The motivator

LOG modified

Remember Ebola?

Only a few months ago the African disease was causing panic. Airports thousands of miles away went into high alert. Myopic Canada shut its borders to people coming from afflicted areas. Good Samaritan health care workers returning from fighting the virus were ostracized and feared. And financial markets slumped as people on subways in Toronto and New York worried about the guy sitting next to them.

Fear. Unplugged.

Ebola’s largely contained these days. A couple of people in North America died. No pandemic. Next?

So now it’s measles. And oil. Ukraine. Lefties in Greece. Deflation. Putin. ISIS. Mad cow. 50 Shades.

There’s always something to worry about in a world where nothing happens without a selfie. Just read the comments on this pathetic blog. We’re all experts. Know almost everything. And for the rest, there’s Google. Mostly it scares the poop out of people.

Magnifying fear today are the merchants of it. Hedge fund managers and burned-out pundits like Marc Faber, Jim Rickards or Harry Dent never let up with predictions of a 50% market crash or 25 years of depression. Behind it usually lurks the ‘advice’ to buy into their funds, subscribe to their newsletters or join their bullion-licking club. So far they have an impressive track record. 100% wrong.

Anyway, crap does happen. We saw a 55% stock plop in 2008-9, and a 20% market swoon in 2011 during the US debt ceiling crisis. There was the tech bubble which blew up the Nasdaq in 2000 and lately people with all their assets in Canada have taken a 20% hit. As you know, the same risk lurks for residential real estate. Meanwhile, savers have been punished with losses for the last six years as their deposits earned less than inflation.

Those who read doomer web sites, worry, and do as they’re told have flamed out. Those who borrowed big to buy inflated real estate have absorbed epic risk. Retirees sitting on GICs are getting poorer. And along the way our financial illiteracy has grown just as fast as the Twittisphere. For example, I’s always surprised at those people who think you should buy bonds to collect the interest or believe every new stock market high means it’s destined to crash.

Ignorance leads people into one-asset solutions. They buy a house, they hoard gold, or they hide in cash. In this, there is danger. By trying so hard to avoid risk, like Ebola, bank failures, stock collapse, hyperinflation or the zombie apocalypse, most people dramatically increase their odds of financial failure. In a volatile and changeable world, there are only three principles to sane investing: balance, liquidity and diversification.

For those new here, I will remind. Balance means an appropriate mix of safe assets, like bonds and preferreds, and growth assets, such as equity-based ETFs. The best split remains 40-60. Diversification means lots of asset classes (fixed income, equity, trusts). Plus, you should avoid home-country bias (these days Canadian growth assets should be a minority), and have exposure to various sectors of the economy along with different-sized companies. Liquidity means a portfolio that can be converted to cash in a few days – in case I’m wrong and the walking dead arrive.

Why is this safer than buying silver bars and burying them under the hot tub?

Simple. When equity markets dip, the fixed income stuff rises in value to offset it. Also, when interest rates decline, bonds get more valuable. Meanwhile REITs are not closely correlated to stock markets and kick out regular income. Ditto preferreds, which are way more stable than stocks and have higher, fixed dividends. These days, oil is hurting Canada, but it’s fuelling the US. As I explained recently, you never want to exit an asset class, while ensuring you rebalance a portfolio routinely to harvest gains and constantly trim risk.

So far in 2015, while the Canadian economy staggers, Calgary homeowners stress, rates drop, gold’s mercurial and markets uneven, this portfolio has gained about 4.5%. Bonds alone have pumped up 6%. The portfolio yield (not the total return) is about 3.3% – dividends and interest only – which means even if there was zero growth you’d still get twice the yield of a GIC, most of it at 50% less tax. As I’ve said often, over the last ten years, even with the 2008 disaster, this portfolio has delivered an average of 7.4%.

And, trust me, there is no 2008 re-rerun coming. No Ebola on your street. No broke banks or bail-ins. No $28 loaves of bread. No depression. No market collapse. The risk was six years ago. Get over it.

260 comments ↓

#1 aL pacino on 02.13.15 at 6:37 pm

Myopic Canada shut its borders to people coming from afflicted areas

****************************************

Are you saying our borders aren’t opposed enough ??????????????????????????????????????????
Please tell me you kiddin’
Fugget about it man…..

#2 aL pacino on 02.13.15 at 6:38 pm

I meant opened enough….capish

#3 mark on 02.13.15 at 6:40 pm

Do you still get clients who want to poop the bed? How long does it usually take in education and reminders before they start taking notice?

#4 calgaryPhantom on 02.13.15 at 6:41 pm

And, trust me, there is no 2008 re-rerun coming. No Ebola on your street. No broke banks or bail-ins. No $28 loaves of bread. No depression. No market collapse.

——————————————————————-
Never say never.

Obviously you believe any of these can happen and hence you suggest balanced liquid portfolio. Else, we would all be buying growth assets and not worry much about bonds and other safe stuff.

Hardly. A balanced, diversified portfolio is to reduce volatility, not guard again the insane. — Garth

#5 Madsquirrel meat on 02.13.15 at 6:42 pm

1st madcow squirrel of the day.

#6 Madsquirrel meat on 02.13.15 at 6:49 pm

Been a great few weeks of returns despite the world being half insane.

#7 mitzerboy aka queencity kid on 02.13.15 at 6:52 pm

60/40
is nice

#8 ozy- this is not over on 02.13.15 at 6:54 pm

sarkozy – this is not over

hyoerinflation will rule – 7% inflation is a reality. check agro prices

buy land my sons, buy agro land

to make the money, speculate downtown urbanites. make 50000 a condo, sell 10. you do the math

then borrow the rest. 5 mil will buy you value anywhere on the planet….

this is not the time to be a fool

#9 For those about to flop... on 02.13.15 at 6:59 pm

Garth ,I get the balanced / diversified thing but what percentage of someone’s net worth should they have invested in the stock market.
I currently only have 50% invested .
Is there such a thing as over doing it.

#10 Bonhomme! on 02.13.15 at 7:02 pm

https://nationalpostcom.files.wordpress.com/2015/02/harperkicks.jpg?w=940&h=1245

#11 batt519 on 02.13.15 at 7:06 pm

All those epic stock market debacles you mentioned were ‘healed’ with massive credit creation.
Interest rates are not going up in America in June. Interest rates will not be rising in America for at least 2-3 years. Write it down.
$ilver has has been stellar so far this year. International sovereign demand in insatiable. You pressed a reader the other week to say whether he sold on the rise, that guy is a fool. You’ll see. Long and strong in the apparent suicide portfolio, and doing pretty good I might add. I’ve been hoarding since ’02(not under the hot tub though) so minor moves don’t shake me.
You are spot on in your real estate coverage.
Regards to all.
PS Jeffrey Saut writes some good stuff.

#12 bdy sktrn on 02.13.15 at 7:07 pm

#9 For those about to flop… on 02.13.15 at 6:59 pm
Garth ,I get the balanced / diversified thing
——————————-
0. use etf’s.
rule of 90. never been discussed here though.
wow.

you forgot to ask if 25% gold was a good weighting!

#13 noplused on 02.13.15 at 7:10 pm

Good advice as always Garth but boring. Can we do another piece on bashing millennials or boomers? Maybe both?

He I can get it going:

Boomers on average don’t have enough saved in a balanced portfolio to fund their retirements, which means they will run out of money, which means lots of old folks digging through the dumpsters behind restaurants. That is if the unemployed millennials don’t get there first.

There that ought to do it…

#14 waiting on 02.13.15 at 7:10 pm

Remember West Nile Virus?
I for one slept better knowing these trusty birds were
guarding our borders. Canada is awesome.

http://news.google.com/newspapers?nid=1955&dat=20000516&id=hvohAAAAIBAJ&sjid=X6MFAAAAIBAJ&pg=5725,928927

#15 Catalyst on 02.13.15 at 7:10 pm

Can you advise if there is risk in holding all your ETF’s with one provider like Schwab, Beemo, Blackrock etc. I feel I have the asset class diversity but its all with 1 institution.

#16 Steveston on 02.13.15 at 7:12 pm

About time some one called out Marc Faber. And someone might be better off taking advice from Harvey Dent than Harry Dent.

#17 Retired Boomer - WI on 02.13.15 at 7:17 pm

Hello from chilly FL. Yeah, 54 degrees is still shorts weather from we hail, its still good! Defrosting going well.

Yeah the market still churning out those dividends, and gains. 60% stocks (63% now) and 40% bonds (now 37%) as growth happens… at a 5% differential I’ll rebalance things. Funny how the dooming desperate react to “good news” but that is not my problem, it is theirs.

My problem is finding that great restaurant that had the fantastic Cuban sandwiches last year! I forgot the dam street! If I can’t find it we eat Greek tonight.

Gas still cheap, though not as wickedly cheap!! So, for the geezer crowd what’s not to like in this moment in time?
Never fear the future is here soon enough!

#18 westsider on 02.13.15 at 7:19 pm

This may or may not be off topic, but I give up on Vancouver!!!It is Different here!!!Friend just sold his condo in False creek for $2.2 million. He paid $1.3 million 3 years ago. Hated the place because it was too noisy and faced south with no cross breeze, so was stinking hot in the summer.Didn’t expect to get his original price for it.Sanity has gone. He made $1 million for doing nothing, but owning a condo.

#19 For those about to flop... on 02.13.15 at 7:22 pm

Bdy [email protected] 12.
If I had a bar of gold I know where I would shove it.

#20 Jimmy on 02.13.15 at 7:22 pm

Not First and proud of it.

#21 Edward on 02.13.15 at 7:29 pm

Finally an optomistic post and a very good one.

I was about to classify you in the same camp as Faber and Roubini.

#22 Dee on 02.13.15 at 7:32 pm

Today was exciting because it was the first time I had to actually rebalance my portfolio. The numbers had always been small enough that I would just look at the per centages in my portfolio and buy more of what needed propping up — but the US gains had been SO huge that I actually needed to cash in some of them and reallocate to other parts of the portfolio.

The advice of Garth and others like him actually have me feeling like I’m on the road to financial independence. It’s an awesome feeling.

#23 Koshy Alex on 02.13.15 at 7:32 pm

“We saw a 55% stock plop in 2008-9”

And how did we recover from that ??????

After all the QEs by the Fed and now we have QE by ECB,

And now even the Chinese and Indians have started their own easing

The great recovery continues ………….

Worry more about your finances, and less about global macroeconomics. One of those you can control. — Garth

#24 Mark on 02.13.15 at 7:32 pm

“Can you advise if there is risk in holding all your ETF’s with one provider like Schwab, Beemo, Blackrock etc. I feel I have the asset class diversity but its all with 1 institution.”

The risk is extremely minimal, but if there were, for instance, an event that impinged severely upon the reputation or operational capability of the specific company you picked, selling out of your position rapidly could be an issue. ETFs are trusts, and are held by a trustee/custodian, so they are not balance sheet assets of the management firms in question and would not be affected by firm insolvency.

The possibility of such happening? Extremely small. But diversifying amongst a few of them basically “costs” you nothing, so why not?

The bigger worry in ETFs, particularly Canadian ETFs, is that their sponsors fail to achieve a critical mass with fund assets, and simply decide to liquidate them. Forcing investors into a potentially unwanted taxable event. TD did this with its ETF line-up in the mid 2000s. There are some niche ETFs and niche providers in Canada that I believe could be vulnerable to such, particularly when units outstanding are minimal.

#25 Mark on 02.13.15 at 7:41 pm

“to make the money, speculate downtown urbanites. make 50000 a condo, sell 10. you do the math”

Hyperinflation, even strong inflation, wipes out credit availability. Until credit is wiped out against RE, prices have an awfully hard time meaningfully rising in strong inflation.

hyoerinflation will rule – 7% inflation is a reality. check agro prices

The CRB index, which is a broad measure of commodity prices (not just agriculture) is at 5-year lows. Not sure how you manage to equate this with ‘hyperinflation’.

#26 Lolo on 02.13.15 at 7:41 pm

I renewed my variable mtg at a big 5 for prime -0.65. I didn’t go knocking on other lenders doors to see what I could get elsewhere, but it sounded good to me, and was lower than my current rate, so I took it. Right move? With these rates, no wonder the house horny are jumping in.

#27 crowdedelevatorfartz on 02.13.15 at 7:44 pm

@#14 waiting

good one. :)

#28 LH on 02.13.15 at 7:45 pm

Yes, CAD got crushed but at my leverage ratio (40% or thereabouts) I should come out flat from asset appreciation. Just have a look at the number of SFHs on guava.ca within the M5T, M5S, M5R (the postal codes closest to the U of T St George campus). Can count them with the fingers on one hand. And no decent offers. No supply but plenty of demand means this baby is going to gap massively higher. Smoking Man is right on the spot on this one.

#29 WHY PAY MORE on 02.13.15 at 7:51 pm

Actually it’s not that bad for Canadian equity investors. I bought into the TSX (XIC) in late August last year, not quite exactly at the top, but pretty darn close. I proceeded to get kicked in the teeth almost immediately. At its worst, I was down 11-12%. I averaged my position down with monthly cashflows and am back in black just this week.

Six months with a lot of volatility and without growth isn’t a great result for the position, but it does go to show that equity investing is not as scary as many people believe. Even in a poorly diversified, resource heavy index like the TSX, a generational collapse in commodity prices produces excitement but not ruination. If the excitement gets to be too much, the dividend cheques go a long way towards securing an ample supply of Crown Royal.

We may not be through with the roller-coaster just yet, but that’s why bonds and the S&P 500 are along to smooth out the ride.

#30 Nick on 02.13.15 at 7:58 pm

Garth – I really think you should qualify some if your assertions.

“For example, I’s always surprised at those people who think you should buy bonds to collect the interest”

Well, fifteen years ago, buying bonds as fixed-income investments (to get the income) was common, and sensible. Not so much today, but you imply it was always so, when it was clearly not.

“In a volatile and changeable world, there are only three principles to sane investing: balance, liquidity and diversification.”

Here you are excluding investors (mostly retired) who depend on their portfolios for income.

“When equity markets dip, the fixed income stuff rises in value to offset it. Also, when interest rates decline, bonds get more valuable.”

There is no way you can substantiate the claim that bonds compensate for stock market volatility. That’s a theory that works in a world that no longer exists, mainly because of the low bond yields today relative to the stock market.

“Meanwhile REITs are not closely correlated to stock markets and kick out regular income. Ditto preferreds, which are way more stable than stocks and have higher, fixed dividends.”

I agree with this. I live on dividends from common and preferred stocks. I allowed my bond ladder to expire. I don’t see any point in holding 1% bonds.

“These days, oil is hurting Canada, but it’s fuelling the US. As I explained recently, you never want to exit an asset class.”

I agree also. I bought traditional (not oil sands) energy stocks late last year and I am anticipating great yields and price appreciation over the next few years.

Clearly you do not understand marketable bonds. The interest rate does not rise when stocks fall. Prices do. Yields drop. Get some help. — Garth

#31 Republic_of_Western_Canada on 02.13.15 at 8:00 pm

Diversification is not the cure-all panacea of risk prevention. In fact it was the justification used for bundling up huge amounts of bad U.S. mortgages and selling them off in packages at unwarranted AAA ratings just before the 2007 housing crash.

If you can’t analyze all the basics for all the financial vehicles you will invest in, and take educated positions based on that and their chart progressions, then you are pretty much blindly selecting based on chance. Bad idea. Better off just investing in across-the-board index ETFs.

Problem with that though, is [today’s] overvalued markets will face-plant from time to time, or go sideways for years. (Widespread deflation hits the markets too. Just ask a Greek).

Better to identify 4 or 5 quality financial vehicles with a little inherent diversification and drive/follow them for the right reasons at the right times. Instead of backing up your car to some stock broker and loading up on a few of everything including the kitchen sink.

Actually, don’t buy any individual stocks. — Garth

#32 bdy sktrn on 02.13.15 at 8:00 pm

#260 kommykim on 02.13.15 at 7:01 pm
RE:#251 Harbour on 02.13.15 at 5:33 pm
#248 kommykim
That’s a crock a shit

The truth hurts, doesn’t it?
Alberta angered the British Columbia government by giving welfare recipients one-way bus tickets to the far-western province.

———————–
jesus man that was 20 yrs ago. let it go.

#33 Sheldon Cooper on 02.13.15 at 8:04 pm

you should be careful with what you write
-preferreds are not “safe stuff”. wishful thinking.
-you are understating the correlation of REITS with equities
-bonds have not pumped out 6% YTD

Wrong on all counts. — Garth

#34 devore on 02.13.15 at 8:04 pm

Just read the comments on this pathetic blog. We’re all experts. Know almost everything. And for the rest, there’s Google. Mostly it scares the poop out of people.

