When crap happens

crash-modified

“We read your post ‘Hard to ignore’ earlier this week,” he wrote me this morning, “where you said… ‘and prepare for increased turbulence on markets, as changes like these never come smoothly.  Stocks could drop into correction territory (a 10% decline) between now and the end of the year, which should end up being a nice little buying opportunity.’

“That was scary. Reassure me.”

A few minutes after I read that, and replied, a call came in from a couple who had commuted a fat, seven-figure, public sector pension three years ago and were fully-invested in a balanced and nicely-diversified portfolio (up 5% so far this year).

“We need to go to cash,” he said. “Right now.”

Huh?, I replied, astutely.

“Can’t take it anymore. Bozo the Clown’s gonna be in the White House and this market is goin’ down. I want this money in my savings account. Yes, all of it. Now. Today.”

Logic was no defence, so he went ahead and did it – triggering capital gains taxes in a blizzard of unnecessary trades, selling off assets (like REITs and bonds) which actually go up when stocks go down, completely soaked in emotion. More evidence that of all feelings in our lives, fear’s the most potent. The greatest motivator. And when it comes to investing, the singular enemy of success.

The meme’s been growing that the crazy guy might actually win (thanks to his social media army), and equity markets will crash when it happens because (a) they don’t expect it and (b) they deserve it. Since his supporters are generally parochial (40% still live in their home towns), hate globalization, elites, politicians, central bankers, free trade, corporations and immigration, many would be happy to see Wall Street burn. It’s turned into a 99%-vs-1% thing. So part of the ‘Make American Great’ movement is to kneecap American capitalism and bring jobs back home by gutting companies. Go figure.

Anyway, there are two things every scared investor should remember between here and November the 8th.

First, he won’t win. (My know-it-all portolio manager colleague Doug Rowat will tell you why on Saturday).

Second, even if the crazy guy did blow into the White House in a shock surpassing that of crazy Britons voting in Brexit, anyone with a balanced and diversified portfolio could afford to ignore it, watching in amusement from the sidelines. Also recall that the fear of stock market corrections is way worse than the actual reality of them. The only people screwed when things go down are the weenies who sell into the decline.

Since 1945 (seven decades ago) there’ve been 56 minor corrections of less than 10%, taking an average of only two months to recover. The last one was Brexit. On 19 occasions we’ve had a major correction (averaging -14%) which disappeared after 4 months. In 70 years there have been 10 bear markets (a -35% return) averaging two years in length. The last one was in 2008-9. So an investor who didn’t sell lost nothing and had to wait – even in the worst of times – about two years to get her money back. Meanwhile the markets advanced 65% of the time.

But wait. Those stats only matter to someone with a 100% stocks-only portfolio – no balance and no diversification. The whole point of mixing equities up with bonds, preferreds, REITs and other securities, plus spreading it around geographically, is to avoid having all your eggs in one basket.

So how has a 60%-equity, 40%-fixed income portfolio done?

Way better. When Brexit cratered stock markets by 6% over a couple of days, the balanced portfolio lost just a little more than 1%, and quickly recovered. In 2008-9 the TSX was crushed 55% and took seven years to struggle back. The balanced portfolio lost 20% and rebounded in a single year. During the oil collapse Bay Street saw losses of 13% while the balanced portfolio temporarily gave up 5%. And over the last six years, which included the US debt ceiling crisis (2011) and the energy rout (2015) a balanced portfolio gained an average of 6.3% per year. So, if you snoozed through it, you won. If you tried to time the market, and missed by a few days, you suffered.

It’s worth remembering when stocks go down, bonds normally go up (money flows to safe havens) – so you should own both. Meanwhile some important stuff in a balanced portfolio, like real estate trusts, isn’t correlated to the stock market. Companies continue to pay their rents and investors continue to get distributions – plus an uninterrupted flow of dividends from preferreds and a little interest from bonds. The whole point is to reduce volatility and mitigate risk while still enjoying decent long-term growth and sleeping like your dog.

But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?

195 comments ↓

#1 True Canadian on 10.13.16 at 6:23 pm

This is a beautiful Article, a must read for everyone. Please read the complete article, start to finish:

http://www.macleans.ca/economy/economicanalysis/change-and-pain-are-headed-for-canadas-housing-market/

#2 The Electric Nikola on 10.13.16 at 6:31 pm

These folks need to sign up the electrified smoking man… he’s an alien and has never ever been wrong.. he would make them gazillionaires.. bet it all on 400:1 USDMXN.. You are gonna bet it all smoking man?? .. right, right… you wouldn’t chicken out now would ya!!!…. couldn’t possible be wrong… president trump you have ordained.. bet the farm

#3 Mr. Frugal on 10.13.16 at 6:33 pm

If Trump really is toast, why do you need to keep telling us this every single day? Anything is possible.

A wise investor would have a balanced portfolio with a little cash on the side. If Trump wins and the market does a Brexit, that would be the time to buy. V-bottom corrections are an investors best friend.

#4 Context on 10.13.16 at 6:37 pm

I cannot believe this guy cashing in out of panic which becomes a fatal error. What he could have done in hindsight was to shave off a few under the guidance of his investment advisor giving him a comfort zone in cash of say 20%. Then when the correction comes buys back in for a few bargains to hoop some profits moving forward as all will come back in time.

#5 Steerage Bilge on 10.13.16 at 6:38 pm

Why do these people hire you Garth… if they don’t listen to you!

The deplorable orangutan doesn’t have the slightest tiniest chance on winning.. his future is divorce number 3.

#6 Smoking Man on 10.13.16 at 6:38 pm

But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?-Garth

……………..

The Crazy Guy wins on the 8th and on the 9th Smokey gets to do a guest post on GF explaining Herdonomics.

#7 equity lover on 10.13.16 at 6:44 pm

Balance portfolio smooths out the dips but if you hold and regularly contribute, doesn’t equities beat out a balanced portfolio in the long run? Fix income is called fixed because it is fixed. Equities grow

#8 crowdedelevatorfartz on 10.13.16 at 6:45 pm

“So you know what happens on the 9th, right?”
*******************************************
My balanced and diversified portfolio keeps humming along………

#9 westcdn on 10.13.16 at 6:46 pm

It looks I will be early.

When I can’t see the way forward, I go by my convictions and instincts. Sometimes the result is unpleasant – I treat those results as a learning experience for evaluating risk. There are always risks that blindside me so building a skill set and backbone to deal those miserable outcomes is important to me. I am an introvert so I don’t ask friends and family to intercede for me. Their help is welcome if it is voluntary with no strings. I don’t like obligations – gifts should be given freely or not at all.

I am blue collar so “locker room” chatter doesn’t offend me. I am just amazed by how much ego plays in life when I know the biggest boasters are the biggest cowards (my opinion – there are always exceptions). The selling of fear does offend me. Fear takes many forms from being left behind, rejection, no control, no money or even maintaining a reputation (no loser here) among the countless only important to the individual – conscious or not. There, I got that rant off my chest. I was trying to expose my biases to partially explain my following comments.

I do believe consumer interest rates will rise. The US Fed does not recognize their actions have caused irresponsible actions by debtors. Promises have been made that cannot be made good (think pensions and first advantage). When the chickens come home to roost, I don’t know when but it will happen. I think these guys have it right until politics appear.
http://www.ftportfolios.com/Commentary/EconomicResearch/2016/10/10/inflation-ready-to-rise
Egos are making WW3 possible. America is not the shining light they once were – show respect to nations and let them make their own decisions and live with the consequences. I fear the US masters are thinking first advantage in a nuke war. Please tell me why this is a good idea! America will not be a second rate nation for a long time if ever.

William Lyon Mackenzie King was my favourite Prime Minister. He would be unelectable by today’s standards because he was ugly and weird. If you want an appreciation of this man – read Pierre Burton’s book, the “Dirty Thirties”. My favourite quote was “why do things by halves when you can do them by quarters”. He was not a fan of big government (he believed people could solve their own problems given time) but he was willing to use government power to turn events over time.

My favourite of pranks gone wrong – death to stupid clowns. http://www.bing.com/videos/search?q=halloween+pranks+gone+wrong&view=detail&mid=2245795626D5525F43C82245795626D5525F43C8&FORM=VIRE

Chances are I would do the same thing.

#10 Debtslavecreator on 10.13.16 at 6:46 pm

I am seeing the same thing. A good number of the masses are very bearish. While we probably have another sharp dip coming like Garth suggests 10% or so soon it will continue to be a great time to add blue chip stock
The stock market has NEVER had a major 30% or more crash from such bearish public sentiment and record low public participation in the stock market
With all the economic, political and currency problems in the world the more likely outcome over the next 12-18 months is a spectacular blow off in the US dollar and us stocks
That said I am holding more cash than normal but looking forward to adding some more vfv or vun on the dips
Sell amateurs sell ! Odds are good I will sell you the sp500 at or around 3000 by late 2017

Oct 18- DDay for Canadian RE

#11 Doug t on 10.13.16 at 6:49 pm

Yeah the crazy lady gets in

Rage Against The Machine

#12 Mixed Bag on 10.13.16 at 6:51 pm

Fantastic pic!

#13 ole Doberman on 10.13.16 at 6:53 pm

Gartho thats what they said about the republican nomination and Donny won by a landslide

#14 Mixed Bag on 10.13.16 at 6:53 pm

Anyone else wonder if The Donald is a Democrat plant?

#15 ole Doberman on 10.13.16 at 6:54 pm

This is Americas last chance for change and hope

#16 Ricardo on 10.13.16 at 6:55 pm

Who doesn’t hate -“globalization, elites, politicians, central bankers, free trade, corporations and immigration”
Your the minority.

#17 Goldie on 10.13.16 at 6:55 pm

“But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?”

President-elect Hillary announces a new Cold War with Russia and orders more troops off to the Middle East?

I’ll sure be relieved on behalf of the world when she gets into office.

#18 Doug t on 10.13.16 at 6:59 pm

Clinton is a true puppet – she and her ilk bring with them the machines of war and violence. Trumps crazy of course but Hitlery is as dangerous as the cronies that surround her. You have to be a naive fool to sit in front of your boob tube and actually think that the words that fall out her trap are anything but hollow. I am stunned by people who watch/read these debates period – it’s a fools circus.

RATM

#19 crowdedelevatorfartz on 10.13.16 at 6:59 pm

Sooooo.
If I understand US electoral politics correctly.
If Donald Trump waits until the last minute and resigns……. Hillary wins by acclimation.
No votes are needed.
She’s the only one left standing since Vice Presidential candidates arent allowed to “step in” if the Presidential candidate decides to quit….. so she wins.

Gee THAT wouldnt be like the Donald to throw a major pile of dung into the US political landscape now would it?
He gets to screw over the Republican Party thats turned on him AND Hillary’s hollow “victory” is despised by everyone including her supporters because it isnt “real”……

This aint over yet.

#20 conan on 10.13.16 at 7:01 pm

2008 markets came back the way they did because of massive QE.

I doubt the next big market freak out will get the same level of QE.

Banks got their hands slapped for 2008 mortgage note fiasco. Large amounts of bad notes were bundled with good notes and sold to unsuspecting commercial investors.

This time around …. it will be the same shit but a different pile.

#21 Long-Time Lurker on 10.13.16 at 7:09 pm

Trump is his own worst enemy. Hillary is Lady Macbeth.
I think Perot or Nader could have made a dent in this election.

Garth, you might have the best financial strategy for passive investors. I take notes. I’m still into swashbuckling, though.

#22 Ned on 10.13.16 at 7:13 pm

brexit was a shock to some so I wouldn’t bet on anything..
The commoner has been beaten down and the blatantly biased liberal / democratic propaganda machine (media) isn’t fooling anyone anymore.

#23 randy on 10.13.16 at 7:15 pm

I’d rather sit on a whack of cash earning nothing. I have no risk and pay no taxes. You should get rid of your shades…the future ain’t that bright.

