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Weekend Reading: TD Twitter Chat Edition

I should have known better than to check my investment statements online this past weekend. I knew from the daily barrage of headlines that it had been a tough start to the year for investors. I didn’t know it was this bad. Both my RRSP and RESP portfolios were down 6.4% in the month of January alone. At this rate my investments will be down a whopping 76.8% by the end of the year! #onpaceguy

But in reality I’m not going to panic over one lousy month. The time horizon for accessing the funds inside my RRSP portfolio is measured in decades, not months. I’ll stick with my plan and add money to the ETFs and index funds that had performed poorly over the last year to help bring them back into balance with my original allocation.

TD #SaveMore Twitter Chat

Calming the waters: That’s the key message we want to deliver when we host TD’s #SaveMore Twitter chat on Wednesday February 10th from 12:00pm – 1:00pm EST. I’m excited to co-host the chat live with Krystal Yee from Give Me Back My Five Bucks.

TD SaveMore

I can’t think of a better way to spend a lunch hour than hopping on Twitter, following the #SaveMore hashtag, and having a conversation about investing. We’ll chat about the current market conditions and what that means for your financial plan (probably nothing!). I’ll also try to hit on the following themes:

1. Feeling nervous? – When you’re feeling nervous about the markets and wondering whether it’s the right time to invest, go back and look at your financial plan. It’s likely that you’re investing for the long term and so you probably told yourself that you’d be willing to accept losses of 20% or more in your portfolio and that you’d stick to your plan.
2. Time to Rebalance – Globe and Mail author Andrew Hallam recently said that rebalancing is counter-intuitive because you’re often selling your winners and adding to your losers. That could feel like pulling flowers and watering weeds, but it works. Take this time to put your portfolio back into balance and reset your asset allocation back to where it should be. Yes, that might mean adding to your Canadian index fund, even though it has dropped 10% or more in the last year.
3. Ignore the headlines – Stock market analysts, economists, and financial journalists alike all want to share their two cents about the stock market: What works and what doesn’t, what’s up-and-coming and what you should avoid. In the end, nobody has a crystal ball and expert predictions fail more often than they succeed. Following forecasts and trying to guess which way the market is headed is guaranteed to end in disaster. Tune out the noise and stick to a low cost, well diversified, and long term investment strategy.

This Week(s) Recap:

Last Monday I wrote about why indexers are terrible at indexing.

Last Wednesday Marie looked at the wide range of scholarship opportunities that go unclaimed each year.

Last Friday we opened up the Boomer & Echo mailbag and looked at some questions about CPP benefits.

On Monday I looked at how target date funds could be a smart solution for your RESP.

On Wednesday Marie wrote about portfolio diversification.

And on Friday I shared the beginner’s guide to RRSPs.

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Weekend Reading:

Should you use your line of credit as an emergency fund? Desirae from the half Banked blog explains why it’s a bad idea.

Speaking of e-funds, how much is enough? Jessica Moorhouse said her emergency savings played a key role in an expensive move across the country to find new work.

Jordann at My Alternate Life shares 16 debt myths to leave behind in 2016.

The Toronto Star’s Adam Mayers on the reality behind two RRSP myths.

Here’s Mayers again on why they’re talking about negative interest rates.

Cable providers must offer a new and low-cost “skinny-basic” package starting March 1st. Here’s the skinny on these changes and why cable providers have been so quiet about it.

Read why WestJet has been forced to discount airfares as the “Alberta effect” hits travel demand.

Fred Vettese and Rob Carrick discuss how much less money we spend in retirement:

Continuing on that theme, Vettese explains why you should save less for retirement and spend your money now (seriously).

Robo-advisors could be the biggest beneficiary from CRM2, the new disclosure policy that’s set to hit the financial services industry later this year. Robo’s are aiming to be the affordable middle-ground between full service and DIY investing.

Wealthsimple, one of Canada’s leading robo-advisors, is ramping up efforts with a Super Bowl ad this weekend.

Here’s the good, the bad, and the ugly of Canadian household debt. Should we be worried?

VICE interviewed Young & Thrifty’s Kyle Prevost about how the crappy dollar hurts young Canadians.

EQ Bank made quite a splash with its 3% interest rate – here’s how they do it.

Michael James on Money offers some smart takes on the way he thinks about insurance.

This My Own Advisor reader retired in 2005 and explains why he has no worries in retirement.

Finally, here’s what to consider if moving is part of your retirement plan.