I would recommend reading some of the comments here from September/October period last year. According to the resident experts, Ebola would be a pandemic that would decimate the population and threaten Homo Sapiens very survival as a species. All that, because some nurse somewhere didn’t bother to handle bio-hazardous waste properly, resulting in TWO Ebola casualties instead of just the one.

So far, every single end of the world disaster candidate was either a snooze fest, or provided a handy opportunity to gather up profits and rebalance. Speaking of which, when’s the next debt ceiling circus?

#35 Zen on 02.13.15 at 8:08 pm

Continuing from our dialogue on your other blog post …

Garth –

Would you consider cash and metals to be included as part of a well balanced portfolio, and if not, why not?

Would someone who held 5-10% of their portfolio in gold and say another 5-10% in cash be considered a “metalhead”?

You say, “trust me, there is no 2008 re-rerun coming”. I’m curious, how exactly do you know that to be the case?

Would you consider someone who is uneasy with the historically high levels of debt and leverage in the system, and the strenuously overvalued, overbought, overbullish conditions that prevail in the markets, to be a “fear-monger”?

Nothing wrong with 5% cash. As for metals, owning an ETF like XIU gives you plenty of exposure through gold producers. No sane person keeps rocks. — Garth

#36 Krusty on 02.13.15 at 8:08 pm

Sunshine, lollipops, everything is wonderful. Peace will break out in eastern Ukraine, ISIS will stop waging war and exchange their swords for plough shares, Ebola, measles, and all deadly diseases will vanish. There will be no end to the growth of the economy, the sky is the limit. No worries mate! I’ll sleep better tonight cause Garth said nothing bad will happen.

Maybe in your world. Not in mine. That is why the portfolio I described is designed to mitigate risk and reduce volatility. — Garth

#37 Freedom First on 02.13.15 at 8:08 pm

I do find it amusing that a person on the subway in Toronto can be worried about ebola while having a $500,000+mortgage and no assets.

Reminds me of articles I have read over the years where 20 or 30% of people polled say their retirement plan hinges on winning the lottery. Same kind of thinking. Insane. No exception.

#38 NoOneOfConsequence on 02.13.15 at 8:09 pm

The single greatest investment in the last 30 years has been to speculate in real estate.
More people have made millions of dollars in real estate than in any other investment class.
Where else has spectacular leverage been available to the average person?
I agree that putting all your eggs in one basket is s bad idea. I agree that real estate is currently not looking like a wise place to invest.
But as long as the greater fools exist, and keep coming…there is no better place to make a ton of money.

#39 Waterloo Resident on 02.13.15 at 8:11 pm

Hey, another one from the TIN-FOIL HAT BRIGADE:\

– Mad cow disease just surfaced in Alberta: everyone stop eating meat !

Nah, just kidding; Yes, mad cow disease was found in Alberta, but go ahead and eat meat, it takes a few years for the mad cow disease to start rotting your brain so nothing to worry about here, go ahead, eat Alberta beef to your heart’s content. YUM YUM.

#40 mitzerboy aka queencity kid on 02.13.15 at 8:11 pm

DELETED

#41 For those about to flop... on 02.13.15 at 8:11 pm

Bdy sktrn @ 12
If I had a bar of gold I know where I would shove it.

#42 Lillooet, BC on 02.13.15 at 8:12 pm

Yes, good advice Garth. After reading your blog a few months ago, I bought a bunch of preferred shares diversified across companies and industries. They’ve increased on average about 4% capital gains as well as paying about 5% dividend so far.

#43 Londoner on 02.13.15 at 8:15 pm

“In a volatile and changeable world, there are only three principles to sane investing: balance, liquidity and diversification.”

I commend you for your consistent message promoting balance and diversification. This is something that people need to understand and can’t be repeated enough.

However, there is one area in which your reasoning has been deficient and I think that’s because of your unexplained economic analysis. You never answered my question of how you saw deflationary pressure (in Canada) leading to an environment where interest rates could be rising. Maybe it’s because you believed a strong CAD would actually be positive for the Canadian economy, but we’ll never know. Now, you’re saying that interest rates will be rising in the US without any adverse affects on US markets? Maybe they will raise rates this year or maybe they won’t for a while longer. It doesn’t matter. Holding US assets may prove to be a profitable strategy in the short to medium term but even you have to admit the inherent risks associated in investing in a country that is monetizing debt at the rate the US is. If for no other reason then to avoid the potential currency risk. In this case having a slight home-country bias may prove to be a suitable mitigation strategy.

#44 olderthana boomer on 02.13.15 at 8:18 pm

#15 Catalyst
Garth may correct me but I do not believe that ETF’s, Mutuals, non-reg brokerage accounts are covered by
CDIC insurance.
But if you really wanted to preserve some assets, say you’d sold a house and hadn’t yet bought the next one, I would spread it around and put it in high yield savings (hah) in several institutions just in case.
just to be on the safe

Bad thinking. No bank will fail. BTW, investors have $1 million+ in insurance. Depositors get only $100,000. — Garth

#45 devore on 02.13.15 at 8:19 pm

#16 Steveston

About time some one called out Marc Faber. And someone might be better off taking advice from Harvey Dent than Harry Dent.

Marc “Dr Doom” Faber?

http://www.greaterfool.ca/2014/04/10/finale/#comment-297236

I think even smoking man’s camel toe has been correct more times than Mr Faber.

#46 Suede on 02.13.15 at 8:21 pm

The good news is that if BoC drops rate to below zero like some countries, at least the big six add 2% on top so we’re still net positive.

Savers are screwed.

Not going to happen. — Garth

#47 zee on 02.13.15 at 8:24 pm

Hey Garth

Does the 4.5 % return to date includes the dividends?

Total return. — Garth

#48 Just Saying on 02.13.15 at 8:25 pm

“these days Canadian growth assets should be a minority”

– counter-intuitive won’t you say ?
what happened to buy low sell high mantra, or have you condemned “Canadian growth assets” to eternal damnation ? – With all the dip, I think one would be better off buying the battered.

The US economy has far more lift than ours. Do some relative strength analysis for solid evidence this will continue. — Garth

#49 Zen on 02.13.15 at 8:27 pm

“…No sane person keeps rocks”. — Garth

Ahem, seems to this insane investor that it is wise to have a “balanced portfolio” that contains both rocks and paper. Only thing missing from our ideal portfolio is scissors.

#50 Mark on 02.13.15 at 8:29 pm

“But as long as the greater fools exist, and keep coming…there is no better place to make a ton of money.”

Except the free money train came to a halt almost 2 years ago, and RE prices have been declining since. You’re correct that RE has been, along with long-term bonds (two investments which are highly correlated for obvious reasons), a spectacular investment over the past 30-35 years. But the phrase, “past returns may not be indicative of future results” is quite apt here.

The key is to be able to identify what might do well for the future, not look to the past and be stuck in it. If bonds/real estate/fiat did so well over the past 30 years, might the complete opposite of such do quite well over the next 30?

#51 Nick on 02.13.15 at 8:31 pm

“Clearly you do not understand marketable bonds. The interest rate does not rise when stocks fall. Prices do. Yields drop. Get some help. — Garth”

I don’t need help. Show me the evidence that bond prices counterbalance stock market volatility.

#52 Mark on 02.13.15 at 8:35 pm

“The good news is that if BoC drops rate to below zero like some countries, at least the big six add 2% on top so we’re still net positive.
Savers are screwed.”

Savers would do excellent under a negative interest rate regime, as they could ‘save’ their money, not even bother to take it to a bank, and their purchasing power would grow by the day. Without bank service charges or taxes on interest to boot.

Its what inevitably comes after a deflationary environment that should scare the bejesus out of “savers”.

#53 Ray Skunk on 02.13.15 at 8:36 pm

Seller takes big loss on Vancouver Olympic Village condo

http://www.theglobeandmail.com/life/home-and-garden/real-estate/seller-takes-big-loss-on-vancouver-olympic-village-condo/article22988400/

Purchase price: $1,565,000
Asking: $1,299,000
Sold for: $1,225,000

$340k down the crapper.

Of course the shocking part here is that the MSM is actually reporting this.

The Realtor’s damage control?
“It’s worth $1.225-million right now, but in the next couple of years it will revert back to the $1.5-million price.”

Righteo pal.

#54 The motivator | Realties.ca on 02.13.15 at 8:37 pm

[…] Source: http://www.greaterfool.ca/2015/02/13/the-motivator/ […]

#55 San Francis in Vancouver on 02.13.15 at 8:45 pm

Leaving SFO to go back to my rented home in van. I see the same home prices in the SFO-SJO surrounds but average incomes are 4 to 5 times that of Van families (in the class buying those homes).

I guess that means 4 – 5 times less risk because of 4 – 5 times better fundamentals. Aside from 30 year mortgages and that interest is deductible.

I Like being stuck in traffic behind people busy getting to somewhere where they are actively contributing to the GDP through innovation and production vs. idling shoppers in the west side of can meandering aimlessly.

Every block in the area I work in is logoed with global bellwethers SAP (though German), Oracle, Microsoft, Amazon, Uber, eBay (not that cheap, useless rendition called craigslist), Apple (not the fruit, the iPhone & Mac maker), Samsung, Microsoft, and a myriad up and coming startups that are disrupting the fabric that everyone else is banking on while creating new economic paradigms.

There are more “we’re hiring” signs here (these are not part time latte brewing jobs but leading individual contributor and up to at. Executive roles) and I’m hiring people here in a highly competitive market – no entitlement at the interview, but hunger to evolve, compete and win.

Going back to Van is “nice” to go relax for the weekend and enjoy the rain (it is 24c and sunny here) but I have to admit – there is a heck of a lot more “future” playing out here than the one asset economy offers my kids…

For now, I get a 20% pay rise just crossing the border and a 40% rent discount so that’s more justification than I need for the commute – one of the reasons renting helps agility. In the interim I’m socking well over $100k in my unregistered balanced investment fund yearly, and am building equity as my stock options mature (that’s one of the riskiest parts of my portfolio so I discount their value when I calculate balance proportions)

Is this a brag? No, not really, but showing that there is a huge opportunity to build wealth competing in a global workplace and doing so because I am not shackled by a crushing mortgage, but each to their own.

I wonder why BC’s population growth is negative with the biggest haemorrhage being in the 20-30 something’s…

I’m 46 and not waiting around to find out…

Good luck to all with your own futures and may all your strategies pay off… I offered mine as an example…

I really wonder. Even with healthcare costs included you get to keep more $ out of your paycheck than BC…

Don’t get me wrong, I LOVE Canada, it’s people and it’s principles, but keep some perspective when it comes to managing your assets in a balanced portfolio – make it Global… Business is Global, profits are global, so should be your portfolio…

#56 Mike on 02.13.15 at 8:45 pm

“And, trust me, there is no 2008 re-rerun coming. No Ebola on your street. No broke banks or bail-ins. No $28 loaves of bread. No depression. No market collapse. The risk was six years ago. Get over it.”

It’s not a matter of trust, but common sense – which isn’t too common these days. Who cares for a repeat of 2008 when the retail investor has been wiped out and many jobs have not come back. Never truly developing an understanding for the ‘market game’ and paying dearly for it – they have and will stubbornly continue to put up with (effectively) negative interest returns on their meagre savings and staunchly hold on to their brick and mortar for as long as they can – sadly, even if it means food banks and co-habiting with extended family, baking their own bread etc – to make it work.

That being said, there are plenty of real assets on sale. Diversify accordingly.

#57 Mark on 02.13.15 at 8:48 pm

“Here you are excluding investors (mostly retired) who depend on their portfolios for income.”

No he’s not. Its perfectly acceptable to derive ‘income’ from a portfolio by selling the most overweighted (relative to target) assets, usually for high prices if the portfolio has a selection of inversely correlated assets. Rather than merely rely upon the coupon income from bonds, or dividends from stocks.

The key here is in proper portfolio construction, an area which usually eludes most DIY’ers, [email protected]’s, etc. And is the domain of FA’s who go through the process of building portfolios, as opposed to random ad hoc selection of assets commonly employed by the armchair “investors”.

Basically put, you can think of correlations as being a sort of circle. An ideal portfolio has assets on as many points of the circle as possible, such that, at any given time, one part of the portfolio is significantly over-valued, and another part is significantly undervalued (ie: diametrically opposed). Rebalancing of such a portfolio provides for returns with an optimal Sharpe ratio.

#58 Mister Obvious on 02.13.15 at 8:54 pm

#18 westsider

“He made $1 million for doing nothing, but owning a condo.”
——————————-

Good for him. Phase one complete. But he’s not done yet. He needs to get that cash properly invested as per tonight’s blog.

#59 bdy sktrn on 02.13.15 at 8:54 pm

flopp – well said! thx for the giggle. just make sure it’s 10oz or less!

#60 Happy Renting on 02.13.15 at 8:55 pm

Had an interesting conversation today. I asked about renting the largest apartment unit (alas, still 2-bdrm) in the building we live in. It’s an extra 80 sq ft compared to what we currently have (over 900 sq ft), so maybe we could fit a second kidlet in there.

Landlord gave me price for unrenovated, then a $500-wide price range for renovated and upgraded. I asked: why the big range? He said tenants could pick what upgrades were put in: stainless steel appliances, granite countertops, rip out some walls to update the look and layout, even add a dishwasher. Depending on what you picked your rent was higher or lower in that range. I was surprised.

Blog dog renters, landlords, property managers: is having so much input into an apartment’s reno common for tenants? I know the place is trying to compete with the shiny, new condos going up all around, but that seems like a lot of customization for a rental. (I do welcome the opportunity to pay more for a dishwasher, though!)

#61 Mark on 02.13.15 at 8:59 pm

“I don’t need help. Show me the evidence that bond prices counterbalance stock market volatility.”

I find this calculator to be an incredibly useful resource:

http://www.ndir.com/cgi-bin/downside_adv.cgi

Try for instance, 100% TSX, and 100% Canadian bonds. Write down the long-term Geometric gain, and the standard deviation.

Now try a 50%/50% TSX and Canadian bond portfolio. Note that the numbers you get out of such are actually superior to that of just the TSX and the bonds alone.

This is rebalancing in action.

Anyways, lots of scenarios you can try with that calculator, with real historic data. Give it a try!

#62 For those about to flop... on 02.13.15 at 9:11 pm

Bdy sktrn @ 59
Good to see you had a laugh.
I know some of the questions seem basic / stupid but remember this , all investors start somewhere.
Try to be nice to the new kids we just want advice not attitude .

#63 Doomers on 02.13.15 at 9:14 pm

Perspective time. There is a reason that there are so many doomers on this blog – GF is likely the largest doomer site in Canada. Lets hope it’s wrong along with all the others, or we’re in big trouble. Have a feeling it’s not…

#64 bdy sktrn on 02.13.15 at 9:16 pm

xiu – 10.2% materials – est 7% pm

xiu = 17% of 60(growth assets) = 10.2% of portfolio

7% of 10.2 = 0.71% of portfolio in shiny rocks

pretty low as GT would like it!

for more just just hide 10 or 20 coins under the bottom drawer and your ‘golden’

#65 young & foolish on 02.13.15 at 9:17 pm

I am glad out host took a swipe at the doomer guys!

#66 ANON on 02.13.15 at 9:20 pm

Happy days are here again? Phew, that was close…

#67 My Life is a Pile of Shit on 02.13.15 at 9:20 pm

Garth, I knew it would be only a matter of time before you tout preferred shares and REITs as safe havens. There is nothing safe about preferred shares and REITs.

ZPR (preferred share index ETF) dropped 10% in 2013; then fully recovered, only to drop 10% again from 2014 to 2015. It hasn’t made a new high since Apr 2013, and made a new low in Feb 2015.

XRE (REIT index ETF) got halved from 2007 to 2008, and dropped 16% in 2013. XRE didn’t recover from its 2013 plunge until a year later.

(Numbers include dividends.)

Smart people buy preferreds for a tax-efficient yield, not for capital gains. Stick with the big guys (bank, insurers) and you’ll do fine. Far less volatility than common stock. As for REITs in 2008, irrelevant. All asset classes went down in a 100-year event not to be repeated in your lifetime. Still love your name. — Garth

#68 takla on 02.13.15 at 9:20 pm

“No sane person keeps rocks”…can I venture to speculate you bought the little lady A gold & diamond{rock } ring when married Garth??

