Bad choices

COON modified

Andres says he’s a hipster at odds with his messed-up generation. “If I was anyone else in Vancouver I would probably be buying a postage stamp condo and patting myself on the back for having a proper down payment,” he says. But he’s different. Praise be.

“I’m currently up to $107,000 in RRSPs thanks to an old government pension plan buyout and $12k in my TFSA,” he tells me. “The problem is that currently $70k of my RRSP is not invested, nor is $12k of my TFSA. I’m sort of paralyzed right now, where I have no idea where to park these funds and I’m losing money to inflation while adding about $5k a month into this stagnant pool. What do I do?”

Sarah ives in Edmonton, is single, 29, and has a government gig. “Just paid off my student loan earlier this year.  Car was stolen a few months back (Edmonton, remember?) and I decided I don’t really need one, so no plans to replace.  Rent and all utilities (incl. phone) is less than $1000/month.  I owned a house once; it was awful… not going to make that mistake again!”

Now she’s got twenty grand to invest and, like Andres, can’t pull the trigger. Should I try to time the market, she asks, or just do it?

“Your answer will likely be “don’t try to time the market, just go all in”… to which I will reply “but… but… with the economy in a bit of a shit storm, shouldn’t I try to buy what’s low now, and then just add/rebalance as the other funds drop in price?

“My divorced parents both own $700,000 houses making $70K outside Vancouver.  They do the low interest savings account and mutual fund thing.  I mentioned ETFs a few weeks ago, and they both had mild strokes.  My friends (in Van) are poor and don’t have money, so they don’t know anything about investing.  So… thank you for being the voice of reason for financial orphans like myself!”

See how people keep asking me questions they know the answers to? It’s weird. I feel like the pope.

Of course these two should invest. They should have done it days ago, weeks ago or months ago. They’re young with vast time horizons. Temporary market fluctuations become irrelevant over the sweep of decades, so long as you cling to the three guiding principles: balance, diversity and liquidity. A 60/40 portfolio of ETFs – a basic four or five for Sarah and double that for Andres – will probably do as well in the next decade as it did in the last (which included the GFC and endless moaning).

Market timing usually doesn’t work because people have lives. They fail to rebalance. They have no actual idea where a top or a bottom is. And they’re massively influenced by the idiot bleatings of the mainstream media, friends with phobias but no money, and their petrified parents. In time, most fail. So don’t do it. Mr. Market will eat you.

This week gives a fine example. On Monday everyone was pissy and morose with markets falling, oil unloved and sentiment negative. By Wednesday there were massive gains – for a few reasons. The US central bank gave a signal that economy is strong enough for rate increases this year as retail sales, industrial production and housing starts all surged. Oil stabilized at fifty-five bucks, and suddenly energy stocks – beaten up badly – looked too low not to love. Money is still cheap, inflation is nowhere, America is growing and gas is on sale. All of that outweighed the meltdown in Russia, and the growing list of layoffs in Alberta. So markets exploded.

Nobody tells you this is about to happen. So what most market-timers do is avoid perceived trouble (Sarah says the economy sucks, so she hesitates), then jump in when things pop and they feel more confident. In short, they buy rising assets and avoid or sell falling ones. They suffer from recency bias – believing what just happened will happen in the future. It’s classic. And fatal.

This is why investors fled screaming from stocks and equity mutual funds in the winter of 2009, just before markets rebounded. They thought losses would beget more losses. Like many of the doomer dipsticks who read this blog (because it’s free and warm) they believed everything was going to zero. History shows us they should have bought, not sold. Like now.

Things we know: the world still runs on oil. When it falls by half, well, duh. Second, US growth is solid and entrenched, so you should have more exposure there. Third, Europe, China and Japan will all benefit from the energy collapse and are some of the biggest economies on the globe. Why wouldn’t you want them when the needle’s at cheap? Fourth, volatility is here to stay, so the more balanced and diversified your holdings, the lower the risk. Fifth, when you can shelter thirty-six thousand (as of next month) from all taxes, present or future, inside your TFSA, and invest in stuff that’s proven it will grow an average of 7% a year even when the lights go out, why wouldn’t you?

By the way, how did we get such wimpy kids?


#1 Fred on 12.17.14 at 7:32 pm

How can those two people have such money, yet not know what to do? Mom?

#2 ILoveCharts on 12.17.14 at 7:33 pm

Roubles are half-off, should I buy those?

#3 mitzerboy on 12.17.14 at 7:40 pm

merry Christmas garth…

Ive always said you have pope like attributes .. the ways of money survival is rebel on …rebel ….at this time of year it really shines

thankz and happy new year

#4 Cici on 12.17.14 at 7:43 pm

That photo is so sad; hope Mr. Raccy made it out with the help of some non-furry friends!

#5 Happy Renting on 12.17.14 at 7:45 pm

“Pope Garth”. I like it!

#6 Mike in the Okanagan on 12.17.14 at 7:49 pm

Just don’t make too much money in that TFSA or CRA will decide to tax you anyways…

#7 Retired Boomer - WI on 12.17.14 at 7:52 pm

Wimpy kids?

Garth, these two fine (but timid exemplars) are not house smitten. Both are liquid, growing their savings, and thankfully NOT listening to their idiot indent parents.

What a breath of fresh air!!

Yes, steer those kids into a diversified portfolio, but I would be a tad lighter on the fixed side at their ages than 40%. At their tender nubile ages 15-20% in fixed is plenty, until they hit midd life crisis mode.

By then IF they didn’t panic when the market takes one of its inevitable dumps they will have all the money they will ever need to set aside for geezerhood.

It IS relatively simple, but never easy. Your biggest obstacle to financial freedom is the idiot that stares back at you in the bathroom mirror every morning.

Best wishes Andres & Laurel. Get those ETF’s before the sun sets tomorrow and then forget about them for the next decade, OK??


#8 omg the original on 12.17.14 at 7:53 pm

This week gives a fine example. On Monday everyone was pissy and morose with markets falling, oil unloved and sentiment negative.

Once again the broad market sell-off because of turmoil in the oil sector shows that “efficient market theory” is just plain wrong.

People are just too emotional to be rational investors (the basis of EMT).

Lower oil prices are such a positive boon for the broader market the S&P should have been testing new highs this last two weeks instead of being down.

#9 omg the original on 12.17.14 at 8:02 pm

#6 Mike in the Okanagan
Just don’t make too much money in that TFSA or CRA will decide to tax you anyways…

Its the same whether its your TFSA or RRSP – if CRA figures you are making income doing short term trading in these accounts they are going try to tax you on it as income.

Of course the guys in the media that these stories are about and that have generated spectacular returns in their TFSA are the extreme exception.

Most people trying to trade in their TFSA will have massive losses instead.

If you are holding assets in your TFSA for the long-term you’ll be OK.

#10 Smoking Man on 12.17.14 at 8:14 pm

Well that was a missed opportunity. This morning I get to tax farm early, prepare for FOMC. 99% on here won’t know what that is.

I fire up my bloomberg terminal, want to see where the USDRUB is at. I thought that’s way over bought.

Damn my fx app was not on my new phone, after a desperate hour getting it set up, I saw it would not allow me to trade it.. I was going to short, 500k in contracts. Damn, the bid ask spread was a dollar all day.. In other words cost you 100gs just to get in the trade.

Insane, I know but it was a certaintee . Then I watched the bet I couldn’t make move by 10 bucks.. Un heard of in Fx.

If you played that bet today you would have doubled your money… I would have made 1/2 million in one day. That would have been a personal record.


By the way, how did we get such wimpy kids?-Garth

Wimps.. They are… Brought up fearing everything.

#11 Wildrose Party Whip on 12.17.14 at 8:15 pm

Send the house horny youngsters to me, Garth, and I will keep them disciplined and in line for you.

I do that all the time in my day job. My record speaks for itself.

Let me know if you need some of the regular posters here brought into line, too.

But if some of the weirdos here like my brand of discipline, don’t blame me.

#12 Obvious Truth on 12.17.14 at 8:16 pm

Garth at the confession booth would be priceless.

#13 Mark on 12.17.14 at 8:21 pm

“I fire up my bloomberg terminal”

I think I’m now beginning to understand why you’re treated with such derision around here.

“Lower oil prices are such a positive boon for the broader market the S&P should have been testing new highs this last two weeks instead of being down”

Unless those “lower oil prices” are merely a symptom of a significant economic slowdown in the present or imminent future. Which appears to be the case.

#14 Roman on 12.17.14 at 8:26 pm

Well, the idea of investing “everything” IS reason why they do not. Probably in their minds it’s on the opposite side as buying a house (where house the safest “investment”).

Another reason is the sea of BS in financial media.

Just look what they were saying yesterday:
“Russia Crisis Hits Pimco Fund, Wipes Out Options as Ruble Sinks”
“Putin’s Mantra of Russia Stability Unravels as Ruble in Meltdown”
and so on, and on and on…
And then boom! Russia’s market up almost 20%…

All these financial “news”, last page investment “advice” for households are much, much worst then realtors propaganda. With realtors you’ll get a house at least.

Not exactly. You get a lifetime of debt. — Garth

#15 Smoking Man on 12.17.14 at 8:31 pm

Speaking of Fear.. I go to my blog, by clicking the link on my name here, want to see how many people took a peek at my selfie from stats. So 29 yesterday, as expected. Fans. Then I go to the audience category.

