Deal with it

UMBRELLA modified

Market update: They suck.

Faye and Rob started investing eight months ago, moving their money out of GICs and high-fee mutual funds at the local credit union into a balanced portfolio of ETFs. He drives a bus. She’s a part-time supply teacher (music). Two kids. House a third paid off. About a dozen years from retirement. Mediocre pensions. Four hundred grand spread across RRSPs, a spousal, two TFSAs and a small non-registered account.

“We’re regular, boring people,” she told me, shortly after they’d engaged a fee-based guy. “This is money that we need to grow over the next decade, so I feel good about the decision. Thanks for the blog, because before reading that we didn’t have a clue this option existed for people like us.”

Good. Smart. GICs pay peanuts, less than inflation, guaranteeing a loss over time. Mutual funds have ridiculous management fees, not even tax-deductible. Besides, the credit union lady had stuck F&R into a maple-heavy equity fund that had been badly scorched. They had little US or international exposure, no REITS, and no plan. No guidance.

Well, guess what happened? The balanced portfolio is sitting at 5.5% less this week than it was last summer, and she’s freaking. She just told the advisor, “We want to go to cash. Yesterday. I can’t take it.”

The rest of this post is for Faye.

In the crash of 2008-9, the worst market event of this generation, the TSX lost 55% of its value from peak to trough. US banks were failing. Wall Street was in crisis. Credit seized up around the world. The car companies spiraled towards bankruptcy. Tens of thousands of layoffs took place every week. The media was filled with alarmist stories of a new depression. As volatility spiked, millions of retail investors jammed the exits. On the day the markets bottomed in the winter of 2009, a mass exodus took place.

During this time a balanced portfolio like yours, Faye, was not immune. It dropped 20% over the course of a few months. The plop in equities was mitigated by the fixed income, which continued to pump out interest and dividends. While it took somebody with only stocks more than six years to get their money back, the balanced portfolio regained all lost ground in one year. The next year (2010) it swelled more than 15%. So over the course of three years – the worst period for investors in decades – the return averaged about 5% annually. Those who bailed and sold at the bottom, however, were crushed. Thanks to fear.

Where are we now?

US stocks markets have lost 12% in a year, and Bay Street has declined 20%. Oil has shed 75% of its value. Despite that, no banks are failing. There are no Lehman-type events taking place. The US is growing, not contracting. The global economy is expanding. No recession. Over three million more jobs were created in the States last year. Canadian banks have been pumping out record profits. The car companies just had the best twelve-month period in history. Gas at 60 cents in Edmonton and a buck a gallon in some American states is a boon to consumers.

So logic tells us the selloff is probably overdone, maybe close to a bottom. Oil is ridiculously cheap for something the world devours daily. There’s no credit crisis and no deflation. Just a ton of profit-taking from the record equity levels of a year ago. And now, fear like yours.

Your portfolio is down less than 6%, and you’re desperate to get out. That makes utterly no sense unless you know things are going to fall more, and never recover. When was the last time that happened? Yes, never.

Here’s what throwing in the towel means:

  • You decide, emotionally, this is not the bottom or anywhere close. That means you’re timing the market – which never, ever works. Especially when based on fear alone.
  • You’ll sit in cash or a GIC, making less than zero after inflation and taxes. So, you’ll choose to lose money and eschew the certain potential of long-term growth. After all, didn’t you invest to have more money 12 years from now?
  • You’ll then have to determine when to invest again, since GICs are no option. More market timing. More emotion.

Over the last 20 years – which included the massacre of 2008-9, someone starting with $100,000 who stayed invested would have $654,055. The person who tried to time things and missed just the best 10 days of recoveries after corrections would have only half that amount. Like I said, fear’s a costly thing. (Click to enlarge)

CHART 1

Here’s more. Let’s imagine over 40 years you timed the market, bailing out when things got scary, and waiting to get in until they seemed more positive. If you missed hitting just the best 1% of days and were invested for the other 99%, look at the difference in your portfolio: (Click to enlarge)

CHART 2

Finally, Faye, do you consider selling your house every time things get rough and real estate loses value? Or do you tough it out and wait for better conditions? Do you appraise your home every year, or worry about whether or not it’s worth more this month than last? After all, if you’re not selling and don’t need the money, who cares?

I just hope the wusses, market-timers, ignoramuses, pantywaists and dorks in the comments section have not added to your emotional fog. Forgive them. They know not what they do.

213 comments ↓

#1 The Man Eater on 02.11.16 at 6:03 pm

I went on a date,
I guess, I think.
To my local Timmies,
I went for a drink.

The snow was crisp,
The air felt new.
This Alberta man,
knew just what to do.

While standing in line,
I saw her approach.
Did she intend,
to make me her goat?

Her stare was intense,
I felt somewhat naked.
This strong boomer man,
was quite agitated.

What did she want,
my money, my liver.
Too scared to ask,
I just stood there and quivered.

But finally the silence,
She mercifully broke.
My heart pounded loud,
I listened, she spoke.

“I’d like to get by,
You’re blocking my way.
I’ve got yummy Timmies,
Here on my tray.”

I felt great relief,
I knew I’d been spared.
Home did I rush,
for fresh underwear.

FF

Just a hunch, but we might be straying off topic. — Garth

#2 powder_hound86 on 02.11.16 at 6:04 pm

“There are no Lehman-type events taking place. ”

https://www.youtube.com/watch?v=V9EbPxTm5_s

Bear Sterns is FINE!!!

No mention of DB? If DB fails will you eat your words ?

Of course Deutsche Bank will not fail. — Garth

#3 powder_hound86 on 02.11.16 at 6:11 pm

“Of course Deutsche Bank will not fail. — Garth”

What if they need a bailout? Does that count as failing?

#4 john on 02.11.16 at 6:13 pm

money is the root of all evil……..

keeps people away from what is important and urgent..

#5 Ontario's Left Coast on 02.11.16 at 6:13 pm

First to declare that I closed out over 10K in gold share profits today, which helps to take some of the sting out of the equity positions in the registered and taxable portfolios. CPD also seems to be getting tastier, so I may put some of those dollars to work in the next little while. Do any of you Dawgs have any thoughts on preferreds right now?

Cheers and good luck to all!

#6 active on 02.11.16 at 6:14 pm

that last graph is sure looking mightily bubbalicious!

#7 acdel on 02.11.16 at 6:14 pm

Good Blog Garth!

#8 Caught In The Grip on 02.11.16 at 6:15 pm

Excellent post. What are your favorite fixed income ETFs?

#9 Fast Mover on 02.11.16 at 6:16 pm

Don’t sell! Everything is on sale right now and everyone loves deals. 5% is nothing. Besides, I bet most people with a balanced portfolio are in a similar situation.

#10 Quebec is Great on 02.11.16 at 6:16 pm

Of the many things I am truly thankful to you for, Garth, I must add an expanded vocabulary to the list.

Pantywaist
This daily information you bring to us on a silver platter is pure gold. Thank you for all you do.

#11 espressobob on 02.11.16 at 6:16 pm

Faye & Rob may have just made one of the smartest moves they can look back on with a huge grin on their faces.

For Faye it’s a learning curve, like most of us haven’t suffered? So stay the course.

Don’t invest short term. Doesn’t work.

#12 Prairie Oysters for All on 02.11.16 at 6:17 pm

#1 The Man Eater on 02.11.16 at 6:03 pm

I went on a date,
I guess, I think.
To my local Timmies,
I went for a drink.

The snow was crisp,
The air felt new.
This Alberta man,
knew just what to do.

While standing in line,
I saw her approach.
Did she intend,
to make me her goat?

Her stare was intense,
I felt somewhat naked.
This strong boomer man,
was quite agitated.

What did she want,
my money, my liver.
Too scared to ask,
I just stood there and quivered.

But finally the silence,
She mercifully broke.
My heart pounded loud,
I listened, she spoke.

“I’d like to get by,
You’re blocking my way.
I’ve got yummy Timmies,
Here on my tray.”

I felt great relief,
I knew I’d been spared.
Home did I rush,
for fresh underwear.

FF

Just a hunch, but we might be straying off topic. — Garth

Bang on to me.. hehe

#13 Back Door on 02.11.16 at 6:18 pm

No way this is playing out yet. One more round of QE, then the IMF starts issuing SDR’s.

Keep your shares in good companies making things we need. He who loses the least in the reset (5 years from now) will come out on top.

#14 Jay on 02.11.16 at 6:19 pm

“Those who forget history are doomed to repeat it”.

The only reason to cash out of a balanced portfolio is if you think this is the end times.

If it’s the end times, does your money matter?

#15 Pookie on 02.11.16 at 6:20 pm

Any comment on what Kyle Bass has been spouting? http://www.cnbc.com/2016/02/10/kyle-bass-china-banks-may-lose-5-times-us-banks-subprime-losses-in-credit-crisis.html

Bloomberg TV shot him full of holes this morning. — Garth

#16 Love my Kia on 02.11.16 at 6:21 pm

Wait it out and ignore the gloom.

I am a bit of a gold bug as well and it balances things out. If you are heavy on gold, these are ‘sunny ways’. I for one am doing decently keeping balanced.

I have made the mistake of selling low and have learned the value of PATIENCE.

#17 ole Doberman on 02.11.16 at 6:21 pm

Garto to ya see one more leg down in stocks?

Im scared man i need hand holding

#18 buy stock in Sikorsky….. on 02.11.16 at 6:24 pm

“The failure of unconventional monetary policy in Japan and Europe is proof that central banks can’t conjure growth in economies that need major reforms to let resources find more productive uses. The old analogy of “pushing on a string” remains valid – if companies can’t find promising investments, credit creation will remain stalled no matter how cheap credit is.” (WSJ)

“A final instrument is “helicopter money” – permanent monetary emission for the purpose of promoting purchases of goods and services either by the government or by households.
If the money went directly into additional spending by government or into lower taxes or to people’s bank accounts, it would surely have an effect. The crucial point is to leave control over the quantity to be emitted to central banks as part of their monetary remit.”
(chief economics commentator at the Financial Times, Martin Wolf)

I’m curious GT, any thoughts on your retirement?

#19 Danforth on 02.11.16 at 6:27 pm

You make a valid point in measuring average rate of return on a trailing 12 month basis isn’t a big enough window.
We go through great years, so-so years, and cruddy years. A multi-year rate-of-return window offers more clarity.

A sanity check in a great year that you’re really not doing so great. And in a bad year, that its not as bad as it looks.

#20 JSS on 02.11.16 at 6:28 pm

Canadian Dividend increases:

– TransCanada Pipelines (+8.7%)
– Manulife (+9%)
– Great West Life (+6.1%)
– Home Capital Group (+9%)

Canadian Dividend cuts:

– Cenovus (-69%)
– Precision Drilling (Suspended)

#21 Skeptical on 02.11.16 at 6:33 pm

QE in the US clearly has been a disaster and now Yellen would consider negative rates if needed:

http://www.wsj.com/articles/yellen-reiterates-concerns-about-risks-to-economy-in-senate-testimony-1455203865#livefyre-comment

And how is this working for Japan in an attempt to devalue their currency? USD are now going to the safety of the Japanese Yen

#22 ILoveCharts on 02.11.16 at 6:33 pm

Interesting to see what those charts would do if you missed the 1% worst of days.

#23 jim on 02.11.16 at 6:34 pm

two analysts on bnn…one commodities…one financial…never seen anything like this…crash in oil is illogical…negative rates…never happened before…so is it still the same this time…wow …may you live in interesting times

#24 BC_Doc on 02.11.16 at 6:35 pm

“Everybody has a plan until they get punched in the mouth.”
— Mike Tyson

It sounds like Faye needs a less aggressive asset allocation– reduce to a baby sized portion of equities. No changes in AA until the markets recover. Financial analyst gets a fail on setting up her AA– she’s too chicken flow the one she has.

