Eleanor Laise in WSJ’s “Index fund tortoises are long-term winners” quotes recent research data showing that not only are index fund investors paying lower management fees than active fund investors, but they also underperform the funds they hold by only 0.47% vs. 1.7% annually for investors in actively managed funds. The likely reason for the lower underperformance is that index investors are more likely to be inclined to buy-and-hold, rather than jumping in and out of funds (usually buying high and selling low) trying to beat the market.

Lawrence Solomon’s “Living freedom” article in the Financial Post provides data showing how increasing longevity over the centuries and millennia is not a function of improving technology (medical science, pharmacology) but of increasing control over one’s fate. His examples range from longevity of kings and Greek philosophers (who routinely lived into their 80s) as compared to average life expectancy of about 30 in antiquity, to more recent (90s) rise in longevity with more freedom in Russia being reversed with the arrival of Putin’s rule!?! Quite interesting…

Jonathan Chevreau writes in the Financial Post’s “Secrets of a ‘Bay St. bag lady’” about women’s, often irrational, fear of becoming destitute in old age. He quotes a recent survey whereby 90% of the women, and even 48% of high earners, expressed this concern. Women often start getting involved in investments only after death of a spouse or divorce.
In Financial Times’ “Now something completely similar” Matthew Vincent describes the use alternative assets (e.g. hedge funds and structured notes) to provide bond-like returns with reduced downside risk. For example in the current very low interest environment one way to get (high) bond-like returns (without taking a flyer into the credit markets) with “reverse convertible structures linked to a basket of three shares, which pay a guaranteed coupon on maturity of as much as 20 per cent, with capital paid back provided none of the shares falls by more than a specified amount, for example, 35 per cent”. Care must be taken that these a priced correctly and falling equity markets may still result in you ending up owning the underlying stock.

Also in the Financial Times’ “Portfolio building: Equities take a smaller share”  are some tips on asset allocation for the moderately wealthy: (1) insure that your portfolio meets all your requirements (total, return, income and liquidity), risk tolerance and time horizon, and that these are not in conflict with each other!, (2) watch out for liquidity, as you may be unable to handle losses to the extent that the more wealthy can, (3) diversification works, use it, (4) equity and property have outperformed in the past and likely will continue to do so in the future, (5) income growth is essential, half of historical equity returns were from dividends, (6) don’t forget tax implications.

In Globe and Mail’s “Agricultural ETFs look to cash in on booming sector”  Shirley Won writes about new ETFs focused on how to tap into agricultural commodities which are not just one of the hot stories driven by India and China’s growing prosperity, but may also provide additional diversification to your portfolio. Many investors already have a small allocation to precious metals (like gold via relatively recent ETFs like GLD) or may be quite heavily invested in energy (especially Canadian index investors). She mentions Claymore ETFs like COW on the TSX or MOO and DBA on the American Stock exchange. If you are interested in this option you might also consider the ELEMENTS linked to the Rogers International Commodity Index- Agriculture RJA  listed on the American Stock Exchange (I chose this as a recently added sliver to my portfolio, as it looked a more diversified agricultural ETN)

Jonathan Clements in WSJ’s “These wild crazy ETFs could help tame your portfolio”  recommends, in small doses, diversifiers such as: (1) foreign real estate (WPS, RWX, DRW), international small caps (SCZ, GWX, DLS), (3) commodities (GSG, DBC, DJP, GSP) and (4) lower-cost un-hedged foreign bonds (BWX).