Emotional baggage


Suzi and her hubby live in Vancouver and read this blog, which means they need serious help. They’re also kids, which is a mixed blessing. “Keep in mind that us young folks are particularly clueless,” she said, with disarming appeal. “I would let you know that we (“the kids”) are scared and confused.”

But it’s not realtors, their Frankenumbers, CREA’s endless stream of misleading stats and humping media releases or insane real estate prices that have them heavy with emotional baggage. They know better than to jump into real estate. After all, who wouldn’t, looking at this house price chart?


No, what’s got Suzi hooped is the bank, and this investing thing.

“Me and my husband have been squirrelling away as much money as possible but unfortunately we are doing the one thing you always say not to do, I have about 25K in a GIC and 20K in my bank account, yes I know this is very stupid. The problem is I don’t know what to do with it and I am scared. I definitely do not want to put it into mutual funds which is pretty much the only thing [email protected] can do for me. I’ve read your blog enough times to know I should be putting it into indexed funds and ETF’s (I have managed to figure out what indexed funds are but still a little clueless about ETF’s).

“So here’s the problem when I go to the bank it doesn’t seem to matter what I say they will only sell me mutual funds, I don’t have enough money to go to a credible money manager and I certainly don’t have the expertise to do it on my own. So there you have it I am scared and paralyzed and wind up in GIC’s (at least I am doing better than my friends with RRSP’s). The typical people we would turn to for advice (our parents) are useless because the rules of the game have changed so much and we also usually don’t have very much money to attract a serious broker so who do we turn to? Help.”

First, Suzi, forget about [email protected] She’s paid to sell you stuff the bank packages and promotes, mostly GICs and mutual funds, which you’ve figured out. Guaranteed Investment Certificates are a brain-dead choice because they pay you less than the inflation rate, unless locked-in for multiple years – and then you lose liquidity. Worse, that pathetic return is 100% taxed at your marginal rate. Even worse, you have to pay tax on interest you haven’t yet received. This totally blows.

As for mutual funds, the performance of most has been mediocre and they cost too much. That comes in the form of MERs, which stands for ‘management expense ratios’ and really means ‘the dough we pay [email protected] for selling you this junk, and the Carrera payments for the fund managers in Calgary.’

ETFs are far better. That stands for ‘exchange-traded funds’ – like mutual funds but with two big differences: no managers, so no fat management fees, which makes them relatively cheap. Plus they trade on the stock market, so they’re more liquid. But, of course, you need to know which ones to buy.

Now, you dissed some friends for having RRSPs. Don’t do that. An RRSP is not a product, it’s just a tax shelter. You can put anything you want in there (like GICs, or ETFSs), and the growth will be free of tax plus you get a tax refund for contributing. That makes it very useful for shifting tax from a year when you pay more tax (because you’re working) to another in which you pay less (being unemployed, having a kid, or fed up).

By the way, savings accounts are like GICs, but sans gonads. Nobody over eight should have one.

The best course of action for you and hubs (and I hope you’ve pooled your finances) is to have two TFSAs, fully funded – which is $25,500 each. While you get no tax break for putting this money in, all growth will be non-taxable, as will be withdrawals. And realize that, like RRSPs, tax-free savings accounts are not actual products (despite what the bank tells you), but just vehicles that shelter assets. It won’t be too many more years before these become the primary saving/investing/retiring tool most people have.

So a TFSA is not a saving s account, or a GIC. Instead you want a ‘self-directed’ plan which means you can stick anything you want inside it. Here’s where the ETFs come in. But in order to do this (with the relatively small coin you have), you’ll need to open a brokerage account with an outfit like TD Waterhouse, QTrade or InvestorLine. In fact, open at least two – one for the TFSA, one for non-registered investing. Relax. Not scary.

But don’t put stocks in it, Suzi. You want diversification, which means owning hundreds of companies instead of three or four. One lousy day, even for a blue chip company, can wipe out a year’s worth of dividends. Finally, also strive for some balance in your overall investments – ensuring you have stable assets that will pay you to own them (‘fixed income’) as well as growth (‘equity) assets.

As I’ve mentioned before, I think 40% in income-yielding stuff (like a bond index ETF and one full of preferreds) and 60% growth-oriented (an ETF containing the major REITs, one pacing the TSX 60, one mirroring the S&P 500 and one for emerging markets) is about right. As you get more dough, you can add in ETFs for things like small-cap Canadian and US companies, real-return bonds (they protect you from inflation) and major sectors (like financials – own a bank instead of savings in one). Don’t fall into the trap of having too much in Canadian securities, since 96% of the world’s markets aren’t here.

Last word: ignore the doomers, pantywaists and fretting nimrods on this site who panic every time markets go down. As an investor, you love down. That’s when you buy. And when everybody thinks prices will only rise, sell the suckers.

You now have the royal jelly, Suzi. Go rock.


#1 TurnerNation on 06.17.13 at 7:47 pm

Here I sit, broken hearted, tried to short but only started. Bulls.

#2 Dean Mason on 06.17.13 at 7:58 pm

They have to be careful that at any discount brokerage that they keep their costs low.Every trade can cost $5,$10,$15.If they are putting smaller amounts like $300 a month a $5 or $10 fee would cost 1.66% to 3.33%.

I heard of commission free ETF’s but there has to be some other fee because the discount brokerage has to make money someway.

#3 Condos and SFH Bidding wars debunked for GTA and TO -June 17 on 06.17.13 at 7:59 pm




#4 KISS Investor on 06.17.13 at 8:01 pm

Suzi, I completely agree with Garth’s advice and wanted to recommend two resources I have found particularly helpful as a newbie investor. The Canadian Couch Potato website has great information on investing in ETF’s, model portfolios, and regular articles. The book “Millionaire Teacher” describes the process of rebalancing (a critical point Garth often mentions but did not in today’s post) in terms that anyone can understand and put into practice. Both resources are particularly helpful to beginner DIY investors with a relatively small net-worth. Good luck!

#5 Emotional baggage — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 06.17.13 at 8:05 pm

[…] via Emotional baggage — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Esta…. […]

#6 sm_YYC on 06.17.13 at 8:22 pm

You are running early tonight Garth. One of the great posts, sums up the message well.


#7 Wilbur on 06.17.13 at 8:23 pm

What are your thoughts on US Reits?
Is it a good time to buy?

#8 jonah on 06.17.13 at 8:23 pm

I havve got around the same amount about 80K, sitting idle in the bank. I had been working on a business idea since 2005 and had registered a business and made break even. With all that cash, I will be putting in the small service oriented business. A little too risky only if you have not done your home work but still better than giving your money to bankers

Starting a small business with your life savings? You’re right, no risk there. — Garth

#9 DJB on 06.17.13 at 8:30 pm

Lesson #1 EFT stands for electronic funds transfer and ETF stands for exchange traded funds.

#10 ChongPong on 06.17.13 at 8:35 pm

Hi Garth,

Long time reader. Just curious, how does someone manage hundreds of companies? I’ve been investing since 2008 because I saw it as a great time to get it and I’ve done well. I don’t think I have the ability to keep track of hundreds of companies without giving up my full time job. There was a point where I owned about 20 and that was difficult enough. Any pointers?

Buy the index. Worry about your girlfriend. — Garth

#11 Fred on 06.17.13 at 8:36 pm

Garth, a question. I have employed the strategy you suggested above, having two InvestorLine accounts, one for the TFSA and one for the rest. I have also as you suggested diversified with a bond and preferred income fund, index ETF’s, equites both US and Canadian as well as still holding some cash in a fund. Which should I be putting in the TFSA vs the other to maximize the tax advantage?

Dividend-payers and things producing capital gains should go non-reg. Assets paying income go in a registered account. — Garth

#12 Bargains everywhere on 06.17.13 at 8:41 pm

All of the major banks have self-directed brokerage arms and their fees are pretty much identical to one another.

Whichever bank you have your TFSA or RRSP with, just call their self-directed broker line (there will be a link to it on the bank website) and tell them you have an account at their bank branch that you’d like to transfer to a self-directed brokerage account. It’s the easiest and fastest way to do it. They will be pleased to help you fill out the paperwork and it’s done in a couple of days.

Voila! You’re free of [email protected] You don’t even have to tell her that you’re moving your account, the brokerage handles the transfer for you. Once your investments are transferred to your new brokerage account, you can sell them and buy ETFs or stocks etc.

It is very empowering to have control of your own investments. Follow Garth’s advice or a website like http://canadiancouchpotato.com/ to get started. The bank brokerages also have seminars or webinars to help you learn. You can find info on their websites.

After losing money with mutual funds many years ago, my husband and I decided to manage our own investments and opened up self-directed accounts with Scotia. After all, we figured we really couldn’t do any worse than our funds did. It was pretty scary at first but we gradually learned along the way and have never looked back. We have well outperformed any mutual funds we would have held and most years we have beaten the stock market indices.

Don’t listen to the doomers on this site. If you are in the market for the long term, you WILL succeed and be much further ahead than if you were to only hold GICs or something like gold. I am living proof. Companies survive and grow over the decades and your investments will grow along with them. Sure, there are ups and downs in the market, but long term, it is far more up than down. Add to that growing dividends over the years and you will do very nicely.

#13 AK on 06.17.13 at 8:45 pm

“Last word: ignore the doomers, pantywaists and fretting nimrods on this site who panic every time markets go down.”
Also, never watch any Peter Schiff videos and don’t ever let anybody convince you to buy Gold.

#14 Dan from Calgary on 06.17.13 at 8:49 pm

Great post. My TFSA is the doing well. You forgot to mention to take profits once in a while or to set stops. 16% for this year is where I’m at, and I gladly go nose to nose with my Calgary house investors over beers with that number!

I may unpopular but I’m liquid and building wealth faster than they are, and when my “condo” leaks, I don’t give a damn!

I still have a position in HVU.TO however. Never know…

#15 Smoking Man on 06.17.13 at 8:57 pm

Suzi even consider Forex, I learned everything on the Web, started with 50k now have 73k in 3 months, and made some bad stupid mistakes, lost 15k in one day but made it back in a week..

Not for sane people this game.. But actually my newly refind strategy make 1.5k to 2.5 k a day using no more than 10 k, some times when I guess wrong and it is a guess I use the rest to double down and fight.

