Five things you should know before you start your work day on Jan. 16

Although HELOCS are widely sold, “many consumers appear to lack awareness of the terms and conditions of this financial product, exposing them to the risk of over‑borrowing, debt persistence, uninformed decision-making and wealth erosion,” the Financial Consumer Agency of Canada says.

Good morning, readers! We look at an in-depth examination of the expanded CPP, the high debt growth of HELOCs, and — if youve got the dosh — why you might want to put your money in a new pooled hedge fund. We have an update on the Newmont-Goldcorp deal, and a look at the about-face Gillette has done with its provocative new razor ad.

PENSION BLUNDER

You may have noticed your year’s first paycheque was smaller than usual. Smaller even than last January’s first paycheque. That’s because of a bigger CPP deduction. And, according to the Fraser Institute, it’s all for no good reason, because the rationales for the expanded CPP are incorrect, or at least debatable. The authors point to several differences, wrong conclusions and assumptions to argue why Canadians save more for retirement than Ottawa thinks.

THE DANGERS OF HELOCs

The Financial Consumer Agency of Canada has found that 25% of Canadians with home equity lines of credit pay only the interest on their loans. And, many use a line of credit at least some of the time to make payments on other debt. The average HELOC rings in at $65,000, and fully half the respondents said they user theirs to fund a renovation. Over the past 15 years, HELOCs have been the instrument that has added the most to fast-growing levels of non-mortgage household debt.

EVERYONE IN THE POOL

Here’s an investment strategy to emulate: Waypoint Investment Partners saw a 6.2% return in its segregated accounts in 2018, crushing its competition. It did this by investing in companies that pay big dividends, then using those payouts to buy options to bet on market volatility. Now, Waypoint wants to do it again by starting one of Canada’s biggest pooled hedge funds by raising $500 million.

MINING SYNERGIES

Newmont CEO Gary Goldberg defended his Goldcorp deal yesterday, following mixed reaction from the street. One analyst said the price was too low, one questioned the reasoning, and one downgraded Newmont from outperformer to neutral. As Gabe Friedman reports, Goldberg explained his thinking, reiterating that he’ll be “taking the operating model we’ve applied over the years and applying that to Goldcorp” — and saving $100M a year.

RAZOR’S EDGE AD

Consumers these days are concerned about where they spend their money, and the stand product manufacturers take on certain issues. Gillette, in its latest ad, takes on “toxic masculinity” in a #MeToo-era rebrand. Procter & Gamble has ignited a debate about gender and cultural branding, as well as about corporate power in shaping ideas about relationships. It went from “The Best a Man Can Get” to asking “Is This the Best a Man Can Get?” — potentially risking many customer relationships.

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