The first six months of this year were not kind to equity fund investors. Stock markets around the world declined, and the mutual funds and ETFs that invest in them followed suit.

Last time, I wrote about the results from the latest review of the five model portfolios created for my Mutual Funds/ETFs Update newsletter. I noted that over the first six months of this year, the portfolios with the highest component of fixed-income funds fared best, because of the unexpectedly strong performance of the bond market.

It’s a fact of life: When the government gives you a tax break, there are always restrictions on it. Always.

In a recent column, I named TD Balanced Growth Fund as one of the weak links in a generally strong line-up. In the article, I said I was not impressed with the fund’s performance under the management of McLean Budden and noted that it has a long history of sub-par returns. I concluded my analysis by commenting that the fund has over $1.1 billion invested in it and suggesting that anyone who owns units should be asking themselves why they are hanging in.

In the advertising business it’s almost axiomatic that hyperbole sells. Look closely at the barrage of ads you see every day, and you can’t help but notice the immense number of ads with strong appeals to a particular emotional response or reaction. Everything from sex to fear is used to sell products and services. It’s all about fantasy and wish-fulfillment related to the product.

Index-based investing is still a relatively new concept for individual investors, and marketplace currently offers a choice between index mutual funds and exchange-traded funds. I gave an overview of the current state of Index fund market in my previous article. One of the reasons why Index mutual funds don’t get the attention that exchange-traded funds (ETFs) do is that ETFs are generally much cheaper to own. With indexing, price is the only differentiator. You have to pay brokerage commissions to trade ETFs, while Index mutual funds typically cost nothing to buy or redeem. Still, ETFs are a lower-cost option for larger investors.

We can all learn from our mistakes. We also learn from adversity. This is true of the 2008 financial crisis and consequent recession. Sometimes we have to learn them the hard way. At other times, we are lucky enough to heed the voice of experience. I was fortunate indeed, then, to hear some pointed words of wisdom from a market veteran at a recent seminar in Vancouver, sponsored by Mackenzie Financial. The keynote speaker was Nick Murray, a 40-year veteran of the financial advisory profession. Here’s what I learned.

Last month, I wrote about the importance of diversification and how it’s used to control risk. I gave an example of diversifying geographically using a Canadian Equity fund and a Japanese Equity fund to take advantage of the low correlation between the two countries.

Jane and Joe head in to see their financial advisor to invest some money. They hope that the advisor has the edge to find the best investments so they can get to financial freedom that much quicker. They sit down with their investment advisor and the advisor says that something like this: “Hi Jane and Joe. I believe investing is personal. Every investor is unique, so before I can recommend a portfolio, I need to learn a little more about you. I need to understand your risk tolerance, your financial knowledge, your time horizons. The more I understand, the easier it will be for me to recommend a portfolio that is customized for your needs.”

One of the most common ways of making socially responsible investments (SRI) is through socially responsible investment funds, as my colleague Reid Baker wrote back in April. It has been suggested that socially responsible investing may be thought of as a tradeoff of performance benefits and diversification costs. Benefits may take the form of more competent and growth-minded management being more inclined to pursue better environmental and corporate citizenship records as well as good employee relations. Social responsibility may be indicative of management seeking to improve relations with as many parties critical to their future success as possible.