#69 Republic_of_Western_Canada on 02.13.15 at 9:29 pm


#55 San Francis in Vancouver on 02.13.15 at 8:45 pm

I found rents to be higher in San Jose than Vancouver actually, and traffic home down the 17 to be every bit as insane as getting across the Lions Gate after a ferry came in. Post-war bungalows were already pushing past a million in parts of Santa Clara up through Menlo Park.

Employment and business in the U.S., especially coastal cities, is far more bipolar than most anything in Canada. Either it’s real good, or real bad. At least in technology. Sort of like the oil biz.

If things are winding up in the Valley again after being dead & lethargic since dot.com 1.0, wonderful. However, considering the massive hemorrhage of work and fabbing/manufacturing to Chindia & elsewhere in the last 20 years, I have my suspicions. For the short term, it might pay off to ride some of the apparent momentum. At least until this little spat between Saudi, frackers, and Iraqers is resolved.

#70 rawdiswar on 02.13.15 at 9:35 pm

The thinking on this blog seems to be you either hoard gold bullion or you have none. What’s wrong with holding ~5% of your portfolio in proven gold producers, many of whom pay a dividend. The sector has likely hit bottom and has a large potential upside. More risk than holding Maple Leafs (the coin) but much greater returns.

#71 young & foolish on 02.13.15 at 9:35 pm

“Clearly you do not understand marketable bonds. The interest rate does not rise when stocks fall. Prices do. Yields drop. Get some help. — Garth”

We need a primer on bonds here. But to realize gains in price, you have to sell (just like appreciated RE, stocks, or any other inflated investment).

#72 Adam Smith on 02.13.15 at 9:37 pm

Is Europe looking like a decent buy now that the printing press is going? How much would the sudden leaving of Greece from the Eurozone hurt European ETFs? They only have 11 million people and I have to assume the chance of them not paying their debts much be mostly calculated into the price of stocks already.

I’m pretty young and need to diversify. Half my investing money is in PHM, which was smart considering the 500% growth over the last year, but it also leaves me thinking I should sell some and spread out. Have Canadian energy stocks hit bottom yet or is it possible they won’t be coming back in the near future?

#73 JC on 02.13.15 at 9:42 pm

Garth, do you still think the gun confiscation in Alberta was reasonable? Whatever our position on gun politics, Canadians must stand up for those law abiding citizens who had their rights trampled, because if we don’t the next day it may be any one of us? As a former MP I hope you feel the same way.

http://www.theglobeandmail.com/news/national/rcmp-rebuked-for-firearms-seizures-during-2013-alberta-floods/article22940656/

#74 young & foolish on 02.13.15 at 9:52 pm

“The key is to be able to identify what might do well for the future, not look to the past and be stuck in it. If bonds/real estate/fiat did so well over the past 30 years, might the complete opposite of such do quite well over the next 30?”

Hmmm … how likely is that? Well, it may be be true!
But if you bought investment RE years ago, are getting great cap rate returns, and the price of the buildings has gone way up, would you still sell it to realize the gain (rebalance?) …

#75 not 1st on 02.13.15 at 9:52 pm

Yup, nothing bad is going to happen…

http://www.theguardian.com/public-leaders-network/2015/jan/23/nervous-super-rich-planning-escapes-davos-2015?CMP=share_btn_tw

#76 Obvious Truth on 02.13.15 at 9:56 pm

The portfolio works. Of course some sensible macro tinkering and understanding of where we are in the bond cycle helps too.

But the monetization, money printing, derivatives blah blah blah is not investable.

And if it was the portfolio still works. That’s the beauty of it.

Some with more time just do it a little different. But don’t mistake that for not being balanced diversified and liquid. Forget that and you get punished every time.

#77 Cow Man on 02.13.15 at 9:56 pm

# 30 Nick

Well written. Don’t be deterred from your position.

#78 Smoking Man on 02.13.15 at 10:00 pm

#46 Suede on 02.13.15 at 8:21 pm
The good news is that if BoC drops rate to below zero like some countries, at least the big six add 2% on top so we’re still net positive.

Savers are screwed.

Not going to happen. — Garth
……….

You sure Gartho?

#79 Republic_of_Western_Canada on 02.13.15 at 10:01 pm


#51 Nick on 02.13.15 at 8:31 pm

“Clearly you do not understand marketable bonds. The interest rate does not rise when stocks fall. Prices do. Yields drop. Get some help. — Garth”

I don’t need help. Show me the evidence that bond prices counterbalance stock market volatility.

Conventional wisdom says people pulling (or keeping) money out of stocks are throwing it instead into the bond market. That jacks up prices just because bonds are more in demand. The QE orgy of the last few years has twisted that up a bit, but unless there is a popular alternative to [junk] bonds, people would still rather put cash into a 2.5% bond yield to maturity for 2 years than 0.5% for consumer product. So bonds go up a bit.

Despite preferreds being considered a form of debt-ish instrument, I found the same does not hold true for them. Even perpetuals. If a company’s common stock craters because the CEO is found to be a doofus (Lear jets anyone?), so does the preferred stock. Although less severely.

Bond (coupon) rates are ‘built in’ to marketable bonds, and don’t change for the life of it. Only the premium or discount paid against face value does. Yields to Maturity implicitly change just because you get more or less than coupon, by virtue of what kind of deal you got on the bond.

#80 John on 02.13.15 at 10:06 pm

NOBODY ESCAPES. Multiple trillions in QEs kept the financial system and higher stake shadow banking system in 2008 from birthing more Lehman zombies, so no one should run around pretending that a nimble balancing act always trumps; tone it down just a titch, please. Loved Garth’s dissing of holding gold ……. too rich. A few years ago we went to a very well attended presentation given by Garth near Pearson airport. He even let a few of the front benchers hold his one ounce gold piece. Now physical gold is for losers? We won’t even talk about generators and safes, but Garth did in a book (2009)…………. Garth’s advice is encouraging and knowledgeable. But he’s been afraid, too. He should be even more afraid now. He was honest when he summed it all up. NOBODY ESCAPES. Too afraid to post this?

2008 was scary. 2015 isn’t. Try to keep up. — Garth

#81 Alpine on 02.13.15 at 10:10 pm

Dear Garth,

Not sure why you keep putting “pathetic blog” in your posts. Nothing wrong with putting food for thought out there and people can do with it what they wish. It is also nice to have a different perspective.

#82 Smoking Man on 02.13.15 at 10:11 pm

I’ve been stuck, at a critical phase of the greatest book ever written.. Problem is not writers block.. The opposite, two many ideas..

Boom, reading every blog dogs comment, every single day. Finally one of of you, today hits the Holly grail..

It’s done in mind now. Perfect.

Who’s made the book so far..

Gartho as LaughingCon s father.
Beach Girl
Old Man
Holly Crap Wheres my Tylenol
Turner Nation

And the new one…

Thanks dogs..

And let’s not forget LaughingCon. Your Charles Ashman..

#83 Mark on 02.13.15 at 10:11 pm

“Hmmm … how likely is that? Well, it may be be true!
But if you bought investment RE years ago, are getting great cap rate returns, and the price of the buildings has gone way up, would you still sell it to realize the gain (rebalance?) …”

Most won’t. That’s why the rich tend to get poorer over time, and the a new breed of smart poor tend to get rich. People get too ‘married’ to trends, especially trends that have proven to be such huge historical winners, and they refuse to adapt when trends change. Wealth only lasts a generation or two on such account.

The wealthy’s failure to rebalance can be thought of as a great equalizer, and the reason why extreme wealth rarely lasts forever.

#84 The Fuzzy Camel on 02.13.15 at 10:14 pm

I am a recovering doomer. I admit it. I bought the line that the US dollar is going to crash, buy gold, etc.

So I bought gold, hasn’t lost or made me any money. I also bought rental properties, they made me money. Since QE stopped, stocks suck, nothing but volatility, Yellen got her wish.

BoC tipped their hand, they have a deathly fear of deflation, they will even sacrifice our currency to stop it.

The new game is currency wars. Every country is trying to pull a China, devalue their currency to gain an export edge.

That will be the theme for this year, race to the bottom. Deflation is about as popular as genital herpes, so I doubt we will see much if the central bankers have their way.

I suppose Smoking Man has the right idea, open a Forex account and short the CAD when oil enters a downtrend, and long when oil is going up, and keep an eye out for BoC rate cuts.

Unless you attend the same synagogue as Yellen, you are out of the loop as for whats to come. Capitalism is dead, and we are now trying to invest in a crony socialist centrally planned nightmare.

#85 AB Boxster on 02.13.15 at 10:16 pm

While a balanced portfolio may provide protection of regular ups and downs of business and economic cycles, it is like having a fly swatter to try to stop a semi should a global mess recur.

Is another and real global financial meltdown really so impossible?

http://business.financialpost.com/2015/02/13/eric-sprott-gives-dire-warning-on-currency-volatility-right-before-one-of-his-funds-gets-hit-by-swiss-national-bank-losses/

Derivatives were a major problem in 2008. And here we are in 2015 with far more invested in these instruments.

Sure, in a world where the financial system makes sense, holding metals makes little sense. But I sure hope the folks I know that live in the Ukraine, had gold, since their currency is down 50 % this year. Gold may not be a great investment , but when the value of your currency tanks, it not about return, its about survival.

#86 John on 02.13.15 at 10:22 pm

Well it’s Friday the 13th……….. does that mean Garth has bonded with his Harley is booting it down to Port Dover to hang with the un-diversified…. OOPS Ah, yes, it’s -29 celsius outside …. ahhhhhhh nuts, guess not. Just left with this pathetic blog and Bandit. Stay off the ice, Garth. Heh, it’s Valentine’s Day tomorrow. Don’t let Dorothy have to remind you…. Nice weekend everyone.

#87 AK on 02.13.15 at 10:37 pm

“Lefties in Greece.”
======================

Yes. OUZO Rules.. :-)

#88 Nodebt on 02.13.15 at 10:48 pm

I got 750k in my holding company getting basically not much interest, I’m actually scared shitless to invest it cause I worked so hard to get it, any recommendations? I’m 40 and want the money to grow but don’t want to take a huge risk

#89 Obvious Truth on 02.13.15 at 10:49 pm

For everyone that has so much money that they need to protect it with gold. Here’s an idea. From a guy who likes the stuff. But mostly physical. Make it a collection. Enjoy different coins and ounces. Just keep it to a reasonable amount of your net worth. 5% seems to be standard. But everyone can stray a little. Especially for a collection.

Then think of it this way. If the zombie apocalypse happens upon us or Putin launches nukes gold goes to 10000 an ounce overnight. So a small percentage can preserve your wealth. Enjoy the hobby and sleep well. No doomerism necessary. Just a more balanced and shiny future. Use your growing money to enjoy life in the pre apocalypse period.

#90 Smoking Man on 02.13.15 at 10:56 pm

Mark, love you man, it’s valentine’s day, but…

Everytime I read one of your posts, I visualize a serial killer..

Wierd huh.

#91 pwn3d on 02.13.15 at 11:04 pm

#50 Mark on 02.13.15 at 8:29 pm

Except the free money train came to a halt almost 2 years ago, and RE prices have been declining since.

Savers would do excellent under a negative interest rate regime

————–

lmao, you really do have a sense of humour.

btw best part of the blog today, Garth says this isn’t a doomer blog and things will be fine and half of the commenters are losing their minds. He’s right, and if that bothers you, you need to get out the basement more.

#92 Waterloo Resident on 02.13.15 at 11:08 pm

GLOBAL WARMING, Global Cooling, WTF ??
Whatever is happening, the only thing i know is that its -20C outside and I’m freezing when i go out for a walk. To me it doesn’t feel as if there is any global warming going on, not yet.

There is ONE THING FOR SURE that is going on, and you can see it here on this chart:

http://www.planetforlife.com/co2history/

The level of atmospheric CO2 is definitely rising. Recently it just hit 400 ( http://climate.nasa.gov/400ppmquotes/ ).

I’m not sure if this will heat up the Earth, cool it down, or a little bit of both, whatever, I’m still freezing.

Take care and keep warm.

#93 45north on 02.13.15 at 11:09 pm

Ray Skunk: Seller takes big loss on Vancouver Olympic Village condo

key word being condo. actual land is a different story

San Francis: should be San Francisco: Every block has logos of global leaders such as SAP , Oracle, Microsoft, Amazon, Uber, eBay , Apple, Samsung, Microsoft, and a myriad of up and coming startups

I’m impressed. What about Google San Francisco – they’re there too.

#94 45north on 02.13.15 at 11:15 pm

in other news:

Halifax police avert alleged Valentine’s Day mass shooting with only hours warning

http://www.ottawacitizen.com/news/national/Attempt+kill+people+public+place+Halifax+foiled+Nova+Scotia/10812748/story.html

holy cow! in Halifax even!

#95 Washed Up Lawyer on 02.13.15 at 11:15 pm

For three days now I was tempted to comment on the high prices of houses in Ft. McM. As I drafted each comment, it dawned on me that they were far too long even though I am a master of brevity. It is a long story. To suggest that it is due to the madness of the populace is, in part, to blame the victim. Tomorrow, being Saturday (Garth’s day off) will be slow on this comment section.

Dogs, let me know if you want my pithy analysis tomorrow. It has to do with a shortage of land (can you believe it??).

#96 45north on 02.13.15 at 11:25 pm

washed up lawyer: yeah give us your pithy analysis

#97 Poutchli on 02.13.15 at 11:28 pm

I diversified my car… sold it and bought more $ZPR, Sunlife, OpenText, HomeCapital, H&R REIT.

ZPR yields 4.5% and its taxed 3x less than income.

#98 Happy Renting on 02.13.15 at 11:32 pm

#86 Nodebt on 02.13.15 at 10:48 pm

Read this to understand the concepts, then decide just how much risk you can stomach (zero losses, 10%, 20%?) Then build accordingly. May I suggest an S&P 500 ETF instead of S&P TSX, and you could use GICs instead of bonds.

http://canadiancouchpotato.com/2012/06/11/a-homemade-principal-protected-note/

And congrats for amassing a whack of cash, especially at a relatively young age. Now get it working for you!

I would not advise holding GICs for the fixed income of a portfolio. They are not marketable so there’s no correlation factor with equities, and zero tax-efficiency with little or no liquidity. Bad idea. — Garth

#99 Happy Renting on 02.13.15 at 11:36 pm

#95 Washed Up Lawyer on 02.13.15 at 11:15 pm

Me too, I enjoy your posts about Ft Mac. Being in Ontario, we talk about it like it’s some mythical land of huge paycheques (mythical but dark, depressing, boring…) Of course most of us haven’t been there, we’re just repeating gossip and daydreaming about better wages. I like hearing from someone actually there who can describe things first-hand and explain some of how it works.

So comment away, help us through our Saturday withdrawal. ;)

#100 TurnerNation on 02.13.15 at 11:36 pm

I’m in SM’s book? Btw I bought Bbd.b at 2.60 today. I smell double bottom barring any bad news. Just a s.t. trade.

#101 april on 02.13.15 at 11:46 pm

bdy – what’s wrong with New West? Can you explain?

#102 Sean on 02.13.15 at 11:48 pm

“I know some of the questions seem basic / stupid but remember this , all investors start somewhere.”

Sure, they just maybe shouldn’t start here. But if they are going to start here and ask basic questions that show they haven’t been reading Garth’s posts within the last week, they should accept the instruction they receive without complaining. You’re here to learn, then shut up and learn instead of being a passive aggressive baby.

Those of you who like GOLD, GOLD, could always try out the permanent portfolio, which splits equally among four asset classes, one being gold. It’s not what I would use (I’m couch-potatoed, but more aggressive than 60/40), but it has a record over many decades of decent returns and lower volatility. It did poorly in 2013 because gold got hammered. Interested people can Google for more info and Garth probably hates it, but there you go.

#103 Washed Up Lawyer on 02.13.15 at 11:49 pm

#45 North

Damn spell check on “pithy” did not work but I will post my analysis tomorrow anyway.

#104 Musty Basement Dweller on 02.13.15 at 11:50 pm

#18 westsider on 02.13.15 at 7:19 pm
This may or may not be off topic, but I give up on Vancouver!!!It is Different here!!!Friend just sold his condo in False creek for $2.2 million. He paid $1.3 million 3 years ago.
≠===================
Sorry westsider gotta call bullshit on your buddies story. Doesn’t add up from what other condo owners there are telling me. If you get the address we can get a realtor to check your buddies claim of immense profit.

#105 Joe Oliver on 02.13.15 at 11:52 pm

I support grape nuts

#106 Crazy like a fox on 02.14.15 at 12:04 am

You didn’t mention the newest craze…Mad Cow is back.

http://calgaryherald.com/news/local-news/mad-cow-disease-confirmed-in-beef-cow-from-alberta

I’m 100% equities and my portfolio is up 5.8% inc divs since Jan.

