How to worry

SUCCESS modified

Tomorrow (Sun): How this pathetic blog did in 2013

People think in extremes. Like Thomas. And of all the key motivators – such as greed, sex, food or fame – fear is the greatest. Nothing makes us take action faster, or more profoundly, than flight from risk.

It’s why people invariably sell stuff that’s lost value instead of waiting for it to recover. The reason: they fear greater losses. The apex was March 9th, 2009, when millions of retail investors threw in the towel and bailed out of stocks and funds in an avalanche of selling that marked the piteous bottom of the financial crisis. The people who bought that day have seen gains averaging 152% since.

Fear of risk is why there’s many times more money in savings accounts or GICs than Canadian investors have in stocks, bonds and all investment funds combined. Most people are afraid of temporary declines, so they embrace the lethal but masked risk of running out of money.

And fear of risk has driven astonishing amounts of capital into residential real estate, which now seems safe because everybody’s doing it. Unlike stocks or funds, houses aren’t revalued every day with the prices posted online, which means most people think there’s no volatility. What a flaw that is.

Anyway, here’s Thomas. He’s afraid of REITs.

“Just wondering if you could comment on how you expect Canadian REITs to perform given the impending housing doom you are forecasting? Are they going to continue to pay their dividends/yield at current levels and only drop a little in value? Are they going to pick up lots of new assets on the cheap as individuals flounder in debt? Are they going to bomb like residential real estate, or is office, health care and apartment real estate safer? Is this housing collapse like a pestilence and the entire economy will be marked by the black death for years and only a portion of it will survive? Which limb will the market amputate in saving the economy? People gotta live somewhere right, businesses need a location to operate don’t they? So instead of owning they are going to rent? REITs to benefit? Any ones more so than others? Invest now or later?”

Real estate investment trusts are pools that buy office towers, malls, nursing homes, apartment blocks or industrial properties (among other things). They collect rents from these income-producing properties and pass them on to investors in the form of regular distributions, which are sometimes structured as return of capital – which means the income is taxless. Often investors buy a basket of REITs instead of trying to pick individual ones. XRE is an example, which currently pays 5.09%.

But XRE is down in price 8.48% for 2013 (after giving a 19.01% return over the past five years). So Thomas (who would probably never worry about REITs if prices were still going up) now frets about their future, when they’re on sale.

Is this valid?

First, nobody (except the Ashen Princess of Doom over at TAE) is forecasting Canadian real estate will crash, taking the economy with it. That’s not on. But it will certainly correct, destroying the financial strategy of millions of families who thought they were smart having only one asset. They aren’t.  And while their net worth will suffer – as it did with US middle class families – there’ll be no discernible impact on the 68-storey, billion-dollar granite building in which I have an office, owned by two REITs. Nor will people stop shopping for clothes or groceries, stop getting old, or cease going to work in commercial complexes.

In other words, good-quality REITS with cash flow-producing assets should do just fine for decades to come. In fact, if we do have a nasty little real estate correction, many REITs will do better – like those which own vast portfolios of apartment rental units.

So why are REIT prices down over 2013, even though they continue to send investors regular cheques? Simple. Interest rates went up – they popped almost a full 1% during the summer after the US Fed said it would start cutting back on its stimulus spending (that happened before Christmas). Many investors stampeded out of stuff that was interest-rate sensitive (bonds, preferreds, REITs), and into stocks, driving the value of those assets lower. That held until this week, when tax-loss selling reinforced things.

So what happens in future when interest rates inevitably normalize? Won’t REITs be crushed?

Probably not. Maybe the opposite. That’s because higher overall rates will only come when the economy picks up steam and inflation expectations swell. Those factors always have a positive impact on income-producing property fundamentals. Demand for commercial space increases. Rent pressures rise. Occupancy levels go up. Already across Canada the median occupancy is 95% (down from 96% in 2011). Meanwhile many REIT managers (unlike homeowners) have used this period of crazy-cheap money to pay down debt, or restructure high-cost financing.

So, Thomas, there’s certainly a lot to worry about. Love handles. Outsourcing. Cholesterol. Rob Ford. Hair loss. Miley Cyrus. Poutine. Climate change. Condos. Dementia. Kias. Hackers. Monogamy. Exploding balconies. Men. The Senate. The Leafs. YOLO. Identity theft. Zits.

It’s a long list. But no pestilence. No black death. And no REITs.

161 comments ↓

#1 Sideline Sitter on 12.26.13 at 7:18 pm

After cashing out my existing TFSA, I’m going to fund my RRSP, and take the return + additional unused savings to re-fill my TFSA in January…

REIT ETFs will definitely be a part of that mix. People gotta live, do business, and all that other stuff in life in some form of building, right?

#2 T.O. Bubble Boy on 12.26.13 at 7:38 pm

Agree. Agree. Agree.

The only time I’ve sold REITs this year was to buy similar REITs and get some capital losses for tax purposes.
(swapping between XRE and ZRE, for example)

I do question some of the REITs with shopping centers in the burbs… but most have “anchor” tenants that should survive regardless of the overall economy.

#3 pinstripe on 12.26.13 at 7:40 pm

It is a known fact that the market is RIGGED.

With the exception of those doing the RIGGING, no one knows what the future will bring.

as a side note: be cautious when the word “probably” is used to describe something.

BUYER BEWARE.

#4 ozu on 12.26.13 at 7:40 pm

im 2nd today

#5 Nemesis on 12.26.13 at 7:43 pm

Ooops.

[CBC] – McDonald’s poutine hitting menus across Canada

http://www.cbc.ca/m/touch/business/story/1.2454323

#6 T.O. Bubble Boy on 12.26.13 at 7:44 pm

FYI – I’m pretty sure that the 24th was the last day to sell Canadian stocks/ETFs for settlement before the end of 2013 for capital gains & losses, and today (26th) was the last day for selling U.S. stocks/ETFs.

#7 Gene Piccoli on 12.26.13 at 7:47 pm

All my professional career as a financial advisor, there were always 100 reasons why it was never right time to buy real estate. This was especially so for a house in Quebec. Referendums, elections, the economy, interest rates, unemployment, inflation, deflation, demographics, etc. The list goes on and on. Meanwhile,those who bought homes or other forms of real estate over the last 40 years have seen their equity values soar. The same can be said of Bank stocks, insurance companies, utilities, reits, and other blue-chip sectors. The sooner one ignores the “noise”of the media, the quicker one will embark on their journey to investment accumulations.

#8 Sideline Sitter on 12.26.13 at 7:48 pm

Hey T.O. Bubble Boy – if a rookie, such as myself, was to ask “hey, where can I get good information on the holdings of a REIT,” where would you send me?

I assume there’s some kind of guide/site/swami that provides those details, without having to go through each one individually?

Sadly, when I was in high-school (early/mid 90s) I won a national stock market competition hosted by WLU; now I’m a fish outta water… any feedback, would love to hear it.

#9 Randy on 12.26.13 at 7:54 pm

What’s wrong with Zits ?

#10 Not 1st on 12.26.13 at 7:56 pm

Garth did you cut and paste from 6 months ago? Ummm XRE now yielding 8% isn’t it?

Distribution yield 5.09%. — Garth

#11 Smartalox on 12.26.13 at 7:57 pm

That’s right folks, buy your REIT units now so that they have lots of cash to buy out these 600 square foot boxes in the skies. Cheaply, too once the specuvestors are under water. Then those condo towers will be turned into vertically oriented retirement homes for aging boomers.

#12 John on 12.26.13 at 8:17 pm

Occupancy rate for major REITs such is RioCan is dropping and XRE is 20% RioCan. This is in line with your message that housing is overpriced and people’s finances are in mess, hence reduced discretionary spending. In addition, there will be a lot more downward preasure if interest rates rise. You should be careful what you are vouching for, not long ago you were all “buy” on REITs, just before they lost 15% overall.

RioCan occupancy is currently 97%. Stop making stuff up. — Garth

#13 JohnL on 12.26.13 at 8:18 pm

I think REIT’s fall into the yield reach camp. Therefore yields up= REIT’s down.
If you believe yields stall out here great. If not…………..

#14 T.O. Bubble Boy on 12.26.13 at 8:25 pm

@ #8 Sideline Sitter on 12.26.13 at 7:48 pm
Hey T.O. Bubble Boy – if a rookie, such as myself, was to ask “hey, where can I get good information on the holdings of a REIT,” where would you send me?
——————-

Google “XRE ETF holdings” or “ZRE ETF holdings”… the iShares or BMO site will give you the details.

Yahoo Finance also is a decent source for ETF holdings (they show Top 10 Holdings for any ETF, and the average P/E and P/B too)

#15 West Vanner on 12.26.13 at 8:25 pm

Garth, do you still recommend borrowing to contribute to a RRSP as you did in 1996? Also, do you still rate Strip Bonds as part of a retirement portfolio?

Borrowing only made sense when interest was deductible. Strips lost appeal when rates tanked. Can I borrow your Walkman? — Garth

#16 Chris L. on 12.26.13 at 8:27 pm

Poutine, yes! But don’t forget apple, cheestring, pickle chips, peanut butter and raisins, chocolate thingies and of course gummies…

This kid learned the hard way: http://www.youtube.com/watch?v=pulZ3jgLM6o

#17 Young & Foolish on 12.26.13 at 8:34 pm

Hmmmm … REITs and preferreds sure sound safe …. but big investors still dropped them at the first hint of a rate increase. Why sell such solid performers? Are treasuries really so much safer?

#18 Shawn on 12.26.13 at 8:44 pm

CAN STOCKS RETURN MORE THAN GDP?

From yesterday recharts at 75 responded to a post and said:

Also, Garth, what I don’t get about your strategy is how one can manage to get 6-8% in a balance portfolio consistently/long-term when the highly diversified US economy grows only 3% at it’s best.

Common sense tells you that it is not possible
Garth, Ralph & Co will tell you that it is.

******************************************** Recharts, your thinking is correct but the result is not correct due to two points. Garth is correct that a portfolio can return 6 to 8% while GDP is 3%.

