Weekly Wrap: Horrendous market timers, Big Mac Index, NHLers defrauded by advisers

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Collage with flying euro clock in a hand on a background of sky and grass.A piece on market timing is a “must read” for anyone who takes market-timing gurus and newsletters overly seriously. Read A Visual History of Market Crash Predictions. (Note the reference embedded in the URL to “the clowns of Wall Street.”)

Yes, all the big fear-monger names are there, including Harry Dent Jr., Robert Prechter, Marc Faber and even a few Marketwatch columnists and the generally respected Mark Hulbert.

As the piece says, you need to remember that almost everyone has something to sell, and the pundits mentioned generally are in the business of selling newsletters, books, market-timing services or related items. And since Fear is a more visceral emotion than Greed, the scarier the headlines these prognostications generate, the more publicity the market prognosticators are likely to reap, and with that more sales of their products or services. As they say in the newspaper business, “If it bleeds, it leads.”

And admit it, would YOU buy a book bearing the calm and sensible title “Markets will fluctuate, stay diversified for the long run and have a sensible asset allocation?” A better title might be “Ignore these idiots.”

Reader reaction to Eternal Truths series

The recent Financial Post series on the 7 Eternal Truths of Personal Finance seems to have been well received. On Friday, the Post ran an online piece that passed along some of the reader feedback I got over the weeks the series ran.

Big Mac Index

The latest issue of The Economist features its annual feature on the so-called Big Mac Index, a handy tool for assessing how much buying power various currencies around the world have.

Ottawa won’t help Ontario launch its provincial pension

The Globe & Mail reported this week that Ottawa won’t help Ontario establish provincial pension plan. The Financial Post also ran a CP story on the same topic on Friday. The so-called Ontario Provincial Pension Plan (ORPP) is slated to be launched in 2017 but has attracted a fair bit of criticism so far. My view is that ORPP got started as a bargaining chip to persuade the federal government to expand the Canada Pension Plan but as it kept getting rebuffed, perhaps calling its bluff, the Province was forced to keep going down that path. Meanwhile, we’re not hearing much about Ottawa’s Pooled Registered Pension Plans (PRPPs).

Is $2 million enough to retire on?

Also in the Globe is this piece by John Heinzl that ran on Friday: Can I Retire with a $2 Million Portfolio? The reader is advised to take a bit more risk with high-yielding equities and check out the usual government retirement benefits like CPP and OAS.

Long-term-care insurance premiums rising

Retirement Redux this week ran a blog titled Premiums rising for existing long-term care policies.

Globe & Mail piece on my personal investments

In an item I should have flagged in the weekly wrap earlier this month, the Globe & Mail’s Larry MacDonald ran a piece on my personal investments. It was titled Financial Journalist mixes ETFs with high-conviction stocks. A few Globe readers contacted me to ask who my own fee-for-service financial advisor is, who was referenced in the piece. A reminder that I usually refer such readers to the Guidance tab here at the Hub, which includes a US and a Canadian directory to true fee-only financial planners, as well as some personal contacts I list under the title Professionals who “get” financial independence.

The sad story of NHL stars ripped off by fraudulent advisers

Which brings us to the related item: the National Post story from Thursday that highlighted the sad case of former NHL star Bryan Berard and other millionaires on skates who trusted their finances to unscrupulous financial advisors: It was all gone. While my experience with many financial advisors in both the US and Canada is that 95% of them are straight shooters (unlike some hockey players: kidding!), there certainly are a few rogues out there who are more interested in their own retirement than their clients. In the case of Berard, it appears he went with an adviser via another player/friend. It’s worth remembering that merely trusting someone because of a friend can be hazardous: there’s an entire practice called Affinity Marketing that allows fraudsters to penetrate social networks like churches or certain associations. Just because you trust someone in your network doesn’t mean that trust can be transferred to  more recent arrival in that network that your friend only thinks he/she truly knows.

Another must read on fraud is in this weekend’s New York Times: Swindlers target older women on dating websites.

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