Yes…there’s a lot of noise…the trick is to buy good companies across the 5 major sectors of the economy and spending time in the market…not time worrying about the noise.

Yes the market cycles…one week oil gets hit….next week telecoms or banks…yawnnnnnn. Keep reinvesting divs to adjust for high and low pockets….buying more stock when the portfolio gets unbalanced works better than selling into strength.

But what do I know…I trade stocks every night, away for the winter..every year in Thailand.

#107 jerry on 02.14.15 at 12:06 am

“Lately people with all their assets in Canada have taken a 20% hit.”

Not true.

People with all their assets in Canada but who reckon their net worth in USD have taken a 20% hit. I believe the technical term for that type of investor would be “idiot”.

People with all their assets in Canada are actually up around 11% over the last year.

#108 Max on 02.14.15 at 12:20 am

I showed up in the doorway this afternoon with an arm full of flowers – guess whose day was made. Busy, busy Valentine weekend. Cooking Friday and Saturday evening as well as making breakfast Saturday and Sunday.

This evening, after dinner, we have 3 episodes of Love It Or List It – Vancouver on the DVR. How romantic is that? And the home ownership humour. Watching frustrated homeowners get told that there are a couple of cost over runs and only half of what was promised will be completed – priceless.

#109 For those about to flop... on 02.14.15 at 12:22 am

Sean,sorry dude I didn’t see the sign saying professional investors only allowed on this blog .
Try not to get caught up in your own self importance.
Goodnight princess.

#110 Mike T. on 02.14.15 at 12:23 am

#95

I’m in! I like fiction!

#111 waiting on the westcoast on 02.14.15 at 12:31 am

Check out this article. Gives some great perspectives on how a Fed tightening could affect a variety of markets….

http://www.bloomberg.com/news/articles/2015-02-13/-9-trillion-question-is-how-tighter-fed-will-impact-world

#112 Washed Up Lawyer on 02.14.15 at 12:36 am

#109 Mike T.

Upon reflection, I have come to the conclusion that I am too damn lazy to try to comment on the subject. No long comment tomorrow. I might provide some links. In the end, the price of housing in Ft. McM does not matter in the scheme of things. I have read too many Socio-Economic Impact Assessments of oil sands developments in the Athabasca oil sands region to get excited about it.

#113 Mark on 02.14.15 at 12:49 am

“People with all their assets in Canada but who reckon their net worth in USD have taken a 20% hit. I believe the technical term for that type of investor would be “idiot”.”

Amen! And since there’s no inflation in Canada at the present or even appearing in the pipeline, the claim that they’ve lost 20% is even more absurd.

#114 For those about to flop... on 02.14.15 at 1:02 am

Hey Bdy sktrn, how many people did the Alberta government ship out to b.c
I’ve been here 12 years I’ve never heard this story before.
Fill me in I’d appreciate it .

#115 Russ L on 02.14.15 at 1:12 am

# 95 – WUL
For three days now I was tempted to comment on the high prices of houses in Ft. McM. ..
Saturday (Garth’s day off) will be slow on this comment section.
Dogs, let me know if you want my pithy analysis tomorrow. It has to do with a shortage of land (can you believe it??).
********************************

Hey Washed,
Pithy away. Good to hear.

A work mate came to us in September from a 5 year gig in Ft Mac.
Poor bastard, his house has been listed by a lame realturd (no showings!) and he had no urgency to sell ’cause two of the kids were living in it until end of school year, 2015.

Now the oil bubble exorcist is happening and the hot tub froze with the weekend power outage (12 hours @ -40 C). It is a wake up call.
Too late to get the RE out.

On the bright side o’ life… he is livin’ the dream on the Island.
Walks on the beach, biking in the forest, sunshine & 15 C today. Same again for Valentine’s Day.

#116 uncle daddy on 02.14.15 at 1:14 am

DELETED

#117 kommykim on 02.14.15 at 1:20 am

RE32 bdy sktrn on 02.13.15 at 8:00 pm
jesus man that was 20 yrs ago. let it go

Your original question is here:
http://www.greaterfool.ca/2015/02/12/nobody-escapes-2/#comment-352884

I answered it here:
http://www.greaterfool.ca/2015/02/12/nobody-escapes-2/#comment-352928

Harbor didn’t like my answer and called me a liar:
http://www.greaterfool.ca/2015/02/12/nobody-escapes-2/#comment-352930

So I provided a link to back up one of my statements. You see, these are things that people in other provinces remember. They stack up. Little arrogant snippets of smugness during the boom years. The rest of Canada sees Alberta through the politicians you elect. So when the inevitable bust comes, no one else has any sympathy for you.

#118 Cici on 02.14.15 at 1:23 am

#60 Happy Renting

(I do welcome the opportunity to pay more for a dishwasher, though!)

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

That was a joke right? I hope so! If not and you really need one, I’d recommend buying your own instead of taking on a rent increase (they can be had quite cheaply these days).

#119 kommykim on 02.14.15 at 1:31 am

RE: #49 Zen on 02.13.15 at 8:27 pm
“…No sane person keeps rocks”. — Garth
Ahem, seems to this insane investor that it is wise to have a “balanced portfolio” that contains both rocks and paper.

Paper always beats rock.

#120 kommykim on 02.14.15 at 1:42 am

RE: #71 young & foolish on 02.13.15 at 9:35 pm
We need a primer on bonds here. But to realize gains in price, you have to sell (just like appreciated RE, stocks, or any other inflated investment).

You sell some of your bonds to re-balance your portfolio if equities drop. Hence you can realize a capital gain on your bonds and buy more equities while on sale. Investing 101.

#121 ozy - check real staples (food) prices on 02.14.15 at 1:53 am

check real staples (food) prices – walnuts/almonds ($20 dollars doesn’t buy you a KILO).
check organic meat prices (even menonites applied a 10% increase), etc
check parking land prices… downtown Toronto (Manhattan too – skyrocketed)
check commercial RE prices – can’t toucht it! ouch
check Property Bill (6.8%)
check water BILL (9%)
check electricity BILL (9%)
check natural gas BILL (20 or 40% last april)
check labour force price – minimum 11$/h and productivity has decreased since no one expects to work for the $$$$ that has no value
check grocery total/month – mine is way larger than last year…. and just got more into frugalism…
check condo prices – even those rose 3% year
check detached housing prices 8-20% up depending on quality
==============

25 Mark on 02.13.15 at 7:41 pm
“to make the money, speculate downtown urbanites. make 50000 a condo, sell 10. you do the math”

Hyperinflation, even strong inflation, wipes out credit availability. Until credit is wiped out against RE, prices have an awfully hard time meaningfully rising in strong inflation.

hyoerinflation will rule – 7% inflation is a reality. check agro prices

The CRB index, which is a broad measure of commodity prices (not just agriculture) is at 5-year lows. Not sure how you manage to equate this with ‘hyperinflation’.

#122 Carousel on 02.14.15 at 2:00 am

For those in love with gold are delusional, the gold system is no longer in effect … We are in the paper decade now … So stop talking about a metal that is not relevant to today’s standards ..

#123 ozy - check real staples (food) prices on 02.14.15 at 2:02 am

let me add this is FRACTIONAL RESERVE, so credit will not dry until THE VERY END. They can borrow 10 billion on bond market at 3% and lend 100 billion at 1% per year. When all the money is paid back by mortgages, lenders make 90 Billion + 1/3 billion every year in interest. Lender cleans a pure, legal $100 billion in 30 years. How pays it???? We all do. Inflation 7%…. like in the last 15 years – is that clear?

check real staples (food) prices – walnuts/almonds ($20 dollars doesn’t buy you a KILO).
check organic meat prices (even menonites applied a 10% increase), etc
check parking land prices… downtown Toronto (Manhattan too – skyrocketed)
check commercial RE prices – can’t toucht it! ouch
check Property Bill (6.8%)
check water BILL (9%)
check electricity BILL (9%)
check natural gas BILL (20 or 40% last april)
check labour force price – minimum 11$/h and productivity has decreased since no one expects to work for the $$$$ that has no value
check grocery total/month – mine is way larger than last year…. and just got more into frugalism…
check condo prices – even those rose 3% year
check detached housing prices 8-20% up depending on quality
==============

25 Mark on 02.13.15 at 7:41 pm
“to make the money, speculate downtown urbanites. make 50000 a condo, sell 10. you do the math”

Hyperinflation, even strong inflation, wipes out credit availability. Until credit is wiped out against RE, prices have an awfully hard time meaningfully rising in strong inflation.

hyoerinflation will rule – 7% inflation is a reality. check agro prices

The CRB index, which is a broad measure of commodity prices (not just agriculture) is at 5-year lows. Not sure how you manage to equate this with ‘hyperinflation’.

#124 M. Kolitz on 02.14.15 at 2:18 am

GT ” . . . in case I’m wrong and the walking dead arrive.”

Haben Sie Angst?

#125 bdy sktrn on 02.14.15 at 2:24 am

#104 Musty Basement Dweller on 02.13.15 at 11:50 pm
#18 westsider on 02.13.15 at 7:19 pm
This may or may not be off topic, but I give up on Vancouver!!!It is Different here!!!Friend just sold his condo in False creek for $2.2 million. He paid $1.3 million 3 years ago.
≠===================
Sorry westsider gotta call bullshit on your buddies story. Doesn’t add up from what other condo owners there are telling me. If you get the address we can get a realtor to check your buddies claim of immense profit.

——————-
agreed. and i’m pretty bullish on 604urban RE
total bs i’d say unless it comes with a freehold lot nearby in kits point!

————

april of lovely new west – check end of yesterdays blog since it seems to be bugging you ;)
smile when you read it!

#126 james on 02.14.15 at 2:28 am

#55 San Francis in Vancouver

“Every block in the area I work in is logoed with global bellwethers SAP (though German), Oracle, Microsoft, Amazon, Uber, eBay (not that cheap, useless rendition called craigslist), Apple (not the fruit, the iPhone & Mac maker), Samsung, Microsoft…”

You do know that Ebay is letting people go, Microsoft is closing out its silicon valley research division (among others). Not all is rosy there.

Are you in North San Jose near North 1st street?

“a myriad up and coming startups that are disrupting the fabric that everyone else is banking on while creating new economic paradigms.”

creating new economic paradigms???

Good lord, is this satire? Did you steal that from a 1998 book on by some dot com wizard who was arguing that this is a new economy?

Most of those companies will not make it. Some will.

“For now, I get a 20% pay rise just crossing the border and a 40% rent discount”

Rents are NOT cheaper in SFO and the South Bay than Vancouver. Where exactly are you living, Chowchilla? Turlock?

Taxes in California are horrific for high income earners. One of the reasons that I left.

#127 james on 02.14.15 at 2:29 am

#107 jerry

You fail to understand that food, most consumer goods (etc) are priced in USD. Canadians are paying more for food than they were a year ago, for instance. Given that it is one of the largest items in household budgets, this is a bad thing.

#128 james on 02.14.15 at 2:34 am

#93 45north

“I’m impressed. What about Google San Francisco – they’re there too.”

The SF offices are pretty small in comparison. The main campus is in Mountain View, with some satellites kicking around in San Bruno and the like. There’s some pressure to put a few teams in the SF office due to transportation difficulties up the 101, but the bulk of the technical staff will stay in Mountain View. It’s a critical mass thing. There are a few new buildings coming online in the same area.

#129 John Schellenberger on 02.14.15 at 2:58 am

#99 Happy Renting

“Being in Ontario, we talk about it like it’s some mythical land of huge paycheques (mythical but dark, depressing, boring…) Of course most of us haven’t been there, we’re just repeating gossip and daydreaming about better wages. I like hearing from someone actually there who can describe things first-hand and explain some of how it works. ”

Dude …you missed the recent publication of civil service wages and benefits from regions cities and municipalities across the country. There’s a thousand copy clerk many Ft Mac wages driving past you every day on their way to much better housing than you live in. Stop wondering and get a government job if you want to live off the fat of the land in Canada.

Most civil servants incomes make Ft Mac wages look like McWages by comparison.

#130 Ronaldo on 02.14.15 at 3:01 am

#102 Sean – re: permanent portfolio. I believe this is the one you are referring to which was developed by the late Harry Browne back in the 70/80’s. Read several of his books. Many of his predictions came to pass.

http://en.wikipedia.org/wiki/Harry_Browne

#131 Millmech on 02.14.15 at 3:16 am

#92 Waterloo Resident
Here is a good doomed theory for you,was watching a video on Fukushima and the amount of radiation being pumped into the ocean.The scientist was theorizing the radiation is killing the plankton which is suppose to be the largest recycler of CO2.

#132 Sean on 02.14.15 at 3:42 am

“Sean,sorry dude I didn’t see the sign saying professional investors only allowed on this blog .”

If there was a sign, you wouldn’t read it, and then you would ask a really obvious question about it in the comments.

#133 Vanecdotal on 02.14.15 at 4:21 am

#95 Washed Up Lawyer

Looking forward to your erudite Fort McMinion pithalysis.

Hopefully this is not an awkward medical procedure?

#134 Vanecdotal on 02.14.15 at 4:35 am

#18 westsider

Sniff*sniff…

Is that RealTroll™ I smell?

Suuuuure your friend made a million $ in the last 3 years on a less than adequte (first world problems) > million $ False Creek *cough* CONDO.

Doesn’t pass the sniff test, sorry. Nice try though.

Thank you, come again!

#135 Vanecdotal on 02.14.15 at 4:48 am

Yargh. “adequate”.

Barley pop fingers.

#136 macroman on 02.14.15 at 5:21 am

Garth, that was one of your better missives. Solid investing fundamentals that will work well for John/Jane Doe in an average 20-30 year economic timeline.

And you’re right about it not being a repeat of 2008…combination of North America 1932 and then Zimbabwe 2008.

The one thing John/Jane are going to see is the Doe, in the headlights.

Oh, the only element powering the next generation will be silver, so maybe those bars will come in handy.

#137 nubbers on 02.14.15 at 6:13 am

I somehow got subscribed to Harry Dent for a while. I was puzzled by just how different his views were to Garth’s, particularly on the US economy.

Eventually I got round to doing a bit of research and found out just how bad his track record was. It seems to me that he specialises in manipulating emotion and telling people what they want to hear, just like real estate agents. In retrospect it is obvious from how he structures his emails and videos.

#138 ETF investor on 02.14.15 at 6:19 am

Well Garth I was hard of hearing but now I listen, in the process of selling off all my individual stocks (Canadian Dividend stocks) and creating a balanced portfolio, 4 ETFs Canadian Dividend stocks (XEI,) bond fund, US fund and Vanguards ex Canada Fund. I decided currently to go with a non hedged US fund.

So again thank you for constantly hammering this point home

#139 Doug, back in Thailand on 02.14.15 at 8:07 am

I think what Uncle Garth is telling us here is you buy assets when they are ON SALE like oil ETFs were until recently. Recently oil has rallied to $61 for Brent Crude. So now I ask you all: where, oh where in the world, is this $20 a barrel oil?

When I heard all that nonsense about $20 earlier this week oil I was whisked through the time tunnel back to 1998 when I lived in Timmins and the “experts” said oil could go to $5 a barrel. I initially hoped that wouldn’t happen again, until I remembered how a big rainfall near the end of the month brought flows up in the local rivers. As a consequence, I had a GREAT TIME surfing that big wave (in a kayak) in the middle of Six Mile Rapids on the Groundhog River. I wouldn’t mind to relive that great experience. So go ahead with your talk of oil at $20 per barrel. Bring it on, baby, bring it on!

#140 JBCanada on 02.14.15 at 9:03 am

I am not the greatest of investors I only made 15% last year, own some gold and cash and a house. Oh yes I worry.

So my question is all this debt in the world and in Canada
What is consumer debt 170%
What should you invest to protect from global debt defaults. Going back a few hundred years almost all major superpowers of the world have defaulted on debt
What should we do as investors to protect our money.
And please do not say diversified profolio

There will be no superpowers debt default affecting your life. Get a grip. — Garth

#141 eric on 02.14.15 at 9:10 am

There is also the risk that the Fed loses control over interest rates. They may raise rates, albeit slowly, with no effects on the bond yield. Therefore, it is entirely possible that we are going the have low rates for a very very long time in Canada. Possibly negative one if deflation is real.