First, GDP is always reported as real growth. It subtracts inflation. Add back 2% for a normal inflation and we are already at 5% nominal GDP growth.

Second GDP growth does not include dividends. Add back 2% for dividends and you arrive at a 7% return.

You are correct to point out that a stock index cannot grow fast than GDP for very long.

Bu the stock index grows with nominal GDP, not GDP measured in real dollars. And the stock investors gets dividends on top of gains in the index.

So there we are at 7% return.

Of course this is before deducting for inflation and income taxes and fees. Nevertheless the claim is true that a portfolio can easily give 7% return in a world of 3% real GDP growth.

#19 Pete in Barrie on 12.26.13 at 8:55 pm

Amen on your list of things to worry about. I think I hit 11 of them:(

#20 I'm stupid on 12.26.13 at 8:57 pm

Reits are a special breed of investment. That’s why they’re awesome to own.

The rate of return of a well managed REIT is difficult to beat. I’ll explain why.

If you buy $100 in stocks, bonds or any other investment vehicle you get the return on the amount. With reits $100 is leveraged to buy more than $100 of Realestate. As long as the properties have a rate of return higher than the financing interest on them you win.

#21 T.O. Bubble Boy on 12.26.13 at 8:58 pm

Overheard in the GTA this xmas:

“Merry Christmas dear… I bought us a $900,000 house for a present!”

http://www.realtor.ca/propertyDetails.aspx?propertyId=13888090&PidKey=-1612433984

“… does it comes with a gift receipt?”

#22 just jack on 12.26.13 at 8:59 pm

Aren’t REITs also used to fund construction for condominium complexes? Another reason why so much condo construction is happening today and why so many suites seem to be vacant or unsold. Developers are not making money selling condominiums but by selling REITs.

Those are MICs. — Garth

#23 Sideline Sitter on 12.26.13 at 9:10 pm

#17 “Merry Christmas dear… I bought us a $900,000 house for a present!”

yikes… 83 feet deep, no parking, wood frame.
but, hey – new berber carpet! that’s like, $1000!

#24 Aliilaa on 12.26.13 at 9:14 pm

Reading your blog is the best thing I started doing this year. Thank you and Happy Holidays, Garth.

#25 West Vanner on 12.26.13 at 9:22 pm

Borrowing only made sense when interest was deductible. Strips lost appeal when rates tanked. Can I borrow your Walkman? — Garth

I couldn’t afford a Walkman, too busy raising a family of future tax payers with the help of a stay at home mum who thought credit lines were tax free. Thanks for the advice none the less, if you’d write a new book I’d read it and save you the trouble and sarcasm.

#26 Ralph Cramdown on 12.26.13 at 9:24 pm

Just for the record, I’m in the crash camp. I’m not predicting that our RE will crash this year, because a) I’m better at gauging value than near-term price, and b) these things always go on longer than you think, and this has gone on a lot longer than I’d have thought already.

But I think this soft landing and/or correction stuff is wishful thinking. Every homeowner has already got his story straight as to why, even though he admits the overall market is nuts, HIS particular street/city/unit type won’t fall so much because they aren’t making any more land/traffic is brutal and people want to live downtown/his street name is mnemonic for “hummer” in hot foreign money’s language of choice, etcetera. The above-normal numerical cohort selling, financing and building all this stuff insists that it can’t pop without a catalyst, Will Dunning says price/rent ratios aren’t out of line “when you consider interest rates” (cute, but only valid if you can lock in your rate for 25 years), and every foreign financial publication is looking at us like we’ve sprouted a third head (nut-o-phone?)

Oh, and not withstanding the high dollar, ballooning electricity rates in Ontario, our resolve to keep all the gas-guzzler assembly plants to ourselves white the gas-sippers get built in the US, and the tiny fraction of people employed in forestry, the latest theory is Canada’s economy will track the US’s in its ascendancy.

Yeah, a wee correction will get us back to long term trendlines… not.

#27 Shawn on 12.26.13 at 9:53 pm

Leverage?

Number 20 said: If you buy $100 in stocks, bonds or any other investment vehicle you get the return on the amount. With reits $100 is leveraged to buy more than $100 of Realestate.

****************************************
Common equity (stocks) are also leveraged by the corporation so that assets exceed equity.

#28 Son of Ponzi on 12.26.13 at 10:04 pm

#18
a company that has 0 growth, and pays a 7% dividend, will be broke in no time.

Not if the surplus cash flow is being sent to investors. — Garth

#29 Alberta Ed on 12.26.13 at 10:05 pm

The REIT portion of our balanced, 100% liquid (no RE) portfolio returned 12.85% this year. Not bad.

#30 recharts on 12.26.13 at 10:08 pm

#18 Shawn on 12.26.13 at 8:44 pm
Recharts, your thinking is correct but the result is not correct due to two points. Garth is correct that a portfolio can return 6 to 8% while GDP is 3%.

First, GDP is always reported as real growth. It subtracts inflation. Add back 2% for a normal inflation and we are already at 5% nominal GDP growth.

Second GDP growth does not include dividends. Add back 2% for dividends and you arrive at a 7% return.

You are correct to point out that a stock index cannot grow fast than GDP for very long.

Bu the stock index grows with nominal GDP, not GDP measured in real dollars. And the stock investors gets dividends on top of gains in the index.

So there we are at 7% return.

Of course this is before deducting for inflation and income taxes and fees. Nevertheless the claim is true that a portfolio can easily give 7% return in a world of 3% real GDP growth.

It amazes me to what degree people can play with numbers (that includes Garth) to justify their position.
If you look around you, at least in Canada you don’t see progress or anything of that nature
BoC is begging the businesses to borrow and to invest and to really do something good for the economy.
Instead what we see is a diminishing economy relying on printing money and RE.
People are getting fired, companies are downsizing or moving their business somewhere else etc etc.
That is for Canada

US? I don’t know, I have big doubts in regards to that country as well.
Is someone tells me that after that much money printing this is going to end up better than the Canadian RE that person is insane. Zerohedge named a couple of fund managers who returned money to investors for a simple reason: there is nothing we can invest in.
I doubt that your math can prove those guys wrong.

I just think that in a little while we will all trade in yuans or bitcoins or whatever. It will be a time when all this US money printed recently will surface and people will run away from USD. But of course that will not happen till Garth says so. Because no matter what you say there will be a caustic comment at the bottom of your post.

PS: you must wonder what got into the germans’ heads and the chinese’ heads that they are all buying gold or repatriating the gold they had in US.

The US$ will still be the global currency when you are dead. — Garth

#31 Smoking Man on 12.26.13 at 10:09 pm

Garth makes a great point on fear.

The herd is some what predictable.

If you want to big loot, you need to take big risks, or have insiders in govt that give you big juicy contracts.

Insanity pays, cowards suffer in poverty.

Off to Atlantic City tomorrow dogs, while my wife donates 2 to 3 k on her addiction, I will be putting the finishing touches on the greatest book ever written, that will sell maybe 50 copies.

But like my suicidal post to the family, insuring they will never speak to me again.

It felt amazing writing it.

#32 Son of Ponzi on 12.26.13 at 10:12 pm

Now, the truth comes out.
Without leverage, you can’t get returns of 7% in a low interest environment.
As we were taught in Finance 101, leverage is your friend on the way up, but the devil when things turn south.

Where did I mention leverage? Balanced portfolios (no leverage) this year are north of 9%. — Garth

#33 Intuitive Missus on 12.26.13 at 10:14 pm

RioCan Q3 -2013 Presentation

http://investor.riocan.com/files/documents_presentations/2013/Q3%202013%20RioCan_Slides_PPT_2013_v.3%20-%20VWEB.pdf

#34 Ruff on 12.26.13 at 10:16 pm

I sleep well at night owning XRE along with XEG. Long live the iShares, LOL!

#35 HDJ on 12.26.13 at 10:17 pm

“Most people are afraid of temporary declines,…” Garth

N0, it’s not about temporary declines. Those with savings in secure things like GICs are simply afraid of losing (forever) large chunks of their savings to shifty financial characters with shady backgrounds. It’s as simple as that.

Ever met one? — Garth

#36 Retired Boomer - WI on 12.26.13 at 10:18 pm

REIT’s have had a rather mediocre year, hence they are a “value” buy right now. That is one of the first things on my “buy” list for the new year.

I just bought some ute’s today “on sale” and will go back to round-off the purchase tomorrow if the pricing is still available.

Yes, there is always ‘noise’ that tells you 50 reasons not to invest in things that throw off money. REIT’s throw off good cash flow, dividend paying stocks too -if you don’t overpay for them- Preferred’s too.

Naturally, you can invest in a “guaranteed” savings account -one that is “guaranteed” to lose you buying power., or those GIC’s where the insurer will pay you a “SAFE” 3% a year.

Hey, my stocks throw off 3% dividends on average AND you get capital appreciation as well. So this year I will have made TEN TIMES what the “safe” people made.

What’s that called? It’s called “Investing” for growth.
Is every year a winner? No. Most are though, sometimes you win a little, sometimes you win much.

Diversified portfolio keeps even the bad years tolerable.
I started with nothing, but most of that is gone now.

#37 Ruff on 12.26.13 at 10:27 pm

If you get a chance check out PLZ on the TSX. Stock graduated from the venture exchange a while ago. I have owned it for years now and it has increased it’s dividend every year. http://www.plaza.ca/
Plazacorp Retail Properties Limited

Have a Happy New Year!!

#38 recharts on 12.26.13 at 10:41 pm

The US$ will still be the global currency when you are dead. — Garth

That sounds threatening

I think you are done here. — Garth

#39 not 1st on 12.26.13 at 10:46 pm

#37 Ruff on 12.26.13 at 10:27 pm

If you get a chance check out PLZ on the TSX.

None of the big ETF funds hold it so it must be small time. I would only buy REITs in an ETF because out of all the sectors, I think this one needs to be extremely well diversified.

