Dead cats

TRUCK modified copy

About nine hours before stock markets opened for business Thursday morning, Jennifer sent this email to her financial guy, who shared it with me. (Is nothing secret any more?)

Put all my investments into cash, now, until things settle or there is more clarity in the markets.  I want this completed immediately to avoid further losses.  I fully understand your long term picture outlook but would feel much more comfortable waiting until markets work themselves out and do not see any reason to currently stay invested. Email me at your earliest convenience to confirm how soon this request can be completed.

When he got in, the financial guy called and made the case to Jen that selling after markets had declined into a correction was, well, dumb. No dice, she said. Sell. After all, her balanced portfolio had lost 5% of its value, and she was freaking.

So, they sold at the open.

By the end of the day the Toronto Stock market had added almost 200 points. The dollar jumped more than a cent in value. Oil prices surged close to 5%. There was a triple-digit gain on Wall Street. Recall that stuff mentioned here yesterday about things being overdone?

Here’s a reminder:

The decline was too far, and too fast. All of a sudden, stuff started looking cheap. Or simply more affordable.

A few months ago the S&P index was at a level equal to 18 times the earnings of its member companies. Not crazy expensive compared to some previous periods, but well above the long-term average of 14.9 times. In fact, the market was trading at a 17% premium to the norm. So what happened today? You guessed it – the index retreated back to its historic average, which made everything look a lot less scary.

Of course, one day does not a market make. The pop up could be wiped out tomorrow. Some people have suggested it’s a dead cat bounce, which is possible. (This is a sophisticated technical term for what happens when you throw a croaked feline from a great height. It bounces. But it’s still dead. We do that a lot on Bay Street.)

The point is, as Jen was told, nobody knows where a top or a bottom is – whether that’s stocks, bonds, houses, ETFs or any other asset. So trying to time a decision to buy or sell is usually bound for failure. Allowing your emotions to make that decision for you guarantees it. Without fail people get scared and sell losing assets, turning a paper loss into a real one. Equally, they become euphoric about rising assets and lust to have them, especially when there are 14 reality TV shows promising they can flip, reno or invest their way to riches.

Yesterday nobody knew oil would surge today. But logic tells you when something the world runs on has lost 75% of its value in the past couple of years, it’s probably too cheap. Logic also tells us fears about China are overdone, especially after the latest growth number (6.9%) was almost exactly what was forecast (7%). After all, China’s a controlled economy with a bunch of dudes running it who care deeply about not looking like goofs. Logic tells us when a commodity rout that’s pushed useful stuff like copper and aluminum to 17-year lows bounces off the bottom, so will the loonie and Bay Street. Logic tells us when the world’s biggest economy is motoring ahead, throwing off 200,000 new jobs a month, there’s no trainwreck ahead, no reason to duck. Logic also tells us, however, that people who have indebted themselves as never before and adopted a one-asset strategy will pay a big price.

The message of this pathetic but narcotic (no weed) blog is not, “houses bad-stocks good”, as so critics like to claim. Own real estate if you want, just ensure it’s part of an overall balance in your life (Rule of 90) because you never know what comes next. It’s exactly the logic behind having a portfolio with safe stuff (fixed income) and growth assets at the same time, plus a broad range of secutiries and mix of regions.

What Jen did wrong is think she knows more than history, and the times are unique. She feared assets in decline would go to zero, when experience proves that’s irrational. Too many moisters are there, believing we’re at some global tipping point and launching into uncharted territory.

Wrong. Not happening. Things go up because a majority of people want them. They go down when most are selling. Debt boosts you on the escalator ride up. It’s a deadly anchor on the trip down. Risk comes from buying high then selling low. So it’s the contrarians who usually walk with full pockets. Until human nature changes (never), until people cease to be ruled by greed and fear, markets will behave as they have in the past. You should look behind for guidance, not into the fog ahead.

No, Jen, it’s not different this time.

255 comments ↓

#1 Randy on 01.21.16 at 6:11 pm

Is that the Starsky and Hutch Torino ?

#2 Penny Henny on 01.21.16 at 6:15 pm

that truck? is wicked

#3 Mark on 01.21.16 at 6:17 pm

I think the mistake many people make is to think of ‘cash’ not as being an investment, but rather, to think of it as something else.

Yes, it is true that cash has less volatility, but anything, measured against itself, will have less volatility than measured against another asset class. Cash is best thought of as a non-interest-bearing loan to the Government of Canada.

On that note, the CAD$ appears to be back on the upswing, as the speculators are increasingly exhausted. People like Smoking Mans’ various “friends” (imaginary or not) who have piled into the futures contracts need to be aware that they’re playing with fire. The fundamentals for the CAD$ rising have almost never been better, and violence on the downside, usually is replicated with violence on the upside. Today was just an example of what can easily happen to leveraged traders who have piled into a severely overcrowded trade.

#4 JSS on 01.21.16 at 6:19 pm

a painful lesson for Jennifer when she looks back 3-5 years down the road.

God, I’m glad I’m not a financial advisor.

#5 WallOfWorry on 01.21.16 at 6:20 pm

Great post Garth. If you are such a fan of analyzing history why do you view gold so negatively? Wouldn’t history also tell us that when countries just print money it creates imbalances in the monetary system that always gets reset against a hard asset like gold?

#6 Nick on 01.21.16 at 6:20 pm

Hmmm no, I’ll take my advice from Soros. China hard landing, deflation, oil to $20. I suggest you panic.

#7 mark on 01.21.16 at 6:23 pm

Her financial guy needs to pump up his communications and education.

The message is clearly failing.

#8 Good to read optimism on 01.21.16 at 6:25 pm

Thanks Garth, I needed that.

#9 MC on 01.21.16 at 6:31 pm

I’m an investment advisor too, and familiar with the likes of Jen. People who are scared always say something fuzzy like “let’s wait until this thing straightens itself out” or “until the markets work themselves out” or whatever. Ok, and when do we know that has happened? It would be nice if a big green light came on and there was a public broadcast telling everyone “Ok, it’s safe to invest again now”. But in the absence of that, comments like Jen’s really mean “Let’s wait until the market rebounds a bit and then get back in”. Fair enough. Of course the real question is – how far will the market have increased, and more importantly, how much of that gain will you have missed, before you finally admit to yourself that “the market has straightened itself out”? Jen is a typical investor – hardwired for failure. My 2 cents.

#10 Doug t on 01.21.16 at 6:34 pm

If someone hands you a business card that reads “financial expert” – run

#11 Smoking Man on 01.21.16 at 6:35 pm

#3 Mark on 01.21.16 at 6:17 pm
I think the mistake many people make is to think of ‘cash’ not as being an investment, but rather, to think of it as something else.

Yes, it is true that cash has less volatility, but anything, measured against itself, will have less volatility than measured against another asset class. Cash is best thought of as a non-interest-bearing loan to the Government of Canada.

On that note, the CAD$ appears to be back on the upswing, as the speculators are increasingly exhausted. People like Smoking Mans’ various “friends” (imaginary or not) who have piled into the futures contracts need to be aware that they’re playing with fire. The fundamentals for the CAD$ rising have almost never been better, and violence on the downside, usually is replicated with violence on the upside. Today was just an example of what can easily happen to leveraged traders who have piled into a severely overcrowded trade.
….

My names not Jen

Sure I lost several big ones, but look around, communism everywhere. If Oil continues rally, I’ll bail out if usdcad hits 1.4

If oil loses it’s legs I’ll buy another 200 contracts of USDCAD.

Futures contracts..? Man your amazing. They are called cfds. Different animal, you.really don’t know shit.

#12 ole Doberman on 01.21.16 at 6:35 pm

Gartho what about the U.S of A social security system piling on 200 trillion in liabilities? No one wants to talk about that one.

#13 earthboundmisfit on 01.21.16 at 6:35 pm

Tits up. Like the Alberta economy. Trying very hard not to feel a degree of schadenfreude.

#14 espressobob on 01.21.16 at 6:38 pm

Sure hope we’re not going into rally mode? Things were just starting to get interesting.

#15 Fleurdelys on 01.21.16 at 6:40 pm

China hard landing means other countries will increase production. It’ s a consumers market. And the big consumer is ready to spend.

I’m more worried about Europe.

#16 Rookie57 on 01.21.16 at 6:40 pm

Cauliflower Alert!

Joe’s Farm Market, Burnaby, BC

$1.19 per lb.

#17 conan on 01.21.16 at 6:44 pm

There are probably 100 k people in America who are right now being told by their advisers to buy the TSX. It is oversold and the currency exchange makes it a no brainer.

I expect an upswing in the Canadian markets….. it could get derailed but should be free money for the next week or so.

#18 GORDIE BEAMER on 01.21.16 at 6:44 pm

Clearly she shouldnt be in the market in the first place with only a 5% UNREALIZED lost,until she folded.i wouldnt blame the adviser if he closed her account &sent her a check.

#19 Nanaimo Bar on 01.21.16 at 6:45 pm

Oil to $55.00. Decline in US stockpile coming. That is my call.

#20 Fed-up on 01.21.16 at 6:47 pm

CAD$ closes at 69.91 cents US, oil “surges” to just over $29 and the markets regain a fraction of the several thousand points that they’re down from their all time highs.

We could be on to something or this could just be a small sucker rally so we may want to keep the corks on those champagne bottles for a little while longer.

Many still see our dollar and oil to fall much lower.

We shall see.

#21 Retired Boomer WI on 01.21.16 at 6:48 pm

Everybody does stupid shit. Some, right after markets hit their highs in 2007 thought we would continue. I did too, until Feb 2008 when I baled.

No insight, just this “feeling”….. That’s why I’m sitting on a larger than usual pile of cash (14%) just now.
The rest, in a balanced portfolio.

Dead cats can bounce to even the third story when tossed hard enough.

We’ll just see… nice oil bounce today!!

#22 tundra pete on 01.21.16 at 6:50 pm

Jen must be some boomers little princess. I guess you can always try but most of us know you can’t fix stupid.

My coworker says to me today in front of the crew, “how’s your wife and my kids”? I said “well the wife is great buts those stupid kids are just dumber than all hell”!

#23 I am the Babbler on 01.21.16 at 6:52 pm

Yeah, well the TSX is at zero gain for the last 10 years! Sure, that does not represent a balanced portfolio and it does not account for dividends paid, but still…..

#24 Leo Trollstoy on 01.21.16 at 6:52 pm

people like jen deserve to be poor. in fact they insist on it

#25 S.Bby on 01.21.16 at 6:54 pm

I’m sure there are a lot of “Jens” this month…

#26 acdel on 01.21.16 at 6:55 pm

This reminds me of that beer commercial “stay thirsty my friends”, I’ll take Garth’s advice and “Stay long my friends”!

#27 Leo Trollstoy on 01.21.16 at 6:55 pm

people like jen deserve to be poor. in fact they insist on it. thankfully reality punishes the dumb

#28 Cash is King on 01.21.16 at 6:56 pm

I thought China was run by a bunch of idiots?

Had the very same discussion with my Father-in-law Tuesday night. It’s 2002 all over again he said. I’m cashing it all out tomorrow he said. Then I again pulled out the updated chart showing what the value of his portfolio would be today if he did not cash it all out in 2002. Sometimes tough love is required to bring a person to his senses.

#29 jess on 01.21.16 at 7:01 pm

bread and circus

The Welsh town that has moved its local businesses ‘offshore’ to shame HMRC into tackling tax-avoidance of Amazon and Google…

Traders get a crash course in tax avoidance and spread the word
Local businesses in the Powys town set up an offshore company
The ‘Fair Tax Town’ brand is created to shame HMRC into changing the law
Other towns are encouraged to join this tax avoidance movement

By Rebecca Rutt For Thisismoney.co.uk

Published: 15:52 GMT, 20 January 2016 | Updated: 08:55 GMT, 21 January 2016

Until recently you may not have heard of Crickhowell, a picturesque town nestled in the Brecon Beacons. But after a group of local traders created a movement to take on the taxman in protest of the paltry UK tax paid by big businesses, it’s a place you’re not likely to forget.

The Welsh shopkeepers are attempting to shame HM Revenue & Customs into changing the loopholes which allow the likes of Google, Caffe Nero and Amazon to legally avoid paying UK corporation tax.

It’s an experiment which they hope will spread to other towns and force the Government to change UK tax laws.

Read more: http://www.thisismoney.co.uk/money/news/article-3408080/Crickhowell-Welsh-town-taking-Google-Amazon-Starbucks-takes-business-taxes-offshore.html#ixzz3xvTP7FT9
Follow us: @MailOnline on Twitter | DailyMail on Facebook

#30 BC Mike on 01.21.16 at 7:03 pm

Garth you state “nobody knows where a top or a bottom is – whether that’s stocks, bonds, houses, ETFs or any other asset”.

