I sent my kids to school on the day after Labour Day with a feeling that it hadn’t been a great summer. We hadn’t gone swimming or canoeing enough. I worked too much. Woe, etc.

This isn’t a new feeling. Friends will testify that I become a mopey sad-sack in the last week of every August because summer is over and I wasted it, ergo I’m a terrible person…

If it truly hasn’t been a bad summer (and it never, ever has been), friends with little patience for Emo Sandi snap me out of my not-quite-end-of-summer funk by enumerating all of the things this particular summer held:

Swam with the kids every evening the weather let us? Check. Bought an old beater canoe and paddled happily around Gull Lake almost every weekend? Check. Slept with the windows open? Hung the bedsheets on the line to dry? Worked on the front porch nearly every day? Check, check, check.

I frequently hear similar angsting expressed by people despairing over their investment returns: it feels like I have the same amount of money I started with, I should switch advisors, investing is a scam....

The stakes are higher, but these people are making the same mistake that I do every September: letting feelings rule the roost without making the effort to substantiate those feelings with fact.

If you’ve ever said any variation of one of the phrases above, you might be right. Maybe your investments really are flaming hot garbage. But maybe - just maybe - you don’t have all the facts, and even if you can check all of the other boxes you couldn’t say for certain what your portfolio has done for you lately.

Coherent investment policy? Check. Disciplined execution? Reasonable cost? Check. Rate of return?

Rate of return?

Bueller?

While ignoring your investments is probably better than monkeying around with them every day, especially if you’ve ticked all those other boxes above, staying up to date on the amount of money they gain or lose over time (otherwise known as your rate of return) is necessary, and an important item to check off your regular money maintenance list.

Why is your rate of return so important? Glad you asked:

Your rate of return can tell you where your bad feelings about investing are coming from

Your feelings about your investments might not come from the investments themselves. You might be paying too much attention to people with a vested interest in making you feel uneasy and out of your comfort zone: think people who earn money every time you switch between funds, hop into and out of the market, or pay a premium to buy investments that have some kind of insurance built into them, whether that’s appropriate for you or not. Knowing what you’re actually earning is a good antidote to the insidious worry that this kind of parasite feeds on.

If you know that you need to earn 4% per year on average to fund your retirement because you worked it out as part of your financial plan (whether you did it yourself or involved a professional), and you’ve been earning 4%, that’s good news.

If your rate of return is 4%, and you know that other investors, with the same asset allocation, virtually identical holdings, and similar investment policies are earning 7%, and you never made a conscious choice to sacrifice some of your returns in exchange for management or advice of some kind...that’s not such good news.

It’s very, very unlikely that you’ll earn 4% year in and year out (impossible, in fact), and while what stocks did from January 1 to December 31, 2016 won’t tell you a whole lot about how much you’ll be able to spend in retirement, it’s a useful way to compare your returns to what they should be, but there’s more to it than that.

The compound rate of return for your portfolio matters; the rate of return for your account does not.

If you’ve been fortunate enough to have money to invest for the future, you could pull out your statements right now and look at the rate of return for each account, or log into your dashboard and it will tell you how much your account(s) have grown (or not) over almost any time period you care to name.

Of course, if you have money stashed away in a TFSA, an RRSP, an old pension that you transferred to a LIRA, and your Group RRSP, and especially if you have a partner with the same laundry list of accounts, the rate of return for each account will only matter when you combine it with all the other money you’ve earmarked for the same goal, irrespective of what account those savings are held in.

Calculating your portfolio rate of return

If you want to answer the question “Is my portfolio right for me or should I change something about it?” using all the facts at your disposal, and you don’t know your rate of return, you can do one of two things: ask your advisor or calculate it yourself.

Asking your advisor can be a pretty great litmus test for whether you have a good one or not; most institutions only calculate your rate of return for individual accounts, so if your advisor A) recognizes the importance of portfolio-level reporting, and B) is either willing to do it for you or already does it as a matter of course, chances are you’ve got an advisor you should keep.

If, on the other hand, your advisor doesn’t return your calls, is cagey about portfolio-level returns or returns in general, or if you’re managing your own portfolio, you’ll need to do the work yourself. You’ll need your monthly statements, and one of the following tools:

• Justin Bender’s Rate of Return Calculator(you’ll have to hack it a little by adding up balances to get a portfolio-level calculation, and stringing together calendar year returns to get more than just a single year’s return)

• Morningstar’s portfolio feature (you’ll have to sign up for an account to have access to this), or

• Four Eyes Financial’s soon to be released portfolio tracking tool.

Snap Out of Your Investment Funk

If I start making plans for Summer 2018 based my feelings (or, more accurately, my fEeLiNgS) about Summer 2017, I’m going to exhaust myself and my children chasing an imaginary summer.

