In addition to tracking investment returns (aka time-weighted returns) for mutual funds, Morningstar also tracks investor returns (aka dollar-weighted returns). That is, in addition to tracking how well a fund performs, they also track how well, on average, investors in that fund perform.

In general, investors tend to lag their own funds somewhat as a result of getting into the fund shortly after good performance and getting out shortly after bad performance.

Russel Kinnel of Morningstar recently shared several points of note with regard to investor returns over the last few years. I originally thought I’d have some commentary of my own to add, but after keeping the article open in my browser for two weeks, it turns out that I don’t. Instead, I’ll just point you to the article and hope you find it as interesting as I did.

• Mind the Gap (2011 edition)

And my other favorites from the last week:

Investing Articles

• Take Money Off the Table After a Good Run from The Finance Buff
• Gold and Silver: What Goes Up… from Larry Swedroe
• Investment Losses: When to Call a Securities Attorney from Wealth Pilgrim
• Model Portfolios Based on Risk Tolerance from The Wisdom Journal
• Bad Investing Habits from The Digerati Life
• Two Reasons Not to Save for Retirement in Your Twenties from GenY Wealth
• For Canadians: RESP Withdrawals from Family Plan Accounts from Money Smarts Blog

Other Money-Related Articles

• Understanding Your Health Care Coverage from PT Money
• Finding Charities That Will Take Your Stuff from Financial Highway
• Getting a Mortgage with Self-Employment Income from Cash Money Life
• Money Mistakes Today’s College Grads Make from Manisha Thakor
• Home Exchange: A Frugal Quid Pro Quo from Frugal Dad
• Getting Help Getting Out of Debt from GenX Finance
• 8 Relocation Costs to Consider Before Moving from Moolanomy

Blog Carnivals

• Totally Money Blog Carnival hosted by Money Beagle
• Carnival of Personal Finance hosted by Live Real Now
• Tax Carnival hosted by Don’t Mess with Taxes
• Carnival of Financial Planning hosted by The Skilled Investor

Thanks for reading!

Retiring Soon? Pick Up a Copy of My New Book:

Can I Retire? Managing a Retirement Portfolio Explained in 100 Pages or Less (Click here to see it on Amazon.)

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There’s been so much going on this week that I barely know where to start.  We found a place to rent for the summer until our new house is completed, and it looks like we’ll be able to save a bit of money in the process.  Boomer will be coming down to visit for our daughter’s 2nd birthday party on Saturday, and then of course Mother’s Day is on Sunday, which will make for a busy and fun-filled weekend.

I wrote about The Pros and Cons of Investing in Canada over at the Mint.Com blog earlier this week.  And on Tuesday I posted on Canadian Finance Blog about how to Balance your Savings and Investments While Raising a Family.  Go on over and check out those articles.

Boomer and I were also very humbled and excited to learn that we were nominated in the Globe and Mail 2011 Best of the Blogs Contest as a top personal finance blog in Canada.  A special thanks goes to Preet Banerjee, Globe and Mail personal finance writer and author last year’s best investing blog:  Where Does All My Money Go for nominating us.

Please take a moment to visit the contest site at the Globe and Mail and vote for Boomer & Echo

Now let’s take a look at some other interesting articles from the personal finance world this week:

1. Wealth Pilgrim explains Investment Losses – When To Call A Securities Attorney
2. Soldier of Finance shows How to Properly Probe your Credit Report for Landmines
3. Oblivious Investor asks Is a Single Target Retirement Fund Really OK?
4. Million Dollar Journey shares Financial Strategies for the New Stay at Home Parent
5. Money Smarts Blog discusses RESP Withdrawals From Family Plan Accounts
6. Free From Broke explains How to Figure Out How Much Life Insurance You Need
7. Money Under 30 shows How to Make Your Budget Stick
8. Moolanomy has 8 Relocation Costs to Consider Before Moving
9. Cash Money Life shares 15 Inexpensive Mother’s Day Gift Ideas
10. Couple Money is Changing Our Financial Strategies
11. PT Money lists 7 Retirement Excuses You Can Overcome
12. Frugal Dad discusses Home Exchange: A Frugal Quid Pro Quo
13. Bible Money Matters asks Should you Lend to Family Members?
14. My Own Advisor explains Why Become a DIY Investor?
15. Dividend Ninja concludes his Can You Live Off Your Dividends series

We were also included in the following blog carnivals this week:

• Canadian Finance Blog hosted the Canadian Finance Carnival and included Three Dividend Stocks On My Watch List
• Money Beagle hosted the Totally Money Blog Carnival and included Some Great Things That I’ve Bought
• Budgeting In The Fun Stuff hosted the Best of Money Carnival and included We Got An Offer On Our House!
• Live Real Now hosted the Carnival of Personal Finance and included Assessing Your Estate Plan
• Value Stock Guide hosted the Carnival of Value Investing and included Three Dividend Stocks On My Watch List

Thanks for reading everyone, please remember to vote for Boomer & Echo in the Globe and Mail Best of the Blogs contest.  And please subscribe to our posts in your RSS Reader if you don’t already.