#40 Doug in London on 12.26.13 at 10:59 pm

Well now, isn’t that strange. Today, Boxing Day, there were people lining up outside in the cold winter weather before stores opened so they could rush in at opening time to scoop up bargains. Why isn’t there the same level of enthusiasm for scooping up REITs while they are on sale? And now the punch line, you don’t have to stand outside in the cold to get these cheap REITs, you can sleep in then buy them from the comfort of a computer indoors!

The concern keeps coming up about the effect of a real estate bust on REITs. Let’s look at CAP REIT, symbol CAR.UN. While many people have been bellyaching about the real estate bust in Ireland, CAP REIT recently scooped up a good income producing property in Dublin at a cheap price. Are you ready for another punch line? Real estate in Ireland is starting to recover now. Well run REITs could scoop up some good bargains during a bust, including some well built boxes in the sky if there are any to be found.

#41 Shawn on 12.26.13 at 11:16 pm

Son of Ponzi at 28 says:

a company that has 0 growth, and pays a 7% dividend, will be broke in no time.

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

I believe that handle is an open admission of a closed mind. For the benefit of those that don’t know, a dividend is typically funded by current surplus earnings as Garth mentioned and there is no reliance on growth in earnings.

If earnings don’t grow the stock price could well fall. But there is no reason to expect the company to go broke if the dividend was sustainable at current earnings.

Anyhow, people were discussing 7% returns, not 7% dividends.

If it was in reference to REITs there may be a concern there. REITS pay distributions often far in excess of GAAP earnings on the basis that depreciation is not a real expense. I hope not, but it really does not sit well with me. This may be the year that REITS have to report GAAP losses as cap rates rise since they mark their properties to market value under IFRS accounting. That could wobble the market. I guess just don’t overdue the exposure to REITS.

I have mentioned in the past a weighting of well less than 10% is adequate exposure. — Garth

#42 Jordy on 12.26.13 at 11:20 pm

Excellent advice as always, fear is the biggest problem, caution and good judgement is always the best way to go.

#43 45north on 12.26.13 at 11:26 pm

Ralph Cramdown: Just for the record, I’m in the crash camp.

me too, I just don’t know when.

debt to income is 164% , houses in Canada cost twice as much as houses in the US, condo-mania in the GTA, layoffs

God help us

#44 Jon B on 12.26.13 at 11:54 pm

I’ll tell you what I fear; financial markets that are full of insider trading and other schemes that ensure the retail investor is kept in a position of disadvantage. Take the Facebook IPO for example.

So don’t buy stocks. There are a myriad of other assets. Like real estate trusts. — Garth

#45 Smoking Man on 12.26.13 at 11:58 pm

Un real, so I’m looking threw my wallet, 40 bills with 5 decimal places.

Was it the UCC, Nope.

My amazing dyslexic powers of observation.

Was watching a game I never played before. The min bet went from 5 to 10 to 15 yet the max bet never went or changed from 100

Sign of weakness from casino.

I’m betting 100 a pop, with 3 times bet times 3.on back.

4 two’s. 40 to one.

Not sure if the math is right, but looped.

Every other game in the house ups the max bet, not this one, now I know why.

#46 Study for dollars on 12.27.13 at 12:40 am

Given the amount of time people spend watching t.v. you could also just learn to trade stocks. To Garth’s point, everyone has just finished writing off any loses from last year, paving the way for former losers to become winners. For example, look at the Shipping industry, it’s simply exploding after years of decline. Choose from drys, nm, fro, balt, free, etc. This is just one tiny example of the multitude of ways you can easily make money in the market. In the meantime, Happy New Year to all.

[email protected]

#47 Bob Rice on 12.27.13 at 12:42 am

Define a “correction” – 15%

Define a “crash” – anything over 20%?

How much of a drop will make, “their net worth will suffer – as it did with US middle class families”

#48 S on 12.27.13 at 1:19 am

So let’s see, Deutsche Bank says RE here’s 60% overvalued, the Economist thinks 30% to 75%, depending on which yardstick one uses. OECD is ringing alarm bells, so is WSJ etc. etc.
But no potential crash, just a correction… Is one to understand that there may be a 10 to 20% pullback (a correction) at which point the RE market will happily settle at just 40% overvalued and call it balanced?

#49 Seth on 12.27.13 at 1:25 am

Garth – Merry Christmas and thank you for your continued efforts.

I’m curious on how you would personally define ‘crash’ vs. ‘correction’?

#50 Ruff on 12.27.13 at 1:39 am

Hi not 1st,
I stared buying PLZ at $2.86 years ago on the Venture Exchange. Company has been doing a lot right so far. Either way a win win. DRIP discount is very good. Dividend grows along with cash flow every year for the past eleven years.

Company converting from a mutual fund company to a REIT this year 2013. Shareholder vote was held not to long ago.

Less then 5% of portfolio in this stock so will ride this one for a while.

#51 john smiley on 12.27.13 at 1:44 am

The US$ will still be the global currency when you are dead. — Garth
———————————————
If recharts is over 80 years old, has high cholesterol or his/her basement is isolated with asbestos: maybe.
Otherwise: Highly unlikely.

I thought that everyone wanted new international currency backed by IMF. Or basket of currencies.

#52 john smiley on 12.27.13 at 1:52 am

The US$ will still be the global currency when you are dead. — Garth
———————
Why not the euro? EU has economy bigger than the US, as does BRICS combined. USD constitutes 65 % of the reserves while the US economy is projected to shrink to 17 % of the global economy.

Why not the YUAN? it seems the chinese would back it with gold.

#53 HDJ on 12.27.13 at 1:59 am

35 HDJ on 12.26.13 at 10:17 pm

“Most people are afraid of temporary declines,…” Garth

N0, it’s not about temporary declines. Those with savings in secure things like GICs are simply afraid of losing (forever) large chunks of their savings to shifty financial characters with shady backgrounds. It’s as simple as that.

Ever met one? — Garth

Ever see the stars on a clear night? H

#54 devore on 12.27.13 at 2:24 am

#32 Son of Ponzi

Stop embarrassing yourself, every post you make reveals your ignorance.

#55 Son of Ponzi on 12.27.13 at 2:54 am

Let’s assume for a moment that a 7% ROI is realistic.
And all of the adults on this planet (about 2 billion) would be investing in this product, and become filthy rich.
Who would be the losers?

#56 Son of Ponzi on 12.27.13 at 3:03 am

Shawn,
One of the reasons why the German Mittelstand companies are so successful is because they plow back earnings into the company rather than paying crazy dividends.
They are not slaves to short term profit taking.

#57 Steve on 12.27.13 at 3:09 am

Question – Do dividends from XRE qualify for the dividend tax credit?

Better Question – where can I find a list of all securities that are eligible for the dividend tax credit?

#58 Onthesidelines on 12.27.13 at 5:29 am

Most people are afraid of temporary declines. The reason: they fear greater losses. – Garth.

Not quite in the order you said it in, but I’m guessing you wouldn’t disagree with my interpretation.

Your point? No need to fear greater losses as the market always comes back, I would presume. As with housing, this premise is not quite correct. The Nikkei crashed from 40,000 over twenty years ago and now sits at 16,000. That’s one example. Another is the dive down of the US$ starting from around 2000 to where it was par with the Canadian$ by 2010. I lost money on both of these events, by selling. The first loss was on a Nikkei index fund which I bought when the Nikkei was showing movement up ( went to 18,000) and then started losing again. The second was on the sale of 5 year US treasuries which were paying 6.5% but over the course of their maturity the US$ started tanking.

Though I bailed and cut my losses, it is important to note that had I followed your advice as you present it here, I would have lost a lot more as neither has come back as yet.

My point? Greater losses are a valid fear.

#59 Future Expatriate on 12.27.13 at 6:22 am

Garth’s most excellent philosophy in seven words:

We’re all lemmings; GO THE OPPOSITE DIRECTION.

#60 bonnie on 12.27.13 at 6:35 am

What’s wrong with monogamy? Protects against STDs and crazy stalkers. Boo Garth don’t be such a frat boy. Otherwise great post. Thanks Garth happy holidays.

#61 cracker on 12.27.13 at 9:27 am

buying another income property in buffalo for 20 grand. 900 month gross, after taxes, garbage and water is 700. no repairs needed. nice 2 tennants. so if i make 700 month net on 20 grand you can get out your calculator out. my advice leave canada. its safe ya wait in line health care. but my rental has a pantry my house in canada worth 450 doesnt have one. and worth over 20 times more. 40 percent unleveraged is normal there.

But it’s Buffalo. — Garth

#62 Onthesidelines on 12.27.13 at 9:47 am

#59 Future Expatriate on 12.27.13 at 6:22 am
Garth’s most excellent philosophy in seven words:

We’re all lemmings; GO THE OPPOSITE DIRECTION.
_________________________________________

How is buying Reits and divident paying stocks and ETFs going in the opposite direction? Opposite of whom? Don’t you know that everybody and their uncle is chasing yield these days? YOU are the lemmings.

#63 Ralph Cramdown on 12.27.13 at 11:30 am

#62 Onthesidelines — “How is buying Reits and divident paying stocks and ETFs going in the opposite direction? Opposite of whom? Don’t you know that everybody and their uncle is chasing yield these days?”

These things are always hard to read (that’s what makes a market), but when I look at the yields of classic Canadian dividend plays like BCE, FTS and TRP, I see yields at or above historical levels, and this in an environment where bonds, their usual competition, pay significantly less than they used to.

I see similar anomalies in sentiment indicators. Surveys show that bullish sentiment is very high and bearish sentiment very low. Yet huge allocations are still in IG bonds, cash and money market funds.

So I think sentiment is bullish among those in the market, but many are still out of it. Those in the market may be looking for yield, but many are still out of it. Sentiment among commenters on THIS blog sure doesn’t suggest yielders are dangerously overvalued… It’s all “financial repression is a war on savers!” “stock bubble!” and whatever else Zeroedge is peddling daily. Myself, if I thought this blog’s comments reflected broad sentiment, I’d be far more bullish than I am (i.e. all in with all I could borrow).

