DIY Balanced Funds for Investing

I always find it interesting that most of the times I have spoken to an “investment person” I have been told What you need is a Balanced Fund, which on face value is a good piece of advice. Rarely have I walked in and made the following statements:

  • I love High Tech, what I want to do is buy a single stock that has very high risk and very high potential pay back.
  • I feel comfortable investing in hedge funds, and want to explore that further
  • Bangladesh and Russia look like interesting investment opportunities, lets put all my money there.
  • I don’t trust the stock market, so all I want are Canada Savings Bonds

Most of the questionnaires I have filled in would not show that, however, I do find it interesting that a lot of the wording in these questionnaires are very “Balanced Fund Sympathetic” (but most questionnaires tend to herd the subjects towards the middle of the pack).

While I realize everybody needs to earn a buck, the Balanced Fund gig pays pretty well with the CIBC Balanced Funds having Fund Expenses of 2.55% , someone is living the high life on those fees. I do like the extra 0.10% in “Trading Expenses”, who gets that money? Oh their traders? Mostly I would guess.

So if you read the CIBC (or TD or whoever) Quarterly Portfolio Disclosure you can see that the top few investments in the fund are:

Balanced in What Way?

Balanced Doesn’t Have to Mean Expensive

  • Cash & Cash Equivalents 4.87
  • Government of Canada, 1.50%, 2023/06/01 4.46
  • Toronto-Dominion Bank (The) 2.83
  • Royal Bank of Canada 2.71
  • Government of Canada, 4.00%, 2041/06/01 2.05
  • Bank of Nova Scotia 2.04
  • Canada Housing Trust No. 1, 2.35%, 2018/12/15 1.97
  • Canadian Imperial Bank of Commerce 1.78
  • Korea KOSPI 200 Index Future, December 2013 1.77
  • Suncor Energy Inc. 1.75
  • Bank of Montreal 1.47
  • Japan TOPIX Index Future, December 2013 1.36
  • etc., etc.,

If you were really a wild investor you could simply mimic this list, but I suspect you’d end up paying a lot in trading fees. The other option is to group the list into and see if you can mimic it using simple Index Funds. Yes this might take you about an hour or two, but then you have about the same mutual fund, but with Index Fund (or ETF) Management Fees.

Want to really have fun? You know when I ask that, it’s going to be fun, but the next time your “Investment Person” proposes a similar Balanced Fund (my apologies to CIBC all the banks have expensive Balanced Mutual Funds, not just them) ask them if they could create an investment plan using Index Funds for a lower MER. Wonder what the response to that query might be?

Do you really want to pay a 2.55% fee (every year) ?


Tax Confusion and Delays

Thanks to the Heartbleed situation the CRA has stepped back and has put in place an extension for tax filings. The new deadline is May 5th according to this CRA web site.

This is good news if you owe money, because you can hold onto it until May 5th, but if you are owed money, why the heck haven’t you already filed your return? I already have my refunds, you could too if you just got it done now.

The CRA tax return backup matrix

There is my tax return, 3rd from the left!

I always feel good when I can quote from Thomas the Tank Engine.


Are We Running Out of SIN ?

No, not sin, Social Insurance Numbers, that SIN.

If the Social Insurance Number is simply a number given out each time a Canadian asks for one, the Maximum number of encodings is simply 999,999,999 codes. That seems like a very large number and why would anyone worry about running out of numbers in this program? The Social Insurance Number has become the de facto standard for identification in Canada (especially financially), and a number to be guarded closely, so each number is very important.

Some points to think about this number:

Social Insurance Number Example

A very Fake Social Insurance Number

  • I don’t think anyone has the Social Insurance Number 000 000 001  or anything like that encoding, so there aren’t as many numbers as we think. Is the exact number of available SINs published anywhere? I don’t think it is, but maybe I missed out on that.
  • From 1973 to 1994 the three digit prefix (the first three numbers) increased by about 265 (if I compare my SIN to my children’s SIN), so not an insignificant increase. From 1994 to 2005 the prefix digits increased by 035. This assumes that the numbers are allocated in an increasing order.
  • There are no more plastic SIN Cards being made, you simply get a letter with your SIN and that is it!
  • Given 900 SIN were lost with the Heartbleed bug, how many more digits are lost due to identity theft and such?
  • Is there a recovery program for digits after someone dies? I don’t think so.
  • Temporary SINs have 9 as the first digit, and depending on where you apply your leading digit will reflect that (see Wikipedia for this)
  • There is a checksum to easily figure out if a SIN is real or bogus.

Am I just fear mongering now? It’s possible, but I just wonder if we are going to hear in about 20 years that the Social Insurance Number will go from being a 9 digit number to either:

  1. A 9 digit hexadecimal number (base 16) (e.g.  DEA DBE EF9 )
  2. A 12 digit regular number

Those would be simple fixes I suppose, except then every and any program that used the SIN for identification would need to be recoded (can you say Y2K ?) .


Spring Financial Cleaning

I spent a busy weekend taking care of many small tasks that have piled up over the long cold winter here in Ottawa. One of the most important that I have procrastinated about is cleaning up my Quicken data files, as they have been neglected for a while. I have updated the files with new data, but there was a lot of information that just never got cleaned up.

