It looks like Capital One has replaced their popular travel card with a watered down version (same points system and fee, but no more $100 annual bonus). For those of you interested, here is an updated list of the top free credit cards available to Canadians.

There comes a time for most of us to plan for the future. Entrepreneurs have the added load of Business Transition Planning as explained by The Blunt Bean Counter.

Many people like to find a reason to rationalize almost everything including action (and inaction) that is to their own detriment. The Retire Happy blog discussed about Three Excuses People use to Ignore Their Finances.

It is the time of the year when advertisers and marketing folks have a field day by targeting the romantic who only wakes up once a year; Canadian Finance Blog offered timely advice through 10 Ways to Save Money on Valentine’s Day.

Diversifying, whether in investment or in sources of income, is a safe way to avoid getting burned. Michael James on Money used graphs to get the message about Understanding Diversification home.

Life will throw curve balls at most of us and there will be occasions when all seems lost. At such times, Pick The Brain‘s 14 Facts About Life to Keep in Mind When Feeling Hopeless will serve us well.

The Saskatchewan government announced a wage freeze for 2015 to help reduce the budget deficit. Canadian Dream poked fun at the exercise and offered evidence to support his statements: Smacked by a Wage Freeze.

Rebalancing has been shown to minimize investment risk by ensuring that an investor’s target asset allocation is maintained. Canadian Couch Potato showed readers how they can go about Rebalancing With Foreign Currencies.

Few of us are fortunate enough to have a Defined Benefit Pension Plan these days. If you are part of that small group and find yourself with a need to withdraw such locked-in pension money, then Boomer and Echo posted the right article for you: Unlocking Funds From a LIRA Due to Financial Hardship.

Over the past year, Mr. Money Mustache has been working on a self-built heating system using his engineering skills in conjunction with his enthusiasm. Recently, he posted his update about the project: The Radiant Heat Experiment – Did it Work?.

In reflection of the status of the Canadian economy, Canadian Personal Finance Blog wrote about the creation of More Part Time Jobs in Canada in January and highlighted the plight of the Gen Y crowd.

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  1. Adam @ on February 12, 2015 at 7:25 pm

    Nice roundup. Hope to make the list soon.

  2. Alan W. (BCM) on February 12, 2015 at 7:47 pm

    Thanks for the inclusion this week, all these part time jobs cannot be good for the economy in the long run.

  3. Michael James on February 12, 2015 at 11:12 pm

    Thanks for the mention. I’ve tried many ways of explaining the value of diversification, but it’s not easy to get across.

  4. Robb Engen on February 13, 2015 at 11:13 am

    Thanks for the mention, FT. Too bad about the Capital One card. Devaluing and discontinuing rewards cards seems to be the norm these days.

  5. SST on February 14, 2015 at 4:06 pm

    @Canadian Dream re: Wage Freeze — don’t fret, amigo. I too work for a provincial gov’t (BC), and incurred a similar wage freeze for the years 2010/11/12. Guess what happened when 2013 rolled around? A fat raise AND retroactive pay for the three years of “frozen” wages. Ergo, there was no wage freeze, simply wage deferment. Politicians do what they must to look good in the public eye, they play a different game behind closed doors.

    @Michael James re: Understanding Diversification — “This is analogous to the difference between picking a small number of stocks and owning (almost) all stocks through index ETFs or mutual funds. Assuming your stock choices are random, the expected outcome is the same, but the volatility is higher the fewer stocks you own.”

    I can’t wholly agree. I guess the people who do pick stocks at random, ignoring everything from ticker symbol to financials, deserve what they get, either way.

    When you write “owning (almost) all stocks through index ETFs or mutual funds” do you really mean owning all North American stocks? If so, then you are right back to being a semi-random stock picker exposed to higher volatility. As well, stocks comprise ~40% of investable global financial assets (even less if you count cash). Owing ETFs and mutual funds is hardly comprehensive diversification.

    The theory that “the volatility is higher the fewer stocks you own”, when applied in real life, simply isn’t true. I can own one stock, Exxon (XOM) for example, which has a long-term lower volatility and higher total return compared to that of a group of 502 stocks (S&P 500).

    Your article does not explain “the value of diversification”, but simple pay-out statistics. If you are implying that volatility is the same as risk, it is not. Diversification is employed to mitigate risk, e.g. permanent loss of capital. In your briefcases example, there is zero risk because i) there is no capital/”bets” on the line, and ii) there is only varying degrees of reward — you win no matter what. Volatility is also zero because the reward in each briefcase is pre-determinied and static. Your example would be more useful by applying a cost to each briefcase selection and filling a few of the briefcases with non-positive prizes.

    Also, to achieve the average of any benchmark, an above-average return would have to be attained to account for fees, taxes, and other friction. One cannot beat the average by “diversifying” across the average.

    On this point, “the only way to beat the stock market soundly is by making concentrated bets. Unfortunately, this is the way to lose badly to the market averages as well”, I wholly agree. Diversification is for preserving wealth, concentration is for generating wealth. It’s interesting to note that most people will aim to concentrate their education/career/geography with the idea of gaining some kind of economic advantage, yet spend the rest of their lives seeking to apply diversification to that advantage, choosing to average down their advantage. I’m guessing it’s the people who are concentration-focused, on both sides of the equation, who fill the 1%.

    Happy Love Day. :)

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