It works

no-dogs-modified

There’s an interesting pattern on this blog packed with deplorables. I write about bonds. They trash bonds. I explain preferreds. They tear ‘em up. I discuss REITs. The deps nuke them. I offer weightings for a balanced portfolio. They diss balance. I proffer diversification. They pick stocks. I explain rebalancing. They wanna day trade.

If I weren’t on a mission from God to save you all, I’d give up. But, alas. Can’t. It’s a Sisyphus thing.

Well, kids, today a few words on why, during 2016, the investing approach and philosophy presented here was the correct one. It’s been a corker of a year, after all. Commodities collapsed last winter and Canada slumped into recession. Then Alberta incinerated. After that came Brexit. Then an oil surge. Stock markets flirted with record highs for months. Terrorists tore up Paris, Nice, Orlando while Syria burned and ISIS raged. Trump defied all odds and became the first inexperienced, Tweeting, goofy billionaire president. And now we stand on the precipice of more change. Rates are about to pop. Trade’s in trouble. OPEC blinked. Donald is crazy.

The question is simple for many people: how do you possibly preserve wealth, yet make it grow, in an insanely volatile world like this?

Well, hate to say I was right. But I was right. If you went through 2016 with a properly balanced and globally-diversified portfolio, then you’ve protected your capital in bad months, grown it in the good ones, and ended up with a return somewhere around 6%. Keep on doing that for a decade or two, and life will be sweet.

There is one big lesson here the deplorables need to learn. Never exit an asset class. You have no idea what’s coming around the corner. Nor does any fancy financial advisor-cowboy who says he can “add alpha” by beating the market. He can’t. You can’t. Almost every fund manager on the globe can’t. But you can have a portfolio that lessens volatility and has a long-term track record of consistent gains.

So just because interest rates are rising and bond values falling as yields increase, is no reason not to own bonds. They keep volatility down, balance equity drops and provide some income. When Brexit hit, for example, stocks screeched lower and bonds streaked higher. People with a nice balanced 60/40 portfolio barely noticed the commotion. Just make sure you have the right combo of bonds (a little government, some corporate, some high yield and real return) and the correct durations (short).

Just because Canada was in the crapper back in February was no reason to dump maple and go all-America. Commodity prices recovered, and so has our economy. Look at the latest GDP numbers, a scorching 3.5% with a big surge in exports. So far this year the TSX is ahead 15.93% – one of the best performers in the world – so abandoning Canadian growth assets along with the deplorables here nine months ago would have been a losing strategy.  Make sure you have the right weightings for your growth assets (Canada 17%, US 21%, international 18%, alternative 4%).

Just because the US election was a massively weird thing pitting two of the worst candidates since politics was invented against each other and promising no good outcome, was no reason to dump equities and go to cash. Or, worse, run to gold. Kneejerkers who did that lost big. And while most of the world thought Clinton would rip Trump, and was shocked when the opposite happened, investors with a balanced portfolio needn’t have worried about the outcome. If markets tanked (like Brexit) then fixed income would soar. As it turned out, the opposite happened – which was even better. Meanwhile gold was creamed and cash did nada.

Just because oil cratered to $27 last February, then recovered and ended up in a mid-$40 swamp with supply overwhelming demand, was no reason to desert the energy sector. Look at what happened this week – the OPECers agreed to production cuts, resulting in a 9% surge in crude in a single day and romping oil companies in the same week the feds okayed two pipelines.

I could go on (and will eventually). But there are solid reasons why people who actually want to preserve their capital and still have solid growth, need to own all of these assets, and in the correct proportions. The goal is to have a portfolio with 40% fixed income (half a variety of bonds, half preferreds) and 60% in growth stuff (real estate trusts plus equity exposure to Canada the US and the world). That’s balance.

Then, unless you have at least seven figures to invest, eschew stocks and go for index ETFs. Picking a handful of individual companies is gambling, not investing. Buying mutual funds, meanwhile, is often a sign of mental defect (or you like paying fat commissions to your salesguy BIL). This is diversification.

Keep a little cash (5%) and never any GICs, since they’re tax-inefficient, low-yield and illiquid. And always worry about taxes. Interest, like rent or your salary, is decimated. Dividends are a lot sexier. Capital gains are a tax gift.

Mostly, though, stop reading this blog. Or at least the comments section. Ignore the news. Don’t listen to [email protected] Or the gold crazies. Or the zero guy. Set up a balanced portfolio. Get a golden retriever.

Just chill. You’re gonna need it.

181 comments ↓

#1 Victoria Real Estate Update on 11.30.16 at 7:06 pm

BCREA’S 2017 FORECAST: A 6.8% DROP IN HOME PRICES IN BC

Even BC realtors are predicting lower home prices in 2017.

Consider the source: realtors. Of course realtors have a vested interest in keeping house prices high. So if they say prices will fall 6.8%, we are probably looking at something more like 10% or more.

I like how they ignore upward skewing of the average price (an increase in the percent of high-end home sales) when prices are moving higher, but make sure everyone is aware that downward skewing may take place as prices fall – even before the price decline has begun.

VICTORIA’S MARKET CORRECTION PROCESS BEGAN EARLIER THIS YEAR

Since April, we’ve seen a 48% decline in the number of detached home sales across Greater Victoria.

THE INEVITABLE

Victoria’s sales mix is constantly changing. The local board may claim that there have been more foreign buyers over the last year. If it‘s true it wouldn‘t matter. Did I mention sales have tanked across Greater Victoria since April?

The market correction process is clearly underway in the region and nothing will stop the inevitable.

CAUTION

Caution must always be used when considering the stats published by real estate boards in Canada. This article is one of several examples that prove it’s always a good idea to keep in mind that real estate boards have a history of publishing false information – false information, that is, that makes sales and price stats appear stronger than they actually are – to convince you to buy now.

FOREIGN INVESTMENT DOESN’T PREVENT MAJOR MARKET CORRECTIONS

In the US, west coast cities had some of the highest levels of foreign investment but ended up being among the biggest price losers, experiencing much bigger price declines than many cities with lower levels of foreign investment.

BUYERS BACK AWAY, SAANICH EAST NO EXCEPTION

That area posted its weakest October sales total since 2013 (detached houses). As well, sales were down 16% year-over-year.

The trend of much lower sales isn’t limited to Saanich East.

Year-over-year in October, sales of detached houses were lower in several areas, including some that realtors claim to be areas of interest for foreign buyers:

Oak Bay: -25%
Victoria: -18%
(Saanich East: -16%)

What’s worse is that sales of detached houses absolutely tanked from April to October in these areas:

Oak Bay: -56%
Victoria: -50%
Saanich East: -54%

LEPRECHAUNS

Will Canada’s housing bubble be the first in history to end happy? The rest of the world knows the answer to this question.

If you think Canada’s massive bubble will deflate in a controlled, safe, orderly fashion with a fairy tale ending, then you may also think that Leprechauns are real. Or, perhaps you think pigs can fly.

Most Canadians will learn the correct answer the hard way – like the Spanish, Japanese, Irish, Americans, Greeks, etc.

#2 Corban on 11.30.16 at 7:10 pm

I think i’m at 7 years in my three story townhouse in Crescent Heights, Calgary. Rent has been the same as when we moved in, $1400/mo.

#3 powdeR_hound86 on 11.30.16 at 7:11 pm

I’ve followed this diversified approach since mid year and am looking at a loss for the year thanks to the bond fund massacre. Wife not happy

Then you did not do as I suggested. — Garth

#4 Doug t on 11.30.16 at 7:13 pm

The last part Garth is very true – everyone better learn how to chill a lot more because 2017 should prove to be a pressure cooker of a year

RATM

#5 IVoteIndependent on 11.30.16 at 7:13 pm

About renting….
Did you ever keep livestock, other than Bandit, in the place?
http://www.cbc.ca/news/canada/toronto/landlord-tenant-board-rent-goat-kingston-1.3872415

#6 NoName on 11.30.16 at 7:14 pm

#190 cramar on 11.30.16 at 4:26 pm

Few days back was a word toilet day, (Nov 18) so I was kind of thinking along those lines, infrastructure water usage per single couple family etc. Water treatment capacity discharge in a lake and all that, than it struck me how much are discharge and intake pipe apart.
Anyone?

#7 Wallflower on 11.30.16 at 7:14 pm

Dear Garth,
A little bit of truthiness for you.
About 99% of viewers/voyeurs/readers never comment.
The ones who don’t comment tend to be the most normal, stable, decent.
So, for the most part, you are only “hearing” from the morons, like me!
The rest of them are getting saved.
Wallflower

#8 Hans on 11.30.16 at 7:17 pm

“Well, hate to say I was right. But I was right. ”

But boy were you ever wrong on real estate! If you would only admit it!

#9 rainclouds on 11.30.16 at 7:22 pm

Concur.

Balanced diverse portfolio Up 7.8% net. Oct 2015 to Oct 2016.

Credit goes to your blog G man. Yuuuge !!!

#10 CL on 11.30.16 at 7:23 pm

I agree with you on most items except the individual equities comment. One thing you do not factor in to your thesis and confusion though, is human nature which, your comment section is a reflection of. It’s why I never pursued working in finance even though I had an offer to do so. I would never be able to deal with daily assaults like these if I was managing other people’s money. It is high priced babysitting and my voice isn’t sexy enough on the phone that anyone would take me seriously anyway so I would have been a massive failure at it.

This discussion could go on for hours, but one thing people cannot do these days is grasp time. Being in the markets requires time. Lots of it. and a lot of patience. But people buy today and expect an equity to make them money tomorrow and if it doesn’t then the world must be falling apart and the phone rings.

Unless a person is gambling as a trader does, then really the only time a true investor needs to “work” is during earnings periods. The 3 months in between should be used for golfing, camping, or long romantic walks in the rain. (really? long walks in the rain? Heard this most of my romantic life but yet I’ve never seen it!)

#11 Londoner on 11.30.16 at 7:28 pm

So Poloz has worked his magic the only way he knows how. By keeping rates (and the dollar) low GDP has grown and the current account deficit has narrowed. Now if he can keep employment steady and get real wages rising then he’ll have found the holy grail of Keynesian economics.

#12 Never Rich on 11.30.16 at 7:31 pm

My Manulife financial “advisor” did 3.2% this year. I’m not happy.

#13 What's with the people in Milton? on 11.30.16 at 7:33 pm

Let’s continue to talk about why renting is cool. All the overleveraged debt slaves just hate us. What I find perplexing is why people are wiling to carry mortgage debt that they may never actually pay off, like ever. Add property taxes, maintenance, utilities. . eating away a good potion of your income. . .for what? For some decrepit slanty semi close to where the hipsters drink coffee. . . or an hour commute time into the city. I don’t understand why someone would trade freedom for debt slavery. Why would someone want to take 25 years to pay for something that took only 3-4 months to put up? Yes, I am talking to you Miltonians. . .or even worse Cambridge people. . .yuck!

#14 Capt. Serious on 11.30.16 at 7:36 pm

GICs are an ok substitute for short duration bonds in a tax sheltered account, given there isn’t much to look forward to from a government bond ETF these days. Over the long run the present yield is a good proxy for the return you’ll get from your bond ETF. VSB’s yield to maturity is 1% currently, for example. You can find a 2 year GIC paying double that without much effort.