However you advocate people should cash out of housing and sell. Indicating a top in the housing market.

So you can time the housing market but not the stock market? That seems hypocritical.

And by the way, yes you can certainly time the stock market, just like the housing market. We are in a bear market and yes this is a dead cat bounce. We will likely bounce into descending moving averages and then break the lows of yesterday. This is how bear markets work.

#31 Why Why Jay on 01.21.16 at 7:08 pm

The message of this (..snip..) blog is not, “houses bad-stocks good”, as so critics like to claim. Own real estate if you want, just ensure it’s part of an overall balance in your life ”

—-

It blows my mind how your avg blog dog doesn’t get that. That’s been your message day after day. If I tell someone something 3 times in 3 different ways and they still don’t get it, I give up.

The problem for a bunch of moist millennials is they must choose between the SFH and investments. They can’t afford both and the house is the sexy option. That combined with stupid sayings like “a mortgage is a forced savings plan” and “housing always goes up” and “this market is different.. it’s desirable.. it’s a destination” or my fave, “a mortgage is good debt”.

A house is not a retirement plan.

I’ve seen that plan in action with a friend’s parents. It resulted in a smaller house and pretty much nothing else. The profits were eaten up by realtor fees, closing costs etc. Had they moved from Victoria to Hixon or somewhere equally desirable their plan might have worked a bit better.

The big problem is cheap money. There is a huge portion of the population (not just the millennials) that are self entitled. They deserve a SFH and a new car and a vacation and an RV. The banks are more than willing to lend them cheap money to follow their consumerist dreams. Treat yo’self. Buy all the things! Anything you want for a low low monthly payment!

I live within my means. It’s low stress and I can’t see why anyone would want to do otherwise. Did it as a poor university student eating ramen and do it now. The difference being I now own a house, have investments, and only eat ramen when I get a craving.

#32 Nanaimo Bar on 01.21.16 at 7:09 pm

Let me re track the U.S. stockpile decline for now but oil to $55.00. This move is more brilliant than the last one. Need time to think this one out. Maybe I should go to Rense for answers. I’m starting to think that. What happened to all the USD longs. So now what, Mark and Garth battle it out in the pinnacle of the temple to see who inherits the riches to the kingdom?

#33 AK on 01.21.16 at 7:13 pm

πρώτos..

#34 "They're All Gonna Laugh At You" on 01.21.16 at 7:13 pm

I’m laughing at Jennifer, haha….

She was ‘pooched good’….hahaha….

now, maybe she’d wait for the next real rip, feel good and buy at the top, haha, just hilarious…..what a doofus….

Draghi’s not only loaded his bazooka, he’s now cocked it, March timeframe for a serious global rip?, if not sooner, eh….

#35 Bram on 01.21.16 at 7:13 pm

Without fail people get scared and sell losing assets, turning a paper loss into a real one. Equally, they become euphoric about rising assets and lust to have them, especially when there are 14 reality TV shows promising they can flip, reno or invest their way to riches.

When I bought my house in ’13 I did the opposite: kept all my depreciated stock positions. But the ones that were flat or appreciated, I sold off to fatten the down payment (to 35%)

I hate the idea of making paper losses real. I preferred to pay a little capital gains tax instead.

Now most laggards have had time to recover their drop, and I still have them.

#36 Sheane Wallace on 01.21.16 at 7:13 pm

Bear market will always exist, we are overdue for one.

Saying that market will always go up and is never time to sell is dangerous. The same as the housing market.

While acknowledging that income is what matters we can not exclude excessive valuations. Stating that markets are under-priced or fairly priced based on adjusted and forward earnings at the moment is incorrect.
They are overpriced.

Whoever sold in the beginning of the slump will be in green for quite some time.

One bird does not make a spring.

#37 raj on 01.21.16 at 7:14 pm

S&P 500 has returned avg 7% in last 30 to 40 years than why bother having balanced portfolio. Warren Buffett and jack boggle has endorsed this in interview and books. Besides this S&P 500 companies has global presence so they are well diversified. Any one has comments why not just invest into low cost S&P 500 index etf vs balanced portfolio.

#38 Grey Dog on 01.21.16 at 7:16 pm

Garth, thanks for the wisdom and guidance to keep calm and carry on especially when invested for the LONG TERM.

Ugh…why won’t it let me press “submit” on my IPod,
Anyone H E L P please.

#39 Sheane Wallace on 01.21.16 at 7:17 pm

#34 “They’re All Gonna Laugh At You”

We will see who will have the last laugh. It might very well be Jennifer.

As for you I hope you have defensive portfolio as otherwise you might be in for a ride until and only if the Fed comes to the rescue.

There are limitation to monetary policies and if Fed changes direction watch out for gold prices. junior miners could quadruple.

#40 Sheane Wallace on 01.21.16 at 7:21 pm

#36 raj on 01.21.16 at 7:14 pm
S&P 500

US stock market is 70 % of the world stock markets in terms of valuations.

While the economy in nominal terms is 23 %, in real – 15%,

So how long do you say this returns can continue?

#41 Franklin on 01.21.16 at 7:22 pm

Contrarian? You are now considering yourself a contrarian? Contrarians are betting against the inflated, stock buyback with debt, they are BETTING AGAINST DEBT. Physical precious metals. That is what contrarian are doing- not riding a pretend, fake, market to model valuation circus of paper promises. This baby is going down- BIG TIME 3 days down 1 day up OVER AND OVER again to keep all the muppets thinking ut will bounce ‘just like always.’ Soo sad.

#42 Bobs ur uncle on 01.21.16 at 7:24 pm

Jen is an example of what I see as a blind spot in conservative thinking – IE, keep the government out of your retirement finances, just do it yourself. But the majority are not wired to calmly navigate the downs without hitting the sell button, assuming they have the discipline to set aside money to begin with. So they are likely better off with the nanny state support than without.

Yes yes I understand they are all thieves and will take every last cent blah blah (and Ontario debt does look pretty sh*tty). But what is the practical solution for the masses? I’d say start with finance basics in the schools, but even then, folks will still hit sell often and will still end up screwed.

I am honestly just as happy to manage my own dough without government interference but I am curious what will actually keep the majority of people without DB pensions from relying on cat food in the future?

Any rational non-ranting arguments welcome.

#43 Al on 01.21.16 at 7:25 pm

not sure where P/E of 14.9 is coming from. Is it based on forward earnings? From what is available on the S&P website (12 months earnings as of Sept 30 2015), today’s PE is 20.6 on earnings contracting for 4 last quarters.
I don’t know if there is going to be a recession, but you don’t need a recession to have a bear market.

Not saying you need to be in cash now, and for vast majority (myself incl.) with long-term horizon it is better to stay invested in a balanced portfolio. But still, given that US market seems to be relatively expensive now, just curious:
– what is the possibility of a bear market in SP500?
– Or, on the opposite, what is the possibility of further significant appreciation of SP500?
– that is, if it is quite likely that SP500 will grow low single digits in 2016 but there is a low possibility of a further drop of 10-20% and even lower likelihood of market growing above 5% this year, isn’t the most rational option to reduce US exposure (or stocks in general) and increase allocation to bonds?

#44 Sheane Wallace on 01.21.16 at 7:25 pm

If the Fed has to choose between ‘saving’ the stock market (whatever that means) and saving the dollar as reserve currency they will pick the dollar. At any time.

Is that clear? Crystal Clear Sir!

So plan accordingly.

#45 Freedom First on 01.21.16 at 7:27 pm

This post is a good reminder to me.

Following a financial principled plan as is spoon fed to us regularly here, with regular re-balancing is the only sane way to go. Unfortunately, Jen is in the majority, deviating from a good financial plan designed by a pro, which is an excellent strategy for a novice. However, not following the paid for financial advice of a pro, is the act of a financial deviant.

That being said, for me, panic is profitable. The same as greed is profitable for me. I can say that too, as I have proved it for decades. Sadly, this is not rocket science. It works for everyone. But you gotta do it.

#46 Sheane Wallace on 01.21.16 at 7:30 pm

Not trying to play devil’s advocate here but what if John Hussman is finally proven correct?

http://www.hussmanfunds.com/wmc/wmc160118.htm

We’ll certainly welcome outcomes that better reflect our experience in other complete market cycles, but we won’t do touchdown dances if the market collapses. The likely distress as the current market cycle is completed is something I wish on nobody. The unfortunate reality is that someone will have to hold stocks over the completion of this cycle, and it would best be those who have either carefully evaluated and dismissed our concerns, or those who have appropriate risk tolerances and investment horizons to weather the likely 40-55% loss in the S&P 500 that would comprise a rather run-of-the-mill retreat from the 2015 valuation extremes.

He is selling his own mutual funds, mostly losers. — Garth

#47 Mr. White on 01.21.16 at 7:33 pm

Dumb move Jen. Have you heard the saying, buy low, sell high. You did the opposite.

I am turning everything I can find into cash and buying into the market. I never sell and will not until I retire.

#48 Capt. Obvious on 01.21.16 at 7:36 pm

Yeah, well the TSX is at zero gain for the last 10 years!

Which obviously cannot be correct for the long term. The Canadian economy is not suddenly the same size it was 10 years ago. O&G shrinking sure, but the pounding the TSX has taken boarders on absurd.

#49 jerry on 01.21.16 at 7:38 pm

Will Justin Trudeau attract the investors needed for an economy based on “resourcefulness and diversity”?

#50 Rainclouds on 01.21.16 at 7:40 pm

About China, Gary Schilling doesn’t share your confidence……………

http://www.businessinsider.com/gary-shilling-17-charts-explain-chinas-economy-2016-1

#51 Capt. Obvious on 01.21.16 at 7:44 pm

US stock market is 70 % of the world stock markets in terms of valuations.

That isn’t right. Look at the MSCI world index. USA makes up less than 60%.

#52 common sense on 01.21.16 at 7:45 pm

So Jen’s timing migssin today’s 1 day bounce makes her an idiot?

So then everyone calling for a housing correction for the last 3-4 years is a genius?

C’mon, a little balance here please.

Timing is everything and none of us have a crystal ball.

It’s all a big educated guess. No more no less.

Some will win, some will lose.

Balance people, balance.

Is that not what I said? — Garth

#53 Mike on 01.21.16 at 7:47 pm

The problem is that “Financial Advisors” (sales guys) spend very little time on educating their clients, especially young people. If the client who hasn’t yet been through a bear market in his/her life says that he/she is comfortable with losses and wants to be aggressively invested in the market, they’ll just make him/her sign the waivers and invest the money. Their bonuses are always highest from products that are the riskiest investments!
There are of course a few fee based and trustworthy enough that they look out for their clients but those are by far the exception and not the norm. Fiduciary duty is mostly just theory, in practice, well …
I learned this the hard way when I started investing and thought that the investment advisor (sales shark) at Investors Group had my back and will invest wisely.
When the bear market hit, I found out how risky those investments were. Then when I educated myself and wanted to withdraw my funds to invest myself in Index Funds ETFs inside a diversified portfolio … it was time to find out about the huge fees Investors Group and similar crappy firms charge for withdrawals. This again was never really explained to me but I was made to sign it among the pile of paperwork I had signed when I moved my funds to them.
It is nowadays super cheap and easy to set up a diversified portfolio with Index Funds! It could be taught in high school to the young generation.
Major overhaul is needed in our modern day financial system. Banks should go back to boring lending stuff, investment bank MUST be separated out. “Investment advisors” dealing with the public should only be independent fee based ones to avoid any conflict of interest!

If IG burned you, the rip IG. Don’t make such broad generalizations. — Garth

#54 Sheane Wallace on 01.21.16 at 7:49 pm

US stock market is 70 % of the world stock markets in terms of valuations.

That isn’t right. Look at the MSCI world index. USA makes up less than 60%.

———————
Correct, it is around 53 %…

So my memory did not serve me well… Posted without checking. Getting older, I guess.

#55 Capt. Obvious on 01.21.16 at 7:49 pm

However you advocate people should cash out of housing and sell. Indicating a top in the housing market.
For the 100th time, that’s not what he’s saying. He’s saying housing should not be a disproportionate amount of your overall portfolio of assets. This isn’t complicated.

So you can time the housing market but not the stock market? That seems hypocritical.
If all your assets are in housing, and housing has gone up significantly, you can think of it more like re-balancing.

And by the way, yes you can certainly time the stock market, just like the housing market.
If you could time the stock market you wouldn’t be here.