#25 james on 02.11.16 at 6:36 pm

I offer this alternative take that makes some of the same points:

http://www.investopedia.com/articles/investing/021116/3-reasons-not-sell-after-market-downturn.asp

I have heavy unrealized losses over the last 6 months. It isn’t pretty to look at my account to say the least. However, a dip like this means that there are opportunities. Solid performers in my portfolio (e.g., PSK, PFF, PGF) are taking a haircut, and it seems like a buying opportunity. Gold stocks are swinging upwards, but they have a long way to go to compensate for their fall in the last few years.

I gave up on market timing ages ago, as I don’t have the hours to devote to analysis (and empirical data shows that most people are bad at it). I just invest at semi-regular intervals.

Garth is right. This is not 2008. Although Deutsche Bank deserves to fail for its horrid conduct during the GFC (e.g., SIVs, mortgage securities, etc), it won’t.

I do note, however, that the labour market is shifting. The rush of money into Silicon Valley is slowing. LinkedIn was decimated, Yelp is in trouble, Yahoo, etc etc. There are significant layoffs at these companies, and at Microsoft. Many industry watchers expect a froth to be taken out in the next 6 months, so you can expect more job losses.

Boeing also announced 7600 layoffs recently, many of them affecting the plant in my area. I’m expecting this to end the double digit gains in home prices here, albeit there is only 1 month of inventory on market right now.

Interesting times.

PS: Don’t cash out your portfolio, lady!

#26 jim on 02.11.16 at 6:36 pm

backdoor…i’m with you completely

#27 Mac on 02.11.16 at 6:37 pm

I’m down 7.7% this year. No biggy. I am in new home construction in Calgary. I have had my worst quarter in 20 years and would literally make more money collecting bottles these days. Alas, no money to take advantage of the cheap market – I can barely pay my bills :-(

#28 Grey Dog on 02.11.16 at 6:40 pm

Don’t Worry…Be Happy, husband is retiring next year after 40 years at the grindstone. RRSPs and TFSAs invested to the max over the past 35 years or so, but, in this environment, does one retire and live a couple lean years on basic pensions without dipping into investments hoping they will recover handsomely as they did in 2011/2?

Things were compounding very nicely til last fall. Suddenly monthly budget meetings when all the investment statements arrive aren’t so much fun anymore.

#29 Harbour on 02.11.16 at 6:41 pm

“US stocks markets have lost 12% in a year”

Actually it’s 10% just this year

http://www.thestar.com.my/business/business-news/2016/02/12/s-and-p-and-dow-down-over-10pc-for-the-year-as-wall-street-sinks/

#30 Harbour on 02.11.16 at 6:42 pm

#18 Harbour

My mistake… I think

#31 Freedom First on 02.11.16 at 6:42 pm

#1 Not me!
An imposter!
I drink Starbucks and am confident with my femininity.

#32 TurnerNation on 02.11.16 at 6:43 pm

Wake me at CPD 10? Maybe after RSP deadline.

Anyway in my sht 1k FX/CFD acct moved on to oil. Trade it following UCO.US moves. 5 tick bid/ask spread is $5 per contact.
I never really liked FX but can do it.

#33 Freeman on 02.11.16 at 6:43 pm

“DEUTSCHE BANK ATTEMPTS TO CALM FEARS OF BANK COLLAPSE”

https://www.youtube.com/watch?v=S_5ZKftk8ZU

Don’t worry everyone, large financial institutions like Lehman Brothers and Deutsche Banks are rock solid and are not in any risk of financial collapse. Nothing to worry about.

In this case, no. — Garth

#34 acdel on 02.11.16 at 6:45 pm

As per Garth’s Blog; stay diversified, but here is another option to add to ones’ portfolio. The projected forecast sales are to increase by 48% by 2020. Sucks getting older!

http://www.bloomberg.com/news/articles/2016-02-11/the-adult-diaper-market-is-about-to-take-off

#35 tundra pete on 02.11.16 at 6:49 pm

Faye, you sound like the blonde who went to the video tape store.

So, the blonde goes to the video store. When she is there the clerk says “why don’t you get a porno tape for you and your hubby”. She says she has never done that before and asks her what to do. The clerk tells her to pick a tape with the title she thinks will spice up their night. The blonde agrees. She picks out a tape, thanks the clerk and heads home.

When she gets home and the time is right, she puts on the tape for her and hubby. But the tape won’t work. Being kind of upset she phones the video store.

She tells the clerk that she is unable to get the tape to play. The clerk tells her how to play the tape and she tries again. Same thing just a staticy picture. The clerk says try again. So she does. Same thing.

The clerk says that sure is strange it should just play. The clerk says to her, “well what was the title of the tape you picked”? The blonde says:
“The head cleaner”.

#36 Doug t on 02.11.16 at 6:50 pm

There are only two things guaranteed in life – maybe she got out at the right time – maybe not – if she stayed in for12 years whose to say the markets wouldn’t kick her in the ass just as she wants to retire. Everyone picks there road – the problem is the bloody volatility that exists in these markets especially since the boom of technology makes millions of trades in nano seconds. People are more anxious and worried than ever and that reveals itself when it comes to investing and finances. whatever allows you to sleep at night is the only way to go

#37 Panhead on 02.11.16 at 6:53 pm

#4 john on 02.11.16 at 6:13 pm
money is the root of all evil……..

I respectfully disagree … the mouth is the root of all evil …

#38 Frank on 02.11.16 at 6:54 pm

I agree about staying invested, that said I think you’re (possibly) wrong about comparing this to 2008.

It’s easy to look back and say ‘2008 was the worst event in a generation’ but in Summer 2007 no one had a clue what was coming. The market dropped ~10% but no one was raising alarm bells and most people were probably talking like you, except they referenced the then-previous recession in 2000/2001 and said things like “The Dot-Com bust was the worst thing we’ve seen lately and that recovered so don’t panic. Besides that was tech stocks with bogus valuations, today we have good job growth and a robust housing market”.

Point is you don’t know what’s coming. This could be the worst recession anyone this side of the great depression has ever seen or we could roar to new highs by December. All the more reason to stay invested and no listen to anyone who claims to know the future.

Isn’t that what I said? — Garth

#39 espressobob on 02.11.16 at 6:54 pm

#16 Love my Kia

Gold?

Commodities are wasted speculations more often than not.

#40 nonplused on 02.11.16 at 7:00 pm

Well, looks like the gold price is playing with the downtrend line. One day does not a change in trend make but perhaps the market sees more QE coming or perhaps it didn’t like Saudi Arabia’s announcement it intends to send troops into Syria to get blown up by the Russians. Could see a lot of desertions in the Saudi army coming up, I sure as heck wouldn’t go. Turkey is threatening to go in too but I don’t think NATO will back them for whatever happens on Syrian soil, which will probably also include a lot of Russian surprises.

Turkey’s army will have to go in the same way their oil convoys did so Russia has already had pretty good practice at what to do. Turkey has an air force and could bring anti-aircraft equipment with them, in which case $hit is going to get real serious real fast.

And if the Saudi forces end up shooting at the Iranians who are already there, the whole Gulf could erupt into skirmishes or worse. Oil might not stay at $20-30 as long as I thought it could be over $100 again by summer. Iran considers itself to have 2 main threats in the region (besides the US), those being Saudi Arabia and Israel. Their defensive strategy for both is non-nuclear missiles. To undercut Saudi Arabia, destroy their oil export facilities. If push comes to shove they are helpless against a probably nuclear armed Israel, but if they can hit the Diachi nuclear plant hard enough all hell will break loose.

Turkey is the real wild card though. If they think they can win a war against Russia because they are part of NATO they are probably mistaken. Most NATO countries have too many problems right now to try and repeat Hitler’s mistake. Heck I don’t think they could even get anyone to sign up for the various armies to try. I just can’t see any modern German or other European young men thinking it’s a good idea to march towards Moscow. Maybe that’s why so many “refugees” have been sent to the area. They can all get a job in the army and march east.

The stuff going on in the middle east and Europe right now is just stupid. We need to get some adults in the room.

#41 EmpCod on 02.11.16 at 7:01 pm

Market timing works both ways. If you happen to miss some of the best days you also miss some of the worst. Cherry picking retrospectively only the best days out of the calculation is not totally fair.

Yes it is. Markets rise over 70% of the time. — Garth

#42 The real Kip on 02.11.16 at 7:03 pm

Faye, I admire your courage. You’re going to get creamed but, I admire your courage.

What’s courageous about fear? — Garth

#43 pinstripe on 02.11.16 at 7:04 pm

The effects of QE is starting to show the magnitude of the global debt. How this plays out is not going to be a pretty picture.

The politicians made a big mistake with QE, Zirp, nirp etc and are not willing to admit they goofed up with their policies. They tried their best to eliminate the business cycle. there will be a big price to pay for these goof ups.

all financial gurus have an opinion and that is what it is, an OPINION. it is all about describing one part of the elephant.

the politicians did an excellent job forcing the masses to lose ALL Trust and Confidence in their policies.

#44 Ex-Cowtown on 02.11.16 at 7:05 pm

Sit tight. I’m looking at what’s on sale and getting ready to vultch.

#45 Danoc86 on 02.11.16 at 7:06 pm

Faye and Rob

You are in good hands. You have a globally and derversified portfolio. The best part about the portfolio it protects your capital during down times and when things bounces back your portfolio continues to grow.

During market declines are buying opportunities.

For Valentine’s day this year i have decided to add to our portfolio great etf sales reits,prefereds,emerging markets. Flowers and chocolates are overrated

P.S this is my first Valentine’s day as newly weds.
I hope I’m not sleeping on the couch like bandit or does he get his own bed?

#46 crowdedelevatorfartz on 02.11.16 at 7:07 pm

@#1 man eater

“Sir, while I admit your general rule….
That every poet is a fool….
But you , yourself may serve to show it…..
That every fool is not a poet.

Or were you recommending we invest in this?

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=5&cad=rja&uact=8&ved=0ahUKEwjEh_CR9_DKAhVJ8mMKHVmgB3IQFghEMAQ&url=http%3A%2F%2Fwww.tokyotimes.com%2Fmore-adult-diapers-than-baby-ones-to-be-sold-in-japan%2F&usg=AFQjCNFRYzWHMEoX9P4W205DcUpExXJjQg&sig2=7K6KyT1kjUKk4B6UeQxNMg&bvm=bv.113943164,d.cGc

#47 earlybird on 02.11.16 at 7:11 pm

Wow…she has no risk tolerance…She needs to stop hyperfocusing and look farther out. When its down, turn everything off and go have a nice day…

#48 Freedom First on 02.11.16 at 7:13 pm

Yes. Fear and greed are killers. As is trying to keep up with the Jonses. Which, of course, is ego. When it comes to finances, as with everything else, just do what is best for you, ignore the fools, and stay humble. It’s been working for me for decades.

#49 Keith in Calgary on 02.11.16 at 7:14 pm

Only problem with your little fantasy here Garth is that no one state can print trillions of money anymore to continually bail out the system.

They can always go full NIRP, impose capital controls, and ban cash, but you said that would never happen.

#50 Linda on 02.11.16 at 7:19 pm

#4 John – actually, its the love of money that is the root of all evil. Money of itself is just a tool to save time. Previous to a convenient method of exchange people bartered. Still done, even in North America but – bartering & getting a good bargain takes time.

Faye, listen to Garth. He is correct. During the 2008/2009 meltdown, my husband & I both wondered if we should get out. Fortunately our fabulous financial consultant invited all her clients to an event to address our concerns en masse. We did not bail. Our portfolios ‘lost’ no more than 20% during the big meltdown. Since we didn’t ‘need’ the money right away, we knew we had time to recover. Did that ever pay off. Our portfolios soared the next few years & while current events are disquieting, that experience is keeping us from heading for the exits, as 1) our portfolios aren’t losing very much despite the current woes & 2) we still don’t need the money ‘right now’. I expect us to see a very nice uptick in portfolio value in years to come. Stay the course, because right now the market is your only hope of getting enough set aside for retirement to keep you from dumpster diving in your golden years.

#51 wallflower on 02.11.16 at 7:19 pm

I agree with Prairie Oysters.
Garth needs to read more poetry.

