my death, I want to leave a gift that benefits Carolyn, but benefits a specific charity as well. How? I can give to charity in my will, providing me with a donation credit in my year of death, which will save me tax. At the same time, I can provide Carolyn with the income, during her lifetime, from those same investments that I'm leaving to charity." One man's quest for redress ends happily Submitted by JD 12:08 PM EST 05/27/04 Brokers "Justice for people who were burned by their investment advisers is such a rare commodity that it's worth celebrating even a single victory. So, let's take a look at the story of Ernest Wotton and the cheque for $52,353 that his onetime brokerage firm wrote him not too long ago." Fees upon fees Submitted by Norm 12:19 PM EST 05/21/04 Indexing "One of things that can be really insidious if left unchecked, however, are the fees on fees associated with a number of so-called 'actively managed' mutual funds." Income trust investors to be sheltered from liability Submitted by Carl 11:16 PM EST 05/20/04 Trusts "The Ontario government is moving to make it legally clear that investors in publicly traded income trusts cannot be held liable for the activities of the trusts." Dig deeper Submitted by Carl 12:16 PM EST 05/20/04 Funds "Canadians like to take the moral high ground when it comes to comparisons with the U.S. We wisely stayed out of the invasion of Iraq, and we like to rein in the free market when it comes to health care. That same sense of superiority, however, could be blinding us when it comes to the Canadian mutual fund industry." Ottawa suspends restrictions on income trusts Submitted by Norm 12:51 PM EST 05/18/04 Trusts "Minister of Finance Ralph Goodale today announced that the Budget 2004 proposals to limit investment by pension funds in business income trusts will be suspended to allow for further consultations. The measures were originally proposed to take effect January 1, 2005." Secrets to 'living lite' Submitted by Norm 1:02 PM EST 05/15/04 Thrift "Forgetting about the Joneses is just one of many reader tips for dropping out of costly lifestyles that deplete your financial and emotional stores. Here's how you, too, can live well on less money." Stock options can generate a nasty surprise Submitted by Norm 12:56 PM EST 05/15/04 Taxes "Today, many former JDS Uniphase employees are feeling the same way. You would, too, if the taxman handed you a tax bill of about $276,000 on income you feel that you never had. There's a tax lesson to be learned here." Maverick managers hit on brainwave Submitted by Carl 11:28 AM EST 05/14/04 Funds "They're making peanuts, working in a small room in the basement of one of the partners' homes. But they have a point to prove. The mutual fund business is failing, they say, because it places too much emphasis on collecting assets and charging high fees and creating new, flavour-of-the-month funds, and too little on making money for their customers -- mostly middle-class investors who have few other options because they're not rich enough to qualify for higher-end, lower-cost investment counselling services." U.S. watchdog calls for end to trailer fees Submitted by Norm 11:25 AM EST 05/13/04 Funds "Ralph Lambiase, president of the Washington, D.C.-based North American Securities Administrators Association, calls for the changes in comment letters to the U.S. Securities and Exchanges Commission. Lambiase wants the SEC to eliminate mutual fund 12b-1 fees, which are similar to trailer fees in Canada. He also suggests that requiring mutual funds to impose a minimum holding period for fund shares would more effectively curtail market-timing abuses than the imposition of a mandatory 2% redemption fee." Why I like Saxon Submitted by Norm 11:51 PM EST 05/12/04 Funds "There are several good boutique fund comnpanies in Canada. One of my favorites is Saxon which offers some of the best performers in the industry plus the important advantage of a low cost structure and no load charges." They're called trailing commissions Submitted by Norm 9:24 PM EST 05/11/04 Funds "In the more than 10 years I've been a financial advisor, the very vast majority of financial advisors have referred to those ongoing payments made from mutual fund companies to advisors as "trailer fees". The media has gotten in on the act, and they too use this terminology. The trouble is, if you look at any prospectus for any fund where ongoing advisor payment is involved, you will see that these are legally referred to as "trailing commissions". Simply calling them fees doesn't make them fees." Are DSCs finally on their way out? Submitted by Norm 10:35 AM EST 05/09/04 Funds "Clients are beginning to appreciate fully the wiggle room they have in picking products, negotiating fees and choosing their contracts. Advisors, in turn, will probably need to focus more on support, and be willing to negotiate fees." The sleaziest show on Earth Submitted by Norm 2:48 PM EST 05/08/04 Funds "Most investors should steer clear of hedge funds. Lush pay has lured the best and brightest to hedge funds, says Michael Price, a hugely successful money manager. But "unless you've got at least $5 million to invest, hedge funds are not worth the risk and fees. Mutual funds will get you where you want to go, so screw hedge funds." With more polite language, Warren Buffett said the same thing at the Berkshire Hathaway meeting recently. A word from the wise." Earn a solid return in the slow lane Submitted by Carl 12:14 PM EST 05/08/04 Funds "By putting your clients in a dividend fund you'll not only help them beat the market but also minimize their exposure to risk in their portfolios" Low-MER investing picks up steam Submitted by Norm 12:09 PM EST 05/08/04 Funds "Whether clients are blaming their advisors or not, it appears low-fee investing continues to pick up steam in Canada, as investors seek alternatives to the traditional actively managed mutual fund, including exchange-traded funds (ETFs) and index funds." What Mom taught us about money Submitted by Norm 11:27 AM EST 05/07/04 Thrift "In honor of Mother's Day, we asked our readers to send in the best financial advice their mothers ever gave. And hey, it turns out, money really doesn't grow on trees and you shouldn't spend it all in one place." Fund investors punish the bad guys Submitted by Norm 9:44 AM EST 05/04/04 Funds "Mutual-fund shoppers mete out justice with their checkbooks, pulling billions out of tainted firms and rewarding those with low fees and no rap sheet." Malkiel agrees with Buffett Submitted by Norm 10:11 PM EST 05/03/04 Indexing "Buffett stated in his 1996 Berkshire annual report 'most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.'" You have the right to question taxman's assessment Submitted by Norm 11:13 AM EST 05/02/04 Taxes "After filing your tax return, you can expect to receive a notice of assessment from the taxman within eight to 12 weeks. If you disagree with Canada Revenue's assessment of your tax return, don't let it go." Advisers should stop whining about DIY investing Submitted by Norm 4:55 PM EST 04/27/04 Brokers "Do-it-yourself investors are naive, uninformed, overconfident and, above all, a danger to themselves. These are facts. Just ask a financial adviser. We've had some real insight into the thinking of some advisers over the past couple of weeks thanks to a controversy over whether self-directed investors should have access to low-cost mutual funds." Asset allocation does count Submitted by Norm 12:22 PM EST 04/26/04 Funds "Using active funds to form a diversified portfolio is a high-cost way to poor performance. A well-diversified portfolio of active funds will result in a portfolio that looks very much like the market portfolio. However, the cost of such a synthetic market portfolio is many times that of buying the actual market portfolio with low-fee index funds." A better way to invest Submitted by Norm 11:26 AM EST 04/25/04 Indexing "The approach to investing suggested in this guide, equally valuable for mainstream and wealthy investors, has been made possible by exchange-traded funds and the Internet (specifically online brokerages). Exchange-traded funds provide diversification and ease of management at remarkably low cost. The Internet cuts costs, removes intermediaries, and empowers the customer." Small names are big winners Submitted by Norm 12:29 PM EST 04/24/04 Funds "Quiet professionalism speaks loudly in this year's ranking of the best mutual fund families. McLean Budden is No. 1, followed by Phillips Hager & North Investment Management in second place and Mawer Investment Management in a fourth-place tie. Each is a no-load fund family run by a company that gives unitholders the benefit of its expertise in managing money for pension funds, foundations, not-for-profit organizations and high-net-worth types. Haven't heard of them? That's because these companies let money come to them rather than going after it with big marketing budgets and by paying big commissions to financial advisers who sell their products." With lower returns, costs matter Submitted by Norm 8:56 PM EST 04/23/04 Indexing "Index-investing pioneer Burton Malkiel is projecting considerably lower returns on equities - in fact on all financial assets - something that makes costs matter all the more. But it also means disciplining investor expectations." E-Trade controversy stirs advisor debate Submitted by Norm 8:41 PM EST 04/23/04 Brokers "E-Trade's forced about-face on a program to sell F-class funds directly to the public generated some strong opinions from advisors this week" Small investors deserve higher standards Submitted by Norm 3:57 PM EST 04/21/04 Government "It is simply not realistic to expect that banks will stand up and fight on behalf of shareholders when their own money is at stake" The investors' advocate Submitted by Norm 3:55 PM EST 04/21/04 Bogle "Fifteen percent of the money in equity mutual fundsnearly $600 billionis invested in low-cost index funds. Investors have one man to thank for making that option available to them: Jack Bogle, founder of the Vanguard mutual fund group and creator of the first index fund in 1975." Do advisors fear F class units? Submitted by Norm 1:15 PM EST 04/19/04 Brokers "If pressure from advisors was at least partially to blame for E&P's and AIM-Trimark's withdrawal from E*Trade's initiative, it's likely that those advisors aren't truly confident in the value of their advice - a sad statement for any professional." True value stocks different from those in value funds Submitted by Norm 12:11 PM EST 04/18/04 Funds "The reason value mutual fund managers have not outperformed growth mutual fund managers is that the terms "value" and "growth" as used by almost all mutual funds these days is nothing but marketing spin. Sure, there will be periods when the growth funds outperform the value funds and vice-versa, but over time the returns of the two groups even out. The fact remains that value mutual funds do not own "true" value stocks." Funds' dirty little secrets Submitted by Norm 4:24 PM EST 04/17/04 Funds "The more time I spend in the money management industry, the more I learn about the nearly infinite number of ways that investment firms can take advantage of their investors. All sorts of abuses result from the combination of motive -- there's big money at stake -- and opportunity. Even sophisticated investors (of which there