#24 Charity on 10.13.16 at 7:15 pm

First let me say you may be wrong on the Donald. He has proven to be resilient regardless of his antics, but only time will tell. As for the 9th going down regardless of who wins. Just too much volition th right now.

#25 Pepito on 10.13.16 at 7:16 pm

The couple should have kept their public pension. Wouldn’t be sweating the ups and downs now. I guess greed won 3 years ago.

Fear, by the way, is a good thing. It focuses the mind like no other emotion. If you had ever climbed mountains or crossed oceans in a small boat you would know that.

#26 Ex-Cowtown on 10.13.16 at 7:16 pm

T3 (funny, eh?) has a strong shot at the White House. Not saying it’s good or bad, it just is. Hillary is a criminal, thief and pathological liar. it makes sense why Wall Street feels more comfortable with her, they get each other totally.

If T3 wins ( I put his odds at about 60-70%) it will only amount to a YUUUUUUGGGE buying op as pinheads and fools bail. After that? Same as the Brexit. Yawwn.

#27 Art on 10.13.16 at 7:17 pm

Garth – A Canadian who moved to the US many years ago and is now retired and living in Florida.

Thanks for the valuable (and free) advice. I have been weighted towards equities (which have done amazingly well in the past year) and, based on your advice, am now moving towards a more balanced portfolio. Hoping to weather the coming market downturn and bounce back when the market does. Again, thanks for the useful guidance. I know I am not supposed to try to time my investments, but cannot stop myself.

Agree with you, and others, that the scary scarecrow with orange hair has little to no chance of becoming US President. However, since we let all legal residents vote (including those who are uninformed, angry at the world and eager to blow up what has failed them in recent years) I have to hedge my bets.

#28 Charity on 10.13.16 at 7:21 pm

Volatility

#29 acdel on 10.13.16 at 7:24 pm

I do not always agree with you Garth but you hit this one right out of the ballpark.

#30 Johnny D on 10.13.16 at 7:27 pm

Things seem a bit different nowadays though. Especially when it comes to resources and energy. Everybody uses them but nobody wants them. OPEC and Russia are playing games with oil, and meanwhile here in North America there are teams of people now trying to disrupt pipelines by shutting off valves, potentially causing catastrophic ruptures. These kids will get a slap on the wrist and not the charges deserved to someone sabotaging major infrastructure.

Point is, public sentiment is shifting toward crazy and extreme, whether it be Trump or whether it be hippies. The more this behavior is condoned and not quickly quashed and set aside, the more disruptors will come forward to try and destroy the world that so many work so hard to maintain.

#31 Rick on 10.13.16 at 7:32 pm

Garth, stick to what you know….finance. You will be wrong, again, on the US election.

I was a member of the House of Commons for nine years, an MP, cabinet minister, leadership candidate and committee chair. And you? — Garth

#32 SWL on 10.13.16 at 7:33 pm

I thought you were done with Trump for the week

Seems you’re baiting the crowd now

#33 The Greater Cauliflower on 10.13.16 at 7:35 pm

Question: Are there any discussions in Ottawa of eliminating the capital gains tax. how likely would it be.

Question: is a REIT eft in a balanced diversified portfolio considered a part of fixed income or growth.

#34 NoOneOfConsequence on 10.13.16 at 7:35 pm

November 9 is when political pundits, mainstream media everywhere say
“I CANNOT BELIEVE TRUMP WON!”.

Then we will see exactly what you said above…a short term decline, followed by a steady improvement over time.

In other words…GO TRUMP! I wanna buy the dip!

#35 Andrew Woburn on 10.13.16 at 7:37 pm

There can’t be this many American men who believe in Trump. I think it’s that many just won’t vote for a woman.

“New analysis by FiveThirtyEight has shown how the recent revelations about Donald Trump have polarised the genders in the United States.

According to their analysis in terms, if only men voted, Donald Trump would win 350 electoral college votes, and Hillary Clinton would get 188.

If just women voted, Hillary Clinton would win a staggering 458 electoral college votes to Donald Trump’s 80.”

But now it gets even crazier. Trump supporters want to repeal the 19th amendment, you know the one that lets women vote. Just cause you cain’t spell misogynist don’t mean you ain’t one.

http://www.salon.com/2016/10/12/repealthe19th-donald-trump-supporters-tweet-new-anthem-after-nate-silvers-poll-shows-hed-win-if-only-men-voted/

#36 South Etobicoke Trump Campaign Central on 10.13.16 at 7:49 pm

I’m watching the wikileaks emails with amazement, as every “conspiracy theory” of right wing fever swamps is getting confirmed with each leak.

– Clinton pay for play (check)
– Total media collusion with the Democrat/State Department Borg Collective (check)
– Bifactional ruling elite made up of the Globetrotters and Generals? (check)
– Dems R Real Racists (yup)

And the media is still obsessing over what Trump said 11 years ago.

Steve Sailer makes the rather astute point that if the media thought Trump was gone, we’d be seeing a lot of snarky Buzzfeed style commentary. Instead its manic-depressive panic that swings between “HAHAH STUPID REPUBLICANS DON’T YOU KNOW HE CAN’T WIN” to “IF TRUMP GETS ELECTED IT’LL BE LIKE HITLER AND STALIN ARE RULING!!”

Absolutely amazing to watch, along with the Wonk Class taking 500 person polls with a D+20 demo and MOEs that START at +5 as gospel, literal truth.

Remember, Trump has to win 2 swing states, be it CO, PA, IL or OH and they are very contested as we speak, with Trump enjoying minor leads. Unprecedented.

So I’m quite shocked how Garth can feign to be so confident in his defeat.

#37 Pete on 10.13.16 at 7:51 pm

Fear is certainly the strongest motivator, with greed coming in a close second.

#38 Bankish on 10.13.16 at 7:54 pm

I wish I had met someone who gave out good advice when I was younger, but all I got from my advisers back then was a series of losses so I learned to do it myself.
I’ve have been investing on my own (stock only) over thirty years now and have observed that the average person is not built for the stress involved in creating your own portfolio. Me I look forward to market opening and then off to the gym and the rest of the day. I spend a couple of more hours later on studying the market , but hey that’s my thing and it is for me the same as others watching sports. I would earn a higher percent return then mentioned here but it would create too much stress for most people.
The most important thing you can do is buy quality or get get good advice from a cash only adviser.

#39 common sense on 10.13.16 at 7:58 pm

#5 Steerage

People do pay Mr. Turner for his expert advice yet always remember who’s $ is it that he is providing advice for at his business?

The customers. Always.

#40 Pete on 10.13.16 at 8:05 pm

Both the Republican & Democrat parties are subsidiarys of the NWO one-party-state which rules most of the world.
The democratic election process is all for show. However, the strongest bellwether of what the next decade will bring is who will be allowed to win.
If it’s Trump, it’s WW3 in 7 years time after he has been allowed to rebuild America (more to steal that way). If it’s Clinton, it’s WW3 right away. Either way it’s the will of the NWO puppet masters, not the people.
I believe they’re going to go the Trump route. He’s the man of the hour, there to assuage the masses who are nearing revolt. I don’t believe that Hillary even wants the job any more, what with her failing health. Remember, it’s all a show.

#41 Lead Paint on 10.13.16 at 8:13 pm

#6 Smoking Man on 10.13.16 at 6:38 pm

Trump wins, SM guest hosts the blog for a month.

Trump loses, SM is banned for life, or loses his PhD.

#42 Shawn on 10.13.16 at 8:22 pm

What if Clinton wins and we enter a new bear market?

Then she would have zero to do with it, as would the crazy guy. — Garth

#43 Context on 10.13.16 at 8:24 pm

The number 9 makes me nervous as that is the Hermit card holding a lantern. Inside this lantern is a hexagram with a 6 pointed star. God in Amos 5:26 condemned this symbol as the star of another God who he called Moloch or the Evil One.

#44 Ace Goodheart on 10.13.16 at 8:28 pm

Trumpster likes to sue people so I have to be careful here. I heard him say he grabs women by the “p%$$y”. He said this is because he can “get away with anything”.

My thinking is, redneck Trump supporters, these women could be your wives or daughters.

Me, personally, the guy is trash. I wouldn’t invite him into my house. I have zero tolerance for men who offend against women, period.

But really, could anyone actually vote for him? It turns my stomach. I don’t like Hillary as a person but she is at least a decent human being.

Were they seriously selling REITS? What in the world for? They are trading below book value. REITS are the most ridiculously sweet and sexy investment available today. They don’t even pay tax for cripes sake. How could anyone go to cash on a Reit?

I’m up 19% this year. That and my ridiculous three unit rental building across the street from the Eglinton Crosstown continues to go up in value by around 50k per year.

Go to cash? Nuts. Never.

Remember people the golden words of wealth: if you want to be wealthy you need to own the means of production of the products consumed by the masses.

#45 White Crock BC on 10.13.16 at 8:28 pm

ART.

However, since we let all legal residents vote (including those who are uninformed, angry at the world and eager to blow up what has failed them in recent years) I have to hedge my bets.
/////////

All legal residents? Citizens only dude .

Talk about uninformed.

#46 Victor V on 10.13.16 at 8:34 pm

HOUSESThe Chase: A young couple goes west-end home shopping, with parental help

http://torontolife.com/real-estate/houses/the-chase-parental-help/

The story: As a relatively new real estate agent, Letourneau understood the importance of entering the property market early. The couple were living in a condo at Yonge and Bloor that belonged to Crisostimo’s father, but they thought they might get the most house for their money in Etobicoke or Mississauga, where they’d be much closer to Crisostimo’s suburban office. Both sets of parents offered to help with the down payment and ponied up a combined $500,000. The couple set a budget of $750,000 and went in search of a house with two key amenities: a basement apartment to bring in extra cash and some outdoor space for Lulu, their beagle mix.

After visiting five other properties, Letourneau and Crisostimo were tired of looking. When they saw this three-bedroom bungalow, they loved its large, treed lot. They bid $779,025, even though the basement was stripped to bare studs. The seller accepted, but, at the last minute, the couple’s pre-approved mortgage fell through, and Letourneau’s mother had to co-sign on the loan. Since moving in on April 7, they’ve spent about $50,000 on renovations and found a tenant who pays $1,300 month.

#47 paulo on 10.13.16 at 8:37 pm

Reality 101: for the Canadian side, firstly they (the USA)
have a very different political system its 2 tiered when the day is said and done the president is a figurehead , and can’t not do so much as take a dump with out congress on side. so you need to study that : whom will control the house the Democrats or Republicans guess what!
so lets for one minute consider that Mr Trump manages to pull the vote and get the white house, based on the “anti whatever and crushed pbl cans in the pickup bed crowd” as his constituency , really dream on is all i can say. he has not got the power base and money gang backing him, and hate to say it: he or she whom has the cheque book calls the shots when the day is said and done,and the big money is not backing him period. so do not worry be happy, if you have liquidity , you will know how to play this, if you are smart take the advice found in this blog, and other than planning a diversified portfolio, stay calm the storm will pass, consider a trump victory a buying opportunity, and a Clinton win a steady as she goes event , life goes on enjoy it, unless you where sucked into the real-estate ponzi game in the Yvr or 416/905 zones , if so keep lots of tums handy,and a good bankruptcy trusty’s name in hand its to late to escape.

#48 Smoking Man on 10.13.16 at 8:43 pm

#2 The Electric Nikola on 10.13.16 at 6:31 pm
These folks need to sign up the electrified smoking man… he’s an alien and has never ever been wrong.. he would make them gazillionaires.. bet it all on 400:1 USDMXN.. You are gonna bet it all smoking man?? .. right, right… you wouldn’t chicken out now would ya!!!…. couldn’t possible be wrong… president trump you have ordained.. bet the farm
…….
No need to bet it all at 400 to 1 smart ass.

A bet on Hilary the favorite, will yield little.
A bet on Trump the Long shot will yield Yuuge when he wins.