First time ever I have more hits from Ukraine than Canada and USA combined.

I’ve been chirping the NAZIS for a while, Oh O… Never had anyone from Ukraine visit to this point.

Ok GUYS, no hard feelings, Russia Bad. Ukraine good…

Ok, let’s be palls.

#16 Obvious Truth on 12.17.14 at 8:37 pm

Way to go kids. Well, they are almost middle aged but who’s counting.

They are wimpy cause they are used to telling their mom about the teacher or coach. These two don’t need mom anymore.

Rebalancing while you are in savings mode and younger is easy. Can be done with contributions every few months. Don’t sweat it. Keep asking questions, reading and being involved. It’s your $. You found a place where you get the truth. Don’t let salespeople with products and promises get you off course.

You’re doing the right thing. No Hail Mary’s for you today.

One tip your parents won’t give you. Your friends won’t understand what you are doing so don’t bother explaining. Neither will anyone at the bank. MBA’s included. Never gloat or tell them what to do. Just point them to where you started.

#17 omg the original on 12.17.14 at 8:40 pm

Unless those “lower oil prices” are merely a symptom of a significant economic slowdown in the present or imminent future. Which appears to be the case.
?????Which appears to be the case.????

That’s the whole POINT – major consumer economies were in retreat a month. (China, Europe, Japan)

Now 40% lower oil prices will transfer massive wealth from the few major oil producing states to those major consuming economies.

Folks going to be going crazy buying new Ford, leiderhosen and sushi with the money they are saving on gas.

A likely big pop to the world’s economy.

I say “likely” as the world is a complicated place and things happen, but pretty good odds on this one.

#18 Sarah on 12.17.14 at 8:43 pm

Hey, Sarah is me! Thanks for posting an answer to my question, Garth.

We aren’t wimpy. Mum and Dad always told us not to take advice from strangers, so we’re just a bit cautious. Trouble is, Mum and Dad also told us to get Arts degrees, buy houses, and invest in GICs.

Anyways, ETFs, here I come.

– Sarah

#19 gregonomic on 12.17.14 at 8:58 pm

Fig. 1-14 in William J. Bernstein’s ‘The Four Pillars of Investing’ shows the thirty-year real end wealth of $1 invested in U.S. stock. The values range from ~$1.50 to ~$20, depending on which year you invested that $1 (just before the 1929 crash for the former, early 1960s for the latter). It also changes rapidly, eg. from ~$5 in the late 1950s to ~$20 in the early 1960s.

With this in mind, isn’t it risky to go all-in with your life savings right now? Would Andres (especially) and Sarah not be smarter to value average over a longer timespan? Say, invest 10% every 2 or 3 months, over the next 2 or 3 years, making sure they maintain balance and diversity each time they put more in?

Of course, everything they save from now on should go straight into their portfolios.

#20 Mister Obvious on 12.17.14 at 9:00 pm

#9 omg the original

“Its the same whether its your TFSA or RRSP – if CRA figures you are making income doing short term trading in these accounts they are going try to tax you on it as income.”

The TFSA, yes.

But I’m confused about how the RRSP could be an issue to the taxman. Isn’t all money earned inside an RRSP taxable at the full rate regardless? Isn’t that why the tax advantages of capital gains and dividends are lost within an RRSP.

I don’t see how anyone can evade any taxes in an RRSP when you need to pay tax on all funds as they are deregistered.

Honest question. Please explain.

#21 Retired Boomer - WI on 12.17.14 at 9:03 pm

POPE Garth??? Yeah, has a nice ring to it.

I like him better as the dispenser of practical, actionable advice, with a salacious side of commentary!

Who does it better?

#22 batt519 on 12.17.14 at 9:09 pm

American interest rates will not be rising in 2015. The fed’s balance sheet will be expanded again instead…

#23 Millenial on 12.17.14 at 9:12 pm

You owned a house? But you just paid off your student loan, and only have $20k to your name? I’m not poo-pooing $20k, but if you sold the house I’d think you’d end up with more than that. How much were your student loans? Did you go to school in the US?

#24 not 1st on 12.17.14 at 9:16 pm

Pope said my dog and my TFSA will both be able to go to heaven. Thats a lot of compounding.

#25 bigtown on 12.17.14 at 9:30 pm

The Bank of Canada has the current interest rate set at historic lows now for years to encourage growth and to put a damper on our loonie currency but as most married people know you can’t have it both ways. Either the spouse will get short-changed or the lover feels the chill.

This BIG BIG BIG UNENDING MOUNTAIN OF CASH supported more and more and more and more oil production from the bank policy of easy money….now we have OIL OUT THE WAZOO and as a result our ACE IN THE HOLE “Oil” has now tanked taking our currency with it.

The Catch 22 for Mr. Poloz.

Mr. Poloz must now choose as our BIG BET ON BIG MONEY AND BIG OIL has backfired and tanked. The phone is ringing with the expected MARGIN CALL.

#26 Mike L on 12.17.14 at 9:31 pm

After months of research for USA ETF 60/40 exposure, we decided to go with:
iShares Growth Allocation ETF (ticker: AOR) as it’s made up of 10 ETF’s and has a 0.30 MER.

May not be for everyone, but I thought I’d put it out there.

#27 Arfmooocat on 12.17.14 at 9:34 pm

Cut Cut Cut

That’s what the local Alberta news is about

Husky announced cutting they’re budget by 50% and about 6 others Penn West, etc… announced 35% cuts.

A work agency was interviewed and they said where they used to recruit 20 jobs, now they’re lucky if it’s 2 jobs… used to be 10 times better.

#28 Cow Man on 12.17.14 at 9:48 pm

# 17 OMG

The average household will save $500 a year on reduced energy costs. That will not turn the world around.

Major trucking companies, airlines yes. The consumer no.

If it were a $500 tax on every family, you’d say different. — Garth

#29 miketheengineer on 12.17.14 at 9:49 pm

Garth et al:

Price of beef – nice chart. Today, my wage is the same as is was in 2000. Guess what beef went from ~ 1.50 per pound to ~4.20 per pound.

No wonder their is a glut of oil on the market. The money is being sucked out of my pocket, faster than it is going in.

Here is the link:

#30 Millenial on 12.17.14 at 9:53 pm

If this mess in Russia gets any worse it could blow up in all of our faces.

#31 Leo Tolstoy on 12.17.14 at 9:56 pm

Unless those “lower oil prices” are merely a symptom of a significant economic slowdown in the present or imminent future. Which appears to be the case.

Speaking of wimpy…

#32 olderthanaboomer on 12.17.14 at 9:58 pm

Take your time, you have to set up a number of self-directed on-line trading accounts before you start…TD, Scotia, whomever you like or trust. RRSP, TFSA, Non Reg, US$ perhaps. Passwords will be mailed to you.
Then look for low-cost balanced funds or ETFs for starters…you can’t afford Garth just yet. Then just do it. Drip it in a bit at a time, don’t look at it too often.

Good luck.

#33 Sparky on 12.17.14 at 10:05 pm

Garth, what do you think is the biggest indicator to watch for in terms of when the Fed will trigger the rate up? And what will be the main factor in determining how much?


#34 Georgyboy on 12.17.14 at 10:10 pm

Ever thought of writing a financial blog, similar to the Gartman letter?

Then I’d have to be wrong every day. — Garth

#35 devore on 12.17.14 at 10:19 pm

I did some rebalancing and moving cash into my accounts to buy oil and energy stocks on Thursday/Friday, a bit early, but after such a beating, and seeing how many people were running around screaming doom and predicting $20 oil, it seemed like we were close to the bottom of the classic over-correction. I’m still holding the trigger on oil sands (COS) because with a likely prolonged period of low oil prices, they’re not going anywhere for a few weeks.

Happy investing, and keep an eye on the ball, not doomer newsletters.

#36 devore on 12.17.14 at 10:27 pm

#6 Mike in the Okanagan

Just don’t make too much money in that TFSA or CRA will decide to tax you anyways…

Overexaggerations and hysteria.

Limit your daytrading to your non-registered account and quit evading taxes, and keep your tax-advantaged retirement accounts in a long-term stance.

#37 Drill Baby Drill on 12.17.14 at 10:31 pm

Dear pathetic blog : I have noticed that sometimes when I post I am not deleted nor am I posted but just do not show up on your blog. I guess it is time to move on.

Maybe you forgot to drill ‘send.’ — Garth

#38 Tony on 12.17.14 at 10:32 pm

I’ve been watching the casino stocks in America and they’re always the first ones to drop. MPEL overseas has already dropped in half. This means the start of a serious decline in the markets and don’t look back on history because the present market is trading exactly as a ponzi. Year end tax selling should end this Friday. So you might get 2 good weeks until the second trading day next year. Then the bankers and the FED will unload.

#39 devore on 12.17.14 at 10:35 pm

#9 omg the original

Its the same whether its your TFSA or RRSP – if CRA figures you are making income doing short term trading in these accounts they are going try to tax you on it as income.

This is something everyone missed the first time around, latching onto the sensationalized headline instead.