Refuse to lose is my moto

Compared to this guy, [email protected] bank is a goddess. — Garth

#16 Efficientsense on 06.17.13 at 9:03 pm

I was with td waterhouse for 10 years. No complaints. Since you are learning, I would suggest starting off with not having all your eggs in one basket. You have to determine how much money you want to put into each etf. Sprinkle your money into atleast 9 etfs. Don’t try to hit the homerun with one holding.

#17 Smoking Man on 06.17.13 at 9:07 pm

Now if garth was ever in a good mood and advised how one can do this with in a tsfa or some other tax advantage that would be amazing.

Not going to happen, garth don’t like gambling..

Any bean counters out there, I want to fund my account huge, rather than 5 contracts, go with 50 lots, but hate paying tax.. Any ideas…

#18 Devore on 06.17.13 at 9:27 pm

Being in charge of your own investments is a great feeling. As long as you stick to index funds and large ETFs, you’re already beating most mutual funds, which consistently fail to keep pace with their benchmark index, and then charge you 2-3% for the privilege.

And finally, don’t follow any “tips” you will surely read on newsletters. Large majority are pump and dump schemes, enriching insiders, or lack any credible analysis, usually all three.

#19 Mark on 06.17.13 at 9:35 pm

REITs are trash. You may as well go tell them to buy that house they’ve been coveting instead. Highly correlated, no matter how many times you come to the blog and try to claim otherwise.

REIT funds have paid 4% or better, monthly, with reasonable price stability. And, no, they are not closely correlated to equity markets. Now run along and get ready for your open house. — Garth

#20 Toronto- June SFH and Condos sales and average prices-mid month report on 06.17.13 at 9:40 pm

“Recharts” bonus: a no frills report for Toronto SFH and Condos


No graphs no pie charts …sorry but I don;t have that much time.
I am just curious to see how much I am going go be off this time :-)

Some say I have no credibility so …nothing to lose here (other than time) …

#21 Dan from Richmond Hill on 06.17.13 at 9:42 pm

Mr. Turner, can you please be more specific about what do you mean by “Assets paying income” ? Thank you!

#22 Carlos on 06.17.13 at 9:49 pm

What about the Couch Potato Strategy for Suzi? I’m implementing the TD version of it, as I’m trying to keep things simple while building the TFSA to $25,500.

From CanadianCouchPotato.com, the “Global CP” Option 2…
The cheapest index mutual funds in Canada are TD’s e-Series, but these are only available to investors who open an online account with TD Canada Trust, or through a TD Waterhouse discount brokerage account. The total annual cost of this portfolio is 0.44%:

Canadian equity 20% TD Canadian Index – e (TDB900)
US equity 20% TD US Index – e (TDB902)
International equity 20% TD International Index – e (TDB911)
Canadian bonds 40% TD Canadian Bond Index – e (TDB909)

Cheap is not the guiding principle of investing. It is Mr. Potato’s blind spot. — Garth

#23 Kreditanstalt on 06.17.13 at 9:57 pm

Right now everyone thinks consumer and bank stocks, REITs, ETFs, junk bonds and other paper will rise forever.

You should buy the stuff that is out of favour. The stuff nobody wants. The most hated asset class, beaten down for two years or more.


That is not investing. It’s gambling. Worst advice possible. — Garth

#24 Sultan on 06.17.13 at 9:59 pm

For any one who is just getting started to invest independenly, here is a good site to check.. They have a good comparison of all the discount brokers, commissions and fees as well as links to tons of free educational resources.. Highly recommended..


Not so fast. That site appears to feature only online brokerages that pay to be included. — Garth

#25 Mikey the Realtor on 06.17.13 at 10:01 pm

still peddling the robmarkets, tangible re is the only place to put ones money, the robmarkets are nothing more then a virtual video game, unless you’re like smokers man who associates the robmarkets with gambling and understands it’s just that then feel free to participate otherwise it’s best to stay clear.

#26 45north on 06.17.13 at 10:02 pm

Garth the picture beneath the header Emotional Baggage does not load on my browser – safari

here’s yesterday’s picture:

it’s fine

here’s today’s picture:

it doesn’t load, I cannot figure out why

#27 Donald Trump on 06.17.13 at 10:05 pm

Re: Blog Photo

I appreciate such ingenuity.

This extra person , mimic’d or otherwise , qualifies one to enter the HOV lane.

Who says dummies and/or the deceased should lose citizenship priveleges

#28 timmy on 06.17.13 at 10:11 pm

the media said the real estate crash was over didn’t you hear?
Canada’s Impending Housing Collapse not in Sight
Recent data have defied warnings from market watchers of an impending housing plunge — and it appears any correction down the road could likely be a mild one

#29 Buy when they cry, sell when they yell on 06.17.13 at 10:14 pm

If you’re poor like me this might work for you.
1. Go to TD and open a chequing account and two mutual fund accounts, one TFSA & one RRSP. While opening the mutual fund accounts you will have to answer a risk assessment questionnaire. Choose all of the riskiest answers. Get access to your “EasyWeb” account online
2. Convert both your TFSA & RRSP accounts to “e-series” accounts by filling out this form for each account

Your age will determine the percentage of your portfolio to keep in fixed income, the remainder of your portfolio will be in equities divided equally between US, International, and Canadian indexes.

3. Using EasyWeb make a small initial purchase in both your TFSA & RRSP. In your TFSA buy the “CDN Bond Index -e” & “TD CDN Index -e”, In your RRSP buy “TD US Index -e” & “TD INT’L Index -e”. Make these purchase in the amounts described above. If you’re 25 years old you would do 25% CDN Bond, 25% CDN Index, 25% US Index, and 25% International Index. Keep buying the funds in these ratios every single pay day adjusting the amount to put into fixed income as needed.
4. Rebalance every quarter.
5. When you max out your TFSA contribution room transfer your CDN Index mutual fund in kind to a non-registered account.

I put $400/week into my portfolio using this method. It’s a nice set up I feel and very easy to manage.

#30 David on 06.17.13 at 10:17 pm

#2 Dean, Questrade offers commission-free purchases but still charges a commission for the sale of ETFs. Half price to re-balance!

#31 My thoughts on 06.17.13 at 10:26 pm

According to today’s newspapers the housing market is not only one but its expected to do even better next year. Come on realtors.. Upgrade that porsche today! Buy some new investment properties… Keep this train going! Fact…. Lots of realtors live in mineola west… Why is that??? South east oakville??? However they are not livingin the beautiful new builds but rather the old 1950s homes in need of major renos. Why are the realtors on this blog? Why do people perceive garth to be such a threat? I think we will really know where things are going in September.

#32 Cowpoke on 06.17.13 at 10:29 pm

To Suzie, no discredit to what Garth’s suggests or his investing techniques but watch and listen to this mini series below and use Garth to implement this strategy if at all possible. Get his advice on this.


#33 Paul on 06.17.13 at 10:32 pm

Well, first off, I will get this out of the way…I am a Financial Planner with 20 years experience. I will not hide behind anything. I totally respect Garth and generally do not disagree with most of what he ever says and I don’t really disagree with what he says in this post. However, I will say that mutual funds are not bad. I have used Model Portfolio’s that I created over a decade ago and my Models have done very well on a risk adjusted basis. I like GOOD active management. In our business a lot of times it is “same crap, different package”. I add real value to my clients in far more ways than just their ‘portfolio’. On the fee topic, ETFs are a bit cheaper, but if using an advisor (which most people should), advisors do not work for free. So on top of the MER for the ETF, you need to add an advisory fee. The all in cost can easily be 1.5-2.25%. In my mutual fund model, which by the way has nearly mirrored the return on Garths (as presented on his website) is not much different in way of fees. I have also started using fee based funds (F-Class). These lessen the cost even further, especially if you have a larger account. Remember there is a COST to FREE. Many DIY investors do not even know what they don’t know. Bottom line is do not let the “package” deter you, focus more on the advice (or lack therof) you are getting and don’t fret too much over the perceived cost difference. ETFs are cachet right now and it is easy to dismiss things like mutual funds, because everyone has maybe lost money in them at some time or another. Trust me, if you had a lousy ETF portfolio in 2008, you lost money big time. Mutual funds, Segregated Funds, Linked Notes, SMAs, ETFs, Private Wealth Management etc…..all the same crap (stocks, bonds, cash, real estate, metals etc) just different packaging. I am quite sure Garth gives great advice. Find someone in your area like a Garth and focus on that relationship and the ADVICE. The crap and TIME will take care of the rest.

#34 Sasquatch on 06.17.13 at 10:37 pm

Thanks for the post Garth. These are the type post I find most useful.

#35 No Longer Innocent on 06.17.13 at 10:37 pm

Great post! Axel and I are about to start building our portfolio with Virtual Brokers. Does any one have experience with this discount brokerage? Selected them because the charge commission to sell not buy which fits my plans better.

Can’t afford the banks fees given that we will be buying monthly, rebalancing regularly and the greedy SOBs charge monthly account maintenance fees that would eat up any returns!

Re Free ETFs – the catch seems to be that trades are only completely commission free if still on the brokers free list when you SELL… which if you hold med to long is unlike so be prepared to pay a selling commission.

#36 not 1st on 06.17.13 at 10:38 pm

Suzi, makes sure you get the HFT option when opening your brokerage account.

And if you love down days, try to pick up some NT or BRE-X when you get a chance.

#37 Smoking Man on 06.17.13 at 10:39 pm

That is not investing. It’s gambling. Worst advice possible. — Garth

Show me a successful business man, I will show some one who gambled. The odds are against you, but no risk no reward, put as much lipstick on that as you want. No sweating no payday…

It is what it is, luck is a big factor, I am living proof.

#38 45north on 06.17.13 at 10:39 pm

Montreal’s mayor faces corruption charges


imagine that criminal charges!

unlike Toronto

#39 Cowpoke on 06.17.13 at 10:46 pm

I don’t know how every Province is doing but here is a great link for BC.

Look at the quarterly count charts, volumes are way down.

Back in the 1990’s there was also 2/3rd’s less realtors and mortgage originators.


Check out this Q1 report for 2010


If all other provinces have similar graphs, I would not be buying into real estate anywhere in this country. As a matter of fact I am living cheaper now (by renting) than I did back in 1978 when interest rates on a 5 year fixed was 10.5%.