#56 rawdiswar on 01.21.16 at 7:53 pm

And just like that oil miraculously recovers! Haven’t seen a turnaround that quick since The Almighty turned water into vino.

Let’s hope (and pray) that we can start exporting diversity and soon, because things are getting ugly out there. Wait until the severance packages and EI start running out, that is serious pressure on wages downwards. Whether or not the Fed raises 3 or 4 times this year (or none), you can bet Poloz isn’t raising for quite awhile.

There are more actors than brains over there in Davos, and if you don’t think so, then why are Leo, Bono and Kevin Spacey there?

Someone tell me where the manufacturing is that will apparently restart Canada’s economy? Sure as shit isn’t in SW Ontario anymore.

You can try and replace the jobs, but replacing the wages is going to prove far more difficult. Unless, of course, you’re trying to create a peasant class…

#57 Chastity Tentpole on 01.21.16 at 7:56 pm

DELETED

#58 Capt. Obvious on 01.21.16 at 7:59 pm

S&P 500 has returned avg 7% in last 30 to 40 years than why bother having balanced portfolio. Warren Buffett and jack boggle has endorsed this in interview and books. Besides this S&P 500 companies has global presence so they are well diversified. Any one has comments why not just invest into low cost S&P 500 index etf vs balanced portfolio.

Well, volatility for one. You’re right about long term return. Here’s the interesting thing about USofA returns over the past 50 years: They’ve been the winner. This fact is obvious in hindsight, but not so much in the past. Between 1966 and 1982, a period of 17 years, US equities barely kept up with inflation. Few people have the mental wherewithal to stick with a plan that long. I’m not saying all stock it’s wrong, but it’s difficult to execute. Also, future returns are expected to be lower for the S&P500 due to the fact PE ratio (Shiller model) is high. You don’t get high return without risk, and if the S&P500 is viewed as being lower risk that other markets, its expected return must necessarily be lower. Note I used the word ‘expected’ a lot, because expected return and actual return are two different things: risk means you may not get the return you expect, but without taking the risk it’s guaranteed you will have a lower return.

#59 sockeye sam on 01.21.16 at 8:00 pm

How’s this work? Invest with you and I get to post. Deciding to invest with you and I still don’t get to post?Same old shit. Money talks I guess. Still deciding. Post or not I could give a shit. That’s O.K. I never wanted to be part of the old boys club.Your loss not mine.

#60 Felix on 01.21.16 at 8:01 pm

Dead cats? Seriously!!??

Screw you Garth, and your anti-feline RACISM!!!!

How about “Dead humans”? Then their mutts with no self-respect will commit hara-kiri with no masters to tell them what to do.

That would be a better world……run by cats.

#61 learningfromyou on 01.21.16 at 8:01 pm

Thank Garth for all your teachings

My daughter (18) already started to read your blog and review the history of it.

#62 Ogopogo on 01.21.16 at 8:06 pm

Garth’s post is the antidote to the financially illiterate. So it’s mind boggling to see in this very thread a comment as monumentally stupid as this:

#41 Franklin on 01.21.16 at 7:22 pm
Contrarian? You are now considering yourself a contrarian? Contrarians are betting against the inflated, stock buyback with debt, they are BETTING AGAINST DEBT. Physical precious metals. That is what contrarian are doing- not riding a pretend, fake, market to model valuation circus of paper promises. This baby is going down- BIG TIME 3 days down 1 day up OVER AND OVER again to keep all the muppets thinking ut will bounce ‘just like always.’ Soo sad.

Another babbling, incoherent goldbug. I thought these vermin left the blog in 2012 never to come back?

Oh, Andrew Hallam has a related post in today’s G&M:

http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/index-investing/enough-with-the-negative-news-rebalance-your-portfolio/article28292170/

#63 young & foolish on 01.21.16 at 8:08 pm

What percent should one pay for a 7 figure portfolio?

Do you have one? — Garth

#64 acdel on 01.21.16 at 8:09 pm

#45 Freedom First
#31 Why Why Jay
#47 Mr. White

Good on you!

#65 Smoking Man on 01.21.16 at 8:15 pm

DELETED

#66 Samantha on 01.21.16 at 8:15 pm

I think Jen made a smart move. I think the stock market declines we’ve seen is just the beginning of a larger move down. I’m not saying everything is going to 0, but another 15-20% down is certainly not out of a question.

#67 Blogbitch on 01.21.16 at 8:15 pm

Sigh. Jen is an excellent example of why women need to take charge of their own financial future. Don’t get me wrong. I love men. I just think women should learn more about money.

#68 IHCTD9 on 01.21.16 at 8:21 pm

#36 Sheane Wallace on 01.21.16 at 7:13 pm
Bear market will always exist, we are overdue for one.

Saying that market will always go up and is never time to sell is dangerous. The same as the housing market.

While acknowledging that income is what matters we can not exclude excessive valuations. Stating that markets are under-priced or fairly priced based on adjusted and forward earnings at the moment is incorrect.
They are overpriced.

Whoever sold in the beginning of the slump will be in green for quite some time.

One bird does not make a spring.

———-

Anyone that sold right before the crash either has a crystal ball, or was just lucky. You’re talking about timing the market, but in reality you just can’t do it without putting everything on the line, and probably getting slaughtered before too long.

I’ve been through two previous big market dumps, both times no one saw it coming. My investments today are doing just fine.

The average dude is much better off just doing what Garth suggests and just stay put if you’ve still got a decade or two before retirement.

#69 Interstellar Old Yeller on 01.21.16 at 8:23 pm

Jennifer & Co., thank you for selling me your assets at discounted prices. I am certain, long-term, that I am getting the better end of this deal.

Jennifer’s financial guy (and those experiencing similar client interactions): I have done a face-palm out of sympathy for you.

#70 BS on 01.21.16 at 8:29 pm

Sheane Wallace on 01.21.16 at 7:30 pm

Not trying to play devil’s advocate here but what if John Hussman is finally proven correct?

Lets hope he finally gets something correct. With a -3.67% 10 year annualized return and -7.01% 5 year return on his STRATEGIC GROWTH FUND investors need a home to get their money back. You get all that for a 1% MER.

http://www.hussmanfunds.com/pdf/hsgperf.pdf

#71 Drill Baby Drill on 01.21.16 at 8:33 pm

I filled up my Kia at Costco today in Cowtown for $0.69/litre.

#72 salonist on 01.21.16 at 8:36 pm

refracking is the new fracking
Bloomberg

http://www.bloomberg.com/news/articles/2015-07-06/refracking-fever-sweeps-across-shale-industry-after-oil-collapse

#73 Scumop on 01.21.16 at 8:37 pm

Why be hard on Jennifer? She just did, as a Canadian, what true Canadians do:

Buy high and sell low.

Its Canadian tradition. How can you argue with tradition?

#74 common sense on 01.21.16 at 8:39 pm

Leo and Jayset

I got out of the Long USD trade yestrday before the rate
announcement..

I also sold my short oil ETF this am taking the profits from the past few months…

Now what and when to get back in.

Suggestions?

#75 Nanaimo Bar on 01.21.16 at 8:40 pm

I am going to retrack all my oil statements all together No call on oil or stockpiles. But CAN to go higher. So confusing but CAN going higher.

#76 Dead cats - Realties.ca on 01.21.16 at 8:40 pm

[…] Source: http://www.greaterfool.ca/2016/01/21/dead-cats/ […]

#77 common sense on 01.21.16 at 8:45 pm

#52 Post

Yes Garth that’s what YOU said….just confirming for those who thought she was a fool for cashing out too quickly.

Only time will tell and who has a clue what her timeline is?

Time will prove what it always has. Yhose who invest with their emotions pay a heavy price. — Garth

#78 46 and 2 on 01.21.16 at 8:46 pm

I wonder how we fair if we adopted the USA mortgage system. I’m sure our banks would fight it tooth and nail but….who cares what our banks have to say.

This system would free up a lot more monthly cash (interest is tax deductible and longer term rates) and put an end to the flipping.

Will never happen. Unaffordable and crosses the Canada Interst Act. — Garth

#79 A Yank in BC on 01.21.16 at 8:51 pm

#61
“What percent should one pay for a 7 figure portfolio?”

Ideally, it should be zero percent. It’s not difficult to properly manage a portfolio yourself if you just do a little reading-up beforehand and apply common-sense. The key is diversification and simplicity. Oh.. and don’t be a Jennifer either.

#80 Nanaimo Bar on 01.21.16 at 8:51 pm

But I will make this call on the Iowa Caucus. We know it will be difficult for Hillary playing on the road in Iowa against Bernie. But we going in there and coming out with two points for the victory. She plays well on the road like Kerry. After that, Sarah will be next on the list. The Yale girl is going to kick Sarah’s University of Idaho Alaskan Oil hairdo all the way back to Moscow. Take your flute with you.

#81 Buddy O' Pal on 01.21.16 at 8:58 pm

After reading extensively about the new mantra and savior being the balanced portfolio I would downgrade expectations from the standard expected return of 7% over ones lifetime to a more reasonable 4-5%. This would be a rational consideration. In so doing, what is investing without taking the time to to thoroughly research a company and the state of the world and make some educated plays. This is lost in the world of ETFs and balanced portfolios. Invest in your beliefs. Invest is the sectors and companies that you believe will excel. Encouraging the ‘moist ones’ to invest couldn’t be any less appealing at this point. Now yes, some have commented about the need to have financial courses in education, but more importantly, the focus should be on business, which I believe it is. Opening a successful small business could be the riskier, but at least it is partially in your control.

There are no guarantees, not even in the balanced portfolio. Risk on, risk off. Gonna take some before me eyes glaze over.

#82 Brazil ex-pat on 01.21.16 at 9:05 pm

Good job Jennifer !! Shame on Goldman Sachs for “changing” their chart after TPTB saw it and did not like it.

#83 Leo Trollstoy on 01.21.16 at 9:07 pm

you.really don’t know shit.

u can’t expect someone who has difficulty finding a job as a wage slave to know anything important can u? lol

#84 Leo Trollstoy on 01.21.16 at 9:08 pm

Suggestions?

nice attempt at saving face. u can’t afford my suggestions

#85 she deserved it, don't u think? haha on 01.21.16 at 9:17 pm

clients today think stock brokers are pizza order guys

she deserved it, don’t u think? haha

#86 BG on 01.21.16 at 9:19 pm

Mistakes with limited damage are the best way to learn anything, provided you can figure the lesson.

#87 Buddy O' Pal on 01.21.16 at 9:20 pm

#83 Uncle Leo

Can you please fill me in how not to be a wage slave?

#88 Herethere on 01.21.16 at 9:23 pm

It must be said, from deep of the bowels in the steerage section, home of lots of frustrated wanna be one percenters. We can’t blame Jen to thru away the chance to double her money in ten or so years, with a balanced portfolio gaining a possible 7% yearly. Without taking into account taxes or monetary devaluation.
We know that Mr. Garth is correct. Alas, here in the steerage bowels, we don’t care, right know our main concern is how much cost the cauliflowers. They told us that to build 8 Kms. subway extension, run an over budget of half a billion dollars. So who cares? What about the price of cauliflowers? With the Mayor’s announcing a 53 Kms. of a so called fast track light rail. It is easy to imagine then, that in some corporate offices, some guys might have choked with their cannolis. While saying, “You have to love the mangia cakes, they are so cute and adorable.” Who cares? Tell me about the price of cauliflowers. However, possibly we are going to start a new political party, we will call it “the double double party.” And you guessed it, we will blame the Mexicans for the price of cauliflowers. Donald will be so proud.

#89 Leo Trollstoy on 01.21.16 at 9:23 pm

#87 Buddy O’ Pal on 01.21.16 at 9:20 pm

if u have to ask the price u can’t afford it

#90 A belieber on 01.21.16 at 9:29 pm

What Jen did wrong is think she knows more than history, and the times are unique.

Just finished Niall Ferguson’s book “The Ascent of Money”. Some people here might enjoy it.

He goes through the various bubbles, manias, when the bond market started, etc, etc. The main takeaway was that nothing changes and long term trends return. Kind of like old people making fun of young people’s music. Some things never change.

#91 Renter's Revenge! on 01.21.16 at 9:35 pm

Why do people hire financial advisors and then tell them what to do?

Do they not know about discount brokerages?

And when has there ever been clarity in the markets?

I’m going to make a prediction: markets will go up tomorrow. If I’m right, I’ll come back and brag about how smart I am. If I’m wrong, I’ll blame it on uncertainty.