The CRA is not “trying” to tax this as income. It views the activity as a business, the gains as income, and operating this out of a TFSA as tax evasion. They are assessing a PENALTY, which for the first batch of people caught might well be simply taxes owed; future evaders will also get to pay a hefty penalty on top of that.

#40 Sheik Yerbouti on 12.17.14 at 11:01 pm

“By the way, how did we get such wimpy kids?” Garth

Garth, I think it has to do with all the extra equipment in hockey…..gigantic goalie pads, face masks, mouthguards……better to reset the clock back to the 1950s, they were tough SOBs back then… helmets, masks, or mouthguards……I bet the Gumper could have weathered any current volatile market conditions, not to mention taking a few pucks in the face (even though he was terrified of flying)

#41 Blacksheep on 12.17.14 at 11:05 pm

“Dear pathetic blog : I have noticed that sometimes when I post I am not deleted nor am I posted but just do not show up on your blog. I guess it is time to move on.”
It’s called censorship. It happens every now and then, usually when I’m pushing it, critiquing the boss.

I get that it’s Garth’s blog, but at least give us a ‘deleted’ and not pretend, the post was just lost.

Lets see if this one sees daylight.

#42 Sheane Wallace on 12.17.14 at 11:09 pm

As I said, no interest rates increases in 2015:

Long live the stock market.

#43 Retired Boomer - WI on 12.17.14 at 11:12 pm

#29 Mikeytheengineer

You poor guy. No raise since 2000? I hope you haven’t bought a ‘new’ car since then either. They have gone up by about the same amount.

Mikey, hope you have been feeding your stock portfolio, at least then you could afford to buy both items.

#44 Smoking Man on 12.17.14 at 11:16 pm

Damn.. Thank God they’re not taking wine belly.

This a public safety announcement from the house of Smoke.

#45 Barbie on 12.17.14 at 11:17 pm

O wise one – is it OK to jump into Putin’s pants, or will they go down further ?

#46 Retired Boomer - WI on 12.17.14 at 11:18 pm

Well today the postal service delivered my annual property tax bill.

Guess what?

The taxes actually went DOWN over a $100 bucks from last year. Then I have to calculate that my auto and home insurances went DOWN over $100 as well.

Yes, a little food inflation is out there, but fixed costs are NOT rising here. Gas is down, I get a small raise in January on the old goat stipend of about $50 a month.

The portfolio will likely end the year up as well. Welcome to retirement times, not as awful as you might have been lead to believe.

#47 kommykim on 12.17.14 at 11:20 pm

RE: #18 Sarah on 12.17.14 at 8:43 pm
Anyways, ETFs, here I come.
– Sarah

A site with some info on building a portfolio:

RE: #26 Mike L on 12.17.14 at 9:31 pm
(ticker: AOR) as it’s made up of 10 ETF’s and has a 0.30 MER. May not be for everyone, but I thought I’d put it out there.

Probably not the best fund for Canadians since it trades in U$D on an American exchange. Not bad if you don’t mind the FOREX costs.

#48 buzz on 12.17.14 at 11:27 pm

100 million American out of work, the shale oil play is ties to high yield energy junk bonds, same that slamed the economy back in 2008.
I am not a doomer but
maybe staying dry and on the sidelines for a couple of months is not a bad idea

There are 200 trillion dollars in derivatives that Jamie Diamond just unloaded tot he US tax payers if the market goes south, BAIL-INS anyone, that just got written in law last last, same as our Harper, but don’t worry it will never happen.

#49 JSS on 12.17.14 at 11:30 pm

I think the best deal on oil/energy stocks are yet to come :)

probably some time early next year.

A toss up between Suncor, Cenovus, and CNRL.

#50 Sarah on 12.17.14 at 11:35 pm

Thanks everyone for your feedback. I’ve already done a bit of research. The question wasn’t whether to invest, it was WHEN. From what I’m hearing from this response, no better time than the present. Here’s what I have in mind (via Questrade), FWIW:

– 25% Canadian Equities (VCN)
– 35% US Equities (VUN)
– 20% Int’l Equities – Developed (XEF)
– 10% Int’l Equities – Emerging (XEC)
– 10% Canadian Bonds (VAB)
– [Emergency fund in savings account]
– [Pension]

Since Questrade has no load ETFs, I plan to “rebalance” by simply investing more into ETFs every few months in line with my overall portfolio targets.

Happy holidays. Enjoy the cheap gas.

– Sarah

#51 Smoking Man on 12.17.14 at 11:36 pm

#44 Smoking Man on 12.17.14 at 11:16 pm
Damn.. Thank God they’re not taking wine belly.

This a public safety announcement from the house of Smoke.
Bahaha, just read the full article of my link..

Apparently dudes my age, with my belly who smoked, diden’t die….

Researchers are scratching they’re heads.. Wtf.

should I write them and tell them about planet Nictonite..

Just no justice in this world… 5 months to boating season, and Thunder storms.

Shit the submit button just vanished, how the hell can I post this… Come back button… It’s back.

#52 ozy - what spike 5%??? on 12.17.14 at 11:38 pm

what spike 5%??? after a 40% drop…

dead cat bounce

#53 buzz on 12.17.14 at 11:42 pm

Here is an interesting point of View about Russian currenc, By comparison, to the US dollar, the ruble is much better capitalized and actually has something backing it.

#54 » Bad decisions on 12.17.14 at 11:45 pm

[…] Source: […]

#55 Smoking Man on 12.17.14 at 11:50 pm

Ok millennial goofs. Here’s an zillionaire idea for you. I would do it myself but, screw it, I’m lazy and rich.

A shit load of boomer out there. 50 plus dudes. Who actuly want to live forever.

I’m talking back pack diffibulators, these old farts who want to make it well past the Viagra years.

Market, defibulators in a back pack so these idiots will feel safe…

Boomer got money..

Any entrepreneurs out there.

#56 YoungInvestor on 12.17.14 at 11:54 pm

Hello Garth and members of this blog. I realize this is a comments section and not a Q&A however i thought i might ask anyway. I’m curious about learning the art of equity trading (turned 23 in November) and i have no experience in investing. I have read a few books and gathered a little knowledge from the google machine, but i have a few questions.

1. As a Canadian and in light of our falling dollar is it better to trade in US currency or stick with CDN?
2. Realistically Is there a minimum amount of money that one needs to have before they can start trading? With the cost of trades being $9 and up per transaction it seems a little difficult to make any money.
3. Should one cash in all there funds and put the money into ETFs?

Also does anyone have any good websites that might be useful to me. Currently i read from MSN money, Marketwatch and Bloomberg.

Thank you, and great blog!

#57 Sean on 12.18.14 at 12:07 am

Ever thought of writing a financial blog, similar to the Gartman letter?

Then I’d have to be wrong every day. — Garth


Lol.. yes! And you’d need to be “short of profits, in monetary terms”, and “long of verbosity”.

#58 Roman on 12.18.14 at 12:11 am

Spot the difference:

#59 Godth on 12.18.14 at 12:17 am

Recency bias – there’s no shortage of that right Garth? Along with every other bias, blind-spot, prejudice, etc. going.

#60 nonplu$$$$ed on 12.18.14 at 12:18 am

A sweet little x-mas song (but not for the overly offended). And don’t delete it Garth it passed y-tube it’s not that bad!!!

So as a side note to the song, I’ve been telling my kids Santa was a weird story parent’s made up to get their kids to behave for years. Not what especially my daughters got from their mom and I remember one time my oldest daughter getting all mad at me “Dad! If I don’t believe in Santa I won’t get any presents from mom!” The kids humor us. And I guess I am a spoil sport.

And then there is my son, who had basically declared himself agnostic at 4. His friend got a “bug blaster” for his birthday, and we were out in the yard him tormenting a ladybug. He says to me “dad, who made bugs?” I asked “like the bug blaster does or real bugs?” “Real bugs”. “Well”, I says, “some people thing the arose naturally along with all the other animals (’bout as far about evolution I wanted to drop on a 4 year old), “and other people thing god created them along with all the other animals”. He went back to tormenting the ladybug but you could almost here the gears grinding for about 30 seconds and then he exclaims “Don’t be ridiculous dad! (yes he used words like that already) God didn’t make bugs, he’s a man!” I just about fell over. I don’t know if he was thinking Morgan Freeman or JC but it was funny.

So on the Santa front he’s still a believer because his friends at school are all true believers. But he is bothered by the physics of our house since we don’t have a fireplace, the physics of getting all around the world in one night, why all the toys say “made in China”, and why Santa give nicer toys to rich kids and some poor kids don’t get any toys at all. Yup, the Santa thing is screwed up. Maybe we could fix this operation by giving the poor kids some toys. Actually I used to give toys at work to the Santa’s Helper campaign but sadly Santa didn’t give dad a job this year. I suppose I could track them down. Maybe it would be good for the boy to be involved.

#61 Lala on 12.18.14 at 12:19 am

New Tims stock is hot…TSE:QSR and is getting hotter…..Burger Horton is the Tim King :)

#62 everythingisterrible on 12.18.14 at 12:22 am

#55 Smoking Man
You’re rich and you have nothing better to do than troll blogs? I can give you some ideas if you like.
I admit I’m here too though. But I am not rich and this is cheap entertainment.
You’re like the boomers who win the lottery and keep their jobs or never retire because they can’t think of anything better to or they have a bag of wife and need an 8hr break everyday.
-Millennial Goof.