are few) aren't aware of or can't detect certain activities." Can't miss tips for late season filers Submitted by Norm 4:22 PM EST 04/17/04 Taxes "Tax season is in full swing, and thousands of Canadians will be filing their returns in the next two weeks. Many have filed already, but procrastinators abound at tax time. Let's face it, the tax preparation task is about as exciting as shopping for snow tires -- so what's the hurry? The good news? Last minute doesn't have to mean lost money. There may still be opportunities to save tax dollars as you file your 2003 tax return. Consider the following list of can't-miss tax-saving measures." Questions raised over possible trust loophole Submitted by Norm 4:21 PM EST 04/17/04 Trusts "The federal budget issued in March could contain a massive loophole which will benefit pension plan members in Quebec only, according to a well-known financial author." April 15 wasn't always like this Submitted by Norm 10:24 AM EST 04/14/04 Taxes "No one set out to build a tax system that confuses many, infuriates most and touches virtually all. It took nearly a century of hard work." A few words to the wise Submitted by Norm 1:25 PM EST 04/13/04 Indexing "Warren Buffett has also complained about abuses in the fund industry. In his annual letter to Berkshire Hathaway shareholders, published last month, Buffett decried "the lapdog behavior of independent fund directors" who routinely rehire management companies and pay them huge sums, however pathetic their performance. The 73-year-old Sage of Omaha noted that very low-cost index funds "are investor-friendly by definition and are the best selection for most of those who wish to own equities."" Even a small interest rate rise will take shine off REITs Submitted by Norm 1:00 PM EST 04/13/04 Trusts "It's not that the real estate trusts are doing anything wrong; but neither are they doing as much right as their astounding stock charts would suggest. Their market success has been driven by interest rates, making U.S. Federal Reserve Board chairman Alan Greenspan the hero of the sector. Getting an 8.8 per cent return from Summit looks decent against guaranteed investment certificate returns that you need a microscope to see." Use capital losses to reduce your tax bite Submitted by Norm 2:39 PM EST 04/11/04 Taxes "Investment losses are painful. But you can relieve the pain when you use your losses to reduce the tax payable on capital gains." Unemployed in '03? Here are some tax tips Submitted by Norm 3:15 PM EST 04/10/04 Taxes "Today, I want to share some tax tips with those who may have been unemployed at some point in 2003." Loss of AIM mars E*Trade's cheaper investing bid Submitted by Norm 12:53 PM EST 04/08/04 Brokers "A breakthrough in low-cost investing has fizzled because of a mutual fund company's trepidations." Where to find hot deals when picking a stockbroker Submitted by Norm 5:48 PM EST 04/07/04 Brokers "Attention, Kmart investors. Value investing is our theme today. Not the typical value style, which is to find undervalued stocks. Instead, we're searching for the best values in stock-trading commissions. The cheapest of the cheap, if you will." Fund analysts dismiss "fee freedom day" Submitted by Norm 5:35 PM EST 04/07/04 Indexing "Last year Barclays declared July 28 to be fee freedom day and the firm acknowledges that April 12 is a substantial improvement. But Atkinson says this is due to better returns and not lower management fees." April 12th is fee freedom day Submitted by Norm 5:33 PM EST 04/07/04 Indexing "Fee Freedom Day is the day in the year that Canadian mutual fund investors stop paying their managers and start paying themselves--keeping the returns that their savings generate" McLean Budden chops MERS again Submitted by Norm 3:09 PM EST 04/06/04 Funds "McLean Budden Ltd. said it is cutting its management fees on all of its mutual funds, making them among the lowest in the industry." Hard line on 'soft dollars' Submitted by Norm 12:11 AM EST 04/06/04 Funds "Critics of the system and they are growing by the day point to the obvious potential for abuse. When the SEC did a study of soft dollars in 1998, it found that some of these credits were used to buy theatre tickets, limousine rides and even interior design services." Strangest taxes Submitted by Norm 1:01 PM EST 04/04/04 Taxes "You might pay taxes on illegal drugs, Pepsi, playing cards and being a star. And that's not all." Tax time can put cash in your account Submitted by Norm 12:17 PM EST 04/03/04 Taxes "Maybe you've heard this advice before: Don't get excited about a tax refund at this time of year. Why not? A tax refund simply means that you've made a loan of your own money to Canada Revenue throughout the year, at no interest. I can think of better things to do with that money -- and I'm sure you can, too." All the major players should join F-class parade Submitted by Norm 12:14 PM EST 04/03/04 Brokers "Right now, investors who want to buy F-class funds are limited to E*Trade and ASL Direct, a small on-line fund dealer that's been around for about four years. Other on-line brokers are now looking at selling F-class funds and the major fund companies that have F-class funds will have to decide whether to accommodate them. If you want to help things along, contact your on-line broker and any fund companies you deal with to say you'd like to be able to buy F-class funds." Index fundamentalism revisited Submitted by Norm 11:18 PM EST 04/01/04 Indexing "we find that whether index funds or managed funds are the superior buy depends on the time span in question, but that managed funds almost always have a lower standard deviation of return than index funds." E*TRADE Canada offers access to lower MER mutual funds Submitted by Norm 1:52 PM EST 03/30/04 Brokers "Online discount brokerage E*TRADE Canada today announced the launch of the FundPlus Program, a new service that provides investors with access to a special class of mutual funds with lower management expense ratio." Nothing quick about getting rich with real estate Submitted by Norm 3:19 PM EST 03/29/04 Real Estate "And the question all this preaching raises is, do these investment techniques, systems and strategies really work? Can they actually make you rich? After all, would people keep trying it if it couldn't be done? Or are hundreds of thousands of people simply seduced by expert sales pitches and swindled out of hundreds and sometimes thousands of dollars?" Bubble trouble? Submitted by Norm 3:16 PM EST 03/29/04 Real Estate "People are fretting that rising house prices could collapse like they did in Toronto after 1989" Interest deductions lost under proposed law Submitted by Norm 2:08 PM EST 03/28/04 Taxes "Our government has said that it intends to allow the deductibility of interest costs related to borrowed money invested in common shares and the like (Finance explicitly said this in the Oct. 31 press release, and CCRA said the same in IT-533, paragraph 31), but has worded the proposed law to deny or restrict interest deductions. In other words, our government is saying "we're going to reserve the right to deny interest deductions, but don't worry, we won't enforce the new law."" Do you cheat on your taxes? Submitted by Norm 6:55 PM EST 03/26/04 Taxes "Most taxpayers say they don't. But more admit to doing so than in previous years." Bummed out? Bad time to shop Submitted by Norm 9:32 PM EST 03/25/04 Thrift "Think you paid too much for a little gift you bought yourself after a tough day at the office? A new study suggests your emotions may have pushed you to a bad decision." Hoodwinking innocent investors Submitted by Norm 8:54 PM EST 03/24/04 Indexing Norbert Schlenker, president of Libra Investment Management, had the following things to say in response to Kevin Cork's March 24th column at The Fund Library entitled The Tragic Perils of Passive Investing. The tragic perils of passive investing Submitted by Norm 8:51 PM EST 03/24/04 Indexing "Now, it seems to be the attitude of the media that regardless of the performance numbers, most Canadians are going to be better off in the iUnits fund than in the 'high cost, low performance' funds their advisor is going to put them in." A fresh start: Bankruptcy is no dead end Submitted by Norm 2:16 PM EST 03/24/04 Debt "With a bankruptcy, all of the individual's assets -- including real estate, cars and boats -- vest with the trustee and are then liquidated on behalf of the creditors, with some exceptions depending on the province. A person living in Ontario, for example, can keep $5,000 of personal belongings, $10,000 of household goods, $5,000 of vehicles and $10,000 of tools of the trade." Ottawa's trust moves are slick and subtle Submitted by Norm 11:27 AM EST 03/24/04 Trusts "Income trusts have been saved from the taxman's clutches, but at a subtle price that investors will pay without even knowing it. After needlessly spinning investors with ambiguous signals about its intentions toward trusts, the Finance Department said yesterday that it will drastically limit the ability of pension funds to participate in a big portion of the trust market." The disgrace of soft dollars Submitted by Norm 12:54 PM EST 03/23/04 Funds "Investment funds are secretly lining their pockets by inappropriately charging billions of dollars' worth of expenses to investors. These "soft-dollar" arrangements allow managers to overpay in brokerage commissions in exchange for research, office space, magazine subscriptions, etc. -- with shareholders unwittingly footing the bill." Mr. Rogers goes to Wall St. Submitted by Norm 12:21 PM EST 03/23/04 Indexing "The late "Mister Rogers" of children's television came to mind as I read a book by Charles E. Ellis called "Winning the Loser's Game -- Timeless Strategies for Successful Investing." Why Mister Rogers? It wasn't a book-jacket picture of the author in a cardigan sweater. Instead, it was the simple way Ellis explained some elegant investment concepts. More important, I felt that I could trust the guy. I found his jaundiced view of my industry to be especially endearing." Watchdogs could end up biting fund investors Submitted by Norm 12:13 PM EST 03/23/04 Funds "Shareholders have a new ally in consumer protection groups. I welcome their know-how in pushing for change -- and worry that they may naively squelch some good funds." Death, taxes, airline food Submitted by Norm 11:42 AM EST 03/21/04 Fun "April 15 is lurking around the corner, so if you haven't yet filed your federal tax return, it's time to set aside a few hours, gather together your financial records, and flee the country." Proposed fund rules 'dangerous' to investor Submitted by Norm 11:27 AM EST 03/21/04 Government "Canadian securities regulators are proposing fundamental changes to the way mutual funds are regulated. Investors beware. This philosophical sea change comes at a dangerous cost to established investor protections." 'Warning shot' on trusts set for budget Submitted by Norm 10:12 PM EST 03/20/04 Trusts "Ottawa will include "a warning shot" to investors on budget day next week, signalling that the federal government is concerned about the tax treatment of the hot income trust market and is seriously contemplating changes in the future, federal sources say." 7 funds with high fees, low returns Submitted by Norm 10:05 PM EST 03/20/04 Funds "The mutual fund industry's piggies are eating your bacon." Putting water in your wine Submitted by Norm 2:14 PM EST 03/19/04 Funds "Imagine if the funds used to construct these portfolios were in fact, impure. In short, imagine if advisors were figuratively putting a little water in their wine by using (for instance) a Canadian Equity fund that had 20% of its holdings in U.S. equities. It would come as no surprise to most readers that most Canadian equity funds have significant non-Canadian holdings." 