#52 Kreditanstalt on 02.11.16 at 7:21 pm

This time is different. It’s the Keynesian nuthouse mad money-printing endgame.

I challenge anyone to demonstrate that real-terms (subtracting the expansion of money & credit since 1971) economic growth will ever again approach that prevailing when stock portfolios or dividends – ‘balanced’, long-term, short-term or whatever – were reliable investments.

#53 SWOntario Guy on 02.11.16 at 7:22 pm

Great post today Garth, longtime appreciative daily reader. It appears to me that the TSX is on sale, would you recommend buying back into maple?

#54 genbizx on 02.11.16 at 7:22 pm

#4 John

” money is the root of all evil……..

keeps people away from what is important and urgent..”
Correction. The love of money is the root of all evil…Puts the emphasis on your relationship with money, not money itself, which is just a thing which can be used well or poorly or yes, as you say, can keep one away from important and urgent things

#55 IHCTD9 on 02.11.16 at 7:28 pm

Excellent post today, and probably very relevant to many folks in Canada right now.

I am trying to coach a family member and new investor who is very fearful of losses in the current market. He has a hard time relaxing even though he knows he probably has 25+ years to sit in the market before retirement. He has yet to go all in, and is keeping 75% in cash, despite my attempts to make him understand this is the best time since the GFC to dump everything in.

I think fear of losses dissipates with every additional you are invested. I’ve already been in for 20 years, and have been through the telecom, .com, and GFC pile drivers, and had great returns in between these events. I look forward to these downturns as times to pound it in with readiness for the trip back up.

Right now, I am pouring more into my investments than I ever have, timing and cash availability came together for once!

I don’t think I will be talking any fear out of my family member, probably something you have to learn the hard way, or never.

#56 Marcus on 02.11.16 at 7:34 pm

In the strictest sense of the word Garth is right. Major banks will not fail (Deutsche Bank) because they are not really banks now are they. LOL

#57 Smoking Man on 02.11.16 at 7:34 pm

So it’s creative poetry tonight is it.

Was having a smoke I wished it was dope.
My whiskey is cold I’m not that old.
I see the world through scratches in glasses.
Good thing I missed most of my classes.
It gave me vision to see the division.
The world is a jungle no need to act humble.
Steal your share and never care.
Be a Smoking Man you all know you can.

#58 IHCTD9 on 02.11.16 at 7:37 pm

#36 genbizx on 02.11.16 at 7:22 pm
#4 John

” money is the root of all evil……..

keeps people away from what is important and urgent..”
Correction. The love of money is the root of all evil…Puts the emphasis on your relationship with money, not money itself, which is just a thing which can be used well or poorly or yes, as you say, can keep one away from important and urgent things
————

Amen to that. Be a good steward of what you have been given, and a shrewd manager thereof.

“Dishonest money dwindles away, but whoever gathers money little by little makes it grow”

Proverbs 13:11

Make sure to give back plenty as well

#59 Ace Goodheart on 02.11.16 at 7:40 pm

I don’t think the current closed off ownership of stocks and equity items, through ETFs, mutual funds or other ownership vehicles, is working. I mean, it works for me, because I get to buy underpriced stocks once about every three to four years, when everyone dumps their holdings and moves to cash, and then I get richer as everyone moves back in again when the market bottoms. But that is only benefiting me.

For most people for whom trading is just too complicated and they need someone else to do it for them, if they don’t get constant upward returns, they bail (and make me rich in the process).

So it’s not working for people who can’t figure out what a stock actually is. I worry about that.

It’s a piece of a company, people. Companies make more in good times than in bad. So the price of the unit goes up and down. In the long term, unless the company is a piece of crap (in which case you shouldn’t buy it) the value of the unit will always go up (because the company is the producer, so it is ahead of the government (that relies on it for tax revenue) the consumer (who buys what it makes) and inflation (because it creates inflation, by making people want to borrow or earn money to buy what it produces).

The company always wins, in the long run, and the value of the units of ownership goes up.

I always figure that owning units of value in revenue generating companies, through closed systems like mutual funds or ETFs is a bad idea, because the person who owns these things expects them to increase in cash value on a linear scale, which of course is impossible (unless you are Bernie Madoff). It’s a flawed system. I don’t know how to fix it. ETFs and mutual funds will not always go up in a linear fashion. If the people managing them are not idiots, they will go up in time, but they will go up on a jagged graph scale with peaks and troughs. If you are not comfortable with that, then just do what I do and wait for people to start dumping their funds, then buy up good companies at major discounts.

#60 Manny Wellmun on 02.11.16 at 7:40 pm

Why wouldn’t Faye and hubby dollar cost average if they were worried about short term weakness/strength? Buying on weakness would have felt better than going all in and then losing a fast 5.5%.

DCA does not work. With a 12-year time horizon it makes no difference when they invest. — Garth

#61 Dennis the Mavin on 02.11.16 at 7:45 pm

But if you’d listened to more sensible people and bought gold you’d be up 20% and sitting pretty.

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/12151770/Investors-go-bananas-for-gold-bars-as-global-stock-markets-tumble.html

Yahahahahahahahahaha !!

I’m buy physical tow fisted , will not touch gold stocks, this is a bullion play, just like last time, sleeping good, laughing all the way to my unbalanced bank.

#62 Frank on 02.11.16 at 7:45 pm

Not all money is for 5year + outlook.

Property is nose diving in some places. If someone is thinking of buying there in the next year or so should they still have the money in a balanced portfolio? What if it doesn’t recover?

What if the sun does not rise tomorrow? — Garth

#63 Work & Tumbel on 02.11.16 at 7:52 pm

Thank you Garth,

I needed a plan and prospective to get me on the path.

#64 gladiator on 02.11.16 at 7:53 pm

Whoever invents the “click to enlarge” device will make Warren Buffett cringe with envy.

#65 Jake Hejihadian on 02.11.16 at 7:55 pm

20 years and 8 months ago I got $125,000 in 32 year government strip bonds worth now $622,000 with compound interest not the over inflated market value.

They mature in 2027 and will be worth $2,120,294 with full compound interest and principal. Comparisons must be based on real alternatives when it comes to lump sum investing.

Who cares what rates were two decades ago? — Garth

#66 lee on 02.11.16 at 7:58 pm

What REIT would you recommend for a balanced portfolio? And don’t say hire me and find out.

#67 Randy Randerson on 02.11.16 at 8:01 pm

Stocks will always recover. Not so when your house burns down. My POV is that stocks are safer than houses.

#68 GTWR on 02.11.16 at 8:04 pm

DB is failing. Wake-up. Derivatives- “Weapons of mass destruction.”- Warren Buffet
He know just a bit about long term investing.

Is he selling? — Garth

#69 tkid on 02.11.16 at 8:10 pm

#57: I see the world through scratches in glasses.

I thought I was the only one.

Lady, don’t sell. Buy’n hold.

#70 Bottoms_Up on 02.11.16 at 8:14 pm

Garth great post and perhaps the best I’ve ever seen for proving that staying invested is the way to go.

#71 Soothsayer on 02.11.16 at 8:16 pm

If someone asks the BILDBERGERS when they want to bring the oil prices back up, they might tell you.

#72 Randy Randerson on 02.11.16 at 8:29 pm

My portfolio is down 12% YTD, because I’m a gambler and I’m 100% equities in VTI and VXUS. I’m hoping the market will tank more so I can buy more equities at a steeper discount.

#73 Ret on 02.11.16 at 8:31 pm

I have never understood investors feel that they have to go all in or all out when making any investment. My Father-in-law would always think of buys and sells in terms of fractions, 1/2, 1/4, 1/3 etc.

If some investment soared, he would sell a quarter or a half and ride the pony a while longer with what he had left on the table. On they way down, he took measured small steps and was a reluctant seller. He knew that the market was fickle and not always rational.

For example using gic’s to keep it simple, why buy a $50,000 gic for 2 years? Two $25,000 gic’s cost the same and maybe one could be for one year and the other for two years to give you much greater flexibility. Buy three for $16667 and ladder over 3 years. The options are endless. Think over all options before acting.

F&R feel that they have to do ‘something” as they feel threatened and that is a perfectly natural human response to a real or perceived danger. That kind of response is great for a kitchen fire and could save your house and your life.

For investing, doing something impulsive and emotionally driven doesn’t work out as well. There are casinos for those impulsive and emotionally driven investors.

There is always the other option. Do nothing, re-evaluate the situation and take a little time to get their heads around what is really happening here. A 5% or even a 10% pull back is no reason to start hyper-ventilating into a panic attack.

After the smoke clears on this pull back, I won’t be binny dipping behind the local grocery store and neither will they if they keep on course.

The bus driver pension managers, teacher pension fund people and CPP fund mangers aren’t selling off their investments with them.

Why would they sell off their own personal investments which are in the same markets, probably in similar sectors and investments?

#74 Deal with it - Realties.ca on 02.11.16 at 8:35 pm

[…] Source: http://www.greaterfool.ca/2016/02/11/deal-with-it-6/ […]

#75 family beagle on 02.11.16 at 8:37 pm

Faye, balanced and diversified is okay, but if you’ll want to top it off with an album launch and a new fashion line. That’s what it takes to keep up.
Look for an index on web personalities soon.

http://www.nytimes.com/2016/02/12/fashion/new-york-fashion-week-kanye-west-day.html?_r=0
http://www.usatoday.com/story/life/entertainthis/2016/02/09/kendall-kylie-jenner-fashion/80090986/
http://www.usmagazine.com/celebrity-body/news/blac-chyna-promotes-rob-kardashians-sock-line-with-a-nsfw-butt-pic-w164028

#76 MarketInquisitor on 02.11.16 at 8:46 pm

I have been adding ZPR, preferred shares at these levels; this is a great buying opportunity. Check out details below.

http://marketinquisitor.com/2016/01/30/bullish-on-preferred-shares-zpr-to

#77 Freeman on 02.11.16 at 8:47 pm

Hey everybody: THE SCION BRAND OF CARS IS DEAD !!

Yes, just a few days ago, Toyota said that as of August 2016 there will be no more SCION brand, all of those cars will be re-branded as ‘Toyota’ brands, or discontinued.

So just like Saturn, (and Lehman Brothers) Scion is soon to be gone.

http://pressroom.toyota.com/releases/scion+transition+toyota.htm

QUOTE: “As part of the brand transition, beginning in August 2016, MY17 Scion vehicles will be rebadged as Toyotas.”

#78 Drill Baby Drill on 02.11.16 at 8:49 pm

Oil & Gas ETF’s are starting to look good however not yet. There is still a lot of production sitting idle and not all of the geopolitical cards have been played(ie: middle east).

#79 Johnson on 02.11.16 at 8:52 pm

Faye, buying into the current and still overvalued market is dangerous right now. Would be wise to wait this storm out because it’ll be a bad one. I know Garth mentioned not to time markets, but look at the big picture of cheap money and ultra-low interest rates since 2009, excessive risk taking, the US Federal Reserve thinking they solved economic problems by throwing money at them. I’m not an expert, but so far my Gold, Gold ETF’s, short-term government and corporate bond ETF’s, and money market funds have risen well in like of all the chaos. Consider having some of those in your diversified portfolio. Good luck!

#80 David L on 02.11.16 at 8:54 pm

Any tips for building a diversified portfolio – how does this look?

1) Canadian Bond (20%): XBB
2) Preferreds (20%): CPD
3) Canadian Equity (16%): XIU
4) US Equity (18%): XSP
5) International Equity (18%): XIN
6) REITS (8%): XRE

Thank you in advance

#81 Smoking Man on 02.11.16 at 8:55 pm

Ucc says leafs to get Stamkos

#82 Kurt on 02.11.16 at 8:55 pm

Faye! Buying opportunity! Whatever you do, *don’t* cash out! I’ve been there, it gets better; much, much better.

#83 WallOfWorry on 02.11.16 at 8:59 pm

Buy and hold has to be a definitive strategy…you can’t waffle. I would question whether buy and hold is a viable strategy with bots and algorithms…it is a different market, with different behavior. Buy and hold over the last 15 years since changes in the market technologies has not been successful.