Have a great weekend!

Share and Enjoy:

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Many people are beginning to feel the pinch as rising inflation has started to impact our overall cost of living.  Gas prices have skyrocketed, the cost of food has soared and even insurance rates are starting to increase, leaving consumers wondering if inflation is getting out of control.

One of the benefits of creating and sticking to a budget is that you can analyze data from previous years and identify the expense categories that have been increasing.  I thought it would be interesting to compare the first 4 months of this year with the same time last year to determine my personal rate of inflation.

Income

We are a single income family now with my wife staying at home full time to look after our daughter.  Last year my wife was still receiving maternity leave benefits (until mid-March), so we didn’t have that income to count on this year.  Meanwhile, my salary increased by 4.4% year-over-year after receiving an annual raise last July.

Net Income = plus 1.5%

Energy Costs

Our energy costs consist of our electricity bill, natural gas bill and water bill.  Our electricity provider charges a fixed rate of $0.07/kwh, while we pay a floating rate for natural gas at around $3.50/GJ (compared to the fixed rate of $6.59/GJ).  Our energy costs are fairly cheap, but likely due to a colder winter our consumption has increased year-over-year.

Net Energy Costs = plus 6.7%

Other Utility Costs

Since we cancelled our landline, our other utility costs consist of my wife’s cell phone bill, our satellite TV bill and our home internet bill.  One thing I find interesting about these utilities is that as a shareholder of Telus, Shaw and BCE I really enjoy it when they increase their dividends, however I notice that the next month my bills have all increased by the same percentage.  All three of these companies increased their dividend in the past 12 months and our utility costs have risen right along with them.

Net Other Utility Costs = plus 4.4%

Grocery Costs

This is the big one where consumers are starting to feel the effects of rising inflation.  Of course, there are things you can do as a family to help lessen the impact on your wallet.  Our family creates a meal plan every month that keeps us on track and helps us to avoid impulse spending, and we also make sure to compare prices at different grocery stores to maximize our value for money spent.

Our grocery costs include baby expenses and cleaning supplies.  Overall I was surprised to see that our grocery costs only increased at a normal rate of inflation.

Net Grocery Costs = plus 2.0%

Fuel Costs

Gas Prices have been soaring this year.  Compared to the same time last year, the prices at the pump have increased by about 30%.  I don’t typically concern myself with the cost of gas since I live in a small city and have a very short commute to and from work.  Fuel costs make up approximately 1.5% of our gross income.

After reviewing this expense perhaps I should change my attitude.  Our fuel costs almost doubled from the same time last year!  The cause of this is difficult to pinpoint.  We redeem our Air Miles for gas gift certificates and could have had a large redemption last year.  We might have taken a couple of extra trips up to Calgary earlier this year.  Either way, I’m going to keep an eye on this category to make sure it’s not becoming a trend.

Net Fuel Costs = up 82.1%

Insurance Costs

Many Canadians have reported that their home and auto insurance premiums have increased considerably in the last year.  Luckily we haven’t seen this in our case.  Every year I call our insurance company and try to find ways to reduce our insurance costs, and last year we managed to lower our auto insurance premiums by over 25%.  I haven’t made that phone call yet this year, but since we are moving into a new house later this summer we will need a new home insurance policy and I’ll try my luck then.

Net Insurance Costs = minus 27.4%

Tax Expense

Our tax situation has changed considerably now that my wife is staying at home and we have a child.  I feel like single income families are taxed unfairly (ok, I’m a little biased) and we should have the ability to be taxed as a family rather than as one income earner.  However there are a few tax breaks that we can claim and our overall tax burden has decreased this year.

Net Tax Expense = minus 10.8%

My Personal Rate of Inflation

Everyone’s situation is unique and it is difficult to determine if inflation is truly impacting your budget or if certain circumstances have led to an increase (or decrease) in expenses.

With our net tax expenses reduced, our overall personal rate of inflation has actually decreased by 3.6% so far this year.  Without the tax expenses included (a more accurate measure of spending), our personal rate of inflation has decreased by $14 or 0.01%.

Have you determined how much inflation is impacting your overall cost of living expenses?