#49 LifeXpert on 10.13.16 at 8:44 pm

Can we do a Trump/Hillary poll?? Just to get an idea where on the spectrum blogdogs fall as a whole

No. — Garth

#50 E-mail wild bill on 10.13.16 at 8:46 pm

The federal government has done absolutely nothing to address the housing issue. No attempts to tackle foreign money laundering. They have been unwilling to pursue tax fraud. And they want to increase the number of immigrants and foreign students.
Shouldn’t the government be worrying about housing for the people who are already here first?
You can email Minister of Families Jean-Yves Duclos, Finance Minister Bill Morneau, Revenue Minister Diane Lebouthillier, Immigration Minister John McCallum, and Prime Minister Justin Trudeau, at the below email addresses. It would also pay to email your local MP.

[email protected] parl. gc. ca
[email protected] parl. gc. ca
[email protected] parl. gc. ca
[email protected] parl. gc. ca
[email protected] parl. gc. ca
—————————————————————–

Got this from the macleans comment section. Please e-mail these people and tell them what you want. ive already e-mailed [email protected] parl. gc. ca to let him know that while his changes are good start they don’t go far enough. Without a doubt at bare min. banks and other lenders should have skin in the game and take some of the risk. Really CMHC should be shut down and the free and open market will set interest rates to reflect proper risk. Went to mortgage broker sites and they are crying like little babies that hate the free and open market. They are e-mail wild bill to cry like the useless eaters they are. Please spend a few mins and e-mail wild bill.

#51 espressobob on 10.13.16 at 8:51 pm

Corrections are an investors best friend. Last January was a no brainer and is proving quite profitable. Not as good as 2009 but still not bad.

Emotional wrecks should consider an advisor along with a bottle of Prozac.

#52 genbizx on 10.13.16 at 8:51 pm

garth – globalization must be more than simply moving operations to locales with cheaper labour and tax environments. politicians get contributions from companies that do this and we’re supposed to think that they will represent “the people”? your snap-judgement generalizations of who a trump voter is illustrate the type of disconnect that has lead to people actually considering voting for this jerk…

#53 Smartalox on 10.13.16 at 8:51 pm

I came across the following article in my daily reading, and found it illuminating, particularly when trying to understand the minds of the blog dogs:

http://www.theatlantic.com/science/archive/2016/10/why-people-fall-for-charismatic-leaders/503906/

Why do people fall for charismatic leaders?


It could be because Trump, like many charismatic leaders, casts his arguments in ways that tickle the emotional parts of our brains while telling the more rational lobes to shush. That’s the process explored by Sara E. Gorman, a public-health expert, and her father, Jack M. Gorman, a psychiatrist and CEO of Franklin Behavioral Health Consultants, in their new book, Denying to the Grave: Why We Ignore the Facts That Will Save Us.

“Persuaders might want to reduce the possibility of dissonance by constantly reassuring people that they have made the right choice … or that there is no viable reasonable alternative,” they write. (Remember “I alone can fix it?”)

In the book, the Gormans explain not just how people fall for the false claims of politicians, but also how intelligent people wind up in cults or why a nation wracked by gun violence continues to reject gun-control measures. They admit they do not support Trump, but they’re otherwise equal opportunity debunkers, taking on GMO fear-mongering and anti-vaxers along with the National Rifle Association.

I just want to say I think it was fortuitous that the book has come out now with Trump running for president, because we see a lot of parallels with the charismatic leader and the conspiracy theories.

It has more to do with feelings of powerlessness, and especially if you’re very, very stressed, you can really be much more susceptible to these ideas. In that way, it’s not as much about your intelligence as it is about your circumstances and feeling like you’ve lost control in some way.

It’s really striking how (Trump) lines up with some of these anti-science charismatic leaders: One of the big things for Trump is that he’s positioned himself as an outsider and being on the fringes. That actually helps create a very strong us-versus-them narrative, in which he can really point to a very large group of people—no matter what party they’re in—it’s all of the government is against him and against us, the Americans.

Once you create a sense of a “them,” you reinforce a strong “us.” And when you reinforce a very strong “us,” a lot of group psychology will sort of kick up. There’s a lot of conformity, there’s a lot of not questioning things because other people seem to be going along with it. It’s harder for individuals who are part of groups to make independent judgments and decisions.

And on conspiracy theories in general:


If the first thing you hear about a topic is something that’s associated with fear, that will often suppress the rational part of the brain. It will be placed into long-term memory by this more primitive part of the brain, and it turns out to be very, very difficult to dislodge that. If you do fear conditioning in a rat so that it learns to associate a tone with an electric shock, it never goes away for the rest of the rat’s life. It will always freeze when it hears the tone, even though you’re not giving shocks anymore.

The point is, those fears that these charismatic leaders arouse are often committed to permanent indelible memory, and they become extremely hard to dislodge, and they are easy to evoke simply by making people scared again.

It requires a lot more effort to use the reasoning part of the brain. The default is to use the faster parts of the brain. So if you’re in a state of stress or there are too many facts coming at you or too much information, the default mode is to say, “I can’t handle all that stuff, it’s too much. I’m gonna default to the more rapid acting part of the brain, and make immediate decisions.”

Conspiracies can and have happened, so we shouldn’t dismiss people who believe [these] things, because there’s a lot of psychology behind that and some historical truth.

But there’s a lot of drama around these statements and a lot of emotional hype, because, again, that’s something that can be used to get people to not use the rational parts of their brain and instead just believe something that’s probably not true.

Of course, many of the same things can be said about this blog’s own (oh so) ‘charismatic leader’…

#54 Slim on 10.13.16 at 8:53 pm

“I am an old man and have known a great many troubles, but most of them never happened.”

–Mark Twain

#55 bill on 10.13.16 at 8:57 pm

It’s Taco Tuesday!!

#56 The Nature Boy on 10.13.16 at 9:01 pm

Why are delirious alcoholics such as Smoking Man come here ranting about garbage then, by midnight EST, posting stupid youtube links to some old druggie burn out Pink Floyd videos?

#57 Andrew Woburn on 10.13.16 at 9:03 pm

Trump people are sure millions of people will vote for him once they are safe from the scrutiny in the polling booth. It never occurs to them there could be millions of women in redneck country who might do exactly the opposite once their male relatives can’t see them?

#58 Metaxa on 10.13.16 at 9:06 pm

Hey, Johnny D what is wrong with hippies?

I bet there are lots of folks on both sides of the aisle in the US that wish they could just stop the entire exercise, let Obama go month to month and buy some time to figure something realistic out.

#59 Joe2.0 on 10.13.16 at 9:10 pm

“So you know what happens on the 9th right”
Ah, Putin nukes Killeries crib?

#60 not 1st on 10.13.16 at 9:16 pm

Garth, you really thought some former govt guy with a public pension was going to sit in the stock market with it?

Have you met many public sector employees? And not MPs I mean. There is a reason they worked for the govt.

Utility worker, and only 13% exposed to the U.S. equity market. Just another victim of the fear you peddle. — Garth

#61 Andrew Woburn on 10.13.16 at 9:20 pm

In his 1936 masterpiece,”Modern Times”, Charlie Chaplin showed how technology wasn’t doing much for human dignity. At least then job interviews involved humans on both sides.

“A recent graduate … learned he wouldn’t be going to an office to talk to a human being about his skills. Instead, he interviewed by webcam, on a laptop.

… It’s the robo-interview, and it goes something like this. In the more humane experience, a hiring manager, who also isn’t all that practiced in the art of digital video, delivers taped questions. Or, if it’s truly Mr. Roboto, a question pops up on the screen. You have a limited amount of time to answer. You talk to your computer, record the responses, and send them back to the company. Sometimes there’s a practice question to get prospective employees used to talking to a camera.”

http://www.bloomberg.com/news/articles/2016-10-12/the-rise-of-the-truly-awful-webcam-job-interview

#62 Victor V on 10.13.16 at 9:21 pm

5 factors that could ‘trip up’ Vancouver’s housing market

http://www.bnn.ca/5-factors-that-could-trip-up-vancouver-s-housing-market-1.583950

#63 Terry on 10.13.16 at 9:29 pm

Reply to post #3:

“If Trump really is toast, why do you need to keep telling us this every single day? Anything is possible.”

It’s quite interesting that so many people and especially the media are constantly barking and barking even louder the closer we get to election day that Trump can’t win? I suspect the real truth is that Mr. Trump is far ahead of Clinton. He will definitely win the popular vote and will surprise everyone with a 300+ Electoral College Delegate vote win! The “Narrative” hopes that by saying over and over again that Trump won’t win then that will make it happen. Repeat after me Liberals and Democrats, President Trump……President Trump……President Trump……I like the sound of that!

#64 Smoking Man on 10.13.16 at 9:30 pm

Revenge of the Deplorable Dyslexic.

8 years ago, I could barely read let alone write, I still, suffer from ADHD when reading, nothing sticks, The mind wanders to all kinds of crazy places, can’t control it, so I don’t bother even trying. Reading short burst holds my attention, Comments and Graths daily drivel if it’s not too long.

But in those 8 years, my writing has improved dramatically, especially with the aid of technology, Grammarly and Autocrit are out of this world tools in learning the craft of fiction writing.

I’m rooting for Trump for one reason, and one reason only, he dislodges and exposes the rotten evil that resides in the hypocritical left side of the brain. Goofs like Wynne, T2 , their retarded disciples of marxism go crazy anytime the word Trump is mentioned.

A Trump white house to me means hours of fun on twitter trolling these arrogant nasty creatures guaranteeing at least 4 years of amazing fun with my new writing skill set.

#65 Smoking Man on 10.13.16 at 9:46 pm

Utility worker and only 13% exposed to the U.S. equity market. Just another victim of the fear you peddle. — Garth
………………………..
The word fear = an unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain or a threat.

What it really means is no understanding,

When you look in the mirror and just see greatness staring back. You fear nothing and understand everything.

Ok that’s the last drink, started early today, at 5:30 tomorrow I’m officially a full-time fiction writer. Sooooo excited!

#66 Cashed Out YVR February 16 on 10.13.16 at 9:50 pm

DELETED

#67 Not a big deal on 10.13.16 at 9:54 pm

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#68 Not a big deal on 10.13.16 at 9:56 pm

DELETED

#69 Figmund Sreud on 10.13.16 at 10:00 pm

Folks, … with Hillary at the helm, we can be sure the Exceptionalistan will double down, continue to lie to itself and the rest of the planet!

Anyway, since about – oh, mid-sixties, 1964 Johnson / Goldwater contest – I used to dismiss the US Presidential selections like a joke, a fraud and an exercise in collective brainwashing.

This time around, … I think that there is a probability that something of grave importance might just be decided on November 8th.

F.S. – Comox, BC

#70 Smoking Man on 10.13.16 at 10:01 pm

#53 Smartalox on 10.13.16 at 8:51 pm

Good post, too long to re-paste.

The entire thesis you eloquently penned is made with the assumption that Trump and his supporters fall into that hypothesis alone.

What I don’t think you realize when you crafted that long quantized post, it can equally be a summation of Hillary and her flock.

See even a rocket scientist like yourself can be influenced by any one of these Attention bias, Interpretation bias or Response bias.

Don’t feel bad, no one is perfect.

There is only one Smoking Man

#71 };-) aka Devil's Advocate on 10.13.16 at 10:02 pm

If I were American and could vote on November 8th I’d probably vote for Trump. Why?

Well the system is screwed, the average American (and to too close a degree Canadian) is pretty stupid. We all need a wake up call. It’d be good to throw things in a tizzy. Unfortunately I don’t think it’d make much difference. The world is really a screwed up place. Like George Carlin said “Your average person is really quite stupid and if you stop and think about it that means half of them are dumber than that.

The world has become a combative, competitive world focused on celebrity (thanks Facebook). The slime throwing antics of this presidential election is pathetic. Dumb and dumber. They are different but neither any less offensive or scary.

The world is headed for a MAJOR SHIFT. It will be uncomfortable most for those who don’t see it coming. It will be a cleansing state of affairs as is any SHIFT. People will die… but then this is Disneyland and we need a good dose of what the rest of the world experiences day in and day out. We have grown to fat, content and lazy.