Holding 5% cash is a waste; the aim is to be fully invested at all times.

Everything else mentioned is perfectly reasonable.

#15 BC_Doc on 11.30.16 at 7:39 pm

I agree with you that a balanced, diversified portfolio is the way to go. But I like my portfolio better than your portfolio:

VXC-T (Vanguard All World Except Canada)– 2/3 of my equity exposure.
VCN-T (Vanguard Canada)– 1/3 of my equity exposure
VAB-T (Vanguard Aggregate Bond ETF)– roughly 1/2 of my fixed income
GICs and money markets– the other half of fixed income

I go with age in fixed income (I’ve hit my magic number so no need to keep playing the game/embrace extra risk).

Between VAB and my GIC/cash holdings, my interest rate duration is around five years.

REITs are baked into my two equity ETFs.

I don’t like preferreds– if I want a stock I’ll buy a stock, want a bond, I’ll buy a bond. Preferreds are neither. Safe but risky?

My portfolio, like it’s owner, is super thrifty.

Keep pushing that boulder up the hill Garth!

#16 trex on 11.30.16 at 7:39 pm

But what about hedging?
Currency spreads?
The meaty stuff

#17 Tony on 11.30.16 at 7:43 pm

Garth you are a champ at writing. Everyday you hit the keyboard and write interesting sh-t to read . I don’t know how you do it .

#18 Toronto on 11.30.16 at 7:44 pm

Oh Toronto, you horrible mess. More taxes, more overleveraged people per square kilometre than most places. I was at a store today, older lady in a trendy place all dressed to the nines, brand name this and that adorning her, she goes up to the cash to pay for some items and oops, credit card declined for insufficient funds. Oh, dear, this soulless city is full of the biggest pretenders, trying to pretend they actually have money. This place is a house of cards.

#19 The Technical Analyst on 11.30.16 at 7:44 pm

Well, hate to say I was right. But I was right. – Garth

You did good, your team did good. You could have done much better if you employed technical analysis.

You could have bought after BREXIT (picked up a +8% gain as I called it right on this blog) or even Trump (-700 points as I called it again on this blog) or even timed the Forex market in Jan/Feb (as I called it, again, on this blog) and picked up a juicy 45% gain…

My core is balanced as well, but it’s not about being right, it’s about buying at the right time.

Guess there is being right, and being

righter.

#20 Shawn on 11.30.16 at 7:46 pm

What was most interesting today was how the $CAD didn’t budge despite such a large jump in WTI. A move like this 1 or 2 years ago would have boosted the $CAD by 200 bps in a single trading session. Not today. Hmmmmmmm.

A false move? The currency market knows all.

#21 Scott Cordier on 11.30.16 at 7:49 pm

GIC’s are #1. I make $25,000 in interest and pay no income taxes annually.

That probably means you could make $100,000 and pay no tax. — Garth

#22 good grief on 11.30.16 at 7:49 pm

‘ Buying mutual funds, meanwhile, is often a sign of mental defect ‘

lol. Some money managers are worth every penny. ETF’s have limitations, there is no ‘ideal’product. Asset allocation is the single biggest factor in portfolio performance

canadian dividend etf, zdy– 3yr: 3.88, 5yr: 7.07

beutel Goodman Canadian Dividend– 3yr; 9.50, 5yr: 13.87

……a mixture of etf’s and mf’s in a balanced portfolio is excellent.

a broad silly statement as the quoted above are amusing…at best….

#23 Rexx Rock on 11.30.16 at 7:49 pm

Didn’t I say to load up on your favourite oil stocks.WCP,WLL,RIG,FANG.Lots of huge gains in oil stocks today,let it ride for a few days.Charting is the way to go!!Tck.B made many millionaires this year!

#24 Doug t on 11.30.16 at 7:52 pm

The SHTF moment will be when the major banks around the globe make the big push towards a cashless system. We are headed there already so it is just a matter of time when they make the leap – then we are truly hooped people. You want to talk about losing control of your personal finances – not to mention privacy.

RATM

#25 bond etfs on 11.30.16 at 7:53 pm

why would anyone buy one of these is beyond me…terrible products

#26 espressobob on 11.30.16 at 7:57 pm

Retail investors face a lot of confusion trying to understand how to invest. Mutual funds come to mind always as most are trying to make a killing.

The problem seeking outperformance is the general inability of most mutual fund managers to produce all that alpha on a consistent basis. Not happening.

The point is that they are trying to beat a benchmark, usually an index, and fail more often than not.

The management expense ratio is the cost of owning such funds and is exorbitant to say the least.

So as a DIY investor, why not own the benchmark? Through ETFs it’s easy to own the S&P 500, TSX composite, international, and emerging markets at a fraction of the cost.

Fund managers hate people that invest this way, I wonder why?

#27 steerage steward on 11.30.16 at 7:57 pm

YTD return 5.3%. Just kept making those regular contributions.

#28 Mean Gene on 11.30.16 at 8:00 pm

Anti-depressants work wonders

#29 John Cray on 11.30.16 at 8:03 pm

Garth,

I appreciate your time and financial guidance provided in your blog. I’ve been meaning to ask this for some time now and decided to finally drop a line here.

>>> Just make sure you have the right combo of bonds (a little government, some corporate, some high yield and real return) and the correct durations (short).

What would be your suggestion regarding the percentage of each of the above types of bonds in a balanced portfolio? How long exactly would the average short duration be? If possible I would highly value a suggestion for an ETF for each of those as well.

>>> (Canada 17%, US 21%, international 18%, alternative 4%).

I am curious about the international – do you include both developed and emerging markets in the 18% and if yes in what ratio? What ETFs would you recommend t
o implement the above? Can you say what constitutes the alternative investments?

Thank you in advance.

#30 Scott Cordier on 11.30.16 at 8:06 pm

Since you think I am making things up, TFSA’s, personal amount, disability tax credit, age amount and pension tax credit.

This is how my $25,000 annual GIC interest is tax free. In fact, all of my net $34,000 annual income is completely tax free which includes property, senior, sales tax credit, other tax credits etc.

No debts and living happy and care free in my $400,000 paid off, mortgage free house.

$5,500 annual TFSA contribution maxed out each year plus $3,500 semi-annually to my laddered GIC’s.

#31 Oakville68 on 11.30.16 at 8:11 pm

One of your best posts to date! I am sure the majority of readers enjoy your candour and wit (as do I) your explanation of the global markets/financial planning is refreshing and direct, not as complicated as “others ” make it out to be. Thank-you Garth

#32 LG on 11.30.16 at 8:17 pm

Love this blog…thanks GT

#33 Berniebee on 11.30.16 at 8:18 pm

Heck fire, I been diverculating my investestments since I was knee high to a Smoking Man.

Personally I use the chesterfield tater style. I look at my potfollier once every year, right after harvest. Then I reblance everythin’, selling weaners and buying hosers.

I ain’t rich, but my returns is usually hotter than Texas whorehouse in the summer.

#34 Smoking Man on 11.30.16 at 8:21 pm

Absolutely, unequivocated. The best rant of 2016.

I’m speech less.. Time for some wine.

#35 Kelowna on 11.30.16 at 8:22 pm

Absolutely great advice Garth with the proof being the very good year that those who followed your strategy are enjoying.
It is always amazing that the greatest threat to financial security is consistently identified by many experts to be human emotion. Fully agree with setting up your portfolio and then having the discipline to leave it alone and not re-act to what you read! Thanks!

#36 Victor V on 11.30.16 at 8:30 pm

Tim Hudak’s bought a new house!

https://twitter.com/timhudak/status/804115052798296066

#37 mark on 11.30.16 at 8:34 pm

#74 Rexx Rock from yesterday – what part of Puerto Vallarta?

#38 Harbour on 11.30.16 at 8:37 pm

“I maxed out mt TFSA”

Whoop dee doo

When was the last time you had to pay tax on the interest you made in your bank account.

Better yet, when was the last time you received any interest on the savings in your bank account

Notice nobody ever talks about their investment returns of a TFSA

It’s always… I maxed my TFSA.

#39 Loose Moose on 11.30.16 at 8:37 pm

If one is investing for the long term, will not need the cash for 20 plus years, and has an iron stomach for volatility, why not ditch the fixed income and go 100% growth? Is there a financial reason not to or just an emotional one?

#40 GFD on 11.30.16 at 8:37 pm

Americans to be compensated for buying homes in Canada
http://hibusiness.ca/2016/11/24/americans-to-be-compensated-for-buying-homes-in-canada/

#41 Mark on 11.30.16 at 8:38 pm

“A false move? The currency market knows all.”

That was my thought. Is there an options expiry or something happening soon, that the traders are trying to beat up on people in certain positions? Everyone knows that OPEC members almost always end up cheating when they set production quotas.

#42 blah..blah...blah on 11.30.16 at 8:43 pm

DELETED

#43 Barb on 11.30.16 at 8:46 pm

Even some of the non-OPECers are reducing oil production.

Strange, considering that’s why they exist: OPEC.

#44 GFD on 11.30.16 at 8:47 pm

#18 Toronto on 11.30.16 at 7:44 pm
. . . . but if you own in TO, you can re-finance your house periodically every 12 months, take out imaginary equity and use it to zero all your credit cards. And when you reach your credit wall, than just sell your home to the next one for $888K and all years you lived for free. Ain’t that hyperopic?

#45 Context on 11.30.16 at 8:50 pm

I am still buying a KG of pure beekeeper honey for $12.00 and look at what you pay at the grocery store for blended, cooked, and watered down jar of junk. I am still buying imports from Europe at 2014 prices so don’t let them fool you.

#46 stock picker on 11.30.16 at 8:51 pm

Again with the stock picker bashing. I told you last week what to buy , GAVE YOU TWO PICKS TO PROVE MY POINT, and have 20 + percent returns to show for it. Thats 3 and a half years of holding a balanced portfolio except I took my profits and moved on already…..see ya.

#47 VICTORIA TEA PARTY on 11.30.16 at 8:51 pm

ON FED WATCH BECAUSE IT’S WORTH THE WATCH

Next December 14 could be a really big day for a lot of countries (and folks like us).

With the Trump-a-thon now in full swing, and he hasn’t even been inaugurated yet, its quite the show right?

–companies deciding to NOT ship jobs off to Mexico and staying at home;

–more jobs being created;

–more people spending more;

–Dems going through more Depends than a flock of geese;

–a generally happier state of being south of the Big 49.

WHAT DOES THIS MEAN?

That the quarter point interest rate raise apparently being assumed by the Fed could actually come in a little higher.

How about 50 bps, or 75? After all inflation is picking up and house prices are up to pre-2008 levels! Yikes.

If it’s just 25 bps, then when the Fed next meets in 2017 just how much will THAT rate increase?

I’m looking at a lot of cooked real estate geese brewing in Canuckistan, shortly, one way or another.

ON ANOTHER MATTER

I’ve been perusing the latest nominations/appointments for the impending Trump administration (and cabinet).

The Commerce Secretary is slated to be Wilbur Ross, a Wall Street insider and a very heavy business dude, absolutely; tough as nails negotiator.

The Treasury Secretary would be Wall Street banker Steven Mnuchin; lots of time in the finance saddle.