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Having a will is one of the cornerstones of good financial management, but before making an appointment with your lawyer take some time to assess your situation and review your estate plan.

Start With a List

Prepare a list of the financial institutions where your assets are held.  Include key contacts  – banker, advisor, stockbroker, lawyer, accountant and insurance agent and their contact information.  Identify your proxies.  Who will exercise Power of Attorney if you become disabled or can’t direct your own personal affairs?

Select an Executor

Choose your executor carefully.  If you choose your children or other relative make sure they are willing to shoulder the responsibility.  Make sure the person you choose is willing to make the commitment and has the time and skills to look after your affairs.  They should also live in the same town or city as you, or at least close by.

Settling an estate can take several months.  For these reasons, or for more complicated estates, a common solution is to appoint your lawyer or trust company jointly with a family member.

Who are your Heirs?

List exact names and contact information as well as their relationship to you.  Likewise, if a favorite charity will be a beneficiary write down all the details.

What do you want each of your heirs to receive?  Identify gifts.  Will any of your heirs require assistance with ongoing income?  Discuss options for the transfer of assets and funds during your lifetime and at death.

Guardians and Succession

Give some careful thought to whom you will name as guardians.  Prepare a list of those people you would trust to care for your minor children (think also of those who should not have that responsibility).

If you own a business, identify your business succession plans.  How should your business interests be distributed and who do you favor to step in to run the show?

Assets, Liabilities and Taxes

Identify your capital assets and their fair market value annually.  Which assets could be transferred during your lifetime and which should be transferred only upon death?  If beneficial, use tax fee rollovers to your spouse or transfers and Fair Market Value.

Deal with debt.  List all your debt obligations and how they should be paid.

Plan for probate fees and capital gains taxes at death.  Review life insurance policies that may be used for these purposes.

Keep it Safe

Draw up your will and tell your lawyer where it is to be kept.  Give a copy to your executor and discuss anything that may need clarification.

Keep all your important documents in a Safety Deposit Box and identify the location.  Be aware that unless you have a co-signor with “right of survivorship,” your box will be sealed until your will is probated.  Keep necessary copies easily accessible in your home.

Keep it Current

Review your will whenever family circumstances change, such as marriage, divorce, a birth or death among your beneficiaries or a significant change in your assets.

An estate that can’t be settled promptly can cause needless delays, financial hardship and legal problems for your heirs.  With a little attention and forethought you can avoid any problems and fighting among heirs (you think it won’t happen, but it does) and your assets will be distributed exactly as you intend them to be.

Share and Enjoy:

• Donating To Charity
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I was quite flattered (and surprised) this week to hear that Oblivious Investor was mentioned by Money in their annual “100 Best Money Moves” article. I don’t know whose idea that was, but thank you!

A few readers who came over via that article correctly pointed out that my site didn’t have any indicator of which articles first-time visitors should start with. As such, I’ve added a widget in the right sidebar with links to a few articles that I think serve as a good introduction to Oblivious Investor:

• The Advantages of Investing in Index Funds
• How Often Do You Check Your Portfolio?
• What’s in My Portfolio?
• 8 Simple Portfolios

I hope you enjoy them.

And on that note, I particularly enjoyed the following articles from around the blogosphere this week:

Investing Articles

• Bond Yield and Risks Triangle from The Finance Buff
• Rebalancing Your Portfolio from Get Rich Slowly
• Rebalancing via New Contributions from Monevator
• America’s Top Advisors: How Are They Made? from The Investment Fiduciary
• Saving for Retirement without a 401(k) from PT Money
• Day-Trading is a Total Scam from Darwin’s Money
• Balancing Liquid Cash and Investments from Cash Money Life
• I was recently interviewed by DebtManagement.net

Tax-Related Articles

• Tax Planning Beyond Deductions from CafeTax
• What if I Miss the Tax Deadline? from Bible Money Matters
• Dealing with a Letter from the IRS from Couple Money

Other Money-Related Articles

• When You Receive a Windfall, Treat it Right from The Digerati Life
• How Old Does Your Resume Make You Look? from Financial Highway
• How to Check the Security of Your Insurance Company from Wealth Pilgrim
• Choosing a Disability Policy from The Wisdom Journal

Blog Carnivals

• Totally Money Blog Carnival hosted by The College Investor
• Carnival of Wealth hosted by Personal Dividends
• Road to Financial Independence hosted by One Family’s Blog
• Carnival of Financial Planning hosted by Nerd Wallet

Thanks for reading!

Retiring Soon? Pick Up a Copy of My New Book:

Can I Retire? Managing a Retirement Portfolio Explained in 100 Pages or Less (Click here to see it on Amazon.)

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