If you start buying different stocks or switching advisors based on your fEeLiNgS instead of all the available facts (including your investment policy and its execution, cost to invest, and rate of return), you’re not only going to exhaust yourself chasing an imaginary portfolio, you’ll be burning money while you do it.

In my world, September is a BIG month. Summer effectively ends on Labour Day, the kids are at school, and it’s time for a hard reset (what I privately think of as a second New Year) to prepare myself for the whirlwind of the last three months of the year.

In your world, September might still be summer, the school calendar might be a distant memory, and there might still be plenty of time to fit a few good reads into your schedule. Fear not, I’ve got you covered.

The list is shorter this month (see above), but still has fiery little gems like this one from my friend Chris about fighting even though it might be too late to win, this one from Kate asking when “being good at money” started to mean “not spending it,” and the first GIF in this reading list’s three year history.

The whole list is below, as usual. If you don’t have time to read every piece, read these:

How Filter Bubbles Distort Reality: Everything You Need to Know

From Farnam Street

It’s a bit rich to link to an article about filter bubbles in a monthly curated reading list, I grant you, but bear with me, since I suspect that the few people who read this list every month are looking for more than just confirmation of their own opinions:

“As technology improves and the ability of someone like the NYT, say, to show the same story to 100 different people using 100 different ways, the filter bubble becomes deeper. We lose track of what's filtered and what's not as the news becomes tailored to cement our existing opinions. After all, everyone wants to read a newspaper that agrees with them.

“Systems — be they people, cultures, or web browsing, to name a few examples — naturally have to filter information and thus they reduce options. Sometimes people make decisions, sometimes cultures make them, and increasingly algorithms make them. As the speed of information flowing through these systems increases, filters will play an even more important role.

“Understanding that what we see is not all there is will help us realize that we're living in a distorted world and remind us to take off the glasses.”

Read the full article here.

Income Volatility in Canada: Why it Matters and What to do About It

From Prosper Canada

This is that webinar I was tweeting about so much in the middle of August. It’s worth watching for anyone who wants a more compassionate understanding of what it’s like to have volatile income and ways that individuals, institutions, government, and industry can collaborate to mitigate its adverse effects. Built on broad American research and budding research in Canada, it’s well-developed and smoothly presented - a must watch.

Watch the video here.

Change the Portfolio, Or Change the Investor

From Daniel P. Egan

One of the most popular episodes of Because Money we ever recorded was the episode on behavioural finance with Preet Banerjee. I suspect it’s because we all know our brains are tricking us, and want to find ways to Trick Back. (Just me?)

This post from the head of investing and behavioural finance at Betterment is a good place to start. Dan lists four different strategies for mitigating the trouble we can get ourselves in when we let our brains trick us into being bad investors:

“We need to be thoughtful about how we arrange our decision making. We should protect ourselves from our weaknesses, and leverage our strengths. When performing this personal optimization there is generally a compromise or balance between:

Changing ourselves as investors or

Changing the portfolio we invested in”

Read the full article here.

You can read this month's entire list below,:

The Complex Motivations Of Money And Retirement As The Freedom To Pursue Non-Monetary Work Rewards|Michael Kitces

"Our relationship with money is far more complex than is commonly understood – such that it can even leads us to pursue goals that we think we want, only to find out that we don’t enjoy once we get there." 

10 Questions | Ben Carlson

It sounds smarter to be pessimistic and brace yourself and everyone around you for the next crash, but is it?" I wonder how much money has been left on the table by investors positioning for low probability events over the past 7-8 years."

 The Biggest Common Investment Errors | Ben Carlson

"I’m going to sound like Captain Obvious here but portfolio management is about managing a portfolio, not just the individual parts." 

Why You Feel Richer or Poorer Than You Really Are | Caroline Beaton

"An accountant, looking at somebody’s overall spreadsheet of debt and assets and net worth and income, and balancing all that out, is going to miss some important features of the psychology of money." 

When Did We Decide Being 'Good at Money' Meant Not Spending It? | Kate Smalley

"Frugality isn’t some virtuous badge. It can just as easily be a crutch, a vice, a way to hide. A box to tick without actually tackling the underlying habits, emotions, and fears that drive you."

 The first GIF to appear in the reading list!| @ReformedBroker

 It’s not too late to start fighting (even if you might not win) | Chris Enns

"You should fight because your finances are so much more complex and run deeper than just answering the question: will I have a funded retirement or non-funded retirement?"

I love my reading list this month, I really do. I know I say that almost every month, but guys: there’s some real gold in here for everyone, whether you’re spending the month of August toiling away at work like you do every month, relaxing in a canoe or on a beach somewhere, or panicking because if we round up, summer’s practically over and we might as well pull out our winter coats already (just me?)