#40 Nick on 06.17.13 at 10:51 pm

Great column Garth.

Here’s a great, short book for young investors interested in ETFs, bonds, compound interest, etc. I wish I had read this when I was 20…


#41 Ralph Cramdown on 06.17.13 at 11:14 pm

Why look, it’s Mikey the Realtor. We know he’s for real, and he’s been in the business a long time. He never capitalizes (no pun intended) any of his writing because He Knows Mls Will Always Do It For Him. Best Of Luck, Mikey.

Hey, what’s the difference between the “robmarkets” and transacting in real estate?

Well, equity commissions are over 90% less than they used to be, bid/ask spreads have narrowed by typically over 90%, execution is in seconds, not minutes, and exchange fees are pennies per transaction. We’ve got this neat internet thing which gives voluminous information about what we trade. Dividends and capital gains are taxed at Mitt Romney rates.

Real estate? Commissions are about where they’ve always been in percentage terms, so they’ve doubled or tripled in the last few decades. Land transfer taxes have been added, lawyer’s fees are up, the banks have added some interesting fees when you give a mortgage AND when you have it discharged, and Canadian agents have banded together to produce perhaps the worst user interface experience on the net (Bing! For when your most valuable asset absolutely, positively has to be mapped in the wrong province so buyers can’t find it!). Rents are taxed at your marginal rate as passive income (it’s passive even when you’re fixing your tenant’s toilet), capital gains are favoured unless you flip too many properties, when you’ll learn the phrase “an adventure in the nature of trade.”

#42 Martin Lazi on 06.17.13 at 11:22 pm

#15Smoking Man on 06.17.13 at 8:57 pm

you scaring the kids away dude

#43 Martin Lazi on 06.17.13 at 11:23 pm


#44 Carpe Diem on 06.17.13 at 11:38 pm

#8 jonah

Garth … although I’m still licking my wounds from my start up days … who knows what Jonah has in mind … it could be the next Google …

I’d kick maybe 50K in a venture if the model seems good.

#45 T5_INCOME on 06.17.13 at 11:51 pm

I just bought 1500 shares of REI.UN.TO today.

Dam it feels good to be a gangsta

#46 Smoking Man on 06.18.13 at 12:03 am

Vegas bubble heads, July 25 to 29

Party with smoky, come on Garth….

Naw you won’t, the hurley is just show….

#47 coastal on 06.18.13 at 12:04 am

“Last word: ignore the doomers, pantywaists and fretting nimrods on this site who panic every time markets go down.”

All those big name REIT’s lost 10% in a month, dropped below their 50 DMA for the first time in ages and rates have barely moved. Same for Emerging Markets ETF the last month or so, got crushed. Yes, 10% on an ETF is “crushed”. Trade them, don’t marry them.

#48 Little Phil on 06.18.13 at 12:05 am


I started by reading “Investing for Canadians for Dummies” after [email protected] suggested it. After finishing the book, I went back to TD to ask questions re: investing. When he couldn’t answer them and yet I could, I knew I was ready to open a DIY account. Been with Questrade for almost two years, fully invested, never looking back.

The more you read, the better!

#49 Just like Susi on 06.18.13 at 12:06 am

Thanks for the advice and clarification. Even I can follow these DIY investment posts.

#50 Smoking Man on 06.18.13 at 12:09 am

My son and new wife poo had their first fight.
So I go over to timothy’s, sons hammered complaining about being emasculated, twinkle in my eye, rub and tug next door.

Don’t play that card, my advice, communication..

Then he birches where have you been.

My reply, I’m a smoking man, need a walk..

#51 Ronaldo on 06.18.13 at 12:30 am

Performance of the TD E-Series funds to May 31/13


#52 Sleeper on 06.18.13 at 12:42 am

I’m chart illiterate. What do the numbers on the y axis represent? Are those dollars? National average price is around $360K, no? How is that only showing $200K.

#53 Moss on 06.18.13 at 12:59 am

Very depressed today Garth. Just found out from my tax lady that being a dual citizen of both Canada and the US nullifies the advantages of investing in the TFSA. The US can tax me on Stocks, ETF’s, preferreds, etc. held in my TFSA. Apparently, only use is as a savings account. As my wife is Canadian, we will use her TFSA as a deposit for the various ETF’s etc. , but am extremely frustrated with Big Brother breathing down my and all ex-yanks necks. The US is obviously getting very desperate these days? So glad I bailed out of there many years ago!

#54 Canuck Abroad on 06.18.13 at 1:06 am

Suzi, here are the actual specific ETFs used by Garth, from his 2012 year end report. This is a very good place to start. If you are very young, you can reduce the exposure to bonds and increase the weighting to equities.


You will occasionally need to rebalance, quarterly is probably fine. What this means is every quarter you reweight your portfolio to where you started by selling the ETFs that have outperformed (selling high, locking in profits) and re-deploying that money into the ETFs that have underperformed (buying low). It might feel counterintuitive, but it works.

Repeat every quarter until you are old and rich.

#55 Kinkalgary on 06.18.13 at 1:10 am

Things are still hot in Calgary. A realtor I know said he is going non stop and stuff is selling within days or weeks not months. Builders are going strong as well. Anything under 500,000 sells fast but mostly is garbage-I shake my head and wander where this is all going. Stopped at Cibc today to pay visa, they are advertising cash back on mortgages -12,000 on a 400,000 mortgage and 6,000 on a 300,000 mortgage. It’s just not slowing down here and with banks offering these deals I don’t see it for awhile. Oh and realturd said most people are buying with 5% down – giddy-up!!

#56 Faith on 06.18.13 at 1:10 am

I’ve spent a few hours over the past two days researching and selecting ETF’s to invest in. I haven’t purchased anything yet, so if I’m out to lunch, please let me know:

1. iShare S&P 500 Index (XUS)
2. iShares Int’l Fund Index (CIE)
3. iShares S&P Global Consumer Discretionary (XCD)
4. iShares S&P/TSX Capped REIT (XRE)
5. Dow Jones Canada Select Dividend (XDV)

I’m thinking of starting with approximately $1,000 each until I’m comfortable to invest more.

When I looked up all these funds, they all list MERs at about 0.5%.

Also, I was under the impression that bonds are not good to get into right now. Have I misunderstood?

#57 Tom from Mississauga on 06.18.13 at 1:22 am

That’s a lot of info for one post. Your starting to get good at writing these things.

#58 Canuck Abroad on 06.18.13 at 1:25 am

Also Suzi, you will need to pay attention to commissions. You will need to do a little bit of googling to come up with a short list of brokers to use (eg Questrade, Think or Swim, Interactive Brokers, etc.) There are others I’m sure. The big banks probably have self-trade facilities as well.

Once you have your list, go to their websites to find out what they charge per trade. It will vary, maybe a lot.

Next, check out their “reviews”, bearing in mind that there are dicks out there who have agendas, but you will be able to get a flavour for if the firm is okay or not.

Then, once you have decided which one is best for you, set up an account and transfer in the funds. It only takes a little time to work out how the platform works; it’s very manageable. I’m sure others out there can recommend Canadian brokerages or mention something I’ve forgotten?

#59 AP on 06.18.13 at 1:39 am

I live at Knight and 33rd in Van. We see more and more homes with waist high grass in front of them. No real estate signs. No lights at night. Piles of junk mail out front. If all else fails they can always shoot some Walking Dead episodes out here soon.

#60 jamie on 06.18.13 at 1:53 am

#2 and #31 Scotia also does commission free sale of some etf’s charging for the sale. Rebalance for me so far has just been done via puchasing which I do weekly. I’ve not needed to sell yet to keep things close to balanced. Eventually the portfolio will be large enough that my weekly amounts can’t bring things back into balance but that’s not going to happen soon.

#61 Calgary Rip Off on 06.18.13 at 2:11 am

What nonsense.

Yes people buy on emotion. Buying a house is not like buying an apple. Or other groceries.

So interest rates go up a little. So what. If you still requalify and bought with the idea that they could go up substantially, you will be ok. Its those that bought in over their heads that will be in trouble. That doesnt describe me.

This blog is based largely on Ontario facts I think. There are no rent controls in Alberta. So, if I had continued renting, that would have been $40,000 to my previous landlord. $1700/month is a mortgage. And that is what rentals go for in Calgary, even if the guy renting it bought it when it was realistically priced at $180K. So this is pure logic: 1)Gonna be in the house at least 10 years, 2)Its not that starter home crap idea that is no longer applicable(yes starter home at $330K in Calgary what a joke), 3)employment is more or less stable(unless Alison Redford decides to paint the town red). Forget emotion and idiot ideas. Persons buy places to live in but this is more and more difficult especially in Calgary due to all the (ahem) holes in the wall buying up properties to renovate and then flip or investors, period(get a real job).

So all this nonsensical talk is bs about waiting for some drastic rise in rates that may happen. Plan and act in accordance with that possibility yes, but dont stop and wait for it, which is reactive nonsense which is what boomers and those selling/renting properties, which is ironic, since this blog is supposed to protect prospective homebuyers, or is it?

The reality is that in Alberta homebuying sucks. Renting sucks. But the job market and scenery are good, so its worth staying. Its difficult to get the down payment, but once a person does, it makes sense to tell the landlord to talk to the hand, because those “investments” dont protect tenants from the hassle if the landlord decides he/she wants more cash and artitrarily raises the rent to whatever amount desired as if the tenants are an automatic withdrawal machine.

Its best to look at facts, not nonsensical possibilities when deciding what mortgage hassles to purchase.

#62 BC_Doc on 06.18.13 at 3:12 am

A “To Do List” for Suzi:
1) Open a TFSA with RBC-DI
2) Deposit $25k Canadian
3) Google “Norbert’s Gambit”
4) Convert your Canadian Dollars to US Dollars using Norbert’s Gambit
5) Buy $25K worth of “Vanguard Total World Stock” (VT-N) with your new US dollar. VT-N is made up of 4,969 companies– diversified around the globe based on market capitalization. MER is a measly 0.19%.
6) Hold for the long run. Reinvest your dividends and add new money to this fund each year.

