In the beginning

In an underwhelming weekend post that actually hurt to read, I detailed why people don’t invest. At least, not enough of them. They can’t bring themselves to trust anyone with their money. They fear paying fees to get help. And markets freak them out.

As a piteous result, 70% own houses with epic debt while only 7% have maxed TFSAs (no debt). So now the second-greatest risk people face is a real estate correction. (The biggest risk has not changed: running out of money. Especially for the girls.)

For many, this will not end well. For others who learn (especially early), financial independence is totally within grasp. So, I got this note from Mike:

“I totally agree with your comments in that blog post and I am following your advice.  But I have a question for you, How does a young person (my son) with only $30,000 -$40,000 to invest go about it?  Most brokers don’t seem interested in small accounts like that and as you noted the commission based pushers of mutual funds are a poor choice. My son is thinking about buying a basket of ETFs via an online trading account.  Is that really his best bet?  With that little capital he won’t be able to build in much balance or diversification. What should he do?”

Good question. Simple answer.

First, stop looking for professional help. Sadly the financial industry is so focused on wealth creation (its own) that you get clown-advisors advertising that they’re “best suited to clients with $500,000 to invest.” Yeah, right. Buy another Porsche. I guess they don’t care about the kids, low-income earners or others seriously trying to succeed. As for the banks, they’ll gladly take the cash and stick it into mutual funds costing 2.5%, and never call. Robos are an option, but do really trust an algo more than yourself?

So, as stated, there’s a simple alternative. Open that online portfolio and start with just one account – the TFSA. As I’ve tried to show many times, it’s a money pig. Put $100 a week in there for 20 years at an average of 7% and end up with $227,000 of which $122,000 is taxless growth. Over three decades it will produce well over half a million, of which $376,000 is growth. The annual income from that TFSA alone would be about $35,000, and not a nickel in tax.

Jr-Mike cannot afford not to do this. C’mon. It’s a lousy $14 a day. That’s, like, two Pumpkin Spice Lattes at Sbux.

So how does you accomplish a 7% return over time without big, confidence-shaking gyrations? By having a reasonable mix of ETFs in a correct weighting which is rebalanced once a year with a few trades. Make deposits religiously – every pay period. Don’t consider the TFSA to be glorified savings account which can be raided to finance a holiday, and ignore all the geniuses on the Internet telling you to load up on gold, cryptocurrencies or (shudder) an investment condo.

Always remember the basics: a balanced portfolio has safe stuff and growth assets at the same time to mitigate volatility. Yes, young people shouldn’t care about being on a roller-coaster ride because they have decades of time. But, seriously, today’s moisters are as risk-averse as 80-year-old wrinklines with walkers and oxygen cylinders. So if you can smooth out the ride with balance, why not?

And don’t forget diversification – holding ETFs, which own large baskets of stocks, instead of individual stocks, for example. Plus ensure you have a global portfolio, not just a Canadian one, since there are far more opportunities outside this country than within. Inexperienced investors always exaggerate market swings, fall victim to recency bias (what just happened will happen forever) and think ‘investing’ means ‘gambling.’ In reality, buying a condo unit with 5% down and 95% debt is a massively greater risk.

So let’s review/revise the Millennial Portfolio. As I said the last time this was published: “It will take guts. I can assure you when the market sheds 15% this blog will be brimming with dour dinks telling you 2008 is just around the corner and stocks are on their way to zero. But it won’t happen. There’s no crash rerun coming, no financial crisis, no bank failures, no bond default, no reason to hide in cash. If you believe otherwise, I don’t expect you to buy a house or have children.”

So, suck it up Jr-Mike, and invest.

Here are the asset types, and the weightings for a balanced, diversified portfolio. Once again, don’t ask me to spell out individual ETFs, as it would be improper to do so. I’m not in the business of promoting or selling any individual securities.

Fixed income portion (40% of total): Government bonds 11%; corporate bonds & high-yield bonds 9%; cash 2%; & preferred shares 18%.

Equity (growth) portion (60% of total): Canadian equity 21% (expanding potential). US equity 16% (getting toppy), International; & emerging markets 23% (the future).

More money to invest means more positions, adding mid-cap US companies, for example, as well as having a 20% overall weighting in US-denominated funds. And once you set this portfolio up you must routinely (annually) rebalance it. That means selling off the excess amounts of those assets which had increased in value and spreading it among the poorer performers.

When you hit $500,000, call me. You can buy lunch.

220 comments ↓

#1 Fake News Again on 11.07.17 at 6:08 pm

#132 Ponzius Pilatus on 11.07.17 at 3:27 pm
#119 Fake News Again on 11.07.17 at 1:31 pm
Meanwhile gas is $1.45 in Greater Van – the most expensive place to buy gas in Canada. And the parasite called Govt wonders why I have not bought gas in Canada in two years. Sumas, WA – 20 minutes away – 95 cents after Cdn conversion.
————–
Good for you.
I trust you are an honorable man and go to Sumas when you need medical help.
___________________

1. Are you suggesting that the GAS TAXES I am not paying are supposed to be going to health care? Here in BC that is what MSP and income taxes are for.