#142 young & foolish on 02.14.15 at 9:21 am

“That’s why the rich tend to get poorer over time, and the a new breed of smart poor tend to get rich. People get too ‘married’ to trends, especially trends that have proven to be such huge historical winners …. ”

This is true, but also somewhat disingenuous. Instead of killing a golden goose, most leverage it into new assets. It’s not as if everyone holding RE today is a loser lacking vision.

#143 young & foolish on 02.14.15 at 9:23 am

“You sell some of your bonds to re-balance your portfolio if equities drop. Hence you can realize a capital gain on your bonds and buy more equities while on sale. Investing 101.”

Correct, but it seem lost to many on this blog …

#144 Mr. Frugal on 02.14.15 at 9:56 am

I remember ebola. All of the airline stocks went on a fire sale. If you bought air canada at the peak of the media frenzy then you could have made about 75% in 4 months. The hoopla over the GM ignition switch was also a great opportunity, as was the Potash price collapse. Oh, and rememer when nobody wanted to buy Apple because they thought they were out of good ideas. That was good for a 50% move. I don’t fear bad news but I’m a little concerned when about good news. When everyone is happy, that’s a good time to set a little extra aside in bonds and wait for the next crisis.

#145 Doug in Thailand on 02.14.15 at 10:05 am

@nubbers, post 137;
Back in the later part of the last decade, I also was following Harry Dents blog. When his predictions kept being wrong, he would keep coming up with excuses to justify his wrong predictions. I’m glad to have come to my senses and seen what rubbish he writes. This blog is far better!

#146 Rabbit One on 02.14.15 at 10:47 am

> #55 San Francis in Vancouver

I agree with you, just came back from Hong Kong, Tokyo and Singapore on business trip.

Downtown core buildings in those cities are filled with business offices, not condo.
Thousands of people employed each 20 stories building, and more and more coming.
While Vancouver, new builds are all condo with No Frills downstird, rarely see new office buidlings.

Sleepy night life here in Vancouver, more Asian like activities, fine dining, world known brand shopping, and vertical surburb type Robson street which mirrors Metrotown, Richmond Centre.

I already saw a couple counter comments to #55 here, dissing life in USA, I hear this type of comment often in Vancouver, “but we are better”.

#147 NewToETFs on 02.14.15 at 10:58 am

Thanks again Garth for tasering me into ETF action. December 15/2014 was the first day I entered into ETFs after many months of indecision. I’m taking advantage of iTrade’s 50 commission-free ETF’s to swing trade. I didn’t even know what swing trading was three months ago. I have realized $7k in gains in two months (almost 5%) and I can’t believe I waited so long to invest, I have the iTrade app and do my morning trades on the train ride to work. Loving it

#148 NewToETFs on 02.14.15 at 11:09 am

@ #106 Crazy like a fox:

*tips hat in admiration*

#149 NewToETFs on 02.14.15 at 11:17 am

@ #22 Dee

I understand the feeling! (Finally on the road to financial independence.) Keep up the great work!

#150 Bob C on 02.14.15 at 11:18 am

Ok ok I’ve got no comeback. Talk about someone else.

#151 AB Boxster on 02.14.15 at 12:15 pm

#122 Carousel

——————————————

Yes,

And all the million dollar shacks being bought in Torana are ‘worth it’ because this time its different.
We’re so much smarter than them folks of years ago.
I mean golly, we all have ipods and the inkanet.

And the huge amount of debt being held by the average Joe is ok, because this time it’s different.

Consider this, the longest lasting ‘fiat currency'(paper) is under 100 years old. The American dollar has lost 93% of its value since it was issued in 1913.
Human history is littered with the remnants of currencies that have failed.

Interestingly, though, gold has endured.
Throughout the entire history of mankind, gold has endured. Gold has not lost 93% of its value since 1913.

I’m not a gold nut, and Garth Turner is right that playing it as part of a portfolio that you are trying to grow and manage in today’s shell game of a global economy, is a fool’s game.

But if you believe that only paper will get you through any currency crash, or protect you against the forces of inflation/deflation because ‘this time it’s different’ then your welcome to your paper.

And if you think that Garth Turner, (and frankly anyone that has any real wealth of any kind, and who knows anything about the state of world’s current financial mess and understand the history of economics) do not hold gold bullion (not paper, because when you need gold, gold paper is worthless) then I have some really cool Italian and German paper currency from the 1940’s to sell you for a great price.

It’s printed by the government, has numbers on either side, and the paper is great quality.

in the 1940’s one day people were using it to run their economies, and the next day they were using it to wipe their butts.

But I’m sure this time it’s different.

#152 Baconater on 02.14.15 at 12:21 pm

If you’re still worried about Mad Cow beef after Garth’s reassurances, just eat Bacon!

#153 Vancouver Troy on 02.14.15 at 12:41 pm

Garth, I am still confused about the portfolio that you suggest which yields 3.3%. If inflation is 2% my real return is 1% a year which isn’t enough to live on in retirement.

What’s wrong with a diversified portfolio of dividend stocks that raise their dividend regularly? A higher yield without selling shares.
With your portfolio wouldn’t I have to sell ETFS to bring in enough money to live on. What if I outlive my assets?

Yield is not total return, only the guaranteed fixed income payment. — Garth

#154 TurnerNation on 02.14.15 at 12:47 pm

Why buy gold and hold cash? You’ve lost 7 years of easy gains in Index funds, Bonds, REITs.

I’ll only brag ever about my balanced port, the thing I can control. #ChancellorRebalancer

Since January 1, 2015 7.3%
For the past 1 year 20.6%
For the past 3 years * 9.0%
For the past 5 years * 6.0%
Since October 17, 2008 * 7.4%
* Annual compound rate of return.

#155 zedgt87 on 02.14.15 at 12:50 pm

Lol Garth, your just as bad as the doom sayers. You say with such conviction that the crisis has passed despite huge amounts of evidence to the contrary. Fact is no one knows what will happen. But there are massive malinvestment bubbles everywhere you look thanks to 6 years of unprecednted stimulus. How those unwind remains to be seen. Your naive if you think everything is awesome.

You are wasting your days worrying about things you cannot control and scenarios that will likely not occur. Foolish. — Garth

#156 not 1st on 02.14.15 at 1:10 pm

Garth, you are nice guy and all trying to help people, but you are whistling past the graveyard.

Its not Marc Faber, or ebola or putin or ISIS or oil or calgary housing we need to worry about.

Its the convergence of debt, insolvent programs, population, demographics, climate change, inequality and automation which will render the most disruption.

The first world has now joined the 3rd world with massive unpayable debts and instead of a young angry unemployed population, we have a geriatric “break the bank” entitlement population increasing by the day.

Now fast forward 10-15 years when automation takes a big bite out of the workforce. Vast swaths of squatter populations who cannot return to the countryside will result. All while we add another 2 billion people and climate change creates roaming walking dead. At the same time we are trying to support our walking dead geriatrics here.

The stock market has seen a lot of shocks but hasn’t seen this one and its coming.

Always surprises me how people believe they live in the worst of times, when they are demonstrably the best. — Garth

#157 For those about to flop... on 02.14.15 at 2:04 pm

Always surprises me how people believe they live in the worst of times, when they are demonstrably the best. — Garth
As one of the lowest earners on this blog I keep telling myself to run my own race and not try to do anything fancy.
I would like to earn a higher wage but at the end of the day I ask myself these questions.
Do I have a decent shelter.YES
Do I have enough food.YES
Do I have enough clothing .YES
Do I have decent health .YES
Do I have enough money to buy life’s necessities. YES
In the whole scheme of humanity I have it better than half off the people on this planet so I am grateful for what I have.
I am only worried about what I can control.

#158 Mark on 02.14.15 at 2:10 pm

“Instead of killing a golden goose, most leverage it into new assets. It’s not as if everyone holding RE today is a loser lacking vision.”

Actually most “leverage it” into more RE, instead of diversifying. That’s how we end up with legions of people with 2 or 3 rentals in their “portfolio”, but barely a common stock to be had (for instance).

The same happens with people who have done very well with stocks.

Now, when I say “poor”, these people can remain very wealthy, but by holding assets that are well beyond their peak, and by not rebalancing, a lot of potential wealth creation is left on the table.

Even adopting dogma such as “gold is just a bunch of shiny rocks” can be very dangerous to long-term wealth creation/preservation, as there are times in the economic cycle where gold does severely outperform.

#159 Cautious on 02.14.15 at 2:14 pm

My current strategy is to buy prefs outside of registered investments and only start buying after both my wife’s and my TFSAs are full. I’ve started adding bonds to my RRSP portfolio via the bond index fund offered through my pension plan (defined contribution of course). I understand Garth’s position on holding bonds, i.e. not for yield but rather for appreciation as a safe haven asset. There may be buying opportunities for prefs and bonds, as well as for REITS, in Q2 or Q3 this year when the FED decides to up the interest rate a symbolic 0.25%. (This change is immaterial in reality, but the market is spooked easily.)

Given the commencement of QE in the Eurozone as of
March, I’m adding Euro-centric equity ETFs (hedged against the devaluing Euro).

#160 Perm Dude on 02.14.15 at 2:29 pm

http://moneytreepodcast.com/mti0024-andrew-hallam-permanent-portfolio/#.VN-Po_nF_wt

Here is a good podcast on the permanent portfolio for the “metal heads” out there. I wonder why Garth doesn’t endorse this type of strategy.

Unbelievably naive. — Garth

#161 charles on 02.14.15 at 2:33 pm

Garth is right for those with faith in a system based on avarice and winners and losers. For those with a desire for honest money and true wealth free of debt foundation there is only one choice.

Celibacy? — Garth

#162 TurnerNation on 02.14.15 at 2:40 pm

Just once I wish we could last a week in this pathetic comments section without mention of Fiat, Flouride, or Flaccidity.

#163 Debtfree on 02.14.15 at 3:48 pm

@89 OT when the disasterous earth quake happened in Haiti ,after just one day , the most valuable thing was not gold but tooth paste . It was used by survivors to smear above their upper lips and in their nostrils to mask the smell of death . Have you ever heard of mutually assured destruction otherwise known as the mad treaty . Somebody invent goldbug spray , please .

#164 NoName on 02.14.15 at 3:49 pm

of topic but something to worry about for all!

How pr is killing journalism.
http://goo.gl/wy7Fs9
“While no one will be surprised that a journalist finds this troubling, the shift has real and significant consequences for public welfare and the right to know. Imagine if the story of the Deepwater Horizon spill had been controlled by BP or Halliburton.”

21st-century censorship.
http://goo.gl/Hp3erZ

Should journalism worry about content marketing?
Corporate brands now compete for audience with an aggressive storytelling strategy
http://goo.gl/8Iqk2s

let me see did I get this right, Braid goes to Egypt mid January and works out a deal to “free” ~wrongfully detained “Canadian” journalist, mid February ~wrongfully detained “Canadian” journalist is released on bail, and he is waving Egypt’s flag inside of a very “same” Egypt’s institution that ~wrongfully detained him for more that a year.
I think that is time for Canada to follow Germanys foot steps when it comes to citizenship. but that just my humble opinion…

#165 For those about to flop... on 02.14.15 at 3:50 pm

SOMEBODY HELP ME!
I asked a question last night about how much of someone’s net worth they should have in the market.
I was subsequently trolled but in the meantime I have been unable to find the rule of 90 post .
I typed it in the box but only found mentions of it not the actual explanation .
I thought the rule of 90 was for real estate ,obviously I was wrong .
Steer me in the right direction someone .
Thanks in advance .

#166 kommykim on 02.14.15 at 3:52 pm

RE: #156 not 1st on 02.14.15 at 1:10 pm
Now fast forward 10-15 years when automation takes a big bite out of the workforce.

I don’t know why people see this as a bad thing. With the proper economic model in place, we could be living in the “Star Trek” economy. Automation have given us all kinds of things that the average person could not afford if it had to be fully assembled by human hands.

#167 Oil Is Sticky on 02.14.15 at 3:54 pm

And, trust me, there is no 2008 re-rerun coming. No Ebola on your street. No broke banks or bail-ins. No $28 loaves of bread. No depression. No market collapse. The risk was six years ago. Get over it.

—–

Care to put a wager on that? $1000 to the charity of your choice if we do NOT see the downturn of the economy worldwide in the next 12 months.

None of the above will occur in lifetime. — Garth

#168 Obvious Truth on 02.14.15 at 3:56 pm

I just paid $6.75 for some nice baked sourdough. Smelled too good to pass up. And way less than $28.

But dempsters with all kinds of healthy seeds is still $1.99 on special. Whole chickens $8.

It’s everything chicken week around here.

Best of times indeed. Except the kids are already doom and gloom about it.

It’s all about perspective.

#169 TurnerNation on 02.14.15 at 3:57 pm

Lots of people working in very low wage retail and server jobs. But they’re free we don’t have slavery right?

Even though almost 100% of their income flows back to their Masters for privilege of working in the plantation groves.

Rent goes to REITs.
Cell/Cable TV bill goes to Bell or to Shaw and Rogers family billionaires.
Groceries go to Weston (Loblaws, Shoppers Drug) or Pattison family billionaires.
Oil/Gas purchases funds Saudi terror regime.

You are free to leave at any time! Hard work brings freedom.

#170 Oil Is Sticky on 02.14.15 at 4:00 pm

Now fast forward 10-15 years when automation takes a big bite out of the workforce. Vast swaths of squatter populations who cannot return to the countryside will result. All while we add another 2 billion people and climate change creates roaming walking dead. At the same time we are trying to support our walking dead geriatrics here.

The stock market has seen a lot of shocks but hasn’t seen this one and its coming.

Always surprises me how people believe they live in the worst of times, when they are demonstrably the best. — Garth
———

Garth technology makes life cleaner and with more vanity. But it does not make it necessarily “better”.

We are taxed much much more than we were 20 years ago (I’m 45) especially here in BC and life has never been so difficult. Every month its a different bill or expense or fee or something we did not plan for. A $100 parking ticket. A new bridge toll. Rising in MSP premiums. For us in the private sector with NO raises or pensions, living is getting much more difficult. Yeah medical technology is awesome. Well….I’m not going to “get sick” just so I can test it out !!!!! You need to come down from your mansion sometime.

Why did you destroy the validity of your comments with a slur? — Garth

#171 Wild roasted nutz on 02.14.15 at 4:01 pm

Well Isis wants to issue gold coins again…. so yeah there you have it.

#172 Andrew Woburn on 02.14.15 at 4:01 pm

A commenter recently posted an article by the Andrew Coyne of the Financial Post. Coyne said the evils of deflation are being exaggerated to support policy changes desired by TPTB. His point was that severe deflation is damaging but that the minor price decreases we are likely to see are not. Coyne may have some perspective on this as his father was the second governor of the Bank of Canada.

The part about the deflation flap I am not understanding is if governments are actually worried about this, why don’t they just print more money and spend it on wages and infrastructure? It appears I have company. David Rosenberg is chief economist and strategist at Gluskin Sheff & Associates Inc. He says:

“What Ottawa should have done, in my opinion, is to stop wearing fiscal balance or surpluses (when you count in the $3-billion “contingency” reserve) as some badge of courage, and start to fiscally reflate. The economic impact would be felt immediately and there are no losers.

The government could announce today a $25-billion “shovel ready” infrastructure program that would offset the capex plunge in the resource sector – and guess what? The federal debt-to-GDP ratio (32 per cent) would not budge one iota.

This would be a far more effective response and with a far more powerful multiplier impact.

If I really thought that currency devaluation was the answer to a private sector capex shortfall, I’d say so. But Ottawa would be better off filling the private sector capex hole with a public-sector capex program. There just has to be the political will.

When you have a government that has a Tea Party mentality when it comes to government spending, it’s obviously a difficult proposition.

That said, you do not have to be a Keynesian to realize that now is not the time to be focused on fiscal balance.”

(Paywall)
http://www.theglobeandmail.com/report-on-business/rob-commentary/rob-insight/dear-ottawa-fight-the-fire-with-fiscal-force/article22986459/

#173 kommykim on 02.14.15 at 4:05 pm

RE: #153 Vancouver Troy on 02.14.15 at 12:41 pm
With your portfolio wouldn’t I have to sell ETFS to bring in enough money to live on. What if I outlive my assets?

Read this page:
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/
It’s not 100% perfect, but it’s a good start.

#174 Andrew Woburn on 02.14.15 at 4:11 pm

Apparently our dollar is a peso after all.