PS – My Super Bowl 50 prediction: Panthers defeat Broncos 34-17. Josh Norman wins MVP.

Have a great weekend everyone!

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12 Comments

  1. My Own Advisor on February 6, 2016 at 1:29 pm

    Go Panthers! Thanks for the nod this week Robb and Marie – always appreciate the mentions from you.

    No doubt you’ll offer some great advice on the Twitter machine. #savemore

    Have a great weekend and enjoy the big game.
    Mark

    • Echo on February 7, 2016 at 10:27 pm

      Thanks Mark, obviously my Super Bowl prediction was dead wrong. That’s why you shouldn’t listen to “expert” forecasts. 🙂

  2. Dave on February 6, 2016 at 1:42 pm

    I have a similar portfolio as you using VXC and VCN. I am wondering if you are worried about a potential recovery to the CND dollar and how it will negatively affect VXC. I’ve been noticing the strong affect the dollar has on the stocks performance. On days when all global markets have been up, VXC has even been down a bit due to a gaining CND dollar. The dollars fall was obviously key to the success of VXC last year but it seems the dollar doesn’t have much lower to go. If it does recover, have you thought about investing in a currency hedged ETF instead of VXC? Or are you concerned at all about the CND dollar recovering? I’m sure VCN will go up as the dollar goes up but like you, I have a much higher percentage of my portfolio in VXC.

    • Echo on February 7, 2016 at 10:33 pm

      Hi Dave, I’ve addressed this in a couple of previous posts. I have no idea where the Canadian dollar will go, or any other currency for that matter. The research suggests that currency-hedged ETFs don’t work all that well in Canada and so I built my portfolio (for the long term) without currency hedging.

      If I tried to tinker with hedging now it’s very likely that I’d get it wrong (and then wrong again when I try to go back to my original model).

      So to summarize: I’m not concerned about the loonie recovering, anymore than I’m concerned with what’s happening in China, or Europe, or Japan. I’ve made my choice with these two ETFs and I’m willing to accept the results that the portfolio delivers.

  3. Beth on February 6, 2016 at 3:05 pm

    I haven’t seen anything about those skinny cable packages… BUT I have noticed my cable provider is ramping up advertising for their new VIP packages with a promo rate o $76+ per month.

    Seriously?

    • Echo on February 7, 2016 at 10:35 pm

      Hi Beth, I’m interested to see how the basic package, bundled with a true pick-and-pay model, works out. The cable companies insisted that it would work out to be around the same or even more expensive for most households, but I’d like the opportunity to test that out myself.

  4. Larry B on February 6, 2016 at 4:02 pm

    I sent a bunch of “hoarded” cash to EQ. If they think I would not move it in a heartbeat if I found a better rate they are seriously deluded. Definitely keep it below 100K folks, the CDIC insurance limit.

    • Echo on February 7, 2016 at 10:39 pm

      Hi Larry, the good thing is that EQ doesn’t charge any transfer-out fees and so even if they do drop their rate at least you can move your money easily enough. I’d be willing to bet that even if they don’t keep their everyday rate at 3 percent for the long term they will stay at the top of the market for the foreseeable future. They wanted to (and did) make a big splash when they entered the market and it would be silly to fall back into Tangerine or PCF territory.

  5. Michael James on February 6, 2016 at 9:18 pm

    I don’t buy Vetesse’s arguments. The fact that people spend less as they get further into retirement is often because they see they’re running out of money. Maybe they start slowing down at 75 or 80 by choice, but not 70 or earlier. Personally, I expect to spend more later in life because I’ll need to bribe young family members to travel with me to help me. Thanks for the mention.

    • Echo on February 7, 2016 at 10:44 pm

      Hi Michael, it’s tough to say. I think you’re right and that if people haven’t saved enough they will adapt to their new reality by spending less in retirement. There are so many factors to consider and most of them are unknown. Maybe his argument is true for public sector workers, but if I were in the private sector with no pension plan then I sure as hell would be saving more today.

  6. Sylvia hartley on February 7, 2016 at 5:03 pm

    Could you do a few articles on estate bonds and buying insurance to preserve your investment value for your children rather than the gov’t. I would be interested in knowing if this truly does work!

  7. Des @ Half Banked on February 11, 2016 at 10:04 am

    I can’t even believe I missed this over the weekend – that’s what I get for getting sick, haha, but thank you so much for including my post in the round up! I’ve been such a longtime reader of your work – SO flattered!

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