#63 Robert on 06.18.13 at 6:37 am

#13 AK

People really have short memories. Gold has had a incredible run from 2006 and 2012. Really don’t buy gold? Also Peter Schiff nailed the US real estate market. As for yourself AK you seem to be a follower of whatever is currently hot.

#64 Craig on 06.18.13 at 7:16 am

REIT funds have paid 4% or better, monthly, with reasonable price stability. And, no, they are not closely correlated to equity markets. Now run along and get ready for your open house. — Garth

I don’t agree with a lot of what you say but you ALWAYS manage to make me laugh.

Good one!

And great pics as usual.

#65 Bargains everywhere on 06.18.13 at 7:50 am

@ #62 BC_Doc

I recently did Norbert’s Gambit for the first time in my account at Scotia. Bought shares of Potash online on the Canadian side and immediately called my broker and had them moved and sold on the US side. You have to ask for the internet rate for the sell trade and they give it to you. Worked great! Now I have US cash ready to deploy without paying any exchange fees.

I chose Potash because there is good trading volume on this stock in both Canada and the US so there was no problem to execute quickly at the current price but it’s possible to do it on any interlisted stock. You’ll only hold the stock for a few minutes so the risk is low. It’s important to do this type of trade on a day where the market is flat to up and not too volatile, otherwise you could wind up with a bit of a capital loss.

I called my brokerage in advance of doing the trade to make sure that it was possible and the guy I spoke to knew exactly what I wanted to do and said it was no problem. It went off without a hitch. So instead of being charged a fee of 1% to 2% to convert my Canadian cash to American, I only paid total commissions of $19.98 ($9.99 per trade) and now I have American cash ready to go. I was over the moon about it.

#66 Mr. Frugal on 06.18.13 at 7:57 am


The first thing you need to do is learn as much as possible about investing. I’ve been doing a lot of research lately and here are some of the books which I’ve found to be very useful;

(1) MoneySense Guide to the Perfect Portfolio by Don Bortolotti
(2) Millionaire Teacher by Andrew Hallam
(3) The Little Book of Common Sense Investing by John C. Bogle (this is the best one of the bunch!!!)
(4) The Gone Fishin’ Portfolio by Alexander Green

The canadiancouchpotato.com site has a lot of good articles on investing. So does andrewhallam.com

Pay close attention of fees. A low MER is critical to success.

Good Luck!

#67 Chickenlittle on 06.18.13 at 8:01 am

This was a great post! I needed a back-to-the-basics crash course on investing myself. Thanks, Garth!

Now on to the day orphanage, I mean day care.

#68 TurnerNation on 06.18.13 at 8:16 am

For low lo commission there’s Questrade but beware. Been with them for years and have had many ongoing issues with balances, buying power, positions, re-org issues incorrectly set. They staff on the cheap (I know former employees who’ve moved on.). Not a serious brokerage. The real pro retail traders are using Interactive Brokers but it’s not for the faint hearted. All exchange fees – including order cancel fees – are passed thru to you; the platform is set for auto-liquidation in case of a negative balance – your fault or not.

#69 TurnerNation on 06.18.13 at 8:24 am

They should make a Kia model hearse ! Ironically the minivan’s marque – Mercury – in today’s pic is also no more.

#70 Kiron on 06.18.13 at 8:28 am

#56 Faith,

If you are investing only small amounts, commissions can be a significant portion of your costs. The Management Expense Ratios (MERs) of mutual funds or the fees of the ETFs are based on a percentage of what you are investing. The costs of buying or selling an ETF on an exchange is a service fee.

If you only have $5000 to invest and buy five ETFs, at $10 each to buy and $10 to eventually sell, your commissions can easily eat into any profit and lower your returns.

Although I am a big fan of direct investing, it might make sense early on to use the bank’s mutual funds and set up a monthly deposit. You can invest $50 (or any other amount) per month without extra fees.

Alternatively, choose one ETF with your $5000 which has a broad exposure to various asset classes (like stocks and bonds). I recall that Claymore had a “balanced fund ETF” with both stocks and bonds in it. You would have to look into it a bit more and other ETF companies may have their versions of “everything and the kitchen sink”. Once you have more to invest you can change to other ETFs.

Just don’t lose all of your gains to fees!

(PS. I found it helpful to read something every week when getting started. It is a learning process but not hard.)

#71 AK on 06.18.13 at 8:30 am

#64 Robert on 06.18.13 at 6:37 am
“#13 AK

People really have short memories. Gold has had a incredible run from 2006 and 2012. Really don’t buy gold? Also Peter Schiff nailed the US real estate market. As for yourself AK you seem to be a follower of whatever is currently hot.”

Everybody and their uncle nailed the U.S. Real Estate Market. Some started calling it since 2004.

I have not heard a single positive point from Peter Schiff. What do you suggest. Tha we all hide in a bunker?

#72 Tyler on 06.18.13 at 8:38 am

I personally use Scotia’s iTrade arm. 40 ETF’s are commission free and their fee for having less than $25 K in it was only $24.99 as opposed to $29.99 in most other places.

#73 2legit on 06.18.13 at 8:46 am

At least Potato sticks it’s neck out and makes specific recommendations.

Garth, how about a post with a short list of your recommended REITs, Bond Funds, Preferred Funds, and ETFs for Canada, US and Emerging markets?

Unethical. Every investor is unique. Unlike Mr. Potatohead I have responsibilities. — Garth

#74 Steve on 06.18.13 at 8:50 am

#53 Sleeper on 06.18.13 at 12:42 am I’m chart illiterate. What do the numbers on the y axis represent? Are those dollars? National average price is around $360K, no? How is that only showing $200K.

Look at the top left of the chart. Q1 1975 = 100. That is the point of reference. Prices then, whatever they were, are considered 100 units, and today they are about twice that, or 200 units. There is no intention to represent this in dollars, and there are many good reasons not to.

Look at how the US prices have trended, and look at the Canadian ones in comparison. Now, predict where the Canadian prices are most likely to go next…

I hope you are ‘hearing’ Red Alert Klaxons when you do this. If so, you are now less chart illiterate.

#75 sciencemonkey on 06.18.13 at 9:06 am

I’ve been with RBC-DI for a year, and it’s been pretty good. Biggest advantage is the ease with which I can transfer funds to and from my bank account. However, the $10 commissions make monthly purchase rebalancing very expensive, so I don’t do it. On top of that I recently sold some XPF (@ 20.63, before the drop, lucky) for cash to buy a Kia (j/k it’s a Honda), so now I’m back to $30 commissions.

Monthly purchase rebalancing would be great because it would take all thought out of the matter. Paycheck comes in, transfer set amount for investment to DI account, check percentages of one’s portfolio, and buy some ETF shares. Only difficult part is how low one wants to place their bid in the bid-ask spread and then deal with waiting to see whether a purchase actually goes through. That’s why mutual funds are great, completely brainless to buy.

The completely free ETF purchases from Questrade seem like a game changer. I think I’m going to switch over; what do you guys think? It’s too bad that these institutions charge $125-$135 for complete transfer outs.



#76 AK on 06.18.13 at 9:13 am

#66 Bargains everywhere on 06.18.13 at 7:50 am
” I only paid total commissions of $19.98 ($9.99 per trade) and now I have American cash ready to go. I was over the moon about it.”

And the difference in price for POT between the TSX and New York. But there is still a savings to be had as there are no forex charges.

Norbert’s gambit

#77 Spiltbongwater on 06.18.13 at 9:13 am

#60 AP on 06.18.13 at 1:39 am
I live at Knight and 33rd in Van. We see more and more homes with waist high grass in front of them.

That is Vision Vancouvers sustainability goal of having residents grow wheat in their front yards. Are there chicken coops in the back yard of those houses?

#78 Ralph Cramdown on 06.18.13 at 9:16 am

#64 Robert — “Really don’t buy gold?”

Really; don’t buy gold. Or, if you must buy gold, wait until the internet isn’t crawling with loons exhorting you to buy gold, the Cash for Gold store in your local strip mall has gone belly up, etc. You don’t know what ‘out of favour’ looks like for an asset class like gold.

#79 Al on 06.18.13 at 9:22 am

To avoid paying any fees, open a TD Waterhouse account and buy TD e-series index funds. These index funds have the lowest MERs in Canada and are nearly as good as ETFS. As TD owns the funds, they don’t charge you anything to purchase. You need to do the math, and determine when you start making money between the spread in MERs and trading costs. I believe that’s something like $75,000. However, if you’re doing monthly purchases, then the e-series funds are a great choice.

#80 Steve White on 06.18.13 at 9:38 am

Lots of “financial advisers” on the Greater Fool today.

#81 Canadian Watchdog on 06.18.13 at 9:40 am

GTA REALTORS® Release Mid-Month Resale Housing Figures

June 18, 2013 — Greater Toronto Area REALTORS® reported 4,620 sales through the Toronto MLS system during the first two weeks of June 2013.  This result was up by 4.7 per cent compared to the first two weeks of June 2012.  Year-over-year sales growth was driven by the regions/counties surrounding the City of Toronto.  Home sales in the City were basically flat in comparison to last year.

Unstoppable baby! Now we await RealNet's next data release.

In other news: OSFI Bank Data for April (YoY)

2.5% – HELOCs
50.6% – HELOC Business Purposes
3.9% – i) Insured Residential Mortgage Loans
41.8% – ii) Of Which Pooled & Unsold
8.2% – Uninsured Residential Mortgage Loans
5.6% – Total Insured and Uninsured

#82 Donald Trump on 06.18.13 at 9:55 am

#51 Smoking Man on 06.18.13 at 12:09 am

My son and new wife poo had their first fight.
So I go over to timothy’s, sons hammered complaining about being emasculated, twinkle in my eye, rub and tug next door.


Not to worry.

This feminism has run its course as it has also been proven a failure. Feminist the world over are revolting, putting on their aprons, dusting off the ironing boards , staying at home and boycotting ” The View ”

Also…as a side inquiry, why would he marry a women named poo? not that I give a sh*t

#83 Ralph Cramdown on 06.18.13 at 10:17 am

Here’s an example for the extend and pretend crowd:

Note how the example couple has an excellent credit rating, is trying to refinance into a LOWER interest rate loan, and is presumably in somewhat BETTER shape than when they got the original mortgage (i.e. smaller balance remaining on the combined home and car loans). Note also that the mortgage broker sees nothing unusual in a debt consolidation refi at 5.7x gross household income even in this environment, and is confident this deal could be restructured to work (cancelling the unused HELOC, obviously).