#63 EmpCod on 12.18.14 at 12:31 am

#20 Mister Obvious

I don’t see how anyone can evade any taxes in an RRSP when you need to pay tax on all funds as they are deregistered.


Answer : RRSP provides tax-free compounding. If money was instead invested within a non-registered account, you would have to pay taxes every year on the realized gains, not just the year of withdrawal.

#64 Godth on 12.18.14 at 12:33 am

I’m really, really looking forward to these interest rate hikes as well. How many times can the Fed. cry wolf?

These central bankers remind me of drinking tea at a Chinese restaurant. When everyone gets to the bottom we try to read the tea leaves, decide we don’t know and fill up the cup with tea again for the next round of magic and mystery.

#65 Smoking Man on 12.18.14 at 12:33 am

Tomorrow marks the two months since my perfect nephew Mark slipped. He was schedule to fly home for Christmas tomorrow, the 18th. I’ve called the entire family, every one of you must be at his parents house tomorrow, starting at noon. They are hurting horribly, they want to die, feeling guilty for being alive, why did God do this to them….

I won’t be there…. See there is a Xmas party I wasn’t invited to, I was excluded. But I deserved to be there.. Well I don’t take rejection well. I’m crashing it..

But damn, no parent should Lose a child..I can’t bare to watch marks parents in this much pain. Yes I’m drinking…
I’m And in the spring, on the lake. I will have bad words, very bad words of what I think of God.

He’s over rated …

#66 Sheik Yerbouti on 12.18.14 at 12:41 am

#55 Smoking Man on 12.17.14 at 11:50 pm

Lots of portable versions of these defibs on the market already….which easily fit into a backpack….

The killerapp will be synching these kind of devices plus all daily meds, booze (JD for Smoking Man) with an auto iPhone delivery app….kind of a daily body portfolio rebalancing for chemical couch potatoes….if they kill the internet for some reason, then you will have to reach for the colostomy bag of course!

#67 LowFatOil on 12.18.14 at 12:46 am

Website shows fun charts & numbers as Calgary real estate Listings get fatter by the day. I bookmarked it and watch it for fat increases.

I checked out the website today. It looks like there are over 850 properties for sale in Fort MacMurray.

Wikipedia says there is only a population of about 61,000 living there. So 850+ “For Sale” signs is a lot for that small population.

Lots and lots of “houses” for sale, from a simple $350k mobile home up to over $1 million.

#68 Larry1 on 12.18.14 at 12:49 am

Average into the market rather than timing it.

High proportions of globally diversified equity and a stomach for volatility is wise for the youth with a long duration.

RRSPs can fund periods of low income – like starting a new co., parental leave, re-education, job searching, etc. For renters, $25K in the RRSP is a tax free option towards a down payment.

#69 Timmy on 12.18.14 at 12:54 am

Don’t get so smug. Ever hear of the expression “don’t catch a falling knife?” This party is just getting started….
Too early to jump back into oil stocks

Why would you buy oil stocks? Buy the index. — Garth

#70 Nomad on 12.18.14 at 1:00 am

So Yellen sees the US economy being on track… not a bad time to feel the courage to buy the US market…

If you want to buy the US market take a peek at Horizon’s HSX. You get no distribution hence no withholding tax (US dividends get taxed more). Instead that distribution goes into the share appreciation. If you are not retired, who cares about dividend income right?

Talk to an advisor or a more knowledgeable friend first, but to me it’s the best way to buy the SP500 with CAD dollars, in a taxable account.

Free to buy in any amount with iTrade (need a minimum amount in account though). So if you hesitate to buy the market, you can buy 50$ a week if you want.

Now let’s hope oil stocks recover a little more. I don’t trust the rally so sold 1/6th of my oil stocks at a small gain and bought some airlines.

#71 Waterloo Resident on 12.18.14 at 1:01 am

This insanity about women NEEDING to know that a man owns a house, and she won’t even consider him if he doesn’t know him unless he has a house, its now spreading to other foreign countries.

On an online chat forum I was talking to a lady from the Philippines, she says that she has relatives here in Canada. She asked me if I own my own house or if I rent. I told her I rent but I have enough cash in the bank to buy 5 houses, 100% with cash each one, in my area if I wanted to. Guess what; instead of her being impressed by my savings, she wrote back and told me that she does “NOT WANT A HOMELESS BUM, SHE WANTS A MAN WITH A FUTURE”. That was her exact words. I tried to explain to her the futility of buying a house at a time when rates are about to rise, and how people who have mortgages do not actually ‘OWN’ the house, they are just renting the house from the bank, it is the bank who has the mortgage. This is what she wrote back:

You know, when interest rates rise, a lot of people are going straight to Hell.

#72 Obvious Truth on 12.18.14 at 1:10 am

Garth has been preaching allocation, rebalance and low cost.

Why does everyone overthink. What’s cheaper and more diversified and liquid than spy or vti.

Buffet bets money you will beat hedge funds.

What about bnd. Jack puts these together for the little guy. He never waivers.

These two guys are legends and they are on your side. They never overthink. Even Abe has seen the light. Wonder if he was a buyer today?

What a joke. I’ll take the boost regardless.

#73 LowFatOil on 12.18.14 at 1:10 am

Back to Wikipedia for my reference….

if the number of “dwellings” in the GFM (Greater Fort MacMurray area) is about 26,000 dwellings and there are about 850 properties for sale, then about 3% of properties are for sale at this moment.

GFM = approx 70,000 population

(my calculations are an estimate. i am not the Rainman.)

#74 Bailing in BC on 12.18.14 at 1:23 am

Sorry, Garth is not the Pope.

The Pope runs The Vancouver Condo Info bear blog.

Garth will have to be the Dalai Lama

#75 Larry1 on 12.18.14 at 1:24 am

#49 JSS on 12.17.14 at 11:30 pm

A toss up between Suncor, Cenovus, and CNRL.

Why not buy some of each plus the others like HSE, IMO, …? Can’t hurt to wait a bit too, until things stabilize.

#76 Lunberjack arch on 12.18.14 at 1:35 am

#55 smoking man aka (hunter S Thompson wannabe)

Sorry they already make portable defibs and they are about the size of a shaving kit bag. Your a schmuck

#77 TheLaughing(e)CONomist on 12.18.14 at 1:37 am

Re #17 omg the original
…Folks going to be going crazy buying new Ford, leiderhosen and sushi with the money they are saving on gas.
A likely big pop to the world’s economy….”

That is what you think protected in your cocoon.

What the real people out there think is different:

69% of the people polled will spend the money to “to pay bills and everyday expenses”

The real economy out there is people consumption, government consumption and export.
With the people out there deeply in debt and the governments out there in a bigger one and practically not able to balance their “government” checkbooks there is not going to be a “pop”

But if we ever discover some martians or other ETs with burning desire for a $1Google of innovative financial derivatives and able use the creative minds of a few million people with AUM experience we may get there to this “pop”.
But until then it is guaranteed to be a “plop”

#78 HD on 12.18.14 at 1:38 am

@ #50 Sarah on 12.17.14 at 11:35 pm

Read this, it will help:




#79 Waterloo Resident on 12.18.14 at 2:04 am

Go to any employment forum and talk to people who are from other foreign countries and you will find that almost everyone from all around the globe have this crazy idea that Canadians have learned how to get RICH FAST, and that secret to riches is to buy a house here.
When I asked a lady how was her application going for a temporary worker’s permit in the I.T. field (for an affiliate of RIM) , she got sidetracked and asked me information about my life. That’s when i learned that no matter how much money a guy has in life, if he rents a house and puts his saving in the stock market instead, he is considered to be a MAJOR LOSER in life, and that feeling is generally the same world-wide.

Meanwhile, if he buys a house, an over-valued pressed cornflakes box house, and has trouble paying his mortgage and he has more days in the month than he has savings, he’s still considered to have won the jackpot as far as many foreign workers in the I.T. field and other professional fields are concerned. So its not just the idiots who have blinders on their eyes, even the NERDS cannot see the forest for the trees.

#80 Millennial_Falcon_The_First on 12.18.14 at 2:10 am

Hey all I think as a 31 year old Millennial I can chime in a bit here about the hesitation to invest in “the markets” my generation is feeling.

I have no debt and about 60 k saved up sitting in a “high interest savings account” earning garbage. I opened a TFSA at ING way back when they introduced them but I have nothing in it.

My parents have their money invested at BMO Nesbitt Burns, and they are raving about our adviser.

So as a courtesy, he is my adviser as well.

I went in there this week. I have finally reached the 50k minimum and I was excited to jump in.

Now he is great. Doesn’t shy away from commission talk. Thinks real estate is way over valued and told me not to buy a condo (which i wouldn’t have done anyways thanks to this blog).

He says:

-Everything is expensive now. Even though oil is bringing down some indexes, this is only a minor dip in an otherwise 5 year and counting bull market.
-Bear markets take years to bottom. At my age (31) I might need my money for big lifetime expenses like a wedding, more school, ring, etc.
-Investing in markets is a 5 year minimum thing. If all goes well, I get average of 5% a year..about $2500…possibly not worth the risk of having the money tied up if I need it during a year when I am at a loss. Losing 5k for someone like me is like 8 months of work.
-He expects real estate to correct when US interest rates rise, and Canada follows suit. He said i may want a downpayment on a condo (only after prices become earthbound again), and therefore might not want to tie up my money.
-Nesbitt burns has this 50k minimum. That means they might ask me for 5 k if my investments are worth 45k because of some lost paper value (even if temporary).
-He said he will tell me when the time to jump in is correct. I have another appointment in a few months.