#92 BAIT AND SWITCH on 01.21.16 at 9:41 pm

DONT dont dont fall for it. tomorrow will be the new black friday or monday.
DOW will drop 666 points. oil to 25.50 (BY MONDAY)
ITS CALLED SHORT COVERING, THERE BAITING IDIOTS IN TO THE MARKET TO DUMP THERE CRAP ON THEM
S&P WILL GO DOWN TO 1320 BY APRIL

The mark of the Beast. And stop YELLING. — Garth

#93 Leo Trollstoy on 01.21.16 at 9:41 pm

the NDP are presiding over a glorious future of economic misery. where’s the popcorn? lol

http://calgaryherald.com/storyline/braid-ndp-smiles-at-the-rest-of-canada-gets-the-finger-back

and JT walks away when asked what the deficit will be. lol. cpc all quiet and watching their opponents get torched. loving it. this. is. the. best.

#94 common sense on 01.21.16 at 9:47 pm

#83 Leo

As per Buddy O’ Pal enlighten us slaves and mere mortals.

#95 TCContrarian on 01.21.16 at 9:47 pm

Fund flows show that people don’t like to “buy low, sell high”. Rather, they much prefer to “buy high, sell higher”.

Been a buyer of Energy stocks recently (while oil in the streets…and blood!), and nice to see the bounce today – finally!
Hopefully, not the ‘feline’ type…

#96 Brazil ex-pat on 01.21.16 at 9:50 pm

Peak Oil busted – check

Global Warming busted – check

http://www.scmp.com/news/hong-kong/health-environment/article/1902830/intense-polar-vortex-could-bring-ice-storm-new

#97 Winterpeg on 01.21.16 at 9:52 pm

Hopefully Jen’s a kid and has a long timeline ahead of her to recover from her mistake. Hopefully, too, she learns from it. I’d bet that most investors at this blog have made some rookie mistakes in the market in their early days.

#98 Smoking Man on 01.21.16 at 9:54 pm

17 bucks for a pino grezzo at the Hilton, 8 at fallsview at club 365.

Senica free for a full glass.

Never doing Canadian side again

#99 Sheane Wallace on 01.21.16 at 9:57 pm

#68 IHCTD9

No crystal ball needed. Just the first rate hike.

As I said, the main goal of the Fed is to protect the dollar.

Markets come second. Unless you listen to mainstream media sellers of hope.

Hussman was deadly wrong so far, I agree, I just used his view to note the danger we are facing and in normal circumstances he could have been correct.

We could kick the proverbial can so far due to NIRP however they have limitations as we are experiencing now.

It is very likely that monetary course of tightening won’t be reversed as no sane person would actually believe that things are OK with another 80 months of zero rates, even negative rates and little growth (0.1 % according to Goldman sacks)

We are playing with fire here and crisis of confidence. There is no way for earnings not to be impacted by monetary tightening as the money printed leave offshore and US imports deflation.

That’s why I believe defensive portfolio is better choice for the moment ad rebalancing from diversified portfolio is needed.

The likelihood of somebody pulling up somehow another 6-7 years of bull markets in stocks is very low in. Not that is zero, but probably highly unlikely.

Investing is risk assessment game, like insurance. Buy insurance while you can.

#100 fany_pants on 01.21.16 at 10:00 pm

nothing wrong with her move. she has chosen a risk she is comfortable with. maybe she values her sleep. the only mistake she made was investing in the market in the first place if she didn’t have the stomach for it. It’s not for everyone. sure it generally goes up (like RE) but day to day there are as many winners as losers.

#101 lookoutbelow on 01.21.16 at 10:06 pm

Before we all get carried away about a triple digit rally, on lower than average volume, consider the following FACTS:

1. US Fed is raising interest rates, no more QE
2. Europe is in deflationary mode
3. Japan market in bear territory
4. Emerging markets are in crisis mode
5. China demand softening, maybe a hard landing
6. S&P 500 in Correction territory
7. High Yield debt market about to burst, oil and gas companies about to go under
8. Canada down 11% in the past year, already in recession

Conclusion: you want to invest in this market. Not really. So let me know what the two or three catalysts are to go up from here. The Bank of Canada is sure isn’t going to do anything.

I am going to be hoarding cauliflower and brewing my on beer. The weekend is coming.

Why would you not invest in a weak market? Waiting to buy high? — Garth

#102 VicPaul on 01.21.16 at 10:09 pm

Recently, a couple of colleagues who have vested everything (plus) in their homes have asked me (with thinly veiled delight), ” how’s the portfolio going”. I explained that I felt the world was in a restructuring period and volatility was to be expected, but admitted I don’t know what comes next. They smiled and moved along.
It got me thinking about my hill o’ beans and I realized, most of the dough in both acc’ts will never be spent by me. I’ve got a 20 year timeline, good lord willin’ (remember Tommy Hunter?), and I am really managing the stash for the kids. So, bloody as it has been, I believe acquiring a few choice assets on sale over the next while will help the kids down the road. My Dad feels the same Garth, so manage his stash well. )

#103 Sheane Wallace on 01.21.16 at 10:11 pm

# 90 a belieber:
Exactly
Byte and switch

#104 Mel on 01.21.16 at 10:12 pm

Nothing goes down in a straight line. There are hedge funds, there are day traders, and every day Joes. However, in the coming months stock markets around the world will go much, much lower. If you own stocks and made some money, I would say SELL!

Wait couple of years, and when DOW goes below 7000 again, keep buying. Economies around the world are much weaker then what is advertised. Throwing more money after bad will only make things worse in the long run.

Stay cash, and wait for opportunities.

#105 Mark on 01.21.16 at 10:12 pm

“Futures contracts..? Man your amazing. They are called cfds. Different animal, you.really don’t know shit.”

Good lord, do you even know what you’re talking about in your zest to troll? A “CFD” is just a bucket-shop/proprietary variant of a futures contract for which the counterparty is the broker itself (who will go out and hedge the net position of their book with futures contracts).

#106 Retired Boomer WI on 01.21.16 at 10:13 pm

Lots of interesting comments tonight, with more than a slight whiff of melancholy.

Look, the markets will do whatever they will do. We have soothsayers out there, be they the Chartists, or others who measure a whole raft of data, and then predict where the market is to go.

Unfortunately, they are both rarely right.

Were I, MF (young guy) I would stay invested, add as much to the portfolio as I could. Hopefully he’s not too reasonably balanced, more like an 80/20 equity/bond split because of his youth.

I am over the hill these days. Still like a 60/40 equity/bond split myself. Yes, I still like dividend champs for a portion of the equity side.
YES, still like those Index funds or ETF’s (same costs here).
YES!! I get panicky when I can’t figure out why the markets are acting strangely, and raise a bit of cash to see what’s next!
NO, do not hold gold silver, diamonds, or LOTTO tickets.
YES, do get paid every month from earnings & dividends.

OIL will revert to a more suitable price. CAD will at the same time recover. Interest rates will likely move up as investors will see the folly with too small a risk premium currently being paid.

Even if I am 100% wrong on my statements, the world will go on, we (mostly) will be around to grouse, and squawk about things in another 6 months.

NEVER take life so darn seriously!! You won’t get out of it alive anyway.

Cocktails anyone?

#107 prairie person on 01.21.16 at 10:20 pm

Reuters says move up today was short covering. The shorts will cover, the longs will hold. Which way will it break? Have there been any major changes re oil, base metals, coal, nat. gas. Any surge in exports? After the short covering what will drive the dollar? Read the reports on tar sands companies and their contractors and suppliers. US money is coming into Canada but it is in very specific areas where US work needs to be done and our low dollar makes it worthwhile to send the work across the border. Not so much exporters of products. We’ll see come Monday.

#108 Investorz on 01.21.16 at 10:21 pm

Boeing just announced their reducing 747 production by half.

Take that news and put it next to CP rail’s outlook and stocks are probably going lower. Don’t sell, but nothing wrong with accumulating a few paychecks :)

#109 Smoking Man on 01.21.16 at 10:23 pm

DELETED

#110 Herb on 01.21.16 at 10:26 pm

#81 Buddy O’Pal,

you say of the balanced and diversified portfolio that you

would downgrade expectations from the standard expected return of 7% over ones lifetime to a more reasonable 4-5%.

To my regret, I must congratulate you on the perspicacity your “rational consideration”. That has been the average annual return of my balanced and diversified portfolio over the last four years. Basically its income, with no capital appreciation worth mentioning.

#111 Sheane Wallace on 01.21.16 at 10:28 pm

bait and switch

damn it, what a spellchecker

#112 Fine Wild Roasted Gonads on 01.21.16 at 10:34 pm

#98 Smoking Man on 01.21.16 at 9:54 pm

17 bucks for a pino grezzo at the Hilton, 8 at fallsview at club 365.

Senica free for a full glass.

Never doing Canadian side again

I thought Senica cost you $200k USD+ a year in slot machine feeds!

#113 Smoking Man on 01.21.16 at 10:34 pm

#105 Mark on 01.21.16 at 10:12 pm
“Futures contracts..? Man your amazing. They are called cfds. Different animal, you.really don’t know shit.”

Good lord, do you even know what you’re talking about in your zest to troll? A “CFD” is just a bucket-shop/proprietary variant of a futures contract for which the counterparty is the broker itself (who will go out and hedge the net position of their book with futures contracts).

You are one amazing dude, you got me.

Keep posting bro..

Ah man is all I’m saying…Mark time for a visit to the Hilton bar..you need it way more than me.

#114 AfterTheHouseSold on 01.21.16 at 10:43 pm

What will the Fed offer for GM to stay?

http://www.thepeterboroughexaminer.com/2016/01/21/gm-head-offers-no-assurances-about-oshawa-plant-in-meeting-with-federal-economic-development-minister

#115 Freedom First on 01.21.16 at 10:44 pm

#52 common sense

White Knight to the rescue!

#116 observer on 01.21.16 at 10:59 pm

Jen… In the investing world. The top brokers will always be looking at people like Jen’s Broker.

Once they start to panic, you know it’s close to the bottom and its time to slowly get in. But do it with a scheduled plan because its rare that you will get in when the market reaches dead bottom….

The Crows are going to feast on your eye balls…

#117 family beagle on 01.21.16 at 11:06 pm

Technical clarification on the “dead cat bounce”… at the time of and during the initial drop, the cat is alive and healthy. At impact, the cat seemingly springs into action unharmed. Alas, expectations were unfounded. The cat merely displayed an illusion of its inherent elasticity (see tennis strings) and expired prior to the second landing.

#118 kommykim on 01.21.16 at 11:07 pm

RE:

She feared assets in decline would go to zero, when experience proves that’s irrational.

This is why investing in index ETFs is pretty safe. If a major world index goes to zero, you have much worse things to worry about than your investment portfolio.
I capitulated today and rebalanced my my TFSA holdings by adding my meagre yearly allotment of $5500.

#119 bubu on 01.21.16 at 11:16 pm

I used to get emails from a realtor with the properties sold or price change in Calgary. Since December, I’ve received only new listings… The realtor was telling me they changed the system – mls, but he set everything back.. I still don’t get the sales.. Is that the case for anybody else?

#120 Augusto Goodrich Esq. on 01.21.16 at 11:22 pm

DELETED

#121 Toodles on 01.21.16 at 11:26 pm

So should I NOT try to time entering the housing market then? Just say fuk it and pay the premium? 200k down on a 950k beater. 190k family income. House horny wife ticking like a time bomb. 39 and 40 years old. Def no rule of 90 here. Virtually all in. The endless gains on 604 RE are making me lose my sanity.

#122 Irrational exuberance on 01.21.16 at 11:33 pm

–101 lookoutbelow

This is a best time to buy! When everyone is afraid!! Time to buy!!

The first time I was able do this was in 2010/11. I had sold my home and went all in. In 5 years doubled my investments.

Then the turmoil this year happenned. I doubled up.

Both times, my guts feel sick since emotions try to get the better of me.

But seriously, all things have cycles in terms of commodities, countries and markets.

You just have figure out the pattern and buy on the lows.

I agree with a balanced approach.

#123 James2 on 01.21.16 at 11:44 pm

Dear Smoking Man
Canada doesn’t want you anymore. Go across to your USA casino feel free to ply your BS over there! We would be happy to help send you over for your free wine! By the way millionaire what the do you care if a glass of wine is 8 bucks or twenty, your rich! Right ? Your BS on your supposed wealth shows through!

#124 MF on 01.21.16 at 11:46 pm

You mean Penny Henny’s advice to sell at the bottom was wrong?

What. Have. I. Just. Done?

Ok i’m joking.

Great article Garth. Thanks for the clarity as usual.

MF

#125 kommykim on 01.21.16 at 11:47 pm

RE:

#37 raj on 01.21.16 at 7:14 pm
Any one has comments why not just invest into low cost S&P 500 index etf vs balanced portfolio.