Transport would be going to Elaine Chao, who toiled in the GW Admin. for years. She knows a lot about airport security, border issues, and the like: indispensible.

But it is the trade secretary position that remains unnominated to this point.

Add that person to those just mentioned and send them to unlock the NAFTA agreement and some large flap could ensue in the Great White North and south of the Rio Grande (Trump wants the deal reopened because it creates job losses in the US, he says).

How our stock market deals with these inevitable issues remains to be seen.

Whatever.

For the best advice, follow St. Garth, Navigator to All Deplorables, and you’ll get through this. Sell that real estate!

#48 bigtowne on 11.30.16 at 8:52 pm

My family out in the oil patch relay the problem for most families is the inability to cut back…once you bought your souped up Dodge Ram pick up or your Ford 250 and you are carrying it for 550 a month and the boat is 700 a month and the condo in Banff is 3,000 a month and the villa in Phoenix is 1,500 a month it is game over.

So it is not possible to cut back for many folks sitting out there on credit. For boomers needing a high quality retirement Alberta and Saskatchewan ranks tops for any Toronto refugees now. Ying and Yang…call it a cultural exchange from east to west.

#49 Smoking Man on 11.30.16 at 8:52 pm

The Trump Landslide to those of us with Alien DNA and the ability to read minds were not surprised in the least. MSM turned trump into a Homophobe, a Xenophobe, a Sexist Misogynist.

If you go online and carefully listen to the exact words he uses after the terror attack in France, “I want to ban all Muslims entering the USA till properly vetted.” That’s not racists, that logical response at the time of the mass killing.

It got him support and all the crazy shit he said got him popular support. So he’s walking it back now.

It was all about winning, Deplorables won. Unlike the left loons, We Deplorables like him walking it back. Do whatever you need to do to make America Great again.

This political correct insane world we live has reached the ceiling.

Trumps Yuugge win was pushback just like I called it. If your a little snowflake justice warrior who can’t understand the context of words but rather focus on trigger words like your Marxist teachers taught you.

You might as well jump off the golden gate bridge. Because in the next four years with King Trump at the helm with his twitter account. You will be unhinged and bouncing off walls which is healthy. You might even discover what Logic is.

Speaking of mind reading, I’m terrified to go anywhere near downtown. I’m sort of famous now since my trip to the general store and everyone saw my mug shot. All my former colleagues would be terrified to death even say HI or be caught near a Deplorable. They live and work in the most mind retarded PC environment imaginable, they make Huge loot. Can’t say I blame them.

But Someone needed to make stand in this mental world, I can write well now, So I did it and I’ll eat the consequences when they happen.

Nothing Else Matters. I’m a writer now.

#50 paulo on 11.30.16 at 8:55 pm

Interesting the Loon only managed a 0.05% increase
despite a $9 Pop in oil ?.

I think the increase will be short lived when was the last time that OPEC members followed through on a deal.

#51 Jenny Pearson on 11.30.16 at 8:55 pm

To GIC #1 guy, we are in a similar situation. We have some Tfsa’s, Rrif’s, and Gic’s, zero coupon bonds, disability income, C.P.P, OAS.

We made last year $73,000 and paid around net $5,475 or only 7.5% in yearly income taxes after all tax credits and tax reducing amounts. We are 100% debt free too house, cars and all.

We are able to max out Tfsa’s both $11,000 total and another $22,000 a year in our joint non-registered GIC’s, bonds etc.

Many don’t understand that pension, annuity, interest income, Rrif, pensions etc. and other so called fully taxed income is not taxed for most Canadians at 35%, 40% or 50% that many in the financial industry keep mentioning over and over.

It is very slim chance at paying such high income tax rates on most Canadians near or at retirement. Debt is the real problem for most Canadians these days.

#52 Braj on 11.30.16 at 8:56 pm

Thanks Garth,

I can see how your balanced portfolio works so well. Since I am young and in essentially an accumulation phase of assets. My goal is simply to fill my TFSA and RRSP with;

20% VAB. I don’t think the diversification of bonds is as necessary for me as I’m higher in equity and I don’t have as much capital to protect or to spread around. I know these aren’t short term but I aim to hold this for 15 years minimum.

27% VCN. This should be around 30% overweight in Maple which works well..or seems to have worked well so far according to Justin Bender over at PWL.

53% XAW. It’s got the US, EAFE, and EM component in sufficient amounts.

It’s a global portfolio, it’s very cheap, and it’s simple which keeps it easy for me to keep throwing money at (people underestimate the importance of this).

It’s still very small comparative to your clients but I like to think of it as a much more simpler version of what you provide which for the most part does the same job. Apart for the smaller bond allocation, I like to think I’m a little more risky, we’ll see how that pans out in a downturn or bear market..

Tax efficiency will have to be implemented when it pays to do so, definitely over $150k.

Not sure of the exact reasoning of this post, but I hope it is helpful to someone. I always like coming along couch potato investors that have been in it for a while, I hope to be like that one day. Slow and steady wins the race.

I respect the knowledge and entertainment provided here, it’s the best financial news relative to most of us Canadians and the open discussion is invaluable, however crazy it gets.

Thanks again dude.

#53 AB Boxster on 11.30.16 at 8:57 pm

TD offering 10 year prov of AB bonds @ 2.2% and prov of Sask bonds @ 2.5%.
Higher than I have seen over past couple of years.

#54 Pete on 11.30.16 at 9:00 pm

“Oh, dear, this soulless city (Toronto) is full of the biggest pretenders, trying to pretend they actually have money. This place is a house of cards.”
————
‘Pretenders’ That’s the word my wife always uses to describe them. It sums them up so perfectly. She splits her sides laughing at them. In her families social circle they hob-nobs with those who are wealthy enough to buy and sell governments while the pretenders in T.O. think that a big-screen TV equals wealth. You’ll see Torontonians out there buying a Patek-Phillipe watch. Well, what did they trade off to get that? A home renovation, once-in-a-lifetime-vacation, what? It’s all show with no substance behind it. They fit perfectly into that category known to marketers as “the aspirational 14%”. Always aspiring to be something that they are not.
Psssst Torontonians; the real wealth is in Westmount and Georgeville. If you’re not familiar with these places, it’s because you don’t belong.
There, that’ll get their blood boiling.

#55 GFD on 11.30.16 at 9:00 pm

#45 Context on 11.30.16 at 8:50 pm
. . . make sure it’s non Louis Pasteurized

#56 Interstellar Old Yeller on 11.30.16 at 9:02 pm

I still read every day but usually give the comments section a wide berth. We are loving our 6% this year, thank you for the advice, Garth!

#57 Wrk.dover on 11.30.16 at 9:10 pm

You can sell a stock at any time, even if it is down. Right.

You can sell a GIC at any time for what you paid for it. Right?

#58 Freedom First on 11.30.16 at 9:11 pm

#13 What’s with the people in Milton?

Your comment is bang on.
…………………………………………………………

I asked a few men this very question recently. All said the same thing in a different way. My fave reply: “Freedom First, ever had to live with a b!t$hy wife?”

How about you, Leonardo Dicaprio?

007
Freedom First
Master of Freedomonics

#59 CL on 11.30.16 at 9:11 pm

And to add, some do take your advice. I had never been interested in preferreds as I’m much better with equities but after reading about them here more than once, I did more research on them and ended up in the CPD etf as a result. So all is not lost, Garth. Thanks for that.

#60 White Crock BC on 11.30.16 at 9:16 pm

Shawn on 11.30.16 at 7:46 pm

What was most interesting today was how the $CAD didn’t budge despite such a large jump in WTI. A move like this 1 or 2 years ago would have boosted the $CAD by 200 bps in a single trading session. Not today. Hmmmmmmm.

A false move? The currency market knows all.

—————————————————-

Was thinking the same thing. Not only the ‘pop’ in WTI but the surprise pipeline approvals and the big GDP number.

If the CAD doesn’t pop on that news, then sure as hell it’s going to plunge on the slightest hint of bad news.

$10 cauliflower anyone?

#61 Freedom First on 11.30.16 at 9:17 pm

#7 Wallflower

Yes. You are part right. You are a moron.

#62 Long-Time Lurker on 11.30.16 at 9:28 pm

Great article, Garth. Thanks!

Balanced – diversified – regular rebalancing does seem to be the best way to invest overall. My backburner stuff is like that.

I was looking for an investment company that uses this approach (with ETFs). Turner Investments seems to be the only one that does this. If you had commodities in your asset class mix I’d think you’d have the perfect system.

I first read about this system in Chuck Chakrapani’s Financial Freedom on $5 a Day. He called it RIGS –Recession, Inflation, Growth, Safety.

Another writer said Jacob Fugger the Rich did the same thing but I think he only diversified his holdings. (Super-rich German guy, 1600s?)

Anyway, great work, Garth. I wish you and your company continued success.

#63 The Great Gazoo on 11.30.16 at 9:34 pm

Today OPEC agreed to cut 1.2 million bbls per day AND non-OPEC producers have also said they are willing to cut 0.6 million bbls per day. Of the 0.6 million or 600k bbls per day, Russia is in for 300k. The total cut is 1.8 million bbls per day.

As Bernie Saunders would say….this is HUUUUGE!

Now I don’t expect 100% compliance, there will be some cheating for sure, but even if they get 75% compliance that will still be a meaningful cut of 1.35 million. This is game changer for the energy industry!

I believe we can expect to see oil prices move to the high $50’s to low $60’s over the next few months, but as Garth points out who really knows for sure what will happen. One thing is very likely and that is the arrow is pointing up and we are not going back to the 20’s. Wasn’t it Goldman Sachs that said we would be lower for longer in the 20’s? Pathetic.

#64 Capt. Serious on 11.30.16 at 9:39 pm

#15 BC_Doc
Between VAB and my GIC/cash holdings, my interest rate duration is around five years.

That’s probably too long if your aim is safety. 2-3 years for duration is the sweet spot. Going further out you’re not getting rewarded for the interest rate risk, albeit 5 is still relatively safe.

I go with age in fixed income (I’ve hit my magic number so no need to keep playing the game/embrace extra risk).

This point is oft overlooked. If you don’t need to take more risk to hit your financial goals, then don’t. The reason returns are higher over the long run for riskier assets is they’re risky. So by definition you don’t know actually what you’re going to get. And we know from history, adjusted for inflation, as long as 20 years can go by for some asset classes with 0 real return.

#65 Darren M on 11.30.16 at 9:43 pm

I’ve been reading for years and never commented but had to tonight because of the line “Get a golden retriever.” My wife picked up our golden puppy today from the breeder. Neat coincidence but unfortunately I probably won’t be getting a ton of sleep for the next few nights.

#66 Smoking Man on 11.30.16 at 9:46 pm

Showing 49 comments. I hit refresh. 35 comments.

I think the Russians have hacked our blog. Only way to see What I typed is to say something stupid like this.

#67 Bottoms_Up on 11.30.16 at 9:46 pm

The Donald (TD) truly is crazy. If he were your son, you’d consider a serious intervention with long term professional help.

#68 Walter Safety on 11.30.16 at 9:47 pm

#30 -Good for you. You have a better life than most leveraged up higher income earners could imagine.