There’s people walking around today who got prime mortgages a few years ago, whose income and credit scores haven’t deteriorated who won’t qualify for a prime loan at renewal time, or who will have to restructure their finances to do so. And they don’t even know it.

#84 JimH on 06.18.13 at 10:22 am

#64 Robert
“People really have short memories. Gold has had a incredible run from 2006 and 2012. Really don’t buy gold? Also Peter Schiff nailed the US real estate market…”

Yes, people DO have short memories! They also seem to have highly selective memories. Peter Schiff did indeed “nail the US real estate market” as you say; he also correctly predicted the banking crisis and the 2008 stock market crash.

However since then, his track record of predictions has been abysmally poor… terrible… disastrous and god-awful. Anyone silly enough to have plopped all of their eggs into the inflationista basket and stayed the course with Peter up to the present is now deeply underwater and has missed the great bull run than began in March of 2009! (something, along with the European crisis, that Peter not only failed to predict, but in fact predicted exactly the opposite!)

see: http://www.economicpredictions.org/peter-schiff-predictions/index.htm

As for gold, yes it did soar from $800 to $1800, a rise of about 128% (even better if you go back to 2004 and earlier); it has since declined to <$1400, a drop of 22%.
(BTW, profit-taking in actual physical gold as well as in some gold ETF's and stocks involves some rather nasty taxation implications with the IRS that severely chews into profits, but that's another story)

Since March 2009, the DOW is up over 125%, the S&P500 is up over 135% and the NASDAQ up over 160%; in the meantime, Peter Schiff's portfolios are DOWN as much as 70%!

Precious metals (and the companies that mine them) are in an investment sector that will fluctuate up and down like any other, and is driven my the same fear/greed, supply/demand market forces.

Right now might very well be a great time to buy gold and gold-mining stocks, but before you jump in, I suggest you find more and better reasoning than simply buying into the sector because bling has been beaten down! (remember all the hype about buying into Nortel as it was taking its first beatings?) Oh, right, people have short memories!

In any event, be careful out there!

#85 Doug in London on 06.18.13 at 10:34 am

@coastal, post #48:
REITs and emerging markets ETF’s down 10 % (or more) recently? Wow, that sounds like a buying opportunity, but don’t wait too long as prices are slowly creeping back up.

#86 Rational Optimist on 06.18.13 at 10:43 am

Blog dogs: check out the whining by a mortgage broker about changes to mortgage rules posted on http://www.canadianmortgagetrends.com today. The example (the “Smiths”) is truly breath-taking. See if you can spot the issues.

These people are completely out of touch. It is insane what they are willing to enable people to do to themselves.

#87 Sleeper on 06.18.13 at 11:10 am

Thanks Steve. That makes sense.

#88 Faith on 06.18.13 at 11:16 am

Thanks to #71 Kiron for the reply. I think I’ll go back to my original plan of investing $2,000 to $3,000 per ETF and take a look at a few broader ETFs to invest in.

#89 Suede on 06.18.13 at 11:46 am

$3m for new bike lanes in Vancouver.

All 205 cyclists are very happy for the 40 days a year they can bike to work.


#90 KommyKim on 06.18.13 at 11:46 am

If you go the discount broker route make sure that you have the bank transfer your TFSA and RRSP funds to the brokerage. Do NOT do this electronically yourself. The proper paper work needs to be done to avoid running afoul of the CRA.

#91 Craig on 06.18.13 at 11:47 am

85 JimH on 06.18.13 at 10:22 am

Since March 2009, the DOW is up over 125%, the S&P500 is up over 135% and the NASDAQ up over 160%

Yeah pick the lowest point after a total meltdown and then throw out %’s as if ANYONE was BUYING at that point.

In fact most were down more than 50% from the meltdown and are just recovering now.

I’ll share with you the DOW’s number from Oct 2007 to Feb 2009

DOWN 46% in 16 months !

Spin away.

Balanced portfolio average return last 3 years, 8.3 per cent, last 9 years average return, 7 per cent. Last year, 9.5 per cent. You have heaps of emotional baggage, dude. — Garth

#92 Craig on 06.18.13 at 11:48 am

Here’s the link;


#93 screwed on 06.18.13 at 11:56 am

Spoke to a banker in Europe today. Discussed mortgage rates for Europeans and what people there are thinking.

Banker’s god honest response was:
“Rates are not going anywhere. They can’t raise rates”

So it’s common wisdom now that Central Bankers across the world are in no position to be raising rates. Commercial bankers are openly stating this as fact.

Why are Poloz and Flaherty putting the screws on Canadians and creating this atmosphere of fear, doom and gloom about debt and interest rates?

15 YR FIXED rate mortgage 2.5% in Germany.
Why are Canadians paying huge amounts of interest instead of being able to enjoy their earnings and spend on new cars, RVs, boats, furniture, house improvements and so on?

Why is Flaherty so hell bent on destroying the confidence in the Canadian consumer and tax payer?
I tell you why. Because he is a banker shill and the big banks are raking in massive profits. Profits that are not being spent into the economy by the debt holders.

What else could his true motivations be? He’s a politician. Bought and paid for by someone who is at the receiving end of his policies. Like all of them.

Idiot words. — Garth

#94 frank le skank on 06.18.13 at 11:59 am

Question about TREB numbers:
On the summary of Toronto MLS sales for June 1-14, 2013 it indicates that there are 1636 sales in 416. When I look at the Sales by home type and add all the 416 denominations I get 1618 sales. Why is there a descrepancy of 18 sales? I did the same for mid June 2012 and saw a descrepancy of 19.

#95 Bargains everywhere on 06.18.13 at 12:06 pm

#76 sciencemonkey

Just ask the receiving institution to cover your transfer fee from the other brokerage. They generally do this if you have enough assets because they want your business. It doesn’t hurt to ask.

#96 screwed on 06.18.13 at 12:09 pm

Idiot words. — Garth

Whatever. The fact of the matter is that central bankers are not in a position to raise rates. If and when BoC does, it will only be to raise profits for banks. There is no logical reason why they would even talk about it when the ECB, BOJ and FED have no ability to do so.

So why not just come out and say it. Give the people with debt the breathing room and the financial security. Trying to curb the debt load now is foolish. The genie is out of the bottle when 40 yr amortizations were offered in the first place.

Maybe European banks should offer low cost mortgages for Canadians? Maybe all we need is some real and stiff competition from overseas?

You can argue until your cows come home.

Rates are not going up. None of the major economies could afford to service the debt from their revenues on higher rates. Cascading waves of defaults and there’s sweet f all you can say or do.

Of course rates will rise. Those who over-borrowed are on their own. — Garth

#97 Prize to the government, bank, RE cartel, and the media on 06.18.13 at 12:09 pm

..for having the skill and being able to convince most of the people that real estate always goes up. Potential sellers hold on to their properties believing that tomorrow they are going to get even more. The buyers go insane trying to get a property believing that it’s foolproof road to wealth. In the process the society gets screwed as the markets get skewed. Some small speculators can make money, and the financial/government system benefits for sure.
Folks, shake your heads.

#98 Mike T on 06.18.13 at 12:25 pm

‘This feminism has run its course as it has also been proven a failure. Feminist the world over are revolting, putting on their aprons, dusting off the ironing boards , staying at home and boycotting ” The View ”’

Yes, and I think this is going to be a larger trend.

The Feminism women’s lib movement was created with good intentions. However, now that we have data to analyze we can go back and see the some of the un-intended(?) effects. I am not trying to win the ‘Mr Controversy’ award here but…..it is pretty well documented now that feminism/ women’s lib was largely funded by the Rockefeller foundation. Why? 2 reasons.

1 – double the number of taxpayers as women entered the work force

2 – disrupt the family unit, what is the divorce rate nowadays?

all part of the machine’s plan, as per the ever eloquent SM

people will wake up before it’s too late though, that is part of the Universal plan and the Universe is pretty much smarter than everything

#99 NoName on 06.18.13 at 12:29 pm

Interesting read…

“Read former staff describe getting Target gift cards as a prize for foreclosing on people, and other awful schemes”


#100 Steve on 06.18.13 at 12:29 pm

#95 frank le skank on 06.18.13 at 11:59 am Question about TREB numbers:
On the summary of Toronto MLS sales for June 1-14, 2013 it indicates that there are 1636 sales in 416. When I look at the Sales by home type and add all the 416 denominations I get 1618 sales. Why is there a descrepancy of 18 sales? I did the same for mid June 2012 and saw a descrepancy of 19.

How significant is the discrepancy? 1.1%

So why be concerned about it? As Garth often recommends, perhaps it would be better to spend time worrying about other, presumably more important issues.

#101 TREB numbers are out but they do not match on 06.18.13 at 12:35 pm


Also it seems that my mid-month numbers numbers are off big time. I will have to dig to see what went wrong. Hopefully CandaWatchdog will post the sales too so I can compare my data with his data. Something is fishy here, I suspect that TREB is inflating the numbers

#102 screwed on 06.18.13 at 12:37 pm

Of course rates will rise. Those who over-borrowed are on their own. — Garth

We’re all on our own. Those who are waiting to invest and save are on their own when investments go sour or they only get cents on the dollar on their supposed safe assets.

It’s all in the realm of possibilities which is exactly why I’m so adamant that BoC gets off their hawkish stance and Flaherty stops scolding banks when they’re offering low rate fixed long term debt.

What part of 15 yr mortgages at 2.5% FIXED in Draghiland are you not getting? The stock markets are in good shape only because money keeps entering the markets in search for yields (dividend stocks).

They cannot raise rates unless they want to create a recession in Canada. It would be a homegrown recession which would render Canadians vulnerable and deliver a death knell to Canada’s exports.

Debt is just a number. When it becomes non-manageable the option is default and BK. Just like cutting losses on a non-performing stock, I advise not to fall in love with real estate assets. If equity in the asset is decreasing, try and sell. If it’s beyond salvation, default. Plain and simple. Not the end of the world, not a personal financial apocalypse if done right. Banks are in a position to clear bad debts through their systems. Learn from them.