Some of the gold is meaning of life stuff (like this piece on taking a break, or this piece from my friend James Osborne on the social pressure to look successful). Some of it is pretty deep retirement theory (like this mathematically dense and so fascinating look at whether randomized portfolio projections overstate the risk that retirees will have to adjust their portfolio withdrawals), and still more gold waiting to be discovered in tools for people who do things for themselves (like this comprehensive discount brokerage comparison tool and this post from my good friend John on estimating whether you’re on track for retirement or not.)

As always, the entire list is down there after the top three, so let's dig in:

Money Lessons from my Oma's Tomatoes

From Chris Enns

First, let me just get this out there: I might have cried a little over the memory of my grandparents’ garden when I read this. NO, YOU’RE CRYING.

I struggle with the idea of telling clients to spend less, although I do it because sometimes it’s the right prescription. The language around it is hard stuff, though, which is where Chris’ post comes in. It’s not on this list because of nostalgia, powerful though it may be; it’s here because of the elegantly simple turn of phrase in the very last section that is about to go into heavy rotation in client meetings where this conversation is on the table. I’m not even going to spoil it for you, you just have to read the story from start to finish.

Read the full article here.

Why Judging the Poor Isn’t Actually Helping Anybody

From Ashley C. Ford

Ashley Ford is one of my favourite writers, and her Instagram is so funny and real and tender that you’ll be a better person for seeing it.

This post from Ashley isn’t only about fEeLiNgs (although I’d be A-OK if it was “just” that), it’s about catching a glimpse of what life looks like for people who aren’t like us, so that when we look at what’s broken in the world and what our role is in patching it up, our perspective is wider than just the experiences we’ve personally confronted.

Read the full article here.

What’s New With My Model ETF Portfolios (and Why?)

From Justin Bender

Tax efficient asset allocation and selection across accounts is HARD, folks. It’s one of the decisions that people who pay for investment management are (supposed to be) getting for their higher fees (whether they’re getting it consistently or accurately is another conversation for another time).

If you’re keen on doing it yourself, you probably already know who Justin Bender at Canadian Portfolio Manager is. If by some weird twist of fate you’re trying to allocate your own DIY index portfolio and don’t know Justin...get thee to CPM.

His latest update is poorly titled, frankly. It should be called “How to not tear out your hair if you’re managing your own portfolio and you have significant non-registered investments.” Yeah, that’s definitely a better title. I spy a new side-gig for yours truly.

Read the full article here.

You can read this month's entire list below:

Take a Break: The Importance of Rest and Relaxation | Kitty

"New tasks have rushed in to fill our empty hours—and very few of them are leisure" 

Shame, Status and the American Dream | James Osborne

"How many Americans would think 'Wow, good for them. They have figured out what makes them happy and are spending/saving money in that way.' Can’t say I think it would be many." 

Can currency-hedged ETFs protect you? | Dan Bortolotti

"It pays to settle on a long-term strategy and stick to it even if it occasionally suffers over shorter periods." 

Fat Tails In Monte Carlo Analysis vs Safe Withdrawal Rates | Michael Kitces

 A dense but very worthwhile read for anyone interested in retirement income research, the 4% rule, sequence of return risk, Monte Carlo simulations, and safe withdrawal rates (so, maybe four of us) 

Baby Boomers Will Live Long But Might Not Prosper | Ben Carlson

"People exhibit a decline in cognitive abilities over time that leads to a decrease in investment performance and financial literacy skills as they age. Older investors also prefer more certainty, meaning lower equity exposure, which could be a problem with increased time horizons and the need to keep up with inflation over the long haul. It’s also difficult for older people to see their own decline in financial skills and abilities." 

Arguments Against Index Investing | Michael James

"The passive versus active debate isn’t going away any time soon. There are too many people who make their livings from expensive mutual funds to expect them to just give up." 

Canada's Best Online Brokerages 2017 | Money Sense

Compare online brokerages side-by-side. 

A Framework for Estimating “Am I On Track?” | John Robertson

"we just want to get a ballpark idea of whether we’re on track or not, and we want to do it ourselves with a whiteboard and spreadsheet" 

Should I use the institution's internal “ombudsman“? | Ken Kivenko

"The firm may “encourage” you to use their internal "ombudsman". The banks and insurers have created these entities to give the institution a second chance. We view the diversion from regulator-approved OBSI as an unnecessary step"

This list of questions at the end is pointed--fierce, even. And the answers (or, more likely, no -answers, will tell you all you need to know about whether you should skip the "ombudsman" and take your complaint directly to the Ombudsman. 