#69 Wrk.dover on 11.30.16 at 9:48 pm

Smoking Man, all I saw in that photo was Garth Turner standing beside a thumb. There are 14 billion of them out there, your cover is safe.

#70 Mark on 11.30.16 at 9:49 pm

“You can sell a GIC at any time for what you paid for it. Right?”

A GIC is one of those investments that takes a big hit the moment you drive it off the lot (like a car). Because there’s little compensation for its illiquidity and lack of liquid markets associated with them.

If you own a GIC, and need to get out of it early, some brokers will help you find someone to sell it to for a fee. Some banks will buy back the obligation, but usually at a significant loss.

The real tragedy of GICs, aside from the point Garth made, is that they’re peddled to people who believe they’re avoiding “market” risk with them (just as there’s some people who believe that selling a stock portfolio and “going to cash” is actually relieving them of market risk!). A brokerage statement will print a maturity price, not the current market value. This makes people perhaps sleep better at night, but the returns they’re giving up for such is usually quite significant.

#71 Context on 11.30.16 at 9:52 pm

#18 Toronto:- That lady sounds like Bloor Street Annie who can pick a wallet faster than a humming bird. Did you check, as it may have been your credit card.

#72 Capt. Serious on 11.30.16 at 9:54 pm

All you folks with VAB might want to take a look at that. Avg duration is 7.8 years, which is way too freaking long if you’re using that as the safe portion of your investments. VSB combined with VSC, say 50/50 weighted, gives you a YTM of 1.35% with an average duration less than 3 years. This is where you want to play, versus only getting a YTM of 1.7% for VAB and huge interest rate risk.

#73 disconnect on 11.30.16 at 9:55 pm

So if my stock trading account has a 14 year compounded rate of return of over 17%, I should give it up?

Well thats as far back as the account rate of return stats go.

Its mostly been buy-n-hold.

I’ve been gradually shifting into large US large caps the last number of years.

And who knows, maybe someday I’ll figure out what I’m doing, really.

#74 Smoking Man on 11.30.16 at 9:56 pm

There goes your federal funding.
http://www.zerohedge.com/news/2016-11-30/university-stuns-world-pledges-support-free-speech-censorship-not-answer

Don’t worry. Logic will find it’s way on college campuses after Jan, at which point I will be kind to teachers.

The blue-haired teachers in Social studies got to go.
ATC Regain those freaks President Trump.

Thanks for the check. going into my USD account in an unnamed country.

Oleary are you listening. Going after Butts not enough. You want it. You got to pay a Drunken Alien. Got no pension.

#75 Metaxa on 11.30.16 at 9:59 pm

“Well, hate to say I was right. But I was right. ”

But boy were you ever wrong on real estate! If you would only admit it!

There is a significant difference between what some commentators think (and repeat constantly) Garth says about real estate and what I actually read here that Garth really does say about real estate.

I read back into the archives, I read live, I don’t get how anyone can feel Garth is “wrong” about real estate. Heck, even some of the true believers who have sold and invested, when recounting their experiences, seem to have missed Garth’s position as well. Sort of getting the correct answer while using the wrong formula.

Garth writes very succinctly, clearly, says what he means. That so many can misinterpret that is sad.

Then to feel so comfortable as to display this lack of comprehension publicly is sadder still.

Its pretty clear to me, if you are able to, sure, do both. If you aren’t able invest and rent. Having all or most of your net worth in one single asset class isn’t a good philosophy going forward.

#76 mariano on 11.30.16 at 10:00 pm

It’s easy to forecast things saying, if nothing changes, then this will happen. But everything changes.
That is the challenge with econometrics.
The internet brought us Trump and the rules of political campaigns in USA have changed.

#77 Capt. Serious on 11.30.16 at 10:01 pm

If one is investing for the long term, will not need the cash for 20 plus years, and has an iron stomach for volatility, why not ditch the fixed income and go 100% growth? Is there a financial reason not to or just an emotional one?

Going 100% equities is definitely the higher risk/reward strategy. The problem is most people can’t execute it. Even after 20 years there is a chance you have a 0% real (inflation adjusted) return, and probably suffered through some horrible years to get there. Efficient frontier folks would say you should aim to maximize return while minimizing risk, and this will always involve mixing in some other asset classes. There are whole books on that topic, so I’m not going to get into it here.

#78 InvestorsFriend on 11.30.16 at 10:02 pm

His Wealth Advisor Failed Him?

#12 Never Rich on 11.30.16 at 7:31 pm complained:

My Manulife financial “advisor” did 3.2% this year. I’m not happy.

**************************************
But really, you got what you paid for no? That being someone to blame, no? It being too emotionally challenging to risk under-performing all on your own, no?

#79 InvestorsFriend on 11.30.16 at 10:10 pm

Assured Monetary Destruction

#53 AB Boxster on 11.30.16 at 8:57 pm said:

TD offering 10 year prov of AB bonds @ 2.2% and prov of Sask bonds @ 2.5%.

Higher than I have seen over past couple of years.

*********************************
Higher yes, but by no means high. It still amounts to basically nothing after inflation.

And if you try to sell before ten years you will get hit with a stiff bid/ask spread from TD.

#80 quebecEconomist on 11.30.16 at 10:14 pm

I have been in markets, with balanced portfolio for 20 years, making more than 8% annualized…
Don’t care how magically you are diversified, by the book or all that.

If shit happens with Russia, or social unrest sparks in US look for the biggest decline in stocks ever. But don’t listen to me, I am just a god send, trying to save some poor soul to realize when a tried and true strategy that has worked for over 40 years does not stand a chance against a clown for president. This is tremendous, the stocks will fall bigly. (90% odds). Balanced portfolios have their limits.

#81 quebecEconomist on 11.30.16 at 10:17 pm

BTW I will keep some preferres ETFs and long-term bonds. no equity for 6 first months of Trump.

#82 common sense on 11.30.16 at 10:18 pm

Great advice as always…Thank you.

#83 TCContrarian on 11.30.16 at 10:18 pm

“There is one big lesson here the deplorables need to learn. Never exit an asset class. You have no idea what’s coming around the corner. Nor does any fancy financial advisor-cowboy who says he can “add alpha” by beating the market. He can’t. You can’t. Almost every fund manager on the globe can’t. But you can have a portfolio that lessens volatility and has a long-term track record of consistent gains.” -GT

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

“Never exit an asset class”…

Except RE when it’s 2x or 3x overvalued – like now in YVR/GTA. My preferred ‘golden rule’ I subscribe to (try to, anyway), is that there’s
a time to be a buyer,
a time to be a seller, and
a time to do nothing

—- for ANY asset class!

TCC

#84 DON on 11.30.16 at 10:19 pm

#20 Shawn on 11.30.16 at 7:46 pm

What was most interesting today was how the $CAD didn’t budge despite such a large jump in WTI. A move like this 1 or 2 years ago would have boosted the $CAD by 200 bps in a single trading session. Not today. Hmmmmmmm.

A false move? The currency market knows all.
********************
I agree. OPEC is no longer the big kid on the bloc with Iran, Russian and other non-OPEC producers. The Saudi’s are bleeding money, no other industry (other than terrorism). The Saudi’s started the oil war and seems to be blinking first. The problem is world demand is still down. If I was Iran I would be pumping the oil to decimate my Saudi enemies.

#85 disconnect on 11.30.16 at 10:19 pm

The week after JFK got shot, US stock went…up

#86 Smoking Man on 11.30.16 at 10:19 pm

#67 Bottoms_Up on 11.30.16 at 9:46 pm
The Donald (TD) truly is crazy. If he were your son, you’d consider a serious intervention with long-term professional help.

Time for you to smash your head on the wall in Israel. Or any wall.

Perhaps the years and years of brainwashing in school will be ejected out of your left ear. The demon on victimhood will dislodge from your brain.

#87 DON on 11.30.16 at 10:22 pm

Smoking Man:

This ones for you

Straight from RT News.

“Gonzo strains: Hunter S. Thompson’s widow to clone his marijuana
The widow of legendary Gonzo journalist Hunter S. Thompson is planning to clone his personal marijuana stash so it can be sold to the masses. “

#88 ww1 on 11.30.16 at 10:22 pm

#3 powdeR_hound86 on 11.30.16 at 7:11 pm
I’ve followed this diversified approach since mid year and am looking at a loss for the year thanks to the bond fund massacre. Wife not happy

Then you did not do as I suggested. — Garth

More like judging a diversified approach based on the first 4-5 months result seems more than a little short sighted?

#89 WaLMark of Sadkatoon on 11.30.16 at 10:22 pm

What was most interesting today was how the $CAD didn’t budge despite such a large jump in WTI.

Poor Canada. The CAD went up half a penny.

Gartho is right, gold sux

#90 WaLMark of Sadkatoon on 11.30.16 at 10:24 pm

No debts and living happy and care free in my $400,000 paid off, mortgage free house.

Clearly not in yvr or yyz

Which is good

#91 TCContrarian on 11.30.16 at 10:25 pm

We’re not alone. The Aussies may have perfected the leverage game:

http://www.zerohedge.com/news/2016-11-24/perfect-storm-set-pop-aussie-apartment-bubble-bringing-economy-down-it

#92 hey espresso bob...... on 11.30.16 at 10:29 pm

Retail investors face a lot of confusion trying to understand how to invest. Mutual funds come to mind always as most are trying to make a killing.

The problem seeking outperformance is the general inability of most mutual fund managers to produce all that alpha on a consistent basis. Not happening.

The point is that they are trying to beat a benchmark, usually an index, and fail more often than not.

The management expense ratio is the cost of owning such funds and is exorbitant to say the least.

So as a DIY investor, why not own the benchmark? Through ETFs it’s easy to own the S&P 500, TSX composite, international, and emerging markets at a fraction of the cost.

Fund managers hate people that invest this way, I wonder why?

…….

fund managers don’t hate people who take that approach. Why would they hate it? You are free to invest how you please.

keep in mind, not all portfolio managers are alike. Just like not all doctors are alike, lawyers etc etc. Each profession has its elite. And yeah, you MUST pay for their expertise

as an example, AFTER expenses.

xic– 5yr- 7.46, 10yr- 4.49, 15 yr- 7.28

mawer cdn- 5yr -14.28, 10yr- 8.20 15– not old enough, :)

not bad, eh?

you are correct, studies show in the long term as high as 80% of managers do not beat the index.

#93 Sunburned canuck on 11.30.16 at 10:30 pm

For us Canadians, contemplating financial moves is daunting especially when you have a “Rock Star” named Trudeau getting global attention like this-

http://townhall.com/columnists/michellemalkin/2016/11/30/justin-trudeau-babyfaced-commie-apologist-unmasked-n2252487

God help us all.

#94 Sideshow Rob on 11.30.16 at 10:31 pm

Sorry to hear about your Sisyphus thing. I hear they have a cream for that now.
Great post!

#95 Smoking Man on 11.30.16 at 10:34 pm

DELETED

#96 mike on 11.30.16 at 10:35 pm

Let’s continue to talk about why renting is cool. All the overleveraged debt slaves just hate us. What I find perplexing is why people are wiling to carry mortgage debt that they may never actually pay off, like ever. Add property taxes, maintenance, utilities. . eating away a good potion of your income. . .for what? For some decrepit slanty semi close to where the hipsters drink coffee. . . or an hour commute time into the city. I don’t understand why someone would trade freedom for debt slavery. Why would someone want to take 25 years to pay for something that took only 3-4 months to put up? Yes, I am talking to you Miltonians. . .or even worse Cambridge people. . .yuck!

