In Globe and Mail’s “It’s about time”  Rob Carrick, who’s been among the most vocal columnists pounding away at the Canadian mutual fund industry fee structure, reports that RBC Direct Investing is making available the RBC family of funds in a new series-D form which reduces trailer fees from as much as 1.15% to a maximum of 0.25%. The rationale given is that since discount brokerages don’t provide advice so they should not collect this fee (Of course, it also helped that the outcry against Canadian mutual fund industry’s unconscionable fees has become relentless and ETFs are taking a growing share of savvy investors’ savings). It’s not clear to me whether investors will have to take the initiative to transfer funds from series-A, B, C and if will be possible to do that without causing a taxable event.

Jonathan Clements in WSJ’s “Is it too late to buy stocks? Not if you have time and guts”  tells you if you have 7-8 year+ horizon and have the stomach for 20% drop in equity prices, then you should not be dissuaded from investing in stocks. (In fact Charles Ellis’s advice, if I recall it correctly, was that you should put all your money, that you are guaranteed not to need for 10+ years, into stocks)

The Financial Times reports in “JP Morgan makes a note of equity”  the emerging use of structured equity notes in discretionary trusts (where permissible). These are investments are tied to an equity index and offer for downside protection and upside leverage. (High net worth Private Clients have been getting access to this type of portfolio structure for years) They suggest that you can think of it as a smart ETF; by giving up on the dividend, some alpha (manager’s excess performance, if any, over the index) and some liquidity, you get downside protection and upside leverage. (Similar approach I mentioned a couple of weeks ago in a blog on Life-Cycle Investing )
Rob Carrick in “Advisors take bad rap in batch of investment books”  discusses about half a dozen recent books on advisors, which suggest that to protect yourself, you should become a do-it-yourselfer. Rob however rightly points out that most advisors are not predators or incompetent, but are committed people wanting to make a living and trying to help investors to achieve their objectives. He feels that the real issue is that there is no clear understanding on what is considered good advice and is expected from the advisor. His bottom line is that while do-it-yourself may work for some, for others getting an advisor is the right answer. (Difficult to argue with this.)

No doubt you must have noticed that the Canadian dollar is heading higher and higher every day, especially if you have a significant part of your portfolio in foreign asset (I noticed!). In “Got high dollar blues? Currency neutrality can bring peace of mind” Rob Carrick suggests that a good way to protect against currency fluctuations (and further run up of the Canadian dollar) is to use currency hedged mutual funds or ETFs; specifically he suggests that half or more of your foreign market investments should be in $CAD hedged instruments. (In retrospect, if I had done this 3-4 years ago, I would be a richer man today; some of the significant foreign market gains have been reduced by the Canadian currency appreciation.) Experts are divided on whether you should hedge or not your currency exposures, though some agree that hedging half is a good compromise, because: (1) currency diversification is part of benefit of diversification, (2) hedging is not free, (3) hedging is betting on the $CAD against the foreign currency, and (4) how much higher can, the now 93 cent, Canadian dollar go (famous last words!). For better or worst, I have chosen to do asset liability matching, i.e. positioning my U.S. and Canadian asset approximately in proportion to whether I expect to spend my money in Canada or the U.S.

I spend a lot of time in my blogs about the concern of most retirees that they shouldn’t outlive their money. Terri Cullen in WSJ’s “The urge to splurge” talks about the about the flip side of that coin, i.e. will you be able to enjoy your retirement before you die? She also addresses the even more difficult situation of a couple, where one thinks she’ll die young and other thinks he’ll live well past average life expectancy. The key is to find the right balance. If anything, increasing longevity is a trend that you should not bet against, and she suggests staying within the 4-5% spend rate guideline; if you splurge one year, cut back the next.

And finally, National Post’s Jonathan Chevreau in “A natural bridge to your retirement” expects bridge and poker to flourish with the boomers flooding into retirement. In addition to the more traditional bridge games, there are now on-line opportunities to play around the clock. One of the suggested sites is Fred Gitelman’s Bridge Base Online .