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The Toronto Star thinks that "low-fee investment products are bad for you"

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  • Sep 4th, 2019 7:49 pm
[OP]
Deal Fanatic
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Sep 1, 2013
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The Toronto Star thinks that "low-fee investment products are bad for you"

Don't look to the Toronto Star for investment advice, folks Smiling Face With Open Mouth

https://www.thestar.com/life/opinion/20 ... r-you.html
But, here’s the issue. The markets in North America have had a very good ride upwards since the beginning of 2016, when they’d taken quite a tumble. This has informed investors wondering if there is much more room for major market growth. And, for ETF investors, is there much growth opportunity left in North American markets. Could it be that ETF investors are actually buying at a high rather than following Warren Buffett’s most important rule — to buy at a low and then sell at a high? Time, and market data, will tell, but by all accounts, it does look this way.
Warren Buffet would be the first person to tell you he can't time the market, and yet this reporter thinks she can do it.
Even if the funds or your adviser’s fees total 2.5 per cent, if the ROR is 12 per cent, net of fees, you’re making 9.5 per cent. So long as the net ROR is above the market ROR, you should be happy to pay those fees.
Is there anyone out there who is willing to make a bet with me that they can pick a mutual fund manager who will make a 12% ROR over the next 10 years? Any takers?
28 replies
Deal Fanatic
Jul 1, 2007
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This is the problem when newspapers rely (almost exclusively) on journalists completely lacking any education in personal finance to write personal finance columns.

The Globe & Mail is no different, with some of that god-awful financial drivel (can't call it advice) from the likes of Berman and Pape.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Sep 8, 2007
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Way Out of GTA
Ouch financial advice from the Toronto Star is akin to housing advice from Garth Turner.

You gonna be broke son!
Deal Fanatic
Jun 3, 2009
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cartfan123 wrote: Ouch financial advice from the Toronto Star is akin to housing advice from Garth Turner.

You gonna be broke son!
Or taking advice from Trump on how to run businesses...

The article is a joke.
Sr. Member
Mar 16, 2018
850 posts
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Hamilton
Check out her Twitter- she's basically just Comso Girl with a slight financial lean.

"What started all the fuss in the first place was when she took up teaching her high school business class about investing, much to her teacher's surprise."

So much cringe.
Deal Fanatic
Feb 4, 2015
6888 posts
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Canada, Eh!!
Yeah, great advice that 2.5% mer not bad if getting above mkt returns.

Knock, knock Cosmo Girl... most/majority of actively managed funds with mer in 2.5% range DO NOT beat market.
.......
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
Penalty Box
Apr 27, 2015
2270 posts
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Toronto Red Star is a joke not only for investment advice :)
Lift lockdowns! Let people live!
Sr. Member
Jun 28, 2018
938 posts
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Toronto
It's an opinion piece, not an article.

She would be better served to use a different quote about buying great companies at a great price.
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Then again what is a great price for overall markets.
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Deal Addict
Sep 2, 2009
1707 posts
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Ottawa
CheapScotch wrote: Is there anyone out there who is willing to make a bet with me that they can pick a mutual fund manager who will make a 12% ROR over the next 10 years? Any takers?
Or she should see what fund has a 2.5% fee for a 12% ROR and see if there is a comparable ETF: "win-win!"
...it's almost as if the writer has no clue what they are writing and that it is a fictional-apple-to-fictional-orange comparison.
Deal Addict
Jul 23, 2007
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I originally read David Chilton's book "The Wealthy Barber" back in 1989 when it was first published, We didn't have index funds in Canada in these days so he gave the same spiel as everyone else at that time to find the best active funds to invest in. Fast forward to his next book published in 2011, "The Wealthy Barber Returns" and now he advocates investing in low cost indexes. I much preferred his second book, but that's just me.
Banned
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May 21, 2019
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I dont know who he is... but sounds like one should be doing the opposite... and now invest in active funds..