12 myths about bankruptcy Submitted by Norm 6:03 PM EST 03/18/04 Debt " Like most big, bad, scary things, bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment. And like most creepy crawlies, it's not nearly as frightening once you know the truth." Exit strategies Submitted by Norm 11:07 AM EST 03/15/04 Taxes "Whoever invented wills had a sick sense of humour. Only a sadist would combine the three things people dread most -- death, taxes and lawyers -- under one roof." The latest returns on tax software Submitted by Norm 11:24 AM EST 03/14/04 Taxes "Canadians can enjoy a higher level of competition this tax filing season. About 5.3 million of us depended last year on products of U.S.-owned Intuit Canada of Edmonton to file tax returns electronically, the cheapest route to getting a tax refund in less than two weeks. But this year, two Canadian competitors with a wealth of experience in professional and home software are taking to store shelves to challenge Intuit's nearly 97 per cent market share of the do-it-yourself software market." This year's tax software offers unprecedented choice Submitted by Norm 10:09 PM EST 03/13/04 Taxes "There's something new in tax software this year -- choice. For the 2003 tax year, Canadians suddenly have an unprecedented number of software options for completing their tax returns." Zombie debt collectors dig up your old mistakes Submitted by Norm 2:46 PM EST 03/11/04 Debt "There's a hot new growth industry: companies that buy bad debts for pennies and squeeze you to pay in flagrant violation of federal law. Here's how to get them off your back." High-interest accounts have value in low-rate times Submitted by Norm 2:39 PM EST 03/11/04 Banks "Check out the posted GIC rates at the big banks -- three-year rates are just below 2 per cent and five-year rates are in the range of 2.5 per cent. Even if your bank likes you and tacks on an extra half a point of interest, you're still not getting anywhere near the value of a high-interest account." Canadian fund fees not that much higher than U.S. Submitted by Norm 11:57 AM EST 03/09/04 Funds "Mr. Spitzer may have something to say about what happens with fund fees in his country, but here in Canada it's up to individual investors to look after themselves. That's fine because there are all kinds of low-cost fund options out there, including index funds, no-load fund families and some mainstream funds that happen to be reasonably priced. Want to know the best way to bash the fund industry over the fees it charges? Just ignore overpriced junk funds." Value funds outperform growth Submitted by Norm 1:15 PM EST 03/08/04 Funds "Yet academic research has shown consistently that value investing produces better returns over time -- up to 7 percent a year on average, said Lubos Pastor, a finance professor at the University of Chicago Graduate School of Business." Financial literacy for Canadians Submitted by Norm 1:10 PM EST 03/08/04 Brokers "Unfortunately, too much of the industry still revolves around consumers who want an advisor who can foresee the future and advisors who claim to be able to identify hot sectors, stocks and funds. No reputable profession would ever made such ridiculous claims." Keep your beneficiaries in mind after a divorce Submitted by Norm 4:03 PM EST 03/06/04 Taxes "The law surrounding the designation of beneficiaries on RRSPs, RRIFs, and life insurance contracts is complex, and can vary from one province to the next. Still, your strategy should be the same. After a divorce, be sure to the change the beneficiary named on your registered plans with your financial institution itself. And if you've named a beneficiary of those plans in your will, be sure your lawyer includes in a new will (subsequent to your divorce) a clear revocation of all previously made RRSP beneficiary designations." Bankruptcy 'reform' could punish elderly Submitted by Norm 9:36 AM EST 03/05/04 Debt "Big banks are pushing for tough revisions to bankruptcy laws. That would be painful for many older Americans who are already struggling with debt." True costs of mutual funds difficult to determine Submitted by Norm 7:14 PM EST 03/04/04 Funds "Millions of Americans who invest in mutual funds have only a vague notion, if that much, of how much it costs them in fees and expenses." The truth about credit card debt Submitted by Norm 11:47 AM EST 03/04/04 Debt "Conventional wisdom is that we're all hooked and struggling. The reality is, in fact, quite different and less frightening." Ottawa should put brakes on taxing trusts Submitted by Norm 11:45 AM EST 03/04/04 Trusts "Given the likelihood of a spring election, the smart play would be for the government to do nothing on trusts and pick up the file again later on. A backlash from seniors struggling with low interest rates is the last thing the federal Liberals need on the campaign trail. Procrastinating on trusts may yield another benefit. By the time the government gets around to this issue, it may not be an issue any more." Ottawa mulls tax changes for trusts Submitted by Carl 12:12 PM EST 03/03/04 Trusts "The federal Finance Department is holding top-level talks and conducting secretive private sector consultations to decide whether it should clamp down on the tax treatment of income trusts in the March 23 budget." Canadians mutual fund sales soar Submitted by Carl 12:11 PM EST 03/03/04 Funds "Canadians showed renewed confidence in equity markets and flocked back into mutual funds in a big way in February as they spent $5-billion during the RRSP season's last month." Retirement savings planning should be a year-round sport Submitted by Norm 6:19 PM EST 02/28/04 Taxes "If you're like many Canadians, you may have forgotten to make your registered retirement savings plan contribution this year. Actually, you have until Monday to make that contribution, but many will neglect this task. Today, I want to focus on the balance of 2004, and some RRSP contribution ideas you should consider throughout the year." How to lead a rich life Submitted by Norm 7:41 PM EST 02/27/04 Thrift "These accounts of the rich and spendthrift point to one big question: What does all that income and spending add up to? A lot of nothing, it turns out. One of the more shocking measures of our "prosperity" is the fact that the United States spends more on trash bags than 90 other countries spend on everything. In other words, the receptacles of our waste cost more than all of the goods consumed by nearly half of the world's nations." Sorbara is now damaged goods as finance minister Submitted by Norm 11:20 AM EST 02/27/04 Government "The facts are as follows: Mr. Sorbara was a Royal Group director from the company's initial public offering in 1994 until he resignedlast fall. During that period, the building products company did tens of millions of dollars in business with company insiders, including most or all of the $32-million in sales to the controversial St. Kitts resort controlled by chairman Vic De Zen. Those deals touched off the criminal and regulatory probes the company confessed to Wednesday evening." Advisors urge caution as CMHC eases rules Submitted by Norm 9:52 PM EST 02/26/04 Debt "Sceeles says the CMHC announcement comes at an odd time, considering the fuss that's been made in recent years regarding the high level of consumer debt in North America." Royal Group drops Submitted by Norm 8:45 PM EST 02/26/04 Government "Ontario Finance Minister Greg Sorbara resigned from his position as a director with Royal Group Technologies Ltd. in October, 2003 to take up his post with Dalton McGuinty Liberal government. He was also on the company's audit committee." Investors looking to politicians for investment help Submitted by Norm 8:41 PM EST 02/26/04 Government "Prime Minister Paul Martin and other politicians will receive a plea tomorrow to stop the abuse of small investors by the investment industry. That's how bad things are for small investors these days. To have any hope of being protected from bad financial advice, you have to complain to the prime minister." Why punish early adopters? Submitted by Norm 3:05 PM EST 02/25/04 Brokers "From my perspective, the eradication of embedded compensation can't happen fast enough. It is only when it becomes totally impossible to bilk the system that consumers can feel protected from advisors who "double dip" or invest money in money funds at "no load" while suggesting the funds in question are "free". We've already established that advisors need to be paid. It should be obvious, therefore, that advice is never "free". Sadly, too many consumers would rather avoid dealing with that harsh reality than work an advisor who has the decency to force them to come to terms with it." Forget RRSPs pay down debt first Submitted by Norm 3:32 PM EST 02/24/04 Debt "Chartered accountant David Trahair thinks we need to get our priorities straight when saving for our future. "Stop making RRSP payments pay down debts first," he screams from the front cover of his new book from Self-Counsel Press, Smoke And Mirrors: Financial Myths That Will Ruin Your Retirement Dreams. His book sizzles with rebellion against popular sales pitches, and he derides big banks and salespersons whose motives may conflict with your best interests." Is that really your tax refund? Submitted by Norm 12:16 PM EST 02/24/04 Taxes "If someone owed you $1,200, would you pay someone else $100 or more to get your hands on that money if all that stood in the way was at most a two-week wait?" Why the AMT is no flat tax Submitted by Norm 4:20 PM EST 02/23/04 Taxes "A simplified rate structure doesn't make the alternative minimum tax an example of reform. In fact, it's just the opposite" Time to tackle the bias Submitted by Norm 2:03 PM EST 02/21/04 Brokers "It's all very well to shift the regulatory focus from trades to advice and to beef up disclosure, but until the compensation system is product-neutral, clients can never be certain that advisors are truly focused on their best interests." A wake-up call to the fund industry Submitted by Norm 1:50 PM EST 02/21/04 Funds "The CSA, as well, has hurt mutual fund investors and its own credibility by giving in to the industry and leading the way in eliminating long-recognized, much-needed protections for fund investors." The ins and outs of trading by telephone Submitted by Norm 1:43 PM EST 02/21/04 Brokers "The second-class citizens among discount brokerage clients are those who trade by telephone. While minimum on-line stock trading commissions go for anywhere from $24 to $29.95, a comparable trade done over the phone with a live representative might typically cost $43. Phone clients also get worse service. When markets are on a tear, clients who want to talk to a rep are more likely to face delays than those who place orders on-line." Foolproofportfolio is easy to assemble Submitted by Norm 1:38 PM EST 02/19/04 Indexing "To me, however, the lesson is clear. Costs still matter but there's more to this