– they probably want a house to live in that’s fully paid for when they are retired. I think that’s why people buy houses.

I own rental properties with long term tenants. when I sell my houses in 20 years. my tenants are going to be royally f**d.

#97 Smoking Man on 11.30.16 at 10:57 pm

https://youtu.be/Tj75Arhq5ho

#98 Pulsars pump it Out on 11.30.16 at 10:57 pm

#49 Smoking Man on 11.30.16 at 8:52 pm

The Trump Landslide to those of us with Alien DNA and the ability to read minds were not surprised in the least. MSM turned trump into a Homophobe, a Xenophobe, a Sexist Misogynist.

If you go online and carefully listen to the exact words he uses after the terror attack in France, “I want to ban all Muslims entering the USA till properly vetted.” That’s not racists, that logical response at the time of the mass killing.

It got him support and all the crazy shit he said got him popular support. So he’s walking it back now.

It was all about winning, Deplorables won. Unlike the left loons, We Deplorables like him walking it back. Do whatever you need to do to make America Great again.

This political correct insane world we live has reached the ceiling.

Trumps Yuugge win was pushback just like I called it. If your a little snowflake justice warrior who can’t understand the context of words but rather focus on trigger words like your Marxist teachers taught you.

You might as well jump off the golden gate bridge. Because in the next four years with King Trump at the helm with his twitter account. You will be unhinged and bouncing off walls which is healthy. You might even discover what Logic is.

Speaking of mind reading, I’m terrified to go anywhere near downtown. I’m sort of famous now since my trip to the general store and everyone saw my mug shot. All my former colleagues would be terrified to death even say HI or be caught near a Deplorable. They live and work in the most mind retarded PC environment imaginable, they make Huge loot. Can’t say I blame them.

But Someone needed to make stand in this mental world, I can write well now, So I did it and I’ll eat the consequences when they happen.

Nothing Else Matters. I’m a writer now.

The adulation must matter… you say that every night!

Did anyone buy it?
When is the movie out?
Did Shirley buy it?
Like Seinfeld, will you play yourself?

#99 DON on 11.30.16 at 10:59 pm

#75 Metaxa on 11.30.16 at 9:59 pm

“Well, hate to say I was right. But I was right. ”

But boy were you ever wrong on real estate! If you would only admit it!

There is a significant difference between what some commentators think (and repeat constantly) Garth says about real estate and what I actually read here that Garth really does say about real estate.

I read back into the archives, I read live, I don’t get how anyone can feel Garth is “wrong” about real estate. …

**********************
For me: It comes down to human nature. “It hasn’t happened yet so it never will” Because it doesn’t happen on their timeline it never will. Most don’t seem to recognized it has happened before -even with the internet at their fingertips. They can’t think long term or see the storms on the horizon. As Garth has explained many times “recency bias”.

Canada got lucky in 2009, due to world stimulus creating a demand for commodities. Canada was the pinnacle of the western world. But now we are reverting to the mean. Lots of younger people grew up in the boom times and have yet to see any pain. Older people have forgotten about fundamentals – helps them stomach the sale of their old $240K house for 2.1 Million to a young moister knowing full well something ain’t right.

#100 RIL on 11.30.16 at 11:01 pm

I have diarized January 21 for Trump’s non-approval of Keystone XL. I am hosting a “Fat Chance Party” at the base of High Test Hill, 20 km north of Fort McMurray on Hwy 63 as you approach the Suncor overpass.

The easiest campaign promise for him to back off of. No cover charge for pipeline welders and a silent auction to raise funds for TCPL.

#101 WalMark of Sadkatoon on 11.30.16 at 11:02 pm


That the quarter point interest rate raise apparently being assumed by the Fed could actually come in a little higher.

How about 50 bps, or 75?

50 would be awesome

75 would be beyond awesome

#102 Gandhi on 11.30.16 at 11:06 pm

Garth, I request you to write about India’s demonitisation strategy. It will be something which requires expert views

#103 Lord of the Deplorables on 11.30.16 at 11:25 pm

#49 Smoking Man on 11.30.16 at 8:52 pm

But Someone needed to make stand in this mental world, I can write well now, So I did it and I’ll eat the consequences when they happen.

Nothing Else Matters. I’m a writer no

……………..
Looks like you’ll be cracking into the top 15,000 list on lulu soon!!… to the stars!

#104 wally wingnut on 11.30.16 at 11:25 pm

Just had a conversation with a co worker. He was really exited about the fact that he just got a new credit card in the mail. I’m assuming that existing cards are likely maxed out. He is going to use the extra credit available to go on vacation in Jamaica. Fella is close to retirement. I think we are all screwed.

#105 Context on 11.30.16 at 11:39 pm

#65 Darren M:- A Golden pup must be trained properly from day one which can be done within an hour. He is the top trainer in USA and flies all over the country to train the mean ones who are out of control. You Tube Chuck McBride and pick out the Golden videos or a few smaller dogs as in minutes he has them trained. Now he is afraid of no dog but don’t watch the Pit Bull stuff as its scary, but he has them walking like poodles after the battle is over; he is a dog whisperer.

#106 Polls R Phake on 11.30.16 at 11:48 pm

And while the media and politicians were making fun of President Trump on Thanksgiving day getting fat, drinking and being socialist idiots, Mr Trump was on the phone talking with Carrier Air Conditioning about their plans to move to Mexico and taking 2,000 jobs with them.

Carrier is no longer moving to Mexico.

You think the crow on everyones face was black on election day? Wait 12 months. The pundits will be sucked into their own virtual black hole they will have been so wrong. Government as you people have known it for 100 years is over.

#107 not 1st on 11.30.16 at 11:49 pm

Garth forgot another important weighing – only 10% of your wealth should be ever in the market.

Trust me on this. You will thank me in the end.

#108 BC_Doc on 12.01.16 at 12:47 am

@Capt. Serious

I really like Taylor Larimore’s “Three Fund Portfolio” which he talks about over at the Bogleheads website. I think it’s a pretty elegant and low-worry portfolio. At this point in my life/career (I’m age 50), I’m trying to make my investment portfolio simple and boring. I hold VAB in my RRSP accounts so realistically, I likely won’t be touching the funds for another 15-20 years. Given the duration of VAB, I hold them realizing there will be periods over the next decade or so where the NAV will drop below what I’ve paid for the ETF. VAB divies are used to buy more VAB shares.

My reason for laddering GICs and holding some RBF-2010 (MM fund that pays 0.75%) is two-fold:

1) As stated, it helps bring my overall FI duration down to a more reasonable 5 years.

2) It spreads my FI eggs into different baskets for safety purposes (Almost 30 years ago I worked for the FDIC in a different career during a period in which there was a high bank failure rate in the US. This experience led me to try to consider all contingencies!).

Cheers,

BC Doc

#109 Tony on 12.01.16 at 1:00 am

Re: #3 powdeR_hound86 on 11.30.16 at 7:11 pm

You learned the hard way, you should have bought corporate bonds not bond funds. Corporate bonds don’t lose anything unless you sell them or the company goes bankrupt or near bankrupt when the bond matures. Interest rates will never come even close to the yields on corporate bonds in the near or distant future.

#110 Damifino on 12.01.16 at 1:30 am

#96 mike

“I own rental properties with long term tenants. when I sell my houses in 20 years. my tenants are going to be royally f**d.”
———————————

You sound like real boffo guy. Say… got anything available right now? I’ve got some farm animals who need a warm spot for the winter.

#111 DON on 12.01.16 at 1:40 am

Victoria.

Overheard on side of a seller/realtor phone conversation.

The seller received what they thought was a low ball offer. Seller was simply disgusted, because she/they (wife and husband) knew in their hearts it was worth more and the offer was a low ball on a wonderful condo. The seller ended with ‘We are taken it off the market and will list it in the Spring when the market it hot again”. Utterly disgusted at a low ball offer.

Times change. How dare a lowly buyer question the pricing wisdom of a seller. You house is only worth as much as the buyer is willing to pay and in uncertain times that amount naturally goes down.

#112 DON on 12.01.16 at 1:45 am

Repost: Bad spelling

Victoria.

Overheard one side of a seller/realtor phone conversation.

The seller received what they thought was a low ball offer. Seller was simply disgusted, because she/they (wife and husband) knew in their hearts it was worth more and the offer was a low ball on a wonderful condo. The seller ended with ‘We are taking it off the market and will list it in the Spring when the market it hot again”. Utterly disgusted at a low ball offer and the realtor for even suggesting it.

Times change. How dare a lowly buyer question the pricing wisdom of a seller.

You house is only worth as much as the buyer is willing to pay and in uncertain times that amount naturally goes down.

Denial?

#113 drydock on 12.01.16 at 2:29 am

#54 Pete on 11.30.16 at 9:00 pm

“Psssst Torontonians; the real wealth is in Westmount and Georgeville. If you’re not familiar with these places, it’s because you don’t belong.”

……………………………………………………..

Don’t forget Senneville.

#114 nubbers on 12.01.16 at 2:52 am

The Technical Analyst @19

You could have bought after BREXIT (picked up a +8% gain as I called it right on this blog) or even Trump (-700 points as I called it again on this blog) or even timed the Forex market in Jan/Feb (as I called it, again, on this blog) and picked up a juicy 45% gain…

My core is balanced as well, but it’s not about being right, it’s about buying at the right time.

Guess there is being right, and being

righter.

Any one of us here would be richer than JK Rowling if we could make our trades with the benefit of hindsight.

#115 Sept 2016 GDP Good, Still Bad Overall on 12.01.16 at 4:38 am

+0.2% GDP in Sept. 2016 or 3.5% annualized. Finally, good news. MSM reveling as usual.

The facts are that you can’t buy anything at the store with a %, you can with $’s.

Canada’s 2015 GDP was US $1550.5 billion, about US $235 billion less than Canada’s 2014 GDP (US $1783.8).

As of the end of Sept. 2016, Canada’s GDP is US $1256.2 billion. By the end of 2016, we should just squeak ahead of our 2015 GDP.

That’s a BIG CHUNK OF CHANGE taken out of our economy over the past couple of years (almost $0.5 Trillion).

People are feeling poorer in Canada. No dung Sherlock. We are the most educated country on Planet Earth, what is going wrong I do not know, but at least we are inching our way back.

Why T2’s CDN $80 billion stimulus over the next 3 years will amount to nothing other than, yet another, failed Keynesian Economics experiment.

bsant

#116 Showing 49 comments... on 12.01.16 at 5:14 am

Too funny.

Thought it was just me.

Good to read that I am not the only Boomer here that had the same WTF moment.

Eyes working well after all…whew.

bsant

#117 Steve French on 12.01.16 at 6:00 am

Yo Garth Dude:

Steve French from Australia land here.

I’m trying to full out my Garth Turner ™ diversified portfolio. I’ve followed all your suggestions, and have just 1 more piece of the puzzle to lock into place.

