According to the Conference Board of Canada, after-tax income adjusted for inflation will rise by 5.4% in 2006, due to the cut in income taxes, an expected cut in the GST and wage inflation. The bad news is that the Bank of Canada is likely to keep increasing interest rates and we will be paying more for variable-rate mortgages, lines of credit etc.
DIY investors can very easily construct a well-diversified portfolio using ETFs or index funds. For instance, it took me only a few hours (including coffee breaks) to construct the Sleepy Portfolio. Rob Carrick, personal finance columnist for The Globe and Mail, recently compared investing in mutual funds with passive investing including the cost of advice. He assumed that passive investors are paying 1.5% of assets in fees every year. In my opinion 1.5% is too steep for constructing and maintaining a passive portfolio.
MoneySense, Canada’s best personal finance magazine has a new look. It is still a bit difficult to navigate the site. For example, I tried to find recent articles by Irwin Michael and had to give up after a few minutes.