debate than active vs. passive. It's all about asset allocation, sticking to the program and keeping things simple." Fears of split hold back spousal RRSPs Submitted by Norm 6:44 PM EST 02/18/04 Taxes "Despite the benefits of spousal RRSPs, many couples are reluctant to take advantage of them, say financial advisers -- and the prospect of marriage breakdown is one of the main reasons." It's RRSP season but don't panic Submitted by Norm 6:37 PM EST 02/18/04 Stingy Investing "To avoid the last minute RRSP panic, simply put new money into high-yielding short-term debt. Good old GICs, high-interest savings accounts, and treasury bills are all possibilities." State's new technology finds tax cheats Submitted by Norm 2:34 PM EST 02/17/04 Taxes "State officials dismiss the notion they are playing Big Brother, but the potential is rather Orwellian. In theory, said Revenue Department Commissioner Alan LeBovidge, the state may eventually be able to track down so much information about a resident's finances that the state, rather than the individual, could complete the individual's tax return." Debt disasters of the rich and famous Submitted by Norm 11:06 AM EST 02/17/04 Debt "Think you've got a money problem? Look at the celebrities -- child stars to Donald Trump -- who've burned through hundreds of millions of dollars and then filed bankruptcy." Top fund picks for your RRSP Submitted by Norm 12:26 PM EST 02/15/04 Funds "There are thousands of mutual funds. You only want a couple. So we pressed the gurus for their single best choices. They even agreed on a few." Estate planning pitfalls Submitted by Norm 12:31 PM EST 02/15/04 Taxes "Badly thought-out estate plans can result in financial grief for beneficiaries and a boon for the taxman" Build your own RRSP with ETFs Submitted by Norm 12:20 PM EST 02/15/04 Indexing "Here's a little project for a cold weekend afternoon in RRSP season: Build your own pension fund. Some of the sharpest investing minds in the country run pension funds, but you can do it yourself in an hour or so spent in front of a computer." Making 'cheap' romance memorable Submitted by Norm 4:47 PM EST 02/12/04 Thrift "Quick: what are the three most romantic gifts you've ever gotten? I'll bet at least one or two of them cost very little, if anything at all." The SEC takes a swing at sleaze -- and misses Submitted by Norm 4:39 PM EST 02/12/04 Funds "Mutual fund regulators' new 'reform' proposals don't demand an end to the chiseling and double-dealing, only that the fund cheat you right out in the open." For rent, cheap Submitted by Norm 11:16 PM EST 02/11/04 Real Estate "High vacancy rates, falling rents: music to a renter's ears and causing heartburn for landlords." RRSP ads once again promoting track record Submitted by Carl 4:44 PM EST 02/11/04 Funds "The annual RRSP ad blitz has begun -- and it's bound to give investors a jolt of deja vu.With stock markets rebounding in 2003 after three torturous years, mutual fund marketers are once again trumpeting snappy performance numbers in registered retirement savings plan campaigns, a tactic most haven't used in years." Just one word: plastic Submitted by Norm 12:40 PM EST 02/10/04 Debt "At the time the concept seemed novelin the early days people would line up at checkout counters to watch someone pay with plasticif not particularly revolutionary. But it was revolutionary. "In 5,000 years there have been only four times that we have changed the way we pay: There was barter to coinage; coins to paper; paper to checks; and then cards," says David Evans, economist and co-author of Paying With Plastic." Vanguard: what flag are they flying now? Submitted by Norm 4:28 PM EST 02/08/04 Indexing "All industries, the fund industry included, need competition and new ideas. Through Vanguard, John Bogle has proven the benefits of low-cost, long-term equity investing. But Vanguard had little to do with the great technological capitalization of the last century. From the gun-slingers to the penny-pinchers, all mutual fund companies have their benefits and drawbacks." An on-line broker for you Submitted by Norm 3:45 PM EST 02/07/04 Brokers "Some brokers are better for certain types of investors, though. That's why this year's version of Globe Investor's annual on-line brokerage rating for RRSPs sets out three different investor profiles -- the neophyte, the established investor and the active investor -- and then outlines the best and worst choices for each." Old sale set tax precedent for Black Submitted by Norm 3:41 PM EST 02/07/04 Taxes "When the owners of an Ontario grocery store won a Tax Court ruling six years ago, the case got little public attention. But its impact was felt in companies across the country because it suddenly created an opportunity for business people to pocket millions of dollars tax free." The discount your broker never told you about Submitted by Norm 3:22 PM EST 02/05/04 Funds "The list of mutual fund pitfalls keeps on growing. If you invested a lot of money in 'load' funds, you might get back some of the commission you paid." Tax bill has increased 1550 percent since 1961 Submitted by Norm 8:32 PM EST 02/04/04 Taxes "The total tax bill of the average Canadian family has increased by 1,550 percent since 1961, according to a new book, Tax Facts 13, released today by The Fraser Institute. That translated into an additional $25,965 in taxes for the average Canadian family." IFIC should aim its guns at other fund industry issues Submitted by Norm 7:06 PM EST 02/04/04 Funds "IFIC was certainly within its right to complain about the CDIC commercials, but is this really the issue that tops the group's agenda right now? Mutual fund investors hope not." Mutual-fund industry wants federal ads axed Submitted by Norm 12:06 PM EST 02/03/04 Funds "Canada's mutual-fund industry is locking horns with the federal government, charging that an advertising campaign by one of the government's agencies is scaring away investors at the height of the RRSP season -- just when fund sales are recovering after a nasty slump." 7 reasons Americans save so little Submitted by Norm 12:02 PM EST 02/03/04 Debt "Lulled by easy credit, rising home prices and a what's-the-point mentality, we're saving less and less. Here's why -- and why some say it might not be the crisis it seems." New Vanguard ETFs Submitted by Norm 3:11 PM EST 02/02/04 Indexing "The exchange-traded class of shares of 14 Vanguard index funds began trading on the American Stock Exchange on January 30, 2004, at 9:30 a.m. The new VIPER Shares feature some of the lowest expense ratios among similar exchange-traded funds tracking specific market segments (large-, mid-, and small-capitalization stocks) and equity sectors." ETFs are a tonic for the scandal-weary Submitted by Norm 12:21 PM EST 02/02/04 Indexing "Part index fund, part stock, these hybrids offer lots of choices and trade just like stocks -- throughout the day, so they're less prone to trading scams. And get this: ETF fees tend to be low." When paying bills can hurt your credit Submitted by Norm 11:43 AM EST 02/02/04 Debt "Borrowers who try to pay off old delinquencies, charge-offs and collection accounts often learn the hard way: Sometimes, doing the right thing does the wrong thing to your credit." Some U.S. index funds provide a 'natural hedge' Submitted by Norm 1:15 PM EST 02/01/04 Indexing "Index investing in the U.S. market these days is like walking up a down escalator. With the Standard & Poor's 500, Dow Jones industrial average and Nasdaq 100 indexes soaring, and the U.S. dollar falling against our Canadian currency, most index products last year returned merely chump change." Consider the "Stewardship Quotient" Submitted by Norm 12:45 PM EST 02/01/04 Bogle "Happily, there are still funds and fund managers that have tried to hold the fort against the industry's new paradigm in which marketing has superceded management." Getting their money back Submitted by Norm 3:41 PM EST 01/31/04 Brokers "Regulators are taking steps to compensate Canadians cheated by rogue brokers" Start on your first $1 million at age 16 Submitted by Norm 5:02 PM EST 01/29/04 Thrift "It's easier than you think to become a millionaire. The magic combo? Getting an early start saving and having the discipline not to raid the piggy bank." A short history of the other MIT Submitted by Norm 3:19 PM EST 01/27/04 Bogle "But how much longer before public awareness begins to catch up with the sweet deal that the fund managers have cut themselves? The answer is that it has already begun to happen." Now's the time to chat up your adviser Submitted by Norm 4:37 PM EST 01/24/04 Brokers "This year, plan to spend a little time with your adviser. When he or she recommends a fund for your RRSP, offer up these 10 questions as a conversation starter. Remember, you're not challenging your adviser so much as you're engaging him or her to show you care." ING redefining funds the same way it did savings accounts Submitted by Norm 4:35 PM EST 01/24/04 Brokers "Where ING differs is in the fact that it has created a true zero-cost model, while most of these other dealers have fee loopholes all over the place." 10 fat warnings about diet products Submitted by Norm 3:24 PM EST 01/22/04 Thrift "Don't be tricked by companies peddling weight-loss products and plans. Instead, digest some facts about the fabulous claims, testimonials, guarantees, machines and wonder supplements that sound so appealing." Don't get hit by falling rates Submitted by Norm 1:59 PM EST 01/22/04 Funds "Rate cuts give bond fund holders a short term bounce but "bond funds will continue to eke out modest returns" in the optimistic case of long term stable rates, Rothery says. So he favours low-fee "frugal funds" from firms like PH&N, Leith Wheeler, Legg Mason and Barclays. "Should bonds yield 5%, you don't want to see almost half of your interest going to pay fund fees."" Two new books on debt can help dig you out of it Submitted by Norm 12:38 PM EST 01/20/04 Debt "You're either born smart about debt or you learn through bitter experience. Two new books offer a third way -- let experts teach you the ins and outs." 5 steps to wedded wallets Submitted by Norm 11:07 PM EST 01/19/04 Thrift "We exchanged vows before we exchanged views on health insurance. Now our finances are proof that opposites attract -- but we've hammered out a budget that works." Will scandals spoil the fun? Submitted by Norm 3:31 PM EST 01/18/04 Funds "At long last, the bull market is back. And not a moment too soon for long-term fund investors, who after three years of wrenching losses are finally being rewarded for their patience." Use incentive trusts to reward, not punish Submitted by Norm 6:16 PM EST 01/17/04 Trusts "When it comes to your estate, planning ahead is critical. Today, I want to talk about an estate tool worth considering. I'm referring to testamentary incentive trusts." The 'yo-yo' car sale trap Submitted by Norm 4:23 PM EST 01/15/04 Thrift "You've got your new car. You showed it off to all your friends. You've driven it to work a few a times. You love it. Then you get a scary phone call." SEC finds widespread fund abuses Submitted by Norm 5:11 PM EST 01/14/04 Brokers "Securities regulators said Tuesday that they've found widespread abuses at 13 out of 15 Wall Street brokerages probed in the sale of mutual fund shares." How to crack down on mutual-fund fees Submitted by Norm 11:26 PM EST 01/12/04 