To make a tool like Quicken, or whatever tool you use to track your finances, useful it needs to be up to date and reflect your current financial standing, and I was not happy to see that I had left around:

  • The mortgage to my previous house was hanging around as a “hidden” account, with basically the balance from when I bought that house. Not sure how it got to that state, but cleaning that up, suddenly made my balance sheet look a lot less lopsided.
  • There were at least 2 RRSP, and two mutual fund savings accounts that were hanging around as well, that have been long since closed, that added a little too much optimism to my retirement planning as well.
  • All of the RESP accounts and pretty much all the remaining active RRSP accounts did not reflect the actual investment levels in them, due to me simply dumping money into the account without actually completing the task by “purchasing” the investment vehicles used.
  • Most of the accumulation from DRIPs and mutual fund reinvestment were also not reflected in the savings accounts as well.

Needless to say this took a very long time (some very quiet swearing) and a few huge mistakes that had to be undone, to fix up most of these issues, but now I think I have most of it straightened out.

The biggest issue I have with Quicken as a tool is that it seems to work very nicely with day-to-day banking things, however, as soon as you enter into investing too many things become far too manual, and then far too easy to procrastinate about.


I was very sad to hear of the untimely passing of Jim Flaherty, our former finance minister. I have poked jabs at Mr. F. but as I said when he stepped down from cabinet, I think he did as good a job as anyone could during a really scary financial period in Canadian history. My humblest of condolences to his family during this sad time.

Jim Flaherty

The Late Jim Flaherty former Finance Minister

“goodnight, sweet prince/and flights of angels sing thee to thy rest”

How bad will the Heartbleed Bug end up being? Pretty darn bad by the looks of things. The latest information seems to imply pretty much every major site on the web has been compromised, so you are going to be spending a lot of time thinking up new passwords for each of them. The hard part is figuring out which sites are fixed and when you should change your passwords. Given the CRA web site is down for Netfile’ing (might be back soon), does that mean they are going to extend the deadline for Tax Return submissions? It is not like it is our fault that their system was hacked, I would assume they may give us a small extension in this case (if not, the backlash might be quite interesting).

The Quebec Elections showed that no matter how sure any politician can be at the start of a campaign, it only matters what happens at the end of the campaign. Mme. Marois ran a very interesting campaign, and somehow managed to go from a clear majority forecast to losing the election outright. Quebec Politics are the reason I still watch TV for this kind of stuff, it’s the best reality TV you can watch.


My Writings for Week Ending April 12th

Rest in Peace Ultimate Warrior

Young Folk Finding Jobs in Canada in March 2014

Some better news from Stats Canada about the job situations for younger folks in Canada. Let us hope the economy can keep this growth up.

Bell Ringing Banks and Frank Costanza

Serenity NOW, was what I wish I’d yelled as I left my TD Branch after ringing the bell, showing my thanks for the ATM machine and its good works.

Smaug and Wealth Protection

Even the super rich and super chaotic need to think about their financial well-being and future.

Heartbleed Bug ? Should You Care ?

Yes, you should care. You should change your passwords too, but only after you are sure the sight you are accessing has been patched against this problem.

TigerDirect (CA)

Cornucopia Section

Lots of interesting stuff not just about the holes in the Internet:

  • Scientific American says that E-Cigarettes’s Effect on Cells Similar to That of Tobacco Smoke, I have been having a Twitter conversation with a few folks about E-cigs, I say they should be treated the same as cigarettes in all ways (e.g. socially, insurance, etc.,).
  • Kerry at Squawkfox shows she has a great deal of “experience” with old technology ideas with Should You Buy It? A flowchart for smart consumers , flowchart? Wow, next time use Step-wise refinement.
  •’s medical side points out that In US, vaccine denial goes mainstream, this means comebacks for those old favorites: Measles, Mumps, Chicken Pocks and maybe even Polio! Seriously folks, WTF?
  • Jim Flaherty’s death really does drive home my message to those planning for retirement, that no matter how much money you have, and no matter how much you plan, you may not get to enjoy your retirement, due to health issues. Get healthy as well as wealthy if you want to enjoy your retirement.
  • Mark from the Blunt Bean Counter continues on with his auto-biographical post Confessions of a Tax Accountant -2014- Week 2 never knew accountants were that exciting.
  • Do you have a  Booze Budget ?  Debt Debs does, it seems pretty high too, not to be too judgemental (but wow that is a lot of money for BOOZE).
  • Barry from Money we Have brings us 6 things we need to know about credit cards, they shouldn’t be used to try to jimmy door locks either.
  • Michael James gave us some Bad Advice on Retirement , not that he wants you to follow, just that he has heard.
  • Mark from My Own Advisor writes about an interesting book with My takeaways from Thinking Fast and Slow I have talked about being a slow thinker, and needing to remember that (don’t act on my first impression or decisions is always a good thing for me (unless it is whether to put out my trousers that have caught fire)).
  • Mark (my brother for those that haven’t figured that one out) from 2nd Career Search is having a fresh dose of hell and he writes about it with Bermuda Triangle of Real Estate - TORONTO, I am not sure how anyone actually lives in Toronto these days.
  • Preet wonders Do you need balance protection insurance for your credit card? I think we can guess the answer on this one.

TigerDirect (CA)

For MMA Fans

Possibly the greatest MMA fighters of all time:

The Ultimate Warrior’s Debut

So many years ago

TeamBuy: Your Golf Destination!

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