So there you have it. Most of us think we might need the money for some lifetime expenses at our age, we are unsure of where the market is going because our advisers say it might be overvalued and due for a correction just like real estate. And, we are too scared to be a do it yourself investor.


Then stop talking to an advisor who sells stocks. There are a myriad of other choices with less volatility and more predictable returns. The choice is not equities vs a savings account. — Garth

#81 limitless progress on 12.18.14 at 2:19 am

I wish i could invest, it always seems like the wrong time. I finally made up my mind to divest of enbridge pipelines and what happens literally the very next week?

forget this gambling bullshit markets. Money in the bank may not be growing, but it is safe. There is a hell gonna come. I just know it. Like that movie, take shelter, from a few years ago. Everything in my body tells me do not gamble on the stock market.

It’s always a sure thing when you are winning mr garth. No one knows what the future will hold. It’s a brand new century.

#82 Nemesis on 12.18.14 at 2:31 am

#SomeLuckyMaskedBanditosDo… #MakeOutBetterThanOthers,Or… #NeverFlyCargoThroughLightningCaptainBillyBob

#SoItIsWritten…SoShallItBeDone… #SeasonalParablesForLoversEntwined…


[NoteToGT: 2of2. Votre autre parcelle ne arrivent aujourd’hui, vieil ami? NoPeeking!]

#83 Lillooet, BC on 12.18.14 at 2:40 am

I am a market timer. Always have been, always will be.

I buy when stocks are cheap and sell when stocks are pricey. I buy when everyone else is selling, and sell when the market hits all-time highs. Like two months ago, there was a “mini-crash” and bank stocks fell 5% in a couple days. I bought. Two days later, they rebounded.

If you are not a market timer, then essentially you don’t care whether a stock is expensive or cheap, whether a sector is expensive or cheap, you just buy. This is a bad strategy because you will buy overpriced stocks and sell cheap stocks. Like this week, as oil stocks were crashing, now would be a good time to buy a SHITLOAD of cheap oil stocks, and banks etc. That is called market timing.

For most people (especially novices) a better strategy is, don’t buy individual stocks. — Garth

#84 Colin Laney on 12.18.14 at 2:54 am

If it makes you feel better, just start dollar cost averaging in.

When Dollar Cost Averaging Makes Sense – Larry Swedroe

#85 Freedom First on 12.18.14 at 3:22 am

Bad choices. Let’s see. Canadians are awash with Mortgage debt, Heloc debt, Auto loans debt, Credit card debt, Student loans debt, LOC debt, Payday loans debt, and now, not only has the price of oil tanked, the C$ has tanked, and our house price average is double the American house price average. Yep, Bad choices. I could go on, but that oughta do it.

#86 SWL1976 on 12.18.14 at 4:01 am

Doomer dipsticks? Hmmm should I be offended? Nah my take is more of a realist, but that is also just a personal opinion

See when I first started seeking the truth, what I found upset me, but that was then, and this is now. I no longer get angry by the truth for I have already been through the grieving process that most have not. I’m over it, and honestly even though I know I have little hope to really change anything… The truth will set you free… And the truth is, that all that most have grown to believe in the western world is all fake, for the current democracy in America is nothing more than a veil for a shadow government who are really calling the shots, and let’s just say they do not have our best interests in mind

I found lots of comments about Russia here to be very scripted. Russia bad, USA good. The truth is that citizens of both nations just want to live free, but they are coerced by governments with one main objective. Power and control. This high stakes game being played on a global scale is a very dangerous game. Anyone knows what happens when you back a hungry bear into a corner?

Be prepared to fight is all

Garth made an excellent forth point, volatility is here to stay. However the end game is no middle class, and very little rights and freedoms to anyone outside the inner circle, and for those who can’t already see that are either in denial or enjoy their servitude.

I am invested in the markets, I do hope to maybe retire one day, but to me being diversified means much much more than a balanced portfolio. To me being diversified includes being close to fresh drinking water, knowing how and where to get food besides the supermarket, knowing how to survive without a handout from a dysfunctional government who takes 50% off the top and always wants more as is

The world is a much different place than it was 30, 40, 50 years ago so don’t let receny bias over the span of 40 years get the best of you – believing what has happened will happen in the future. If push comes to shove big government right now have a hand up in giving us all a real bad day.

These debt mountains are unchartered water after all

Don’t think governments pass bills and laws they have no intention of using such as martial law and bail in legislation. I guess they look at things like this as insurance, you know in case $hit happens, they have their own best interests to protect. Once they feel they have an adequate insurance policy than they might just burn the place to the ground

We’re just pawns in the global chess game

Prepare accordingly

#87 Rexx Rock on 12.18.14 at 4:37 am

God bless little granny Yellen.The cheerleader pumped the market by choosing the right words in her speech.Patience in raising rates meaning no rate increase for 2015 and many years to come.I feel sorry for the fools who believe they will raise rates next year.
But its ok the stock market will keep going up.Does anyone believe Poloz when he makes his speeches?

#88 Fortune500 on 12.18.14 at 6:02 am

Congrats Garth

The discerning personal finance aficionado’s blog of choice.

#89 Spiltbongwater on 12.18.14 at 6:15 am

“Dear pathetic blog : I have noticed that sometimes when I post I am not deleted nor am I posted but just do not show up on your blog. I guess it is time to move on.”
It’s called censorship. It happens every now and then, usually when I’m pushing it, critiquing the boss.

I get that it’s Garth’s blog, but at least give us a ‘deleted’ and not pretend, the post was just lost.

Lets see if this one sees daylight.”

I thought I was the only one this happened to.

You are my guest here, and while I post over 98% of all comments, some are unworthy of more than a single click. They all come from a small group of disturbed individuals. Sometimes they even self-identify.– Garth

#90 neo on 12.18.14 at 7:58 am

If it were a $500 tax on every family, you’d say different. — Garth

Except a poll conducted in the US concluded that 73% of americans would be using any energy savings to pay down debt or bills. That isn’t exactly GDP positive. Prudent though.

#91 neo on 12.18.14 at 8:03 am

Also, all the market heard in that Fed statement was “patience” as far as rate hikes which means it may or may not happen in 2015 and if it does it would be late 2015 and be a .25% change, hardly anything in the grand scheme of things. The real question is what will happen first, house prices in Canada going down YOY in a monthly report or the Fed raising rates.

#92 Matt Gamon on 12.18.14 at 8:04 am

Commodities (oil, copper, iron) have crashed, China, Europe all slowing down, aging bull market in its 6th year has gone up parabolic in the past 2 years (blow off top?). Market is running on cheap words from the central bankers.
Just in one month energy stocks lost all gains since early 2013, things can turn south very fast.
I know US economy is still strong, but given what is happening around the world isn’t warranted to be cautious at least? This ‘you can’t time the market, stay 100% long’ advice is very puzzling to me

#93 Future Expatriate on 12.18.14 at 8:14 am

Somebody please get that poor house horny kitty out of that drain!!!

#94 Kevin on 12.18.14 at 8:22 am

@Mike in the Okanagan

Just don’t make too much money in that TFSA or CRA will decide to tax you anyways…

Wow, really Mike? A 2-week old article about one daytrader from Quebec who was abusing the TFSA rules to run a business? You think that’s a reason not to invest inside your TFSA?

#95 Duane Storey on 12.18.14 at 8:51 am


Good work on the portfolio.

I personally would go down on the US exposure and add a REIT (ZRE is a good choice) since it’s another asset class and it typically has good yields (~5% or so).

Also, you may also want to consider ZCN instead of VCN – it has slightly higher fees, but it caps each of the underlying assets to counter the ‘Nortel effect’, where any one company has too large an influence.

#96 T.O. Bubble Boy on 12.18.14 at 8:59 am

Russian RE buyers now absent from London England market:

Watch out if China hits a slowdown or more assets get frozen… who will buy the ultra-high-end in Vancouver and Toronto?

#97 Duane Storey on 12.18.14 at 9:10 am

“2. Realistically Is there a minimum amount of money that one needs to have before they can start trading? With the cost of trades being $9 and up per transaction it seems a little difficult to make any money.”

Several online brokerages allow for commission-free purchases ETFs. Questrade is one of them, and it’s what I use. Depending on how many you buy, you may still have to pay ECN (exchange fees), but this usually amounts to 5 – 25 cents per purchase. So you can basically build up an ETF portfolio for a few dollars and buy new portions of those ETFs for practically zero whenever you make a contribution. You will pay $9 I believe per transaction when you sell, but most people are buy and hold investors, so you likely won’t be selling for a long time, unless you need to during a rebalance.

Some websites say a good rule of thumb is that with less than $50,000 to invest, you should stick with Mutual Funds (TD’s e-Series are quote low cost, and many people start with them). Over $50,000, switch to ETFs. But given you can now purchase ETFs for almost nothing via brokerages like Questrade, that advice might be a bit old.