Many technical indicators have been breeched in this last correction. The American bank stocks are in trouble with the technical support line being taken out today. For those of you embracing buy and hold with no hedge in gold etc need to stay mindful that you committed to buy and hold. You don’t want to be half pregnant.

#84 JSS on 02.11.16 at 9:03 pm

From Jan 20th to Jan 29th this year, my portfolio (mix of Canadian and some US blue chip dividend growth stock) jumped 9%.

I would be pissed if I sold on the 20th. I’m down 4.9% YTD.

#85 Ben on 02.11.16 at 9:03 pm

Nikkei 225 down 4.35% a few hours in.

Put some more boomers on the fire please, it’s getting chilly.

#86 Paul on 02.11.16 at 9:03 pm

#62 Frank on 02.11.16 at 7:45 pm

Not all money is for 5year + outlook.

Property is nose diving in some places. If someone is thinking of buying there in the next year or so should they still have the money in a balanced portfolio? What if it doesn’t recover?

What if the sun does not rise tomorrow? — Garth
———————————————————-
Hey Garth, isn’t that what you said when you left the Paper?

#87 Marius on 02.11.16 at 9:12 pm

Investors ruining Vancouver:

http://www.theglobeandmail.com/opinion/a-crisis-in-vancouver-the-lifeblood-of-the-city-is-leaving/article28730533/

#88 TCContrarian on 02.11.16 at 9:18 pm

Garth – “….Despite that, no banks are failing. There are no Lehman-type events taking place.”

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

Lehman and Bear Stearns (among others), were victims of high-leverage in mortgage-backed securities. We’ll see how our financial institutions fare when RE begins to retreat in earnest – then,and only then, we’ll be able to gauge things more accurately.

I’d say, wait until RE in Canada is full retreat – then we’ll see how well our banks do.

They’ll do fine, The risk is carried by CMHC. — Garth

#89 Smoking Man on 02.11.16 at 9:20 pm

Faye and Rob down 5% in an all out panic.

Try trading Forex with 400 to 1 margin. ..
You’re either the king or the peasant in 5 minutes.

Don’t understand humans your all going to die, you live 10 years or 100 years your still dead.

Risk it bitches you only have a microscopic vien of time in the grand scheme of things.

The shit this spices worries about.

#90 Yitzhak Rabin on 02.11.16 at 9:22 pm

Things are not normal. The 45 year old monetary system is failing, debt is exploding worldwide and savings & capital are being destroyed. This is clear as day by looking at any metric (debt/gdp, savings rate, debt/equity ratios, etc.)

All the post 2008 crisis interventions have done is delay the inevitable and make certain that the outcome is much worse when it finally arrives. The phony economy built on debt-financed consumption, QE, low (and now negative) interest rates begins to collapse as soon as these props are removed or lessened.

Gold meanwhile, is rapidly racing back to its peak in $CDN and making new all time highs in other currencies.

The market had it wrong since 2013 in thinking that the FED would sustain a trend of rising interest rates and shrink its balance sheet. The market front-ran the phony recovery and is now realizing that it was all central banks props.

The bubble is bursting in central bank credibility and Keynesian deficit spending economics.

The way out is a global monetary reset and the restoration of a gold standard.

A gold standard. You bullion nuts are comical. — Garth

#91 Bearster on 02.11.16 at 9:24 pm

No freakin way ths is ‘the bottom’ Garth! It’s just getting started. 7 years straight up will correct.

SPX 1650 for starters. Then 1400 and 1100. If we are lucky 666 will hold. You can hold all the way down. As for me I’d rather be in cash and buy at the bottom.

Enjoy the ride!

#92 James on 02.11.16 at 9:33 pm

Why does DCA not work for the every day investor? If you have a long horizon. And a diversified portfolio . It is hands down the best plan. Still steadily buying while the rest retreat.

#93 cramar on 02.11.16 at 9:35 pm

Interesting economic news today.

1. Canadian bond rates dropped again prompting one “expert” giving a business commentary saying the we can expect 1.99% 5 year mortgage soon. Oh, wonderful!

2. Business news said that there was selling on markets today with money going into gold, which drove up the price of the shiny stuff. Gold bugs are gloating!

3. Chrysler announced today that they are going to hire 1,200 more workers for the mini-van plant in Windsor.

I’m impressed how much potential the Windsor-Essex region has. Remember the Heinz Leamington shut down with over 700 jobs lost in 2014? The company Highbury Canco that took over and hired 250 of the workforce is expanding. It is hiring and will have 400 employees soon. They are doing real well and the future looks good. More greenhouses will also be built in the area. So with Alberta being devastated, this area is slowly but steadily expanding. Hopefully, RE prices are bound to rise, since they are way too low now.

#94 ARP on 02.11.16 at 9:38 pm

Thanks to GT’s sage advice with a balanced portfolio, I’m only down ~4.75% this year with appropriate weightings in Maple, Eagle and Intl. :)

However, WTI and USO are looking more and more interesting as we keep testing 52-week lows.

Patience. Patience.

#95 Smoking Man on 02.11.16 at 9:41 pm

And I’m the crazy one.

https://www.rt.com/news/332196-gravitational-waves-kip-thorne/

Dude is selling a book.

#96 Nelson on 02.11.16 at 9:41 pm

I agree that most people shouldn’t time the markets.

However, you speak like a naive Central Banker when you are so adament on comments like this “The US is growing, not contracting. The global economy is expanding. No recession. ” I predict that this will be another case of Central bankers saying that everything is fine, when history will show that we were in economic contraction, recession and possibly deflation.

My statements are factual, and correct. There is no deflation, no recession and no contraction in the US economy. And, yes, global GDP growth is positive. — Garth

#97 my house is my friend on 02.11.16 at 9:52 pm

My statements are factual, and correct. There is no deflation, no recession and no contraction in the US economy. And, yes, global GDP growth is positive. — Garth
Where do you get your information from, Janet Yellen?

As opposed to you? Um, tough choice… — Garth

#98 Leo Trollstoy on 02.11.16 at 10:01 pm

unfortunately ppl like Faye are born to be poor. scared of their own shadow. it’s sad but true. most ppl are Faye. wage slaves that are born poor and will remain poor. it’s not good or bad, it just is. can’t change it. such a shame.

#99 Scott in Gibsons on 02.11.16 at 10:02 pm

You might help the blog dogs by discussing strategies for risk management. When I hear stories like Faye’s I can’t help but think that she was out of sync with her advisor. Somehow the advisor was comfortable with a higher risk/volatility level than the client. All good in a rising market but the client needs to be prepared by the advisor for the downside of high yield.

#100 ed on 02.11.16 at 10:04 pm

#15 Pookie

Kyle Bass? Really? He’s been saying for 10 years that Japan’s debt level would lead to a default, promoting the Yen short (which is called the Widow-maker short for a reason)..

Guys like this are just like the doomer dorks on this blog, with a louder voice that gets the attention of the media (which isn’t really that hard to do).

#101 Leo Trollstoy on 02.11.16 at 10:06 pm

u can’t change ppl like Faye. they only feel ‘comfortable’ when prices go up in a straight line. their soul is destined to be poor. they desire to be poor. they fight to be poor. they will be poor. that’s how inequality works. inequity has nothing to do with money. the majority desire to be poor and they will be. the minority desire to be financially secure and they will be. u can’t change one into the other. faye is a poor person. give her money and she’ll be back to being poor in no time. guaranteed

#102 Nelson on 02.11.16 at 10:09 pm

Housing prices continuing to increase is also factual. You would obviously agree that it doesn’t mean that it will continue to rise and should be decreasing soon. The stock market is forward looking…cares what things will be like and not what it has been

#103 Nikola Tesla on 02.11.16 at 10:28 pm

The year 2100 will see eugenics universally established. In past ages, the law governing the survival of the fittest roughly weeded out the less desirable strains. Then man’s new sense of pity began to interfere with the ruthless workings of nature. As a result, we continue to keep alive and to breed the unfit. The only method compatible with our notions of civilization and the race is to prevent the breeding of the unfit by sterilization and the deliberate guidance of the mating instinct. Several European countries and a number of states of the American Union sterilize the criminal and the insane. This is not sufficient. The trend of opinion among eugenists is that we must make marriage more difficult. Certainly no one who is not a desirable parent should be permitted to produce progeny. A century from now it will no more occur to a normal person to mate with a person eugenically unfit than to marry a habitual criminal.

#104 macroman on 02.11.16 at 10:37 pm

Are you kidding me! Huge storm clouds in the form of a F5 while the US “market” is near all time highs.

Get out while the getting is good, unless you can catch this oil and gold bottom.

This next correction to 1350 S+P will be just a taster. It will make 2008 seem small on a relative basis as the diving platform started much higher this time.

Oil corrected 75%, why can’t stocks?

#105 WUL on 02.11.16 at 10:42 pm

Faye is actually Fay Wray. One of the original “scream queens”. 1933 “King Kong”.

Having been through that, I can understand a flight to safety with her investments.

Fay was born on a ranch near Cardston, Alberta. Well versed in volatility.

Shrewd move Fay.

#106 Derry McDredge on 02.11.16 at 10:46 pm

If people aren’t supposed to time the market, then we’d have no market. The point of the market is to trade because some people are timing it that it is right to buy and others right to sell for their own reasons. So you have to time something. If you don’t time the market you’d never buy or sell anything and have no market yea?

#107 Julie K. on 02.11.16 at 10:49 pm

#85 Ben ~

Not very nice especially considering all we have done for the world.

As our host led with today…

#Dealwithit

#Boomersrule

#108 Julie K. on 02.11.16 at 10:50 pm

#64 gladiator ~

And every other male in the universe.

#sizematters

#109 DON on 02.11.16 at 10:53 pm

#40 nonplused on 02.11.16 at 7:00 pm

…The stuff going on in the middle east and Europe right now is just stupid. We need to get some adults in the room.
**************************************

Agreed – been following as well! Seems no adults among the political ranks. Decades of cronyism, nepotism and idiocy is the new trend.

Turkey’s air force would be dismantled in a jiffy if they tried flying into Syria where the S400s or most likely the next version is waiting. I would also be weary of the crouching tiger hidden dragon scenario as China lost assets in Libya and most likely is not prepared to lose more. The balance of power seems to be shifting again – perhaps more multi-polar for a while. Diversified and balanced.

#110 macroman on 02.11.16 at 10:54 pm

#55 TD9, don’t bulldoze your relative now. Sitting on 75% cash is smart, unless you are coaching oil and gold.

he doesn’t have to make a rush for the exit like everyone else.

Crikey, with the retirement demographics 7 years longer in the tooth, who the hell would take a long horizon view now considering what most went through in 2008/09.

Save yourselves from dumpster diving. Does negative interest rates not flash trouble trouble?

#111 AfterTheHouseSold on 02.11.16 at 10:57 pm

Flaherty-Elliott riding remains conservative despite Trudeau-Wynne glad handing.

http://www.thestar.com/news/queenspark/2016/02/11/whitby-oshawa-voters-head-to-polls-in-byelection-on-wintry-morning.html

#112 DON on 02.11.16 at 11:01 pm

48 Freedom First on 02.11.16 at 7:13 pm

Yes. Fear and greed are killers. As is trying to keep up with the Jonses. Which, of course, is ego. When it comes to finances, as with everything else, just do what is best for you, ignore the fools, and stay humble. It’s been working for me for decades.
****************************

Perfect timing…thanks for the reminder.

Cheers,

#113 Capt. Obvious on 02.11.16 at 11:03 pm

I will say this sequence of returns the past 12-18 months has kind of sucked for my parents, who are in the first few years of retirement. On the other hand, if I were 30 I’d be thanking my lucky stars that I can accumulate assets at depressed prices.

On the economic front, we (giant multinational) just had our best quarter in terms of free cash flow in many years, so it’s not all doom and gloom out there.