#64 Julia on 12.27.13 at 11:59 am

#60 bonnie on 12.27.13 at 6:35 am
What’s wrong with monogamy? Protects against STDs and crazy stalkers. Boo Garth don’t be such a frat boy.

Love that Bonnie, The Greater Fool Frat Boys. Sounds like a band name. Maybe we could start a short form response to certain types of blog comments that says it all in two short words.

#65 bentoverpayingtaxes on 12.27.13 at 12:04 pm

Vancouvers real poverty shows as ‘Boxing Day’ shoppers now flood the thrift stores.

http://www.vancouversun.com/news/metro/Thrift+store+chic+draws+budget+conscious+shoppers+Boxing/9325866/story.html

I thought when I was giving clothes to charity that they would go to the needy….now it seems that what I give goes to support a system of lies wherein Vancouverites with high rents and uaffordable mortgages are cleaning out the bins….disgusting.

#66 learningfromyou on 12.27.13 at 12:39 pm

Hello Garth
Please help me out understanding the following paragraph.

Real estate investment trusts are pools that buy office towers, malls, nursing homes, apartment blocks or industrial properties (among other things). They collect rents from these income-producing properties and pass them on to investors in the form of regular distributions, which are sometimes structured as return of capital – which means the income is taxless. Often investors buy a basket of REITs instead of trying to pick individual ones. XRE is an example, which currently pays 5.09%.

If the REIT returns part of the investment capital, I understand that is not income because the investor gets back his/her own money. How this “structure” will be advantageous for the investor?
I understand “regular distributions” as dividends what is a real income for the investor.

Please forgive me for any error in the concepts, I just want to learn.

The ACB (adjusted cost base) is reduced by return of capital payments. So when you sell, if the REIT price is lower than when purchased, you will have received tax-free distributions and pay zero tax. If the REIT value is higher, then 50% of the gain is added to your income in the year of disposition. — Garth

#67 Penny Henny on 12.27.13 at 1:06 pm

When I say the title of today’s post, “How to Worry” .
I was expected Garth did an interview with my mom.

#68 TurnerNation on 12.27.13 at 1:06 pm

#55 Son of Ponzi

The people paying markups.

What is the mark up, do you think, on the clothes we buy made overseas in sweatshops? Just do it.
On that $1.50 chocolate bar or $4 cup of coffee or $10 McCrappy meal combo? Corporate profits man.

I’ve boycotted Tims and SBUX for years, refused to pay for their from-frozen or burnt offerings. Visit small franchisees down in the PATH, or use work’s.

#69 TurnerNation on 12.27.13 at 1:08 pm

68th? Where is everyone – Boxing day shopping?

I remember the days when The 99% emailed this blog.
Frugal Chad. Durango driving guy w/BB on hip. Did they cave?

#70 angela on 12.27.13 at 1:12 pm

Occupancy rate for major REITs such is RioCan is dropping and XRE is 20% RioCan. This is in line with your message that housing is overpriced and people’s finances are in mess, hence reduced discretionary spending. In addition, there will be a lot more downward preasure if interest rates rise. You should be careful what you are vouching for, not long ago you were all “buy” on REITs, just before they lost 15% overall.

RioCan occupancy is currently 97%. Stop making stuff up. — Garth

where in this posting is he making stuff up? did you even read this post Garth dont be so defensive

How is a fact defensive? Don’t be so offensive. — Garth

#71 Shawn on 12.27.13 at 1:36 pm

How to Get Filthy Rich

Son of Ponzi at 55 asked:

Let’s assume for a moment that a 7% ROI is realistic.
And all of the adults on this planet (about 2 billion) would be investing in this product, and become filthy rich.
Who would be the losers?

****************************************
This is a great question and worthy of respectful discussion.

The available returns in the market have at their heart the simple supply of and demand for cash (In real terms some people have surplus goods or surplus ability to purchase goods and others have a shortage and are willing to borrow).

I agree that if everyone piled into a 7% investment they would drive the price up and the return down. (This is what happened when the FED piled into bonds, for example).

Of course not everyone is able to invest.

A huge group of people have no money to invest.

Some need to borrow for today’s consumption rather than invest.

Some borrow for a house rather than invest in the markets.

Business owners borrow with a view to making a high return on the borrowed money.

It all comes down to supply and demand.

It’s certainly valid to question whether a 7% return from a given investment is sustainable.

But be a little cautious about jumping to conclusions.

And even if something is not sustainable for say 200 years or 100 years, that does not mean that such returns are unsustainable or unavailable in the next 10 years or 20 years.

Well, as many have pointed out it takes a divergence of opinion to make a market. Part of the reason that some people can get good returns in stocks is certainly the fact that others are afraid to invest in stocks and others have no funds to invest.

It’s all very complex and yet sometimes there are simple rules and observations that are true and helpful. But everyone should be careful about the conclusions they reach regarding the markets.

hmmm “someone” here suggested a balanced approach is best. A balanced approach can protect people from betting too heavily on a particular view of the market.

I think it is possible to get filthy rich in the markets. But it takes perhaps 40 years and very few will give it a serious try.

#72 KommyKim on 12.27.13 at 2:03 pm

RE: #57 Steve on 12.27.13 at 3:09 am
Question – Do dividends from XRE qualify for the dividend tax credit?

A very small portion of it does. Most of it comes as capital gains. (2012) Look at the bottom of this page:
http://ca.ishares.com/product_info/fund/distributions/XRE.htm

Better Question – where can I find a list of all securities that are eligible for the dividend tax credit?

Just use Google finance to find some big companies on the TSX who pay a good dividend. Smaller companies usually don’t qualify for the enhanced dividend tax credit because they get the small business tax rate.
You can thank the Harper Gov for lowering the credit in recent years. No more negative (Federal) rates for low income earners.

#73 not 1st on 12.27.13 at 2:07 pm

Distribution yield 5.09%. — Garth

So to be clear, the remaining 3% payout is capital gains? Subject to tax upon receipt?

What 3%? And capital gains taxes are never due ‘upon receipt’. — Garth

#74 Nemesis on 12.27.13 at 2:23 pm

PostHolidayDoldrums got ya down, SaltyDogz? FugedAbout it, for as it happens, there’s something for everyone in this morning’s Zen.

FirstUp: Messy. ButStylish…

[UK Independent] – Tycoon Robert Wilson gives away $800 million fortune before jumping to death

…”A legendary Wall Street tycoon gave away his entire $800 million fortune before plunging to his death in a suicide jump this week.

Hedge fund multi-millionaire Robert W. Wilson, 87, leapt from the 16th floor of his luxury San Remo apartment building (pictured): a prestigious address in New York’s Upper East Side which has been the residence of Steven Spielberg, Demi Moore, Glenn Close, Dustin Hoffman, Bono, Steve Martin, Bruce Willis and Steve Jobs in the past.”…

http://www.independent.co.uk/news/people/news/tycoon-robert-wilson-gives-away-800million-fortune-before-plunging-to-death-in-suicide-9027278.html

NextUp: A famously botched IPO could well be the least of the fabled SocialNetwork creator’s problems…

[UK Telegraph] – Young users see Facebook as ‘dead and buried’: A study of how teenagers use social media has found that Facebook is “not just on the slide, it is basically dead and buried”, but that the network is morphing into a tool for keeping in touch with older family members

…“What appears to be the most seminal moment in a young person’s decision to leave Facebook was surely that dreaded day your mum sends you a friend request.”

The Global Social Media Impact Study, which was funded by the European Union, observed 16- to 18-year-olds in eight countries for 15 months and found that Facebook use was in freefall. Instead, young people are turning to simpler services like Twitter, Instagram, Snapchat and WhatsApp…”…

http://www.telegraph.co.uk/technology/facebook/10539274/Young-users-see-Facebook-as-dead-and-buried.html

LastUp: Ladies who SaddleStraddle… are, like, WayHappier. Start your engines, Girlz…

[LAT] – Study: Women who ride are happier, more fulfilled

…”Freud asked, “What does woman want?”

Harley-Davidson has the answer. She wants a motorcycle — or should.

That is the result of a study of female motorcycle riders and non-riders, commissioned by the Wisconsin-based bike manufacturer.

Female riders were twice as likely as their non-riding counterparts to feel “confident.” They were twice as likely, too, to feel “extremely satisfied” with their appearance.

More than half of those riders said the two-wheeled experience made them feel “free” and “independent.” And while they were marginally less inclined to say they “usually feel good” about their senses of humor and intelligence, they were almost twice as likely to say they “usually feel good” about their sex appeal.”…

http://www.latimes.com/business/autos/la-fi-mo-autos-study-women-who-ride-are-happier-more-fulfilled-20131223,0,7365416.story

BonusZen:

http://youtu.be/0nCbnjvbaS8

#75 live within your means on 12.27.13 at 2:41 pm

#65 bentoverpayingtaxes on 12.27.13 at 12:04 pm
Vancouvers real poverty shows as ‘Boxing Day’ shoppers now flood the thrift stores.

http://www.vancouversun.com/news/metro/Thrift+store+chic+draws+budget+conscious+shoppers+Boxing/9325866/story.html

I thought when I was giving clothes to charity that they would go to the needy….now it seems that what I give goes to support a system of lies wherein Vancouverites with high rents and uaffordable mortgages are cleaning out the bins….disgusting.
……………………
Big Brothers/Big Sisters call me regularly for household articles & clothing I no longer need. They sell these articles to Value Village. I do drop off items to Sally Ann as well. I know various people that shop at these places. I’ve bought a few items. We have consignment shops & bought some high end classic clothing years ago. Regret not buying a beautiful old classical Chanel purse that I loved – like new. My beautiful, Parisienne, SIL was with me & tried to convince me to buy it. I was retired – how often would I use it?

#76 live within your means on 12.27.13 at 2:54 pm

Further to my previous post. Clothing that is not sold at Value Village or Sally Ann, etc. gets shipped to Africa in compressed bundles – based on a docu. I watched years ago. Then, IIRC, these bundles of clothes, go through 3 intermediaries, & are finally sold at outdoor markets in Africa.

