Why Your Investment Portfolio Is Like A Bar of Soap

Plenty of investors start out well. They build a diversified portfolio of low-cost index funds.

But then an analyst on Bloomberg says bonds are going to crash.

An expert on CNBC says U.S. stocks will fall.

A financial magazine says Asian stocks will soar.

The headline reads, “These Are The ETFs To Buy Right Now!”

Suddenly, you have an itch that’s begging to be scratched. By tweaking your portfolio, you might gain a performance edge.

But here’s something to remember: your portfolio is much like a bar of soap.

The more you mess with it, the smaller it’s likely to get.

Image by Pixabay

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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2 Responses

  1. Maureen MacPherson3@gmail.com says:

    Hi Andrew, I’m a non resident Canadian expat in Abu Dhabi with a Saxo trading account in Canadian funds. 2 questions: I currently pay a 25% dividend withholding tax. Is this correct? I thought it was 15%. If so, how do I collect the overpayment. Next, I swear there is a dividend reinvestment fee, so if you’re reinvesting say $150, the charge is hefty. I’ve requested to take all my dividends in cash and when I reach $5000 (with additional deposits) I buy.

    • Hi Maureen,

      Most countries have treaties with Canada that ensure your withholding tax is just 15%. If there’s no treaty, it’s 25%. Contact your brokerage and tell them it should be 15% (I don’t know whether there’s a treaty with Abu Dhabi or not) and then see what they say. This happened to me, many years ago, in Singapore. A treaty did exist, so after I complained, my dividend taxes dropped from 25% to 15%.

      Good luck!


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