Trump or Clinton… personally I don’t care they are just a reflection of what the real problem is… your average person and they on the left side of them. Too many dumb asses… we need a cleansing.

#72 Ace Goodheart on 10.13.16 at 10:05 pm

RE #46 VICTOR VERY

This is what scares me about real estate in general. Couple of morons, parentally enabled, buy a 750k house so their dog can have a spot of lawn to p $ss on, come in with 500k parental and 250 mortgage and then DNQ.

Sort of like watching that green scum on a pond bubble up and not quite hit that low lying tree branch. And you’re wondering if it will ever hit…..

And these folks now are landlords (welcome to the social justice tribunal where the odds are ever in your favour).

Brutal.

Re: Trump: sayin notin. Word on the street says he’s a has been. All burned out. No flame.

#73 The Electric Nikola on 10.13.16 at 10:06 pm

#6 Smoking Man on 10.13.16 at 6:38 pm

But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?-Garth

……………..

The Crazy Guy wins on the 8th and on the 9th Smokey gets to do a guest post on GF explaining Herdonomics.

Actually the bet was the smoker man would clean Garth’s toilets at the ice cream joint if the orangutan lost… report for duty Nov. 9th and get to work … it’s all in the archives.. you wouldn’t renege on a bet would ya?

#74 Porsche on 10.13.16 at 10:10 pm

Ok Trump is trash… we got it, but the never ending 24×7 trashing of Trump going back 30 years to grab some trash is mind boggling.

Come on dig up some trash on Crooked Hilary, I’m sure you could find a lot with the Clinton Foundation, Haiti, For Profit Colleges, emails, etc.

But nope… nothing ever is dug up on old Crooked Hilary.

#75 Not a big deal on 10.13.16 at 10:11 pm

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#76 NoName on 10.13.16 at 10:15 pm

#48 Smoking Man on 10.13.16 at 8:43 pm

that cuts deep, i tough you are all for saving humanity…

#77 paulo on 10.13.16 at 10:19 pm

#61 welcome to the new age
cant help but mention a curious incident that happened at a mall some time ago, was walking through and ended up walking beside 3 teenage girls with smart phones in use as they walked abreast each other,that caught my attention, realized they where texting a conversation between each other , and actually asked them if that was what they where doing they confirmed
kids these days do not know how to communicate directly face to face , welcome to the new reality

#78 Victor V on 10.13.16 at 10:22 pm

http://dailyhive.com/toronto/angus-reid-poll-millennials-want-to-leave-toronto-2016

In an Angus Reid Poll, it was revealed that 45% of Millennials living in Toronto are seriously considering leaving the GTA.

The only thing surprising about this info is that the poll didn’t directly start out looking for this information. Instead, Angus Reid was trying to gauge what Torontonians’ reaction would be if a BC-style foreign buyers tax was introduced to the city or province.

And the answer is that people living in the GTA overwhelmingly love the idea, with 77% either moderately or strongly supporting the motion:

#79 Sheane Wallace on 10.13.16 at 10:23 pm

#1 True Canadian

——————

It is not just a bubble. It is the biggest real estate bubble in the history of the world as we know it. Engineered intentionally/by design by Steve’s conservatives.

Never heard of underwriters who do not bear the risk for the pricing of their product. CMHC is a disgrace
Loans should be returned back to the books of the lenders along with their ‘insurance’

After all it is all ‘prudent’ loans right? /sarcasm off
————————————-

As for understanding mentally of the heard I give it to SM. Even though I support Hillary, Trump can win and I dont’t think he is the crazy gay the media is presenting him to be. It is much ado for nothing, US politics will not change.

#80 PT on 10.13.16 at 10:24 pm

Trump for Prime Minister of Canada!
I would rather vote for The orange hair guy than that … T2.

#81 Sheane Wallace on 10.13.16 at 10:25 pm

crazy guy, not gay….

#82 ww1 on 10.13.16 at 10:25 pm

#49 LifeXpert on 10.13.16 at 8:44 pm
Can we do a Trump/Hillary poll?? Just to get an idea where on the spectrum blogdogs fall as a whole

No. — Garth

Thank goodness. I think we all know how the last blogdogs election poll worked out.

#83 Smoking Man on 10.13.16 at 10:27 pm

#73 The Electric Nikola on 10.13.16 at 10:06 pm
#6 Smoking Man on 10.13.16 at 6:38 pm

But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?-Garth

……………..

The Crazy Guy wins on the 8th and on the 9th Smokey gets to do a guest post on GF explaining Herdonomics.

Actually, the bet was the smoker man would clean Garth’s toilets at the ice cream joint if the orangutan lost… report for duty Nov. 9th and get to work … it’s all in the archives.. you wouldn’t renege on a bet would ya?
…..

First off the bet was Guest post vs Servicing Ice Cream. I don’t do toilets, ever. In order for a bet to be valid, the counterparty needs to accept.
The race is close, and Garth being a balanced and safe sort of fellow would never take that risk. If I got him on a drunk one night maybe?

When I meet him last week, yes I was a bit frightened in a not understanding sort of way. But my observational talents were in high gear. No signs of a drunk in Garth. Clean living, content, warm and kind is what the antennas in my Walmart flip-flop picked up. They are never wrong.

#84 Lefty on 10.13.16 at 10:28 pm

Demographics guru Harry Dent on China housing exuberance.

http://economyandmarkets.com/markets/housing-market-markets/harry-dent-orgasmic-real-estate/

#85 Sheane Wallace on 10.13.16 at 10:35 pm

#71 };-) aka Devil’s Advocate on 10.13.16 at 10:02 pm
If I were American and could vote on November 8th I’d probably vote for Trump. Why?

Well the system is screwed, the average American (and to too close a degree Canadian) is pretty stupid. We all need a wake up call. It’d be good to throw things in a tizzy. Unfortunately I don’t think it’d make much difference. The world is really a screwed up place. Like George Carlin said “Your average person is really quite stupid and if you stop and think about it that means half of them are dumber than that.

————————

That is putting it mildly.

It is actually even more depressing to look at far inferior by intelligence and capacity connected people running the affairs in the world these days and they have the nerves and stupidity to show their ‘superiority’ publicly.
but hey, the world has been like this since Caligula,

as for the ‘average’ intelligent person these days, I would simply pass on as I can not find strong enough words to express my opinion.

dumb-kopf-brain-washed-damaged-brain-frozen-childish-idiot
sounds too mild for me.

working on proper definition.

#86 Sheane Wallace on 10.13.16 at 10:41 pm

mentality of the herd, damn it.

#87 conan on 10.13.16 at 10:46 pm

Oil should increase in price tomorrow. Hearing rumors that the US just destroyed 4 Iranian radar bases in Yemen.

I thought the bet was free sprinkles for SM if Trump wins.

Who suggested guest blogger? That would create mass exodus and anarchy.

#88 Christopher Lackey on 10.13.16 at 10:49 pm

Wow…people make it all the way to you and then still panic and go into cash?

I guess he didn’t see fivethirtyeight.com today (Donald currently sitting at 12% chance of winning, his lowest)

#89 cramar on 10.13.16 at 10:52 pm

#41 Lead Paint on 10.13.16 at 8:13 pm
#6 Smoking Man on 10.13.16 at 6:38 pm

Trump wins, SM guest hosts the blog for a month.

Trump loses, SM is banned for life, or loses his PhD.

————————-

I hate to tell ya, but SM’s PhD is all smoke and mirrors anyway. Loosing it means absolutely nothing!

#90 Jeffery on 10.13.16 at 10:53 pm

The correlation between stocks and bonds are increasing. What if the next major correction is due to a spike in interest rates? Wouldn’t all long duration assets suffer? Unless you are holding substantial cash or negative duration assets (like IO bonds), I’m not sure how you can diversify away from duration risk.

Get serious. Rates are not going to ‘spike.’ — Garth

#91 dogman01 on 10.13.16 at 10:57 pm

Mixed Bag on 10.13.16 at 6:53 pm

Anyone else wonder if The Donald is a Democrat plant?

Thought that from near day one, Hillary and the Donald know each other.

I think the machine is so entrenched it does not strike me as far fetched.

I have Hillary @ Syria fear re the Russians. Is not order under Assad better then this chaos and destruction. The only winner the West backs will be radicals , like Libya.

Hillary may challenge the Russians and it may break the wrong way.

#92 DON on 10.13.16 at 11:06 pm

#31 Rick on 10.13.16 at 7:32 pm
Garth, stick to what you know….finance. You will be wrong, again, on the US election.

I was a member of the House of Commons for nine years, an MP, cabinet minister, leadership candidate and committee chair. And you? — Garth
************************

Political scientists have a hard time calling an election, as it depends on the socio-economic context and mood of the population. Change comes when people have had enough.

Trump – will be known at worst as a vulgar individual who speaks his mind.

Hillary – has crossed so many political and professional lines, the insider speeches are but few examples.

Unless the system is fixed it all comes down to how people actually feel about the Clintons.

If things in the US are as good as people have been saying than the party in power has a greater chance to stay. But something tells me the civil unrest is increasing as the inequality gap grows wider.

Alberta and Brexit were stark reminders of what was thought as simply impossible.

Can’t they simply pause the whole event and bring in new choices, how about the independent candidates provide them equal funding and give them a chance.

For too long perception has been allowed to trump substance.

Hillary speaks perfect political talk sounds good, but is always vague and never translates to anything meaningful.

Trump babbles, but yet he still speaks his mind. And some Americans like their reality TV and Trump is all about the show business. He is asking pointed questions that I would like to hear the answers to.

No to both – The American Public should demand better and so should we in the possible leaders we are presented with.

How about I get back on topic with this

“Red alert for US stocks with ‘very high’ chance of severe fall, warns HSBC technician”

http://www.cnbc.com/2016/10/13/red-alert-for-us-stocks-with-very-high-chance-of-severe-fall-warns-hsbc.html

#93 Prairieboy43 on 10.13.16 at 11:06 pm

Going Hunting election week. Media free. Enjoying the Crisp mountain air from Eastern Rockies, Rolling foothills and soon to be iced Rivers. Canadian Moose this is a warning. Leave now.

#94 Sean on 10.13.16 at 11:06 pm

DELETED

#95 Maga on 10.13.16 at 11:08 pm

Lock her up! Lock her up! Lock her up!

The inanity of comments tonight is overwhelming. What a disappointment. — Garth

#96 Former Fool on 10.13.16 at 11:13 pm

I have my money on Clinton becoming the next POTUS. Actually, I have a steak dinner riding on it.

Fivethirtyeight.com breaks it all down. Nate Silver is a respected statistician. The guy analyzes all the polls, gives more weight to the ones that have had better past predictions, runs some 20,000 simulations, and yields an outcome. Basically, an analysis driven with some hard numbers to yield a result. Rather than some of the gut feeling opinions that most people seem to have.

Take a look at the 538 election “snake”. You’ll notice – out of all the swing states, Hillary only needs to win one of: Colorado, Nevada, Florida, N. Carolina, Ohio, Iowa, Arizona. Trump needs to win them all. My money is on Hillary winning at least one swing state vs. Trump winning all of the swing states.

Don’t chew me out here for my prediction. I dislike them both. I’m only looking at numbers. These are the two worst candidates in US presidential history. Clinton is corrupt and apparently above the law. Trump is accused regularly of sexism and racism. I don’t focus on that though as I genuinely don’t know; I focus on his platform. His policies are a joke and nothing Trump says is founded in any data or fact. Build a wall? Laughable. Engineering and logistics dictates it won’t be done during his presidency (which won’t happen). Rip up NAFTA? He’ll have to get that approved through a Congress and Senate that hate his guts and won’t work with him for 4 years. I could go on but I encourage those interested to check Factcheck.org. They critique the claims of both candidates.

#97 jane24 on 10.13.16 at 11:14 pm

We were in Italy two weeks ago and met a very nice, educated American couple from `New England’ way. They informed us that they were voting for Trump although they usually voted Democrat.