Please correct me if I’m wrong.

#77 father on 12.27.13 at 2:55 pm

Bond, Mr. Bond what ya up to?

#78 Old Man on 12.27.13 at 3:05 pm

#70 angela – there is one thing you are missing in the equation with REITS. There may be a minor vacancy rate from time to time, but they were busy during the past few years refinancing assets long term with cheap money.

#79 Matthew on 12.27.13 at 3:16 pm

Hi Garth, I just wonder, what’s up with you and KIA and Costco? I really like to know more about your vendetta with them. Thanks, Happy New Year

#80 Old Man on 12.27.13 at 3:27 pm

#76 live within your means – I can answer that as most clothing donated for the poor in Canada with organizations that will not mention are shipped to 3rd world countries and sold to gangs. There are huge warehouses in Canada for sorting that go on ships for profit; some is sold in stores here in Canada; and very little is given to the poor. There is one organization in Canada that you all know well, and you would be shocked what they are doing with your donations. Yes, they do well on occasion for causes in Canada, but there is another side to this all and am not telling.

#81 Retired Boomer - WI on 12.27.13 at 3:31 pm

#71 Shawn and #55 Son of Ponzi

1st Shawn – It depends on how ‘filthy’ one wishes to get.
Some put 100% of they investible assets into stocks for many years. I don’t have quite the stomach for the inevitable ups and downs of such an approach. I just want to get dirty, not filthy.

I do have a large fraction in equities currently, and will dial that back through re-balancinbg shortly.
I like a 60/40 approach. to a 70% equity & / 30% short & int term bond or, REIT.. That’s MY stomach, not necessarily everybody’s fare.

#55 Son of Ponzi

First there are close of 7 billon people on this planet. Am I to assume only 2 billion will be investing, and more specifically in a single stock, or even an index of stocks?

First, as more people pile in, the price tends to rise. A rising price all else being equal lowers the ‘value’ of the earnings, or dividend stream.
In an index, while the price might not rise from that, the index would buy more of the securities held possibly driving up their individual values, hence a rising index.
It raises the PE (Price Earnings ratio) of the stock, generally the higher the PE number the less of a ‘buy’ it may be.

Now, it usually takes a hell of a lot of ‘buying’ to move a stock price. You & I aren’t going to do it.

Stocks move every day, some go up, some go down. I own one (a tiny one) that hasn’t changed price in a week.
They, like people, die, merge, and change. If you were to look at the Dow (or is it S&P) of year 1900 and 2013 there is but ONE name common to both. I am certain others can trace their ancestry to stocks in that 1900 list.

Point is nothing really remains static forever, change is always there to some degree.

Stocks have returned on average a higher return than Bonds. I can take any number of years and turn those stats on their heads as well. But lets look only at the last 113 years for example, a time span more than adequate for the usual human.

Do you NEED Bonds then? Yes, because they tend to move in the opposite ways of stocks. I use them for balance. Right now I am comfortable with a lower percentage in bonds as I think (hope) continued recovery will be world-wide. There will be countries that are exceptions, maybe yours, who can tell? The bonds act as that stabilizer. Right now, Bonds don’t pay me enough to want to own too many of them, or with a very long duration.

When we have a great year in stocks (2013 as an example) bonds tend to underperform. So, that is why I need to re-balance as I have more equities than i would like, so I’ll sell some of those, and buy either bonds or REIT’s.
Today, the PE ratios of many stocks are higher than they were a year ago. Does that make it a bad time to invest in stocks? No, but…
Bond prices are lower (hence the higher cupon rate on new bonds). Does that make it a good time to buy bonds? No,but…

Lots of other factors to weigh in these decisions, and space here is limited. Both work, both are good a mix is best. Age, relative debts, income all a part of tour plans

#82 Onthesidelines on 12.27.13 at 3:42 pm

#63 Ralph Cramdown on 12.27.13 at 11:30 am

All I’m saying is that for those who are in this market, yield IS the main game in town. With treasuries and provincial bonds below GIC returns, all that’s left, really, are yield producing preferreds, ETFs and Reits… exactly what Garth recommends. Makes sense given the choices, but surely going for this sort of yield is the main strategy of the retail investor right now. To imply that this is something contrarian to the rest of the sheeple as Future Expat # 59 suggests is ludicrous.

#83 Bgreene on 12.27.13 at 3:50 pm

#18 Shawn wrote:
“Second GDP growth does not include dividends. Add back 2% for dividends and you arrive at a 7% return.”

There’s also the effect of share buyback. I’ve seen charts indicating that recently it has been comparable to the current dividend levels (which are low compared to long-term historical levels).

#84 TurnerNation on 12.27.13 at 4:27 pm

Rigged market? Pick any point on this chart, from 1985. (Or 1885 if your chart goes that far back into time.)

Pick *any* point. Have you made or lost money (including dividends)? I thought so.

http://tinyurl.com/qyrk622

#85 Sideline Sitter on 12.27.13 at 4:33 pm

#76 – Indeed you are correct. those “donation” bins in 7-11 parking lots are not charities… they sell the clothes to Africa by weight.

it’s why you’ll see a kid in Africa wearing a Nike shirt, and wonder how they’re surviving a drought… oh, and the clothing, while being bought/sold, is the cheapest means of clothing the people.

#86 Son of Ponzi on 12.27.13 at 4:34 pm

Devore #54
that’s what they said about Socrates.

#87 Son of Ponzi on 12.27.13 at 4:44 pm

Shawn # 71
If someone makes a 7% gain, someone must take a 7% loss, unless you believe in synergy or the tooth fairy.

Your comments border on the infantile. — Garth

#88 REITs dead money? on 12.27.13 at 4:54 pm

So basically it seems that Garth is saying if interest rates go up, then that means our economy has been doing well (hence the rise in rates)…fair enough.
However from a capital preservation perspective, share price of REITs will fall at every uptick of interest rates UNLESS THEY INCREASE THEIR DISTRIBUTIONS to maintain the appropriate premium on return over safer instruments (e.g. bonds).
The only way they can increase distributions is to make more money (i.e. higher rents, lower vacancy etc.). With vacancies already fairly low, as Garth has pointed out), it seems to me that the higher rents is going to have to be the way to go. However, a good chunk of REIT portfolios are longer term leases, where squeezing more than what was already negotiated won’t be possible.

I’m happy to be put in my place with some contrary logic, fire away.

As a side note, Dundee Reit announced their January distribution at $0.1751, which is about 6% lower than their previous distributions of $0.1866. Share price is down about 24% for the year.

#89 Old Man on 12.27.13 at 5:10 pm

It is the time of the year when all goes a bit nuts, so had to make a run to the TD bank which is a stand alone operation to deposit a counter check; get me some more cash; and pay a bill. I knew full well that today was Friday, but had time to do this all for another day. Along the way all shopping venues were busy, and when I turned into the TD their parking lot was filled with cars.

I said will take a shot no matter what, so when I went inside there was nobody there with no line up or anything, so threw down my deposit book and in five minutes all was done. Now, the question remains as why all the cars, and what was this all about? Was there a party taking place in the back rooms? I should have asked, but none of my business, as something was afoot.:)

#90 Kilt on 12.27.13 at 5:31 pm

Doesn’t sound like he is afraid of REITS. Sounds like he is eager to own them and wants someone to confirm they are a good investment.

Kilt

#91 Son of Ponzi on 12.27.13 at 5:41 pm

An investment returning 7% must be 7 times more risky than one returning 1%.
otherwise, arbitrage would occur.
That’s assuming that the markets are perfect.
Which, of course, they are not.
That’s the point. It’s a gamble.

#92 Shawn on 12.27.13 at 5:53 pm

ABSOLUTELY FALSE

Son of Ponzi at 87 said:

If someone makes a 7% gain, someone must take a 7% loss,

*****************************************
Now I though we were going to discuss things respectfully.

The statement above might look correct but it is false. It would be true in a poker game. In the stock market the ultimate net gains come from the customers of the businesses, and not from other traders. (It’s a positive sum game over time)

But believe what you want, statements like that are how half the population rationalizes not investing.

There is no point to me responding further to any of your posts.

#93 Uh Oh Canada on 12.27.13 at 6:21 pm

Garth,

I own shares in two different REITS (not ETFS). I’m afraid of REITS like RioCan and other commercial/retail ones since I see a lot of ‘for rent’ signs in my local area and the numbers keep growing. Some buildings have been empty for the 5+ years that I’ve been here.

It’s irrelevant unless your REIT owns those buildings. Obtain a list of the holdings, and trust that the guys running the REITs are smarter than you, or at least have way more time on their hands to ensure their portfolios are performing. — Garth

#94 Retired Boomer - WI on 12.27.13 at 6:23 pm

Son of Ponzi….

Stick with the old man i.e. Ponzi …His scheme had nothing to do with the markets

#95 Old Man on 12.27.13 at 6:28 pm

#88 REITS dead money – this should only be no more than 10% of any investment portfolio and buy a basket like XRE, and adjust along the way to balance the portfolio as cost of money adjust, as the real target in life is the net affect with taxation with a balanced investment portfolio. I am laughing at those fools who buy GIC’s, Treasury Bills, or Term Deposits for a negative return. :)

#96 Andrew on 12.27.13 at 6:30 pm

Personally I like NWH.UN.TO. Medical REIT that is beaten down with an 8% yield.

#97 Rich Young on 12.27.13 at 6:44 pm

Take your time in choosing a REIT. Many I have looked at appear like a Ponzi Scheme.

Debt 1A expires to have Debt 3B take over and pile on Debt 4A to pay off the pay out and the pay out comes again for Debt 6C to pay off Debt 4B early. If you can decipher a REIT balance sheet and debt schedule and clearly see when it all ends nicely … dive in.

DRV is a traders choice for shorting REITS. Stocks and REITS have never been more expensive in history and this is why the WEEKLY chart of DRV looks strong.