#103 Ralph Cramdown on 06.18.13 at 12:40 pm

#92 Craig — “In fact most were down more than 50% from the meltdown and are just recovering now.”

Wrong average. You want the DJI total return, which takes into account dividends.

Anyone who reinvested their dividends broke even in early 2011 and is up 28% since then. But that’s for someone who went all-in at the peak and didn’t invest any new money since. WHO DOES THAT? Most people invest a bit every paycheque, and would’ve done considerably better on a per dollar per day invested basis.

Oh wait, I know who buys an asset all at once and hopes he’s not at a near-term top — house buyers, because they’ve no other choice!

#104 TREB numbers are out but they do not match on 06.18.13 at 12:42 pm

Though the avergage price calculated with my data is very close for Detached and condo appartments
TREB moves the condo townhouses in the same category with the free hold townhouses, as I noticed last month, so for townhouses the prices do not match

My impression is that these mid month numbers are messed up (pumped up) to squeeze the last drop from the market. They will probably rebalance in the second half of the month. This does not look good.

#105 reasonfirst on 06.18.13 at 12:44 pm

Hi All,

I have an actively managed portfolio that generally follows Garth’s principles (balance, diversification etc. that carries equities, ETFs, REITs, bonds). I pay 1.75% to a pro which includes transaction fees.

Is this reasonable if I am satisfied with the quality of the service?


Too much. — Garth

#106 alisonmild on 06.18.13 at 12:53 pm

That is not investing. It’s gambling. Worst advice possible. — Garth
3000 years of history seem to disagree with you. What is you marriage ring made out of?

I will take that gamble anytime.

#107 Holy Crap Wheres The Tylenol on 06.18.13 at 1:21 pm

Strange Investing Times Indeed!
My next-door neighbor just returned from the WWDC in San Francisco and he was gleaming. Apple runs the show and of course everything is geared toward Apple products but the most interesting foresight he caught was the surge in Phablets. Twenty years ago he said a phone was the size of a brick. Now phones and tablets are combining and we are going back to the brick! Isn’t it amazing how technology has run its course and we are back at square one!
Phablets, I don’t know if this is the future or not. I like the fact that my smart phone fits in my pocket and I don’t look too geeky when I’m using it. I just can’t foresee the twenty something cuties in the rave club pulling out their Phablets to text the girl two seats away and then answer the young stud with the next hand gesture!
I’ll pass on this one!

#108 AK on 06.18.13 at 1:22 pm

US Back on Top: Most Millionaires in 2012

#109 Andrew Woburn on 06.18.13 at 1:32 pm

#54 Moss

Very depressed today Garth. Just found out from my tax lady that being a dual citizen of both Canada and the US nullifies the advantages of investing in the TFSA.

Your only way out of US tax is to renounce your US citizenship. Big decision, but if you are not going back, does it matter?

#110 Just Ed on 06.18.13 at 1:35 pm

For an investor that is just starting off, does it make more sense to allocate funds for thier FIXED INCOME portion to a High Interest Savings Account or a BOND Index.

I’m still fairly green to the investment realm, but from what I’ve gathered so far the HISA has the advantage, for now…

HISA: insured, liquid, capital is safe, better returns if interest rates go up.

BOND Index: not insured, liquid, loss of capital if interest rates go up.

Is there something that I’m missing??

#111 em on 06.18.13 at 1:45 pm

What is [email protected]?

#112 Craig on 06.18.13 at 2:07 pm

You have heaps of emotional baggage, dude. — Garth


#113 Mister Obvious on 06.18.13 at 2:10 pm

# 90 Suede

“$3m for new bike lanes in Vancouver.

All 205 cyclists are very happy for the 40 days a year they can bike to work.

Thanks for succinctly nailing a perfect example of the overall Vancouver experience. The Mayor is an avid cyclist, thus, so are we all. He is very fit and can shower at work after 10 Km of pedalling, the same must be true for everyone. Even if you’re a single mother with three kids working Tim Horton’s at 7 AM.

If a handful of hedonistic triathlon trainers lobby for special and costly changes to the city’s infrastructure then it shall be done in rain-town as it is in heaven.

If you want to live in the ‘Best Place On Earth’ you must be prepared to accept the occasional selfish, minority-driven mandate. Paint “green” on the most impractical initiative and it rises to the top of the order paper. Remember, it’s all for the good of Mother Earth. (the choicest part of which is, you-know-where)

Vancouverites are sometimes said to be unfriendly and distant. This is not really true. They just don’t notice you or anyone else. There’s little time for pleasantries when you’re busy skiing in the morning, golfing in the afternoon and attending world class concerts at night.

A tip to newcomers from a life long Vancouver resident: This attitude is unlikely to change. Just try to keep a sense of humor as a narcissistic city fills it’s daily needs. No skin off your butt, eh?

#114 fancy_pants on 06.18.13 at 2:26 pm

#12 Bargains everywhere on 06.17.13 at 8:41 pm

same could be said for RE long term (based on historical evidence)

#115 Donald Trump on 06.18.13 at 2:26 pm

Syria what is really going on and why



You see folks…its all about perception.
People have a very skewed idea of wealth.

As wealth continues to get concentrated into the hands of a few… they will continue to bait the hooks to catch the last few suckers.

Then the SHTF…be perceptive about THAT.

Like Wal Mart: It has wiped out many small Ma and Pa businesses and replaced with minimum wage jobs. Now it is forced to take on Obamacare? Solution? Cut hours for Staff so that the rules don’t apply.

Whose to blame? Wal Mart?..Gov’t?….. does it matter…as they are, in essence one and the same….same result=killing off the Middle class.

#116 Old Man on 06.18.13 at 2:57 pm

I do not like the feel for this market at all, as too many things make no sense at all, as see some storm clouds moving in that few will ever see with margin ratio debts at an all time high, as this ratio indicates a big bust coming soon bigtime. Now can history be wrong? I say no way. Now maybe the tooth fairy will be wrong for all past history with this ratio being at a depression level; hey what do I know? I am cashing out, and for you that own Real Estate RIP.

#117 blobby on 06.18.13 at 3:01 pm

Any chance of a graph comparing canada/us and vancouver?

#118 sciencemonkey on 06.18.13 at 3:10 pm

@54 Moss, Would you share your tax lady’s contact info? I’m also a dual citizen looking for tax help. Can the moderator please pass my email on to Moss?

#119 Josh in Calgary on 06.18.13 at 3:14 pm

57 faith
I agree with #71, when you’re investing small amounts like $5000 you have to watch your fees. If your buying in $1000 increments you’re paying $10 to get in and $10 to get out which adds another 0.2% to your management fees. You definitely don’t want to invest in smaller chunks if your paying per trade. You can find balanced ETFs that give you both fixed income and broad exposure to different equity types. Most ETF providers even provide an option to buy a basket of ETFs in one trade. Basically an ETF of ETFs. Good one stop shopping for low investment amounts.

As for bonds a lot of the articles you may read refer to US treasury bonds simply as bonds, which are heavily over bought by the Feds QE program. There are many other types of bonds including corporate bonds (which pay more but are slightly more risky) and government bonds including Canada and provincial and foreign countries. Find an ETF that gives you wide exposure to everything and you’ll be safe enough.

#120 thoughts on 06.18.13 at 3:16 pm

Just saw the newly released numbers. I guess Realtors and speculators are laughing all the way to the bank. This doesn’t look like it’s ever going to end. As a side note, just spoke with a coworker who mentioned her neighbour was moving and she was disappointed, she asked them why. Turns out they are both retiring and have very little equity in their home and although it’s not a high end home with very little upkeep they have realized that they cannot afford to stay there. So they are downsizing out of oakville and out into the boonies. My coworker says she gets it and reasons that at least their kids grew up in a reasonable neighborhood. I think this speaks volumes for the logic of the average person today and why realtors can sway people to pay more then they can afford. the want is greater then the need! I have personally noticed this shift with friends. Everyone is buying into neighbourhoods that they cannot afford. Just to be in the desirable location. It’s interesting for someone like me. Do I want to live in a quote on quote “desirable neighborhood” with neighbours who really cannot live there?

#121 Grantmi on 06.18.13 at 3:27 pm

#72 AK on 06.18.13 at 8:30 am

Everybody and their uncle nailed the U.S. Real Estate Market. Some started calling it since 2004.

Really?? Who were they?

Other then Peter Schiff, Nouriel Roubini, Jim Rogers and Marc Faber.. not many did call it right. (and by the way.. all four of these gents were ridiculed for saying so at the time… they were called FOOLS!)

They ALL had the last laugh.

#122 Wally on 06.18.13 at 3:40 pm

As I’ve mentioned before, I think 40% in income-yielding stuff (like a bond index ETF and one full of preferreds) and 60% growth-oriented (an ETF containing the major REITs, one pacing the TSX 60, one mirroring the S&P 500 and one for emerging markets) is about right.
Yes, nicely diversified there Garth. But YTD, all of those sectors are flat or down, except the US S&P which is up 10.5%. Overall the above portfolio, if weighted as described, would be down 0.5% for the year.

But it yields about 3%, so including distributions, it would be net up 1.0% for the year to date.

A comparison, Teranet Canadian house index is up 1.3% YTD.

You can’t count too well. — Garth

#123 bill on 06.18.13 at 4:12 pm

#26 Mikey the Realtor on 06.17.13 at 10:01 pm
how many underwater mortgages do you have?

#124 Canadian Watchdog on 06.18.13 at 4:21 pm

Toronto Chief Planner Jennifer Keesmaat's welcome speech at CityAge. Video

Not to my surprise, the inculcated UN Agenda 21 socialist muppet had this to say:

Becoming a homeowner in the city where they [new buyers] work, is not a dream within reach. Solely folks are left with a few options, the first is to rent indefinitely, this is becoming more and more common. Renting indefinitely, however, does not allow one to accrue a nest egg. The wealth that is typically generated through home ownership and which is an imperative part of growing the middle class, will evade many in this model. So while this is an option, I do believe it is a constraint to meeting our objective of insuring prosperity for all.

The other option is to move away — far away to areas where the prices are lower, because they are places of one use, uses of…places of separation where the uses have not been mixed up. There has been an impact on value and it is in fact more valuable…[correction]..less valuable. Here one can live and the nest egg can be accrued: but it comes at a high cost.