When I expressed surprise they said that they had no choice. One was crazy, Trump, and the other corrupt, Clinton. They hope that the crazy one will surround himself with sane talent but are sure that the corrupt one will surround herself with corruption.

Interesting perspective from the horse’s mouth. So pleased now that I have £30 in bets on Trump!!

#98 not 1st on 10.13.16 at 11:19 pm

Utility worker, and only 13% exposed to the U.S. equity market. Just another victim of the fear you peddle. — Garth

——-

Just keeping it 100. Someone has to.

#99 S.Bby on 10.13.16 at 11:23 pm

There are now 17 houses for sale in my immediate area of South Burnaby – Deer Lake. Prices continue to drop by $1,000 a day.

I don’t think dogs should be allowed to drive.

#100 cramar on 10.13.16 at 11:23 pm

I know there are pockets in Canada that have the same problem. I’ve been saying that for young people, there are some good manufacturing jobs out there for skilled workers.

Indiana could be short as many as 1 million manufacturing employees by 2025:

http://www.marketwatch.com/story/indiana-manufacturers-facing-a-shortage-of-1-million-workers-go-back-to-the-drawing-board-2016-09-21

#101 traderJim on 10.13.16 at 11:27 pm

#35 Andrew Woburn The twitter link you and the Hillary surrogate Salon writer cite is an already debunked fake created by one of the many super Pacs working for Hillary, probably the one called ‘Correct the Record’.

If you had read even a handful of the WikiLeaks Podesta emails, you’d know just how completely the Democrats own the media and have them do their dirty work.

(Look into it folks, the entire mainstream media world is losing what little credibility they already had, it’s quite spectacular, and long overdue.)

It would be miraculous, and speak to a very unsettling state of affairs in the USA, if Trump even makes the race close.

The entire establishment, including the Republican party itself, is working for a Hillary win. Pretty hard to overcome.

And of course, the Donald and his blustering buffoonery make it even more difficult.

But I do give him credit, he’s probably damaged his brand by a billion or perhaps more. For what? And vindictive as the Donald might be, the Clintons will go after him with a vengeance once they are in power.

He thinks he’s been audited by the IRS, lol. Wait ’til he sees what’s coming. There will be FBI investigations, all kinds of false (?) allegations, and even his family will be put through the wringer.

Meanwhile Bill will continue to receive $1m birthday cheques from Qatar, while the Clintons admit privately that Qatar funds ISIL. Sweet.

No one will win on November 8. that’s the only thing we know for sure.

#102 traderJim on 10.13.16 at 11:29 pm

Actually, now that I think about it, maybe there is a winner in this horror show. people are finally wising up to the truth about the bias in the media, and how sycophantic they are to the left.

How ironic that the famously left wing WikiLeaks organization is the one lifting the scales from some people’s eyes.

#103 Chris on 10.13.16 at 11:53 pm

Trump will NOT win. That is not obvious?

#104 DON on 10.13.16 at 11:58 pm

#53 Smartalox on 10.13.16 at 8:51 pm

Thanks for that post! Perfect timing make soo much sense.

Besides…I always knew this blog was a cult of some sort – an unruly bunch of magnificence.

#105 Fortune500 on 10.13.16 at 11:58 pm

Looks like Ontario doesn’t have the guts to pull a ‘Vancouver’. They’ll do anything to avoid deflating this

http://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-said-to-be-eyeing-subsidies-to-bolster-bottom-end-of-housing-market-rather-than-tax-to-cool-top

#106 Not a big deal on 10.13.16 at 11:58 pm

DELETED

#107 Capt. Serious on 10.14.16 at 12:07 am

Fear and greed.
The best thing about a balanced diversified low fee portfolio is that it allows one to focus on the important things in life. You should not need to spend more than a few days a year on your portfolio if you are doing it right.

A couple people made the comment that they think an all stock portfolio is a good way to go. The thing is, living through a bear market if you’ve never done it is a bit like having sex the first time. Sure, people can explain it to you and you might have seen it, but you don’t really know what it’s like until you’ve gone through it. Stock bear markets can be really long in real inflation adjusted terms. Can you stick with a plan for 20 years if you’re still down from where you started? Not many people could. So, diversity is key. You’ll be able to stick to the plan, which is 90% of the battle.

#108 Vundo on 10.14.16 at 12:07 am

Edmonton mutual fund salesman banned from industry over $8.8 million in client losses

In addition to balance and diversification, I would also advocate not buying into shady deals.

#109 WalMark of Sadkatoon on 10.14.16 at 12:13 am

The Canadian economy is slowly but surely going into the tank. Can’t be good for the CAD$.

http://forums.redflagdeals.com/why-cad-usd-dropped-so-much-1-year-1420560/3/#p17974291

“Fair value” for the CAD$ is far above $1 USD$ at this point given the wide disparity in the quality of our economies, and the significant amount of housing and debt deflation that is in our future. The recent weakness is transitory at best.

“Transitory” is 4 years apparently.

When you get the inputs to your argument backwards, then of course the result is going to be backwards.

Yes it will be! :D

#110 15% ontario tax on foreigners on 10.14.16 at 12:14 am

email:
[email protected]
[email protected]
[email protected],
[email protected],
[email protected],
[email protected]

#111 Smartalox on 10.14.16 at 12:45 am

@Smoking Man #70:

Thanks for calling out my post, but if you’d read it closely, (or clicked the link) you might have realized the text in italics was quoted from the article in the link.

I can’t take credit for that work, I just thought the Link’s discussion of Trump’s cult of personality, his true believers, and in particular, the similarity with conspiracy – theory belief systems, were interesting, given what I’ve read in the comments section.

I’m not a fan of Hillary as a person, but I do think that compared to Trump, she is better qualified as a candidate. I even harbour a conspiracy theory of my own, that trump struck a deal with Hillary, to run, just to make her look good! But it’s academic for me, as I can’t vote in the US election.

What was more interesting to me in the article I quoted was the role that stress and insecurity play when it comes to Trumpism and conspiracy theories – committing one’s belief to a story that might be appealing, but also untrue.

To me, that was the most revealing part of the article: when faced with a conspiracy theory victim, to recognize that their point of view is less about ignorance, or malice, but a natural reaction to insecurity, to loneliness, to feeling powerless, in the face of the ‘Normal’.

With record levels of household debt, interest rates set to rise, and times looking bound to get tougher, stresses are on the way up, and conspiracy theorists, charlatans, and quick fix snake oil salesmen will be doing a quick business.

#112 Ronaldo on 10.14.16 at 12:51 am

”So you know what happens on the 9th, right?”

Yep. Trump wins in a landslide victory and I go to the dentist for a crown prep and the world continues to turn.

#113 Dragonslayer on 10.14.16 at 12:54 am

To all the Trump supporters on this blog : Do you not realize that a Trump win would be the worst possible news for Camada? Economically, militarily and culturally it would be horrific for us.
Rooting for Trump as a Canadian is like Austrians in the 30’s rooting for fascism in Germany.
Remember Trudeau Sr.’s analogy about the mouse and the elephant. We get crushed.

#114 Bob dog on 10.14.16 at 1:03 am

For anyone who believes trump can’t win, I would like to take the opportunity to remind you that hitler was democracy elected.

#115 Setting the Record Straight on 10.14.16 at 1:18 am

From the Claremont Review of Books
worth reading

http://www.Claremont.org/crb/basicpage/after-the-republic

#116 Aggregator on 10.14.16 at 1:34 am

Told you. This is the public-to-private subprime transition.

Canada Housing Rules Revive Paper Market Quiet Since Crisis

This means home prices are going higher over the mid-term, as commentator Ron Butler on Canada Mortgage Trends explains:

Mike, no disrespect, but if a mortgage broker feels that the actions of their own government have a good chance of materially reducing that mortgage broker’s income then thoughtful, calm, measured, intelligent responses tend to go out the window and are replaced with an urgent need to make sure the knife does not go any deeper.

You got it Ron. Do whatever it takes to qualify borrowers, just so brokers can keep the lights on.

#117 TheWilyKatipo on 10.14.16 at 2:09 am

When will this damn election be over so the USA can stop boring us stupid with idiot partisan blather for about six months until it all starts over again with effing primaries for 2020?

It isn’t an election any more. It’s a fundraising scam of epic proportions.

#118 Karma on 10.14.16 at 2:33 am

#6 Smoking Man on 10.13.16 at 6:38 pm
“But anyway, the crazy guy’s toast. So you know what happens on the 9th, right?-Garth

……………..

The Crazy Guy wins on the 8th and on the 9th Smokey gets to do a guest post on GF explaining Herdonomics.”

—————————————–

Garth, if Trump loses, you should auto-delete any Smoking Man posts that has “PhD Herdonomics” in the signature.

#119 Karma on 10.14.16 at 2:46 am

#25 Pepito on 10.13.16 at 7:16 pm
“The couple should have kept their public pension. Wouldn’t be sweating the ups and downs now. I guess greed won 3 years ago.

Fear, by the way, is a good thing. It focuses the mind like no other emotion. If you had ever climbed mountains or crossed oceans in a small boat you would know that.”
——————————————–
Fear may focus the mind in certain circumstances, but it also makes people do foolish things when they are thinking ill-prepared to contemplate the consequences of their actions. These (former) clients of Garth may not like taking risks with their capital, but there’s a higher probability of running out of retirement funds the longer they stay in cash.

Fine by me though, bring on a correction.

#120 #1 True Canadian - Read GF More on 10.14.16 at 3:01 am

Nothing new in that article that you would not have read numerous times here, in the GF Blog and well in advance, along with a lot of thoughtful (and nutty) Commentary – which does not exist at the end of that article.

Read this Blog more frequently.

bsant

#121 Trumpian on 10.14.16 at 3:06 am

One of the patterns I see is the difference between attack styles of Clinton and Trump supporters, in that Clinton supporters attack both Trump and his supporters while Trump supporters mostly attack only Clinton (and other government officials).

For Trump supporters, Clinton is the enemy.
For Clinton supporters, Trump and everyone who supports him is the enemy.

Even in the comments section of this blog.

#122 Karma on 10.14.16 at 3:29 am

#87 Christopher Lackey on 10.13.16 at 10:49 pm
“Wow…people make it all the way to you and then still panic and go into cash?

I guess he didn’t see fivethirtyeight.com today (Donald currently sitting at 12% chance of winning, his lowest)”

Actually, his lowest was 10.8% on August 14th. But regardless, he’s currently at 14.4%, which is still quite low…

#123 Freedom First on 10.14.16 at 3:54 am

Yes. Fear. Powerful.

Naturally, for living a first class Freedom First lifestyle, one must study human psychology throughout their life, on a regular basis. Just so you learn and remember what you’re dealing with.

Also, of course, this includes the male and female mindset/instincts. There is a difference. And, what you do not know can cost you dearly, as both unethical/disturbed men and women can and do use this knowledge to take advantage of people, for a variety of selfish and self-centered goals. The Herd are easy targets.

That being said, in my studies over the years, I have read that “FEAR” can stand for “False Evidence Appearing Real”.

You have to know how the mind works to control your emotions. Fact.

007
Freedom First
PHD/Freedomonics

ps I have talked little about the upcoming U.S. election. Been waiting for HC & DT to take the gloves off.

#124 Bankish on 10.14.16 at 5:18 am

#106 Capt. Serious on 10.14.16 at 12:07 am
Fear and greed.
The best thing about a balanced diversified low fee portfolio is that it allows one to focus on the important things in life. You should not need to spend more than a few days a year on your portfolio if you are doing it right.

That’s fine for those that find finance boring or stressful,but I like investing and my dividend portfolio will carry me through the down times.
If your stocks are down for twenty years you are most definitely doing something wrong. My longest down period was three years(guess when?)
If your method is working for you that’s great,but don’t judge others who are just as successful but doing it in a different way

#125 Wrk.dover on 10.14.16 at 7:06 am

Nov. 8, a nice day for a white wedding!