Another monster list for your July reading pleasure. These top three are the ones you shouldn't miss, but the whole list is down there...I'm sure you'll find something interesting on retirement income satisfaction, how to handle a windfall, surviving close encounters of the banking kind, how the 4% rule works outside of the US (where most of the retirement income research has come from), and the first article I've read about market bubbles that didn't blame it on fear and greed (plus more...lots more).

Let's dig in:

FAIR Canada Submits Brief to Parliamentary Standing Committee on Finance

Frustrated by the recent stories about high-pressure, unethical sales practices at Canadian Banks? (For a refresher, here's the first one on CBC Go Public) FAIR Canada (Canadian Foundation for Advancement of Investor Rights) has submitted recommendations to make banking fairer for consumers, including:

"a requirement for a best interest standard that includes acting fairly, honestly, and with a duty of loyalty to the client and avoiding conflicts of interest. A best interest standard would combat the proliferation of harmful products, damaging sales practices and financial incentives not in the client’s interest, would remove structural conflicts of interest (notably embedded commissions) and require banks to adapt their business practices so that employees no longer prioritize sales over the interest of the consumer.”

And for those of you who want the committee to act on FAIR's recommendations, here's the list of MPs who serve as members  or associate members and how to contact them. 

Read the full brief from FAIR Canada here.

Build your own financial planning spreadsheet

From Lars Kroijer, an <insert your own superlative here, because I'm running out> series in which he literally builds an incredibly practical spreadsheet in front of your eyes, complete with commentary and mistakes that he corrects in real time. Watching his screencasts has made me a better planner, and even if you ultimately don't use the spreadsheet for planning, just copying what he's doing will make you smarter about your own money.

Watch them all here.

The Subjectivity of Wealth, Or: Don't Tell Me What's Expensive

From Piggy at Bitches get Riches, a(nother) smart and saucy reminder:

"If you lack the empathy to be able to imagine financial circumstances more dire than your own, perhaps you should retire from polite society and eat your avocado toast in silence...

"Fortune does not smile equally upon us all. If you started your life healthy, debt-free, and unfettered by familial financial obligations, you should count yourself lucky. And yes, you can acknowledge that luck while still taking pride in your accomplishments. But the fact remains that sometimes the only thing separating you from a poorer but equally talented, driven, and worthy person is an accident of birth."

Read the rest here.

I've got a monster reading list for you this month, and I'm still fighting that nagging feeling that there was way more good stuff out there than I managed to catch.

If you've got the time, scroll through the entire list down there at the bottom, and catch Preet Banerjee's conversation with Dan Hallett (especially around minute 40), Dan Bortolotti's advice for people rebalancing a Couch Potato portfolio across multiple accounts, and Bob French's game where you have to guess which chart of daily stock moves is Netflix and which is the a random old coin toss. You won't be sorry.

Let's dig in to June's Great Reads:

When Your Financial Plan Gets Thrown Out the Window

From Ben Carlson, a guy who clearly has his financial house in order, a reflection on how his family priorities have changed now that he and his wife have brought home twins, including this gem (the italics are all mine, naturally):

"Normal personal finance advice works. Beyond a good savings rate to give us some wiggle room the simple personal finance principles such as avoiding credit card debt, paying down our mortgage debt, living below our means, having a good credit score, etc. didn’t seem to matter until they really mattered. This stuff seems boring but it can be extremely helpful when you really need it.”

Read Ben's entire piece here, especially if pictures of sweet, wee little babies are your thing (they so are).

These are the most common myths about bankruptcy in Canada

From Scott Terrio, who's running one of the most informative Twitter accounts I follow right now, a good primer on the things we hear from our friend's friend about bankruptcy and accept as truth.

Knowing what your rights and options really are before you run into financial trouble might help you make better decisions in the teeth of it. Scott's list includes myths like losing your house or job if you file for bankruptcy and what happens to outstanding taxes or your spouse's credit score.

It does not, unfortunately, include this gem, which I've taken the opportunity to remedy:

Read Scott's post in Maclean's magazine here.

How to Start Investing in Your Canadian Actors' Equity Group RRSP

From my friend John Robertson, on my other friend Chris Enn's blog From Rags to Reasonable, an all-round top of the line post about how to get over the burning need to make the perfect choice from a list of mutual funds in a group RRSP or Defined Contribution Pension Plan and just do it already.

Although John writes some specific advice to members of the Equity Group RRSP, everyone who's even slightly nonplussed by the options available in their plan and letting that stop them from making any choice at all for fear of being wrong should read this.

"Few of them are what you find in the model portfolios you see in The Value of Simple or funds that everyone talks about on Reddit or in MoneySense. Remember that picking something and getting enrolled is far preferable to picking nothing while you try to research to identify the “optimal” fund (or mix of funds)."

Read the rest here (Also, who's excited that Chris is coming back soon from his Grand European Tour? All of us? Thought so.)