Good luck!

#98 maxx on 12.18.14 at 9:16 am

If interest rates don’t rise….beaver bucks are an inevitability and Canada will end up looking through the fence at the play ground.

#99 davikk on 12.18.14 at 9:42 am

Housing Bubble 2 Goes Nuts: San Francisco Home Sales Plunge 20%, Prices Soar 27%

#100 Steve French on 12.18.14 at 9:47 am

“If there was hope, it must lie in the proles, because only there, in those swarming disregarded masses, eighty-five percent of the population of Oceania, could the force to destroy the Party ever be generated… [The] proles, if only they could somehow become conscious of their own strength, would have no need to conspire. They needed only to rise up and shake themselves like a horse shaking off flies. If they chose they could blow the Party to pieces tomorrow morning. Surely, sooner or later it must occur to them to do that. And yet—! … Until they become conscious they will never rebel, and until after they have rebelled they cannot become conscious.”

#101 Jeff in Moose Jaw on 12.18.14 at 10:06 am

#16 Obvious Truth
“One tip your parents won’t give you. Your friends won’t understand what you are doing so don’t bother explaining. Neither will anyone at the bank. MBA’s included. Never gloat or tell them what to do. Just point them to where you started.”

That last part speaks to me (no gloat, here is a place to start), great advice for family and friends.

#102 mid20millenial on 12.18.14 at 10:29 am

#50 Sarah on 12.17.14 at 11:35 pm

Get more bonds

#103 economictsunami on 12.18.14 at 10:30 am

Ever wonder why after the Fed expanded their balance sheet to just shy of $5T, 6 years of ZIRP, an official unemployment rate of 5.8%, coupled with collapsing energy prices, Yellen still finds it necessary to keep the overnight lending rate between zero and a 1/4 pt? (Replacing “considerable time” with “patient”???)

It could be because many cash rich companies/ continue to hoard cash/ stock buy backs, nominal wages have been stagnant for what seems like forever, the M2 money stock (velocity) has steadily dropped for the last decade and many consumers/ governments are still mired in debt; while attempting to repair their own balance sheets.

(You may be told that they are repaying their debt but with what exactly? Unfortunately, personal bankruptcy is mostly responsible for for falling US consumer debt.)

If this were a normal recession, the recovery trajectory (especially with all of this tsunami of liquidity) would be much more positively pronounced.

With a financial crisis (albeit a small ‘d’ depression, except in the EZ periphery) many areas of the western global economy are slowly succumbing to Japan-ification.

Forewarned is forearmed…

Let’s get fiscal: A new book from a prescient economist

#104 eric on 12.18.14 at 10:34 am

Apparently TD bank is stating Ontario will pick up the slack in the economy due to troubles with oil price in Alberta. Also, they claim that BoC will be accommodative longer than expected, meaning rates will remain unchanged in 2015 and even till 2017 to help export.

Spring housing market will hot in Toronto.

#105 Kenchie on 12.18.14 at 10:44 am

Always a fun comparison:

“Oil is cheaper than bottled water and whisky and beer”

#106 Obvious Truth on 12.18.14 at 10:52 am


See can’t tell mom about the teacher so tell garth.

It’s sickening.

At least he’s a saver and has choices. Well done. Keep reading.

#107 Ian - Ottawa on 12.18.14 at 10:59 am

Watching youtube an Ad for Brad J. Lamb pops up from American Express.

I guess he is giving small business advice now instead of flogging condos!

#108 Bytor The Snow Dog on 12.18.14 at 11:14 am

@Waterloo Resident- There is a term for that type of woman. Say it with me – “Gold digger”. They are best avoided.

Re: Censorship: I don’t think deletion of posts happens. Garth-o leaves “DELETED” in the spot where your post would have been. I think it’s a software issue or people forgeting to press the “submit” button.

PS- Garth, about that cowboy joke….

#109 Mr. INolistentothemediaever on 12.18.14 at 11:20 am

Yup….last week the headlines were all about how fast the world was coming to an end. Now…on Tuesday in fact….everything’s back to being fine. I’d love to be a fly on the wall of every brokers office who was urging his clients to sell before they lost everything. Picture this…he doesn’t care.

Meanwhile my petroleum portfolio is up $50,000 this week. Big jumps…especially in stocks that were thrown out with the bathwater.

COS…HSE…TLM….Wow….what a week. I’m to stupid to listen to an advisor. Instead I have my wife…..Her angelic voice once said at a client meeting “Why not just buy the stocks that go up?” and then who said a couple weeks ago ….”Didn’t this happen last year about this time?”

She’s always right….and I went ahead and bought more. I mean…why would companies that package balony be sold off with the OPEC announcement….makes no sense right? There was some juicy bargains in the market this week. Thank you puking sellers.

‘When they’re crying you should be buying….When their yelling you should be selling’…..true a hundred years ago when Doctor J penned those thoughts…..and just as true today.

I’m listening to a karaoke party drift through the window of my Bangkok hi rise…resting my my swim….this is what listening to your wife will get you boyz…..not listening to some vacuous Arab minister of sand.

#110 Sideshow Rob on 12.18.14 at 11:41 am

Speaking of bad choices…
Oil is down this week. Smart money is still selling of all oil related junk bonds, while the dumb money is rushing in to be euthanized in energy stocks. As a bright blog dog noted Suncor and many other energy stocks are actually selling for the same prices they did 10 months ago when oil was 82% higher!!
The carnage in the oil patch is not over. It hasn’t even begun!
If your time frame is several years, and maybe it should be, a buyer at these prices will likely be ok. Maybe even up a bit with dividends. But there will be some stomach wrenching moments between now and then. A capitulation type wipe out is still to come. Buyer beware.

#111 Rational Optimist on 12.18.14 at 11:52 am

110 Mr. INolistentothemediaever on 12.18.14 at 11:20 am

“…not listening to some vacuous Arab minister of sand.”

That made me laugh out loud- thanks!

Garth, are you going to amend your prediction that the feds will double the TFSA contribution limit? It’s looking like they won’t be able to balance the budget (or even pretend) after all.

When’s the election? — Garth

#112 Renter's Revenge! on 12.18.14 at 11:55 am

“Why would you buy oil stocks? Buy the index. — Garth”

A 10-year price return of 12% for XEG versus 60% for the TSX plus twice the volatility. What’s not to love? I believe that’s what they call a “trader’s paradise”.

#113 Mike on 12.18.14 at 12:12 pm

Get into private investments! Income trusts, private equity funds, mortgage pools, etc. Find a better ‘investment guy’!!!

I used to have my money in with an Assante/IR group type ‘friend’ in mutual funds. The only people that made money were him and the fund managers. Pulled it all out and now I have investments in private equity – things like RE buildings, land holdings, secured Accounts receiable loans, business loans, bridge loans, own some shares small-med cap once-baby-boomer-owned-and-looking-to-sell businesses, low depletion oil & gas wells, etc. I would have never thought any of this existed, but it does. Everything I’m invested in (for several years now) is with reputable companies that have been around for decades, any pay out monthly or yearly. My shortest investment is getting me 7% for 1 year (that’s where my house downpayment $ sits rather than in a 1.5% tangerine account), and most of my other longer 5yr term ones are netting me 10-12%.

I will never ever go back to an off-the-shelf garbage mutual fund like what Manulife or Sunlife offers again.

From the pan to the fire. Sounds like you have swallowed a ton of risk. Be careful. — Garth

#114 Rational Optimist on 12.18.14 at 12:24 pm

112 Rational Optimist on 12.18.14 at 11:52 am

When’s the election? — Garth

October, 2015…anything else would be going back on their word. You don’t think they would ever break a promise, do you?

#115 NewToETFs on 12.18.14 at 12:29 pm

Hello Garth – what a timely post. I had $179,000 sitting in my LIRA for two years as (shamefully) cash. A couple months ago you posted a recommended mix of ETFs, so I took a screenshot with the intention of following your advice some day. A couple days ago I bit the bullet, cracked open my iTrade account and plunged right in with my first ever ETF purchases. The first one was nerve wracking. I have my 40/60 mix of Fixed/Growth, and have set aside 5% in cash. In two days my fund earned $1,500. I wish I did this years ago. My husband accused me of being a “gambler”, and I dare not breathe a word of this to the rest of my family.

Thanks Garth for the constant cajoling and reminders via your blog, you are a beacon of light in a world full of naysayers. I sprang into action and hopefully I’ll have something decent to retire on in 25 years.

#116 JimH on 12.18.14 at 12:45 pm

#84 Lillooet, BC on 12.18.14 at 2:40 am
“I am a market timer. Always have been, always will be…” &etc.
Yours is a most interesting post, friend! (BTW… Lillooet is a charming spot… especially when the sun is shining! Spring comes a little earlier there, too!)

From what you say in your post, you appear to be more of a ‘market sector contrarian swing-trader’ than a ‘market-timer’. (I didn’t see any evidence in your post about trying to catch tops and bottoms.)

I would like to see you post your methodology in establishing entry and exit points. I’ll show you mine…

I have been trading in equities, ETFs and derivatives in one form or another for ~20 years now, and apart from some over-enthusiastic gambles in my early rookie days, never tried to catch tops or bottoms. I was very successful as a ‘trend-follower’ however.