But down here in Ozzieland, my online brokerage platform (though my bank) is not linked in to make any preferred share ETF purchases possible.

Any quick advice, (other than wiring the funds directly to Smoking Man on his perch at Casino Niagara, to invest on my behalf?)

Thanks

Steve O

#118 Wrk.dover on 12.01.16 at 6:28 am

Again on the National….Atlantic Canada covered in snow.

Again from me in SW Nova the only white I have seen was a hard frost Nov. 9.

To be fair there was a gone by sundown early morning blanket of snow INLAND a few days ago.

IHCDC9 wants to hide from the tax man on Manitoulin…
He could hide fromthe weather man here.

#119 Honey Dripper on 12.01.16 at 6:29 am

Great free advice as always and thanks.
One question though. If you have a company pension coming to you why the bond component in the RSP? ISTM that it would act like a long bond while you wait for retirement. Go growth with any extra money you have.
Of course if you don’t contribute to a pension then a 40% weighting is appropriate as you’re building a personal pension plan.

#120 ANON on 12.01.16 at 7:11 am

It is absolutely amazing that the wheels are still on the bus going into 2017. Not complaining, and certainly not looking forward to the inevitable, simply in awe at the power of collective narratives. Will the wheels stay on for another year, let alone a decade or two? Really, really, really doubt it. D-dude’s mental health is irrelevant, he is merely the contraction’s way of saying “Hello boys, I’m baaack!” after many, many decades, probably too many to recognize it for what it is. He is the Son of Diminishing Returns.

#121 IHCTD9 on 12.01.16 at 8:19 am

#54 Pete on 11.30.16 at 9:00 pm
“Oh, dear, this soulless city (Toronto) is full of the biggest pretenders, trying to pretend they actually have money. This place is a house of cards.”
————
‘Pretenders’ That’s the word my wife always uses to describe them. It sums them up so perfectly.
______

Those folks do the same thing with their job descriptions. I met with a new guy at one of my best customers a while back, told me he was a “consultant “. I knew that was BS right off the bat as the guy didn’t know his arse from a hole in the ground regarding the industry.

A few months later he was gone. I asked the GM where buddy went. “Oh, he was a temp, we didn’t need him any more”.

#122 Almontage on 12.01.16 at 8:21 am

I’ve been a Garth fan for more than 25 years – he was my MP back in the day. Now I am a client.
His firm offers good advice in investing and financial planning. He and his partners practice what they preach.
I feel comfortable knowing my affairs are looked after well and my interests come first. His company’s fees are fair.
You get enough free advice on his blog to go it alone but I’d rather spend the time with my grandchildren.
That’s my story and I’m sticking to it.

#123 Renter's Revenge! on 12.01.16 at 8:25 am

Not that anyone cares, but…

Mostly, though, stop reading this blog. – I haven’t stopped yet (obvs)

Or at least the comments section. – Next on the list of things to do.

Ignore the news. – Will do after dropping the comment section

Don’t listen to [email protected] – Haven’t talked to her in years

Or the gold crazies. – Always knew they were idiots

Or the zero guy. – Stopped reading about 4 years ago. Best.decision.evar

Set up a balanced portfolio. – Mine’s closer to Buffett’s idea of balanced than Turner’s

Get a golden retriever. – Not a dog guy. Maybe I’ll get one a dem blue russian cats someday

Just chill. You’re gonna need it. – Working on it every day

#124 crowdedelevatorfartz on 12.01.16 at 8:28 am

Hmmmm.
“Brexit” may be a moot arguement in the British Parliament next year if Italy then France pull the pin……….

Bye bye EU in 2017?

http://www.reuters.com/article/us-italy-referendum-salvini-idUSKBN13Q4JA?il=0

http://www.google.ca/url?url=http://www.journal14.com/2016/11/16/the-french-presidential-elections-and-possibly-a-frexit/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiu7a2hjNPQAhUQ1GMKHY_BAe0QFggmMAM&usg=AFQjCNFY9hv6ztl2MEnoXxWRW36FUrv4Hg

Be interesting to see if it isnt just Donald Trump building walls and tearing down trade agreements

#125 IHCTD9 on 12.01.16 at 8:41 am

#8 Hans on 11.30.16 at 7:17 pm
“Well, hate to say I was right. But I was right. ”

But boy were you ever wrong on real estate! If you would only admit it!
________________________

Out of all the RE markets in Canada, there were 3 that were bubbly. Then there were two. Then there was one. Going forward, every metric you care to name is screaming that soon, the last one will join the other two.

Garth wasn’t wrong obviously. History will show the 3 bubbly markets as a blip on a graph 50 years from now, and with the benefit of hindsight, everyone on the planet will agree the market [back then] was insane.

#126 pBrasseur on 12.01.16 at 8:41 am

Big tax changes coming to the US

http://www.msn.com/en-us/money/markets/mnuchin-outlines-largest-tax-change-since-reagan/ar-AAkY4cK

Including a cap on mortgage interest payment deductions!

If that happens this is great news, those Goldman Sachs boys sure know what they’re doing…

#127 IHCTD9 on 12.01.16 at 8:56 am

#123 crowdedelevatorfartz on 12.01.16 at 8:28 am
Hmmmm.
“Brexit” may be a moot arguement in the British Parliament next year if Italy then France pull the pin……….

Bye bye EU in 2017?

http://www.reuters.com/article/us-italy-referendum-salvini-idUSKBN13Q4JA?il=0

http://www.google.ca/url?url=http://www.journal14.com/2016/11/16/the-french-presidential-elections-and-possibly-a-frexit/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiu7a2hjNPQAhUQ1GMKHY_BAe0QFggmMAM&usg=AFQjCNFY9hv6ztl2MEnoXxWRW36FUrv4Hg

Be interesting to see if it isnt just Donald Trump building walls and tearing down trade agreements
________________________________________

Was just talking to a supplier the other day about the EU. You’ve still got the P.I.G.S. of Europe sucking cash and trailing smoke, Merkel is heading into an election next year, and she’s never had more opposition. If Brexit is formalized, that pretty much leaves Germany alone to bail out the entire EU, how much of this will German taxpayers (very high tax rates already) stand for heaped on top of the immigrant crisis?

Will be an interesting planet if Spain and Italy bail on the EU considering the Brexit vote and Trump running North America.

Could be curtains for the EU.

2017 is shaping up to be a year to get out of debt and get an emergency fund together asap if not done already. Depending how bad things get, you may want to stock pile ammo and dry goods as well :).

#128 Julian on 12.01.16 at 9:02 am

Are there any real, unique drawbacks to bond etfs?

#129 SimplyPut7 on 12.01.16 at 9:14 am

New rules now in effect for low ratio mortgages!

Let’s see how those homes in Toronto with an asking price of over $1 million do now.

Bring on the popcorn.

#130 IHCTD9 on 12.01.16 at 9:42 am

#122 Renter’s Revenge! on 12.01.16 at 8:25 am
Not that anyone cares, but…

Mostly, though, stop reading this blog. – I haven’t stopped yet (obvs)

Or at least the comments section. – Next on the list of things to do.

Ignore the news. – Will do after dropping the comment section

Don’t listen to [email protected] – Haven’t talked to her in years

Or the gold crazies. – Always knew they were idiots

Or the zero guy. – Stopped reading about 4 years ago. Best.decision.evar

Set up a balanced portfolio. – Mine’s closer to Buffett’s idea of balanced than Turner’s

Get a golden retriever. – Not a dog guy. Maybe I’ll get one a dem blue russian cats someday

Just chill. You’re gonna need it. – Working on it every day
____________________________________

Number one thing: Make peace with the insanity of the world, you can’t change it, and it will probably keep getting worse. If you don’t make that peace, you could be the next loon blowing himself up or executing a cop.

You can’t live worrying about the concerns of this world. All you can ever do is make straight paths for yourself. If the world is destined to burn, make sure you are sitting on the sidelines with a bag of marshmallows and a long stick.

Get your financial situation in a position where it strengthens you rather than weakening you. Security in an e’er insane world puts you on solid ground, build your financial house on a rock and win.

You come first – others will do what they may. Don’t waste time contemplating the latest headlines, you have more important things to do.

#131 goldfunger on 12.01.16 at 10:08 am

There is one big lesson here the deplorables need to learn. Never exit an asset class.”

Garth does this mean I should not abandon gold….or is it not an asset class?

Owning the TSX is all the exposure you need. Physical gold? Never. — Garth

#132 Bytor the Snow Dog on 12.01.16 at 10:15 am

In the What The F’s Going On In The World File….

The eco-terrorists and their enablers at the UN are at it again. They have proposed a world wide MEAT TAX on all meat products to “save the environment”. If passed as proposed it would bring in $500 BILLION a year.

I’m tired of the agenda-pushers and their non-sense. I’ve now converted to a “deplorable”.

#133 WalMark of Sadkatoon on 12.01.16 at 10:20 am

The US is BOOOOOMING!

http://www.businessinsider.com/ism-and-markit-manufacturing-pmi-november-2016-2016-12

Maybe I should use Marin Cuban’s fav adjective.

The US is CRUSHING it!

#134 Che Guevarist on 12.01.16 at 10:21 am

Garth,

You often bash mutual funds but what’s your opinion on TD e-series? Relatively low MER (0.45 %), no commissions for contributions and withdrawals etc, easy to set up pre-authorized plans. Can’t be thaaaat bad right?

#135 traderJim on 12.01.16 at 10:32 am

As someone who has been trading stocks and currencies since the age of 18, I can say that unless you are willing to devote your life to studying balance sheets like Warren Buffett, by FAR the best strategy is to plough all your money into Vanguard (or similar) index funds and forget about it.

Just the fact that 99% of people do not have the proper psychological bent to trade and deal with stress of losses is reason enough to not attempt stock picking.

Not to mention all the accounting knowledge and time spent studying a stock is worthless in the face of accounting or other fraud. (Remember Nortel, Worldcom, Valeant?)

Just buy index funds (a balanced one if you must) and spend your thousands of hours saved earning more to invest or in enjoying life.

There is a good reason to have a financial advisor though: To stop you from selling low and buying high, which virtually every amateur in the world professes they will never do, but reality shows otherwise.

No financial advisor can pick stocks or mutual funds. They are brutal at it in fact. They earn their money preventing people from selling at every downturn and buying back at every manic peak.

#136 InvestorsFriend on 12.01.16 at 10:38 am

Canadian GDP in U.S. dollars?

Number 114 said:

Canada’s 2015 GDP was US $1550.5 billion, about US $235 billion less than Canada’s 2014 GDP (US $1783.8).

That’s a BIG CHUNK OF CHANGE taken out of our economy over the past couple of years (almost $0.5 Trillion).

********************************************
Poppycock and balderdash!

GDP is a measure of economic activity. It’s up.

Where were you when Canada’s dollar rose 30% in about two years? Did you then claim we all got a 30% raise?

This reminds me of the old saying that if you torture the data long enough it will confess to anything.

Again, people believe what they want to believe and they seek confirming evidence.

And if need be they will convert the evidence to a different currency if that is what it takes to get the desired answer.

#137 Jib Halyard on 12.01.16 at 10:41 am

Garth, what do you think about D Series mutual funds? Especially one that seems balanced roughly in accordance with what you recommend above? Are they worth it?