It's true. Renting indefinitely is the new normal and more common amongst new folks migrating to Toronto, while 905 GTA areas is (by Keesmaat's own words) "less valuable" because its uses only has one purpose (like affordably raising a family). I find it interesting how the very same people planning this city (which is really BILD member's lobbyists) admit prices are too high, yet in their latest Toronto condo consultation there is not one mention of it. Nada.

Moreover, as the first speaker in the video stated: Toronto has now replaced Chicago as the 5th most popular city in North America. This is great news when comparing yourself to a city that was just downgraded by Fitch to BBB+ from A- and, whose last few mayors have been embroiled in corruption scandals. Sound familiar?

Watch the video carefully as the message from those whose objective is to insure "prosperity for all" couldn't be more clear: if you want to live in Toronto, you'll have to pay higher taxes, walk more and settle for less space.

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. —United Nations, Our Common Future

#125 Faith on 06.18.13 at 4:27 pm

Thanks #121 Josh From Calgary. I appreciate the extra advice. I’m going to revise my game plan this week and invest larger amounts in more broad, safe ETFs as recommended. Thanks for the info about bonds. I’ll take another look at the Canadian Couch Potato’s recommended bonds.

#126 blokexistentialist on 06.18.13 at 4:29 pm

The lunacy of bicycle paths in Vancouver for a select few (the ones who can shower at their place of work) does not make me smile … the civic leaders of our tiny village have put government grant money to work this summer by installing a community garden. For god’s sake, this is the country. Everyone already has a garden, if not a farm. Proof positive that cities do not have a lock on stupidity.

#127 frank le skank on 06.18.13 at 4:30 pm

#101 Steve on 06.18.13 at 12:29 pm
Its a method of verification and when you add up the values that should be equal. If the numbers don’t match there’s a discrepancy somewhere in addition to all the other dicrepancies on the TREB website. Maybe there’s an explanation that i’m not aware of and I’m wondering if anyone knows?

#128 AK on 06.18.13 at 4:52 pm

#123 Grantmi on 06.18.13 at 3:27 pm
#72 AK on 06.18.13 at 8:30 am

Everybody and their uncle nailed the U.S. Real Estate Market. Some started calling it since 2004.

“Really?? Who were they?”
There were numerous guest on both CNBC and BNN who were predicting that it was not going to end well. They also advised to get out of U.S. financials. Which I did. In my case, I got out of BAC, MS and Merrill Lynch during December of 2006. I left the party a bit early, but it was worth it.

#129 Ralph Cramdown on 06.18.13 at 4:58 pm

#123 Grantmi —
| Everybody and their uncle nailed the U.S. Real Estate Market.
| Some started calling it since 2004.

Really?? Who were they? Other then […]

Really. Piggington from 2005: http://piggington.com/bubble
Krugman 2005: http://www.nytimes.com/2005/08/08/opinion/08krugman.html
Bill McBride & ‘Tanta’ 2005: http://www.calculatedriskblog.com/p/about-calculated-risk.html

You can read selected quotes of David Lereah denying a bubble in 2005 here http://davidlereahwatch.blogspot.ca/2006/12/david-lereahs-most-corrupt-foolish-and.html — and why would NAR’s ‘economist’ be denying a bubble if nobody was talking about one?

Ditto Alan Greenspan http://www.nytimes.com/2005/05/21/business/21fed.html

#130 Devore on 06.18.13 at 5:03 pm

#34 Paul

ETFs are cachet right now and it is easy to dismiss things like mutual funds, because everyone has maybe lost money in them at some time or another. Trust me, if you had a lousy ETF portfolio in 2008, you lost money big time.

The point is that as a novice investor, you cannot tell which mutual fund, or adviser selling them, is good, and which is bad. Fact is majority of mutual funds underperform, and as usual, past performance is no indication of future performance.

Someone with not a whole lot of money is not going to find a good adviser. They will find someone selling expensive mutual funds with nice glossy brochures and a smooth sales pitch. While there are plenty of reliable guides and web sites offering basic investment advice and guidance for novices, which eases the self-directed aspect.

Sure, if you held ETFs in 2008 you lost money. But chances are you lost even more money holding mutual funds. If you held a generally balanced basket of ETFs, the drop would not have been very deep, and the recovery was reassuring.

Remember there is a COST to FREE.

Who is talking free? ETFs cost money. Transactions cost money. But fact is everyone has to start somewhere. As young professional, you have to accept lower wages and crappy jobs, until you can establish your reputation and referral base.

As a young investor I will not be able to find a good adviser or “wealth manager” to look after my fledgeling $10,000 nest egg. Thus, I must look for cost effective solutions, until I gain more experience and build my investable assets so I can find someone I trust to look after it, while I concentrate on doing what I do best and make more money.

#131 Happy & Free in BC on 06.18.13 at 5:04 pm

Here’s a tip for you…
Before opening my TFSA DI account at RBC I asked them what incentive they would give me to move my money from ING Direct? They said they would re-imburse the transfer fee from ING…I said not good enough as ING doesn’t charge a fee to transfer out money. I managed to get free trading for two months and once you have $50,000 in there, your trades become $9.95 each :)
Best of luck to you!
P.S. Garth…what is [email protected]???

#132 keener on 06.18.13 at 5:12 pm

@ 111 em What is [email protected]?

The Nice Lady at The Bank

Go here for all the other shorthand Garth uses:


#133 DreamingInTechnicolour on 06.18.13 at 5:20 pm

Just remember all the new development and construction work coming up when the Syrian civil war is over. Nice weather to boot!

#134 Smoking Man on 06.18.13 at 5:27 pm

Dividend, safe, slow is the way to go if your old and have a few million.

But you young people where the he’ll is 7 precent going to get you on 25k

No where fast….

#135 espressobob on 06.18.13 at 5:36 pm

#119 Shawn

Interesting comment. Yesterday I got a knock on my door, my super. OK what the hell did I do this time? The look on his face was desperate. He just got his portfolio summary.

Seems he lost 45% in two years…ouch. Had a look at his statement and was mystified by the fact his Commissined advisor had roughly 75% in a precious metals fund and the rest in a Canadian resource fund with mer’s close to 4%…yikes, and their rear loaded! What the hell am I supposed to say?

Point is, its your responsibility to educate yourself, and work with an ethical fee based advisor who loves etf’s & rebalancing! Buyer beware!

#136 Mikey the Realtor on 06.18.13 at 5:44 pm

125 bill on 06.18.13 at 4:12 pm

#26 Mikey the Realtor on 06.17.13 at 10:01 pm
how many underwater mortgages do you have?


none, willy, sorry to disappoint. The underwater mortgage phenomenon that flows through this pathetic blog is a joke, in any market there are bankruptcy’s, under water mortgages etc, but the overall market is doing fine and that wont change unless there is a catalyst, massive job losses.

#137 Devore on 06.18.13 at 5:46 pm

#71 Kiron

Just don’t lose all of your gains to fees!

This is really important, and my previous reply to whatshisface alluded to it. You have to tailor your investments to your situation. When you have only a few thousand, you may have to limit yourself to one or two balanced funds, like you mention, Claymore has a couple, otherwise transaction fees will eat you. As you grow more wealth, you can create your own “basket” and buy individual ETFs. When you get even more, you can look for a professional to look after your investments, unless you have lots of time and like doing it yourself.

This is the point of money. The point of money is not to be able to buy stuff. The point of money is not power. These are merely side effects. The real point of money is having choice. Money gives you options. When you have little money, your choices are radically limited, if you even have any. Crappy apartment, cheap processed food, shitty car, discount beer, a job you hate, and boring investments. As you get more money, more choices open up. With more choices, you can make better decisions, and further improve your life.

But unless you’re born rich, we all start out the same. Broke and wondering where the next paycheck will come from. And so depending on your situation, there is a place for all kinds of investment vehicles and strategies, from savings accounts, GICs, broad ETFs, low cost ETFs, index ETFs, advisers, wealth managers, and even overpriced underperforming mutual funds.

#138 Canadian Watchdog on 06.18.13 at 5:55 pm

Seems like developer's are not only using MSM as a selling proxy, but also as a warning medium against any specualtors who challange their presale agreement.

Failed condo pre-sale deal costs Vancouver buyer $750K

A man who signed a pre-sale contract for a luxury condo in Vancouver has lost almost three quarters of a million dollars after he failed to complete the final sale on the unit. Lawrence Austin signed a deal to buy the condo at 1499 West Pender in the spring of 2008, just months before the global financial crash.

In her ruling issued last week, Justice Catherine Bruce dismissed Austin's claims that he had not received the disclosure statement, noting he had signed a statement saying he had received it at the time he inked the deal. She also found nothing substantial to support Austin's claims that he had an oral agreement with the developer permitting him to assign the pre-sale agreement without the developer's agreement. The justice ordered Austin to pay the developer nearly $500,000 to cover the difference between the pre-sale and final sale price, minus his deposit. Austin was also ordered to pay the maintenance fees and property taxes for the six months it took the developer to sell the condo.

#139 Observer on 06.18.13 at 5:59 pm

#94 screwed on 06.18.13 at 11:56 am

And what part of “TEMPORARY EMERGENCY RATES” don’t people understand. Especially the word Temporary.

Why are savers punished?

Its a free market. Some out there will soon be in a position of Growth and would need $$ to do so. Therefore will raise the rates to raise cash.

#140 Devore on 06.18.13 at 5:59 pm

#64 Robert

Gold has had a incredible run from 2006 and 2012.

It’s now 2013. Tell me something I don’t know.

Also Peter Schiff nailed the US real estate market.

Yeah yeah yeah. Him and millions of other people you’ve never heard of. What has he “nailed” since?

#141 JimH on 06.18.13 at 6:03 pm

#92 Craig
“…85 JimH on 06.18.13 at 10:22 am

Since March 2009, the DOW is up over 125%, the S&P500 is up over 135% and the NASDAQ up over 160%

Yeah pick the lowest point after a total meltdown and then throw out %’s as if ANYONE was BUYING at that point….”
Actually, Craig, I did pick March 2009 also because that was about the time Peter Schiff was making some of his most extreme predictions! So, in a sense, I didn’t pick the timing any more than he did!