If you had an all stock US portfolio (100% SP500) starting in 2007, it would have taken you 6 years to recover. But if it was made up of 25% each of Canadian bonds, TSX, SP500 & MSCI-EAFE it would have taken 3 years. Change it to 40% bonds, and 20% each of TSX, SP500 & MSCI-EAFE it would have taken just under 2 years.
Play around with this historical calculator to see for yourself:
http://www.ndir.com/cgi-bin/downside_adv.cgi

#126 The American on 01.21.16 at 11:53 pm

At #17: Conan, so you’re saying 0.02% of the American population? Stop the presses. LMFAO

#127 A Canadian Abroad on 01.21.16 at 11:54 pm

The CAD dollar should still go lower, after all, oil inventories were reported today to increase by 4.4 million vs 2.6 estimated. Iran is coming on-line with 700k/day and if it wasn’t for ECB “promised” simuti today the market wouldn’t have gone up (as much?).

That said, oil and the dollar will go up. Many see the CAD to be 0.67 or 0.66 bottom.

As always my fellow traders:

“ALWAYS WAIT FOR CONFIRMATION” before buying.

#128 The American on 01.21.16 at 11:55 pm

At #12: Ole Doberman, do you even understand what “liabilities” means as opposed to “debts?” My GAWD how dumb are you people? *Think* before you write, please.

#129 The American on 01.21.16 at 11:57 pm

At #32: Nanaimo Bar, wait for it. :-) You’ll see. CAD still going DOWN. Don’t let a day of gain fool you. The price of a bucket of fried chicken is more expensive than the price of a barrel of oil. Get used to it for a loooooooooong while.

#130 Gulf Breeze on 01.22.16 at 12:02 am

I feel very strongly that Saudi Arabia can’t survive its own open spigot policy much longer. It’s one thing to shoot yourself in the foot for market share, but another to commit slow painful economic suicide, particularly if you have lost the full support of Western regimes.

Very soon, they will have to sit down with Iran and other OPEC countries and work out their differences, this allowing oil prices to rise.

I have a hunch the Canadian dollar may be near a bottom right now, as a consequence.

I just transferred all of my American funds into my Canadian account. I could have waited, but thought that would be playing with fire.

#131 Greg on 01.22.16 at 12:05 am

About 20 years ago I remember gas prices in alberta were 46.9 cents per litre. 46.9 seemed to be the standard price for a long time. 46.9 is stuck in my mind as a fair price for gas.

46.9 x 2% inflation for 20 years.

46.9 x 1.02^20 = 69 cents per litre.

We are back to normal. I need to get a v8.

#132 kommykim on 01.22.16 at 12:05 am

RE:

#62 Ogopogo on 01.21.16 at 8:06 pm
Another babbling, incoherent goldbug. I thought these vermin left the blog in 2012 never to come back?

They’ve just been reinvigorated by the recent tiny reverberation of the deadcat bounce in gold. It doesn’t take much to get them excited.

#133 A box in the Sky on 01.22.16 at 12:15 am

No point ripping into just Jenn. Over half of this blog is exactly like her.

Doomer peasants who are resigned to living in basements.

Just look at the comments – people talking about being in cash waiting for the Dow to falls below 7000, or over 50%.

And on the 1 in 50 chance we do get a 50% crash these doomer peasants still won’t buy because then they’ll set some new arbitrary limit like 3000 or 1000 or 1 or 0.

Doomers are mouthbreathers.

#134 Tj on 01.22.16 at 12:18 am

So, if logic tells you oil is getting too cheap… Wouldn’t investing say 5-10% or one’s portfolio in an ETF that tracks the TSX Capped Energy Index mame sense?

#135 Big Dipper on 01.22.16 at 12:22 am

#105 Mark on 01.21.16 at 10:12 pm

“Futures contracts..? Man your amazing. They are called cfds. Different animal, you.really don’t know shit.”

Good lord, do you even know what you’re talking about in your zest to troll? A “CFD” is just a bucket-shop/proprietary variant of a futures contract for which the counterparty is the broker itself (who will go out and hedge the net position of their book with futures contracts).

——————————-

Exactly.

But somehow the crowd thinks this derivative is new and different. My past experience has been with futures which have lower fees and more transparency. CFD”s appear suitable for smaller purchases and higher leverage. Each to their own.

#136 Bob dog on 01.22.16 at 12:44 am

Walking down Robson street in Vancouver today and noticed every 3rd store is shuttered and for lease. If this is happening in the money laundering capital. What’s happening in the real world? But don’t try to time the rigged casino some call the market.

#137 Bobs ur uncle on 01.22.16 at 1:07 am

#106 Retired Boomer WI on 01.21.16 at 10:13 pm

Cheers!

#138 Bob dog on 01.22.16 at 1:18 am

Perhaps Jen remembers 2007 when financial terrorists did more damage to western society than Al-Qaeda and ISIS could ever dream of. Perhaps if justice was served she would feel more comfortable investing her hard earned money in the market. Nothing has changed. The derivatives bomb is even bigger today. Financial WMDs are still out there.

#139 Mark on 01.22.16 at 1:28 am

“Boeing just announced their reducing 747 production by half.”

An airplane that is closing on being 50 years old, and is mostly economically/technically obsolete having its production reduced is hardly big news. What you should be looking at is the many thousands of 777’s, 787’s, KC-46A’s (USAF 767 tankers), and 737’s that are on Boeing’s order books. Over 5700 airplanes apparently.

So as a data point, the reduction in 747 production has almost zero relevance to the state of the US economy. I’m really, really bearish on the US economy and stock market (and largely restrain my comments here on the topic simply not to raise Garth’s ire), but heck, even I’ll admit that Boeing is a very bright spot in a sea of doom and gloom.

#140 Leo Trollstoy on 01.22.16 at 1:31 am

#109 Smoking Man on 01.21.16 at 10:23 pm

don’t waste your time. he’s too dumb to recognize how dumb he is. after all, he thinks finding a job in tech is hard. tells u somethin about the person right ther

#141 Leo Trollstoy on 01.22.16 at 1:32 am

lotsa posters tonight deserve to be poor. crave to stay poor. they will be. wage slaves forever. it’s what they want. it’s what they do.

#142 Leo Trollstoy on 01.22.16 at 1:34 am

#94 common sense on 01.21.16 at 9:47 pm

if u dun kno you’ll never kno. if u gotta ask the price you can’t afford it

#143 family beagle on 01.22.16 at 3:16 am

#102 VicPaul on 01.21.16 at 10:09 pm
Recently, a couple of colleagues who have vested everything (plus) in their homes have asked me (with thinly veiled delight), ” how’s the portfolio going”. I explained that I felt the world was in a restructuring period and volatility was to be expected, but admitted I don’t know what comes next. They smiled and moved along.

Well that’s suspiciously snarky of them. What comes next? We get along with our neighbours, eh? You know why the rich party with the poor? Because those @$$oles in middle class are too good and too needy.

Loon up by fall with a .25 interest up by BoC early summer. Pharma/geri/web syndicates/reits. 1 mill more people in GVRD in ten years. Average 604 lot 4 to 5 mill $. Average condo 1 to 1.5 mill. RE will be national pastime, defended only by our supplicance and the weather. Or not.

#144 old gringo on 01.22.16 at 4:43 am

“Dead cat bounce”!
Don’t get too excited, as this is just the New York Boys cleaning up on a few more of your $$$.
I’ll wait for a bottom before I top up.

#145 Zack Prentice on 01.22.16 at 5:01 am

Is there collusion between Ottawa and the BOC to keep rates at near zero so that Ottawa can issue zero interest bonds to itself and then spend billions with the excuse that ‘it’s a great time to borrow ’cause the rates are so low”?

http://business.financialpost.com/fp-comment/william-watson-ottawa-is-the-debt-pot-calling-the-kettle-broke

#146 Ray Skunk on 01.22.16 at 6:32 am

Just perusing this morning’s market and JT-selfie news…

Oil futures up 4.5-5.3%
Nikkei up 5.9% at the close.
FTSE 1.8%, CAC 2.5%, DAX 2%.

Nice one Jen. For all the winners who will have bought in at the bottom, there need to be losers. Thanks for being the other side of the coin.

#147 Ontario's Left Coast on 01.22.16 at 6:44 am

http://www.theglobeandmail.com/globe-investor/inside-the-market/market-updates/premarket-global-stocks-oil-soar-as-draghi-the-dove-tames-global-bears/article28333896/

Poor Jen, locking in a punishing loss and now chasing equities as they rocket higher. I really hate to say I told you so, but this is the worst rookie move you can imagine.

#148 saskatoon on 01.22.16 at 7:22 am

#291 Herbn on 01.21.16 at 6:21 pm

why do I find myself exclaiming “O.M.G!!!” every time I read one of your “rebuttals”?

possibly because you are irrational, and think that putting (“”) around words suffices for argumentation?

incidentally, this was exactly my earlier point.

socialists are sociopaths…unempathetic.

consequently, when “debating”…they either:

1. lie
2. slander
3. misdirect

this is ALL they CAN do!

when these tactics fail…they move on to the next victim.

notice how “herbn” tries to illicit an emotional response from the “group”–substituting an irrational reaction for logical proof?

this social “conformity” is all the left-wing nutjob requires in order to validate his opinion.

they are the most dangerous of people.

#149 Deb on 01.22.16 at 7:37 am

How long has Jennifer been investing? It does not sound like it has been for very long, but we don’t know that. It is rather odd that someone would react in such an extreme way to a short-term 5% decline in a balanced portfolio.

In the note to her financial guy, she states, “I fully understand your long term picture outlook….” Really? From this, it does not sound like she needs the money for next Tuesday.

Whether you are working with an advisor or doing it on your own, the idea is to construct a plan with a timetable, and stick to it. And for heaven sakes, if you are bothered by the noise (the financial media), turn it off.

#150 JimH on 01.22.16 at 7:39 am

#108 Investorz on 01.21.16 at 10:21 pm
“Boeing just announced their reducing 747 production by half.”
================================
Wow! What a blockbuster piece of news! Before you or anyone else sets their hair on fire, maybe just pause for breath?

First, you do realize that the Boeing 747 family has been in production since 1968? That Boeing currently has only 20 unfilled orders for the 747-8, and half of those are for the 747-8F cargo variant? In short, the 747 has more or less been eclipsed by more modern airframes, and that if it wasn’t for a flurry of orders (12 in 2013 and 2 in 2015) the production line would have been shut down?

Secondly, let’s look at “reducing 747 production by half”. Boeing’s 2016 Q1 plans call for producing 1 (one) 747 per month; Q3 plans call for reducing that to 0.5 (one-half) 747 per month beginning in September.

Hope you’re feeling better.

#151 pbrasseur on 01.22.16 at 7:52 am

«What Jen did wrong is think she knows more than history»

That she did of course.

But what she did mostly wrong is to look at the current price of her assets instead of looking their intrinsic value.

I don’t like short term stock market fluctuations more than the next guy, but I know the stock market the only practical way for me to own pieces of the greatest companies on earth.

As an investor all you need to concentrate on is the performance, behavior and management of the companies you own, it’s all that matters in really and once you bought you should pretty much ignore stock price (unless it becomes way overvalued in which case you might want to take a profit). Just like you would do for a business you really owned, you wouldn’t be questioning the market every day about its value, instead you’d worry about its earnings, investments, etc… All you need to know is that in time market always give thing their true value.

I know Garth’s advice is to not buy individual stocks and I respectfully disagree of this. Setting up a portfolio of individual stocks is the ONLY WAY to ensure you own quality assets. What you should not do is to do it on your own unless you really know what you’re doing. Finding and monitoring companies is a tedious job that requires a good bit of knowledge, so get help, in the long run you won’t regret it.

If you treat the market with respect it will reward you, if you play smart ass by trying to time it or act like you’re in a casino you will get results accordingly!

#152 Grantmi on 01.22.16 at 7:56 am

Bob dog on 01.22.16 at 12:44 am
Walking down Robson street in Vancouver today and noticed every 3rd store is shuttered and for lease. If this is happening in the money laundering capital. What’s happening in the real world? But don’t try to time the rigged casino some call the market.

AND top tourist street also in Hongcouver….

AND a 70 cent dollar…….

It tells you lots!

#153 AfterTheHouseSold on 01.22.16 at 7:59 am

And so it goes, Cobourg hospital, Bowmanville conveyors, Oshawa GM, eroding from the edges.

http://www.thepeterboroughexaminer.com/2016/01/21/layoffs-looming-at-northumberland-hills-hospital

#154 Julia on 01.22.16 at 8:00 am

#67 Blogbitch
“Sigh. Jen is an excellent example of why women need to take charge of their own financial future. Don’t get me wrong. I love men. I just think women should learn more about money.”