“Why Is The Dollar Sign A Letter S?”

http://observationdeck.io9.com/why-is-the-dollar-sign-a-letter-s-1683940575

#175 NoName on 02.14.15 at 4:19 pm

#EI
they could do it online as I did, but waiting in line is more exciting I guess….
http://goo.gl/DSwHLc

how to divvy up 500k “right” way
(some bad language)
http://goo.gl/aBfMkr

#176 Bottoms_Up on 02.14.15 at 4:20 pm

#166 kommykim on 02.14.15 at 3:52 pm
—————————————————–
We all know how the US is steaming ahead with job creation.

BBC news did a piece last night of how jobs are coming back to the USA…factories are moving from China and India, and restarting in the USA, with the caveat of more automation instead of just sheer numbers of employees.

It’s the best of both worlds, automation to achieve efficiency, and ensuring Americans have jobs.

#177 Andrew Woburn on 02.14.15 at 4:26 pm

#95 Washed Up Lawyer on 02.13.15 at 11:15 pm
Dogs, let me know if you want my pithy analysis tomorrow. It has to do with a shortage of land (can you believe it??)
=====================

We are all disappointed that you are not going to take the pith out of Fort McMoney.

I did have the pleasure of a brief visit there a couple of years ago. I suppose I was expecting some kind of labour camp two steps up from Tobacco Road but it appeared to be a pleasant enough small town with all the usual amenities.

I drove up from Edmonton so I got a first hand look at the pristine boreal forest that is being raped by greedy oil companies. At least I kept looking for it. All I saw was endless quasi muskeg, great for water fowl, with not a lot of vegetation. Is that why there isn’t much land?

#178 Oil Is Sticky on 02.14.15 at 4:38 pm

Why did you destroy the validity of your comments with a slur? — Garth

—–

I apologize if you feel that way. I guess I was put off by by seems like your view that life is lollipops and unicorns. Any news service around the world will show you its not. And it seems that every other day (in BC anyway) we are being told about another tax increase.

We are most certainly not living better when we cannot afford anything except food, water and shelter. Especially when the food is less safe – GMOs and chemical processing. The water is less safe – full of chlorine. And the shelter is less than adequate – glued garbage made of sawdust leaching formaldehyde.

Pissing on me won’t make your life better. If you don’t find this (free) blog useful then bug off. — Garth

#179 palebird on 02.14.15 at 4:43 pm

#170

Exactly why I would never live in BC again unless there were major changes. Try getting divorced in BC and see how that works out for you.

#180 Washed Up Lawyer on 02.14.15 at 4:43 pm

OK, so how has the shortage of available land for development hampered the expansion of Ft. McM? Yesterday I described it as a shortage of land. That is not the correct picture. In every direction you look there are hundreds of miles of boreal forest. It is more an issue of availability.

To start with there is a miniscule amount of privately owned land on the outskirts of Ft. McM. Almost none. There are no farmers and ranchers up here waiting for a lavish retirement fund from a developer.

The land is all provincial Crown land. So what you ask. The subsurface minerals (bitumen) has all been leased to oil sands ventures. All of it. Right up to the existing boundaries of Ft. McM. Urban development, whether residential, commercial or industrial is incompatible with oil sands development.

For obvious reasons, the priority of the provincial government is extraction of the oil hence a refusal to make land available to the municipality for urban development.

As a result, there has been a decade plus of a shortage of developable land for urban purposes. This has affected house prices and rental rates which have been exacerbated by population growth rates not seen anywhere in this country. Those who are interested on the socio-economic pressures in the region can review the Suncor/Voyageur Upgrader decision (2006?), the TOTAL/Joslyn North Mine decision (2012?) and the Shell/Jackfish Mine Expansion decision (2013?) on the website of the Alberta Energy Regulator.

The logjam may have been broken in the summer of 2013 when the provincial government agreed to make 22,000 hectares available for purchase by the municipality.

It has cancelled all of the mineral leases on those lands and now must compensate the oil sands companies for the losses of those leases. That compensation program (the details of which I have not investigated) is underway and claims are being filed. It will cost hundreds of millions of dollars I expect.

#181 NoName on 02.14.15 at 4:45 pm

@#165 For those about to flop…

http://www.greaterfool.ca/2012/04/13/the-trouble-with-women/

#182 Debtfree on 02.14.15 at 4:51 pm

@170 ois want to be proactive on the MSP front ? Go to bc Green Party site and sign andrew weaver’s petition . He knows how unfair BCers are being treated , specially our poor , children and elderly . Andy is the only one addressing this issue . Or you could just sit and whine about it like most . Your choice .

#183 Debtfree on 02.14.15 at 4:58 pm

Garth , what is the minimum account size that you will handle as a fee based advisor ?

This is not a commercial site. I have emailed you. — Garth

#184 Smoking Man's Old Man on 02.14.15 at 5:18 pm

My balanced and diversified managed portfolio is at it’s highest level as of close Feb 13th. It closely follows the recommended weightings that Garth suggests.

Not bragging, I live very simply, just illustrating first hand that this strategy, despite all the uncertainty in the world has proven successful.

I’m very frugal, but I believe it’s money well spent to have your account professionally managed. It is my largest monthly expense and I’m fine with that given the peace of mind it affords.

#185 Casual Observer on 02.14.15 at 5:31 pm

#102 Sean on 02.13.15 at 11:48 pm
#130 Ronaldo on 02.14.15 at 3:01 am
#160 Perm Dude on 02.14.15 at 2:29 pm

Whether or not people believe it, Gold behaves as a real asset that provides diversification and is often negatively correlated to the growth assets found in most portfolios.

It should not be treated as a religion.

I commented about how I structured part of my investments along the lines of the Permanent Portfolio here…
http://www.greaterfool.ca/2014/06/22/stress/#comment-310993

I’ve been very happy with the results. With Gold essentially flat during 2014, the portfolio’s annual return was still 9.1% in USD terms (higher in CAD terms).
http://www.crawlingroad.com/blog/2015/01/01/permanent-portfolio-returns-2014/

Even in 2013, with Gold down nearly 30%, the total portfolio was only down by -2.4%.
http://www.crawlingroad.com/blog/2013/12/31/permanent-portfolio-2013-results/

CAGR over the 40 years between 1972-2012 has been 9.6%, with the largest annual loss being around 4% (1981).
http://www.crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/

During 2008, with the stock market crashing 37%, the Permanent Portfolio was only down by -0.7% as measured by the indexes. If measured using ETFs (VTI, SHY, TLT, etc.), the 2008 return was actually up by +1.97%.
http://www.crawlingroad.com/blog/2009/01/01/permanent-portfolio-results-2008-a-disaster-averted/

That’s real diversification. Correlations can change over time. The assets in the PP were chosen for their simplicity, and for how they react to different economic conditions.

Consistent returns with minimal volatility. What’s not to like? Just don’t forget to re-balance.

#186 Washed Up Lawyer on 02.14.15 at 5:36 pm

#177 Andrew Woburn

Yes, Ft. McM does have its attributes:

1. The majority of people obey the “No Spitting” signs at the mall.
2. Motorists stop for me on the main drag, Franklin Avenue, when I jaywalk. (must be a laid back East Coast thing – try that in Calgary and you will be handed a ticket for jaywalking as you are wheeled into the ambulance).
3. The highest per capita money donations to the United Way in Canada.
4. Average household incomes which are probably double Canada’s.
4. Jobs. My son has applied for a manual labour position paying $35.00 per hour together with $12,000 annual living allowance. Hope the scrounger gets it.
5. A school system with 29 different languages spoken. Unbelievable diversity with people from all over the globe who came here to improve their circumstances. Motivated and educated people who are happy to be here and smile and laugh a lot.
6. Citizens and families highly dedicated to the community, social profit groups and public endeavours.
7. Lousy tobogganing May through September.

I could go on but short and snappy is the way to go on this site. The little city is rough around the edges. What boontown/mining town is not? It gets a bad rap in the media but from what I read the DTES in Vancouver and Jane and Finch in Toronto ain’t too hot either.

#187 DisgustMadeMePost on 02.14.15 at 5:49 pm

Re # 183… Ditto Garth… Not sure what services I need.
But want to feel a little less naked.

Thanks

#188 Julie K. on 02.14.15 at 6:28 pm

Garth, I have same Q as #183 Debtfree re minimum portfolio you will work with & your fee.

As great as the free DIY knowledge/lessons available here and elsewhere are, I’m aware that at my tender boomer age there is not enough time left to recoup losses if (er….more likely when) I mess up. Still red in the face from buying ~ 200 shares of Ballard Power @ $120 back in ’99 — inside my RSP. Soothe myself with fact I still hold those shares, so I haven’t really lost my $$$, right? Ballard is going to make a comeback one day soon…right? ;)

Yeah, I need professional help.

#189 Darryl on 02.14.15 at 6:30 pm

#160 Perm Dude on 02.14.15 at 2:29 pm
http://moneytreepodcast.com/mti0024-andrew-hallam-permanent-portfolio/#.VN-Po_nF_wt

Here is a good podcast on the permanent portfolio for the “metal heads” out there. I wonder why Garth doesn’t endorse this type of strategy.

Unbelievably naive. — Garth
————————————————

Funny
When Garth and Scott moved from Wellington West to Raymond James I was still at WW for a while .

The new guy tried to flog this one at me.
I said no to that by the way. I think it was 25 or 30 percent gold if I remember.

#190 Roasted wild nutz on 02.14.15 at 6:50 pm

#178 Sticky oil

Unchlorinated public drinking water… yeah go for it… please buy your own antibiotics, and you’ll need some vaccines likely as well, to deal with the aftermath.

#191 A box in the Sky on 02.14.15 at 6:51 pm

#165 For those about to flop… on 02.14.15 at 3:50 pm

SOMEBODY HELP ME!
I asked a question last night about how much of someone’s net worth they should have in the market.
—————————————–

Personally I keep 3 months living expenses in cash and put everything else into the market.

I’m single though. I think if you’re married with kids you should have 6 months living expenses in cash, the rest should be invested.

An emergency cash reserve is a poor idea. That is what God made LOCs for. — Garth

#192 Roasted wild nutz on 02.14.15 at 6:55 pm

How come Smoking man’s old man can spell? mysteries of the universe.

#193 lurker on 02.14.15 at 7:07 pm

Thanks for the great site Garth.

I was racing to pay off my house (I’m about 2 years out), but have now slowed down in order to catch up and max out my RRSP’s and TFSAs. Making sure my net worth isn’t too concentrated in my house.

Now that I’m close to 200k in investments, I can see the roughly 6% annual gain happening in real time, every few days I’m up another few hundred dollars. It’s great! It was hard to see with only 50k invested.

Thanks for keeping my head straight. This blog is a real service to those of us who follow it.

#194 Bottoms_Up on 02.14.15 at 7:36 pm

#165 For those about to flop… on 02.14.15 at 3:50 pm
———————————————————–
the rule of 90 is 90 minus your age = percent of net worth that should be in real estate.

this rule is really only applicable to those that have significant real estate equity, to ensure they are not overweight.

#195 Bottoms_Up on 02.14.15 at 7:40 pm

#157 For those about to flop… on 02.14.15 at 2:04 pm
————————————————————
my friend you are probably better off than more than half that is for sure.

he who dies with the most money wins right? :)

#196 Smoking Man on 02.14.15 at 8:16 pm

An emergency cash reserve is a poor idea. That is what God made LOCs for. — Garth
….. Wrong

Fx trading ha…

Locs are good for Syndicated commercial mortgages..

It’s a Smithski but relatively safe.

My God damn alien DNA keeped my from two wrecks on the 401 on my quest for Windsor, my wife counted 84 cars in the ditch from London to Windsor..

That road is a beast..

#197 Smoking Man on 02.14.15 at 8:18 pm

#195 Bottoms_Up on 02.14.15 at 7:40 pm
#157 For those about to flop… on 02.14.15 at 2:04 pm
————————————————————
my friend you are probably better off than more than half that is for sure.

he who dies with the most money wins right? :)
…..

Wrong, who spends someone else money wins, just look at Greece.

#198 Andrew Woburn on 02.14.15 at 9:00 pm

#186 Washed Up Lawyer on 02.14.15 at 5:36 pm
I could go on but short and snappy is the way to go on this site. The little city is rough around the edges. What boontown/mining town is not? It gets a bad rap in the media but from what I read the DTES in Vancouver and Jane and Finch in Toronto ain’t too hot either.
==========================

Nothing you read can prepare you for the reality of walking through the Downtown East Side. It looks somewhere between those paintings of destitution in the streets of 18th century London mixed in with an old fashioned mental asylum. It is also partly a zoo as middle-class drivers roll through gawping with their doors locked. You wonder how the backstreets of Bombay could be worse. You wonder how this can happen in a G8 country and then you realize that perhaps people now have a human right to shoot up in the street and defecate in doorways. They just don’t have the right to effective mental health care.

I have walked my children through, in broad daylight of course, to show them how much fun you can have with drugs. On the other hand, in its own way, this is still a community, albeit of sad and vulnerable human beings. I have met the locals helping out at a drop-in centre, and through friends who had an artists studio there, and found most to be more sad than crazy. I have seen the people clustering on flat roofs at dusk to avoid sleeping in the alleys, hoping to find a heating vent to curl up to. I met a twenty something man, quite functional, who had never been to Kitsilano even though he could easily walk there. It was as if there was a invisible wall around the area. Maybe there is.

#199 For those about to flop... on 02.14.15 at 9:12 pm

Thanks” bottoms up ” for trying to help.
I should have made it clear does the same set of rules work for the stock market/ ETF’s ?
Have a good evening.

#200 Smoking Man on 02.14.15 at 9:25 pm

Nothing but silence from Ashman, he’s got a wired expression on his face,_#2012 10 14224355666666669666665665²56ⁿ64555/3

The F-en bastard is hiding a secret. Q a Q
Back on Nictonite we can read each others minds. When on a military mission, they insert a chip into our heads, prevents us from reading each others minds, it’s a precaution in case one of us gets captured and torcherd, we can’t give up the others. The chip controls our power, personal flyer’s, head explosions, giving the old back their youth. It makes us Gods. The scientist back home who invented it never even when to school. He was somewhat a wierd. They say he drank from dawn to dust, experimented with every drug our planet had.

…….

I just wrote this, BA ha.

Trying to figure out what this means..
CIA, NSA, MOSSAD.. Can you help out.

8:20 and I’m shit faced…

CSIS Notice how your not included..
Dudley Doright ring a bell..

Dogs, a blond not a day over 50 is eyeing me up…

I’ll give you a report in morning.

#201 Mister Obvious on 02.14.15 at 9:30 pm

#198 Andrew Woburn

Several years back the provincial government of BC legislated an end to mental illness.

Many facilities were closed since it was judged that abused souls with profound psychological problems coupled with savage addictions would be better served “within the community”.

The sea of sad human wreckage you see in the downtown east side of Vancouver grew significantly as a direct result.

No politician has ever been brought to task over this travesty. Our PM’s advice to them all: “just say no”.

#202 Wildroasted Nutz on 02.14.15 at 9:32 pm

These are the sorta follks who are gonna take it all down down down….

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/glass-half-full-for-young-couple-with-time-to-save/article22990420/

#203 Washed Up Lawyer on 02.14.15 at 9:42 pm

#198 Andrew Woburn

If you are not supplementing your income with your writing ability, you should be. Well crafted

When I attended UBC (’79 – ’83) we used to tie on a feed bag for a cheap lunch of fish and boiled potatoes at “The Only” restaurant which, I think, was amidst the union halls. Was that in the DTES?

My hockey teams drank beer at the Cobalt. At least the carpet there did not smell of diesel like the railway taverns of Edmonton.

#204 palebird on 02.14.15 at 9:55 pm

#198

I guess you have not been to the backstreets of Bombay?
If you are from Canada then India will , quite literally, blow you away. You won’t be the same, not if you walk the streets. And that goes for an awful lot of the third world. Everything is for sale and people on the streets are desperate.. Vancouver’s problems are first world problems. Big difference.

#205 Smoking Man on 02.14.15 at 10:00 pm

http://dyslexicsmokingman.blogspot.ca/2015/02/i-snaped-this-in-vegas.html

I took this pic in Vegas, it’s going to be the book pic..

I’m the green guy…

#206 Smoking Man on 02.14.15 at 10:29 pm

Shit, I almost forgot..

Mom, happy birthday, you would have been 95 today.. Miss you.

Dad’s ok, he’s lost his mind along time ago. Dosent know your gone.

There is a God I’m thinking..

Hope all is cool, how’s mark, I know he’s cool, but damn. His folks are deviated.

I know mark was one kid from one cool family, witnessing the devastion the people that knew him, pisses me off. Why did they not take vampires.

I’m thinking about John McCain, Harpo.
Dieing to send other people’s kids to die in the name of a ideology that guarantees a better than average pension for them.