Stryker wrote: I originally read David Chilton's book "The Wealthy Barber" back in 1989 when it was first published, We didn't have index funds in Canada in these days so he gave the same spiel as everyone else at that time to find the best active funds to invest in. Fast forward to his next book published in 2011, "The Wealthy Barber Returns" and now he advocates investing in low cost indexes. I much preferred his second book, but that's just me.
Deal Fanatic
Aug 17, 2008
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MagicPants wrote: I dont know who he is... but sounds like one should be doing the opposite... and now invest in active funds..
You don't know who Doug Chilton is? :facepalm:
Deal Addict
Jul 23, 2007
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MagicPants wrote: I dont know who he is... but sounds like one should be doing the opposite... and now invest in active funds..
If that's what you want to do, there's nothing to stop you. I used to read interviews with active managers but not so much nowadays. A few did outperform their respective benchmark, but then something would happen, like they'd retire and the replacement managers were useless, or their superior methods just stopped working. Even here in Canada we had some great performing active funds like Trimark and Altamira. Their glory days are long gone.
Deal Fanatic
Aug 17, 2008
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Stryker wrote: If that's what you want to do, there's nothing to stop you. I used to read interviews with active managers but not so much nowadays. A few did outperform their respective benchmark, but then something would happen, like they'd retire and the replacement managers were useless, or their superior methods just stopped working. Even here in Canada we had some great performing active funds like Trimark and Altamira. Their glory days are long gone.
If he doesn't know Chilton, he def doesn't know Mersch
Deal Addict
Jul 23, 2007
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MrMom wrote: If he doesn't know Chilton, he def doesn't know Mersch
Between you and me, that's why I didn't mention Mersch. I don't watch business television but seeing what's on the net, looks like he's still around. Most certainly a star manager,.....at one time.
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May 12, 2014
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cn_habs wrote: Or taking advice from Trump on how to run businesses...

The article is a joke.
Trump started with millions and has billions.
He also built some brands from scratch.
I don't get your point.
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Dec 11, 2005
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Thalo wrote: This is the problem when newspapers rely (almost exclusively) on journalists completely lacking any education in personal finance to write personal finance columns.

The Globe & Mail is no different, with some of that god-awful financial drivel (can't call it advice) from the likes of Berman and Pape.
FWIW this is not a journalist, its a contributed column. She supposedly has credentials. Doesn't make the content any better though.
Lesley-Anne Scorgie is the founder of MeVest, a leading-edge financial education company specializing in money coaching for Canadians. er passion for personal finance was strong well before her appearance on the Oprah Winfrey show in 2001. What started all the fuss in the first place was when she took up teaching her high school business class about investing, much to her teacher's surprise. Since appearing on the show, Lesley-Anne has branched out as a bestselling author (Well-Heeled: The Smart Girl’s Guide to Getting Rich, Rich by Thirty: Your Guide to Financial Success and Modern Couple’s Money Guide: 7 Smart Steps to Building Wealth Together), entrepreneur, renowned professional speaker, educator, television personality with Breakfast Television and LA TV and freelance contributing columnist with The Star.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Fanatic
Jul 1, 2007
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brunes wrote: FWIW this is not a journalist, its a contributed column. She supposedly has credentials. Doesn't make the content any better though.
Sorry, I kind of lump them all in one. Basically, the newspapers too often rely on people with no accreditation in that area to write their content, even if from time to time they interview financial professionals for such content (I don't consider her such a professional, more a communications professional).
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Jun 3, 2009
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FrancisBacon wrote: Trump started with millions and has billions.
He also built some brands from scratch.
I don't get your point.
Are you serious? The Trump empire was started by his father who built it from scratch. The fact remains that he had to declare bankruptcy multiple times and that he is hiding his tax returns from the public in order to keep up the lie that he's a multi billionaire.
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Dec 4, 2016
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Stryker wrote: If that's what you want to do, there's nothing to stop you. I used to read interviews with active managers but not so much nowadays. A few did outperform their respective benchmark, but then something would happen, like they'd retire and the replacement managers were useless, or their superior methods just stopped working. Even here in Canada we had some great performing active funds like Trimark and Altamira. Their glory days are long gone.
I think with high speed internet being taken for granted and forum/blogs space basically free for the past decade, it's getting harder and harder to hide the bad performing funds of a manager, and definitely harder to hide all the poor performing funds shut down by a financial institution. It's easy to "beat the market" if you just start 10 funds, and put one randomly chosen stock in them, and shut down any funds that don't do well at the 5 year mark. Suddenly you have a rock star manager who "consistently beat the market".

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