Because no man would do this? Stupidity has no gender.

#155 salonist on 01.22.16 at 8:20 am

people live in their minds and if jen’s mind needed to sell and be In her own comfort zone.so be it.right or wrong.
toytool
calling jen a dumb blonde,shame on you
toystool
you seem to be comfortable,debasing people.have another drink.

#156 fancy_pants on 01.22.16 at 8:35 am

kinda like the Titanic. have a seat and relax while the band plays on.

#157 ANON on 01.22.16 at 8:38 am

Dead cats ripping faces off on the bounce. Happy days are here again.

#158 Soothsayer on 01.22.16 at 8:42 am

Throw all history away, is what I say.

Past performance is no indication of future performance or trends.

We are in unchartered territory as far as the economy goes. I am very bearish overall.

Having said that, I didn’t sell like Jenn did. I’ve held on but then again, I only have a very small measly portfolio that most would laugh at.

I also say, don’t take money advise from a poor man.

#159 cto on 01.22.16 at 8:46 am

My significant other is like Jen. By my advice she has finally in the last two years let a financial manager, manage her investments. However she had it in cash for 3 years because she wanted to use it as a down payment on a house or condo which she has been told is a “safe investment”. Now she thinks listening to me was a failure and wants to liquidate it to cash to buy that “safe investment” and become landlord of a house with ever increasing value.
Looks like the system has proven her right and my name is dirt!
For this, I would like to thank:
My government (both past and present),
my Central bank,
the banks,
HGTV,
And of course Realtors

#160 AfterTheHouseSold on 01.22.16 at 8:48 am

‘$500 million innovation fund’ available to GM Oshawa

http://www.ctvnews.ca/business/3-000-jobs-in-limbo-as-gm-stays-silent-on-oshawa-plant-s-future-1.2746230

#161 Balmuto on 01.22.16 at 8:53 am

Crude awakening.

#162 cto on 01.22.16 at 8:55 am

its funny, everyone seems to think on here that jen is going to buy back in at higher costs. im thinking that she recieved advice some where to change investment classes, i.e,…to real estate…as its a “proven performer”. she tryed equities and they failed her,…now she has learned her lessen and she knows whats best.

#163 TRT on 01.22.16 at 9:06 am

Hope no one was leveraged long the USD.

If you were = wiped out. Lol

QE. Central banks printing cash like no tomoro.

#164 Noel on 01.22.16 at 9:20 am

#127 A Canadian Abroad

“As always my fellow traders:

“ALWAYS WAIT FOR CONFIRMATION” before buying.”
___________________________

Actually, for traders its the exact opposite – the saying is “buy on rumour & sell on news”.

But none of you, unless its your job, should be traders. Just buy the ETFs.

#165 Herb on 01.22.16 at 9:26 am

#148 Sask,

I had hoped that you were a minor operative spreading the Right Wing gospel, but now I fear that you believe what you write and are just plain sick.

Out.

#166 TurnerNation on 01.22.16 at 9:28 am

That’s a patronizing and passive aggressive email. Typically Canadian.
If this person’s goal is Sell Tops, Buy Bottoms they now are calling a Top? Would be nice to see their Bottom call.

Good riddance. Leave markets for Rich, Traders, and HFT.

#167 pbrasseur on 01.22.16 at 9:29 am

«Hope no one was leveraged long the USD.» #163 TRT

That’s the problem with owning RE in the US. Sure the market value of the property has increased with the currency but as well the price to service it, everything went way up and that’s real money you must pay right now. So unless you rent it out to generate some US income I’m not sure how it’s such a great thing and there is no guaranty what the value of the currency will be when you do decide to sell!

Financial assets have been a far better investment as far as I’m concerned.

#168 Nanaimo Bar on 01.22.16 at 9:36 am

Brent at even with crude. Probably Goldman. Buying, oil short squeeze.

#169 Leo Trollstoy on 01.22.16 at 9:40 am

#159 cto on 01.22.16 at 8:46 am

don’t forget to thank yourself. nobody can become your significant other without your permission

#170 Grantmi on 01.22.16 at 9:56 am

Balmuto on 01.22.16 at 8:53 am

Crude awakening.

Temporary!!

#171 Pierre on 01.22.16 at 10:00 am

Coming to the bank preferreds?

http://www.zerohedge.com/news/2016-01-22/chesapeake-suspends-preferred-stock-dividends

The ignorance on display here is often stunning. — Garth

#172 Leo Trollstoy on 01.22.16 at 10:04 am

Garth, how does Canada compare?

http://www.businessinsider.com/us-anti-recession-chart-2016-1

#173 cramar on 01.22.16 at 10:05 am

Whatya mean it is not possible to nail tops and bottoms of the markets? Jen might have just done that! Living proof that it can be done. But I need one more confirmation that it wasn’t just dumb luck.

Let us know when she buys in again. That should be the top of the market and the confirmation needed that she nailed it the second time.

#174 Ronaldo on 01.22.16 at 10:06 am

#130 Gulf Breeze

”I just transferred all of my American funds into my Canadian account. I could have waited, but thought that would be playing with fire.”

Good move. Agree with your thoughts as well. I switched my USDs a couple weeks ago. Pretty much caught that bottom. Don’t expect it to go much lower. The next move for the TSX will be driven by the resourse stocks and PM’s which I believe have also bottomed. The next couple years are going to be very good in those areas. Nothing stays the same for very long. All very temporary. The Americans have an opportunity once again to get into PMs, especially Ag at a very low price. If you bought US houses back when our dollar was at $1.06 or thereabouts, you would be wise to sell, take your profits and run or you can hold on and watch those gains melt away as our dollar goes back up. I have my doubts the the value of the real estate will go much higher down there. I would stay as far away from Cdn real estate as possible. Just my take on things.

#175 Trey on 01.22.16 at 10:08 am

#12 ole Doberman on 01.21.16 at 6:35 pm

Gartho what about the U.S of A social security system piling on 200 trillion in liabilities? No one wants to talk about that one.
——————————————————–
Doberman makes an excellent point – funny how Garth side steps this one.
This is the mega bomb sending the States back to the stone age – like the fall of Rome

They print their own money, which is the global reserve currency. I don’t think Americans are too worried about it. — Garth

#176 Penny Henny on 01.22.16 at 10:20 am

#84 Leo Trollstoy on 01.21.16 at 9:08 pm
Suggestions?

nice attempt at saving face. u can’t afford my suggestions
/////////////////////////////////////
Translation.
If you follow Leo’s advice you would lose a whole lot of money. And thus you cannot afford his suggestions.

#177 saskatoon on 01.22.16 at 10:20 am

#160 AfterTheHouseSold

‘$500 million innovation fund’ available to GM Oshawa

atrociously immoral.

#178 Trey on 01.22.16 at 10:26 am

They print their own money, which is the global reserve currency. I don’t think Americans are too worried about it. — Garth
———————————————————
LOL!

QE won’t be able to handle 200 trillion – that’s why it’s the end game.

Debating doomers is like wrestling pigs. — Garth

#179 Ronaldo on 01.22.16 at 10:29 am

#167 pbrasseur on 01.22.16 at 9:29 am

My thoughts exactly.

#180 Mike hokasichy on 01.22.16 at 10:32 am

So many canadian oil sands company stocks are down huge…..can’t wait to get back to work so I can buy even more of them….for now I’ll stay where it’s warm…..just left thialand….too many ladyboys. …maybe I’m weird but I kinda miss work…..sure as f*** won’t miss all those ladyboys

#181 Noel on 01.22.16 at 10:34 am

#177 saskatoon

Would you prefer the $500mn was paid out in EI benefits and urban renewal projects after the most important business in Oshawa shutters its doors?

#182 zee on 01.22.16 at 10:39 am

Jen must feel really stupid this morning.

#183 How's Jennifer Doing? on 01.22.16 at 10:39 am

Markets up almost 2% LOL

Nervous nellies gonna call back their brokers today …

#184 Nanaimo Bar on 01.22.16 at 10:47 am

No QE. Keep Rense ideology out of here. But get ready for higher interest rates, kids. Keeping to my record, it will be 4 and a whole lot more. US economy is humming. Going forward, rates will be depend of market expectations. Meaning, rates will Rise when Bond Market is comfortable. The floor on Oil by the central Banks was the shot to the Bond Market. This is what the Bond Market needed. Party on acros the board.

#185 BobC on 01.22.16 at 11:03 am

#175 Trey
Our Social Security isn’t a problem. The deficit between what comes in and what goes out is $78 billion dollars between now and 2018. Our problem is the $1Trillion plus dollars a year handed out in welfare and $19 Trillion dollars to pay interest on. Another liberal/democrat government with interest rates normalizing will send taxes to the point of destruction. You’ll find out with the new Canadian liberal mindset.

https://www.ssa.gov/oact/trsum/

#186 cramar on 01.22.16 at 11:16 am

102 VicPaul on 01.21.16 at 10:09 pm

Recently, a couple of colleagues who have vested everything (plus) in their homes have asked me (with thinly veiled delight), ” how’s the portfolio going”. I explained that I felt the world was in a restructuring period and volatility was to be expected, but admitted I don’t know what comes next. They smiled and moved along.

———-

You’re all in it for the long haul. When the time comes in future when interest rates rise and/or housing prices correct, they are going to be hurting pretty bad. Resist the urge to say “how is the housing investment going?” No sense rubbing it in. Just say, “I feel for you,” smile and move on.

#187 Dups on 01.22.16 at 11:16 am

Soros wants people to sell so he can buy…How else did he become rich?
He does not have a crystal ball either. Media works for someone rich too…

#188 Dups on 01.22.16 at 11:32 am

With all this cheap oil floating around the world, I do not see the need for more Canadian oil until Oil goes to 70 C/barrel minimum. This increase today in the TSX is a temporary blip upwards.

The CDN economy has some fundamental issues that need to be worked out before we are on solid ground again: heavy on expensive energy and resources, unaffordable housing bubble, low wages, highest debt ever 171%, hanky dory government, brain drain to US, unemployment, new higher taxes that do not work, punishing the successful, CHMC scheme that needs overhaul, ageing population, etc etc….

Based on the fundamentals above,
The TSX will take much longer to go up. The dollar will be low for a while before we say we are out of this Canadian recession.

#189 Dups on 01.22.16 at 11:33 am

…meant 70$/Barrel

#190 kommykim on 01.22.16 at 11:38 am

Finally the B.C. Securities Commission is getting involved with investigating some real estate companies in Van:

http://www.vancouversun.com/life/Crowdfunding+real+estate+ventures+being+reviewed/11668345/story.html

#191 common sense on 01.22.16 at 11:42 am

Patience to anyone enjoying the bounce just yet. I am.

Anyone want to guess if CDN and US markets are higher at year’s end than they are today?

As they say, “That’s why they play 60 minutes.”

That is IF the US does not lower interest rates nor introduce QE4. If so, all predictions are off.

There are no natural markets any more nor will be until all stimulus stops and true price discovery can take place.

Hey Freedom..White Knight? Not really…just a decent human being . :)

#192 cramar on 01.22.16 at 11:46 am

#178 Trey on 01.22.16 at 10:26 am

Debating doomers is like wrestling pigs. — Garth

LOL! Blog dawg translation:

Never fight with a pig.
You can’t win.
You both get dirty.
The pig loves it.
– Pasquale Capozzi

#193 HFT Dude on 01.22.16 at 11:46 am

With this morning’s rally, Jen might have timed market bottom perfectly.

#194 NTH on 01.22.16 at 12:04 pm

And then they discussed how to have fab hair in All climates ;-) ‘cuz you know…..

http://www.calgarysun.com/2016/01/21/trudeau-dicaprio-square-off-in-davos

You go get ’em tiger, you one tough MoFo-PeeMo

#195 Noel on 01.22.16 at 12:07 pm

#185 BobC

Yes, don’t you just hate those welfare recipients driving up the national debt with their overseas war campaigns and TARP programs?

#196 A Canadian Abroad on 01.22.16 at 12:09 pm

#164 Noel on 01.22.16 at 9:20 am “buy on rumour & sell on news”. But none of you, unless its your job, should be traders. Just buy the ETFs.

Another great expression Noel indeed. I’m a trader BTW, mostly in FOREX; individual stocks are above my risk tolerance. ETFs and even carefully selected MF’s are great options for everyone.

#197 saskatoon on 01.22.16 at 12:13 pm

#181 Noel

no.

how’s about a third option:

don’t initiate governmental force to take half a billion in the first place.

this is the only moral course of action here.