#114 Squatter on 02.11.16 at 11:05 pm

I think Faye is doing the right thing.
There’s a reason why commodities are hitting new lows.
It’s the harbinger of a world recession.
Not a good time to hold stocks.
Let’s wait until a few really big companies go bankrupt.
The stock market will panic and THEN it will be a great opportunity for Faye to buy stock ETFs.
Now, better to hold bond ETFs or gold ETFs.

#115 DON on 02.11.16 at 11:09 pm

#68 GTWR on 02.11.16 at 8:04 pm

DB is failing. Wake-up. Derivatives- “Weapons of mass destruction.”- Warren Buffet
He know just a bit about long term investing.

Is he selling? — Garth

He seems to be selling fear so he can continue to buy low as others bail.

#116 macroman on 02.11.16 at 11:19 pm

Garth, you have a great blog.

I just find you hypocritical in your smart call to get out of sky high real estate but not the sky high US stock part of a balanced PF.

And CMHC will fold so what does that do to our banks?

Jingle banks?

#117 macroman on 02.11.16 at 11:23 pm

#113 CPT Obvious, you must work for the US Printing and Engraving Dept…

On the economic front, we (giant multinational) just had our best quarter in terms of free cash flow in many years, so it’s not all doom and gloom out there.

#118 GenXer on 02.11.16 at 11:38 pm

Thanks for another great blog Garth. I check my portfolio daily (masochist?) but I know I have 25 years until I need the money so I don’t worry. Right now I’m just stacking my cash waiting to buy some more.

#119 turn of the tide on 02.11.16 at 11:51 pm

Garth, you freaking rock dude!

I started reading your blog a few months ago and read it every day now.

I finally get it and I am so glad I see the light. Indeed, I’m balanced and down about 5% but I don’t give 2 cents about it! As a matter of fact, I’m putting all my cents into buying my (yours) diversified strategy in this downturn.

It’s actually beautiful, thanks to mass fear, the courageous win and buy the sale. How ironic!

KEEP IT UP!! I am learning so much and thank you for offering this FREE pathetic and fantastic blog.

#120 JRH on 02.11.16 at 11:59 pm

Lord Tonderin Jesus my safe stocks Na, ZPR, CPD, XTR, FIE, etc, must be down 25%. I don’t think even a super balanced portfolio can be winning at this time. I think the real crash might just happen when China fires up on Monday. Anyway keep a strain on it boys !

#121 Garth what happens if your wrong! on 02.12.16 at 12:01 am

Garth what happens if your wrong!

Please, please Garth play the advocate of the opposite of what you think not only for you but for all of your followers!

Just In Case the corruption has clouded your thinking!

Good Luck Garth and to all who read this. I truly mean it!

My soul hurts knowing the tragedy’s that has and is coming towards us all.

No Fear Garth, it is what it is by the grace of God we all go!

There is nothing that man/woman kind can stop now.

Game Over major reset! No choice!

By the grace of God we all go!

Don’t give in to hate or despair love and forgive and help the ones in need and never ever give into advertised hatred.

Me aka nobody really, just like you, just trying to survive the insanity!

Night!

#122 Love my Kia on 02.12.16 at 12:10 am

Thanks for addressing the elephant in the room Garth.

I think its important to keep people informed especially on those bad market days. I for one don’t like when you do a blog posting about real estate on a down day on the markets. It can make people feel that you are avoiding the reality of the day for convenience.

Letting people know to hang in there on a bad day is good medicine, do the real estate when the markets are doing well and end it with some market gloating.

#123 AlbertaShrugged on 02.12.16 at 12:20 am

http://www.theguardian.com/society/2016/feb/10/housing-prices–conservative-mp-william-wragg-back-home-to-mum?CMP=fb_gu

*sigh….. What if you all just rented and the supply and demand would wain back to normal.

#124 TRON on 02.12.16 at 12:33 am

This unprecedented debt has never been seen before and the world economy is in uncharted waters.

What is happening is an experiment and we have no idea where it will land because we’ve never in history done what’s being done.

It’s like the fire and police response on 911 where there was no plan for something as devastating as that because nobody thought it could happen.

Nobody right now can say one way or the other what a ‘good investment is’ but bad investments can be found everywhere.

#125 VB on 02.12.16 at 12:34 am

Fair enough, all good points.

Thanks
VB

#126 kommykim on 02.12.16 at 12:40 am

RE:

#8 Caught In The Grip on 02.11.16 at 6:15 pm
Excellent post. What are your favorite fixed income ETFs?

I like my bonds short: VSB

#127 My Life is a Pile of Shit on 02.12.16 at 12:52 am

Faye and Rob can cash out their portfolio and pay off the mortgage. A financial return in the form of substantial interest savings is an absolute certainty. There will never be certainty in financial markets. If they change their minds, they can use HELOC to borrow money to play the market, and that will put them back roughly in the same situation as today.

#128 Information on 02.12.16 at 12:58 am

Banking/bankers – pervasive (false) definition: holders/guardians of wealth. Actual truthful definition: trustworthy book keepers. (If they breached that trust it does not mean the definition is false). That is, just information. Who did what, who owes what to whom, and so on. Pay a fee for that service, and accept the books are hidden. Tough deal, but what we have. Culture of secrecy only helps the Cesar. Keep it up.

Matter does not matter, only word. That’s the origin of the U (see SM’s UCC). Lookup the very first sentence in the very first book. It must count for something getting that first place… “In the beginning it was the Word, and the Word was…” – hidden in plain view.

What does it really mean, having an account? It means, you are in general agreement, being entitled to a share of the/a pie. “General agreement” is paramount here. Anarchy is general disagreement. Kiss account good bye. The account value is just the enumerator. What is the denominator?… not under your control. Inflation/deflation: adjusting the denominator.

What is an asset? Practical value. You can use it. Like a tool… or some consumable. Cheese, cured meats, grains, hydrocarbon flammables. Concrete, practical, but narrow applicability value. Have a hammer, have pliers, but need a screwdriver… bummer. With some “dough” could have had it when the need arises.

If everyone has it, then no one wants it.

As opposed to “assets”, “liquidity”, the enumerator, can apply to anything… as long as it applies, that is. As long as the “agent”‘s mentalities accept it for exchange. Gain some, lose some. You can use it as long as it’s “usable” for just anything. The moment mad max kicks in, a million points in that enumerator won’t buy you a gallon of petrol. That narrow area valuable finds its day of fame. But it’s just lottery. Who knows what will be wanted? What if you amassed large stocks of victoria secret’s items before mad max? God is funny this way. Poker chips all around, as far as you can see. And all an illusion. Play on, just don’t get mad, it’s just a game.

#129 sealclubber on 02.12.16 at 1:02 am

Over the last 20 years – which included the massacre of 2008-9, someone starting with $100,000 who stayed invested would have $654,055. The person who tried to time things and missed just the best 10 days of recoveries after corrections would have only half that amount.

What if the person who tried to time things missed just the 10 worst days?

#130 bdy sktn on 02.12.16 at 1:14 am

Japan’s negative rates not working out. Eqs crushed again.
20k to 15k .
25% hit so far. Makes 604 re look stable.

Oh, and, Trudy is an idiot.

And gooooooo Windsor minivan plant. Nice

#131 top on 02.12.16 at 1:35 am

The top is in on various assets. ..housing stocks collector car’s. …they are down 10-15% re 2016 Barret Jackson. ..everything is sliding down yet you say all is good don’t sell.well if most are up its time to sell. Re balance people

#132 Josh in Calgary on 02.12.16 at 1:38 am

#80 David L
Looks like you have it nailed. Could always add a nice corporate bond fund to the mix. A little more yield than XBB but a little more volatile too. They have taken a beating lately though so not a bad entry point

#133 David on 02.12.16 at 2:11 am

Your graphs of portfolio values when missing the best days in the market are very one sided. What if you are a market-timing genius and missed the 10 or 20 worst days in the market over the past 20 years? Selling at the right time and buying back in at the right time must work for some people.

#134 conan on 02.12.16 at 2:39 am

ETF funds are contributing to the sell off problem. This is not just about economic news.

#135 Nagraj on 02.12.16 at 2:52 am

Alberta
was named after the 4th daughter of Queen Victoria, Caroline Louise Alberta, who married the exceedingly wealthy and handsome (and possibly gay) Lord Argyll, Marquess of Lorne who became Gov Gen of Canada.
Originally the name proposed for Alberta was not Alberta but Louise.
The Princess however felt that her daddy, Albert the Prince Consort, ought to have some recognition too – so she objected to Louise, and her objection was honoured.
If it hadn’t been, today Lake Louise might be Lake Alberta, and Mt. Alberta Mt. Caroline, and Alberta Louise. Of course then we’d have to refer to Albertans as Louisers.

In light of the fact that Alberta has devolved into an ongoing emergency, wouldn’t the right thing to do by the memory of Princess Caroline Louise Alberta, be to now change the name of that miserable province – how about Bitumenia?

[Maybe that sounds too much like some kinda mental disorder. “Yer stupid cocker spaniel has been nipping at everybody in the neighbourhood!” “Oh don’t worry about it, it’s just a mild case of bitumenia.”]

Speaking of names, how does GT come up with “Faye”? Do these aliases just pop into his head unchecked, or is there method? Why not Flo, Fiona, Fatima or Fridolina, eh?
In any case, “Fifi” describes herself and her hubby as ordinary and boring. Does ordinary and boring come in degrees? Yas wrote to the wrong blog, sweetie, because everybody here is special and fascinating.

#136 Rocket Man on 02.12.16 at 5:21 am

“Do any of you Dawgs have any thoughts on preferreds right now?”

The Head Clown of the Clueless and Insane Clown Consortium aka BOC Polozy Woozy and True Bell Liberal PAYrty of Canada have telegraphed that for the next two years the BOC will be tongue wagging about negative rates. That means that Preferred shares can only contionue to lose vale from here on.

#137 Sharon Mates on 02.12.16 at 6:07 am

Gold Baby Gold

“A gold standard. You bullion nuts are comical. — Garth”

Something has to be worth something G, otherwise it’s all just “Crap Speak”. A gold standard would herald a new age of fiscal responsibility by governments. Trudedette could no longer lie about debt, Obama could no longer blow smoke up yer ass. A real economy based on real money.

Never. Happen. — Garth

#138 AfterTheHouseSold on 02.12.16 at 7:45 am

#93 cramar
“Chrysler announced today that they are going to hire 1,200 more workers for the mini-van plant in Windsor.

Here’s a link to the announcement.

http://www.cbc.ca/news/canada/windsor/fiat-chrysler-windsor-assembly-plant-1.3444443

#139 Apocalypse2016 on 02.12.16 at 7:54 am

Over 30 earthquakes have hit New Brunswick and are continuing, moving west. North Korea is testing nuclear weapons, now in our own backyard.

Family Day coming – cherish the time.

http://www.cbc.ca/news/canada/new-brunswick/mcadam-earthquake-swarm-new-brunswick-1.3441895

#140 Rakiki on 02.12.16 at 8:18 am

In recent days, I have enjoyed dividend hikes from Brookfield (BAM.A, BEP.UN, BIP.UN), BCE, TRP, CNR… and locked in 5%+ yields on some dividend ETFs as well. It’s like the old mutual funds ad said: Buy, hold and prosper.

#141 James2 on 02.12.16 at 8:33 am

#89 Smoking Man on 02.11.16 at 9:20 pm
Faye and Rob down 5% in an all out panic.

Try trading Forex with 400 to 1 margin. ..
You’re either the king or the peasant in 5 minutes.
Don’t understand humans your all going to die, you live 10 years or 100 years your still dead.
Risk it bitches you only have a microscopic vien of time in the grand scheme of things.
The shit this spices worries about.
……………………………………………………………………..
You don’t understand us Humans because you can not communicate with us. BTW I like spice in my chili but I don’t believe it worries about anything, except being eaten.
qaStaHvIS yIn ‘ej chep.

#142 Dups on 02.12.16 at 8:34 am

Garth hit the nail on the head with this post.

#143 JWD on 02.12.16 at 8:43 am

#80 David L

Very interesting! Looks like a solid portfolio to me. In fact, mine is pretty much a mirror image.