Generally, ‘up-trends’ involve an asset moving higher and above a 5DMA & with a flat or rising 15DMA while demonstrating a series of higher highs and higher lows; RSI (14) is trending higher as is the slow stochastic (14-3). MACD (12-26-9) crossovers in + or- territory mark my entry and exit points on a 150-day daily chart. I also confirm macro trends with weekly/monthly charts also. (If you’re so inclined, you can pull up a 1 year daily chart of SCHB (Schwab broad market ETF) and see the 6 trades in that ETF I have made this past year. I am fortunate in that I trade commission-free at this brokerage.

I trade options off intra-day charts of various time frames/frequencies, but that’s another story.

I now usually hold only 8-12 individual ETF’s at any given time. These are very broad-based market cap and/or sector ETFs with >200k daily volumes.

#117 JimH on 12.18.14 at 1:35 pm

#116 NewToETFs
Hang in there! You may have occasional short-term doubts, but you’ll have no intermediate nor long-term regrets!!!
(Your hubby is a lucky man!)

#118 chapter 9 on 12.18.14 at 1:43 pm

#71 Waterloo Resident
Little over three years ago I worked with a dude who came here from the Philippines and his wife wanted a house. This was his life:
Mon.-Fri. Start afternoon shift @1:30 till 10:30pm with usual breaks.
Go home change and start night job @11:00pm till 7am
His wife started her job @8:00am so had to watch the kid to save money on day care. Total sleep time maybe 3-4 hrs a day. And of course on his days off on the weekend he had some down time-nope, he worked midnight shifts cleaning.

But they are rich!! They have a house!!

#119 Mark on 12.18.14 at 1:59 pm

“As a bright blog dog noted Suncor and many other energy stocks are actually selling for the same prices they did 10 months ago when oil was 82% higher!!”

But it could be argued that the stock of a firm like Suncor was unusually cheap even 10 months ago, as though it was anticipating a significant fall in the price of oil. After all, if you look at the longer-term chart of Suncor, it hadn’t even recovered to 50% of its 2008 highs.

Replacement cost of the assets is relevant as well. Oil is always going to be needed, and we’re just north of one of the world’s largest importers/consumers of oil which isn’t likely to ever achieve energy independence.

#120 80'sKID6$4 on 12.18.14 at 2:00 pm

#65 Smoking Man on 12.18.14 at 12:33 am
Tomorrow marks the two months since my perfect nephew Mark slipped. He was schedule to fly home for Christmas tomorrow, the 18th. I’ve called the entire family, every one of you must be at his parents house tomorrow, starting at noon. They are hurting horribly, they want to die, feeling guilty for being alive, why did God do this to them….

I won’t be there…. See there is a Xmas party I wasn’t invited to, I was excluded. But I deserved to be there.. Well I don’t take rejection well. I’m crashing it..

But damn, no parent should Lose a child..I can’t bare to watch marks parents in this much pain. Yes I’m drinking…
I’m And in the spring, on the lake. I will have bad words, very bad words of what I think of God.

He’s over rated …
Do you really think an economics/finance forum is an appropriate place to lament the loss of a nephew and describe your tumultuous relationship with god? Your narcissism and knows no bounds Smoking Man.

#121 NewToETFs on 12.18.14 at 2:22 pm

#117 + 118 JimH
Thanks for the vote of confidence! I think I have too many ETFs, around 20. Also too much in Canada/US, want to diversify globally a bit more. My strategy will be to rebalance if the 40/60 ratio gets out of whack, but grnerally just sit tight. And maybe play around with the commission free ETFs a bit just for fun (iTrade has 50 of them). I have a sneaking suspicion the market was slightly depressed just now so I think I got in at a good time. I also am a bit worried over oil prices going down and how that will impact things, which is the main reason Im trying to shift away from Canada right now. But i bought an Energy ETF just to see what would happen and its the best performer right now.

#122 Blacksheep on 12.18.14 at 2:34 pm

Bytor #109,

“I think it’s a software issue or people forgeting to press the “submit” button.”
And your thinking would be incorrect.

If I feel strongly about a comment and my post ‘disappears’, (happens to about 1 in 10) I’ll try to repost hours later and still, it does not show up.

We must remember, this is Garth’s privately owned blog and he can do whatever the hell he likes (not a criticism, just a fact). Just as I too, can choose whether or not to participate.

#123 Sarah on 12.18.14 at 2:41 pm

#96 @Duane Storey… I’ll add to this weekend’s homework some investigation into REITs. Thanks.

#122 @NewToETFs… which energy ETF do you hold, if you don’t mind me asking?

#124 Low Rates Forever on 12.18.14 at 2:45 pm

Sorry, no Fed rate hike, ever. Next up, more QE from the Japanese, then Europe, then the US. After that, SDR’s from the IMF.

Zero indication of a rate hike coming from the US Fed. We must have read two different documents.

#125 Obvious Truth on 12.18.14 at 2:49 pm

Way to go 116. It gets way better!

#126 Blacksheep on 12.18.14 at 2:52 pm

Having critiqued the censorship occurring @ Greater fool, I must confess, If I felt I had no opportunity to state my opinion, I would not waste time coming here, just to read others.

#127 DON on 12.18.14 at 2:59 pm

Anyone have any perspective on what James G Rickards is saying in the US.

any truth to what he says. Some rings home…but.

#128 saskatoon on 12.18.14 at 3:19 pm

how come new car prices stay essentially the same as time goes on?

is the quality decreasing? or, is the labour getting cheaper?

why no inflation here?

#129 Smoking Man on 12.18.14 at 3:22 pm

#121 80’sKID6$4 on 12.18.14 at 2:00 pm

Happens every time I get hammered, oh ya I get it teacher..

It’s math class, I should not talk about flying. I’m sorry
I will just put my head down, and walk to
the principles office… To the absolute delight of the all the pupils in the class.
After all they follow rules too.

I will drink, when, I want and post what ever I damn well please…

Eat them apples..

#130 Doug in London on 12.18.14 at 3:25 pm

Oil has been the topic of discussion lately, so here’s my 2 cents worth for today. I’m not very good at reading the tea leaves, but in the last 2 weeks when oil stocks and ETFs were being almost given away I scooped up even more. Yesterday there was a sudden rally and I sold off some HSE and XEG for a quick profit. If this recent rally is a suckers rally I’ll buy some back again if prices drop and if not I’ll do nothing. The speed dropped so low that the governor rammed the throttle wide open. Now the speed has recovered somewhat, the throttle has closed slightly. Buy low, sell high.

So, dup check, does that answer the question you asked me last week?

#131 Mister Obvious on 12.18.14 at 3:32 pm

#63 EmpCod

“Answer : RRSP provides tax-free compounding. If money was instead invested within a non-registered account, you would have to pay taxes every year on the realized gains, not just the year of withdrawal.”

I thank you for being the only one to respond to my question but what you say above still does not explain to me how an RRSP is a place to evade tax.

An RRSP has always been touted as place to defer tax to a later date (i.e. retirement or death) when presumably one’s tax rate might be lower. A tenuous proposition at best. To quote Garth, they are more like future ‘tax bombs’.

There isn’t really any ‘tax free compounding’. All compounded gains are subject to tax at withdrawal time or when the estate is settled at death.

If the money was in a non-registered account, capital gains tax would not be owing until the year in which they were realized and would be only 50% exposed to tax. As far as dividends, they are always better off, tax wise, in a nonregistered account. Income from interest is a wash either way.

The taxman actually wins on capital gains and dividends realized in an RRSP. He just has to wait a bit longer. No problem. The government is not a person and, as such, has endless of time to kill.

Given the above it behoves the CRA to discourage day trading in an RRSP only for the following reason: Money lost within an RRSP is also tax lost to the CRA.

But people who are foolish enough to try and lucky enough to benefit have actually increased, not decreased, their tax load.

#132 Luis on 12.18.14 at 3:33 pm

#121 80sKID

Re: smoking man

I believe yesterday that was called the smoking man self fellatio routine.

Yep, narcissism rules with some people here.

Tedious egomania. And irrelevant. Fake, too.

#133 Oil makes us poor on 12.18.14 at 3:40 pm

#134 4 AM Sunrise on 12.18.14 at 3:45 pm

#71 Waterloo Resident on 12.18.14 at 1:01 am

News from Canada headed abroad always gets exaggerated. When I was in Turkey in 2011, some well-educated guys were half-joking that they heard the streets of Canada were paved with ($1900/oz) gold.

The sad part is that when the SHTF on interest rates, these ladies will blame the evil banksters for taking homes away from good, deserving people who didn’t do anything “wrong”…like their relatives who probably live in a million dollar house in greater Vancouver, carrying a CMHC-goosed mortgage.

I guess they’re not old/aware enough to remember Japan.

Keep in mind that some people in emerging markets mistrust the markets because their currency is hostage to the world’s whims. I don’t worry about my savings, or my country, losing 1/3 of their purchasing power overnight because I’m wrapped up inside my G7 cocoon. It took a while for me to realize the rest of the world doesn’t work this way. And where currency can’t be trusted, people want land. Old traditions die hard.

#135 Bottoms_Up on 12.18.14 at 4:13 pm

#6 Mike in the Okanagan on 12.17.14 at 7:49 pm
It’s not about ‘wins’, it’s about using your TFSA as a day-trading account (ie, a business activity).