#198 Bottoms_Up on 01.22.16 at 12:19 pm

#151 pbrasseur on 01.22.16 at 7:52 am
————————————————–
I think Garth’s point about diversification outweighs the likelihood of owning a ‘bad’ company as held within an ETF.

You may think you’re choosing a ‘quality’ stock, but things happen…think of BP…VW….SNC lav…you can own quality stocks but still have no idea of random events, corruption, scandals, bribery. That’s where diversification (and rebalancing) takes away the risk.

#199 BeSmartRich on 01.22.16 at 12:21 pm

I feel really bad for Jen. The market recovered its loss from Wednesday completely yesterday and adding 2% of gain now. Just stay in. Why would buy something at $100 and sell it for $95 when it will be worth $108 by the end of the year.

Thanks for the article as always.

BeSmartRich

#200 saskatoon on 01.22.16 at 12:21 pm

#165 Herb

herb, buddy…you are an unintelligent sociopath incapable of independent thought, rationality, or empathy.

evidence: you (again!) just proved my point.

slander = check.
misdirection = check.
appeal to group for validation = check.

well done, r-selected rabbit.

well done.

#201 Bottoms_Up on 01.22.16 at 12:22 pm

#294 maure on 01.21.16 at 8:04 pm
———————————————-
FYI in yesterday’s post I did post the proof of humans causing global warming.

I have yet to hear your response to the proof?

#202 bdy sktrn on 01.22.16 at 12:24 pm

:1740 KITCHENER STREET (teardown tiny dump)
ask $1,599,999
sold $1,650,000
DOM 1 week
————————–
new record for a 33′ east van lot

8 months ago this price got you a new house on the same lot.
18 months ago this was under 1m.
3 years ago this was half of todays price

nice double for the ‘fools’ who got in recently.

#203 Nanaimo Bar on 01.22.16 at 12:26 pm

# 191 Common Sense.
That is IF the US does not lower interest rates nor introduce QE4. If so, all predictions are off.

——————————————————-
QE4? Not in the cards. People don’t understand how the Fed works. They are not fly by night making decisions on the spur of the moment. They have a Path that was designed probably 3 years ago. Today was a signal to the vultures that is their time in the US has come to end. Or that life will be more difficult for them. The vultures will moving on to more toxic environments. I will take a few minutes today and give my forecast for Canada 2016. I will post it after Garth’s new post tonight.

#204 DEVELOPERS SAYS IT'S DIFF THIS TIME on 01.22.16 at 12:30 pm

http://www.cbc.ca/news/canada/british-columbia/falling-loonie-fueling-foreign-interest-in-vancouver-real-estate-say-industry-experts-1.3415244

More realtor crap. Show me sales stats and I’ll believe it. — Garth

#205 Old Man Too on 01.22.16 at 12:40 pm

Jen, It’s important to remember that market volatility is a normal part of the economic cycle. If your investment portfolio is based on your risk tolerance, and is properly diversified across different asset classes, sectors, investment styles and geographic regions—short term events may have little, if any, effect on your longterm retirement and savings goals. It’s important to remain calm and to focus on your long-term investment goals. Now isn’t the time to change course

Remember that, historically, there have been many major events that have had a dramatic short-term impact on the markets. Looking back, these are now mere blips on the financial market radars. Generally, those who stay invested and contribute regularly are rewarded in the long run.
Personally my RSP at work returned 16.5% last year. It’s 25% balanced and 75% foreign equity. So far this year it is down 5.5%. C’est la vie.

#206 MF on 01.22.16 at 12:40 pm

#198 Nanaimo Bar on 01.22.16 at 12:26 pm

Some interesting posts from you today. What sign to the vultures are you talking about? Who are the vultures?

Not knocking your posts, just legit curious.

MF

#207 common sense on 01.22.16 at 12:49 pm

#203 Naniamo Bar

Thanks..looking forward to reading it and who the vultures are…

#208 saskatoon on 01.22.16 at 12:50 pm

#201 Bottoms_Up

misdirection = check.
lies = check.
slander = forthcoming.

“Science begins with theories…and then once enough data accumulate, something becomes fact. It is now a fact that humans are the biggest contributor (ie, the biggest cause) of global warming and climate change.”

even in your OWN linked ipcc report…it doesn’t claim anthropogenic global warming as “fact”.

it says it is “extremely likely”.

is 2 + 2 = 4 extremely likely?

another r-selected sociopathic rabbit–getting a dopamine bang from abusive pathological altruistic tendencies.

#209 BobC on 01.22.16 at 12:51 pm

#195 Noel
I didn’t mean to imply welfare was our only problem. Damn we both could go on all day about the problems down here. What you mention is true but that’s part of the $19 Trillion debt isn’t it?
With unemployment supposedly at 5% do we need all that welfare? I believe it’s a scam by people that really don’t need it and a government that wants to say GDP is still going up.

#210 pbrasseur on 01.22.16 at 12:56 pm

#198 Bottoms_Up

Warren Buffet doesn’t buy ETFs and neither should you.

For someone who knows what the’re doing it’s not that hard to find a group of companies that grow by 15%+ a year.

#211 MF on 01.22.16 at 12:57 pm

#102 VicPaul on 01.21.16 at 10:09 pm

Don’t even try man. These people live on a self imposed cloud and there is no talking to them. That’s why it will be so sweet when this BS housing “market” goes down in flames like the Hindenburg. Make no mistake they will then all cry for help from the government because it’s “not their fault!”.

#159 cto on 01.22.16 at 8:46 am

Yup. Spot on with your list of morons/chitty organizations to thank. CMHC should be destroyed since I’m pretty sure all the returning WW 2 vets have found housing by now.

Remember women are more emotional than men (always). That’s why they make lousy managers (90% of the time). Kudos on your success so far but you are fighting a losing battle. She will not take kindly to the emotional rollercoaster investing in the markets provides, and at the same time her nesting instinct will demand a house. Add to this her friends will post chitty pictures on Facebook of their homes and “happy” lives everyday and then her jealousy will kick in to high gear. Resentment towards your decision will build further and further with no end in sight. Tough spot to be in.

MF

#212 Nagraj on 01.22.16 at 12:57 pm

if $BKX leads the broader mkt (and if $TRANS is ahead of the broader mkt) this Jen person may have acted with due caution both for the short and intermediate term

#213 Josh in Calgary on 01.22.16 at 1:01 pm

#151 pbrasseur on 01.22.16 at 7:52 am,

It’s not that owning individual stocks is “bad”, it’s just not worth it for most people.

I’m sure you’ll agree that keeping a balanced portfolio is the best approach. That requires keeping at least 5 to 6 ETFs. Now if you want to achieve that same balance picking individual stocks you can safely multiply that by 10. When it comes time to rebalance any “gains” you’ve achieved by picking good stocks are quickly eaten up by extra fees. And if you didn’t beat the market you’re behind.

Now if you have a large amount of money and a good advisor you trust this exercise could be worth while. But that doesn’t apply to most people. Garth is attempting to advise the masses here and the ETF approach is best for the vast majority. And if you’re good enough to pick your own stocks then you hardly need advice dished out on a free blog.

#214 Re #175 Trey and Gart's reply: on 01.22.16 at 1:04 pm

Gart’s reply to post #175 Trey on 01.22.16 at 10:08 am

“They print their own money, which is the global reserve currency. I don’t think Americans are too worried about it.”

For how long will they be able to print their own money?

And I am sure that the mainstream media in the hands of a few “chosen” people and the financial elites will try anything to keep them in the same state.

For how long?????????????

http://i65.tinypic.com/2mweog.jpg

#215 AB Boxster on 01.22.16 at 1:05 pm

T2 new comments in Davos.

Now we all need to be feminists.

So lets see:
Our economy will improve because we are ‘diverse’?
Countries should invest in Canada because were are ‘resourceful’
We should be respected because we are ‘feminist’?

Best opinion piece so far:

http://business.financialpost.com/fp-comment/peter-foster-dumb-in-davos

Longing for Jean Chretien to return to run the Liberals.

#216 MF on 01.22.16 at 1:09 pm

#208 saskatoon on 01.22.16 at 12:50 pm
#165 Herb on 01.22.16 at 9:26 am

r-selected. I love it.

For those that don’t know what r-selected means:

“r-selected species are those that place an emphasis on a high growth rate, and, typically exploit less-crowded ecological niches, and produce many offspring, each of which has a relatively low probability of surviving to adulthood”

Love the nod to biology/evolution sask

MF

#217 Nanaimo Bar on 01.22.16 at 1:09 pm

Mr Deep Pockets has the best quotes that sums the U.S. Economy. And this is from a guy who is a senior advisor for a Large Hedge Fund

Overall, there is a lot to be optimistic about,” he said. “The U.S. isn’t going gangbusters, but we are the envy of the world right now.”

“my advice is to stay calm and pay attention to what is going on” in the economy.

https://www.multihousingnews.com/post/bernanke-recession-not-imminent/

I think I will run with Mr Deep Pockets

#218 MF on 01.22.16 at 1:11 pm

#214 Re #175 Trey and Gart’s reply: on 01.22.16 at 1:04 pm

“For how long will they be able to print their own money?

And I am sure that the mainstream media in the hands of a few “chosen” people and the financial elites will try anything to keep them in the same state.

For how long?????????????”

-Hopefully forever.

MF

#219 Mike in Edm on 01.22.16 at 1:27 pm

According to http://calgaryrealestatereview.com/ some house that was listed for $8.9million in 2014 along the Bow just sold for $3.3million. Ouch.

#220 Mike in Edm on 01.22.16 at 1:27 pm

Sorry, that house is along the Elbow, not the Bow

#221 T2 @ Davos on 01.22.16 at 1:34 pm

I knew this guy was trouble the minute he got elected but just how moronic this dude would turn out to be for us, surpasses even my worst nightmares.

If he had “resources between his ears” he might have made it big in the US like the University of Waterloo grads working in Silicon Valley that he cited as examples of Canadian excellence.

This kid is an absolute disaster. Snooty little pampered brat riding the coat tails of his Daddy’s political legacy.

If we’re lucky he will get bored of playing King of Canada soon enough and go back to his sandbox, ie being an eternal student of all things irrelevant.

What a joke!

#222 AB Boxster on 01.22.16 at 1:37 pm

#219 Mike in Edm on 01.22.16 at 1:27 pm

———————————-
Yeah but because it was probably relisted in 2016 at 3.2 million, its a great example of how the price of housing is actually rising.

Ain’t math fun.

#223 spaceman on 01.22.16 at 1:37 pm

People like Jen should put all their money in a T-bill fund, and forget about it. Absolutely no forward thinking..

I have had so many people tell me, they watched their Retirement fortune plummet in 09, then pulled it all out and put into a GIC. I told them just to leave it, and look at the long term gain of the TSX, DOW, or S&P… they all come back… and average about 6% across history.

I balanced in 08 50/50 and rebalanced in 09 60/40 Equity to Bonds, and both have done well. Now Since 2014, I have been moving 2000 a month from Equity to a mix of Bond/Cash/T-bill and Short Term. I am now at a perfect 50/50 balance, and have a long term horizon for most, but the short term (RESP) is now 60% in Cash. I have never been afraid of a loss, it always comes back, even the Nasdaq… even Oil…. wait and see.

#224 USDCAD high leverage on 01.22.16 at 1:40 pm

Anyone who was playing this currency pair USDCAD with 200x leverage in the last couple days got wiped out.

OUCH!

Smoking Man is hiding somewhere…

On the other hand.. the pullback is a great opportunity to convert more soon worthless(er) C$ into USD.

There is still no upside to Canada’s economy with the whole world going into starvation mode.

Anyone still trying to convince himself that Canada’s economy and currency are NOT squarely tied to the price of whatever we have in the ground is a dreamer.

Canada is a resource driven and export dependent economy. The commodity supercycle of 40 years has just ended and China is at the tail end of its massive expansion and growth phase. What will replace the declining demand from China? The Martians maybe?

#225 T2 sucks on 01.22.16 at 1:40 pm

#215 AB Boxster on 01.22.16 at 1:05 pm

T2 new comments in Davos.

Now we all need to be feminists.

So lets see:
Our economy will improve because we are ‘diverse’?
Countries should invest in Canada because were are ‘resourceful’
We should be respected because we are ‘feminist’?

Best opinion piece so far:

http://business.financialpost.com/fp-comment/peter-foster-dumb-in-davos

Longing for Jean Chretien to return to run the Liberals.
………………………………………………………………….
Perhaps I’m cynical, perhaps its because I really dislike the Liberals. However Jean Chretien was at least a well crafted politician and I could respect him for that. A smart guy, knew his way around the political circuit and was a professional. This guy Justin, well there is just no way to say it nicely. He is a blithering idiot! How did this country elect him? It’s like handing the keys to the liquor cabinet over to a 15 year old.