I have XSB instead of XBB, and I have a greater percentage in XSP at 25%

I have also decided to reduce the CPD down to 10%, so mine looks like this:

XSB 25%
CPD 10%
XRE 10%
XIU 15%
XSP 25%
XIN 15%

#144 maxx on 02.12.16 at 8:43 am

#4 john on 02.11.16 at 6:13 pm

“money is the root of all evil……..”

….”The love of money is the root of all kinds of evil”….Timothy 6:10

Big diff. Money is simply a tool. Indisputably essential in this world, but ultimately just a tool.

#145 AfterTheHouseSold on 02.12.16 at 8:50 am

Smoking Man
Didn’t you just buy a cottage next door to this guy? : )

http://www.bnn.ca/News/2016/2/11/Kevin-OLeary-The-curse-of-cottage-ownership.aspx

#146 BMAC on 02.12.16 at 8:54 am

Bunk! We are in a bear market. US is not healthier, Chicago Pension debacle, Pureto Rico going bankrupt, impending Fracking collapse and a future presidential candidate who is not market friendly. Expect a 30% correction over the next two years. Put everything to cash and 10% to gold. The next phase for US and Canada is deleverage and what type of return can you expect from Equities in that scenario.

#147 Penny Henny on 02.12.16 at 8:59 am

Over the last 20 years – which included the massacre of 2008-9, someone starting with $100,000 who stayed invested would have $654,055. The person who tried to time things and missed just the best 10 days of recoveries after corrections would have only half that amount. Like I said, fear’s a costly thing.-GT

I’d love to see the chart if one was lucky enough to miss the ten worst days!

That, of course, would be as fruitless as trying to hit exactly the best ones. The point remains – why attempt to market time when you cannot possibly pull it off? — Garth

#148 gladiator on 02.12.16 at 9:13 am

@144 maxx:

Great attitude towards money – it is indeed just a tool that, if used wisely, can help you get a good life.

“Money is a great servant and a terrible master.”
– stolen from the internet

#149 Retired Boomer WI on 02.12.16 at 9:14 am

Busy, busy, busy…..

#150 The Other Chris on 02.12.16 at 9:22 am

Faye and Rob seem to be doing reasonably well. House 2/3rd paid off, $400k in invested assets, plus mediocre (but extant) pensions. Still 12+ years to retirement. Something has been going right for them. Those numbers wouldn’t be great for two medical doctors, but for a bus driver and a supply teacher, not bad at all.

#151 Bottoms_Up on 02.12.16 at 9:25 am

#133 David on 02.12.16 at 2:11 am
——————————
You’re missing the point, it is impossible to time the markets to this accuracy (ensuring a miss or coverage of 5 or 10 days). Thus by ensuring you stay invested, you are guaranteed both the worst and best days. Alternatively stay in cash….and where does that get you long-term?

#152 Trey on 02.12.16 at 9:37 am

Garth what about US banks, they are looking wobbly again since 2008, we may have another crisis brewing.

A groundless fear. — Garth

#153 cramar on 02.12.16 at 10:17 am

There seems to be many blog dawgs like Faye. It is hard to take when markets take a dive and your portfolio takes a hit. Garth has been pushing the balanced portfolio, which has historically increased over time. Maybe some people should have a focus on structuring their portfolio for an income stream rather than growth.

I recently received my monthly statements and calculated the hit to my portfolio for January. Between Dec. 31 & Jan 31, I lost $77 total. What?!
Then I realized although the book value of some investments are down, since I structured it for monthly income, the income almost compensated for the losses. Fortunately I don’t need the income stream to live on, so it mostly gets reinvested.

Two other examples of this was in the crash of 2008-9. Had a neighbour who said his mutual funds were down a third and blamed his advisor. He switched advisors and investments. I was 100% in bonds at the time and my portfolio didn’t change much (actually went up), but kept cranking out the same monthly income.

My financial guy told me last year of a elderly client (now deceased). He had a $900k portfolio, which he was hoping to grow to a million+. But it was structured for monthly income. Then 2008 hit. The portfolio dropped to the $600k range, but it still kept cranking out the same monthly income! Eventually it came back to near the million mark before he died a year or two ago.

So if one structures their portfolio for monthly income rather than capital gains, the current situation might not be as hard to take. Obviously there are tax considerations that have to be taken into account.

#154 fancy_pants on 02.12.16 at 10:27 am

you thought 2008 was bad? each successive ‘meltdown’ will be harsher. or stick your head in the sand and believe otherwise. $ can be made along the way but long term instability will become more extreme

#155 Josh in Calgary on 02.12.16 at 10:27 am

#80 David L and #143 JWD,

One additional thought for you on your balanced portfolio is splitting your XIU between XIU and ZLB. ZLB is BMO’s low volatility Canadian ETF. So basically Canada after you strip out the oil and mining stocks. It’s down a lot less than XIU through this tough time. Of course if you believe XIU will rebound then you can wait awhile to do this.

#156 Smoking Man on 02.12.16 at 10:31 am

#145 AfterTheHouseSold on 02.12.16 at 8:50 am
Smoking Man
Didn’t you just buy a cottage next door to this guy? : )

http://www.bnn.ca/News/2016/2/11/Kevin-OLeary-The-curse-of-cottage-ownership.aspx
……………

Yes, with a partner, near walkers point marina. Swiped it. Under 500k
Needs a bit of work.

#157 Noel on 02.12.16 at 10:31 am

Global equities have a lot more room to run down, they’re still 30-40% higher compared with 5 years ago. Volatility is steadily increasing and the global central banks have run out of bullets.

Look at what happened when the Fed took its rates off emergency levels. 10% correction. What do you think will happen if they continue to hike throughout the year? Likely to test 5 year lows if you’re lucky.

Right now is a great time to be cash heavy.

Also Deutche Bank probably won’t fail, but there’s a good chance they shutter their US operations over the next year and a half as they won’t have the capital to pass the Fed’s more stringent stress tests that are upcoming.

#158 Ret on 02.12.16 at 10:38 am

No mention by the CTV Politbureau of the Whitby provincial by-election.

Obviously the flying in of JT for photo-ops and CTV’s showing of Kathleen Wynne every 10 minutes on their network didn’t pay off for the Liberals at the polls.

A special thank you to all Canadian taxpayers who paid to fly in JT and his entourage to Whitby to help the provincial Liberal candidate. At least they didn’t have to fly them in all again for a victory celebration and more photo-ops.

When will the media stop treating Canadians like useful idiots who need to be programmed as to what to think, say, feel or do?

#159 Bytor the Snow Dog on 02.12.16 at 10:41 am

Cramar- Although the job numbers in Windsor/Essex seem like positive news, it ain’t all exactly so.

Ya see, a job is not a job is not a job. Highbury replaced 700 jobs in the $25/30 an hour range with 400 or so jobs in the $12-20 an hour range.

Ditto with FCA. The outgoing (retiring) workers make $32 an hour and up. The new hires start at $20 an hour and it takes 10 years to make it up to full pay…that is if the new contract stays the same and they don’t end up with two tier wages like the US.

Yes the new jobs are great but they are nowhere the quality of the old ones, which leads to less disposable income for everyone.

The Neocon attack on workers continues.

#160 S.Bby on 02.12.16 at 10:49 am

Still more mortgage scamming:

http://www.cbc.ca/news/canada/british-columbia/surrey-mortgage-broker-ordered-to-cease-and-desist-1.3444572

During the course of their interview, Gill allegedly told the investigator she would tell the lender he planned to live in the investment property, even though he stated he did not, as he would get a better deal from the bank.

The FICOM document says: “Ms. Gill further advised the investigator that if he was ‘going to be short (on the down payment) and you need to borrow, then we tell them, okay, then we make a gift letter. Then we tell them my parents, or whatever, they’re going to give us a gift.”

#161 Smoking Man on 02.12.16 at 11:06 am

Atten FX traders

http://www.bloomberg.com/news/articles/2016-02-12/dollar-defies-forecasts-sending-analysts-back-to-drawing-board

#162 Moller on 02.12.16 at 11:08 am

Real Estate shadow flipping in BC:
http://bc.ctvnews.ca/warning-about-real-estate-shadow-flipping-from-alleged-victim-1.2774998

#163 VJGoh on 02.12.16 at 11:11 am

Here’re the problems with oil:

1) It’s not OPEC and the Saudis that are driving prices down, it’s fracking.
2) The oil from fracking (and even from OPEC) continues to flow because the operations were all financed with debt. Now in an effort to service their debt, US fracking operations are keeping the taps open and selling at a fractional profit because money is money.

So if you want to know when oil prices will recover, try to figure out when these companies are back in the black again. Once they’re not in hock, they can turn down the output for a while and coast while surplus is consumed.

#164 Rational Optimist on 02.12.16 at 11:12 am

http://www.cbc.ca/news/canada/calgary/prepay-taxes-wealthy-albertans-1.3442826

“Wealthy Albertans look to avoid tax pain- for now”

Those Albertans who will be paying more income tax to two different levels of government in 2016 are trying to book as much income as possible in 2015. Makes sense. I wonder what the total impact could be.

In the article, a prof from UCalgary put it in terms us regular Joes can understand:

‘”People respond to taxation,” Mintz said. “Suppose the government puts a higher tax on beer compared to wine. People switch to wine instead of beer, that’s tax avoidance.”’

Oh, NOW I get it.

#165 For those about to flop... on 02.12.16 at 11:19 am

I guess this stat should come as no surprise…
Bankruptcies in the Oil Industry have quadrupled in the U.S in the last 12 months- source CNN.

#166 Vamanos Pest on 02.12.16 at 11:21 am

What if I missed the 3rd, 4th, and 5th best worst days, and then also missed the blah, blah, blah.

What the hell kind of questions are these?

Time the market at your own peril.

It’s just so much easier to ignore it.

(Yes, I’m down this year, last check was a few percent…and it effects my day to day life, my overall quality of life, and my retirement plans exactly ZERO!)

#167 Dave on 02.12.16 at 11:28 am

Getting Killed on preferreds (CPD and ZPR). they keep going down, not sure why…

#168 For those about to flop... on 02.12.16 at 11:30 am

I’m surprised Angus Reid former centre for the B.C Lions came out and said he resorted to BlackJack to scratch his gambling itch.
What’s wrong Angus ? Vancouver real-estate market and the stock market in general not enough excitement for you?

M41BC

#169 Leo Trollstoy on 02.12.16 at 11:40 am

lack of money is the root of all evil

#170 Jonah on 02.12.16 at 11:48 am

Good advice, but market will crash further. I would not be surprised that we have a repeated 2008 at least in Canada this year.

i had sold my stock when they had gone down 10%, and they went down further 12% so I made the right choice by staying out of market which I believe has potential to fall for next few weeks for another 10 to 20%.

Even though Alberta is a mess right now, it is helping GTA, and Vancouver prices to atleast remain stable if not rise. Houses will stay up, any devaluation in houses would mean blood on streets for which Banks, Lenders, Horny REs, Builders and Foreign investors collectively known as Mafia should be held responsible.

#171 Mark on 02.12.16 at 12:00 pm

“Those Albertans who will be paying more income tax to two different levels of government in 2016 are trying to book as much income as possible in 2015.”

The guy in the article must have a real pessimistic view of the markets. After all, even if tax rates do rise a few points, the ability to invest the cash in his pocket and defer income, would, for most reasonable investment strategies, especially with markets so depressed, would far exceed that of the tax increases allegedly passed on.

I’m pretty much of the view that this guy is just a political type trying to make a public personal point against the governments’ changes to tax rates. Not an investor rationally trying to minimize his tax load which generally would involve deferring tax as long as possible. Deferring capital gains as long as possible, only selling the highest cost base shares possible when shares need to be sold — these are strategies far more fundamentally sound than trying to game short-term tax policy.

So if you want to know when oil prices will recover, try to figure out when these companies are back in the black again. Once they’re not in hock, they can turn down the output for a while and coast while surplus is consumed.

