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Clearing out junk in the basement...
September 11, 2016
8:35 pm
Loonie
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We came upon a small pile of financial advice books from the mid-late 1990s.
They are mostly about mutual funds, one of the preferred investment categories of the day, but not exclusively.

I highly recommend looking at these for a sense of historical perspective about financial advice - available at many garage sales for free since nobody wants stale advice. Reading them raises a lot of questions and sometimes provides for some retrospective humour. And it makes you appreciate how ephemeral advice can be.

Most of the most highly recommended funds are names that are now not recognizable. Some have no doubt been folded into other funds due to restructuring and corporate takeovers. Odds are that what you bought then is not what you have now, which really makes me wonder how anyone could possibly track performance for any serious length of time, especially since we are told that we should expect to hold them for long term. Mandates can change, managers change, fund companies change, MERs change. It all adds up to "not trackable". The only one with which I am familiar was, in those days, a US health care fund; now it has another name, is run by another fund company, has a different management team, and is invested in US large cap with an emphasis on tech!

I was particularly amused at the encouraging write-ups given to labour-sponsored funds. I know that the best-known of them, Working Ventures, went completely belly=up and everyone lost their money. I'm not sure what happened to the rest, but think their fate was similar.

Some of the funds have done very well over that time, although they weren't necessarily the ones with the highest ratings back then, but there is not a clear correlation between recommendations and performance in most cases. And, as I said, most would be very difficult to trace and track.

If I had the time, I have no doubt that I could tell some very interesting tales about what became of these recommendations. But, much as I enjoy historical research, I'm going to leave that to some enterprising thesis writer.

It's easy to see why ETFs have become the preferred vehicle for so many people.
But I have to wonder how the advice of today will look in 20 years. I probably won't be around to find out!

September 14, 2016
6:48 am
SavingIsGood
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Loonie said I probably won't be around to find out!

You SHOULD! Eat right, do not smoke, drink. Exercise. Walk. Do not watch TV. Do not get upset. Look at well endowed girls (boys, whatever is your preference). Ignore idiots on the road.

For all these years in Canada I learned that there is NO 10% mutual fund return as every banker, fin adviser wants you to believe.

Find stable, 4-6% return mutual fund and enjoy. There is no fast wealth unless you put a pantyhose over your head and walk into bank with shotgun...

September 14, 2016
3:51 pm
Loonie
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Actually, I did once get a 13% return on a mutual fund. I kept it about a year and decided that was enough for my worry meter and that I should cash in while I was ahead. It was better than the interest rates at that time.

In other "housecleaning" activities, I still have another small mutual fund but it hasn't gotten more than about 1.1% for the last 10 years or so. The MER is higher than the return! I'll be dumping it next week. At the time I bought it, it got Gordon Pape's #1 rating in its category. So much for predicting the future based on the past!

September 14, 2016
4:49 pm
Koogie
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SavingIsGood said

Loonie said I probably won't be around to find out!

You SHOULD! Eat right, do not smoke, drink. Exercise. Walk. Do not watch TV. Do not get upset. Look at well endowed girls (boys, whatever is your preference). Ignore idiots on the road.

Not drink !! What is the point of living long then... sf-cool

Seriously though, I think about this concept a lot and that is why I haven't fully 100% embraced ETFs for the equity side of my portfolio. I remember in the early 90's when I started investing on and off, that I was going to seminars on mutual funds (put on by the Big 5, shamefully) that touted mutual funds as the ideal vehicle for small time investors and solid, mathematical "proofs" were on display to back up their sales pitches.
I am not a mathematician. So they looked convincing to me. And the business media agreed wholeheartedly and said MF were the way to go.
Nowadays, banks and the media are touting ETFs and boy oh boy, do they have mathematics and pie charts to back up their claims. Again, it all looks convincing to me.
I buy into the concept of reducing your investing costs and that portion of ETF logic appeals to me. As does the basic logic behind broad market indexes and why they work versus the dartboard approach. But, do I fully understand how ETFs are created, held and manipulated by the market makers. You bet I don't. So, once bitten, twice shy.

The favorite flavor of today is next decades has been. So, I'm moving toward buy and hold investing for my Canadian equity and away from the index ETF. I will rely on ETFs for my US and INTL simply because I don't have time and aptitude to look at global stocks as much.

Diversity in all things. Including diversity.

September 18, 2016
11:25 am
Norman1
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SavingIsGood said

For all these years in Canada I learned that there is NO 10% mutual fund return as every banker, fin adviser wants you to believe.

Find stable, 4-6% return mutual fund and enjoy. There is no fast wealth unless you put a pantyhose over your head and walk into bank with shotgun...

Mutual funds that have significant number of years when the return is 10% or better still do exist. These are some that I own:

Fund Name 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Chou Associates, Series A -6.95 12.06 41.33 26.96 -16.90 19.21 29.70 -29.30 -10.22 18.77
Mawer Canadian Equity, Series A -0.27 15.83 25.43 12.67 1.90 13.74 29.45 -29.68 11.50 13.94
Mawer International Equity, Series A 20.27 9.14 22.57 19.51 -7.49 8.40 24.90 -32.23 -2.39 32.00
PH&N Canadian Equity, Series D -7.87 11.04 18.68 8.87 -11.17 12.52 34.87 -35.54 5.30 15.58
PH&N Dividend Income, Series D -8.42 10.01 16.14 11.22 -2.66 11.90 33.00 -32.54 -3.90 16.52
PH&N High Yield Bond, Series D -2.97 3.98 5.06 10.56 4.86 10.61 17.35 1.33 3.83 8.09
Trimark Fund, Series SC 19.17 10.02 30.53 12.00 3.16 5.02 10.40 -28.65 -9.65 26.95

The challenge is that one needs to stay invested in them during those years that they don't do as well.

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