#126 IHCTD9 on 10.14.16 at 7:09 am

#161 Context on 10.13.16 at 4:19 pm
#157 IHCTD9:- Just in case you want to split and change your mind have a bargain for you. Its on sale for $5,000 which is MLS number 7175917. In fact maybe the Smoking Man might be interested in buying for a safe home.
________________________________________

Hey sounds great, I’ve changed my mind. Hopefully SM lives in Alberta – I’m just waiting for Nutbar Notley to get booted before I pack it up and head out West.

#127 IHCTD9 on 10.14.16 at 7:12 am

#121 Trumpian on 10.14.16 at 3:06 am
One of the patterns I see is the difference between attack styles of Clinton and Trump supporters, in that Clinton supporters attack both Trump and his supporters while Trump supporters mostly attack only Clinton (and other government officials).

For Trump supporters, Clinton is the enemy.
For Clinton supporters, Trump and everyone who supports him is the enemy.

Even in the comments section of this blog.
_________________________________________

That’s a left/right thing. Angry lefties can’t control the berserk, the foam drips in plain view of all.

#128 Randy on 10.14.16 at 7:26 am

http://www.goodreads.com/book/show/16057204-the-five-stages-of-collapse
Which stage do you feel we are in currently ?

#129 down and out on 10.14.16 at 7:27 am

Marshall McLuhan was ahead of his time knowing what was going to happen watching the daily media manipulation of tidbits of facts being distorted or magnified into headlines for the masses ,good thing the majority have reservations about the main stream media truthfulness .

#130 IHCTD9 on 10.14.16 at 7:27 am

#104 Fortune500 on 10.13.16 at 11:58 pm
Looks like Ontario doesn’t have the guts to pull a ‘Vancouver’. They’ll do anything to avoid deflating this

http://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-said-to-be-eyeing-subsidies-to-bolster-bottom-end-of-housing-market-rather-than-tax-to-cool-top
__________________________________________

Wynnie’s been getting a lot of bad press lately. Seems many outside the golden horseshoe have to choose between food and paying their hydro bill. She is feeling that everyone does not like her anymore, and it’s panic time.

#131 IHCTD9 on 10.14.16 at 7:39 am

#92 Prairieboy43 on 10.13.16 at 11:06 pm
Going Hunting election week. Media free. Enjoying the Crisp mountain air from Eastern Rockies, Rolling foothills and soon to be iced Rivers. Canadian Moose this is a warning. Leave now.
____________________________________________

I don’t hunt, but that sounds damn good! I think this weekend will see me on the Grizzly 700 well off the beaten path :).

#132 pBrasseur on 10.14.16 at 7:40 am

Trump maybe toast

But now we may end up with a democrat controlled congress.

The markets won’t like that either.

#133 Braj on 10.14.16 at 8:12 am

109 15% ontario tax on foreigners on 10.14.16 at 12:14 am
email:
[email protected]
[email protected]
[email protected],
[email protected],
[email protected],
[email protected]

You worry about nonexistent foreigner tax and not the almost basically existent carbon tax??

#134 Randy on 10.14.16 at 8:21 am

The MSM is one of the real victims. Cancelled my cable subscriptions.

#135 crowdedelevatorfartz on 10.14.16 at 8:26 am

@#107 Vundo
“I would also advocate not buying into shady deals.”
********************************************

I’m pretty certain that none of the clients of this Mutal Fund “salesman” thought that what they were buying was “shady”.
They trusted a piece of $h!t and got hosed.
Happens all the time, every day, all across Canada.

Patently false. That’s why this is news. — Garth

#136 Andrew t on 10.14.16 at 8:35 am

#96 jane24 on 10.13.16 at 11:14 pm
We were in Italy two weeks ago and met a very nice, educated American couple from `New England’ way. They informed us that they were voting for Trump although they usually voted Democrat.

When I expressed surprise they said that they had no choice. One was crazy, Trump, and the other corrupt, Clinton. They hope that the crazy one will surround himself with sane talent but are sure that the corrupt one will surround herself with corruption.

Interesting perspective from the horse’s mouth. So pleased now that I have £30 in bets on Trump!!

Boy that couple is misguided. Just look who surrounds Trump now. If they think cabinet posts for Trump’s kids, Steve Bannon, nosferatu Rudy Guiliani and the rest of that rogues gallery of nincompoops, sycophants, and white nationalists will do the trick they’re morons. There’s no way to sugar coat it. That gang defines sketchy a million miles above and beyond anyone associated with Clinton. Scott Baio for Secretary of State? Meanwhile, Michelle Obama just gave a speech for the ages yesterday. Hillary Clinton’s administration will be just fine. Not perfect, but at the very least competent, which passes for amazing given the alternative.

#137 Pepito on 10.14.16 at 9:14 am

Lots of cognitive dissonance on display here, not least of all from the host. Belief in the “housing always goes up ” meme is delusional, but belief that ” the market always goes up” is intelligence squared. Fear of serious financial market downturns is a bad thing, but fear of entering the housing market at current highs is a good thing.

A lot of cowboys here in the comment section, bragging about how big their balls are for buying the dips because the market always comes back. Of course it does, until it doesn’t. The Japanese, usually ahead of everybody on everything, learned that lesson already. Soon, if not already, you will hear a barista, the equivalent of a 1920 shoe shine boy, talking about his ETF balanced portfolio. That should tell you something.

Lastly, those wishing for a Hillary win should also hope that she is indeed a big-time liar. Because if she is not, and the dems also win the house and senate, markets will tank on all the Bernie promises she will have to keep.

Best case scenario for the vampire squid crowd is a crooked Hillary win and a Republican congress… so nothing gets done, again.

Nice rant, but a balanced portfolio is not ‘buying the market.’ How can people read something so many times and remain so thick? — Garth

#138 pBrasseur on 10.14.16 at 9:20 am

Honestly I couldn’t care less about the balanced portfolio thing although I recognize it is the very purpose of this blog to present you (ad-nauseam) with all the risks out there and then the cure which is of course a balanced portfolio (incidentally available you know where)…

In fact the numbers Garth himself mentions as the top of this post should suffice to convince you how little risk a 100% stocks portfolio represent, this is even truer if your portfolio is made up of carefully chosen, successful, well managed non-cyclical companies! If you are really prudent you may want to keep a couple of years’ worth of cash in front of you to give you peace of mind, but that’s not even necessary.

My main portfolio was created in 2004, mostly US companies (not a geo-political choice but because that’s where the best companies are) with a low CAD and been through the 2008 debacle, that a lot of headwinds and far from the best period but I still made 9.2% annualized (in CAD) since then. This is no extraordinary accomplishment, in fact it will very likely get better because my companies themselves have grown at a much higher rate, in the end that’s all it about!

Just remember this: Over time you will never find anything less risky than owning the best wealth creators in the world. No need to time the markets, mitigate risk with low yielding assets or presume you can predict market reaction to whatever geo-political mess is out there. Just stick with those making money and instead of worrying about Trump spend you effort to find them (or pay someone to do that for you).

Now after challenging the great master’s investment strategy I should be good for a reply ;-)

#139 Penny Henny on 10.14.16 at 9:52 am

#57 Andrew Woburn on 10.13.16 at 9:03 pm
Trump people are sure millions of people will vote for him once they are safe from the scrutiny in the polling booth. It never occurs to them there could be millions of women in redneck country who might do exactly the opposite once their male relatives can’t see them?
////////////////////////////////////

Once they is done their chores maybes wes will let them go a votin.

#140 jistsayinh on 10.14.16 at 10:18 am

#31 Rick on 10.13.16 at 7:32 pm
Garth, stick to what you know….finance. You will be wrong, again, on the US election.

I was a member of the House of Commons for nine years, an MP, cabinet minister, leadership candidate and committee chair. And you? — Garth”

Garth, I promise not to hold any of that against you!

#141 45north on 10.14.16 at 10:20 am

a call came in from a couple who had commuted a fat, seven-figure, public sector pension three years ago and were fully-invested in a balanced and nicely-diversified portfolio (up 5% so far this year).

the real enemy is yourself, in this case the couple has panicked, Donald Trump is a small threat who by-the-way should not be President.

Tony Schwartz: If he had to be briefed on a crisis in the Situation Room, it’s impossible to imagine him paying attention over a long period of time

http://www.newyorker.com/magazine/2016/07/25/donald-trumps-ghostwriter-tells-all

there is a common thread between this couple and Donald Trump: both have started on paths they have not considered.

#142 drdoeslittler on 10.14.16 at 10:53 am

#90 dogman01 on 10.13.16 at 10:57 pm

Mixed Bag on 10.13.16 at 6:53 pm

Anyone else wonder if The Donald is a Democrat plant?

Thought that from near day one, Hillary and the Donald know each other.

I think the machine is so entrenched it does not strike me as far fetched….”

C’mon go all the way and finish the narrative with some out there speculation. Maybe if it is rigged as you say, Clinton has already promised some juicy contracts to Trump and co. Maybe military contractors in Syria to help “rebuild” the country.

#143 Smoking Man on 10.14.16 at 10:59 am

2016 election.

Deplorables vs Delusionals

#144 Canadian Moose on 10.14.16 at 11:05 am

Prairieboy43 on 10.13.16 at 11:06 pm

Going Hunting election week. Media free. Enjoying the Crisp mountain air from Eastern Rockies, Rolling foothills and soon to be iced Rivers. Canadian Moose this is a warning. Leave now..

I am in my element, not worrying too much. Garth’s blog can be summed up in 2 words “dont panic” and stick to that balanced portfolio. Thats the plan…….with another smart ass camo hunter in the mix in my forest.

FYI. I will be the Moose hiding in the water with a straw for breathing.

#145 Bankish on 10.14.16 at 11:24 am

#44 Ace Goodheart on 10.13.16 at 8:28 pm

Were they seriously selling REITS? What in the world for? They are trading below book value. REITS are the most ridiculously sweet and sexy investment available today. They don’t even pay tax for cripes sake. How could anyone go to cash on a Reit?

Which REITS would you recommend? I now know nothing much about them,but will start studying them for long term investment. Are yo using them for long term investment and how safe are they?

#146 Context on 10.14.16 at 11:26 am

Enough of this election talk as your comments are scaring me to buy a bottle of booze and become a drunk. I am quite happy with my green tea and glass of Pepsi going forward so lets talk Real Estate instead.

#147 jess on 10.14.16 at 11:55 am

excrement of lower life forms:

Sheila Blair:

…”Its losses were not attributable to uncontrollable ‘market conditions’; they were attributable to weak management, high levels of leverage, and excessive risk taking. It had major losses driven by their exposures to a virtual hit list of high-risk lending; subprime mortgages, ‘Alt-A’ mortgages, ‘designer’ credit cards, leveraged loans, and poorly underwritten commercial real estate. It had loaded up on exotic CDOs and auction-rate securities. It was taking losses on credit default swaps entered into with weak counterparties, and it had relied on unstable volatile funding – a lot of short-term loans and foreign deposits. If you wanted to make a definitive list of all the bad practices that had led to the crisis, all you had to do was look at Citi’s financial strategies…What’s more, virtually no meaningful supervisory measures had been taken against the bank by either the OCC or the NY Fed…Instead, the OCC and the NY Fed stood by as that sick bank continued to pay major dividends and pretended that it was healthy.”

http://wallstreetonparade.com/wp-content/uploads/2016/07/Derivatives-at-Bank-Holding-Companies-March-31-2016-OCC-Report.png

#148 Fools on 10.14.16 at 12:19 pm

http://www.bnn.ca/mortgage-lenders-swamped-as-homebuyers-race-to-beat-new-stress-test-rules-1.585079

Don’t these fools realize if they only stopped buying the hse of cards would collapse much faster? …. Can’t fix stupid.

