Some years ago I wrote a piece called: "Freedom Fund down 71 percent puts mattress up 345 percent." Although it is an old post, it continues to bring in hits. Recently I have been in a back and forth exchange over that old post with a reader going by the moniker "Too bad."
This person seems knowledgeable and they know the investment community jargon. I believe this person works in the investment business. Possibly, they are an adviser as they have indicated. I am writing this post partially as a reply to Too bad, and if TB wishes to comment, they can. I will not add my two cents worth. I will respect their position and let it stand unchallenged.
|From June 30, 2009 London Life statement.|
Too bad's first reaction was: "Yes, this guy thinks that he deposits $4196.71 over apparently 9 yrs and expects to retire a millionaire. Wow what a genius."
In a later exchange Too bad (TB) told me: " I could list many funds that over that same time have under-performed . . . some of them amongst the biggest funds in the industry . . . most not under the LL umbrella."
I know that TB sees this as a defence of Freedom Fund. He seems to be saying, "Hey your investment didn't perform THAT badly, lots of funds do badly and bigger funds than yours." My mother called this "damning with faint praise."
When lots of funds are underperforming the mattress, something is wrong. When folk investing for their retirement lose big time, you can be sure the majority of fund managers made out just fine. TB likes to point out that some of my responses compared, as they say, apples and oranges. I say, O.K., let's take away the apple, let's examine the other fruit. I believe we'll find we have a lemon and not an orange. (In TB's defence he does point out that my original fund may well have been a lemon that even London Life acknowledged by dumping the fund from their offerings.)
I decided to google: "how much value do advisers add to a portfolio." I learned from an article posted on the CBC News site that the Canadian Foundation for Advancement of Investor Rights, FAIR Canada, supports moves to have better performance information provided to investors.
"Many investors find after 10 years that they're no further ahead than when they started, but the financial adviser has generated large fees." — Ermanno Pascutto, FAIR.
Ilana Singer, Deputy Director at FAIR Canada, notes governments and employers are gradually shifting the burden of providing for retirement onto the shoulders of individual Canadians, who must rely more and more on their own savings to get them through their retirement years. If your savings are with a financial adviser, it is more important than ever that your adviser understands the great responsibility placed on the shoulders of those providing financial advice.
One investor interviewed for a Globe and Mail article, written by Barrie McKenna, complained that “[advisers are] making money, whether we’re losing money or making money.”
|One expense I've faced in retirement is travel. I love touring in my Morgan.|
If you take the value of my portfolio today and subtract its worth when I retired in Jan. 2009, you will find that I have about 45 percent more money today. This does not take into account the money removed each year in order to live.
I have been fairly open about my investments – some are conservative, the TD Monthly Income fund, some are risky but promise high yield – DRW, REM, lots are ETFs – AUSE, SDY, XIC, XRE and some are plain stock plays – CPG, IPL.UN, PWT. When I feel there is a dip in the market, I tend to buy. That was how I picked up my BNS, RY and ZUT and my latest purchase of PRQ.
I blogged about buying PRQ if it hit $10. Anyone who followed my hunch can now sell and will have made a quick ten percent profit after their trading fees are subtracted. Note: I share hunches; I don't give out investment advice.
A fellow I worked with at the newspaper uses an investment adviser. When the market wilted a few months ago, his adviser got him out of the market. Me? I scrambled to buy. One thing I did, was buy a hundred shares of RY at $45 for my Tax Free Savings Account.
My TFSA is up more than 20 percent in a few months. And the chap from work, I don't know if he got back into the market in time to benefit from the recovery. He hasn't told me.