Funds "The brouhaha helps make Spitzer's point: There's no way for average investors to know what they are paying for core advisory services. Currently, fund documents must reveal the management fee that shareholders pay as part of the overall expense ratio. But that fee may include costs such as rent and legal bills. At a time when shell-shocked investors are being told to shop carefully, they need to know what they're paying for stock-picking expertise to invest wisely." Management expense ratio update Submitted by Norm 12:21 PM EST 01/11/04 Funds "There have been many articles in the press lately about Management Expense Ratios (MERs), and some people may be wondering what exactly is included in the calculation of the MER of a mutual fund. The following is a review of the exact makeup of MERs." Investing: Profession or Business? Submitted by Norm 4:13 PM EST 01/10/04 Funds "Based on our S&P scouting report, these managers seem to follow the index's strategy with regard to turnover and limited time on macro forecasting, and deviate from the index's strategy with regard to concentration and a sharp focus on price-to-value discrepancies." Watchdog to abolish mutual fund conflict rules Submitted by Norm 12:33 PM EST 01/10/04 Funds "Ms. Stromberg said the rules governing conflicts and self dealing were initially put in place to ensure that fund managers meet their fiduciary duty by acting in the best interests of investors. She said requiring funds to have independent committees is "not an equal trade-off." The proposed rules will provide less protection for investors than the existing regime, where rules are in place prohibiting mutual funds from such practices as owning stocks or bonds in a related entity, she said. There is also plenty of evidence in the corporate arena that independent directors are often powerless to prevent problems, she added." Be sure to compare service fees if you use your card a lot Submitted by Norm 3:27 PM EST 01/09/04 Thrift "Here's how the credit card business works. Dazzled by rewards that suggest lifestyles of the rich and clueless, people sign up for cards and end up paying bloated interest charges and/or a vast array of service fees." 5 tales from debt hell Submitted by Norm 10:59 AM EST 01/08/04 Debt "If you use credit foolishly or naively, the consequences can dog you for years -- as these readers have learned for themselves." Deferring tax payment puts money in your pocket Submitted by Norm 11:23 AM EST 01/07/04 Taxes "Procrastination can work in the realm of taxation, too. You see, delaying the requirement to pay tax can actually save you tax. This is true now more than ever." Investors beware the backside of the bull Submitted by Norm 11:20 AM EST 01/07/04 Funds "It's time you were warned about the other kind of bull market. That's the one where the bull's in the propaganda generated by an investment industry looking to cash in on a huge stock rally. Right now, we have both kinds of bull markets." Your 3 worst debt consolidation moves Submitted by Norm 11:54 AM EST 01/06/04 Debt "If you're up to your eyeballs, the fantasy of debt consolidation can suck you right in. Watch out for the slippery side of consolidation loans, balance transfers and other 'easy fixes.'" More than pure luck Submitted by Norm 3:18 PM EST 01/05/04 Funds "For the 13th year in a row, a mutual fund called Legg Mason Value Trust (LMVTX) has beaten the benchmark Standard & Poor's 500-stock index. No other fund has come close to this amazing feat. In fact, most funds, most of the time, fail to return more than the S&P, which is a good proxy for the market as a whole.For the 13th year in a row, a mutual fund called Legg Mason Value Trust (LMVTX) has beaten the benchmark Standard & Poor's 500-stock index. No other fund has come close to this amazing feat. In fact, most funds, most of the time, fail to return more than the S&P, which is a good proxy for the market as a whole." Ten helpful tips for saving and investing this year Submitted by Norm 10:43 AM EST 01/03/04 Thrift "Eat less, exercise more. Now that we've taken care of your physical well-being in 2004, let's talk about your financial health. No lectures here. Instead, we'll look at 10 easy-to-follow tips for saving money and investing smarter. You may have heard some of these before, but they bear repeating." How does your debt compare? Submitted by Norm 9:28 PM EST 01/01/04 Debt "A snapshot of American debt shows a troubling picture. See how your mortgage statements, credit card balances and payment practices compare with other Americans' bills." Mutual fund portfolio contagion Submitted by Norm 5:25 PM EST 12/31/03 Funds "hey are both consistent with the idea that information about stocks diffuses gradually across the investing population, and that this "epidemic effect" leads to momentum effects in stock ownership and trading." Keep more in 2004 Submitted by Norm 5:03 PM EST 12/31/03 Thrift "Here are 8 resolutions: pick one or two and stick with them to bolster your finances next year." Don't fall for these stupid credit-card tricks Submitted by Norm 4:59 PM EST 12/31/03 Debt "Lenders are counting on you to fatten up their profits -- with higher rates, new fees and more fees -- all hidden in the fine print. Here's how to fight back." Playing in a closed game Submitted by Norm 4:40 PM EST 12/24/03 Funds "Unscrupulous mutual funds, as investors have learned to their chagrin, have found plenty of ways to cheat. There are, however, sound alternatives with many of the benefits of mutual funds but without the drawbacks. I discussed one such investment -- exchange-traded funds (ETFs) -- a few weeks ago. Now, consider closed-end funds" Manulife, John Hancock in fund probe Submitted by Norm 3:11 PM EST 12/24/03 Funds "Manulife Financial Corp. and John Hancock Financial Services have been served with subpoenas for information about trading practices as part of ongoing probes into the mutual-fund industry." Home buying with no money down Submitted by Norm 3:07 PM EST 12/24/03 Real Estate "In fact, according to a survey of buyers conducted in early 2003 by the National Association of Realtors, less than half of all buyers put down 20 percent. Among first-time buyers, 33 percent kicked in less than 10 percent of the purchase price, while 28 percent financed the entire price of the home." Out of sight, out of mind Submitted by Norm 1:06 PM EST 12/21/03 Funds "We argue that the purchase decisions of mutual fund investors are influenced by salient, attention-grabbing information. Investors are more sensitive to salient in-your-face fees, like loads and commissions, than operating expenses; they are likely to buy funds that attract their attention through exceptional performance, marketing, or advertising. Our empirical analysis of mutual fund flows over the last 30 years yields strong support for our contention. We find consistently negative relations between fund flows and load fees. We also document a negative relation between fund flows and commissions charged by brokerage firms. In contrast, we find no relation (or a perverse positive relation) between operating expenses and fund flows. Additional analyses indicate that mutual fund marketing and advertising, the costs of which are often embedded in a fund's operating expenses, account for this surprising result." Tax Act amendments could eliminate interest deduction Submitted by Norm 12:22 PM EST 12/21/03 Taxes "Golombek is concerned that if the new legislation is passed, it will be virtually impossible for investors who borrow money to purchase dividend-paying investments to pass the cumulative profit test. For example, Golombek gives the example of an investor who buys a stock yielding a 2% dividend today with borrowed money at a 4% interest rate. Assuming the price of the stock increases each year by 7%, he says, it would take approximately 20 years of holding the investment to make a cumulative profit since this profit does include the ultimate capital gain upon disposition. Most investors make regular changes to their portfolio and do not want to hold on to particular investments for so many years. Therefore, he says, any losses investors attempt to write off as a result of interest deductibility could be disallowed by the CCRA." Is the party over for income trusts? Submitted by Norm 12:19 PM EST 12/21/03 Trusts "A little over a week ago, mutual fund manager Ben Cheng addressed an audience of 40 or 50 investors who gave him a startling insight into how retail investors view income trusts. "I asked how many of them had an income trust in their portfolio, and all their hands go up," Mr. Cheng recalls. "And then I said, how many people in this room have more than 50 per cent of their investable assets in income trusts? More than half of the hands go up. "That scares the hell out of me," says Mr. Cheng, who manages an income trust fund -- CI Signature High Income. "At the end of the day, it looks like retail investors have jumped again with both feet into an asset class thinking that it's invulnerable and it goes up forever. I don't think that's the case."" Snowbirds should understand tax rules Submitted by Norm 12:14 PM EST 12/21/03 Taxes "You should be aware that you may have filing requirements in the United States even if you have no tax to pay south of the border. Certainly if you're a U.S. citizen you're required to file a tax return in the United States each year. But even those who are residents of Canada and non-citizens of the United States (known as non-resident aliens) may have filing requirements in the United States depending on the number of days spent there each year." Beware the tricky fees on gift cards Submitted by Norm 11:36 PM EST 12/19/03 Thrift "Between hefty shipping, maintenance and service fees, all the cheer can be sucked out of gift cards -- and most of the value. Here are 10 questions to ask if you give one or get one." 2 mutual funds you can trust Submitted by Norm 2:56 PM EST 12/18/03 Funds "Tweedy, Browne's offerings are the first to make the "Clean Funds" cut. Now, I need your help to find more." Sadly, lawsuits are best remedy for investors Submitted by Norm 11:25 PM EST 12/17/03 Brokers "In Canada today, protections for individuals preyed on by the investing industry are as feeble and inadequate as I've seen in five years of writing this column." Avoid the home equity hangover Submitted by Norm 11:45 AM EST 12/15/03 Debt "Debt in lines of credit has jumped 31 percent this year. Don't let equity become a license to spend." Fund middlemen need to shape up Submitted by Norm 11:34 AM ESY 12/15/03 Brokers "Why shady sales practices result in higher costs and biased advice." Giving is still sound tax policy Submitted by Norm 4:05 PM EST 12/14/03 Taxes "The recent death of gift-in-kind tax shelters doesn't mean the end of charitable giving in Canada. It's just no longer possible for donors to make a profit on the deal." Scrooge of the investing world Submitted by Norm 9:25 AM EST 12/13/03 Thrift "A a time of year when most people are beingurged to spend, Norman Rothery is going about his business of urging people to be thrifty in how they invest their savings. Examining the menu over a Diet Pepsi at Pangaea, in the heart of the fashionable Bloor Street shopping district in downtown Toronto, the founder of StingyInvestor.com and FrugalFunds.com and publisher of two quarterly newsletters is an unlikely Scrooge -- more of a