Hot Off the Web

“Getting more of what the market gives” in the WSJ focuses on why investors have to change the emphasis from investment returns in general toward the returns we receive as investors ourselves. Data shows that investors don’t receive anywhere near what the markets return (after fees, costs and taxes) due to behavior whereby people are getting out at the bottom and getting into funds at the top. This is especially true the more volatile the fund is. The article goes on to suggest that this is where a good fee-only financial planner can be useful.

In another interesting WSJ article “Survive retirement even if short on savings” Jonathan Clements suggests an interesting strategy to spend down assets with reduced risk of exhausting them for a 65 year old with limited resources. The approach has the potential of increase income if portfolio performs well. Take 85% of the portfolio and draw 1/20^th the first year, 1/19^th the second year and so on. The other 15% is invested into stocks and inflation indexed bonds and if the individual lives past 85 can buy an annuity or just spend down the accumulated assets.

Rob Carrick of the Globe in “Note to angry trust owners- Don’t bet on a reprieve” thinks that there is faint hope of changing the government’s mind on trusts even though a new coalition was created to push for change and opposition parties won their push for hearings to challenge the basis of the government’s rationale for the trust tax changes. Time will tell if Mr. Flaherty can hang tough on the issue ( I think so, and I hope so as it is the right thing to do- the only possible exception being the depleting natural resources area, where trusts were first used and still are used elsewhere in the world) 

The Financial Post in  “Toward a more balanced portfolio” advises individuals holding their own employer’s stock are advised to generate a plan to reduce holdings to no more than 10% in a single company (interestingly the advice is that the 10% should include the company pension as a fixed income asset!). This is not a bad advice to keep up front and visible and should not come as much of a surprise to those who were working for a telecom company during the late 90’s telecom bubble.