FUD Financial Messages

What is FUD Financial messages? FUD is a technical term from the world of politics where you try to create Fear, Uncertainty and Doubt with your message. FUD is usually a strategy to influence perception by spreading negative and dubious or false information leading to fear-mongering and concerns by the public. Naturally, you do this to create an advantage for yourself, or cast aspersions on an opponent.

It is easy to see the power of FUD in the last few elections, but politics is not the only arena where FUD works well.

FUD financial messages are out there. Usually to cause you to wonder whether you are using the right bank, insurance company or you are missing out on a great deal. All Fear of Missing Out (FOMO) messages are in this genre.

Fear Uncertainty and Doubt

Some might argue this blog is a FUD financial message, however, getting out of debt is not really FUD in my book.

The message continues to be confusing to most folks. The Truth in finances is not clear to many folks (if any), and there are few places where consumers can get clear and truthful financial information.

Investing FUD

I find the entire investment industry seems to be a FUD Factory.

  • Cryptocurrency seems to be the leader in FUD. You will miss out on untold riches unless you buy one of the over 200 cryptocurrencies (even though you have no idea what it is).
  • In Canada there is tons of FUD swirling around legalized Marijuana, even though most of the companies seem to spend a great deal more than they are making currently.
  • Actively managed funds want you to be unsure that you are not making the huge growth they can offer, however, Index Funds point out that actively managed funds can’t keep up their claims (and thus are part of the financial FUD game).

Get the tools you need to comprehend truth from fear-mongering, and create Financial Firewalls to filter out the disinformation.

Remember that sometimes FUD is a good thing, and the sales person you are dealing with is trying to allay your personal FUD, with any lie that will cause you to buy their product.

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Risk Profiles and E-series Orders Rejected

My daughter is running into the same issue that I did when I had my TD E-series orders rejected, due to my investment risk profile. She has set up a TFSA, unfortunately with TD Mutual Funds (not TD Direct investing). As we learned to use TD E-series funds in a TD Mutual Fund account, you must complete many steps. None of these steps include the change your investment risk profile to stop having your TD E-series orders rejected.

e-series orders rejectedI have talked about how to use the E-series funds to set up a simple Couch Potato investment portfolio, so my daughter is going to use this for her TFSA account.

The application to allow you to use TD E-series Index Funds in your TD Mutual Fund account is straight forward and easy to fill in. You must do this if you end up with a TD Mutual Fund account, which is what you end up getting steered into if you go into a TD Branch. My daughter thought she was opening a TD Direct Investing account, but it ended being a TD Mutual Fund.

If you fill in the form, you assume that you then buy E-series funds (they even show up in your list of funds that you can buy), however, that is incorrect.

The E-series funds are Index funds with low MER fees (and I use them in many of my accounts, as full disclosure, but I am not receiving any recompense for talking about them). Many different web sites have talked about them, and how useful they are, but they are tricky to use in a TD Mutual Fund account.

A TD Mutual Fund Investing Risk Profile is filled out when the account is first opened, and periodically after that (every year or two). The profile questions usually push folks into a lower risk Balanced profile, and evidently the E-series funds are far more riskier funds.

The E-series Funds have turned into the red-headed step-child of the TD Mutual Funds group. None of their staff seem to want to sell them or use them in any kind of form. It is easier to use TD E-series funds in a Questrade account than a TD Mutual Fund account.

My opinion is that due to the E-series being lower cost, the TD Mutual Fund reps don’t make much money (if any) off them, so they are less motivated to sell them. Why the TD Mutual Fund on-line system seems to default to E-series orders rejected, is another issue.

Simple Solution to E-Series Orders Rejected ?

A simple fix which I will suggest to TD Mutual Funds who be to add the following “initial” block.


Ο  I allow the TD Mutual Funds group  to alter my Investment Risk Profile to allow me to use the E-series funds in my investment portfolio.

Name:  ________________           Initials: _____________


Seems straight forward to me. I doubt this will happen, it is too straight forward and nobody makes money.

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2 Key Investment Strategies

There are two key investment strategies that all folks need to have, that are obvious, but rarely ever spoken about. The second strategy is the one that most folks seem to forget about.

A Buy Strategy

Why are you buying? What is the reason you are investing? Is this for a retirement fund, emergency fund, or just savings in your TFSA ? You need to answer that question and that is the cornerstone of your buy strategy.

When are you going to buy can be important, but market timing isn’t going to work out. When are you going to start investing is more important in your buy strategy.

What are you going to buy? Stocks, mutual funds, index funds, ETFs, and GICs are just some of the investment vehicles you can use to invest your money. Depending on what you buy, you will then need to think about how often and when you buy.

How much are you going to buy? How much money do you have to invest? Another important aspect of your buy strategy.

The other aspect of your key investment strategies is one that far too many folks don’t have.

Is there another investment strategy I need other than Buy?!?

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Index Investing Downsides

Even though I do Index Investing (mostly) I do realize that with all investing plans there are downsides. I read an interesting article in the Kiplinger magazine (by Elizabeth Leary) that talked about the obvious Index Investing downside, you are investing in the Index. In these raucous days of market corrections, this is a concern to Index Investors

The best quote from the article is:

“By definition, index funds guarantee that you will suffer 100% of the next bear market’s decline,” — Jim Stack, president of InvesTech Research.

Given  you are an Index Investor, you already knew that, but for others the subtleties of the statement is lost. When the Indexes are in a Bull Market, you enjoy the low MER and growth, but when the Bear Market comes (and it has?) you will feel the brunt of the market drop. The argument that actively traded funds make are that they can react quicker to market corrections.

Index Investing

Both of those statements are true, but the losses you incur from Actively Traded funds MERs are usually not mentioned (especially during Bull Markets, so you lose some of your profits). Do all actively traded funds manage to stop-loss during market corrections? No (some do), and some might argue they are some of the market forces that cause the market corrections.

The other point folks forget is that the “Yard Stick” that most Index Funds use correct themselves as well. The S&P (and others) regularly update (add and drop) stocks from their Indexes, depending on what the Index is tracking. They don’t typically do this during a market correction, but the “bad apples” do eventually go away.

Ms. Leary points out that if you buy into the argument about Indexes and how active traders can be more nimble, you are assuming that your Mutual Fund manager are smart enough to deal with rapid market changes. This is a very big assumption to make, you must choose the wisely managed Active Trading Mutual Funds or risk being worse off than if you simply use well-defined indexes. The hard part is figuring out which funds are the wisely managed nimble ones.



My Opinion

I will stick with index investing for now. I tried to be an active investor myself and lost enough money to realize that Market Timing is not possible for an individual investor. Are there Actively Traded Mutual Funds that beat the market (i.e. out strip the Indexes)? Yes, however, it is interesting that it is rare to find any that can make that claim over 10 years.

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Stock Picks 2018

For my regular readers you must be shocked by this title, but a new year brings some new ideas and concepts. For the first time in a while, I will be putting out my stock picks for 2018. Hey if I can put out swag Financial Predictions for 2018, I can do this.

Yes, I have espoused Index Investing for a long time, but if you really want to make big money you will need to take some big risks. Some might tell you that Bitcoin is your way to sure money, others might say that Marijuana is a sure-fire money maker in the coming year, but I am here to say they are missing the boat. You buy that stuff and all you’ll have is bad-parity and a craving for Chips and Brownies.

I give you the portfolio that you should have for 2018.

Stock Picks



📈 Click here to unlock this amazing stock tip 📈

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