#149 Victor V on 10.14.16 at 12:21 pm

Converting your principal residence into a rental property (or vice versa)? Here’s what Ottawa’s new rules mean for you

http://business.financialpost.com/personal-finance/taxes/converting-your-principal-residence-into-a-rental-property-or-vice-versa-heres-what-ottawas-new-rules-mean-for-you

#150 I'm stupid on 10.14.16 at 12:23 pm

I’m not saying Trump will win. The way I rationalized the US election is similar to a housing bubble. In a bubble those within it can’t see the error in their thinking. Those looking into the bubble are scratching their heads, not knowing what those fools are thinking. The same is going on in the US, we’re on the outside scratching our heads. We can’t fully understand the sentiment of disenfranchised Americans since we’re looking in and angry people tend to take action. Voter turnout will determine the winner, a higher turnout than normal will favour Trump.

#151 Victor V on 10.14.16 at 12:26 pm

http://business.financialpost.com/investing/trading-desk/fed-poised-for-historic-rate-hike-amid-elevated-economic-risks?__lsa=140d-356c

The Federal Reserve has never hiked interest rates while the balance of economic risks has been as negative as it is today, according to David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates.

“This is rather historic,” he said in the daily Breakfast with Dave report, pointing to the latest set of FOMC minutes.

While the market pegs the odds of a rate hike by the Fed in November at below 20 per cent, fed funds futures contracts suggest a nearly 70 per cent chance of an increase in December.

Rosenberg noted that ‘down’ or ‘downside’ was mentioned five times in the macro forecast provided by Fed staffers, while ‘risks’ also came up five times.

#152 Victor V on 10.14.16 at 12:35 pm

“We have found that potential home purchasers, especially first-time home buyers, are stunned that they may now not be able to get a mortgage.”

http://www.bnn.ca/mortgage-lenders-swamped-as-homebuyers-race-to-beat-new-stress-test-rules-1.585079

#153 Context on 10.14.16 at 12:38 pm

This article came out in the Globe and Mail whereby Urbanation Inc. is stating bidding wars are breaking out and rents are going higher in Toronto which is all due to Ottawa’s new mortgage rules. The research of facts comes exclusively from the multiple listing service on condos in Toronto or the Real Estate cartel. This is bogus as they are discounting untold thousands of condos for rent that are off the books renting for much less.

#154 cramar on 10.14.16 at 1:19 pm

#138 pBrasseur on 10.14.16 at 9:20 am

Honestly I couldn’t care less about the balanced portfolio thing although I recognize it is the very purpose of this blog to present you (ad-nauseam) with all the risks out there and then the cure which is of course a balanced portfolio (incidentally available you know where)…

In fact the numbers Garth himself mentions as the top of this post should suffice to convince you how little risk a 100% stocks portfolio represent, this is even truer if your portfolio is made up of carefully chosen, successful, well managed non-cyclical companies! If you are really prudent you may want to keep a couple of years’ worth of cash in front of you to give you peace of mind, but that’s not even necessary.

My main portfolio was created in 2004, mostly US companies (not a geo-political choice but because that’s where the best companies are) with a low CAD and been through the 2008 debacle, that a lot of headwinds and far from the best period but I still made 9.2% annualized (in CAD) since then. This is no extraordinary accomplishment, in fact it will very likely get better because my companies themselves have grown at a much higher rate, in the end that’s all it about!

Just remember this: Over time you will never find anything less risky than owning the best wealth creators in the world. No need to time the markets, mitigate risk with low yielding assets or presume you can predict market reaction to whatever geo-political mess is out there. Just stick with those making money and instead of worrying about Trump spend you effort to find them (or pay someone to do that for you).

Now after challenging the great master’s investment strategy I should be good for a reply ;-)

———–

Yup! There is more than one way of becoming successful. Garth’s (and others) “Balanced Portfolio” method is a valid way for most anyone. Your “good companies” approach works over time too. Thanks for posting this and reminding me that if I just bought technology companies in the 1980s-1990s, instead of working for them, I would have been much better off. Sigh!

#155 Pepito on 10.14.16 at 1:22 pm

Nice rant, but a balanced portfolio is not ‘buying the market.’ How can people read something so many times and remain so thick? — Garth
__________________________________

Of course it is. “Market” in my post refers to “financial market,” as stated. Reits, Preferreds, Bonds, ETFs etc.. are all products in the financial market. Agree?

The worrying part about a balanced portfolio, from what I can see, is the increasing correlation between both regions and products. Note the recent correlation between stock and bond price movements. If this becomes a serious trend, then diversification and balance ( your and thousands of other portfolio managers’ one horse strategy )will lose much of its volatility hedge. Then what?

Saying all liquid assets are part of one ‘financial market’ is like saying all Trump supporters are deplorables. Wait… — Garth

#156 bdwy sktrn on 10.14.16 at 1:23 pm

RIP jim prentice.

he was on a plane out of kelowna which crashed yesterday.

http://bc.ctvnews.ca/former-alberta-premier-jim-prentice-dies-in-b-c-plane-crash-1.3115233

#157 crowdedelevatorfartz on 10.14.16 at 1:25 pm

@#135
“Patently false. That’s why this is news. — Garth”
*******************************************

The “news” is the conviction and his lifetime banishment from selling Mutual Funds.

The bad financial advice happening everyday, across Canada……well.

That’s what’s been bringing your company new clients that are fed up with lousy(zero returns), expensive(high fees) advice that achieves less than nothing for their clients’ retirement……..
That’s why I moved.

#158 South Etobicoke Trump Campaign Central on 10.14.16 at 1:27 pm

#113 Dragonslayer

So Trump is LITERALLY like Hitler?!

What a refreshing and insightful perspective.

I hope you don’t live in an urban area near any military installations. Clinton’s deranged Neo-Con and “Right to Protect” backers are determined to initiate a nuclear exchange with Russia.

Those directly within the blast radius will be the luckiest.

#159 Cici on 10.14.16 at 1:27 pm

Breaking news: Jim Prentice (former Alberta Premier) killed in B.C. plane crash:

https://ca.news.yahoo.com/former-alberta-premier-jim-prentice-164941416.html

#160 jess on 10.14.16 at 1:33 pm

Regulator issues warning to investors

The Financial Services Commission of Ontario, which regulates syndicated mortgages, recently warned investors to be careful when it comes to the value of property.

“You want to ensure the appraiser has valued the property in its current state without any assumptions concerning the successful completion of the property,” FSCO stated on its website in August. “If the appraiser has made such assumptions, the sale price of the undeveloped property would likely be lower than the value indicated in the appraisal. This would create more risk in terms of recovering your investment.”

http://www.cbc.ca/news/canada/manitoba/fortress-land-values-1.3802841

#161 Vern from Cowtown on 10.14.16 at 1:49 pm

The concept that Trump would be bad for Canada doesn’t even hold water. Although I believe Gartho is right – HRC will win – I just don’t think it’s even relevant.

Garth, what you’re saying here regarding the long-term market analysis – and a message you’ve repeated 170 times (I’m counting) – makes perfect sense to people who understand math and history (and the fact that it repeats itself).

However, most people just don’t understand math and sure as heck don’t care about history, so you get hormones (emotions) driving decisions.

So, you continue to struggle.
As T2 and our educational system push us to stay more in tune with ourselves and how we feel, topics like math, finance and history will continue to get the back burner treatment.

The choir is still listening, though. Keep preachin’ bro….I mean, father.

#162 Victor V on 10.14.16 at 1:51 pm

Juicy dividends and s/p trending higher. Gotta love prefs:

https://ca.finance.yahoo.com/echarts?s=CPD.TO#symbol=CPD.TO;range=1m

#163 Careful what you wish for on 10.14.16 at 1:55 pm

And for all of you renters thinking that the new mortgage rules will benefit you, be sure to understand that you rents are going up.

“Even so, the number of new apartment buildings under construction is still too small to meet the record demand for rentals, which is set to only increase in the coming months as more buyers are priced out of the housing market.
Even so, the number of new apartment buildings under construction is still too small to meet the record demand for rentals, which is set to only increase in the coming months as more buyers are priced out of the housing market.

theglobeandmail.com/real-estate/toronto/ottawas-new-mortgage-rules-will-drive-up-rents-in-toronto-study/article32358821/

Remember all those years of glee about a pending oversupply of GTA condos, well, it looks like the industry regulated itself and choked the supply enough to keep demand up. With limited supply coming on the market, along with more people being priced out, it means more demand for rentals.

And what happened to the impending TO and Ontario foreign buyers tax because? Well, it looks like Wynne will out in measures to further stimulate the market.

You can keep waiting for the mythical crash/correction to happen.

What is the next hope for the renters?

Still waiting to hear how rental rates actually go down when there is a correction – lol. Logic dictates that when more people are priced out because of market prices, and when more people sit on the sideline not wanting to catch the falling knife in a correction, it means more people going after a limited pool of information.

This is one of the little nasty truths behind sitting on the sidelines and watching your portfolio returns eaten up by increasing rent.

#164 jess on 10.14.16 at 2:12 pm

…”The collapse of property developments in Auckland as banks refuse to fund projects due to blowouts in construction and labour costs, is “almost groundhog day” to the run-up of the global financial crisis in 2007/2008 says John Kensington, the author of KPMG’s Financial Institutions Performance Survey.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11727267

#165 Denise#1 on 10.14.16 at 2:12 pm

#148 Fools on 10.14.16 at 12:19 pm
http://www.bnn.ca/mortgage-lenders-swamped-as-homebuyers-race-to-beat-new-stress-test-rules-1.585079

Don’t these fools realize if they only stopped buying the hse of cards would collapse much faster? …. Can’t fix stupid.
====================================
Yes! Exactly! It drives me insane listening to the news about the

#166 Denise#1 on 10.14.16 at 2:18 pm

Oops, not finished haha. It does drive me crazy listening to the news and reading articles about the “poor potential buyers” who now won’t be able to purchase RE under the new rules. They are so freaking stupid!! These are common sense rules, you know, like before Harper & Co screwed Canada so badly with his 2008 housing “rules”.
Prices will come down, like they should’ve been allowed to in 2008, a natural correction.
WAIT people! Think, read, educate yourselves, use your brains. So frustrating to read the BS drivel about poor potential buyers now unable to afford a house…

#167 BobC on 10.14.16 at 2:47 pm

DELETED

#168 Bottoms_Up on 10.14.16 at 2:54 pm

The election is a 6-sided die.

Trump has one number.

#169 rjrt81 on 10.14.16 at 2:56 pm

#143 Smoking Man on 10.14.16 at 10:59 am
2016 election.

Deplorables vs Delusionals
——————————————————————–

strange. you fit in both camps.

#170 mike from mtl on 10.14.16 at 2:57 pm

#137 Pepito on 10.14.16 at 9:14 am
The Japanese, usually ahead of everybody on everything, learned that lesson already.
=====================================

Whilst I agree on the 20 years ahead point and quite sure our housing bubble will be like theirs, slow and grinding.

Not sure where you’re going on about though, if invested heavily domestically then yes agreed. However same is true to the Canadian, British, German or Chinese investor as well. Putting bulk of your net worth invested in one market or (gads) asset class is plain foolish in my opinion.

#171 Aggregator on 10.14.16 at 3:14 pm

#152 Victor V “We have found that potential home purchasers, especially first-time home buyers, are stunned that they may now not be able to get a mortgage.”

This is all fear mongering from the broker industry. What they're really kicking and screaming about is that they won't be able to offload FTB mortgage risk to taxpayers and now have to use the private market to get a real rate of interest. Private mortgage funding has practically been nonexistent in Canada since 2008, and I'm willing to bet there are yield-starved investors our there willing to buy this stuff (at the right price) if private lenders start bundling mortgages.

What lenders fail to realize is that the govt's private mortgage limit of $300B is almost breached. Genworth estimated the balance at $240B ($60B remaining) and the limit would be breached sometime in 2017 at the current rate. And if homes were to continue higher the limit would be breached even sooner. This is why the govt had to act sooner rather then later: because they're not willing to raise the limit (while planning to spend and run a deficit) stated in the PRMHIA Act.

On top of that.. think of all the housing units under construction with pre-approved buyers. Many, in not most of those buyers will need mortgage insurance. 

