Loblaw to buy Shoppers + MORE Jul 17th

“Smart beta” has become a buzzword in investing circles, especially among pension funds and other institutional investors. The term may be new, but the idea isn’t: it’s about looking for ways to capture the returns of an asset class with a strategy other than traditional cap-weighting. These alternatives include fundamental indexing, equal-weighted indexes, low-volatility strategies and a few more exotic techniques.
A growing body of evidence has highlighted the inherent flaws in cap-weighted indexes, which are undeniable. By their nature, cap-weighted indexes give the most influence to the largest companies, as well as any that happen to be overvalued. That’s a potential problem because these are companies that are most likely to underperform the broad market over long periods.
A second potential problem with cap-weighted indexes is concentration. This isn’t an issue in huge markets like the US, or in a multi-country index like the MSCI EAFE. But it’s a concern in small countries like Canada (where Nortel once represented about a third of our entire stock market) and in individual sector funds…

Loblaw Companies Ltd. has a friendly deal to purchase Shoppers Drug Mart Corp.  for $12.4 billion in cash and stock, combining Canada’s largest grocery and pharmacy chains. The proposed sale represents a nearly 30% premium over Shoppers closing share prices Friday. For the very latest, head over to Canadian Business. And for those wondering what will happen to their Optimum points, Shoppers says there are no changes to the loyalty program planned at the moment.
Speaking of loyalty programs, COLLOQUY and Environics Research Group have published a new online tool that promises to reveal the best loyalty program for you based on your spending habits.
A recent HSBC study has found that men are more likely to dip into their retirement savings during tough times than women (27% vs. 23%). One-third would tap other savings/investments while roughly 20% would downsize their home, 17% would sell valuables and 18% would borrow. The study also found only 40% of Canadians are regular savers.
Here’s another interesting stat for you: 22% of Canadians in a romantic relationship polled fora recent TD study said they are not always completely honest with their partner about money…

The government provides the OAS pension plan to Canadians to help them in their retirement years. Not everyone gets to keep the full amount, though, since these payments are subject to the Old Age Security Benefits clawback for people earning above a certain threshold. Your financial advisor can help you find out how to minimize this situation and keep more of your money in your pocket.
Old Age Security Pension Overview
The Old Age Security program provides a basic pension to most Canadian residents who have lived in the country for at least 10 years since the age of 18. The amount that you can expect to receive depends on the number of years you have lived in Canada. To qualify for the maximum amount, you will have to have lived here for 40 years. If you have lived here less than that time, your pension will be reduced. As of 2013, the maximum amount you can receive from OAS is $546.07 per month.
High Income Earners and the OAS Clawback
If your individual net income for 2013 is $70,954…

When was the last time you volunteered your time to help someone else? Caring for others is one of  the seven habits of happily retired people, according to BrighterLife.ca.
Check out these money-saving tips for the budget traveller from Boomer and Echo.
The latest Mostly Money, Mostly Canadian podcast features our very own Jonathan Chevreau.
Canadian Business columnist Larry MacDonald takes a look at country-based ETFs.
Attention Scotia iTrade customers: The online brokerage has just launched its iPad trading app.