Watch for the mall collapse in the next few years as on-line shopping takes over. Watch for more and more seniors to stay put in their Condo, like my in=laws, despite being terminal. They chose to stay as the cost of living in the a Senior REIT made them feel sicker than the cancer he has. More and more seniors have trouble making ends meet never mind staying at an all inclusive REIT Resort.

I’m sorry, this economy is false. It is run by low interest rates. Christmas spending at the mall was Canadian loading up more debt. The music will stop as it always does and another recession will begin. Only this time, lower interest rates won’t be an option. Rates are already rock bottom. REITS will suffer like all else.

I remember when everyone was saying GOLD stocks were cheap at GOLD $1500 … now just recently another GOLD company cut its dividend completely. REITS, once they see their tenants disappear will do the same. The only REIT that looks attractive to me are average Joe Apartments. As people lose homes and downsize… Apartment REITS will continue to do OK so long as not all of the losers move back with parents.

What a cocktail of fear and ignorance on this blog. Let’s take a break for a day. Too much. — Garth

#98 Son of Ponzi on 12.27.13 at 6:49 pm

They say: The markets are forward looking.
Just a few days ago, Blackberry jumped by 16%.
Today, it was down almost 10%.
Looks pretty short sighted to me.

#99 Nemesis on 12.27.13 at 6:50 pm

@OldMan/#89…

Was there a party taking place in the back rooms?” – OldMan

You’re kidding, right? Right?

http://youtu.be/pabEtIERlic

Well… you did ask.

[NoteToSaltyDogz: Inspired by a TrueStory]

#100 Old Man on 12.27.13 at 7:28 pm

Well I know that the someone in this room is watching my comments, as was blacked screened with an attack that has never happened in some 17 years. I lost all control, as tried to shut down with hit on my keyboard and did not work, so hit my monster board to shut all down, and when it came back Microsoft attempted to do a fix on my system. It worked, so who did I piss off with my comments?

#101 jess on 12.27.13 at 8:00 pm

The memo

JPMorgan Doesn’t Want to Talk About Bernie Madoff
By David Cay Johnston / December 23 2013 7:12 PM

http://www.newsweek.com/jpmorgan-doesnt-want-talk-about-bernie-madoff-225067

#102 jess on 12.27.13 at 8:02 pm

governmentattic.org
-provides electronic copies of thousands of interesting Federal Government documents obtained under the Freedom of Information Act.

Fascinating historical documents, reports on items in the news, oddities and fun stuff and government bloopers, they’re all here. Think of browsing this site as rummaging through the Government’s Attic — hence our name. Our motto: Videre licet…”
http://www.governmentattic.org/

#103 Julia on 12.27.13 at 8:09 pm

#99 Nemesis on 12.27.13 at 6:50 pm

Just went to see Wolf… scary stuff.
As Garth says, best to stay away from the day trading and buying stocks game.

#104 KommyKim on 12.27.13 at 8:20 pm

RE: #79 Matthew on 12.27.13 at 3:16 pm
Hi Garth, I just wonder, what’s up with you and KIA and Costco? I really like to know more about your vendetta with them.

It’s all in fun. All part of the entertainment mixed into Garth’s posts.

RE: #100 Old Man on 12.27.13 at 7:28 pm
Well I know that the someone in this room is watching my comments, as was blacked screened with an attack that has never happened in some 17 years.

You are reading too much into that. Maybe you have a failing hard-drive, RAM, or motherboard; or you’ve got a virus, malware, etc. What can someone get from hacking this forum? The email address you use for posting and maybe your IP address. If your system is secure, none of that should be a problem. Look elsewhere.

RE: #91 Son of Ponzi on 12.27.13 at 5:41 pm
An investment returning 7% must be 7 times more risky than one returning 1%

If the correlation was that simple, then investing would be easy. But it’s not…..

#105 JESS on 12.27.13 at 8:36 pm

hot and homeless money

clones of allan j lefferdink would make one worry

http://www.coloradodaily.com/ci_13117857

http://tinyurl.com/o76zo5w

Money-Politics-Debt-Third-Edition/dp/0773527435
naylor

#106 AK on 12.27.13 at 9:25 pm

#97 Rich Young on 12.27.13 at 6:44 pm

“Watch for the mall collapse in the next few years as on-line shopping takes over.”
====================================
LMFAO.

I am not going to bother commenting on the remainder of your useless propaganda post.

But as far as your silly mall comment goes, people were saying the same thing about movie theatres way back when BETAMAX first emerged. LOL… :-)

#107 Spaccone on 12.27.13 at 9:28 pm

On top of the XRE monthly cash distributions for the year you have to reflect $0.62205 special year-end non-cash distribution (for several other ETFs as well) that you have to adjust against your cost or ACB.

http://ca.ishares.com/newsroom/index.htm

#108 45north on 12.27.13 at 10:34 pm

old man: Well I know that the someone in this room is watching my comments, as I was black screened with an attack that has never happened in some 17 years.

The most obvious way for someone to attack your computer would be to get your ip address from Garth

well Garth didn’t give it away

Rather I suspect your hardware and I suspect it’ll fail again in the next 24 hours.

#109 Ruff on 12.27.13 at 11:55 pm

#35 HDJ

I have been in the market since 1984 seen a few pull backs, market declines, recessions, and the 2008 really not sure what to call that, but made some good change off it. In fact made some good change off all the declines. Why, good advisors that know you and your investment style. When to sell and when to buy and most important when to hold.

Don’t paint Investment Advisors with the same brush. It is up to you and I to do our own research and decide. My penny’s worth.

#110 Andrew Woburn on 12.28.13 at 12:16 am

Rising Interest Rate Challenge: 10-Year at 3% and 30-Year at 4%

http://247wallst.com/investing/2013/12/27/rising-interest-rate-challenge-10-year-at-3-and-30-year-at-4/#ixzz2ojudFyca

#111 Rexx Rock on 12.28.13 at 12:40 am

There is an old saying ,its not what you make but what you keep.Thats why I have a gic at 2%.I met a guy in Mexico who had a 3.5 % for $500,000.He said its enough and safe so I don’t loose 10%-20% on my principle.Better safe than sorry.

#112 World According To Garth on 12.28.13 at 1:04 am

Just as the Gov comes and says we need to “give more” this chart shows up and shows how we are one of the most “stolen from by govt” countries in the world. With shit to show for it by the way. Low productivity, crappy healthcare, infrastructure falling apart, user pay education.

But hey…..those govt workers with their $91,000 salaries and million dollar pensions are doing great !! Your “almost highest” in the western world tax dollars at work.

http://armstrongeconomics.com/2013/12/27/simply-running-a-correlation-on-one-theory-produces-false-positives/

#113 MarcFromOttawa on 12.28.13 at 1:11 am

G Man,

No new article? You have me worried. ;)

#114 bob on 12.28.13 at 2:23 am

worrying about … Rob Ford…. Leafs… Nice.
I noticed you also mentioned Kias.
But no mention of see-through yoga pants??? Your journalism is slipping.

#115 TurnerNation on 12.28.13 at 10:16 am

#88 REITs dead money?

My news feed say no cut to D.UN’s Jan payout.

And Killam just raised their payout. On the Least Coast they have near 100% occupancy in each province. Residential.

“Killam Properties Inc.’s board of directors has approved a 3.4-per-cent increase to the company’s annual dividend to 60 cents per share from 58 cents per share. The dividend, paid monthly, will be five cents per share per month, up from 4.833 cents per share per month. The increase will become effective for the January, 2014, dividend, to be paid in February, 2014. Killam also has completed three recent acquisitions for a total purchase price of $14.7-million, ending 2013 with $120.8-million of acquisitions, in line with its target for the year. The properties, located in New Brunswick, Prince Edward Island and Nova Scotia, complement Killam’s existing portfolio.”

#116 Steven on 12.28.13 at 10:51 am

“It’s a long list. But no pestilence. No black death. And no REITs.”
During the last little ice age circa 1315 to 1850+/- the black death and pestilence didn’t instantly materialize. Be patient Garth it will be along in the near future.

#117 AK on 12.28.13 at 12:37 pm

#88 REITs dead money? on 12.27.13 at 4:54 pm
“As a side note, Dundee Reit announced their January distribution at $0.1751, which is about 6% lower than their previous distributions of $0.1866. Share price is down about 24% for the year.”
====================================
You have no clue as to what you are talking about. Why are you waisting people’s valuable time?

…………………………………………………………………………..
Dundee REIT December 2013 Monthly Distribution11:57AM ET on Wednesday Dec 18, 2013 by Marketwire
DUNDEE REIT (TSX: D.UN) today announced its December 2013 monthly distribution of 18.666 cents per REIT Unit, Series A ($2.24 annualized). The December distribution will be payable on January 15, 2014 to unitholders of record as at December 31, 2013. “

#118 X on 12.28.13 at 1:09 pm

re #73 Not1st – http://ca.ishares.com/product_info/fund/overview/XRE.htm

#119 Shawn on 12.28.13 at 2:19 pm

EXCUSES, EXCUSES, EXCUSES

World (Not) According to Garth at 112 whines about government workers with $91,000 salaries and million dollar pensions and whines about income taxes.

****************************************
Just how hard is it to accumulate a million dollar pension?

Actually, it’s not hard if you start early.

Government workers are currently contribution about 10% of wages to pensions and the employer kicks in another 10%, that ‘s 20% in total. Even when current shortfalls are paid off the amount will be something like 7.5% each for a total of 15%.

At $91,000, 20% is $18,200 per year and at 15% saved its $13,650.

Imagine you can earn 5% real returns after inflation in a balanced portfolio.

How much do you have to save to reach a million in 30 years? The answer is $14,350 per year. That’s real dollars you will need to increase with inflation each year). In 30 years you get to $1,000,000 of today’s dollars.

Is that so hard? What about taxes? Well the government makes your pension and RRSP contributions tax deductible. At a marginal tax rate of 40%, that $14,350 per year will cost YOU $8610 or $718 per month! You need to contribute $1196 per month but after the tax refund it will cost you $718. Really, is that so hard?