You are missing the high depletion rates of the shale wells in your analysis. Give it another year or two, the US shale sector will be down by millions of barrels per year of production. Whether this will restore balance to the market, I am not sure (global deflationary forces are pretty darn strong these days), but I wouldn’t expect the shale sector to return to profitability for a long time, and probably not the existing players without a dramatic restructuring of the industry.

#172 GS in T.O on 02.12.16 at 12:14 pm

#103. Nikola Tesla

Thank you for your prediction of a future utopian society……………ADOLPH!

#173 NoName on 02.12.16 at 12:14 pm

What say you, Uber? Taxi???

“More likely is that Google will start by offering robotic taxi services in cities that already welcome autonomous vehicles. Austin, Texas, would fit that bill. Google has been testing its self-driving cars there since July 2015, and the state has no special rules or regulations for driverless cars.”

http://www.theguardian.com/technology/2016/feb/11/google-self-driving-cars

#JohnnyCab

#174 bill on 02.12.16 at 12:15 pm

#163 VJGoh on 02.12.16 at 11:11 am
I agree.
I wonder when that which you speak of will be.

#175 S.Bby on 02.12.16 at 12:36 pm

#162 Moller

Wow. They really threw the book at that guy!

Wang was ordered to complete a course, was fined $1,000, and suspended for 14 days.

#176 cramar on 02.12.16 at 12:37 pm

Oh! Oh! More fuel for the generational divide. Wonder if Canada is different? I personally think it is just the opposite here, especially in the big cities like GTA & YVR.

Why boomers are loading up on debt and millennials aren’t.

http://www.marketwatch.com/story/why-boomers-are-loading-up-on-debt-and-millennials-arent-2016-02-12

#177 Prairie Oysters for All on 02.12.16 at 12:37 pm

#135 Nagraj on 02.12.16 at 2:52 am

Alberta
was named after the 4th daughter of Queen Victoria, Caroline Louise Alberta, who married the exceedingly wealthy and handsome (and possibly gay) Lord Argyll, Marquess of Lorne who became Gov Gen of Canada.
Originally the name proposed for Alberta was not Alberta but Louise.
The Princess however felt that her daddy, Albert the Prince Consort, ought to have some recognition too – so she objected to Louise, and her objection was honoured.
If it hadn’t been, today Lake Louise might be Lake Alberta, and Mt. Alberta Mt. Caroline, and Alberta Louise. Of course then we’d have to refer to Albertans as Louisers.

In light of the fact that Alberta has devolved into an ongoing emergency, wouldn’t the right thing to do by the memory of Princess Caroline Louise Alberta, be to now change the name of that miserable province – how about Bitumenia?

[Maybe that sounds too much like some kinda mental disorder. “Yer stupid cocker spaniel has been nipping at everybody in the neighbourhood!” “Oh don’t worry about it, it’s just a mild case of bitumenia.”]

Speaking of names, how does GT come up with “Faye”? Do these aliases just pop into his head unchecked, or is there method? Why not Flo, Fiona, Fatima or Fridolina, eh?
In any case, “Fifi” describes herself and her hubby as ordinary and boring. Does ordinary and boring come in degrees? Yas wrote to the wrong blog, sweetie, because everybody here is special and fascinating.


Wikipedia is a wonderful thing ain’t it… provides fuel for metrosexual monkey brains of limited capacity.

Speaking of fuel…. is your world powered with horse or pig manure.

#178 Retired Boomer WI on 02.12.16 at 12:47 pm

While yesterday I was busy with vinyl buyers, sellers & traders in Madison, I didn’t get much of a chance to view the markets. Just as well I guess.

Today we are back to basically Wednesday…

Yup. Why bother to change up now? Your buys should have been made, your holds set, and if you are selling, better have done it in December. Is that all clear?

Stay the course…

#179 dontcallmeshirley on 02.12.16 at 12:50 pm

All the big funds and managers time the market.

Why shouldn’t Joe Retail Trader do the same?

#180 Briana on 02.12.16 at 12:55 pm

I still say sell all market holdings and buy much lower. Yes, the US economy is improving and the world ia always consuming oil (esp under growing world population), but economies are much more connected than in previous decades. Recently rapidly emerging economies are now much weaker, much lower Chinese/Indian/South American/African growth will continue to impact the global economy overall and especially established economies/developed countries. Employment is higher in the US, BUT analyze the job types and salaries…a majority of high paid incomes were lost in the 2008-09 crisis and have not returned and even more high paid jobs lost and being lost due to low oil and natural gas prices. The advent of technology is also replacing specific, once well paid positions. The US is addiing low salary jobs with mediocre benefits. It’s happening in Ontario too…..sure population and employment is increasing, but mainly low salary. It’s high paying jobs with great benefits that fuel consumption and many areas of the economy — combine these aspects with the amount of record debt globally…..and it is clear the world is headed for a recession. The markets are recognizing this and you should too – don’t live in a dream world. Look for markets to plummet much futher this year.

Furthermore, YVR and YYZ housing markets are heading for a major correction. Rapid stock market declines are typically correlated with housing market price corrections. This will be futher exacerbated by record debt that the population is carrrying on top of much higher cost of living and expenses, and higher borrowing rates or negative saving rates to come!! Employment and low income jobs are growing in Ontario along with debt. Housing affordability has deteriorated at a rapid pace. It seems home prices are peaking now, and we head on a downward cliff or spiral from here…. Many analysts are justifying housing price increases in Toronto by simply population growth….well, the population in Toronto has been rising quickly for decades and decades and the city has still endured housing corrections in the 70s, 80s, and 90s, etc………population/ immigration growth and strong employment combined did not save the US in 2008-09!!

Sell everything you have(homes and markets investments) and rent. Keep cash liquid or in safe secure investments and wait for the fall out. It has only started…….

#181 Smoking Man on 02.12.16 at 12:55 pm

Man reading on line the femanzis have their knickers in knots over the Ghomeshi trial. They are now reaming their vile venom away from Ghomeshi toward his two female Lawyers.

From twitter “That bitch was too hard on the victims, she’s set back women’s rights for decades she should be ashamed of herself. Hate, hate, hate.”

Rosie DiManno: Ghomeshi’s lawyer will be crucified for stating the obvious about Crown’s collapsing case:

http://www.thestar.com/news/crime/2016/02/11/ghomeshis-lawyer-will-be-crucified-for-stating-the-obvious-about-crowns-collapsing-case-dimanno.html

There hasn’t even been a verdict yet but these leftist freaks of nature thrive on hate and bashing anything male. They never mention the migrants attacking women in Europe, they don’t fit the profile or resemble their own brothers or cousins.

Marie Henein Ghomeshi’s lawyer is a very smart and strong assertive woman, personifies the word feminist.

My wife was asking my youngest today if he ever plans on getting married. The kid is 28, handsome as hell, 6`4 athlete.

“Mom, woman in my generation are crazy, thieve turned into men, they just want sex, I have 3 apps and could have a hottie here within 30 minutes, what`s the point of getting married? I’ll wait till I’m 45 then get a 25 year old to make some kids with, at that point I wont care what they do. ” He said.

Sad times indeed.

#182 Rational Optimist on 02.12.16 at 12:55 pm

It’s all good news from the States: http://www.bloomberg.com/news/articles/2016-02-12/u-s-retail-sales-increased-in-january-in-broad-based-advance

“Excluding cheaper gasoline, which depressed service-station receipts, purchases climbed 0.4 percent…

Average hourly earnings climbed 2.5 percent in the 12 months ended January after a 2.7 percent gain in December that was the most since 2009.”

Rate hike in March.

#183 Dana Samuel on 02.12.16 at 1:02 pm

Who cares what real estate prices and stock markets were 20 years ago!

#184 AfterTheHouseSold on 02.12.16 at 1:03 pm

#159 Bytor the Snow Dog
“FCA. The outgoing (retiring) workers make $32 an hour and up. The new hires start at $20 an hour and it takes 10 years to make it up to full pay…that is if the new contract stays the same and they don’t end up with two tier wages like the US.”

Chrysler, and to some extent GM, have been very clear about their expectations for the upcoming Canadian contract negotiations. This has included the suggestion of a permanent freeze of the upper wage while all others start at the lower wage. They definitely expect concessions as Ontario is not their only option for auto production.

The Brampton plant is particularly vulnerable as most car production has gone to Mexico. I wouldn’t be surprised to see the workers opt for strike action and, like the workers at Caterpillar of London Ontario, find the plant closed and jobs lost.

#185 Sideshow Rob on 02.12.16 at 2:03 pm

Smart money selling to the brain dead money today. This smells like a wipe out into the close.

#186 MF on 02.12.16 at 2:28 pm

#180 Smoking Man on 02.12.16 at 12:55 pm

“Mom, woman in my generation are crazy, thieve turned into men, they just want sex, I have 3 apps and could have a hottie here within 30 minutes, what`s the point of getting married? I’ll wait till I’m 45 then get a 25 year old to make some kids with, at that point I wont care what they do. ” He said.

I don’t know if I agree with this. The quality women that still exist out there will find the quality men. That’s how its always been. The creme rises to the top. Lol at these guys who smoke, drink, don’t exercise, have no personality, don’t have great jobs expecting they are going to get a 25 year old hottie whenever they want.

90% of my friends said the same thing at 28, now at 32/33 the same guys are all getting married because they found “the one”. The fantasy about being 45 and getting a 25 year old doesn’t work and is an illusion. Most guys at 45 are too old to have kids (biologically and socially). Most guys are tired of the dating scene by then, actually usually at my age you get tired of the BS.

MF

#187 MF on 02.12.16 at 2:32 pm

I, like most people, am pessimistic about the market and believe it will fall further.

It’s simple. There is no where to go.

-If bad statistics come out, it stokes this fear of a worldwide recession starting. This is at a time when the central bankers have no bullets left after 2008.

-If good statistics come out, it means the FED is on track to tighten and raise rates. This stokes the fear many have that the rise in stock values over the last 7/8 years was driven by “stimulus” and that “stimulus” is now being removed.

MF

#188 STHU, Leo Trollstoy on 02.12.16 at 2:37 pm

#163 VJGoh
Yes, but the MSM wants us to blame the Arabs (I know they didn’t do anything at all actually, but still…:) and now they will want us to blame the Persians. So many idiots out there don’t even know who the world’s largest oil exporter is: the Russian Federation. But, by all means, please continue to blame the Middle Easterners:)

#189 Penny Henny on 02.12.16 at 2:57 pm

To-#179 Briana on 02.12.16 at 12:55 pm

You sure sound alot like VREU.

But you needs some fancy charts.
Please allow me.

1 2 3 4 5 6 7 8 9 0
X X
X X
X X
X X

You’re welcome!

#190 Penny Henny on 02.12.16 at 2:59 pm

Victoria Real Estate Update the gig is up.
I have been informed that you are a landlord.
A slumlord at that!
So much for full disclosure…. Slumlord!

#191 waiting on the westcoast on 02.12.16 at 3:10 pm

#181 Rational Optimist on 02.12.16 at 12:55 pm
“It’s all good news from the States: http://www.bloomberg.com/news/articles/2016-02-12/u-s-retail-sales-increased-in-january-in-broad-based-advance
“Excluding cheaper gasoline, which depressed service-station receipts, purchases climbed 0.4 percent… Average hourly earnings climbed 2.5 percent in the 12 months ended January after a 2.7 percent gain in December that was the most since 2009.” Rate hike in March.”

I don’t know if they will raise given the games they are playing…

But they should raise. When I chat with my employees in the US… It’s times keep getting better!

#192 Sam the Sham on 02.12.16 at 3:13 pm

#4 John

“money is the root of all evil……..”

No, the LOVE of money is the root of all evil!

#193 Tony on 02.12.16 at 3:14 pm

Oil looks like a good short sale for Monday for any gamblers. Usually everyone gets “cold feet” over the weekend resulting in too much short covering today. The Chinese market will be open for trading meaning the odds of a down day on Monday are high especially if they can pump the DOW to exactly 16,000 at the close today. The under/over for rumors I put at 20 meaning 20 rumors before any cuts in oil production. We’ve had 2 so far.