#138 Renter's Revenge! on 12.01.16 at 10:54 am

OK, just a follow up to my “Word becomes flesh” comment the other day, which 45north graciously remarked as profound (although I can’t take credit for it; it’s from the Bible).

Here is scientific evidence that Word literally becomes flesh:

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/how-complaining-rewires-your-brain-for-negativity/article31893948/

***

Also, thanks IHCTD9 for your response to my comment this morning. All good points.

#139 The Technical Analyst on 12.01.16 at 10:55 am

#113 nubbers “Any one of us here would be richer than JK Rowling if we could make our trades with the benefit of hindsight.”

Very true. Most people struggle with Technicals but it is worth learning. That’s why I use (and recommend to my clients and to Garth) a balanced Fundamental/Technical approach.

If you doubt anything of what I called BEFORE hand, you only need to check greaterfool blog logs to see. My nick before was: A Canadian Abroad.

All my trades and recommendations are in the open.

#140 Johnny Boy on 12.01.16 at 10:57 am

#49 Smoking Man on 11.30.16 at 8:52 pm

The Trump Landslide to those of us with Alien DNA and the ability to read minds were not surprised in the least. MSM turned trump into a Homophobe, a Xenophobe, a Sexist Misogynist.
If you go online and carefully listen to the exact words he uses after the terror attack in France, “I want to ban all Muslims entering the USA till properly vetted.” That’s not racists, that logical response at the time of the mass killing.
It got him support and all the crazy shit he said got him popular support. So he’s walking it back now.
It was all about winning, Deplorables won. Unlike the left loons, We Deplorables like him walking it back. Do whatever you need to do to make America Great again.
This political correct insane world we live has reached the ceiling.
Trumps Yuugge win was pushback just like I called it. If your a little snowflake justice warrior who can’t understand the context of words but rather focus on trigger words like your Marxist teachers taught you.
You might as well jump off the golden gate bridge. Because in the next four years with King Trump at the helm with his twitter account. You will be unhinged and bouncing off walls which is healthy. You might even discover what Logic is.
Speaking of mind reading, I’m terrified to go anywhere near downtown. I’m sort of famous now since my trip to the general store and everyone saw my mug shot. All my former colleagues would be terrified to death even say HI or be caught near a Deplorable. They live and work in the most mind retarded PC environment imaginable, they make Huge loot. Can’t say I blame them.
But Someone needed to make stand in this mental world, I can write well now, So I did it and I’ll eat the consequences when they happen.
Nothing Else Matters. I’m a writer now.
…………………………………………………………………..
So essentially what you have just stated is that Donald Trump Lied, cheated and coerced everyone into voting for him. Yes I agree he did a great job and it got him elected. It really proves he is the better low life than Hillery could ever hope to be.
God Dam Americans must be as dumb as shit to vote for either of those two. What ever happened to one’s capacity for logic, understanding, self-awareness, learning, emotional knowledge, planning, creativity and problem solving. Did the world suddenly get stupid?

#141 Don't take it for granite on 12.01.16 at 11:04 am

Hi Garth, I’d be curious to hear your view of retirement schemes like sun life’s “Granite Portfolio” with a changing mix of investments over different target dates. By way of background I pay 6% of my income a month to a 2040 scheme, which is a DCPP. My employer does the same. So in my case that puts away a combined $14,000/year…not exactly a king’s ransom, but hopefully I do that for the next 25-30 years. Once thing I’ll say about it is that I never have to think about the contribution as it automatically comes off my paycheque. What’s your view? Should I be more do-it-myself? Thanks for your ideas over the years.

#142 Don't take it for granite on 12.01.16 at 11:07 am

And the link I meant to add. Sun Life Granite background: http://www.sunlifeglobalinvestments.com/Slgi/Institutional+investors/Investment+solutions/SLF+Granite+Target+Date+Funds?vgnLocale=en_CA

#143 WalMark of Sadkatoon on 12.01.16 at 11:07 am

Let’s see how those homes in Toronto with an asking price of over $1 million do now.

this is no longer considered an unusual Toronto home

its unlikely that anything happens to the price of these homes

#144 For those about to flop... on 12.01.16 at 11:13 am

The last time I checked my TSFA had increased around 11% for the year, mainly because I have 25% CAD equity in there at the moment.
I bought some more at the end of January and haven’t done anything since.
I will lower this amount the next time I see my Origami Instructor at the bank.

Going to the bank sucks,it stops me from taking advantage of short dips, but it also stops me from doing anything stupid at 3am in the morning.

Still one month to go,anything can happen.

I will soft count it at the end of the year.

I will hard count it when it’s in my pocket…

M42BC

#145 yvon on 12.01.16 at 11:16 am

Don’t forget that active (and passive) fund managers make lots of money at your expense:

https://www.ft.com/content/962ae5d0-b30b-11e6-a37c-f4a01f1b0fa1

#146 InvestorsFriend on 12.01.16 at 11:20 am

Bond ETFs versus individual bonds

#127 Julian on 12.01.16 at 9:02 am asked:

Are there any real, unique drawbacks to bond etfs?

***********************************
The answer, in a word, is “no”.

Compared to owning the same bonds individually the bond ETF gives you far greater liquidity to get in and out if you wish. And incredibly less time and effort.

Also, in my experience there are not many individual bonds available from the likes of TD Direct (TD Waterhouse) and they have large bid/ask spreads. Certainly, not ALL bonds are available for TD Waterhouse.

The bond ETF does all the work for you but charges a fee.

The often cited criticism that a bond ETF never gives you back the cash from a bond at maturity is complete poppycock and rubbish. If you were managing a pool of bonds yourself you would reinvest that cash into more bonds at maturity just like the ETF.

But not all bond ETFs are the same so you face the chore of picking one or two.

Or just find an investment manager who will do that and for you as part of a balanced portfolio if you wish. As an excellent bonus you will then have someone to blame on any occasions when your portfolio is not doing as well as you think it should.

#147 Pre-retiree on 12.01.16 at 11:21 am

Yes but where to park safely proceeds of house sale $1.5M while waiting on the side for 2-3 years before buying in another not so demented market and protecting the capital at all cost?

#148 Rexx Rock on 12.01.16 at 11:21 am

Sell your usd,the cad is about to skyrocket.$70 bbl by next summer.The economy and real estate are going to boom again in Alberta baby!!Load up on oil and gas stocks as the rally begins.Oil up big time,good times are here again!

#149 You Tube Chuck McBride and pick out the Golden videos or a few smaller dogs as in minutes he has them trained. on 12.01.16 at 11:26 am

DELETED

#150 traderJim on 12.01.16 at 11:27 am

#105 polls

The absolute genius of Trump is that he will take this minor win at Carrier and turn it into a yuuuuge win.

CNN will of course launch a 24 hr attack on the deal, using every possible angle they can find to paint it in a negative light.

Meanwhile, the public, even the ones still left watching CNN hear about the Trump/Carrier deal (he’s not even in office yet!) 24 hours a day for the next 2 weeks and think: Sounds like he’s doing what he said he would do.

Further, the video now making the rounds with Obama saying this kind of deal is impossible ‘Trump doesn’t have a magic wand’ whines Obama, shows very clearly the difference between the two.

Trump will get more positive publicity for a mere 1,000 jobs than Obama could manage with (statistically manufactured) millions of jobs.

And CNN will wonder why Trump’s popularity just jumped 5 points, after all their work attacking the deal.

And Hillary will be caught wondering out loud ‘why didn’t I win by 50 points???’

Oh man this is going to be a fun 4 , erp , 8 years.

#151 Huge spike in bond market today... on 12.01.16 at 11:28 am

https://www.bloomberg.com/quote/GCAN10YR:IND

Garth, should I go long some Jan 2017 GS and BAC calls?

I smell some big rips in the U.S. banking stocks this year.

GS up big this week and BAC right behind it….

#152 5 year fixed rate going up big on 12.01.16 at 11:52 am

http://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

Hello 3% plus mortgage rates next week….

#153 gattaca on 12.01.16 at 11:57 am

I rent for $1100 in Mississauga. Make 105k + bonus.

Have enough money stashed to buy the average house in Mississauga with no mortgage. But it’s all invested. My portfolio is up over 50% year-to-date.

#154 traderJim on 12.01.16 at 11:57 am

#105 polls

And after the attack on the Carrier deal slows down, Trump will tweet:

“10 million more Carrier deals in the works”

And media will go insane pointing out how it’s impossible, how Trump must be a lunatic, how he is lying, how he ignores facts, how there are not that many businesses in America, etc etc.

And Trump will sit back and laugh at how with 1 sentence that took him 10 seconds to tweet, his Carrier deal will generate another million hours of publicity.

the guy is a true genius.

#155 golden retrievers are great on 12.01.16 at 12:58 pm

DELETED

#156 Reddy on 12.01.16 at 1:00 pm

Seriously only six percent? My stock portfolio is up well over 40% overall with one of my sectors up over 100%. That’s why I left my fin advisor years ago who was losing my money on etf’s and thier consultancy fees

Ps- my portfolio is balanced to weather any upcoming storm

How large is the portfolio and what holdings? — Garth

#157 those damn house obsessed Canadians on 12.01.16 at 1:14 pm

DELETED

#158 Hawk on 12.01.16 at 1:16 pm

At not so sure – poster Bsant

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

Hi my friend,

I read your long post with much interest and enjoyed it a lot. Let me first say that I was answering the original poster in the context of youth unemployment in Italy vs. Canada, but I agree with a lot of what you wrote in your post in praise of Italy particularly as a place to visit.

Having been over 59 countries and hopefully many more, Italy in my opinion is NUMERO UNO. I have travelled over 13 towns and cities in Northern Italy and without exception, each place was amazing to visit.

Indeed, i am going back again there for vacation in a few days time, except it will be South and Sicily this time. Italy will undeniably beat Canada hands down as travel destination, for all the reasons that you so carefully listed.

But having said all that……in fairness to this Great White Blessed piece of Tundra, here’s what was left unsaid.

Canada is way larger than Italy, with far greater natural beauty. We may not have the benefit of geographical proximity to the world, (though we do the superpower to the south) but we do have more natural resources than most nations, including Italy, including the single most important one for the future i.e. FRESH WATER.

Money definitely doe not buy happiness, but it definitely does buy one of the key components of happiness i.e. “comfort”, so it remains important for that reason. And economically Canada is better off, relative to Italy (well atleast until Justina bankrupts us).

Low cost and good accommodation is more likely to be available in much of Italy but that is because the quality of employment is even more dramatically low. I read somewhere that a Chateau in France can cost what a mansion in Toronto does, but there the employment opportunities in the vicinity of the chateau :-) are non – existent. I appreciate that your life in Italy may be great economically, button terms of averages, from what I have seen in both lands, the ordinary person here has it better.

And yes Venetzia, will get more visitors (hell just the cathedral of San Marco, will likely get more visitors) than all of Canada, but if “on average” if you offer a legal migrant from most parts of the world a choice between a Canadian residency and an Italian one, we will win

All that said, hey I love Italia, don’t get me wrong, but to live I’ll take where I am.