happy warrior of the value investing world." The virtue of ETFs Submitted by Norm 4:25 PM EST 12/12/03 Indexing "But I think it's much easier and ultimately a better strategy simply to stick to ETFs that track the broad market -- for example, the iShares Dow Jones Total Stock Market Index (or Vanguard's Total Stock Market VIPER) for the stock market and the iShares Lehman Aggregate Bond fund for bonds." The new indexing Submitted by Norm 2:44 PM EST 12/11/03 Indexing "In the presence of more than one risk factor, the goal of indexing switches from diversification across the available stocks to diversification across the available risk-return dimensions. This might seem like "sector betting" to traditional indexers like Vanguard founder John Bogle, who still believe that market risk primarily determines performance and that small stocks and value stocks aren't separate sources of risk and return. The academic community is arriving at a different consensus, one that recognizes multiple independent risks. Investors might even have natural combinations of the different risk exposures that best suit their individual time horizons and preferences. As long as the portfolios they use to gain these exposures are index funds, and as long as the exposures are consistent and not timed to predict markets, this sort of portfolio structuring is not a "sector bet"it's the new face of indexing." The second largest tax investors pay Submitted by Norm 2:26 PM EST 12/11/03 Funds "Well, let's face it -- nothing is worse than inflation. The Voluntary Graduated Financial Services Tax, however, can be a lot worse than the highest income tax rate. By my calculation, accepting an annual expense ratio of 1.39 percent on an equity mutual fund is the equivalent of accepting a 40 percent tax rate from the financial services industry. The amount you accumulate in 40 years will be only 60 percent of what you could accumulate if there were no financial service expense." SEC action on high-yield funds near Submitted by Norm 12:42 PM EST 12/11/03 Funds "U.S. regulators are expected to bring an enforcement action as soon as today in their probe of mispricing of shares in high-yield bond mutual funds, people familiar with the matter said Thursday." Mutual funds or hole in the ground? Submitted by Norm 12:20 PM EST 12/11/03 Funds "How times change. Today, mutual funds are the biggest financial scandal since Martha Stewart phoned her broker. What Martha did was entertaining, but not serious. This is serious. The only reason this scandal hasn't generated more popular outrage is that nobody can understand it." Watchdog says car dealer scams are rampant Submitted by Norm 4:13 PM EST 12/10/03 Thrift "A report released Monday by Public Citizen, the consumer watchdog group founded by Ralph Nader, accuses the nation's car dealers of wholesale fraud and asks all state attorneys general to investigate." SEC to act against MFS Submitted by Norm 11:11 PM EST 12/08/03 Funds "Sun Life Financial Inc. said Monday its U.S. mutual funds unit may face enforcement action by the Securities and Exchange Commission." Rip-off room revisited Submitted by Norm 10:51 AM EST 12/07/03 Thrift "Extended warranties, rust-proofing, Scotchgard: Is this stuff ever worth it?" 12 tax tips to munch on Submitted by Norm 10:45 AM EST 12/07/03 Taxes "Why do we call money dough? Everyone knows that dough tends to stick to your fingers, while money tends to slip through them. Good tax tips, on the other hand, can be a lot like doughnuts. If you try one, it could make life a lot sweeter. TIM CESTNICK serves up a dozen tasty year-end tax-planning ideas that could keep investors' wallets a little fatter and a little happier in 2004." The child molester next door Submitted by Norm 10:43 AM EST 12/07/03 Real Estate "From the start we had vowed not to skip the inspection, despite prodding from our realtor. Yet by the time this house came on the market, we had already lost out to rival bidders on two other homes. In the first case we were outbid because another couple's escalation clause a stipulation in an offer that a buyer is willing to pay a certain amount above the highest bid up to a specified maximum beat ours by a few hundred dollars. We lost the second house because another buyer waived the home inspection outright. After that experience, we were tempted to throw caution to the wind. Thankfully we didn't." Tax system squanders donations Submitted by Norm 11:50 AM EST 12/06/03 Taxes "Many charitable Canadians worry about the plight of the ill in poor countries. More of us may feel that way after hearing rock star Bono lecture Paul Martin and his Liberals at their recent convention. But, with too little money to go around, it is important to spend wisely." Tax shelter helps poor get medicine Submitted by Norm 2:53 PM EST 12/05/03 Taxes "But tax litigator David Thompson of London, Ont., said he has cautioned clients who have asked about Canadian Gift Initiatives and other donation tax shelters to expect to be reassessed by CCRA." Risks in 'buy low, donate high' Submitted by Norm 11:50 AM EST 12/05/03 Taxes "Taxpayers prepared to gamble should brace for an audit. The history of tax shelters in Canada is always the same: loopholes are discovered by lawyers and accountants, and the early exploiters are their wealthy clients. By the time small investors get wind of the massive tax savings and government coffers are threatened, the department of Finance closes the loophole." A new charge called 'Oops' Submitted by Norm 1:31 PM EST 12/04/03 Thrift "Every few years, economists identify another mutant variation of inflation to keep them awake at night. In the 1980's, it was stagflation. Three years ago, it was deflation. And now, meet the economic specter of the new millennium: stealth inflation." How fund scandals will serve fund owners Submitted by Norm 10:28 PM EST 12/03/03 Bogle "It is the myriad conflicts between the interests of fund managers and the interests of fund owners that exist in this industry that bear so much of the responsibility for this staggering gap between the stock market's return and the returns earned by fund investors, and even the returns earned by the funds themselves. While the unacceptable, and partly illegal, market timing scandal has gained a great deal of well-deserved attention, it pales in significance when compared with the powerful impact of high costs on reducing fund returns, on the force of fund size in diminishing fund returns, and on the marketing focus that tempted too many investors to purchase funds that they now wish they had never bought." Tax cuts may prove a mirage for AMT payers Submitted by Norm 11:40 AM EST 12/03/03 Taxes "The tax cuts of 2003 may be a boon to the economy and provide welcome padding to some taxpayers' wallets, but for others those cuts will prove to be a mirage. That's because lower tax rates will push more people into paying the Alternative Minimum Tax, rendering some of those much-heralded breaks moot." 12 tips for negotiating with debt collectors Submitted by Norm 11:54 PM EST 12/01/03 Debt "It pays to know your rights and keep a record of all your communications when you butt heads with debt collectors. Here are some ways to hold your own." CIBC unit may face class action Submitted by Norm 11:25 PM EST 12/01/03 Funds "The asset management arm of Canadian Imperial Bank of Commerce is the target of a proposed class action after it allegedly failed to disclose a change to a mutual fund that left investors exposed to the falling U.S. dollar." 3 more mutual fund scandals in the making Submitted by Norm 11:14 PM EST 12/01/03 Funds "Reader e-mails tell me there's still more rot in the fund industry that's about to be exposed. Here's what could be next -- and what might happen to the industry as a result." IRS revamps RRSP reporting Submitted by Norm 4:09 PM EST 11/30/03 Taxes "The U.S. Internal Revenue Service has spared about 750,000 people in Canada and the United States from a tax-filing headache involving their Canadian registered retirement plans." A year-end registered plan checklist Submitted by Norm 4:06 PM EST 11/30/03 Taxes "You don't have to make your 2003 contribution until March 1, 2004, but why wait? Avoid the rush in the new year, contribute today and get your money working." The seven deadly sins Submitted by Norm 12:25 PM EST 11/29/03 Real Estate "In 1929 John D. Rockefeller decided it was time to sell shares when even a shoe-shine boy offered him a share tip. During the past week The Economist's economics editor has been advised by a taxi driver, a plumber and a hairdresser that "you can't go wrong" investing in housingthe more you own the better. Is this a sign that it is time to get out? At the very least, as house prices around the world climb to ever loftier heights, and more and more people jump on to the buy-to-let ladder, it is time to expose some of the fallacies regularly trotted out by so many self-appointed housing experts." CCRA tax shelter donation arrangements Submitted by Norm 12:21 PM EST 11/25/03 Taxes "As tax filing season approaches, you may see a growing number of advertisements for tax shelter donation arrangements. While donating various items to a charity (such as art, computers, and prescription drugs) is a legitimate way of making a charitable donation, you should be aware of the risks associated with certain donation arrangements." The greed disease Submitted by Norm 12:19 PM EST 11/25/03 Brokers "The crux of his book was that work on Wall Street -- and more broadly in the financial services industry -- was different from other work because it was only about money. There was no product, no goal. There was nothing but the production of endless amounts of money. It tended to make a mess of people's lives." Putnam: The greed machine Submitted by Norm 12:05 PM EST 11/25/03 Funds "If you're like most investors, you probably think that the insider trading scandal at Putnam Investments, the nation's fifth-largest fund company, is a sordid but simple tale of portfolio managers picking investors' pockets." A nimble, cheap and safe ETF portfolio Submitted by Norm 11:53 AM EST 11/25/03 Indexing "They're easier to trade than mutual funds, less risky than stocks, and more impervious to fraud than either, making them perfect for the flexible portion of your portfolio." Ottawa eyes charitable tax shelter Submitted by Norm 11:36 AM EST 11/25/03 Taxes "10,000 donors audited or reassessed in crackdown. As the year-end tax shelter season goes into overdrive, Ottawa's tax collectors are about to issue a stern warning to investors considering arrangements based on charitable donations or "gifting."" Mutual fund abuses found in Canada Submitted by Norm 10:29 AM EST 11/24/03 Funds "A U.S. economist who tracked mutual fund abuses in the United States says there is evidence of similar trading problems occurring in Canada." The real costs of turnover Submitted by Norm 5:00 PM EST 11/23/03 Funds "Not surprisingly, the most active group trailed the least active group by an average of 5.5% per year. And this doesn't even consider the effect of taxes, which were surely significant. For individual investors and mutual funds alike, the message is clear -- low turnover equals better performance." Break the poverty mentality for a good cause Submitted by Norm 4:44 PM EST 11/23/03 Taxes "When it comes to charitable giving, many of us tend to fall short. Some of the