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Air Miles

The personal finance story of the year is how Air Miles remodeled itself as a customer disloyalty program. The past year began with media coverage of how Air Miles points older than five years were going to start expiring at the end of the year. A backlash quickly developed against both this policy and the way Air Miles handled the rush of customers trying to use points before they expired.

Air Miles ditched the expiry policy earlier this month, but the move hasn't done much to placate customers. Those who rushed to use points on any old reward in order to avoid expiry are angry. And the people who get to keep points older than five years are mad because Air Miles has indicated that the program will be less generous with rewards in the future. Fed up? The Rewards Canada website has created a special section for people who are done with Air Miles.

Sticking with Air Miles? You'd better read this CBC Marketplace report showing that redeeming Air Miles for a long-haul flight might not be a great deal. Me, I'm keeping my Air Miles card to collect cash rewards useable on purchases of gas, groceries and such. I now have enough cash miles to get $10 off at a variety of fine establishments. Woo-hoo.

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The question: "I am 65 years old and planning to sell my home and rent an apartment. I'm wondering about shifting the capital from real estate (my home) to my investment portfolio, which is managed and doesn't include much real estate. Should I put some or all of the proceeds from the sale of my house into some kind of real estate stock or mutual fund or ETF, or should I just add it to the existing investment portfolio?

My reply: Real estate stocks account for almost 3 per cent of the S&P/TSX composite index and S&P 500, so you will almost certainly have some exposure to the sector through conventional Canadian and U.S. equity funds. Something else to consider is that bank stocks, with their heavy exposure to mortgages, are virtually real estate stocks these days. You could bump up your real estate exposure a bit higher by adding a real estate fund or real estate investment trust (REIT), but don't get too aggressive here. Real estate is just one sector of many in the Canadian market.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.

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