By Patrick McKeough, TSI Network.ca

Special to the Financial Independence Hub

Some investors believe that market timing—trying to figure out if the market will rise or fall—is or can be an aid to their investing decisions.

However, most investors who try to time the market find that it costs them money in the long run. When it works, it may help them make some modest profits or avoid some modest losses. When it fails, on the other hand, it often does so in a bigger way. At times it leads to ghastly losses.

The key risk in market timing is the “false signal.”  That’s when the market does exactly the opposite of what the timer expected. In fact, some false signals may seem like sure things until they fail.

Danger of false signals

Market timers may multiply the danger from false signals by making much bigger transactions than usual. They can also raise their risk by shifting to more aggressive and highly leveraged forms of trading — delving into stock options or futures trading, for instance.

Right now, some investors are venturing into market timing without realizing it. They are trying to base investment decisions on the next movement in interest rates. Continue Reading…

By Bill Tufts, Fair Pensions for All

Special to the Financial Independence Hub

The Harper government introduced the Tax Free Savings Account (TFSA) in 2009. At the time Finance Minster Jim Flaherty wanted Canadians to bolster saving, mainly for retirement. The growth of RRSPs had started to slow and many Canadians are going to be in for a big surprise on their first day of retirement and be greeted with even bigger surprises a decade or two into retirement.

The first year of the TFSA proved a big success when Canadians opened an estimated 3.6 million accounts and deposited $12.4 billion in just the first six months of the plan being opened.

After this initial success and the resulting growth of assets that Canadians could use for retirement, the government decided to build on this success. The plan had expanded once, raising the annual limit from $5,000 and was boosted by $500 as an inflation adjustment for calendar 2013 to $ 5,500. TFSAs were also designed to be cumulative and savers could backfill the TFSA using previously unused accumulated room.

In 2015 the federal budget hiked the annual contribution allowance to $10,000 annually. Canadians around the country applauded this move.

TFSA opponents have no problem with “tax cost” of public-sector pensions

The increased room announced in the budget for the TFSA and the fact that it would accumulate tax free alarmed some groups. The Broadbent Institute was the first out with a report, concerned about the ability of government to continue funding ever expanding and increasing government programs. Broadbent was opposed to the TFSA and any expansion of the program because it was leaving too much money in Canadians’ bank accounts and not coming to government as tax. Continue Reading…

SensibleInvesting.tv recently released a free documentary that’s a behind-the-scenes look at the multi- billion dollar investment industry.

How to Win the Loser’s Game includes interviews with Vanguard founder John Bogle, Nobel Prize-winning economists Eugene Fama and William Sharpe, author and wealth manager Larry Swedroe, among many others. (To view Part 1, which runs for six minutes, click the red link above, which takes you to YouTube.com). You can also find it and future instalments housed here at Findependence.TV.

While the publisher is UK-based, most of the concepts are widely applicable to most of the fund management industry, both in Canada and the U.S.

The series clearly communicates the challenges that investors face and gradually covers the benefits of a low-cost, long-term, low-maintenance, diversified investment strategy.  This is valuable information for consumer-investors, although many in the investment fund industry would probably prefer that it not be widely distributed.

After watching the video if you want to learn more, download the free guide, 12 Essential Ideas For Building Wealth.

“If you are serious about investing and building wealth the video documentary series ‘How To Win the Loser’s Game’ is a must-see. It’s excellent.” — Paul Philip, Financial Wealth Builders Securities

Here’s my latest Financial Post blog, titled More than two thirds of Canadians worry ‘a lot’ about money, but 69% still don’t have a plan.

You can also find some of the factoids from the survey here.

In case you missed the kickoff on Sunday, we’re now well into the seventh annual Financial Planning Week, which started on November 15th and runs until November 21st. As the link reveals, there’s something every day on the program.

By Michael Drak

Special to the Financial Independence Hub  

Recently the book Jonathan and I co-authored — Victory Lap Retirement  — was discussed on BNN.  Since I’ve described this with tongue in cheek as a “retirement book about not retiring,” one of the first questions asked by the show’s announcer was “will a person earn less money during their Victory Lap?”

I was not surprised by the question, as it comes up in almost every seminar we give on VLR but every time I hear it I tend to feel a little sad about what we have become.

Why are we always so fixated on making more money so we can buy more stuff in order to prove to others that we are worthy? Wouldn’t it be better if we focused our attention on making a more meaningful life? Or as Jonathan’s Hub slogan puts it, “While You’re Still Young Enough to Enjoy It.”

We believe most people need to keep working but we need to do work for reasons other than for just more money. The opportunity to help somebody, the opportunity to make a difference and the opportunity to create a legacy. We need to stop defining the importance of our work in terms of how much money we make or by how much stuff we can buy because of it. We need to start thinking and living differently.

For most of our lives we have been told what to do. We are taught by our schools and parents how important it is to work hard and get good grades so we can get a good job that pays lots of money. Money was and still is the focal point for most people and that way of thinking needs to change.

The deal with the “Corp”

Continue Reading…