The fourth in our regular series of videos from FWB TV is now up at their site and at Findependence.TV.

The topic is that perennial one beloved of believers in passively managed index funds or ETFs: the proportion of actively managed funds that beat the market and do so consistently.

But as the preamble below the 3.5-minute video points out:

The funds you tend to you see advertised or mentioned in the media are generally active ones too and yet independent and peer reviewed research has consistency shown that very few actively managed funds are able to be low cost passive ones with any degree of persistence.

The interview is with Professor Keith Cuthbertson of the Cass Business School. He says research shows 70% of these funds are “closet” index trackers; in 20% of cases “your grandmother could do better” and that even the 5% of truly skilled managers are “harder to find than the Higg’s Boson.”

Attempting to pick such funds amounts to a gamble, he says, although it seems plenty of investors like to gamble.

The Financial Post provides my take on Monday night’s Liberal landslide, as it pertains to Financial Independence in this blog that just was published online: So long $10,000 TFSA, and other personal finance fallout from the federal election.

The gist is that we’ll likely lose the $10,000 annual contribution TFSA limits that were only hiked earlier this year but as aging boomers move into semi-retirement or full retirement, it’s likely they’ll fall into the middle tax bracket where the Liberals’ 1.5 percentage point cut should provide several hundreds of dollars of annual tax savings. There are also significant implications for an expanded Canada Pension Plan, Old Age Security and I expect that Ontario will now no longer see a need for the Ontario Retirement Pension Plan or ORPP.

Plenty of other links via my Twitter feed (@JonChevreau), which can also be viewed under the new “Social” tab at the top left of the blue menu bar above.

Update:

A good package of the tax policies is in Wednesday’s FP that go into more depth about some of the points raised in the above blog. Be sure to read Jamie Golombek’s The Liberals’ Taxing Policies: What they mean to you and when.

See also Garry Marr’s Think of 2015 as a bonus year for your TFSA and Fred Vettese’s  Time to expand CPP, ditch ORPP. (paper only last I checked)

The Wednesday Post also contains a longer version of the blog linked at the top of this blog: How the Liberal Victory is a major setback for Canada’s Wealthy.

The Wealthy Barber, aka David Chilton, didn’t disappoint financial bloggers when he gave the keynote address Saturday to the Canadian Personal Finance Conference 2015.

In his own circle in his native Kitchener, Chilton says that when friends in their mid 50s and up compare their financial readiness for retirement, there is a great divide between those in the public sector and those in the private sector.

I dare say most of us could report the same thing: teachers and government workers may well already be retired by their mid 50s to early 60s while the rest of us: not so much. People who have good pension income also tend to be better savers, Chilton said, and there are many couples in which both spouses enjoy public-sector Defined Benefit pension plans. Late-life divorce and job loss are common but again, this is somewhat less common in the public sector.

Speaking financially across the general population, there are “still too many people in trouble.”  In the real world, “People suck at investing … People don’t know what mutual funds are, let alone MERs,” Chilton said, telling financial bloggers it’s up to them to educate their readers.

PF Bloggers are “freaks”

Continue Reading…

Apart from the small matter of a federal election on Monday, the big event this weekend for those of us who focus on Financial Independence is the fourth annual Canadian Personal Finance Conference (aka CPFC15), being held in the Appel Salon at the Toronto Reference Library. On Twitter, follow along throughout the day using the hashtag #CPFC15. Subway riders: check routes, some may be closed.

Highlights include The Wealthy Barber himself, David Chilton, delivering the keynote address Saturday afternoon. You can also find regular Hub contributor Robb Engen, who plays many roles, among them spearheading the Boomer & Echo blog. Just before Chilton is the Star’s Ellen Roseman.

The event kicks off around 9 am, with the Globe’s Rob Carrick scheduled at 9:15 am. Carrick has been described in previous editions of the conference as the PF writer most financial bloggers wish they could be: many yearn to be included in his influential web roundups. Rob was kind enough to include the Hub soon after its launch late in 2014 and I can attest to the reach of his column.

As for yours truly, I’m not scheduled to appear until Sunday for a 2:45 pm panel on “How to pitch the media.” However, I plan to attend at least some of Saturday’s sessions.

Election’s impact on investors

Now about that election. Continue Reading…

Here’s my latest Young Money blog for the Financial Post, bearing the headline Web-literate millennials look beyond traditional banks for online investing and lending services.

For the Millennial generation born between 1980 and 2000, the Internet and social media comes naturally to them, as does entrepreneurship. They gravitate to services like Netflix, Uber and much more.

That makes them a prime market for both automated online investment services (aka robo advisors, which we often highlight here at the Hub) and online lending services, at least three of which have started up in Canada in the past year or two.

Go to the above link for the full FP blog.  Former mortgage broker Chantal Chapman, at 32 also a millennial, has just been appointed National Financial Fitness Coach for one of those three companies, Vancouver-based Mogo, which trades on the TSX under the ticker GO.

The U.S. model for these is San Francisco-based Lending Club.  We may look at this space in more depth in the coming weeks.

In the meantime, Chantel is co-hosting a series of Adulting 101 financial education events in various cities this fall.  The Toronto event is on October 25th:  details here.