#226 S.Bby on 01.22.16 at 1:46 pm

#204 Developers Says…

and Bdy Sktrn was sitting in the front row.

#227 Noel on 01.22.16 at 1:51 pm

#209 BobC

“With unemployment supposedly at 5% do we need all that welfare? I believe it’s a scam by people that really don’t need it and a government that wants to say GDP is still going up.”

_____________________

Welfare spending is only a small chunk of social assistance, and for sure there are some people scamming the system. Its probably a small % of people that are scammers, and the cost of enhanced enforcement may or may not offset the losses from the scammers.

Two thirds of people who take some form of social assistance are either employed, or out of the labour force (children, the disabled or elderly), so there isn’t really a connection between unemployment rates and social spending.

Over 1 in 5 Americans needs some form of social assistance – and I would argue that this speaks to a problem of income inequality as opposed to too generous handouts or people scamming the system.

Here are some stats:

https://www.census.gov/newsroom/press-releases/2015/cb15-97.html

Who knows what the solution to income inequality is, or if it is a problem at all (I think it is), but I believe some form of basic guaranteed income will be instituted across all industrialized nations within my lifetime.

#228 family beagle on 01.22.16 at 1:52 pm

#202 bdy sktrn on 01.22.16 at 12:24 pm
:1740 KITCHENER STREET (teardown tiny dump)
ask $1,599,999
sold $1,650,000
DOM 1 week

….
330k down
1.32m over 25yrs @2.8 plus tax, private ins = over $7k / mo.
Some may find themselves living in a shotgun shack paying 7 grand a month in one of the largest free and open land masses on earth and ask themselves, “how did I get duped here?”

These were selling new for 850k new two years ago… http://vancouver.craigslist.ca/van/reb/5414020370.html
Burke Mtn Coquitlam now asking 1.325 mil. Asking up 55% in two years for a shiny pressboard and polyurethane squat. Better returns than drug running. More profitable to shut down the grow op and do a kitchen reno. Meanwhile, the locals are picking cans in alleys down Coast Meridian, but hey money is money, say our Premier, and the money is fine. I’m really surprised there aren’t more cartels in B Colombia. $7k/mo mortgage for a stick frame house that only rents for $2800/ mo… http://vancouver.craigslist.ca/pml/apa/5391064856.html

#229 Investorz on 01.22.16 at 1:54 pm

CEO of Tricon saying that them buying in Calgary would get “catching a falling knife”. But also says there could be a mini recession in the U.S:

https://uk.finance.yahoo.com/video/tricon-ceo-u-could-mini-230819538.html

#230 Retired Boomer WI on 01.22.16 at 1:54 pm

Interesting day again. Oil up, stocks -ditto.

Doing a bit of nibbling on a few laggards today. A few limit orders floated… we shall see.

Overseas had a great day. Bond rates still too low… waiting for Gaudet?

#231 Lorne on 01.22.16 at 2:11 pm

#225 T2 sucks
“Perhaps I’m cynical, perhaps its because I really dislike the Liberals. However Jean Chretien was at least a well crafted politician and I could respect him for that. A smart guy, knew his way around the political circuit and was a professional. This guy Justin, well there is just no way to say it nicely. He is a blithering idiot! How did this country elect him? It’s like handing the keys to the liquor cabinet over to a 15 year old.”
……….
Now, T2 may not be Mensa quality, but, unlike your buddy Steve, he has surrounded himself with very intelligent people who play a large role in developing policy….and he encourages them to do so. We finally got rid of our 9 year dictatorship…but it sounds like you prefer that form of “leadership”.

#232 BobC on 01.22.16 at 2:13 pm

227 Noel
Good point. I have to agree with you on the guaranteed income. Taking demographics, robotics and software into consideration our present system just can’t work much longer. It scares me to say I think it will take a total reset to force the change. There’s too many powerful people that wants things to stay exactly as they are. I hope it’s not in my lifetime.

#233 cramar on 01.22.16 at 2:28 pm

How come no comments on CP Rail killing 1,000 jobs? A thousand here…a thousand there! Add to the mess in ALberta and we are suppose end up with a projected growth of 1.7%, with much less workers?!

Yeah right!

#234 broader mind on 01.22.16 at 2:36 pm

Nearly had my membership to the one percent club revoked and was getting ready to sign in to the doomies. Guess I’ll wait and see.

#235 conan on 01.22.16 at 2:37 pm

#225 T2 sucks on 01.22.16 at 1:40 pm

I am waiting to see what the resourceful thing is all about.
You never know it could be cool.

#236 Arfmooocat on 01.22.16 at 2:51 pm

Starting to see the effects in home prices and inventory in Edmonton now

http://edmontonrealestateblog.com/2016/01/weekly-update-2216.html

#237 TurnerNation on 01.22.16 at 3:05 pm

FORD = Found on Road Dead.

#238 RimJabba on 01.22.16 at 3:23 pm

#224 USDCAD high leverage on 01.22.16 at 1:40 pm

You and Smoking Man are in for a world of hurt trying to short the CAD after Poloz announced he would hike rates to ‘protect the Canadian dollar’. They BoC flat out reversed policy on the 20th. As oil falls, the BoC will hike rates to maintain confidence in the CAD.

I’m betting this market rally will give the Fed a reason to hike rates on the 27th now. Look for the market to really come down early Feb. Expect rates in Canada to rise now.

Flip flop Poloz almost collapsed the CAD, now he will go down as the popper of the CAD housing bubble.

I expect 1% rates by summer. The debt consumers will be in a world of hurt. Oil will hit $15/barrel, this is the perfect storm, the Fed has the world by the nuts now. The BoC can no longer stimulate the economy via interest rate cuts due to the Fed hiking rates as it almost collapsed the currency.

This is a new game now. Get out of non-productive debt.
Also, Smoking Man, you are brave as hell betting money on FOREX/CFDs. You make it sound easy, I’ve traded options/stocks for 8 years, it is friggin’ hard as hell.

#239 Brazil ex-pat on 01.22.16 at 3:25 pm

OECD predicts worse crash than 2007

http://deutsche-wirtschafts-nachrichten.de/2016/01/22/sparguthaben-europa-steht-vor-einer-massiven-finanz-krise/

Untrue. The comments come from an ex-official of the Bank for International Settlements. We all have an opinion. — Garth

#240 Mark on 01.22.16 at 3:26 pm

CPI accelerated to 1.6% YoY up from 1.4% YoY.

Looks like the BoC made the right move, at least for the moment.

#241 RimJabba on 01.22.16 at 3:41 pm

#204 DEVELOPERS SAYS IT’S DIFF THIS TIME on 01.22.16 at 12:30 pm
http://www.cbc.ca/news/canada/british-columbia/falling-loonie-fueling-foreign-interest-in-vancouver-real-estate-say-industry-experts-1.3415244

If killing your currency brings prosperity, Zimbabwe should be a model of success…Oh wait…

#242 Bottoms_Up on 01.22.16 at 3:47 pm

#208 saskatoon on 01.22.16 at 12:50 pm
—————————————————-
If ‘extremely likely’ (as well as ExxonMobil saying we need a substantial price on carbon) isn’t good enough proof for you, then you my friend are a lost cause.

#243 Vundo on 01.22.16 at 3:53 pm

#210 pbrasseur: very few of us can reasonably be comapred to Warren Buffet. I am smart enough to know that I am not smart enough to pick individual stocks. I will leave that to people who know what they are doing. I invest in a portfolio inspired by the advice on this blog partly to avoid the risk of making bad decisions based on my emotions and incomplete information.

#244 Nanaimo Bar on 01.22.16 at 3:54 pm

#240 Mark
CPI accelerated to 1.6% YoY up from 1.4% YoY.

Looks like the BoC made the right move, at least for the moment.
—————————————————————–
That was the right move. This is going to be interesting next 6 months with the threat of U.S. hikes.

#245 Philburt on 01.22.16 at 4:19 pm

#163 TRT on 01.22.16 at 9:06 am
YES When its pressed this far…people are this negative the majority are always wrong…GOOD bet against.

Garth
Correction bought $200,000.00 Preferreds. Looks like a bottom this time??! Not an oversold bounce…time will tell but 6% is a nice paycheck to wait.
Up $12,000 since yesterday Morn.

#246 Panem, droga et circenses on 01.22.16 at 4:24 pm

Garth’s reply to #239 Brazil ex-pat on 01.22.16 at 3:25 pm:

Untrue. The comments come from an ex-official of the Bank for International Settlements. We all have an opinion.

Sure Garth, however “All animals are equal, but some animals are more equal than others” and given his past and present positions, his location right now and given the fact that he already made a similar prediction in 2005 that turned out to be true a few years later and that he is sounding even bigger alarm this time around I am of opinion that he is one of the “more equal animals” to me and even to you.

The poster said it was an OECD prediction. It is not. — Garth

#247 waiting on the westcoast on 01.22.16 at 4:25 pm

So my parents recent neighbors sold their 5 acre lot after a few years, grow op in the barn and a full reno on house from previous grow op. Owned the place for three years and sold for just over $1.2M after buying it for 700k (reduced relative to market due to rehabbing needed).

As one of the posters noted above, you could get out of the grow op business and make money on renos or you could do both… ;-)

#248 I blame the Liberals on 01.22.16 at 4:30 pm

re the debate on T2

I squarely blame the Liberals for putting us through this. The Cons also for they could have put a different guy on the ballot if Harper had taken early retirement. But they had more technical reasons NOT to do this.

The Liberals however who must know how unfit T2 is in leading our country, they should have put someone else up for top job.

Now we have a complete mess in our political leadership. Doesn’t matter who T2 surrounds himself with. Nobody outside Canada takes T2 serious and at important recent meetings where the war and strategy against ISIS was being discussed, the rest of the world (mainly NATO and the US) decided to not even involve a Canadian. This is unheard of.

The rest of the global leadership doesn’t take T2 serious and even worse, they don’t trust this government.

Who, pray tell is going to invest in Canada under this leadership vacuum?

We have got ourselves in a pickle and a real problem on our hands!

#249 conan on 01.22.16 at 5:33 pm

#248 I blame the Liberals on 01.22.16 at 4:30 pm

I disagree with every point that you made in this post.

1) Current predicament is all on the last Government.
2) Doing a great job. His approval ratings are high.
3) The World is happy that Canada turfed the Luddites.
4) Canada does not go to every meeting about ISIS
5) The World likes T2 more then Harper.
6) Market up once commodities settle.
7) Getting rid of the Reform Government = solution.

The last Government was brutal. Hard to find anything redeeming about them.

#250 45north on 01.22.16 at 5:48 pm

AfterTheHouseSold: from your link: And while Canada hasn’t locked down any deals, Trudeau seems to be in high demand. According to one report, about 400 people came for his keynote address Wednesday — more than were in the room just minutes before as two top Iranian officials spoke.

well thank God we can still fill the room!

Mary Barra CEO GM, is holding her cards close to her chest. There is a lot at stake: the GM plant in Oshawa is high tech manufacturing, providing good jobs.

here’s a link talking about GM’s R & D Centre:
http://www.cbc.ca/news/business/gm-canada-expands-ontario-r-d-centre-to-focus-on-connected-car-1.3052025

#251 Philburt on 01.22.16 at 7:30 pm

#249 conan on 01.22.16 at 5:33 pm
He who admires any gov should pull their head out of their ______.
1/3 of the deficit is complete waist.
I run a company…Try that in your private and see how it goes…
If I could I run them all down.

#252 Nanaimo Bar on 01.22.16 at 10:35 pm

#139 Mark

Huh?

#253 NTH on 01.22.16 at 10:55 pm

Rest easy & get well Bandit, you are well loved indeed.

#254 Smoking Man on 01.23.16 at 11:03 pm

When I came to earth

Google when I was young

#255 Armando on 01.24.16 at 9:25 am

What Jen did wrong is make a decision based on emotion with no empirical basis. There are many strategies that can make money in the market. Garth’s strategy (let’s call it “Diversifed Buy & Hold”) is one of them. However, market timing strategies also work (if by “work” you mean improve risk adjusted returns). However, regardless of what strategy you follow, it should be rules based and you must stick to it through thick and thin. In this regard, it helps to be familiar with the historical results of the strategy (i.e. Drawdowns, CAR, etc.) so that you are not surprised when you encounter the inevitable periodic setbacks. Seat-of-the-pants decision making should be avoided at all costs!