To get YOUR million dollar pension get a government job or get a job with a good pension or save $14,350 yourself and get it professionally managed to aim for a 5% real return on average per year.

Outside of a government job make sure you are making around $100k or more. I know in Alberta most people with any level of technical or (useful) university education are in that range by about age 30.

Start saving 15% of wages (half of that if your employer is kicking in half) at age 30 and at age 60 you will likely have your million. Worse case it might take to age 65.

Not every government worker is making $91,000. And you will find that most are not in fact retiring with million dollar pensions, although definitely many are.

In any case being jealous about others and making the excuse that high income taxes are defeating you is simply not productive.

Why not reflect on how you can save YOUR million? instead of lusting after what others have allegedly at you expense.

#120 Nemesis on 12.28.13 at 3:43 pm

#YouCan’tMakeThisS***Up….

“With this kind of operational model, banks will continue making money even if all the bank presidents go home to sleep and you replaced them by putting a small dog in their seats.” – Yao Jingyuan, former Chief Economist and spokesman of China’s National Bureau of Statistics

[SCMP] – A dog could run China’s banking system, says former statistics bureau spokesman: Yao Jingyuan predicts economic growth in 2014, but has harsh words for China’s banks

http://www.scmp.com/news/china-insider/article/1389717/dog-could-run-chinas-banking-system-says-former-state-council

#RetroZen – Una Storia Italiana

http://youtu.be/2JDgTld7Yt8

#121 Shawn on 12.28.13 at 3:48 pm

Can’t make $100k

Yeah admittedly that is high but on a family basis it is not. And the point is you can amass a million in 30 years for about the same (after your tax refund) as the payment on a really spiffy truck. It’s not that hard.

The fact that half the population will never save more than a pittance is why the other half of the population can enjoy 5% real returns. Choose which half you will be in.

#122 nincompoop on 12.28.13 at 4:01 pm

Hey Einstein, do you think if we could get the 7 billion plus people to run all in the same direction as our rotation so we could speed up the clock so I would have a post to ponder? Not that my life is totally pathetic, I’m still working on a better line of friends since becoming the black sheep of the family. That’s what I get for spouting off some of Garth’s comments at my last family gathering. Thankful it was dark so the assorted paraphernalia that was tossed my way only caused a distraction for my get away…

#123 Daisy Mae on 12.28.13 at 4:02 pm

“The apex was March 9th, 2009, when millions of retail investors threw in the towel and bailed out of stocks and funds in an avalanche of selling that marked the piteous bottom of the financial crisis. The people who bought that day have seen gains averaging 152% since.”

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

So THIS is what happened. Investors Group sat around wringing their hands and watching as mutual funds took a dive, instead of aggressively seizing the opportunity to buy on our behalf.

#124 Shawn on 12.28.13 at 4:05 pm

GDP and the Return of Canada

GDP in Canada is $1.6 trillion dollars measured in 2007 dollars.

I believe that represents the value added by the Canadian economy. It works out to about $46k per person in the country.

So let’s call that the income of the County.

Where does it all go?

56% is spent on personal consumption and 22% by government expenditure. That’s a total of 78% being consumed annually. In corporate terms that is perhaps analogous to a dividend payout ratio of 78%.

The rest about 22% is invested by business (and a bit by government) in longer term assets. These represent both new assets and , I believe the replacement of depreciated assets.

This actually looks pretty good. According to this the economy as a whole (consumers, business and government) is actually consuming only 78% of its income and is investing 22% back in for future consumption and growth.

What is the ROE of Canada? I don’t know that. I would need a figure for the total money invested in long-lived assets in Canada by government, business and perhaps consumers, less accumulated depreciation.

In any case I suspect the ROE of Canada is pretty attractive looking. (Of course we count all the natural resources in and on the ground as zero dollars invested since the country did not pay for those, this boosts the ROE).

#125 Shawn on 12.28.13 at 5:01 pm

Who Missed the Boat?

Daisy Mae just above said:

So THIS is what happened. Investors Group sat around wringing their hands and watching as mutual funds took a dive, instead of aggressively seizing the opportunity to buy on our behalf.

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

You are right that someone missed the boat. But it was not InvestorGroup’s fault. They were pretty much mandated in most of their funds to be fully invested at all times.

If you insert an apostrophe and an “s” and the word customers after Investors Group, and drop the last three words at the end you have it exactly right. To wit:

So THIS is what happened. Investors Group’s customers sat around wringing their hands and watching as mutual funds took a dive, instead of aggressively seizing the opportunity to buy.

When the market tanked InvestorsGroup itself had little or no funds to buy. It was up to you to purchase their mutual funds at the lows of early 2009. You could have mortgaged the house. Too many Canadians were busy selling mutual funds at the lows at that time while the smart money was buying.

We must stop blaming others for our situation. And don’t like InvestorsGroup? There are countless other choices.

#126 Waterloo Resident on 12.28.13 at 7:01 pm

I don’t know if such a thing is possible or not, but I’m aiming for yearly returns of 100%+, each and every year. So far all I’ve been able to get is 30% to 42%, but now I’m trying something new and it seems to be working, so in another 6 months I’ll see if I can reach my 100% per year goal.

#127 just an observatiion on 12.28.13 at 7:09 pm

Given the rate of misguided advices you’ve given and the number of times you use the word pathetic to describe your blog I am now inclined to believe that it is just that.

All will be tallied tomorrow. Bring crow, and a fork. — Garth

#128 Doug in London on 12.28.13 at 7:15 pm

Yes, as Garth and many others here (myself included) have said, REITs are still on sale. This glorious time we call Boxing week has brought some other sales also. Has anyone noticed XPF and CPD are on sale this week? They have actually have been at a discount for some time but more recently it appears brokerage houses are on a mad panic to clear out the inventory RIGHT NOW! On seeing these sales, I have one more reason to believe in Santa Claus!

In post #123 and 125 there’s talk about Investor’s Group during the fire sale prices of early 2009. It WAS NOT the fault of Investor’s Group or any other mutual fund or brokerage company that there was so much panic selling. These sellers failed to see an AWESOME BUYING OPPORTUNITY and have no one to blame but themselves for how they acted. I figured that during this time the phone lines and on line trading sites should have be jammed with buy orders. I had visions of those agents of Investor’s Group (or other mutual fund companies) seeing hallucinations due to severe sleep deprivation from staying night after night trying to process all those buy orders!

#129 Julia on 12.28.13 at 7:28 pm

#114 bob on 12.28.13 at 2:23 am
worrying about … Rob Ford…. Leafs… Nice.
I noticed you also mentioned Kias.
But no mention of see-through yoga pants???

Good point! With climate change will come frequent hydro outages and these would not be very warm in a freezing cold house, although the see-through nature would be less an issue.

#130 Retired Boomer - WI on 12.28.13 at 7:32 pm

#119 Shawn

Absolutely correct!

I am almost living proof. While never quite made that mythical $91K figure and even with the wife working full time only once did our combined incomes hit 6 figures.

As oj Jan 1 2014 we will now both be retired debt free,
3 decent cars and $750K+ in investments.

A pension, not a million dollar one either, but with discounted healthcare, and the US social security payments. She will take hers at 62, I will let mine raise 6% a year until 66 then see, it raises by 8% from 66 to 70.

All done on 401K and ROTH the US version of TFSA account. We could have spent more along the way but decided not. Built home in 1997 4 br 3 bath 2 car garage, deck, finished lower. Yes, costs here are less than GTA
(think rural Buffalo, NY for comps)…still not exactly free.

Saving was roughly 1/4 of it the GROWTH was the difference over time. No magic, just the magic of compounding interest.

Why is it SO hard to make others see it is just simple diligence?

Yes, you can listen to the dormers for reasons not to change your ways, but should you wake up broke at retirement, it will be nobody’s problem but your own.

We are both only 62 and might decide to do something new now. Who knows? We have time, freedom, and financial security.

No other bullshit need apply, what more does one need?

#131 father on 12.28.13 at 7:32 pm

I’m having withdrawal symptoms, Garth are you doing some tapering of your own?

New blog tomorrow. Go do something memorable. – Garth

#132 just an observatiion on 12.28.13 at 7:41 pm

OH, did I touch a sensitive subject for you sir.
Sorry for not being your regular ass-kisser as most others here are.

It’s Saturday night. Get a life. — Garth

#133 Randy Macho Man Savage on 12.28.13 at 7:43 pm

#126 Waterloo Resident on 12.28.13 at 7:01 pm
I don’t know if such a thing is possible or not, but I’m aiming for yearly returns of 100%+, each and every year. So far all I’ve been able to get is 30% to 42%, but now I’m trying something new and it seems to be working, so in another 6 months I’ll see if I can reach my 100% per year goal.
——————————————-

Why set your sights so low?

#134 Nemesis on 12.28.13 at 8:20 pm

@RetiredBoomerWI/#130…

…”Yes, you can listen to the dormers for reasons not to change your ways…”…. – RBWI

Seriously, you really don’t won’t to listen to Dormers, RB. True, they can be amusing – provided you don’t have to devote too much of your life to BabySitting them… while they’re waiting for their trusts to vest.

Hmmm.. but just between the two of us… if you’re a WellBehaved MasochisticVoyeur who enjoys PleatedSkirts and StarchedLinens… you could do worse.

http://youtu.be/LjbWiTDmm4o

“It’s Saturday night. Get a life.” — Garth

http://youtu.be/aLeWB3C2cLo

[NoteToGT: I’d have preferred Sam Cooke, but there are no live period performances extant on that yoUtOOb thingie. Cat was so much more fun before he went, like, all ‘Madrasa’…]

#135 JSS on 12.28.13 at 8:35 pm

Since there was no new daily weblog yesterday and today, I’m going to resort to having sex.

#136 father on 12.28.13 at 8:57 pm

132
you must be a debt pig that you blame other’s for your non productivity, go grow a pair

#137 Andrew Woburn on 12.28.13 at 8:57 pm

#52 john smiley on 12.27.13 at 1:52 am

The US$ will still be the global currency when you are dead. — Garth
———————
Why not the euro? Why not the YUAN? Why not the YUAN? it seems the chinese would back it with gold.

