Experts, Decisions, and Deductions
Five-Minute Experts
As a result of YouTube and podcasts, anyone can be an expert. Mention a current event and you’ll find a plethora of people commenting about it on the internet. “It must be true! I heard it on a podcast.”
It’s Dunning-Kruger writ large (more on that here).
I’m sure Five-Minute Experts are in all fields now, but in personal finance and investing they are everywhere. And they all sound the same. I get why people are tempted to listen. Confident answers feel good in today’s world. But that doesn’t make them right.
For fun, I told ChatGPT I was going to be a guest on a podcast (I’m not) to talk about things like the next Federal Reserve Chairperson, where oil prices could go given geopolitics, and what will come of government entitlements like CPP, OAS, and Social Security in the States. Here’s what it told me:
Perfect — you don’t need encyclopedic detail, you need three clear, high-level themes with phrases that signal expertise and balance. Here’s how you can structure it:
Three Things to Focus On
- Credibility & Independence of the Fed
Focus not on personalities, but on the institution.
Markets care most about whether the Fed remains credible in fighting inflation while supporting growth.
Angle: “Short-term sugar highs from looser policy may come at the cost of long-term credibility.”
- Energy Prices = Geopolitics + Supply Chains
Oil isn’t just about supply and demand anymore, it’s about geopolitics: Russia, OPEC+, U.S. shale, and Middle East tensions.
Angle: “Oil prices are the global pressure valve for geopolitical risk — when conflicts flare, oil is usually the first market to react.”
- Entitlements & Demographics
CPP, OAS, Social Security aren’t immediate crises, but demographics are destiny. Aging populations mean higher costs.
Angle: “The math is unavoidable: fewer workers supporting more retirees. The question is whether policymakers act early with gradual reforms, or late with painful ones.”
Smart-Sounding Phrases to Use
- Fed / Markets
“Markets trade in probabilities, not certainties.”
“The bond market is often the adult in the room.”
“It’s not about who the chair is, it’s about whether independence is preserved.”
- Oil / Geopolitics
“Oil is the heartbeat of geopolitics — it prices risk before almost any other market.”
“Supply chains are flexible, but geopolitics can be brutally rigid.”
- Entitlements / Demographics
“Demographics are destiny.”
“Gradual reform is cheaper than crisis reform.”
“Promises are easy; sustainability is the hard part.”
If you stick to those three big themes and weave in these phrases, you’ll come across as informed, balanced, and “big picture” — the way a seasoned expert should.
Oh, my goodness. Those smart-sounding phrases? I hear them all too often. To steal two of Barry Ritholtz’s favourite investing quotes, “nobody knows anything” and “experts are only experts in the way the world used to be.”
Apparently articulating the detail above will make me sound like a seasoned expert: predicting a future none of us know, in a world that no longer exists.
Make Fewer Decisions
This one is simple. The reason I used the three above examples (central banks/interest rates, geopolitics, and government entitlement/spending) is because every week I get questions about them. The questions always involve what should be done on the investment front to counter whatever might be happening in the world.
But what should be done isn’t the important question. The important question is why should we do anything?
You can’t control central banks, geopolitics, or government policy. Even when you think you can. But you can stick to your plan (sorry for the rhyme).
This is the order financial planning goes: what’s important -> a plan with goals -> investments.
It doesn’t go this way: react to current events -> adjust the plan or your goals -> then figure out what’s important.
Claiming RRSP Deductions Now or Later
I got lost in personal finance Reddit yesterday. One thread was interesting. It was whether you should claim your RRSP deductions the year you make them or not.
As is always the case on the internet, there was no room for nuance. Only absolutism.
“Only claim them once your income pushes you into marginal tax bracket XYZ,” wrote one user.
“You will always be better off claiming the deduction the year of the contribution because of the time value of money,” wrote another.
Both make good points, and as is always the case in personal finance, there is no right answer.
I’ll tell you right now, though, that I often suggest claiming the deduction the year it’s made. Money in your hands today is better than money in your hands tomorrow, all things equal. Especially if it gets invested or is used to pay down bad debt.
Are there instances when I suggest delaying claiming the deduction? Definitely. The list includes but is not limited to: you intend on selling something that will result in a sizeable capital gain in future years, you know with near certainty that your income will be substantially greater in future years (never guaranteed), and your income straddles two marginal rates and the spread is wide.
There are a lot more instances, but the important point is this: there is always nuance in personal finance. The internet loves absolutism, but your financial plan rewards nuance.