At the end of January 2009 and through September 2009, he was widely predicting incipient extreme hyperinflation, a dollar “sinking to zero”, the prices of all commodities skyrocketing, rapidly rising interest rates, the value of foreign equities vastly outperforming domestic ones, gold shooting to $6500 an ounce, &etc. etc. He was wrong about China, wrong about the yen and wrong about treasuries.

You make the strange inference that “after the total meltdown” nobody was buying stocks… “as if ANYONE was BUYING at that point….”, you say…

Craig, perhaps you can enlighten us as to how there can ever, at any time, be a selling off of stocks without anyone buying them? That notion is no less silly than the idea that you can have a rally without anyone selling. Both notions are logical (and practical) absurdities.

In fact, if you do a little research, you’ll quickly see that the high volumes of the panic sell-off in the late fall of 2008 (Oct-Dec) were matched by the high volumes of the amazing rebound between 3/25 2009 and 6/11/2009. So, yes, there were both buyers and sellers in higher than average volumes during BOTH the meltdown and the rebound. Yes, there was a great volume of smart money and institutional buying driving the rally of March 2009. There was an equal volume of greater fools eager to sell to them.

In closing, Peter Schiff did us a great service in warning us of the incipient housing/real estate bubble, and he did take considerable flack for it. In sounding that warning however, he was neither alone, nor was he the first. Dean Baker and Med Jones did in fact beat him to the punch.

#142 condopoor on 06.18.13 at 7:20 pm

Great post today, Garth.

#143 McGinty's_Shredder on 06.18.13 at 7:21 pm

That is not investing. It’s gambling. Worst advice possible. — Garth

Nonsense. The key to successful investing is a predictable progression of pricing within the time frame of interest, as well as overall positive income stream vs expenses in such a time frame.

You can make money if a security goes up, down, sideways, or up or down, or up/down or flat, as long as it progresses as you expect within the time frame which you expect or have arranged.

The progression of gold pricing was largely predictable over the last few years, as were many other things. REITs went up – Gold went up. Nonrenewable industrial metals and convenient hydrocarbon energy will certainly go up [again] within a multi-year time frame. It’s not bad or good, it’s just profitable.

‘Herd-chasing’, either on a second-by-second basis in the futures markets, or on a week-by-week basis was also largely profitable if you had the patience to buy in at the right point and the stomach to hold on until a nice high recovery. Although HFT and the snuffing of market signals by massive QE has pretty much killed all that.

Investing is a calculated estimation and commitment of capital. That can be successfully applied to gold periodically just as many other things.

Nope. Pure speculation. Worst advice possible for a novice investor. — Garth

#144 happity on 06.18.13 at 7:27 pm

Garth if interest rates rise to a modest 6% and this roughly represents 50% of the tax dollars collected in order to pay the US government debt each year, what happens to the USA government?

#145 Daisy Mae on 06.18.13 at 7:32 pm

#74 2Legit: “Garth, how about a post with a short list of your recommended REITs, Bond Funds, Preferred Funds, and ETFs for Canada, US and Emerging markets?”


You’re asking for free specific investment advice?

#146 Ralph Cramdown on 06.18.13 at 7:55 pm

“Although HFT and the snuffing of market signals by massive QE has pretty much killed [trend following].”

A few million people all reading all the same technical analysis books, flipping the pages with their grease stained left hands, right index fingers poised between the buy and sell buttons, and you blame Bernanke for the signals not working anymore? Even the dentists in Peoria are plotting out their Fibonacci retracements — there’s nobody left to fool.

#147 Alex K on 06.18.13 at 8:02 pm

what about Nasdaq in March 2000 ? was at 5132, lost my calculator< what's the gain to date?
Please let me know LOL

#148 Daisy Mae on 06.18.13 at 8:06 pm

#99 Mike T: “1 – double the number of taxpayers as women entered the work force.
2 – disrupt the family unit, what is the divorce rate nowadays?”


My sentiments exactly. Two-income families has been good for governments, bad for families. Too many parents are feeling guilty and missing so much of the ‘growing up’ years. Very sad. Money does not make the world go ’round.

And, by the way, the divorce rate is about 50%? Too much pressure/stress and not enuf commitment.

I was a ‘stay-at-home’ mom and have never regretted it for a single moment.

I was there to see the kids off in the morning.

I was there to see the kids come home after school.

It was wonderful. More to life than the almighty buck. And it’s not all about family income — it’s about ‘management’ of that income.

And I was busy! I did everything except build retaining walls and fences. LOL

#149 Thoughts on 06.18.13 at 8:12 pm

Sigh…. Yup all the speculators are saying things are moving. However it’s a different market out there with the banks. They are not giving funding so easily. Are we reaching the max yet?????

#150 Ann on 06.18.13 at 8:13 pm


#151 Happy & Free in BC on 06.18.13 at 8:13 pm


Thanks for this post – it’s a gooder!

Would love to see a post on life insurance. Just talked to a dude at Raymond James who nearly talked me into whole life policies on my kids (ages 2 & 5). I personally think a term policy on my 33 year old husband would be better (he is the sole breadwinner).

#152 Daisy Mae on 06.18.13 at 8:13 pm

I SUPERVISED the building of retaining walls and fences, however….

I was a GREAT supervisor!

#153 Ralph Cramdown on 06.18.13 at 8:50 pm

#149 Alex K — “what about Nasdaq in March 2000 ?”

Not everybody needs multiple editions of Security Analysis, but if you’re going to buy a market index with a P/E of 240, you gotta know that the only reason to hold that baby for more than 10 minutes is to ensure your ex gets nothing in the concurrent messy divorce.

#154 Cyclist on 06.18.13 at 9:03 pm

113 Mr O – I wouldnt shower after 10km. I havent even broken a sweat yet.

#155 Alex K on 06.18.13 at 9:11 pm

#155 Ralph Cramdown
That wasn’t my question

#156 Ronaldo on 06.18.13 at 9:22 pm

#150 Daisy Mae – Good for you. Totally agree.

#157 info on 06.18.13 at 9:33 pm

In China, 25 million people agree that Gold is not going anywhere, same as Canada.

The 975 million Chinese remaining don’t like being asked to pay banks fees to have digits in computers.

Unless banking becomes free, gold and other rent free wealth classes will only gain popularity, and then these prices returns to normal function of scarcity.

No shortage of stocks, ever. No shortage of bank notes either.

Banks, stocks are good but not immune to sentiment either.

#158 bill on 06.18.13 at 10:17 pm

#138 Mikey the Realtor on 06.18.13 at 5:44 pm
I am not disappointed mikey.I just have trouble believing you.
or you are out of the market ?
it looked dismal to me .and looking to get worse.

#159 World Traveller on 06.19.13 at 7:30 am

Maybe people will still argue that Islam is a peaceful religion??


(a) About Saudi culture, not Islam. (b) Take your opinions elsewhere. — Garth

#160 World Traveller on 06.19.13 at 7:49 am

#161 World Traveller on 06.19.13 at 7:30 am

a) Are we going to argue that Saudi Arabia is a secular country now?
b) Sorry, thought a comments board is for opinions, otherwise, what is the point?

Financial, real estate, money blog. Take your religion elsewhere. — Garth

#161 World Traveller on 06.19.13 at 8:20 am

ok back to finances, is Krugman right?


#162 Doug in London on 06.19.13 at 11:03 am

@JimH, post #85:
You’re quite right about not jumping in just because gold or gold mining stocks are down. Normally when a sector dips in price it’s a good time to buy in, but one exception is if it’s coming off a bubble. It’s like, as you say, when Nortel or other tech stocks were dropping in 2001. Oh sure, they were cheaper than at the peak when the NASDAQ (which, during the tech wreck became the NauseateDAQ) was at 5000, but that was a bubble and they can take a long time to come back down to more normal and realistic values. I found that out the hard way, buying into science and technology funds too early when they were dropping in price in 2001 and 2002. Only recently am I any where near breaking even. Anyone buying into gold now, thinking they are scoring a good deal, may have a similar experience to what I had. Forget about gold, there are better places to put your money at this time.

#163 Holy Crap Wheres The Tylenol on 06.19.13 at 12:47 pm

#150 Daisy Mae on 06.18.13 at 8:06 pm

Kudos to Daisy and all of the other parents out there that raised their own children!

I am old, perhaps too old. Back in the mid fifties and early sixties it was not normal for a home to have two parents working. I recall only one instance where the woman worked and that was due to that tragic death of her husband. The family suffered as she had to work shift work and raise three children. Luckily one child was already an adult (17) and she helped raise the other two. Today’s societal issues can be directly linked to this two-worker no solid base at home condition that has been created. It is all due to stuff! We need to have stuff, larger home, bigger fancier car, cottage, boat, whatever. When you have children you should forget about stuff and focus on them. They are your most important investment that you will ever make! And you can take that to the bank!

#164 Paul on 06.20.13 at 11:09 pm

#132 Devore – I think you missed the point of my post. My point is that most DIY investors need advice. I am talking about broader advice than just what funds, etfs, stocks blah blah blah to pick. It has been illustrated in the past that a monkey throwing darts can do as well as most people. What I am referring to is advice on a broad spectrum. In a review meeting with a client, I might sit with them for 90 minutes and maybe speak for 2 minutes on the widgets they hold in their portfolio. Investment widgets are merely tools. Important yes. But if you have an advisor that follows a tight and understandable, clearly defined PROCESS with investing, I can assure you that you will do a nose hair difference in performance over time whether using funds, etfs etc. As for getting enough money to see advisor, you are more likely to get your $10,000 by seeing a good one than by not. This is what I mean by the cost of FREE. I obviously know the cost structure of etfs and other products. I am referring to the fact many people do not see a professional because of their erroneous impression they are all there to screw you over. This is just not the case in MOST cases…interview several.

Just a simple example, I do taxes. For the clients for whom I do not do their taxes, I still ask them to bring them into my office for review, because I am most familiar with their situation. Without a word of a lie, 70% of them are wrong and we do T1 Adjustments for them. Last year alone, I probably found $30,000 in errors, from only about a dozen such cases. THIS is the cost of free. To save $125, a client may have missed $2000 in tax savings. I have 20 years experience doing what I do. It strikes me odd that people don’t realize if they are good at making money as you say you are, you don’t seek advice on the many things you are highly likely to not know about.