The first quarter of 2018 was a tough one for investors. It started on February 5th with the worst single-day point drop in history for the Dow Jones Industrial Average, which fell 1,175 points that day. Indeed, market volatility was back and, according to some pundits, here to stay.

Stock markets can be manic, prone to violent swings up and down depending on the mood of investors. But, for those who manage to ignore the daily headlines and stick to their investment plan, there wasn’t much to get excited about this quarter. In fact, a well-diversified investor could well have slept through the first three months of the year and woke up today without noticing anything unusual going on in his or her portfolio.

My RRSP, for example, which is invested broadly across the globe with Vanguard’s VXC and VCN, was up slightly for the quarter – a 0.72 percent gain. Not a stellar quarter by any means but not one that would have me fleeing for safety either.

My RESP, which is invested similarly inside of four TD e-Series index funds, was down a mere 0.79 percent. That’s a pretty steady quarter, despite all that market volatility.

What drives investing headlines? Greed and fear. Well, markets have been on fire since 2009 and, after the cryptocurrency hype fizzled out earlier this year, it seems we’ve run out of greedy headlines. Time to dial-up the fear factor and get investors thinking about (and reacting to) the next crash.

Long-term investors can safely ignore these headlines and instead focus on the things they can control. Regular contributions to a low-cost, broadly diversified portfolio along with a healthy bullshit filter that tunes out these useless distractions.

This Week’s Recap:

On Monday I wrote about my experience testing the Endy, Casper, and Bear mattresses.

On Wednesday Marie explained how to generate retirement cash flow from your investments.

And on Friday Marie wrote a checklist for new parents in the latest Boomer & Echo financial makeover.

Many thanks to Rob Carrick for including my post on how families can get more from the Canada Child Benefit in his latest Carrick on Money newsletter.

We’ll get into some helpful tax-related content next week as we gear up for the end of tax season. Stay tuned.

Weekend Reading:

Morgan Housel with another exceptional post – this one on how to talk to people about money:

The best way to talk to people about money is keeping the phrases, “What do you want to do?” or “Whatever works for you,” loaded and ready to fire. You can explain to other people the history of what works and what hasn’t while acknowledging their preference to sleep well at night over your definition of “winning.”

Visual Capitalist beautifully charts the relationship between money and happiness, concluding that life satisfaction increases with wealth – up to a point.

Canadians generally believe that owning your home is a smart investment while renting is a waste of money. In this episode of Common Sense Investing, Ben Felix explains why renting can make a lot of sense:

Money After Grad blogger Bridget Casey got into a Twitter war following this epic thread on the plight of Millennials:

Behavioural economist Dan Ariely adds further context as to why it’s so hard for people in their 20s to “adult” these days:

“It’s becoming more difficult for young adults to think long-term, since they’re not reaching the milestones that typically force them to do so, such as getting married and having kids. Now, we have teenage years, take 2.”

Gen Y Money shares a brutally honest post about money and family, culminating with her estranged father asking her to lie to protect his real estate assets from a failed marriage.

Financial planner Shannon Lee Simmons shares an age-appropriate guide to talking to kids about money. One quibbled is with the advice that an allowance should be linked to chores to ‘mimic work’. As a parent of soon-to-be six and nine year-old daughters I’m on the opposite side of the fence when it comes to an allowance. I use it as a teaching tool for my kids to learn about money and that it can be used to spend, save, and give to others in need. Tying an allowance to chores puts the emphasis on the work rather than the money. Our kids still do chores, don’t get me wrong, but it’s for the same reason that we do them – because they need to be done, not because we expect to be compensated for tidying the house. /rant

On a lighter note, here’s Saturday Night Live’s Kate McKinnon having fun with financial literacy talking with kids about money:

Jason Heath says that when timing CPP and OAS with your workplace pension deferring CPP makes sense even if you expect a ‘bridge’ payment from your defined benefit plan.

Author Michael Drak says one of the biggest mistakes you can make is sacrificing your time with friends, just so you can work longer to save for your retirement.

Rob Carrick says the safe and sound choice in today’s mortgage market is to lock down a rate for five years and let borrowing costs do what they may. But here are two ways that make variable-rate mortgages the better deal right now.

You cannot transfer investments directly between TFSAs and RRSPs but you can sell for cash in one and repurchase them in another. BNN’s Dale Jackson explains:

Finally, an interesting read inside the strange odyssey of billionaire hedge-fund king Eddie Lampert, the majority shareholder of Sears and Kmart.

Have a great Easter weekend, everyone!

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