Inflation

Inflation

The most dangerous asset class may surprise you: Cash!

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Depositphotos_16811249_s-2015Investors flee to cash during times of trouble.  However, far from being a safe haven, cash is potentially the most dangerous asset class for investors, luring investors into bigger psychological bubbles than even tech stocks and housing have historically.

We recently wrote about why investors might want to consider holding bonds rather than cash, even at current low and negative yields (see Why on earth would you hold a bond with a negative yield?).  A recent article (see Journey of Cash by Alex Gurevich) and further investor questions have inspired us to think a bit more specifically about cash and its merit (or not!) as an asset class in a well diversified portfolio.

Hold cash for known near-term purchases and an emergency fund

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Gold guru Peter Schiff says Goldmoney deal will draw millions to BitGold

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Peter Schiff (Twitter.com)

Author and US-based gold guru Peter Schiff is teaming up with a Canadian gold fin-tech company — Goldmoney Inc. — in a deal both parties expect will accelerate the firm’s growth into “millions” of users seeking a “real-money” alternative to the “fiat” currencies of the world’s central banks.

Initial details were revealed on Friday, when Toronto-based Goldmoney Inc. (trading as XAU on the TSX), announced its plan to acquire Schiff Gold Inc. (SGI) and form a marketing and service agreement with Schiff (pictured left).

The Hub last looked at Goldmoney and its Bitgold in this post in March: BitGold: a cure for savers frustrated with low or negative interest rates? The link also contains my blog on this for the Financial Post.

And we looked at a couple of recent books on the soaring gold price in a Hub post in June. You can find the review, which includes Schiff’s The Real Crash, in this Hub review titled The New Case for Gold. The link also contains my blog on this for Motley Fool Canada.

The Goldmoney release describes Schiff Gold Inc. (“SGI”) as a “private, US-based dealer in precious metals” that was launched in 2010 under the name Euro Pacific Precious Metals. It in turn was described as “one of the largest and fastest growing retail gold dealers” that services a large client base with buy and sell orders for precious metals, storage and vaulting arrangements and gold & silver IRA arrangement services.”

Schiff is the “LeBron James of the gold market”

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Climb into a higher tax bracket — and save money

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MoneySense.ca has just published the second instalment of my new Retired Money columns. Click on the highlighted headline for the full piece: Climb into a higher tax bracket — and save money.

Yes, the concept may seem at first blush a bit contradictory but strange things can happen when you’re in the netherworld between full-time employment and full-stop retirement.

A period of semi-retirement (or what we call Victory Lap Retirement in an upcoming book I’ve written with Mike Drak) brings with it various opportunities to pay a little more tax than necessary while you’re “basking” in a relatively low tax bracket, in order to pay a lot less tax once those large RRSPs grow into even larger RRIFs and their forced annual (and taxable) withdrawals once you reach age 71.

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Emeritus Financial Strategy’s Doug Dahmer

One of the sources for the piece is Emeritus Financial Strategies’ Doug Dahmer, a Hub contributor who has penned many blogs on this theme, most of them housed in the Decumulate & Downsize section. Doug is pictured to the right.

Check out some of his earlier Hub guest blogs:

Debt is more than a four-letter word during your drawdown years. 

Timing of CPP Benefits: Get both a bird in the hand and two in the bush. 

A Rare Breed of Financial Planner. 

Mother’s Day and your future role as Mom’s money manager

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Depositphotos_6869353_s-2015By Josh Miszk, Invisor.ca

Special to the Financial Independence Hub

Most of us will care for our aging moms at some point in our lives, but helping our parents maintain their independence as they grow older can be a juggling act, particularly when it comes to their finances.

Before we are thrown into the overwhelming responsibility of managing Mom’s investments, it’s important to do some advance planning. For many, starting the conversation with Mom is the biggest hurdle, and what better time than on Mother’s Day?

Whether it’s day-to-day or long-term investments, here are a few things to consider when helping Mom with her finances:

Get a holistic view

Start by getting a complete picture of Mom’s current and expected cash flow needs. Look at her sources of income (like pension and CPP) and her living expenses to get a better idea of any cash shortfall her investments will need to cover.

Next, get a holistic view of her investment portfolio, including what investments she holds and where. Continue Reading…