There was talk on here previously that there’s a threshold for # of trades a month, you should keep it below 100 or 150, I forget the exact number.

#136 Bottoms_Up on 12.18.14 at 4:17 pm

#20 Mister Obvious on 12.17.14 at 9:00 pm
Theoretically you could use an RRSP account as your business trading account, claim zero income for the year, and withdraw your gains from RRSP. That would be quite illegal.

#137 NoName on 12.18.14 at 4:36 pm

#129 saskatoon on 12.18.14 at 3:19 pm

efficiencies, new materials, platform sharing. production lines are planned in sync with new global platforms etc. chrysler failed k-car ans fords sierra platform were at leading edge, in my opinion very visionary but poorly executed, both platforms failed to failed to deliver intended result. chrysler k-car concept was supposed to deliver 3 very style vise different vehicles (plymouth, chrysler, dodge) with identical guts, but somehow chrysler’s eng. did exactly opposite, and fords sierra supposed to be world wide platform but never took off.
interesting books on a topic
The End of Detroit: How the Big Three Lost Their Grip on the American Car Market, and The Toyota way
Lotc of plastic under the hood now days, salesman will call it synthetic materials used to save on weight and increase fuel efficiency…

#138 kommykim on 12.18.14 at 4:53 pm

RE:#96 Duane Storey on 12.18.14 at 8:51 am
Also, you may also want to consider ZCN instead of VCN

I went with ZLB for my Canadian holdings. Done well with it so far.

#139 JimH on 12.18.14 at 5:02 pm

#122 NewToETFs
“… I think I have too many ETFs, around 20.”
IMO there is no magic number… my little brain can handle 8-10 in-depth items at any given time, but others are more gifted in that regard.

You didn’t ask, but might want to check out Vanguard Canadian ETF’s here for a start (they have low management fees):

#140 Mark on 12.18.14 at 5:07 pm

“Anyone have any perspective on what James G Rickards is saying in the US. “

Basically the same story as any other goldbug out there. Which probably won’t end up being true, until it is. The problem with gold bugs is that they’re wrong 95% of the time, but the 5% of the time when they are right, the results of their (temporary) correctness prove to be spectacular for their portfolios.

The problem is, they’re only ‘right’ once in an investors’ generation. Unless they started investing very young, or are themselves very old.

#141 jess on 12.18.14 at 5:10 pm

Switzerland shifts to negative interest in bid to weaken Swiss franc
Swiss central bank wanted to discourage investors buying Swiss francs as a safe haven currency amid the rouble crisis

#142 Alberta RE up, up to the sky on 12.18.14 at 5:28 pm

‘Complex’ mortgage fraud scheme uncovered, Alberta police say:

#143 JimH on 12.18.14 at 5:32 pm

#128 Don
Much of what he says gets quoted way out of context by those who want to cherry pick items that support their viewpoint/agenda. Forbes review is pretty good.

As he points out, The International Monetary System has “collapsed” 3 times in recent history: 1914, 1939 and 1971. And we’re still here.

“Collapse” is too strong a word IMO, and tends to get the doom & gloomers way over-lubricated and frothing.
Rickards is a good writer/researcher, and is worth the read.

I also recommend Cullen Roche’s “Understanding the Modern Monetary System” which you can download here:

#144 Mike S on 12.18.14 at 5:34 pm

– [Emergency fund in savings account]
– [Pension]

I know Garth is against emergency funds in saving accounts (As you can secure LOC instead).

but I can’t agree, for instance just this month we saw several people surprised by their LOC rates increases by TD. This can happen just in time for emergency.

True that if you have a big net worth, this risk is mitigated

#145 Kreditanstalt on 12.18.14 at 6:25 pm

“US growth is solid and entrenched”

Yes, this IS the mainstream establishment belief/agenda. Or, rather, MESSAGE.

Because, in a Ponzi scheme, maintaining confidence is everything.


You have to be a Central Planner to believe a)that governments or their central banks can actually create any wealth and b) that “stimulus” works. So many of the believers in “recovery” do worship government statistics, numbers, quotes, authorities, dollar-denominated figures, graphs and charts

So try these:

#146 bdy sktrn on 12.18.14 at 6:42 pm

helllloooo? anybody there?

is sir Garth passed out drunk in some hotel celebrating the day?

Huh? — Garth

#147 espressobob on 12.18.14 at 6:43 pm

#132 Mister Obvious

I tend to agree with your comment. Garth has also pointed out the use of an RRSP for tax shifting. If one looses their job or self employed individuals have a crap year they could take some proceeds from their retirement fund at a lower tax base. More like a contingency fund. Just a thought.

#148 bdy sktrn on 12.18.14 at 6:43 pm

well he’s back.

#149 NewToETFs on 12.18.14 at 6:58 pm

#126 Obvious Truth on 12.18.14 at 2:49 pm
Thanks! It’s hard to find support to trade ETF’s so I appreciate yours. :)

#131 Doug in London on 12.18.14 at 3:25 pm
Just tried to sell off XEG today as well, but learned today that there are actually start and end times to the market. So hope to sell tomorrow. Was looking at picking up Horizons HUC tomorrow.

#140 JimH on 12.18.14 at 5:02 pm
Thanks for tip on Vanguards! I just picked up some VEF earlier today, and I bookmarked this link for future research.

#150 80'sKID6$4 on 12.18.14 at 7:00 pm

#133 Luis on 12.18.14 at 3:33 pm
That makes sense, thanks Luis. I always just thought smoking man had a learning disability, now I know it’s because he’s bent over so far and trying to type at the same time. He cant see the screen! It’s all so clear now.

#151 saskatoon on 12.18.14 at 7:05 pm

#138 NoName

thanks for the info..


#152 Linda on 12.18.14 at 7:32 pm

80s kid 6$4 # 151

LOL – Hilarious!

You nailed him – now its all clear, eh :)

#153 Daisy Mae on 12.18.14 at 8:17 pm


#154 espressobob on 12.18.14 at 8:26 pm

#150 NewToETFs

Don’t mean to be critical, but? XEG is pure speculation!
Are your broader based ETFs hedged to CAD? Should they be? Not sure? Do you own bonds in a non-registered account and prefered shares in your RRSP?
Ever considered a fee based advisor?

#155 NewToETFs on 12.18.14 at 9:09 pm

#150 espressobob

Most of my broad based securities are hedged, two are not. Trying to sell off XEG (tomorrow morning when market opens). Have 40% fixed in bonds etc. I don’t have a non registered account, and do have preferreds. Havent considered a fee based advisor, I am enjoying this learning curve. Thanks for commenting!

#156 DON on 12.18.14 at 10:51 pm

#144 Jim H

Thank you – much appreciated.

and so I stay on for the blog comment.

Housing sucks income and will suck more in the coming years…YIKES. Herd on the radio today that Millennials are cautious investors. Must have been a radio station on Mars. Oh!.. yap!…just saw a flying pig pass by.

Real estate is no longer a topic of discussion at work. Things are started to sink in, people are quiet when the topic manages to surface. Concering…but expected. Unfortunately the hang over is unavoidable.

Someone mentioned it is hard to change jobs when you have a mortgage. I remained silent and thought wow…dodge that bullet. I like my freedom to move on when necessary. Landlord can fix the pipes, clean the chimney and I am ok with that. Sure I will buy, but not now and not in a year or two. I have waited long enough and will wait longer for the gravy.

By the way – on the way home from work the car dealerships were out advertising the 72 months car loans with large ticket savings…

#157 bill on 12.18.14 at 11:54 pm

#94 Future Expatriate on 12.18.14 at 8:14 am
its a raccoon eh? they like dry drains…. he/she may or may not be stuck…

#158 Ian on 12.19.14 at 12:09 pm

We cashed out, downsized and travelled, and went into a Calgary rental 2 years ago.

Started to look again in this past summer and stopped.

Condo’s seem overpriced in comparison to rent. Houses…..being sold the same day, or within 48 hours with multiple bids. One RE agent advised us to put in a bid, over list, and with no home inspection. Lots of junk for sale. So happy we decided to walk from the market.

At that point, much to my spouses chagrin, I called it a day and we went travelling again for 2 months. Back now, oil has hit the skids. Not even going to bother looking. Leaving in 10 days for another 3 months. I suspect we will get a good indication on the market when we return at the end of March. By then we may know more about oil prices and interest rates. Our equity investments, after tax, have easily beat the Calgary market over the past 30 months.

#159 Doug in Londonn on 12.19.14 at 6:00 pm

@espressobob, post #155:
Yes, there is an element of speculation to XEG. It has a higher beta than something like XIU. However, if you bought it recently around $12 to $13, when all the “experts” were saying oil could go to #40/barrel, you would have made a spectacular gain over a short period in the last few days.

Last week I mentioned I was on the 401 in Mississauga, in bumper to bumper traffic with all those other gasoline and diesel fueled cars and trucks, and watching many planes taking off and landing at Pearson International Airport. I also saw a GO Train and CN freight train, both pulled by diesel electric locomotives, going by. At that time I really wondered if there could ever possibly be a future for oil.

#160 espressobob on 12.20.14 at 5:45 pm

#160 Doug in Londonn

Could have, should have, would have.