Housing starts 12,596
Housing Under Construction 192,733
Total: 205,329

Canada Aug YTD average price $494,938 (CREA, nsa)

$494,938 x 205,329 = $101,625,124,602

Assuming 50% of those buyers need mortgage insurance, that's another $50B in mortgage insurance (on top of resale market) needed over the next few years. The problem is the drawdown rate from outstanding insurers' insurance-in-force is only 10% per annum. This is the crux of the problem: Who's going to insure all these mortgages? It seems the govt has opted out, for now anyway.

#172 Mr. Frugal on 10.14.16 at 3:14 pm

There are 25,000 deplorables watching Trump in Greensboro NC. And that’s only one of the Youtube streams covering the event. Does’t look to me like he’s done. I think it’s the MSM that’s done. Oh and crooked Hillary, she’s done too.

#173 jess on 10.14.16 at 3:20 pm

ACLU And NAACP Accuse The City Of Detroit Overcharging Homeowners On Tax Bills

The ACLU and the NAACP have filed a joint lawsuit against the Wayne County Treasurer and the City of Detroit. Both the ACLU and the NAACP allege that thousands of pending evictions are the result of illegal tax foreclosures.

“Instead of conducting annual assessments or properly updating recent property sales, the lawsuit alleges the city used assessment rolls with estimated values that had no relationship with the actual True Cash Value of the properties, a violation of law, lawyers for the plaintiffs argue.”
http://www.mlive.com/news/detroit/index.ssf/2016/07/civil_rights_group_sues_wayne.html

#174 Context on 10.14.16 at 3:25 pm

I just checked one of the non listing sites and rentals are being uploaded by the minute in Toronto and elsewhere. Existing homes; new homes; condos; and apartments are for rent. One caught my eye as had an office once in the shopping center commercial part with a great location. How would you like a luxury high rise apartment rental with an inside walk to the subway and a major indoor shopping center with everything on a renewable lease. The rents for a one bedroom start at $1,261 and so on, but there will be extra for the hydro and underground assigned parking. Not a bad deal for a bullet shot on the subway at Yonge going downtown.

#175 Fluorine on 10.14.16 at 4:10 pm

Just breathe… I don’t envy you having to filter this crap, but there are some interesting links amongst the turds.

I look forward to this election being over and we can resume our regularly scheduled programming of investment advice.

I’m not an ass-kisser, but I am sometimes afraid you will get fed up by the trash and shutter the site. I think that would be a win for them, so please remember the silent majority who have no need to post trump nonsense, and soldier on!

Cheers,

Flu

#176 Landlord on 10.14.16 at 4:17 pm

#162 Careful what you wish for on 10.

You must be an uneducated realtor spreading fear. Rents are coming down as there is so many rentals avaliable it’s not even funny. Btw you do realize that article you posted is pure lies and made up. As a landlord I can tell you it is hard to find a good tenant. If you didn’t buy your condo years ago (2010 and lower) your condo will be cash flow negative. With new rules prices will fall on top of being cash flow negative. I hate stupid realtors.

#177 Landlord on 10.14.16 at 4:20 pm

Fools #148

It’s all propaganda and lies from the real estate industry

#178 Trump Likes Women on 10.14.16 at 4:31 pm

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#179 Shut down CMHC on 10.14.16 at 4:31 pm

Email
foreigners on 10.14.16 at 12:14 am
email:
[email protected]
[email protected]
[email protected],
[email protected],
[email protected],
[email protected]

Don’t be lazy just do it. I’ve email them all.

#180 traderJim on 10.14.16 at 4:39 pm

“Trump is Hitler”

A more clever person than I pointed out that the people pushing this idea are pretty much validating what every redneck, conspiracy theorist, prepper and gun nut has been saying for years, which is that they need to prepare for a totalitarian government in the US of A.

I always dismissed them as kooks, but you do start to wonder.

#181 Dan on 10.14.16 at 4:51 pm

Hope Trump wins and all of those who put so much effort to deny his presidency, loose they job.

#182 Spiltbongwater on 10.14.16 at 5:00 pm

I think anytime one flys in a cessna there is a great chance of death. RiP Jim

#183 Blacksheep on 10.14.16 at 5:19 pm

Donald,

Brother your having a little trouble and need something big to motivate the citizenry.

The people of the US of A are pissed at the outsourcing of jobs since Bill Clinton signed NAFTA. You could bring jobs back to the west, but you need to layout a plan how.

1) All globally trading nations are assigned a: “Trade Class Rating”. (T.C.R.)

Example: “A”, “B”, “C”, “D”, “E” & “F”.

T.C.R. of “A” is assigned only to countries with the strictest, environmental, labour, health care and wage compensation practices. (Switzerland)

T.C.R. of “F” is assigned to countries with non existent, environment, labour, health care, or wage compensation practices. (Sierra Leone)

With the rest of trading nations, falling somewhere in between.

2) The following import taxes are linked, to all globally trading nations receiving a “Trade Class Rating”

T.C.R. of “A” 0% import tax.
T.C.R. of “B” 10% import tax.
T.C.R. of “C” 20% import tax.
T.C.R. of “D” 30% import tax.
T.C.R. of “E” 40% import tax.
T.C.R. of “F” 50% import tax.

A country with a T.C.R. of “A” (Switzerland) sells goods to a country with a T.C.R of “A”, (Sweden) 0% import taxes apply.

A country with a T.C.R. of “F” (India) sells goods to a country with a T.C.R of “B”, (USA) 40% import taxes apply.

A country with a T.C.R. of “E” (Mexico) sells goods to a country with a T.C.R of “A”, (Canada) 40% import taxes apply.

This of course only applies to lower T.C.R. countries trading up. If an “A” T.C.R. can manage to sell goods into a “F” T.C.R. good on them.

This would bring jobs back to the US do the levelling of global economic trade, with out damaging countries that are currently trading on level T.C.R.’s.

If Trumps talks about anything like this, you’ll know where it came from.

#184 Pepito on 10.14.16 at 5:26 pm

#169 mike from mtl on 10.14.16 at 2:57 pm
#137 Pepito on 10.14.16 at 9:14 am
The Japanese, usually ahead of everybody on everything, learned that lesson already.
=====================================

Whilst I agree on the 20 years ahead point and quite sure our housing bubble will be like theirs, slow and grinding.

Not sure where you’re going on about though, if invested heavily domestically then yes agreed. However same is true to the Canadian, British, German or Chinese investor as well. Putting bulk of your net worth invested in one market or (gads) asset class is plain foolish in my opinion
_______________________________________
I’m making 2 points. First, the Japanese Nikkei is evidence that no regional stock market is immune to a downturn that just doesn’t come back up for a very long time, if ever…. a point you seem to agree with.

The second point is in my reply to Garth regarding correlation across financial markets both geographically and in terms of asset classes. The 2008 worldwide crash was a result of such correlation. Diversified and balanced portfolios may not provide the hedge against volatility if most markets act in unison which, ironically, the huge worldwide ETF market is actually facilitating. In other words, the possibility exists that in a major crash, most markets and asset classes may go down simultaneously and stay there for a very long time as the Nikkei has.

#185 Doghouse Dweller on 10.14.16 at 5:31 pm

He must have read this post by Ms. Park before he panicked.

https://jugglingdynamite.com/2016/10/11/calling-bs-on-the-buy-and-hold-propaganda/

The markets have been very correlated for many years . On a down day
everything goes red and when the FED cajoles its all green, rainbows and unicorns all around.
They say the FED is the market, there is no longer honest price discovery. I hope he didn`t deposit his cash with Wells Fargo !

#186 Blacksheep on 10.14.16 at 5:37 pm

Emailed Trump Oct/13/16

#187 Ace Goodheart on 10.14.16 at 5:43 pm

Reading more of that new buyers’ website I mentioned in my other post. I found a couple who bought a house for I believe a million two hundred using what looked like 300k down and mortgaging the rest.

They had the opportunity to purchase a house for 500k. Turned it down. Reason? Not enough trees. No guff. Seriously.

So they gave themselves a 900k mortgage (instead of 200k) because they wanted trees.

This is f $&^$g ridiculous people. What sort of lotus is everyone on? You can buy a lot of trees for 700,000 dollars. A full grown tree, transplanted to your yard, costs around $3000.00. There are companies that will bring you a tree tomorrow. Just call. We’re talkin Douglas fir, maple, linden you name it. Right off the truck.

$700,000 for trees?

People are really getting nutty.

The other post had two folks buying a house because they had a dog who needed a backyard. I believe the price was 760k.

From my perspective I like selling over priced real Estate to people who buy for stupid reasons.

I am getting rich.

#188 Tony on 10.14.16 at 6:23 pm

Re: #162 Careful what you wish for on 10.14.16 at 1:55 pm

It’s common knowledge worldwide when property prices fall so do rents. That may never change and certainly will not change with the new mortgage rules.

#189 jess on 10.14.16 at 7:21 pm

goldman’s new consumer lending platform

online lending platform, Marcus.

Named after one of the banks founders, Marcus Goldman, the business will offer unsecured personal loans of up to $30,000 and is targeting prime borrowers who may be looking to consolidate their credit card debt, or those that are frustrated with the fees and complexity of other lenders. The Marcus platform will offer two-to-six-year fixed rate loans at interest rates of between 5.99% to 22.99%, and is being positioned as a consumer friendly lending alternative due to a lack of origination and prepayment fees, flexible payment dates, and overall simplicity.

#190 Careful what you wish for on 10.14.16 at 7:22 pm

#162 Careful what you wish for on 10.

You must be an uneducated realtor spreading fear. Rents are coming down as there is so many rentals avaliable it’s not even funny. Btw you do realize that article you posted is pure lies and made up. As a landlord I can tell you it is hard to find a good tenant. If you didn’t buy your condo years ago (2010 and lower) your condo will be cash flow negative. With new rules prices will fall on top of being cash flow negative. I hate stupid realtors.

——

Landlord – where are rents coming down? Not in the GTA; not in Vancouver or the lower mainland; not on Vancouver Island. Perhaps in your podunk neck of the woods they are but not in areas with 0.5% vacancy rates. The reality is that there are bidding wars and increases beyond inflation.

I dislike renters posing as landlords who are always apparently ‘cash flow negative.’

#191 Greaterfool Dead on 10.14.16 at 8:34 pm

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#192 JimB on 10.15.16 at 2:00 pm

“In 2008-9 the TSX was crushed 55% and took seven years to struggle back. The balanced portfolio lost 20% and rebounded in a single year.”

In September 2010, I made a note in the spreadsheet I use to track our (balanced and diversified) portfolio: “Our portfolio was down 18.7% in 2008, and up 17.3% in 2009, therefore we made back the 2008 losses when our portfolio was up another 4.9% (which occurred in September 2010).”

I keep that note in the spreadsheet as a reminder to always keep a cool head, particularly when events like Brexit and the oil collapse (both of which never came remotely close to the potential danger of the GFC) happen along, as “unknown unknowns” always will.

P.S. To believe that the Human (barely) Orangutan will emerge triumphant on November 8, one must be as delusional as the candidate himself, since virtually all polling gives Clinton a lead of between five and eleven points, including even the latest poll from Fox News, which has Trump behind 49% to 41%. As Garth says, folks, it simply ain’t gonna happen.

#193 Jerry Springer on 10.15.16 at 6:39 pm

Having taken the kidlets to an afternoon flick I’m literally sitting in a movie theatre right now reading the incredibly childish comments rather than watch the children’s cartoon playing on the screen. I must say the rhetoric on screen seems much more rational and mature. ;) always entertaining though. Garth & Doug, when are you bringing in Jerry Springer?

#194 Rakiki on 10.15.16 at 8:57 pm

Bonds are a huge dilemma. Our 1 million portfolio has 0% bonds. A mix of Can, US and international ETFs plus some individual stocks with a strong tilt to dividends. 5% prefs. The portfolio yields 3.8% and we need 4% return to reach our financial goals. My wife and I both have DB pensions, no debt and the house is paid for. We are not 40 yet. Bonds? Wouldn’t that be locking in low returns? Am I deluded?

#195 Smoking Man on 10.15.16 at 10:38 pm

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