Rulers of the world, you all see the little orange orbs, Flying illegal in your air space.

Thats us,, your Roswell experiance, nothing compared to Smoking Man, Charles Ashman, Jeremiah Jones, and let’s not forget, Blithe Barrington..

Day..

We’re coming for you…. Gauranteed..

#207 EL James on 02.14.15 at 10:41 pm

Fifty Shades of Garth……..

His voice is dark and husky like dark melted chocolate fudge caramel….or something.

I can’t wait to see his b-log everyday. I refresh my screen from 6 p.m. onwards, tantalized by what he might write, and be wearing while writing it. Then it happens.

And from a very tiny, underused part of my brain – probably located at the base of my medulla oblongata near where my subconscious dwells – comes the thought: He’s here to see you.

His tone is so…so directorial, his usual control freak. I imagine him as an old-time movie director wearing jodhpurs, holding an old-fashioned megaphone and a riding crop. The image makes me laugh out loud.

My stomach somersaults – he wants me, in a weird way, true…, but this beautiful, strange, kinky man wants me to read his blog…and what else?

I’m all deer/headlights. moth/flame, bird/snake…and Garth knows exactly what he’s doing to me.

My very small inner goddess sways in a gentle victorious samba.

Then Garth writes about moist virgins and house horniness. I feel the color in my cheeks rising again. I must be the color of The Communist Manifesto. (Much like many yearning millennials posting on here)

I think of Garth as he steps off his Harley before writing his odes to us each day. He steps out of his Converse shoes and reaches down and takes his socks off individually. Garth Turner’s feet…wow…what is it about naked feet?

I flush at the waywardness of my subconscious – she’s doing her happy dance in a bright red hula skirt at the thought of being his reader.

Happy Valentine’s Day, Garth – we can barely wait until tomorrow, the sweet anticipation :)

#208 Musty Basement Dweller on 02.14.15 at 10:47 pm

There are so many similarities between our present real estate game and a Ponzi scheme. Just read the attached article and substitute real estate agent and house or condo as appropriate. From The Globe and Mail:
http://www.theglobeandmail.com/news/alberta/jury-finds-calgary-men-guilty-in-multi-million-dollar-ponzi-scheme/article23004620/

Via The Globe and Mail’s Android app

#209 Smoking Man on 02.14.15 at 10:50 pm

Make up, Stilettos, perfume, Brazilian, what are they hidding. Perhaps a soul.

We all lie damn it. It’s natural.

Those that don’t understand this, your programing is complete. Your servitude complete. Your obidance certificate golden.

It took me at leased 1000 short term rental properties before I figured it out.

The holy grail of life. It’s simple.

Your a purchase or a sales men..

Ladies your secret safe with me..

Although I trade, highest bidder wins.

Shit how can I even type after 3 litters of wine and 7 Shits of JD.

Obviously I’m for another planet

#210 Godth on 02.14.15 at 11:08 pm

#198 Andrew Woburn on 02.14.15 at 9:00 pm

The castaways have to go somewhere. Those residential schools sure ring-out don’t they.

#211 John C on 02.14.15 at 11:12 pm

So why is it that some of you moron’s actually think that the Fed stopped it’s QE program?

Go to http://www.usdebtclock.org

#212 DON on 02.14.15 at 11:46 pm

157 For those about to flop… on 02.14.15 at 2:04 pm

Always surprises me how people believe they live in the worst of times, when they are demonstrably the best. — Garth
As one of the lowest earners on this blog I keep telling myself to run my own race and not try to do anything fancy.
I would like to earn a higher wage but at the end of the day I ask myself these questions.
Do I have a decent shelter.YES
Do I have enough food.YES
Do I have enough clothing .YES
Do I have decent health .YES
Do I have enough money to buy life’s necessities. YES
In the whole scheme of humanity I have it better than half off the people on this planet so I am grateful for what I have.
I am only worried about what I can control.

***********************
As I spent the good part of the last week fighting the octopus they call the norovirus I have care only about the necessities and HEALTH. HEALTH is the big one. (Dame daycare parents). Anyways…making money is good, but if your health is more important.

and to the chap who thinks all civil servants make more than Fort Mac workers…wishful thinking. Maybe at the executive levels, but not entry level to entry level. I have worked in both sectors and in good times people love the private sector and in bad times they bitch about the public sector. Can’t win.

Once upon a time a band of workers joined hands to fight against low wages and better working conditions. Did this not happen in the PRIVATE SECTOR.

Fu*K globalization and worry about you and your neighbors first, grow food, sell local *quality* products for reasonable prices and people will buy. Re-think the tools of the past and apply them to our current times.

Garth provides balanced advice – take it and move on.

#213 DON on 02.14.15 at 11:53 pm

198 Andrew Woburn on 02.14.15 at 9:00 pm

Nothing you read can prepare you for the reality of walking through the Downtown East Side. It looks somewhere between those paintings of destitution in the streets of 18th century London mixed in with an old fashioned mental asylum. It is also partly a zoo as middle-class drivers roll through gawping with their doors locked. You wonder how the backstreets of Bombay could be worse. You wonder how this can happen in a G8 country and then you realize that perhaps people now have a human right to shoot up in the street and defecate in doorways. They just don’t have the right to effective mental health care.

I have walked my children through, in broad daylight of course, to show them how much fun you can have with drugs. On the other hand, in its own way, this is still a community, albeit of sad and vulnerable human beings. I have met the locals helping out at a drop-in centre, and through friends who had an artists studio there, and found most to be more sad than crazy. I have seen the people clustering on flat roofs at dusk to avoid sleeping in the alleys, hoping to find a heating vent to curl up to. I met a twenty something man, quite functional, who had never been to Kitsilano even though he could easily walk there. It was as if there was a invisible wall around the area. Maybe there is.

************************************
Yup the invisible wall, within 5 or 6 city blocks of the posh downtown. It is weird to say the least.

I was driving by the old library with three late 20 friends (at the time). The first thing that comes to your mind is to lock the doors. Go that you are showing your children, hopefully our youth can succeed where we have become complacent.

#214 asach on 02.15.15 at 12:16 am

Doug in Thailand:

Doug, I am also in Thailand. In Bangkok to be precise. I wanted some investment advice. May be we can meet.

#215 For those about to flop... on 02.15.15 at 12:30 am

Don @212.
I wish you better health in the future.
Take care.

#216 Ozy agrees with #140 JBCanada on 02.15.15 at 12:34 am

Be on an area you can get armed and protect the street. Join a gun club. no kidding.
Know a second language
Have a passport with entrance to your escape countries.
Diamonds don’t beep at border crossings, but are hard to make liquid in a foreign place
Have property you can chop and rent in pieces and that does not look expensive…. divide it on multiple people’s names
Property is going to get confiscated when big-socialism emerges from the death of corrupt oligarchic capitalism system, be smart- invest in something governments will not confiscate (or raise taxes to DEATH on)

Success

#217 Dom on 02.15.15 at 12:54 am

#178 Oil Is Sticky on 02.14.15 at 4:38 pm

Pissing on me won’t make your life better. If you don’t find this (free) blog useful then bug off. — Garth

F-ing brilliant Garth, I love this pathetic blog!

#218 Hicksville Alberta on 02.15.15 at 1:00 am

Probably another negative vote for the Alberta and Western Canadian oil patch. Saw a late article on a U.S. market wire on friday that Conoco Philips expressed interest in selling 20% of their Western Canadian oil and gas interests.
They obviously know more than most as they are one of the biggest. Likely this “correction” has a lot longer to go but perhaps it may be only a case of realigning their interest by replacing Western Canadian stuff with other stuff they think they will be able to acquire through the turmoil.
They have quite large oilsands interests amongst others.

#219 bdy sktrn on 02.15.15 at 1:05 am

Yup the invisible wall, within 5 or 6 city blocks of the posh downtown. It is weird to say the least.

I was driving by the old library with three late 20 friends (at the time). The first thing that comes to your mind is to lock the doors.
——————————–
for all the hell it is, there is very little danger of person.
it’s very, very bad looking, but almost totally non violent.

plenty of little old tiny ladies pass right thru on the way to chinatown, no problem. always a crowd and the cops are highly visible.

you can leave the windows down, in the daytime at least.

regarding the ‘wall’, problem is, it comes down late at nite. a few select idiots of the area (many very goop ppl there too) fan out to the surrounding areas for “neighbourhood clean-up”; collecting un?(wanted) bikes , anything in your car, ladders, pressure washers, stereos etc. not sufficiently nailed down.

the upside is you know where to look for your stuff if you get hit.
the morning i looked out to see a cable cut and my bike missing (they left the daughters new bike at least) i was livid. i quickly grab my discussion stick (16oz estwing, the bmw of hammers), and take off

swear to god, i turn on to hastings at main and immediately, while still turning, bam, there it is. 2 guys and 1 gal, all with bikes, one is mine. had it back home 20 min after i noticed it missing:)

i believe the dtes is on its last legs , very expensive development encroaches an all sides. crowding out will continue. the ppl will all have to move to surrey (sorry ’bout that) 15yrs it will be cleaned out and rebuilt for working people or rich non working people. – see granville island

#220 Doug in Thailand on 02.15.15 at 1:08 am

@asach, post 214;
I’m not sure our paths will cross. I’m in Sukhothai and on Monday I will board a bus for Bangkok and fly out early Tuesday morning. The subject of oil, and how supposedly the demand for it will drop sharply in the near future, keeps coming up here. I will sign off soon and board a PETROL burning mini bus for the old historic Sukhothai city today. Tomorrow I’ll board a DIESEL engine bus for Bangkok, and board a plane that burns JET FUEL. I’ll probably use a PETROL burning taxi or tuk tuk tomorrow also.

#221 Oil Is Sticky on 02.15.15 at 1:08 am

#190 Roasted wild nutz on 02.14.15 at 6:50 pm
#178 Sticky oil

Unchlorinated public drinking water… yeah go for it… please buy your own antibiotics, and you’ll need some vaccines likely as well, to deal with the aftermath.

—–

Not all drinking water is laced with E-Coli and maybe you have heard of this stuff called ozone? Chlorine is last century but we are in …..BC so I guess it makes sense to kill people with chlorine as the bozo’s here don’t know any better.

#222 Pour another one. on 02.15.15 at 1:13 am

Well so much for the investment focus of this place… And off the cliff it goes… yikers.

#223 bdy sktrn on 02.15.15 at 2:05 am

any gamers here?
http://www.cbc.ca/22minutes/videos/clips-season-22/conservative-staffers-video-game

#224 Don on 02.15.15 at 2:10 am

215 For those about to flop… on 02.15.15 at 12:30 am

Don @212.
I wish you better health in the future.
Take care.
***********

Thank you…the fog has lifted. I know because I am starting to bitch about things again. Reminded me that all you really need is your health, and a warm place to sleep, everything else is doable.

To anyone else that gets this noro sickness. Rest, medicate, lots of liquids. But really important to rest it seems to feed off any energy you try to exert.

#225 Cara on 02.15.15 at 2:29 am

I actually LOL’ed at #207 “EL James” take on the 50 Shades of Garth.
Nailed the tripe that is 50 Shades of Gray (I weep for a culture filled with women with NO taste in literature reading poorly written porn and cheering for a man abusing his girlfriend, who then turn around and think they are “feminists”)
The comments here educate and entertain (except for Smoking Man; I can’t figure out what he thinks he’s adding to the conversation. He’s like the guy in the corner of the pub talking to himself, and the rest of the patrons ignore him as a polite gesture since he doesn’t realize how badly he’s embarrassing himself…)

Whoever recommended the book “Millionaire Teacher” THANKYOU! Ordered from Amazon, husband hadnt been willing to read anything prior, but picked it up and has already taken some steps to rebalance our savings according to the advice given.

Happy Valentines Garth, my man’s sick with the flu (not me, I got the shot)and passed out in bed, so I appreciate the evening we’ve spent together. Hopefully Dorothy won’t mind…

#226 BillyBob on 02.15.15 at 2:30 am

” palebird on 02.14.15 at 9:55 pm
#198

I guess you have not been to the backstreets of Bombay?
If you are from Canada then India will , quite literally, blow you away. You won’t be the same, not if you walk the streets. And that goes for an awful lot of the third world. Everything is for sale and people on the streets are desperate.. Vancouver’s problems are first world problems. Big difference.”

====================================

Completely true. Comparing Vancouver’s DTES with Bombay – or Kolkata – is beyond glib. That is not to minimize the struggles of the poor or mentally ill in Canada, but unless you have seen India (or the most impoverished parts of Manila, Bangkok, Dhaka, etc) firsthand you have no perspective.

You would not believe how much of the world lives.

#227 Myths on 02.15.15 at 2:45 am

Top Myths:

1. DEFLATION FEAR MONGERING: There is none in Canada. Food prices and everything a consumer buys is going up or packages getting smaller. Gas, the only thing cheaper this winter, is only 10 cents/L less. Don’t buy this drivel spewed by bankers. Wage pressure deflation; if they were worried about this then they would end all the foreign worker programs.

Reason for this fear mongering is to expand credit by propping up RE and Stock Markets.

2. THREE PARTY RACE IS GOOD: Don’t buy the MSM assertion about the federal government election being a 3 way race. The NDP will purposely be given extra coverage in order to split the NDP/Liberal vote. Don’t. Vote strategically.

3. LOW DOLLAR IS GOOD: caused by Poloz and Harper and not external forces. To help their export buddies at the expense of most Canadians.

#228 Mark on 02.15.15 at 3:11 am

Wow, comment quality sure has gone down tonight. Smoking Man, please, for the sake of the world, get some help for the alcoholism. And what’s with the tin foil hat crowd? Haven’t seen it that bad here for a long time.

#229 Derek R on 02.15.15 at 4:06 am

Rule of 90? For an explanation of this and various other Garth-related mysteries see the GarthFAQ

#230 Debtfree on 02.15.15 at 4:17 am

@216 oaw I’ve got news for you . Capitalism can operate quite nicely in every political system that you can think of . It operates in communist , fascist , imperialist , monarchist , kleptocracies , oligarchies , democracys, or any variation of the above. It ain’t going away , get with the program . get armed ? With what ? An iPhone with 911 on speed dial ? Butterfly net anyone ?

#231 Kalergie on 02.15.15 at 7:54 am

This is for all the metal heads and rock collectors. And women: http://www.cracked.com/video_19282_if-jewelry-stores-were-honest.html

#232 Doug in Thailand on 02.15.15 at 8:07 am

@asach, post 137;
I wrote a reply earlier but it got lost in the shuffle somehow. I’m not sure our paths will cross, presently I’m in Sukhothai and going by bus to Bangkok on Monday. On Tuesday morning I fly out and back home to the cold.

#233 Doug in Thailand on 02.15.15 at 8:13 am

There’s been a lot of talk lately about Canada’s slowing economy. It shouldn’t be all bad news for such a great country, so here’s something more positive. Today, February 15, 2015 is the 50th anniversary of the first time the Canadian flag we all know and recognize first flew on Parliament Hill. That’s something to be positive about, isn’t it?

#234 OttawaguyRenting Worried but not too worried still a worrier but look on the brightside on 02.15.15 at 8:23 am

Ottawa. Houses seem to sit on the market forever. I have no data to back it up.

A few house horny friends around me. “now is the time”
or as a colleague said to me this week “how are you going to retire without a house?”
I said – With Money

My LL has been subsidizing me for years. Free Property Tax – Repairs – Water
Colleague doesn’t see it.
“You could be building equity though”

Wife and I just moved some more money into TFSA this year to top it out. RRSP is income splitting and working the tax break. Nothing more.

I love the attitude I heard the other day from someone in my circle –
“how are they all doing it? 2 holidays away every year – house – nice car(s)…WHAT AM I DOING WRONG”
lmao kiddo

When you look from the outside… you NEVER really know what is going on.

House horny and renters like me
The two religions.
Both trying to be RIGHT all the time.

I won’t have the most toys at the end.
But I won’t be working till the end.

Have fun working at Home Depot at 67

#235 PR on 02.15.15 at 9:14 am

Magnifying fear …Marc Faber, Jim Rickards …predictions of a 50% market crash … So far they have an impressive track record. 100% wrong.

I am, 100%, one your side.

#236 Waterloo Resident on 02.15.15 at 9:23 am

House prices fall when people simply CANNOT afford to buy those houses. That happens either when jobs vanish and people just don’t have the income to buy those houses or keep them anymore,
OR
interest rates rise so dramatically that the same thing happens = people find they simply cannot afford to keep paying the drastically increased monthly carrying costs.