#194 James on 02.12.16 at 3:32 pm

#156 Smoking Man on 02.12.16 at 10:31 am

#145 AfterTheHouseSold on 02.12.16 at 8:50 am
Smoking Man
Didn’t you just buy a cottage next door to this guy? : )

http://www.bnn.ca/News/2016/2/11/Kevin-OLeary-The-curse-of-cottage-ownership.aspx
……………

Yes, with a partner, near walkers point marina. Swiped it. Under 500k
Needs a bit of work.
…………………………………………………………………..
Ha, ha, ha. Can’t believe you just poured $$$ into a shanty fixer upper. Even O’Leary thinks its a mistake. What happened to your short term rentals who haw? You say one thing and do another brother. You could have invested $$$ and made a killing, only an idiot would plunge into the cottage market. Wasted investment my friend, and don’t tell us how suave you are as an astute investor. Any good investor worth his wait in, dare I say it “gold” would tell your whacked! I’m surprised Garth didn’t chime in with a scolding.

#195 hope & ruin on 02.12.16 at 3:32 pm

#159 Bytor the Snow Dog on 02.12.16 at 10:41 am

Ya see, a job is not a job is not a job. Highbury replaced 700 jobs in the $25/30 an hour range with 400 or so jobs in the $12-20 an hour range.

The Neocon attack on workers continues.
_____________________________________

The deal in leamington is better than what factory workers in the GTA are getting. Especially with the lower cost of living down there.

Also, there is no “neo-con” attack on workers. If there is an attack on workers it is coming from the left. Which has been hijacked by big-govt and environmentalist movements. How this lines up the workers movement is beyond me. I would actually like Big dippers thoughts on this topic. Bunch of champagne socialists if you ask me.

Only a couple years ago I was in their shoes. It’s not pretty living on their wages. Couldn’t figure out how some guys did it supporting families.

Never forget the day I met a big-union front office guy. Always pumping the NDP. Two cars. A beat-up corolla for going to see the guys he reps and a Cadillac for going to play golf at the country club with his buddies.

The best lesson I learned early in life was: trust the man writing me a cheque and telling me “life’s tough”. Over the guy taking a cut of it and promising me sunshine and rainbows.

#196 liqudincalgary on 02.12.16 at 4:20 pm

active on 02.11.16 at 6:14 pm
that last graph is sure looking mightily bubbalicious!

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

if that is your best assessment, then you completely missed the point of GT’s post

#197 Smoking Man on 02.12.16 at 4:30 pm

194 James on 02.12.16 at 3:32 pm
#156 Smoking Man on 02.12.16 at 10:31 am

#145 AfterTheHouseSold on 02.12.16 at 8:50 am
Smoking Man
Didn’t you just buy a cottage next door to this guy? : )

http://www.bnn.ca/News/2016/2/11/Kevin-OLeary-The-curse-of-cottage-ownership.aspx
……………

Yes, with a partner, near walkers point marina. Swiped it. Under 500k
Needs a bit of work.
…………………………………………………………………..
Ha, ha, ha. Can’t believe you just poured $$$ into a shanty fixer upper. Even O’Leary thinks its a mistake. What happened to your short term rentals who haw? You say one thing and do another brother. You could have invested $$$ and made a killing, only an idiot would plunge into the cottage market. Wasted investment my friend, and don’t tell us how suave you are as an astute investor. Any good investor worth his wait in, dare I say it “gold” would tell your whacked! I’m surprised Garth didn’t chime in with a scolding.
…..

I have a agenda. Not willing to share at the moment.

#198 Curt on 02.12.16 at 4:32 pm

tundra pete:

Almost every guy I hung out with, salivated to be with a blonde. Most couldn’t get one. Many weren’t as smart as most blondes. But these guys sure told a lot of blonde jokes.

Besides, blonde jokes will be obsolete in a few years because blondes are going extinct.

#199 StockBet on 02.12.16 at 4:34 pm

Show greed when others show fear.

Show fear when others show greed.

#200 Investorz on 02.12.16 at 4:42 pm

Garth Turner “Markets: They suck” has marked the bottom!

Oil up 12%.

You can buy oil with $HUC ETF from Horizon. At least, oil can’t die. $ZEO and $XEG can die.

#201 Mark on 02.12.16 at 4:45 pm

“I wouldn’t be surprised to see the workers opt for strike action and, like the workers at Caterpillar of London Ontario, find the plant closed and jobs lost.”

I hope you’re somewhat aware that there was a deeper issue going on at the former EMD plant at London. EMD had their products basically banned from new production after last year or so on account of the design they were using being 20-30 years old and not meeting Tier 4 emissions regulations. Itself a derivative of a design that first was sold in the 1930s. Faced with the need to drastically reduce capacity because they simply didn’t have a product to sell, they had to close factories. EMD’s factory at La Grange, Illinois, at least in the 40s, 50s, and, was considered so vital to US national security that it was one of the few industrial facilities guarded with domestically deployed anti-aircraft weaponry. So closing US production of their increasingly limited, but strategically important product line, would have been denied on national security grounds. London was closed instead.

Which brings me to the point, and that is, there was another poster yesterday who suggested that Bombardier’s management was extremely poor/incompetent. Citing, of course, the poor stock price and negative book equity. To him, I ask, “what was the alternative” to investing in the C-Series to replace Bombardier’s line-up of obsolete aircraft? Bombardier was in a “damned if they do, damned if they don’t” situation because clearly their existing CRJ product line is on its last legs and is obsolete. Its unfortunate that they’ve suffered delays which have caused the accountants to insist upon non-cash impairment charges (thus rendering the negative book equity, but to call Bombardier’s management incompetent, or to suggest that Bombardier is mismanaged is mostly without evidence. They operate in a systemically important, yet risk and capital intensive industry. What’s his suggestion? That Bombardier suffer a slow burn over time and not take any risk? That the enormous private sector engineering workforce employed by Bombardier sit at home and do nothing because nothing that doesn’t neatly fit into Buffett’s investment criteria (which has various flaws, BTW) is worth funding? We know what not investing, what stagnant product lines did to EMD/Progress Rail/Caterpillar at London. If they had done the heavy lifting earlier, I am pretty sure they would be still producing product, especially with the very attractive CAD$/USD$ pair at the moment.

#202 Noel on 02.12.16 at 4:45 pm

#187 MF

Exactly, they’ve run out of ammo.

A few possibilities to derail your theory – more QE, fiscal stimulus (send everyone a cheque) or negative interest rates.

Some scenarios are more likely than others…

#203 liqudincalgary on 02.12.16 at 4:46 pm

Yitzhak Rabin on 02.11.16 at 9:22 pm

The way out is a global monetary reset and the restoration of a gold standard.

A gold standard. You bullion nuts are comical. — Garth

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

then you should check this out Yitzhak:

http://www.gold-to-go.com/en/locations/atm-locations/

#204 Jinxy on 02.12.16 at 5:18 pm

Alright, please don’t jinx any market rebound today by talking about the dramatic 13% increase in oil price and spike in the DJ and TSX, and how cheap things have become.

This may not be the bottom, as once again, rumours and one minister’s comments spurned the dramatic turnaround in oil price.

I would like it to be the bottom as my ‘growth’ in my balanced portfolio has been decimated back to 2012 levels….

#205 AB Boxster on 02.12.16 at 5:18 pm

#181 Smoking Man on 02.12.16 at 12:55 pm

Man reading on line the femanzis have their knickers in knots over the Ghomeshi trial.

——————————–
Careful Sman.
You risk incurring the ‘rath of the femzis’.
I suspect someone is already looking to retroactively remove their consent from one of your past indiscretions.

#206 Josh in Calgary on 02.12.16 at 5:40 pm

#171 Mark on 02.12.16 at 12:00 pm,
All the guy in the article is doing is taking money out of his company as income as opposed to leaving it in the company and taking it out at a later time. Since the top tax bracket will be higher soon. He can still turn around and put that money into his personal RRSP and TFSA and unregistered investment account. So it’s not a play on the markets at all.

As for oil, it will rebound for sure. We use more of the stuff EVERY SINGLE day. Of course the timing is the critical piece. I’ve seen estimates that it takes about 18 months from when rig counts drop before you see the drop in production. But when it does happen it will be faster than people expect. Also we have a MASSIVE inventory to work through. I think it will be 2 or 3 years of pain, which is significant, but it will rebound quicker than people expect (just like it dropped quicker than people expected). Forecasts are always linear even though everyone knows that the industry is cyclical. It’s little wonder why we rarely get it right.

#207 Tony on 02.12.16 at 7:17 pm

Re: #175 cramar on 02.12.16 at 12:37 pm

That’s in America, the opposite is happening here in Canada.

#208 Tony on 02.12.16 at 7:34 pm

Re: #131 top on 02.12.16 at 1:35 am

I noticed very few European cars were for sale at the auction.

#209 David L on 02.12.16 at 8:04 pm

#132 Josh in Calgary, #143 JWD, #155 Josh in Calgary

Thanks for the feedback, I’m getting ready to build it. I’ve been sitting on the sidelines too long.

Cheers to all,

#210 Victoria Real Estate Update on 02.14.16 at 3:40 am

Do not post.

1. OVERALL INCREASE IN HOUSE PRICES (first chart):

4. Increase in household debt-to-income ratio (third chart):
Canada: —– + 53% —– (from 2000 to 2013)
US: —– + 41% —– (from 2000 to peak)

#211 Victoria Real Estate Update on 02.14.16 at 3:47 am

Do not post.

2. INCREEASE IN PRICE-TO-INCOME-RATIO (first chart):

3. INCREASE IN PRICE-TO-RENT RATIO (second chart):

#212 jess on 02.14.16 at 12:32 pm

speaking of wives ….perhaps the X mayor of new york should read a little history …and “deal with it”

Louisiana Black Women:
An Ignored History

by Jan Doherty

This paper was selected by the Department of History as the Outstanding Paper for the 1985-1986 academic year.

…”Such has been the case with the role of women in history. Arthur Schlesinger Sr. wrote in 1922 that “from reading history textbooks one would think half of our population made only a negligible contribution to history.” The black woman has been ignored even more; she has been considered historically inferior to the white female in the United States and at the same time a member of an entire family of people that was considered little more than chattel for more than 200 years.

“None of the names of the first women in New Orleans have survived. They have left no written history…. [B]ut we can imagine how hard life was for the early French women who kept house and raised families in the fetid swamp, the Indian women who brought their wares to market or the African women sold on the slave blocks to serve local wealthy families or work on plantations upriver.” When Sieur de Bienville brought 300 men to build the city of New Orleans in 1718, 272 were bachelors. For this reason, some of the Native American women were sold to whites and lived a quasi-slave existence in their own homeland.

In the 1720s French girls who were in disfavor with their families or who were orphans, prisoners or inmates from asylums were shipped to Louisiana. Whether “correction girls” or “casket girls,” their primary purpose was to satisfy the sexual desires of the French settlers. As a further insult, the commissaire ordonnateur, Jean Baptiste de Bois Duclos, logged an official complaint to the Company of the West for a 1713 shipment of 12 young women who were “too ugly and ill-favored” to marry.

As New Orleans became established as the slave center of North America, black women by the thousands were sold into bondage. For one group of the women, the assigned price depended upon their beauty and subsequent use to the master who could lease them to wealthy white men. For another group of slaves, bondage meant learning that “white men considered every slave cabin a bordello.”

Strong black women were sold as breeders valued for their reproductive as well as productive capacity. In a similar manner, a system that came to be known as placage was established in New Orleans to enable wealthy white men to set up a double household. The young women of the placage system were persons of French or Spanish plus black parentage. Placage was essentially a type of common-law marriage, or “the best-known institutional arrangement for miscegenation.”

http://www.loyno.edu/~history/journal/1985-6/doherty.htm

#213 Victoria Real Estate Update on 02.14.16 at 2:40 pm

do not post

AND FLORIDA) SAW HOUSE PRICES GO BACK TO PRE-BUBBLE (2000) LEVELS OR WORSE (see chart)