Cheers,

Hawk

#159 Johnny Boy on 12.01.16 at 1:18 pm

#153 traderJim on 12.01.16 at 11:57 am
#105 polls
And after the attack on the Carrier deal slows down, Trump will tweet:
“10 million more Carrier deals in the works”
And media will go insane pointing out how it’s impossible, how Trump must be a lunatic, how he is lying, how he ignores facts, how there are not that many businesses in America, etc etc.
And Trump will sit back and laugh at how with 1 sentence that took him 10 seconds to tweet, his Carrier deal will generate another million hours of publicity.
the guy is a true genius.
…………………………………………………………………..
I’m not sure hes a genius but the people he tweets to in the USA are dumb as a stump. Jesus if you fed them a bucket of shit and told them it was fudge, they would look past the stink and taste and still swallow it whole!
How stupid is the world?

https://www.washingtonpost.com/news/the-fix/wp/2016/12/01/this-clip-of-a-trump-supporter-insisting-there-is-widespread-voter-fraud-is-super-depressing/?postshare=2201480613821946&tid=ss_tw&utm_term=.3014b96e77fd

#160 IHCTD9 on 12.01.16 at 1:57 pm

#134 traderJim on 12.01.16 at 10:32 am

…unless you are willing to devote your life to studying balance sheets like Warren Buffett, by FAR the best strategy is to plough all your money into Vanguard (or similar) index funds and forget about it.
_______________________

Good advice here.

For anyone that could care less about looking at spread sheets, I can say setting up an auto-withdrawal every week/month for investment is the way to go. You don’t miss the money because you never got to see it in the first place. Look everything over at the end of the year and adjust as desired and then forget about it for another year.

The wife and I have been doing this for near 20 years so far, and it’s really starting to pile up. After we paid off the house, we decided to keep the mortgage payment withdrawal going as well, except into the investments – every month.

We’ll do the same when the kids are done school with the tuition payments. It’s simple stuff involving [email protected] and mutual funds (I know, I know…), but I can’t complain with how things have gone thus far, and it sure beats the crap out of doing zip.

#161 iShares Index iETF approximation of GreaterFool portfolio on 12.01.16 at 2:21 pm

Out of interest, I used what Garth mentioned above and in the blog post below to make an iShares ETF approximate version of the portfolio.

http://www.greaterfool.ca/2016/08/18/no-lid/
>Instead they plowed it all, every dollar they could land, in the portfolio which exactly resembles the one I have described here. (17% in a mix of government, corporate, high-yield, real return bonds; 5% in REITs; 18% in preferreds; 17% in Canadian equities; 21% in US growth; 18% in international markets; 4% alternative strategies.)

Garth doesn’t mention specific funds and he could well have access to funds that retail investors don’t. The below is an approximation of the GreaterFool.ca portfolio using only iShares ETFs with the following changes: a) I used developing markets instead of the 4% to alternative growth as I don’t know what alternative growth is supported to represent; b) iShares doesn’t offer any short-term bond ETFs that include real return bonds or high yield/junk bonds so the ETF below is short-term government and corporate bonds only.

You could construct the same type of portfolio using Vanguard ETFs. The iShares ETFs below are reasonably representative of the asset categories.

Returns are total return figures YTD through Nov. 30 from the iShares fund pages.

Cdn equity (XIC iShares Core S&P/TSX Capped Composite Index ETF)
percentage: 17.0% YTD total return: 19.04%

US equity (XUU iShares Core S&P U.S. Total Market Index ETF)
percentage: 21.0% YTD total return: 7.51%

International equity – developed markets ex-Canada/US (XEF iShares Core MSCI EAFE IMI Index ETF)
percentage: 18.0% YTD total return: -5.23%

International equity – emerging markets (XEC iShares Core MSCI Emerging Markets IMI Index ETF)
percentage: 4.0% YTD total return: 7.05%

alternative growth (?) – replaced with emerging market equity, above

Cdn short-term bonds (mix of gov’t, corp) (XSQ iShares Core Short Term High Quality Canadian Bond Index ETF)
percentage: 17.0% YTD total return: 0.89%

Cdn REIT (XRE iShares S&P/TSX Capped REIT Index ETF)
percentage: 5.0% YTD total return: 12.82%

Cdn preferred (CPD iShares S&P/TSX Canadian Preferred Share Index ETF)
percentage: 18.0% YTD total return: 2.87%

Cash – listed as 5% but doesn’t fit within 100% so left out
percentage: 0.0%

Total
percentage: 100.0% YTD total return: 5.46%

#162 mike on 12.01.16 at 2:36 pm

#109 Damifino on 12.01.16 at 1:30 am

I have the upper two levels of a duplex in Hamilton available for jan 1.

I read that article too. my tenants who occupy the other part of the house or the Italian guy next door will be sure to let me know of anything out of the ordinary.

being a landlord isn’t for everyone.

#163 WalMark of Sadkatoon on 12.01.16 at 2:48 pm

anyone for some big inflation?

http://www.businessinsider.com/treasury-bond-market-update-december-1-2016-2016-12

#164 For those about to flop... on 12.01.16 at 3:23 pm

The Orange Octopus promised to make America great again.

Tiger Woods is back playing golf.

Job done…

M42BC

#165 Context on 12.01.16 at 3:23 pm

Some nice POS in Toronto over $1 million and in some cases have been in the family for over 50 years. Of course there should be no mortgages left which tells me they refinanced to speculate on the condo market in Toronto and got into trouble.

#166 Canadian Moose on 12.01.16 at 3:33 pm

The (GOOG) Great Oracle Orator Garth has spoken and his wisdom is undeniable. SO listen up blog dogs. Certainly has made a difference in this Mooses life.

Life is good in the Hinterland.

#167 Oakville Stinks on 12.01.16 at 3:34 pm

I know all this is great advice but I don’t have time to manage and deal with the details.

Does one need a 6 figure account to have the pros (Turner investments) manage this type of portfolio?

#168 Russ on 12.01.16 at 3:37 pm

Garth says, “If I weren’t on a mission from God to save you all, I’d…”

He’s in good company.
https://www.youtube.com/watch?v=-4YrCFz0Kfc

Johnny RIP

#169 Smoking Man on 12.01.16 at 3:45 pm

#139 Johnny Boy on 12.01.16 at 10:57 am
…..

Ofcource Trump lied.. Everybody lies except for Charles Ashman one of my crew from Nictonite.
Get over it.

#170 traderJim on 12.01.16 at 4:22 pm

#158 Johnny Boy

Love your view that you are so smart and everyone who disagrees with you is stupid.

That mindset is a great one for losing your shirt in the market too.

I urge you to keep believing your own superiority.

#171 Brokerizer on 12.01.16 at 4:45 pm

Gold is down again CIBC at an all-time-high

Gold bugs: you’ll have to wait for the next engineered fear campaign to recover your losses. Meanwhile many of us are 20% up on our banks and got a 4% dividend all year.

If you gold falls to 1075 maybe I’ll buy some, just to help you out. I feel merry.

#172 jess on 12.01.16 at 5:04 pm

#158 Johnny Boy on 12.01.16 at 1:18 pm

ethical dilemmas of data journalism
http://www.cjr.org/tow_center/transparency_algorithms_buzzfeed.php?curator=SportsREDEF

Journalists Hang Tough in Face of Backlash Against Panama Papers Reporting
Reporters have faced consequences both in nations where media crackdowns are common and also in nations with reputations for high levels of press freedom
https://panamapapers.icij.org/20161201-journalists-face-backlash.html

ukraine
holding journalists up to higher standards /public trust
https://www.occrp.org/en/announcements/5311-occrp-responds-criticism-poroshenko-ukraine-panama-papers
https://www.occrp.org/en/daily/4581-bosnia-and-herzegovina-former-high-representative-warns-of-criminally-captured-state
https://thecorrespondent.com/3884/big-business-orders-its-pro-ttip-arguments-from-these-think-tanks/653615122028-ce8f9e10
==========

behavioral data to access financial services ?

No Credit History? No Problem. Lenders Are Looking at Your Phone Data
by Olga Kharif bloomberg
November 25, 2016 — 5:00 AM EST

FICO, Equifax stike partnerships to expand access to loans
‘The way you use the phone is a proxy for the way you live.”

#173 Freedom First on 12.01.16 at 5:15 pm

#129 1HCTD9

Yes. Your Post today aligns very well with the Freedom First mindset. 5 star.

#174 Smoking Man on 12.01.16 at 5:18 pm

Test

One of your best. — Garth

#175 Bram on 12.01.16 at 5:37 pm

#39 Loose Moose on 11.30.16 at 8:37 pm
If one is investing for the long term, will not need the cash for 20 plus years, and has an iron stomach for volatility, why not ditch the fixed income and go 100% growth? Is there a financial reason not to or just an emotional one?

This!

Moose is so right.
An all-stock portfolio is up 20% for the year.
Goes down again next yr? Who the F cares, you get paid dividends regardless.

Bonds is for old ppl who need the money now.

#176 espressobob on 12.01.16 at 5:43 pm

One of the problems with mutual funds is the performance going forward. How would a retail or pro know which fund will outperform in the future? Tough call.

Some do, most don’t.

Global & balanced index investors beat cherry pickers over the long haul most of the time. Why gamble? The odds suggest otherwise.

#177 jess on 12.01.16 at 5:53 pm

carrier /united technologies

http://subsidytracker.goodjobsfirst.org/prog.php?parent=united-technologies

since 2010
Violation Tracker Parent Company Summary
Individual Penalty Records:

Thursday, June 20, 2013
United Technologies Corporation Liable for Over $473 Million for Inflating Prices on Aircraft Engines Sold to Air Force
Recovery Sets Record for Case Tried Under the False Claims Act
https://www.justice.gov/opa/pr/united-technologies-corporation-liable-over-473-million-inflating-prices-aircraft-engines

http://violationtracker.goodjobsfirst.org/parent/united-technologies

#178 mark on 12.01.16 at 6:19 pm

Your time horizon is till you die. After that your heirs get your money.
You should be in 100% stocks period for biggest return above inflation.

#179 spaceman on 12.01.16 at 6:36 pm

$34,000 annual income is completely tax free ..

How do you live on 34 K a year ? Interest on a GIC is what .5 % ? But if you had 50% in Dividend paying stocks, your dividends alone would be 3-5% Your income would be $60k, not $34…

#180 spaceman on 12.01.16 at 6:44 pm

#39 Loose Moose on 11.30.16 at 8:37 pm
If one is investing for the long term, will not need the cash for 20 plus years, and has an iron stomach for volatility, why not ditch the fixed income and go 100% growth? Is there a financial reason not to or just an emotional one?

Because Markets don’t keep going up forever, they crash, taking 100% of your portfolio with it… can you live with that?

Also, you want cash to buy into the bottom of a market, that is why you rebalance after a long bull run, (like now) and have cash ready. (bonds, liguid low risk etfs)

My short term Bond fund pays for itself, even with the last rut, the distribution is 1.3%, low and behold, that has brought it right back to par. No risk, no loss in Principal.

#181 espressobob on 12.01.16 at 6:46 pm

Just to be fair with those starting out with the investing game, Nothing wrong with I trade or whatever with regards to getting started.

Homework is paramount, don’t discount that.

This is a worthwhile study, knock yourself out.