Outside of Alberta, I don’t see either of these things happening anytime soon, so the house party rolls on.

When I come to a blog like this I frequently read things about how someone is waiting for house prices to fall 20% and they will then POUNCE down and buy them all up. What usually happens instead is that these house-lusty guys go to some sale expecting prices to fall 20% but instead they get caught up in a house-buying frenzy and end up paying 20% OVER what the house is worth.

So all of those posters you see of guys saying “I cannot wait for house prices to fall” ; those are the exact same guys who will be going to the upcoming open houses at sale sites, bidding up new houses with thousands and thousands of other eager Canadian house buyers. That is why this house boom will continue another 10 to 20 years at the minimum. By then the average Canadian house price will be well over $1 Million, and the average house price in T.O. will be over $2 Million, and the average Vancouver house price will be over $3 Million.

Then the next massive recession hits, job losses come around big-time, and even though rates will still be stuck at zero %, laid-off people won’t be able to pay their mortgages, and only then will we begin to see house prices fall because unemployed people cannot make house payments on $3 Million Dollar houses.

I’m saving comments like this. They will be so precious in a year or two. — Garth

#237 carl on 02.15.15 at 9:52 am

And THIS is not a doomer website? Holy cow man. Get a grip on yourself. You can’t be that obtuse. As Michael Douglas said in Falling Down…..”Wait, I’m the bad guy?”

New Canadian definition of ‘doomer’: saying real estate will not go up forever wiping away the insanity of your borrowing. — Garth

#238 Scott on 02.15.15 at 10:27 am

Considering what Jim Grant calls the “house of mirrors” economic world the central bankers have created its difficult to see how one is to allocate wealth effectively.

With the artificial interest rates, financial repression by the central banks, and the inability to reasonably assess risk the return OF wealth becomes more important than return ON wealth.

The main point of the topic discussed above is diversification which it claims in of itself acts like a counter balancing of risk and rewards. One goes down while one goes up. While this is essentially true in rational markets operating in a natural risk assessment environment with true and natural price discovery markets neither exist today.

The unprecedented and extraordinary actions of central banks around the world have made these models obsolete. Those old models have become the veneer of the central banks confidence game. The main threat to all wealth today is devaluation. Holding any asset who derives its price tag by a fiat paper currency has in that relationship a counter party risk of devaluation. A depression in all fixed and paper asset can occur irrespective of the desperate attempts by central banks to stop it. This isn’t speculation this is in fact the long view of historical record.

Monetary systems do not last forever. Its average life span is 40 years. The current global currency wars will ultimately lead to a new monetary system based on a more reliable and globally central means of valuation other than the caprice of individual central bankers, governments, and their fiat paper.

With that perspective one needs to look beyond the recent history of asset allocations and diversification and look to more long held historical precedents in assessing risk profiles and its counterparty dependence on valuing assets and allocate accordingly.

When I see the words ‘paper fiat currency’, I stop reading. It’s called ‘money’, without which your life is grinding. I have shown you how to augment money. The rest is up to you. — Garth

#239 nubbers on 02.15.15 at 10:52 am

Perm Dude @160
I think people (including Garth) have got the wrong end of the stick about this post.

I had a listen to some of the podcast. It is actually about a ‘mechanical’ rebalancing between 4 asset classes to avoid being influenced by emotion, which is same principle as advocated on this blog e.g.
http://www.greaterfool.ca/2014/10/01/the-snooze-portfolio/

There is no special ‘gold bug’ advocacy in the podcast, it just happens that the portfolio mentioned uses 25% gold as one of the asset classes. The principle of rebalancing is the important thing.

#240 maxx on 02.15.15 at 11:00 am

#44 olderthana boomer on 02.13.15 at 8:18 pm

#15 Catalyst
“Garth may correct me but I do not believe that ETF’s, Mutuals, non-reg brokerage accounts are covered by
CDIC insurance.”

“Bad thinking. No bank will fail. BTW, investors have $1 million+ in insurance. Depositors get only $100,000. — Garth”

GICs:
100K max, per institution, per depositor. Joint deposits are protected as well. So, a couple can have for example, under the umbrella of the the blue bank (blue bank, blue trust, blue mortgage corp, etc), a total of 12 protected accounts for GICs. This covers 1.2MM. 2 single and 1 joint account per institution, or “silo”.

RSPs, same coverage.

TFSAs, same coverage.

So pushed to the limit, a couple could have as much as 2.4MM with full protection, plus TFSA coverage.
Just draw down your interest to the level of max. limit.

http://www.cdic.ca/DepositInsurance/FAQ/Pages/default.aspx#howcoveragework

Not precisely true, but highly bizarre. Besides, any couple with $2 million earning 1.5% in two dozen accounts constantly drawing off fully-taxable interest needs psychiatric help. An investor couple qualifies for far more insurance on assets with a vastly superior track record. Finally, if you ever need CDIC coverage because your bank is failing, it’s too late. What is it about this blog that makes people go to such extremes? Can’t be me. — Garth

#241 maxx on 02.15.15 at 11:15 am

#52 Mark on 02.13.15 at 8:35 pm

Its what inevitably comes after a deflationary environment that should scare the bejesus out of “savers”.

True, inflation is a scary thing indeed. However many view investing as though they expect to live forever. We need only as much as required to live out our dreams, have maximum quality of life and most importantly, find happiness, which often doesn’t involve money at all.

We also live in a system relative to others and policymakers will course-correct as much as possible to allow the mainstream a certain level of comfort, based on keeping the general health of commerce aloft. So, yes, we certainly do need to be mindful of inflation, however saving is by no means futile, nor is it the antithesis of investing.

#242 Victor V on 02.15.15 at 11:38 am

http://www.fool.ca/2015/02/13/7-terrifying-numbers-from-canadas-oil-patch/

100,000 job losses: In January, oil giant Suncor Energy Inc (TSX:SU)(NYSE:SU) announced that it was cutting 1,000 jobs, representing about 7% of its workforce. Since then, dozens of other companies across the industry have announced layoffs and hiring freezes. Worldwide, the energy sector has laid off more than 100,000 people, according to estimates by Bloomberg.

6.4% drop in housing prices: The growing ranks of unemployed workers are having a predictable impact on Calgary’s housing market. Sales are down 33% so far in February, compared to last year. The average sale price has fallen 6.4% year-over-year.

#243 Victor V on 02.15.15 at 11:52 am

http://calgaryherald.com/business/energy/ewart-oil-woes-driving-albertas-downward-economic-spiral

A report from CIBC World Markets early in the week predicted the unemployment rate in Alberta would climb 2.5 percentage points to 6.8 per cent this year — meaning more than 60,000 lost jobs — and the dire prediction looks to be increasingly plausible after Cenovus Energy and Precision Drilling revealed more layoffs…

Job cuts have become almost daily events in oilpatch with companies like Suncor Energy (1,000 jobs) and Shell Canada (300 jobs) making headlines over their staff reductions. Nonetheless, most layoffs come with little public notice.

Husky Energy, for example, announced it will reduce spending by a further $400 million Thursday would only say it had made a “small” reduction in staff levels.

Others are more forthright.

“Industry downturns are difficult for all, but they affect our rig crews more than anybody else,” Precision CEO Kevin Neveu said in a news release as Canada’s largest driller confirmed it has 1,000 fewer workers active on crews today than a year ago.

The Association of Oilwell Drilling Contractors has forecast 23,000 jobs could be lost as the number of active rigs declines with the price of oil. The Canadian Association of Petroleum Producers has said companies will cut their spending by one-third this year to $46 billion, but it only means production will grow at a slower rate of production growth than previously forecast.

#244 T.J.BONES on 02.15.15 at 12:18 pm

Sir Garth: And All

Smokingman is right!! You cannot beat the MACHINE! All we can do is limit the damage it can do to us! They can”t control all the worlds financials at once. So they can only attack “sectors”. How do we protect ourselves from them? Wait for it,’ A Diversified and Balanced Portfolio’.This is the only way to fight back! This is the only defence! Good Luck All!!

#245 Wildnut on 02.15.15 at 12:40 pm

#221

I’m fine with other methods if they are more effective/safe/cheaper…but your statement that chlorinated water is killing people is bullocks….. provide proof for such over the top doomer silliness.. there are a heck of a lot of places in the world sure would love some chlorination to keep them healthy

#246 liquidincalgary on 02.15.15 at 1:02 pm

209 Smoking Man says :

Shit how can I even type after 7 Shits of JD.

============================================

what’s that in metric?

#247 Wildroses on 02.15.15 at 1:16 pm

Boomers hit the medical circuit .. often funded by helocs

http://montrealgazette.com/news/local-news/should-medical-tourism-be-used-to-supplement-gaps-in-our-health-care-system

#248 maxx on 02.15.15 at 2:21 pm

“Not precisely true, but highly bizarre. Besides, any couple with $2 million earning 1.5% in two dozen accounts constantly drawing off fully-taxable interest needs psychiatric help. An investor couple qualifies for far more insurance on assets with a vastly superior track record. Finally, if you ever need CDIC coverage because your bank is failing, it’s too late. What is it about this blog that makes people go to such extremes? Can’t be me. — Garth”

WADR, people may do whatever they want, whenever they want with their wealth, whether or not it pleases you.

….and CDIC is not a bank.

http://www.cdic.ca/CDIC/Pages/default.aspx?gclid=CPHCy67I5MMCFQePaQodhn8ASw

Of course not. CDIC is a federal agency without enough capital to cover deposits at a single bank. As I said, if your bank is failing and you need CDIC to protect you, it’s already over. — Garth

#249 Edmontonian on 02.15.15 at 2:26 pm

RE: #114 For those about to flop..

in the 1990s the Conservative Government of Alberta cut everyone off welfare, and rolled back the welfare rates to those below 1970 levels (it was reduced to $425 a person and still is today I believe). They gave welfare recipients cash and a bus ticket to B.C. if they would leave Alberta. I heard over 500 took this.

The saddest part of these times by THE CONSERVATIVE GOVERNMENT of Alberta was the cuts to disabled people, people in paralyzed, blind people, mentally handicapped and those brain damaged were cut off of all funding, and did not have a penny for living expenses. The Conservative Government of Alberta forced them to make appointments for interviews to prove they were disabled. it often took over a year to get back on AISH (the funding for the Disabled). I remember walking to work in the morning and seeing a blind man running into traffic trying to take his own life, he was so scared with no money for food. They even had to put up fencing on the high level bridge in Edmonton, as many suicides started as they mentally ill couldn’t often couldn’t handle the stress of these actions. Even today in the Edmonton Area, the mental Hospital has a lot less beds open than it did 25 years ago for the mentally ill, and they have been forced to live on the street in homeless shelters, our downtown is not a pretty sight sometimes, as these poor souls wander the street, and are often persuaded to get on drugs to “escape”.

In the end the Government was sued by a lawyer representing a portion of those cut off, and it costs the government a fortune, I don’t think the welfare recipients were a part of this lawsuit that won against The Conservative Government of Alberta.

#250 HogtownIndebted on 02.15.15 at 2:54 pm

So much for living in a democracy. First they forced back Air Canada workers, now this. Aren’t these private companies and unions?

http://www.ctvnews.ca/business/ottawa-to-introduce-legislation-to-end-rail-strike-cp-source-1.2237078

If they seize the moment, the NDP might make some hay out of this.

Whether it is the TFW program or curtailing collective bargaining rights or income splitting for the wealthy, it’s hard to remember a government so blatantly against the middle class of this country.

#251 Snowboid on 02.15.15 at 3:28 pm

#236 Waterloo Resident on 02.15.15 at 9:23 am …

Besides your obsession with old Corollas that started 4 years ago, I see you are still making ridiculous predictions about real estate prices.

However, it is good to see you have tempered your price increases, remember when you said Toronto homes would be worth 10 million in 2017?

Let me refresh your memory from September 2011:

“That $500,000 house you have your eyes one will soon have bidding wars on it, and it will sell for $10 Million in about 6 years time, just wait and see.”

Of course you could be right, then your Corolla would likely be worth $ 100,000, right?

#252 For those about to flop... on 02.15.15 at 3:33 pm

Thankyou Edmontonian for taking the time to explain this sorry tale.
I actually googled it last night and found brief details ,your explanation was more detailed.
A related story about Ralph Klein going into a homeless shelter ,calling everyone “bums” and to get a job before throwing his spare change on the floor was a real eye opener for me.
Thank goodness we only have Mike Duffy to put up with!

I remember being taught in school in Tasmania that politicians were elected by the people to serve the people.
It seems like nowadays politicians see themselves as above society ,not part of it .
Their loss I guess.

#253 Smoking Man on 02.15.15 at 3:44 pm

http://m.spiegel.de/international/world/a-1018357.html#spRedirectedFrom=www&referrrer=http://www.zerohedge.com/news/2015-02-14/nuclear-specter-returns-threat-war-higher-cold-war
…….

Could happen at any moment..

#254 jess on 02.15.15 at 3:55 pm

nobody escapes? apparently this guy did for 24 years! OMG …his money came from a “box”

Tax evading tycoon not prosecuted – BBC.com
http://www.bbc.com/news/uk-31459067
2 days ago – Tax inspectors failed to prosecute a property tycoon who did not submit returns or pay any tax for 24 years, documents seen by the BBC reveal

#255 JimH on 02.15.15 at 4:15 pm

#211 John C on 02.14.15 at 11:12 pm
You write; “So why is it that some of you moron’s actually think that the Fed stopped it’s QE program?” and then make a reference to US Government debt…
==================================
You need to do much more research on what exactly constitutes the ‘Fed’s QE program’ as you call it!

This might help:
http://www.pragcap.com/a-quick-quantitative-easing-primer

In addition, it is insane to blame the Federal Reserve for US Government debt!

If you look at the Fed’s balance sheet from the 2013 annual report you can see that the Fed distributes most of its profits back to the US government every year. In 2013 they remitted $79.633 billion to the US government. In 2012 they remitted $88.418 billion to the US government. Over the course of the last 10 years they’ve remitted over $500 billion.

http://www.federalreserve.gov/publications/annual-report/files/2013-annual-report.pdf

#256 edmontonboy on 02.15.15 at 4:18 pm

#252
Yeah, In Alberta they paid dearly, with many social sacrifices to pay of their debt and save money. Can you imagine the horror of these voters now, who have seen the Recent Conservative Government of Alberta Plunge the province into massive debt and over spending while they are going on $40,000 trips and giving themselves a 30% raise (2008). Crazy. Having a Family of lifetime conservative supporters, they are ready to stop the votes for them, they’ve pissed away hundreds of billions for the province, and society. It’s becoming a real hell hole in some areas to live now, this government had been in power every year since 1970s they have to accept responsibility for all the damage they’ve done.

In the meantime, the housing market continues to plunge! :-(

#257 kommykim on 02.15.15 at 5:33 pm

RE:256 edmontonboy on 02.15.15 at 4:18 pm
#252 It’s becoming a real hell hole in some areas to live now, this government had been in power every year since 1970s they have to accept responsibility for all the damage they’ve done.

The BC Liberals (Really conservatives) have been in power since 2001 and STILL blame the NDP for this and that. So it wouldn’t surprise me if the AB CONs start pointing the finger elsewhere.

#258 Carousel on 02.16.15 at 1:34 am

Putting in an offer on a home is not like bidding on a horse. This frenzy rubbish in over paying is delinquent on the buyers part. People are like a herd of sheep, follow the crowd, do what they do. It take real scruples and a savy mind to leave the crowd and go it alone.

Interest rates will eventually go up, but don’t let that stop you in buying a home, the selections are piling up, and there are deals out there. It depends where you want to live. Canada is a big continent, the choice is yours. We live in unpredictable times, and maybe exiting to some.

The clock is ticking ..

Cheers…

#259 tdarron on 02.16.15 at 6:28 am

I am firmly in the Harry Dent camp …everything drops except the US dollar in the near term. One difference though. I believe that the NEXT financial storm will usher in a relatively short period of hyper inflation. We will not have a 28$ loaf unless you exceed your food ration.

#260 tdarron on 02.16.15 at 4:37 pm

Yes, yes …..tons of liquidity but very little solvency. Wage increases are minimum wage mandated and much of that part time in lieu of welfare. Most economic activity non productive: government employment direct and indirect , financial engineering activity , mal investments due to ZIRP.
Get ready yea motley fools. Corporations increasing productivity per unit labor while total productivity collapses with negative excess due to debt driven declining demand. Declining demand due to austerity both voluntary and involuntary. Then after the next upset , hyper inflation caused by a temporary seize of the distribution network and previously destroyed equity capital.