The Euro is a failing project. A monetary union between countries with vastly different levels of productivity cannot be sustained unless the stronger members are willing to transfer cash to the weaker ones. Federal governments like Canada and the US make transfer payments to the less well off provinces or states, but they are political as well as currency unions.

Clearly the architects of the Euro knew this and thought they could finesse Europe into political union, but Germany has made it clear they don’t want to pay their neighbours’ bar bills and other countries do not want a political union inevitably dominated by Germany. The Euro might survive in some form but if I were a central banker, I would not be making it my preferred reserve currency at this point.

The Chinese will have probably have to give up capital controls if they want to be a major reserve currency and is not yet clear that they can risk the massive flight of capital that might follow. Furthermore, although the US Fed gets all the attention, China has been printing money even faster, probably to keep the value of the yuan low.

“between January 2005 and January 2013, Chinese bank deposits have soared by a whopping $11 trillion, rising from $4 trillion to $15 trillion!”

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half-worlds-new-money-supply

Despite the wet dreams of goldbugs, China is unlikely to be planning to re-establish the gold standard. If gold were the basis of international currency, the supply of gold money would be unlikely to keep up with increases in productive capacity. The effect would be to drive up the value of gold money relative to goods and services, in other words, deflation, the very danger the world’s central bankers are desperately trying to avoid.

#138 NoFridayPost on 12.28.13 at 8:59 pm

#97

“What a cocktail of fear and ignorance on this blog. Let’s take a break for a day. Too much”. Garth

Way to go #97. You ARE #1.

#139 Daisy Mae on 12.28.13 at 9:05 pm

#75 LiveWithinYourMeans: “Regret not buying a beautiful old classical Chanel purse that I loved – like new.”

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

Should have! We only go ’round once. I’m not familiar with the Chanel purse, but I googled and notice they ARE pricey! I picked up a Derek Alexander for a pittance — perfect condition. And was delighted with that!

#140 T.O. Bubble Boy on 12.28.13 at 9:06 pm

@ #126 Waterloo Resident on 12.28.13 at 7:01 pm
I don’t know if such a thing is possible or not, but I’m aiming for yearly returns of 100%+, each and every year. So far all I’ve been able to get is 30% to 42%, but now I’m trying something new and it seems to be working, so in another 6 months I’ll see if I can reach my 100% per year goal.
—————————-
You’re shorting RIM?

#141 Daisy Mae on 12.28.13 at 9:09 pm

#76 LiveWithinYourMeans: “Please correct me if I’m wrong.”

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

You are not wrong. Value Village supports about 130 charities. And that does include third world countries.

#142 Daisy Mae on 12.28.13 at 9:30 pm

#125 Shawn: “When the market tanked Investors Group itself had little or no funds to buy. It was up to you to purchase their mutual funds at the lows of early 2009. You could have mortgaged the house.”

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

You’re kidding, right? LOL That’d be funny if it wasn’t so damn pathetic.

#143 Daisy Mae on 12.28.13 at 9:35 pm

#127 Just An Observation: “Given the rate of misguided advices you’ve given…”

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

Garth is the only one with any BRAINS…and countless ‘economists’ are now coming on board.

#144 Daisy Mae on 12.28.13 at 9:39 pm

#128 Doug: “It WAS NOT the fault of Investor’s Group or any other mutual fund or brokerage company that there was so much panic selling. These sellers failed to see an AWESOME BUYING OPPORTUNITY and have no one to blame but themselves for how they acted.”

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

Clients paid dearly to have their portfolios MANAGED. If we were all so knowledgeable we wouldn’t need anyone to MANAGE our portfolios. Duh!

#145 AK on 12.28.13 at 9:55 pm

Will we see a “melt-up”
in 2014?

#146 broadway skytrain on 12.28.13 at 10:07 pm

no new post for today???? wow.

is this the first time ever? is garth angry at bad commenters…

hope there is no personal problem behind this. garth, you are not allowed to get sick or die, you understand?

I’m having my horns waxed. Back Sunday am. — Garth

#147 Retired Boomer - WI on 12.28.13 at 10:11 pm

Nemesis #134

regarding my missive @ #130…
‘Dormers’ should have read DOOMERS dam that auto-correct feature on this ‘puter.

Agree, Sam Cooke’s is way better version, and fantastic in True Stereo if you can find it at this late time.

#148 Shawn on 12.28.13 at 10:29 pm

Managing Money in Mutual Funds

Daisy Mae said: Clients paid dearly to have their portfolios MANAGED. If we were all so knowledgeable we wouldn’t need anyone to MANAGE our portfolios. Duh!

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

There is truth to that. InvestorsGroup itself could not do much as each fund had a mandate to be in Canadian equities, U.S. equities, Bonds, balanced etc.

Bu the individual InvestorsGroup advisor could have advised people to move out of equity funds. But really that is just not realistic.

The fact is if you stayed with a balanced portfolio of InvestorsGroup funds and especially if you kept up your monthly purchases (at the lows) you did okay with InvestorsGroup funds.

The markets have more than recovered the losses of 2008 quite a while ago.

Is there some evidence that InvestorsGroup funds have not done about as well as the markets after deducting their fees?

If anyone expected them to do better than the market minus fees they were mis-guided in that perception.

Investorsgroup merely helps people put money into a balanced and diversified portfolio. And they charge fees for doing so. There is really not much management going on, nor should there be.

It is a mathematical fact that the average manager can’t beat the market. And you don’t expect above average management at InvestorsGroup.

The big thing that InvestorsGroup does is they encourage a lot of people to invest money that would otherwise be spent and not invested. They put that money into diversified and balanced portfolios. They charge fees for this.

Don’t buy a KIA and then complain it does not perform like a Ferrari.

Don’t buy an off the rack suit and them complain it is not a perfectly tailored fit.

#149 TheCatFoodLady on 12.28.13 at 10:37 pm

Garth is not allowed, EVER to take more than a day off. He may be earning his way through a diversified, liquid balanced portfolio, to a great retirement but he forgot to figure out holiday time.

The poor bugger is doomed to eternal ‘vacation debt’.

#150 Ralph Cramdown on 12.28.13 at 10:40 pm

…and studies have shown that the average mutual fund investor does worse than the average mutual fund, because he buys high and sells low.

#151 Nemesis on 12.28.13 at 11:50 pm

@CatFoodLady/#149…

Loathe though I was to say it myself… [and I could not possibly have said it any better]… albeit, in Spanish – it comes out something like this:

“Sin miedo a la vida.”

…and it looks like this…

http://youtu.be/zC3-uON9bt0

[NoteToGT: Cash it in. “It’s important to enjoy life while you still can.” http://youtu.be/h_2iPKrT0EA ]

#152 Waterloo Resident on 12.28.13 at 11:52 pm

No, I’m not shorting RIM, however that is a really great idea, thanks.

No, I’m timing both SPXL and UPRO, so that I buy near the bottoms, a but after they have hit bottom, so that I buy in when they are on a rising trend, and sell just after they peaked and are beginning to ride a falling trend. The hard part is to not get tricked by some bad volatile days in between these 2 points.

#153 Son of Ponzi on 12.29.13 at 12:17 am

Ralph, Shawn.
I think you are are a couple of bookies.
Eddie Murphy in Trading Places.

#154 Son of Ponzi on 12.29.13 at 12:19 am

Any GDP growth numbers are worthless without subtracting the cost to the environment used up to achieve them.

#155 Smoking Man on 12.29.13 at 12:45 am

DELETED

#156 Nemesis on 12.29.13 at 1:25 am

SaltyDogzWithPrivatelyEducatedChildren – Swallow your PancakesEggzBaconSyrup&Mimosa first… prior to viewing.

SundayBrunch; BonusTrinianZen:

http://youtu.be/QW1xuCXABVc

JollyHockeySticks!

[NoteToRBWI: Seriously, the ‘people’ who write this stuff are truly speaking from experience. I s*** you not.]

#157 Tiger on 12.29.13 at 2:28 am

Do you think your water system in Africa will be free , just another way to milk sheeple!
Sad but true!
Just a mother smoking man trying to get rich!

#158 Standard Deviation on 12.29.13 at 5:30 am

This week in the US one of the major delivery groups announced that package delivery for online shoppers was 65%+ over expectations in the 2 weeks prior to christmas. If people are increasingly shopping on line what does the retail picture look like going forward and what impact will that have on commercial real estate in the form of malls and outlets etc…

#159 Old Man on 12.29.13 at 2:59 pm

#104 KommyKim – My system had a clean report from Microsoft, and have tons of protection as keep all running like a Rolex. I have seen this all before during the late 1990’s, and for want of a better word call it a zapper tool. It works off a component from satellite tv, and can knock out a system while being in a room, and in my case got blacked screened. In fact a zapper hit can blow out a chip which will leave the monitor to go pink; its a nasty tool, but you should see what the hackers can do today; just ask Target Stores.

#160 Doug in London on 12.29.13 at 3:10 pm

@Daisy Mae, post #144:
I actually had mutual funds with Investor’s Group, as well as with TD Canada Trust and National Bank during this period. From 2006 to 2008 I took it upon 3 persons, namely Me, Myself, and I to gradually cash in some of my equity funds and put the money into bond funds as they were on sale then. Those same 3 people saw an incredible opportunity and in late 2008 and early 2009 reversed the flow by cashing in some of those bond funds (after using up the money market funds) and actually BOUGHT DIRT CHEAP EQUITY FUNDS!!!!!!! I was out of work at the time, so thus I played the game conservatively, but still, as I said above, bought cheap equity funds none the less. ANYONE who owned mutual funds could have done the same. If an idiot like me who failed a college economics course could see the opportunity, anyone else should have also seen it. Why is that so hard to understand?

#161 REITs dead money on 12.29.13 at 3:54 pm

Whoops sorry about my previous post #88, re cut in D.un distribution, I was reading a press release in US funds.