numbers published by the Canada Customs and Revenue Agency may surprise you. Of those who reported between $50,000 and $70,000 of income on their tax returns in 2000, 49.7 per cent claimed charitable donations, and they gave an average of 0.67 per cent of income to charity. Between $70,000 and $100,000, 59.5 per cent claimed donations, and gave an average of 0.76 per cent of income. Finally, 69.3 per cent of those earning more than $100,000 claimed donations in 2000, and gave an average of 1.4 per cent of income to charity." The value of a fee-based advisory relationship Submitted by Norm 10:36 PM EST 11/21/03 Brokers "Instinctively, well-heeled people are far more favourably inclined to work on a fee basis because they understand the business model and how it both aligns interests and embeds transparency. Quite apart from the ethical perspective, there are sound tax reasons for working on a fee basis, too." The hard sell for reverse mortgages Submitted by Norm 10:14 PM EST 11/20/03 Debt "Mandatory mortgage insurance ensures that you (or your heirs) don't end up owing more than the house is worth. But it's entirely possible to drain all or most of your home's equity." Joined at the hip Submitted by Norm 10:22 PM EST 11/19/03 Indexing "A few years ago Barclays Global Investors did the unthinkable when it released a wide array of U.S. stock ETFs that actually undercut the expense ratios of several comparable Vanguard index funds. Ever since, Vanguard, BGI, State Street Global Advisors, and other ETF providers have waged a public relations battle for the 'hearts and minds' of investors and advisors who use funds tied to popular benchmarks." The scandal may get much worse Submitted by Norm 10:21 PM EST 11/18/03 Funds "Illegal behavior at funds is so longstanding and pervasive, rising to the highest levels in many cases, that some fund firms could very well 'crumble' as investigations proceed, says one plugged-in independent investigator." Fund scandals for dummies Submitted by Norm 3:07 PM EST 11/18/03 Funds "There's some reason for confidence. Late trading is less likely in Canada because of FundServ, an intermediary that has been executing fund purchases or sales since 1993. If you buy fund units after markets close at 4 p.m., they are priced at the 4 p.m. close the following day, says FundServ CEO Alan Hutton. That stops investors from profiting from "stale" prices: buying after the market has closed, as has occurred in the U.S." Bigger fund ripoffs exist than illegal trading Submitted by Norm 2:50 PM EST 11/16/03 Funds "It's fascinating to watch the regulators tie themselves in knots to investigate the fund sector. As usual, they're getting only part of the picture. Illegal late trading is a scandal, sure -- but so are many of the things fund companies do every day that are perfectly legal." A closer look at investment fees Submitted by Norm 2:50 PM EST 11/16/03 Funds "Only time will tell whether or not index products out-perform actively managed products. They areuseful tools for certain types of investors who seek alternatives to active management. Yet, it is not unreasonable to conclude that above-average, low-fee, actively managed products stand a strong chance of providing superior returns." Too young, too rich? Submitted by Norm 12:33 PM EST 11/14/03 Wealth "The problem of inherited wealth, seen through the camera of an heir." Some mutual fund firms just don't get it Submitted by Norm 11:59 PM EST 11/13/03 Funds "The thing about scandals is they usually blow over. So the Canadian mutual fund companies that have been hiding from the U.S. mutual fund industry scandal will probably make out fine. Odds are pretty good that the sort of trading abuses that several U.S. fund companies have allowed will turn out to be rare or non-existent in Canada. Any risk of an investor backlash will melt away. Or not." A few small-cap values Submitted by Norm 2:15 PM EST 11/12/03 Funds "Mr. Tattersall is the lead manager of the Saxon Small-Cap Fund. Founded in 1985, Saxon Mutual Funds is owned and managed by Howson Tattersall Investment Counsel, and is widely recognized as one of Canada's premier value-oriented investment firms. The fund invests primarily in TSX listed small-cap Canadian stocks with a market capitalization (share price * number of shares outstanding) of less than $300 million." How mutual funds stole your money Submitted by Norm 10:29 AM EST 11/12/03 Funds "While your shares were handcuffed by 4 p.m. closing prices, others could wait for hours -- sometimes the next day -- before swooping in on good or bad news to make a killing." Up against the wall Submitted by Norm 5:00 PM EST 11/11/03 Funds "Dick Strong runs his mutual fund firm with a raging passion. And passion can get you into a lot of trouble." Your home: Worst-case scenario Submitted by Norm 4:46 PM EST 11/10/03 Real Estate "Will rising interest rates unravel all of the gains of the recent housing boom?" Nobody sues in a bull market Submitted by Norm 9:53 AM EST 11/10/03 Brokers "'Rogue clients' try to blame their advisor for their losses "People don't sue when they're making money." That's a direct quote from a lawyer who specializes in defending investment advisors from "rogue clients."" Inexcusable Submitted by Norm 9:49 AM EST 11/10/03 Indexing "Founder and former CEO of The Vanguard Group John Bogle has been speaking out for the past several years against bad trading practices in his industry. Suddenly, a lot of people are listening" 9 ways to look rich but live cheap Submitted by Norm 9:45 AM EST 11/10/03 Thrift "Rise above your measly income and worn-out shoes. You can live the Simply Fabulous lifestyle and enjoy cushy perks even without being adopted by the Rockefellers." Investor Behavior = Returns Submitted by Norm 7:16 PM EST 11/04/03 Funds "What has the largest impact on the returns individual investors get? Is it the actual investments they own, or their own behavior?" Job-creation schemes don't work Submitted by Norm 11:24 AM EST 11/03/03 Taxes "Free-market economists like myself attack government tax-and-spend policies as being damaging to prosperity, accusing the government of "sucking money" or "leeching resources" out of the economy. We claim that taxes damage not only the welfare of the person from whom they are taken, but the whole country." Hot water for Prudential Securities? Submitted by Norm 1:59 PM EST 11/01/03 Brokers "Massachusetts' securities regulator is set to charge six brokers -- and maybe the firm itself -- with deceptive trading practices" Perigee changes name to Legg Mason Canada Inc. Submitted by Norm 11:27 AM EST 10/31/03 Funds "Perigee Investment Counsel Inc. is changing its name to Legg Mason Canada Inc. to reflect the money manager's purchase three years ago by Baltimore-based Legg Mason Inc." Substantial savings result when tax planning's a family affair Submitted by Norm 10:48 AM EST 10/31/03 Taxes "If your family is like mine, they'll drive you crazy from time to time. But cut them some slack. Without their help, you could be paying a lot more tax. That's right, when a family works together to reduce each member's tax burden, the result can be significant dollars saved." Sceptre rushes to reassure jittery clients over Putnam Submitted by Norm 10:47 AM EST 10/31/03 Funds "Sceptre Investment Counsel Ltd. is scrambling to reassure jittery clients after news that two of four portfolio managers fired by U.S.-based Putnam Investments for allegedly profiting from improper trading helped to run two pooled funds for institutional clients in Canada." Clients can be greedy too Submitted by Norm 10:09 AM EST 10/30/03 Brokers "Some clients may deliberately misrepresent their investment experience and risk tolerance to make aggressive gambles on the market. If the bet doesn't go their way, they sue the advisor. More often than not, advisors find it cheaper to settle, since errors and omission insurance will pay most of the bill." The fund industry is broken Submitted by Norm 11:09 PM EST 10/29/03 Funds "And it can't be fixed without some major changes. But there are some key questions you can ask the fund companies you deal with to protect yourself." SEC cracks down on Putnam for self-dealing Submitted by Norm 12:55 PM EST 10/29/03 Funds "The U.S. Securities and Exchange Commission has announced civil actions against Putnam Investment Management LLC and two former Putnam managing directors and portfolio managers, Justin Scott and Omid Kamshad, in connection with their personal trading in Putnam mutual funds." Gold gives boost to small-cap sector Submitted by Norm 2:43 PM EST 10/28/03 Funds "Of the outperformance of junior mining companies and other more speculative stocks, Ferguson says: "Investors in the small-cap area have been focusing on companies that do well in environments of strong economic growth. They seem to be, he says, downplaying the possibility of other scenarios such as slower economic growth, he says." Still waiting for lower fund fees Submitted by Norm 2:38 PM EST 10/28/03 Funds "Investors losing patience as cuts fail to materialize. Canada's sky-high mutual fund fees are again under the microscope. As reported in yesterday's Financial Post, management expense ratios (MERs) have soared the last three years." Shadow on the funds Submitted by Carl 11:59 AM EST 10/27/03 Funds "Widening probes into the practices of U.S. mutual funds are uncovering a surprisingly large number of abuses, conflicts of interest and other irregularities, many of which have benefited wealthy clients at the expense of small ones." Time to chuck commissions? Submitted by Norm 6:50 PM EST 10/26/03 Brokers " A growing trend toward fee-based financial advice has both benefits and pitfalls for investors" Mutual funds weather scandals Submitted by Carl 6:44 PM EST 10/26/03 Funds "We at the Fool have also reported on these developing scandals. In fact, we've been warning investors for many years about various problems inherent in mutual fund investing. We've railed against such problems as their outlandish fees, overdiversification, below-average performance, and counter-productive, short-term thinking." The bad apple data base Submitted by JK 10:13 AM EST 10/24/03 Brokers "IDA's online search helps investors, deters violators. It just got easier for investors to check out whether their financial advisors or their firms are 'bad apples.'" Industry muzzles its victims Submitted by Norm 11:09 AM EST 10/23/03 Brokers "Gag orders keep bad advisors' names out of the press. One of the frustrations with this job is some of the most potentially instructive stories can't be made public. Since the stock bubble of 1999 burst, many tales of investor abuse involving leveraged loans have come to my attention." Your condo, your money pit? Submitted by Norm 11:24 PM EST 10/22/03 Real Estate "Though condo values have been rising, they historically have been much more volatile than single-family home values. Worse, living in a condo can be maddeningly complex -- and costly." Choose beneficiary carefully to save tax Submitted by Norm 11:33 AM EST 10/22/03 Taxes "Naming your estate as beneficiary of your RRSP can make sense where you have capital losses and expect to have insufficient income in your year of death to use up those losses." Income trusts are not created equal Submitted by Norm 11:31 AM EST 10/22/03 Trusts "Ask any investment dealer -- income trusts have been the only game in town in the