In the Canadian House of Commons, “everybody’s trying to get on the National” according to former opposition party leader Preston Manning. Not surprisingly, this creates a temptation to stretch the truth to garner attention.

During his address to the planners at this year's Institute of Advanced Financial Planners (IAFP) Annual Symposium, Manning related how an aide, whose responsibility was to prep him for the question period, was especially talented at coming up with media friendly sound bites. The problem was most of it wasn’t true!

Asking the question "is it true?" is something presenter Scott Newman from Invesco Trimark did well in his presentation titled "ET...Fs - Call Home" to the planners gathered.

It was refreshing to hear Scott start by saying that "[ETFs] are not the panacea of solutions," especially from a representative of a firm that recently introduced an ETF product to the market.

Scott cautioned planners to beware of buying or selling at the beginning or end of the trading day, make sure to put in limit orders, check the bid/ask spread, and generally use the highly liquid ETFs where possible.

Many financial blog readers will already know to be cautious about the things Scott talked about. However, for the non-investment geeks, I think the popular media is only now writing in a more nuanced and ‘truthful’ way about ETFs.

What do you think? Are ETF manufacturers and the financial media doing a decent job of following Manning’s suggestion of asking ‘is it true’ in their communications?

Inspired by Scott's blog Tax-Free Savings Accounts - the RRSP for the Facebook Generation?, I wanted to see what a 19 year old could accomplish with some discipline. Quite a lot, I found.

For instance, a 19 year old who starts socking away $5,000/year in an equity-oriented portfolio that averages an annual compound return of 8% will find him/herself sitting on a portfolio worth over $1.5 million before their 60th birthday.

For all you fellow Facebookers, I just hope that the increased opportunity for leisure that comes with a larger portfolio doesn't translate into hourly 'status updates'.  

Tom has a thing for Principal Protected Notes. He thinks that most PPN’s don’t benefit investors. I feel the same way about another product, the reverse mortgage.

Reverse mortgages are a product targeted towards seniors who are house rich but cash poor. Instead of clipping coupons and eating beans, those over 60 can get money out of their homes and live out their dreams, so the pitch goes.

The notion of using one’s home as an ATM machine is nothing new. Banks have long trumpeted using home equity loans for every kind of purpose imaginable. As a former bank employee, I’ve seen it first-hand. What’s more, the banks will typically offer these loans at a borrowing rate of roughly 2% less than ‘reverse mortgage’ providers. So why do seniors need so-called ‘reverse mortgages?’

Beats me.

According to the product providers, Canadian Home Income Plan (CHIP) and a recent entrant, Seniors Money International (Jonathan Chevreau talks about these players in his column in last weekend’s Financial Post), it’s because seniors with little income often fail to qualify for bank loans.

Last time I checked, it wasn't hard to find bankers willing to offer loans of up to 40% of the value of one’s principal residence to homeowners with limited income, especially considering these bankers can then advise on investment solutions after advancing the loan (along with collecting a nice fee for setting up the loan, of course).

Why the banks are letting these reverse mortgage providers carve out a market for themselves, rather than marketing their own solutions more aggressively, is beyond me. But my burning question is why would someone opt for a ‘reverse mortgage’ when they can easily make an arrangement with their friendly banker that has more favourable terms? While reverse mortgages offer some nice features, their costs far outweigh their benefits in my opinion.

I guess some people just don’t fully explore their options. Which would also explain the popularity of PPNs.

1. a) prophet: an authoritative person who divines the future. b) a prophecy (usually obscure or allegorical) revealed by a priest or priestess; believed to be infallible. c) a shrine where an oracular god is consulted.

2. In complexity theory and computability theory, an oracle machine is an abstract machine used to study decision problems. It can be visualized as a Turing machine with a black box, called oracle, which is able to decide certain decision problems in a single step.

3. A seer/psychic of great power. Uses objects like a Crystal Ball.

I think these definitions are pretty revealing into why people refer to Warren Buffett as the ‘Oracle of Omaha.’ While I doubt Buffett hides a crystal ball, talks regularly with deities or dons priestly garbs in his office, I do think Buffett is able to focus better than most investors on what really matters, and make complex decisions seem simple. His ability to assess a business’ prospects and buy stocks accordingly is why many people tag him as someone who can see the future.

Though, as he tirelessly relates: “It’s not rocket science.” At Steadyhand, we share this belief.

Buffett’s clarity of thought especially comes through when he talks or writes, and this is why I particularly enjoyed these Q&A videos I found on YouTube where Buffett fields questions from an MBA class.

Hope you enjoy!

What I’ve found out so far is that Steadyhand is a great place to work. The team really is committed to the client and being as transparent and direct as possible. Therefore, I don’t feel a need to sugar-coat things.

The phones haven’t been ringing off the hook, nor have too many bodies been rolling through the door, so I have had some time to do a lot of eating (leftover from the opening party) and a lot of reading.

The food has gone down well but the reading has turned my stomach.

What’s the cause of this indigestion? Noise.

What happened this quarter? What’s the best sector to be in? What is the Fed going to do next meeting? Where is gold sitting? What’s hot today? Who cares!

Sure this matters if you are a trader, but not for a regular investor trying to build a nest egg. As a long-term investor absorbed in this noise, it does more harm than good.

How can an investor avoid getting hurt? By recognizing there is no crystal ball and that consistently calling the shots on short-term market moves is highly unlikely.

Worrying about daily prices or chasing trends is a terrible fixation and hard on your mental health. Behavioral finance tells us that we feel the pain of a loss twice as hard as we feel the joy of a gain. Now, unless you are a sadist, why choose a road that leads to less joy and less money?