Weekend Reading – Name changes are needed to financial accounts
Welcome to a new Weekend Reading edition about some name changes needed to many financial accounts. At least a proposal or two for that in this edition to consider!
First up, a reminder from last weekend about some asset allocation advice I will not follow:
Weekend Reading – Vanguard recommends 40/60 portfolios, do you follow along?
Weekend Reading – Name changes are needed to financial accounts
Headlining this Weekend Reading edition, this article in The Globe and Mail caught my eye (subscribers only).
Aaron Hector, a certified financial planner and founding partner at Calgary-based TIER Wealth, believes various investment accounts need a name-change overhaul. I would agree.
From the article:
“Take the Tax-Free Savings Account. Although it’s not only for savings, the wording leads many to treat it as a cash account rather than an investment vehicle for long-term compounding, said Mr. Hector, who proposed calling it a “Tax-Free Investment Account” instead.”
And…what about the LIRA, well, Aaron thought of this:
“Switching the name of a Locked-In Retirement Account to Locked Pension Account, “…could answer half the questions right off the bat,” said Mr. Hector.”
Aaron’s thoughts definitely reasonated with mine because I felt the same way – back in 2013.
Back then, the TFSA, RRSP, RESP, and more needed an overhaul too.
I suspect Aaron and I will be waiting some time on those account name changes… 🙂
Name Changes Needed to Canadian Financial Accounts
Over at Cashflows & Portfolios my blogging partner Joe and myself shared some insights about how we’re going to invest in 2026 amidst oil market calamity, ongoing tariff wars and what the Canadian dollar might do. We shared as much since many DIY investors have been emailing us about their portfolios and what they should watch out for in this new year too. We offered some things we’re thinking about – which could be a challenging investing year to come.
Are you investing any differently in 2026 inside registered accounts, non-registered accounts or your corporation? Do share!
Morningstar offerred up some tips on generating income in 2026.
It goes without saying but I firmly believe the closer you get to retirement or during retirement – cashflow is king.
Unlike the Vanguard folks shifting some of their time-varying portfolios from a pension-like mix of 60/40 to 40/60 since they don’t see the upside to be had in U.S. equities near-term, I’m staying the course with my existing diversification:
Our equities are about 50% Canadian stocks, and thenEquity ETFs, withCash/cash equivalents after that.
Even though my mix equities is VERY different than Vanguard, I aligned with the Morningstar takeaway:
“Diversification is important, particularly when it comes to income, because your goal isn’t to maximize return. The more you can broaden out exposures in your portfolio, the more likely it is to remain stable and help you generate a more consistent income stream in 2026.”
We’ll see where we end up towards the end of 2026 as retirement spending ramps up:
December 2025 Dividend Income Update
I’m sitting on some decent capital gains. Here are some ideas that I employ when it comes to that – namely diversifying into other holdings.
From the article:
“The bare minimum number of stocks you need to have a diversified portfolio is generally considered to be 20, according to academic studies. Some experts contend it should be higher. After 30 or 40 stocks, the incremental advantage of a 31st or 41st stock becomes smaller and smaller, from a diversification perspective.
That does not mean that an index fund with hundreds or even thousands of holdings is over-diversified or not a good investment strategy. It just means that if you are going to buy individual stocks—and deal with the cost and complexity of doing so—you may not want to own hundreds or thousands directly.
If a 20-stock portfolio is already a lean portfolio, that implies a 5% allocation to each holding (100% divided by 20 stocks). As a result, my own rule of thumb for when a stock allocation is getting too large within a portfolio is when it rises over 5%. So, if a stock is more than 5% of your portfolio, you should be cautious about letting it become a much larger allocation.”
Which is largely why I have a 5% investing rule – shared on my FAQs page and practiced since 2009.
Have a great weekend and if you’re an NFL football fan, enjoy the next two days of playoff action!
My predictions:
(6) Bills at (1) Broncos. Broncos.
(6) 49ers at (1) Seahawks. Seahawks.
(5) Texas at (2) Patriots. Pats.
(5) Rams vs. (2) Bears. Rams.
Mark
Related Reading for 5% or 10% or other investing rules:
Weekend Reading – Does diversification really matter?
My name is Mark Seed – the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I’ve reached financial independence. Now, I share my lessons learned for free on this site. Join the newsletter read by thousands every week.