past couple of years. That's not surprising, given their generous distributions, the steady price appreciation in the group as a whole and some pretty impressive tax breaks to boot. But don't walk away thinking all income trusts offer juicy tax-efficient cash flow. They don't." How cheapskates get away with it Submitted by Norm 11:56 AM EST 10/20/03 Thrift 10 classic cheapskate strategies. Mutual recriminations Submitted by Norm 11:26 AM EST 10/20/03 Funds "A former fund manager has admitted to obstructing an investigation into improper mutual-fund trading, making him the first executive to face a criminal charge in the rapidly widening probe into the industry's practices" Indexing: new, improved newness Submitted by Norm 7:21 PM EST 10/19/03 Indexing "Once a steady-as-you-go approach to an untamable market, indexing now has Wall Street busy offering expensive imitations and some not-so-reasonable facsimiles" 5 ways to stop the urge to shop Submitted by Norm 12:03 PM EST 10/18/03 Thrift "If you can still pay your bills, you might not think you have a problem. I didn't think I had a problem, either -- until I asked myself why buying shoes felt so good." Easy Chair formula is hard to beat Submitted by Norm 4:53 PM EST 10/17/03 Indexing "The iG5 is a welcome addition to the ETF world - ticker symbol on the Toronto Stock Exchange is XGV. It holds a single government of Canada five-year bond. As new money comes into the fund and existing five-year holdings mature the identical bond is purchased again and again. A big advantage of iG5s for a passive portfolio is the low management expense ratio (MER). The MER on iG5s is just .25 per cent. Compare that to the average bond fund MER of 1.6 per cent and imagine how quickly that additional one and a half per cent will eat away at a fund's performance." Fee rise says watch out for hidden RRSP costs Submitted by Norm 8:34 PM EST 10/16/03 Brokers "You're not just buying an investment when you put Royal Bank of Canada GICs and mutual funds into your registered retirement savings plan. You're also buying a relationship that you can't get out of without paying $50." Financial advisers weave scary tales Submitted by Norm 7:57 PM EST 10/15/03 Brokers "You want to hear horror stories about financial advisers? I'll tell you a few." The professional financial advisor Submitted by Norm 12:20 PM EST 10/12/03 Brokers "Perhaps the biggest sacred cow in the industry right now is the notion of independence. Since virtually all advisors receive their compensation through some form of embedded compensation, it could be argued that virtually no one in the industry (please don't call it a profession yet) is truly independent. Arguments about proprietary vs. non-proprietary funds are just plain silly. The more meaningful distinction is between embedded compensation and unbundled compensation. It is only through the latter that consumers can feel confident that the recommendations being made are truly in their own best interests. This means that commissions and trailing commissions have to go- and the sooner the better." SEC unveils plans to combat late trading of funds Submitted by Norm 12:17 PM EST 10/12/03 Funds "The regulator is considering new rules and rule amendments designed to prevent late trading abuses. It is examining the feasibility of requiring that the fund (rather than an intermediary such as a broker-dealer or other unregulated third party) must receive the order prior to the time the fund prices its shares for an investor to receive that day's price." Time to unhitch that trailer Submitted by Norm 12:12 PM EST 10/12/03 Brokers "Leemhuis's inspiration was to replace the floating expense of $1,000 per annum with the fixed $360/year subscription fee. In the above example, the $1,000 trailer fee is rebated to the client. On a net basis, the client is ahead $640. Since the average portfolio at ASL is $250,000, the savings are often more than that." Payday Loans = Costly Cash Submitted by Norm 11:40 PM EST 10/06/03 Debt "The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans - which come at a very high price." Is your fund firm earning its keep? Submitted by Norm 7:05 PM EST 10/05/03 Funds "Wanted: Frugal, industrious mutual funds for long-term relationship. No fee-hogs need apply." Funds grapple with growing scandal Submitted by Norm 10:28 PM EST 10/04/03 Funds "The list of big-name companies engulfed in a scandal involving mutual fund trading abuses lengthened Friday, leaving a burning question for the $7 trillion fund industry: How much worse will it get?" Canadians in the dark? Submitted by Norm 10:41 PM EST 10/03/03 Brokers "Financial consumers have a very weak understanding of the function of planners, their qualifications and how they are regulated, a survey for the Financial Planners Standards Council reveals." Investors should see where cash goes Submitted by Norm 11:04 AM EST 10/02/03 Funds "One mutual fund industry executive's take on the idea of showing investors exactly how much they're paying in fund fees: Good idea in theory, but not for us." Mutual fund tax efficiency Submitted by Norm 4:24 PM EST 10/01/03 Funds "Is there a list that shows the tax efficiency of individual mutual funds? If so, how do I get it?" Make your advisor squirm Submitted by Norm 11:18 AM EST 10/01/03 Brokers "For investors and the salespeople who [self-] serve them, the book is the biggest expos of Canada's mutual fund industry since Daniel Stoffman's The Money Machine. It's the book Glorianne Stromberg might have written if she'd been an advisor instead of a lawyer and regulator." Fed-up fund investors shut their wallets Submitted by Norm 8:43 AM EST 09/30/03 Funds "The amount of money flowing into funds dropped 70% in the weeks after major players were accused of cheating investors. It's no coincidence." How to fend off kids selling stuff Submitted by Norm 11:32 PM EST 09/29/03 Thrift "No more magazine subscriptions! No more wrapping paper or candles! Stand up to these pint-sized salespeople and their adult accomplices." How to survive 7 big budget busters Submitted by Norm 11:31 PM EST 09/29/03 Thrift " Most budget advice focuses on carving savings out of your discretionary spending -- how much you blow on lattes or health clubs or eating out. But interviews with credit counselors and bankruptcy attorneys show it's more often the expenses you consider fixed or beyond your control that can cause you serious financial trouble." Barrage of takeovers marks start of new era Submitted by Norm 10:30 PM EST 09/27/03 Brokers "When the banks bought brokerage houses, the bargains came to those who bought first; the last ones in paid the highest prices. However, this next round of convergence in the financial services industry will probably be driven by the desperation of the sellers. Patience, in this game, may well be rewarded." New ETFs give access to emerging markets Submitted by Norm 8:55 AM EST 09/27/03 Indexing "ETFs have always done an excellent job of providing avenues for investing in North America, but the selection of global funds used to be disappointing. The iShares and BLDRS emerging market funds, both less than a year old, are symbolic of how times have changed for ETF investors." The envelopes, please... Submitted by Norm 8:34 AM EST 09/26/03 Indexing "The logic that underpins the advice put forward by many so-called "professional" financial advisors can be quite amusing. Perhaps the most amusing of all the truisms of financial advice proffered by virtually all advisors is that investors should choose actively managed mutual funds over passively managed index funds or exchange traded funds." It's time for mutual funds to stop burying fees in muddy MERs Submitted by Norm 9:56 AM EST 09/25/03 Funds "I'd like to know how much my mutual funds are costing me in fees. Sure, I've got the management expense ratio (MER) to give me an idea of how much I'm paying, but that's not good enough. I want a dollars-and-cents breakdown." The great fund ripoff Submitted by Norm 8:12 AM EST 09/22/03 Funds "Like Joshua shattering the walls of Jericho, in early September New York State Attorney General Eliot Spitzer shook the mutual fund industry to its very foundations." Fund scandal may run deeper Submitted by Norm 8:11 AM EST 09/22/03 Funds "Mutual fund companies repeatedly allowed Wilshire Associates, the investment consulting firm, to engage in a rapid-fire trading strategy that netted the firm huge returns -- and came at a cost to the mutual funds' long-term investors, according to a report in the October issue of Money Magazine." Fees! Fees! Fees! Submitted by Norm 12:10 AM EST 09/22/03 Thrift "Companies can't raise prices, so they're socking consumers with hundreds of hidden charges--and that's creating stealth inflation and fueling a popular backlash" How safe is your identity? Submitted by Norm 8:17 AM EST 09/21/03 Fraud "Identity theft is the latest trend in consumer fraud. PhoneBusters, an anti-fraud group set up by the Ontario Provincial Police, says there have been about 8,817 reporter incidents of identity theft across the country this year, up from 8,178 for all of 2002. The value of these thefts has risen to $14.1-million so far this year from $8.8-million last year." Is your degree worth $1 million -- or worthless? Submitted by Norm 11:58 PM EST 09/20/03 Thrift "Look before you leap into spending a small fortune on an associate's, bachelor's or graduate degree. If money is your motivation, learn which ones really pay off." Parts and labour sold separately Submitted by Carl 8:24 AM EST 09/19/03 Funds "With unbundled investment products, advisors could set a certain (perhaps sliding scale) fee schedule and then ask clients what "building blocks" they would like to use in constructing their portfolios. Products like exchange traded funds and true no load funds (PH&N, Mawer, Perigee, etc.) are often as good as or better than conventional products like A Class or "embedded compensation" mutual funds, yet substantially cheaper." Domestic stock funds in red again Submitted by Carl 8:22 AM EST 09/19/03 Funds "Canadians pulled nearly $200-million from domestic stock funds in August, the Investment Fund Institute of Canada reported yesterday, extending their losing streak to 15 months and suggesting that investors are not yet convinced that a six-month rally in equity markets has staying power." 10 ways you mindlessly waste money Submitted by Carl 7:54 AM EST 09/16/03 Thrift "Silently, secretly, your money disappears under some hideous voodoo spell, right? No way. Take a look at some ways you're flushing your cash down the loo -- and what you can do about it." A latte today or $1 million tomorrow Submitted by Norm 10:54 PM EST 09/15/03 Thrift "Can you cut the caffeine and stay out of Starbucks? You could be on your way to piling up $1 million. The choices: a quick coffee fix now -- or drinking in a more secure retirement later." The real Wall Street rip-off? Fat fund fees Submitted by Norm 10:50 PM EST 09/15/03 Funds "Here is an idea: Keep more of your own money in your pocket by paying fewer fees. Just shelling out 0.2% more in fees each year can rob you of thousands in profits over the long haul." The cost of the good life Submitted by Norm 8:33 AM EST 09/15/03 Thrift "Spending on stuff seems a never-ending spiral in America; there's always something new to buy." Illegal trading appears rampant Submitted by Norm 3:03 PM EST 09/14/03