2. Not one media station EVER talks about reducing the size of fat inefficient bloated wasteful govt that taxes the living crap out of me. SHOULD that change and taxes go down, I will spend more of my “after tax” income in Canada.

#2 What I found. on 11.07.17 at 6:10 pm

#65 Fortune Faded on 06.15.16 at 10:39 pm

Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
https://gist.github.com/anonymous/7d6201256f98010f6bf935e33ee4374e

#3 Start Raging on 11.07.17 at 6:16 pm

For a frequent commenter that shall remain unnamed:
You can start foaming at the mouth again, after reading this:

https://www.realestatedaily.com/news-items/remax-executives-caught-scandal-delay-third-quarter-earnings-report/

#4 Vancouver Brit on 11.07.17 at 6:17 pm

As Garth likely can’t say it, tell your son to go to Questrade and open up his TFSA (and RRSP if he wants). You can buy any ETF there you want for free, and even with just a few thousand dollars you can create a balanced, global portfolio. You don’t need expert advice with that little money. It’s really not hard or scary in anyway, as much as it might seem daunting. Take the plunge and don’t look back.

Oh, and go more aggressive than 60/40 like Garth recommends. At that age, more like 80/20 or even 100% stocks wouldn’t be inappropriate and would provide much greater returns than 60/40, albeit in a highly volatile way.

#5 Calgary Guy on 11.07.17 at 6:20 pm

Check out Canadian Shareowner Association. Good selection of quality etf’s, low trade costs and monthly dividend reinvested with no trading cost. They offer both rsp and tfsa accounts. Worth a look especially for investors starting out.

#6 Parksville Prankster on 11.07.17 at 6:20 pm

Sage advice as always Garth. The only question I would have would be in regard to the tax withholding at source which would be required on any dividend income of the US or International ETFs held within the TFSA. As you know, an alternate may be for Junior to hold those particular ETFs within his RRSP to avoid the 15% bite on dividends of those ETFs going forward. Of course, that would have to be weighed against taxable levels of total principal at withdrawal.

#7 Yuck ! on 11.07.17 at 6:21 pm

30% corrections occur once every 9 yrs or so . You couldn’t predict the last and you won’t the next one. To say 2008 (a 30% correction ) is not going to happen ?

Talk about recency bias …

A major correction is not even on the radar. Besides, people with balanced portfolios who stay invested did just fine in the last one. — Garth

#8 dee on 11.07.17 at 6:23 pm

mortgage broker i know says b20 will only impact first time home buyers come january. Is that bull? Doesn’t sound right. I don’t think he’s done enough digging.

#9 Johnny D on 11.07.17 at 6:23 pm

… or sock it all into WEED (Canopy Growth Corp.)
You’ll be a millionaire in no time… or broke. Either way, what a ride!!!

#10 US getting 'toppy'? on 11.07.17 at 6:24 pm

You market timer ..:)

#11 jess on 11.07.17 at 6:24 pm

…” artificial schemes.

Politicians across the spectrum have denounced complicated arrangements that allow people to shelter their earnings from tax authorities.

A favourite method recommended by Aston Court appears to be the one adopted by some of the actors from the BBC One sitcom Mrs Brown’s Boys. Earnings from their work were transferred offshore into Mauritius-based cell companies. There, they became non-taxable loans.Technically, the clients did not own the money any more. But by signing up to be “investment advisers”, they were able to keep control over how the cash was spent.” read more @

https://www.theguardian.com/news/2017/nov/06/james-o-toole-tax-alchemist-assets-uk-paradise-papers

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

Croatian businessman arrested in London over mega bankruptcy case
Founder of Croatia’s biggest private food and retail company arrested in the British capital.

By Associated Press
November 7, 2017 15:14 GMT
“The company is so large it now accounts for about 15% of Croatia’s gross domestic product and the debt is too large for the government to rescue it without endangering the state’s financial stability.

#12 BC_Doc on 11.07.17 at 6:24 pm

“Once again, don’t ask me to spell out individual ETFs, as it would be improper to do so. I’m not in the business of promoting or selling any individual securities.”

Junior could do a whole lot worse than this:

40% VXC-T Vanguard All World Equity ETF Except Canada

20% VCN-T Vanguard All Canada Equity ETF

40% VAB-T Vanguard Canadian Aggregate Bond ETF

Fair and balanced, like CNN. Diversified too.

#13 Adam on 11.07.17 at 6:29 pm

As long as he opens a TFSA at the brokerage account, YES a basket of LOW FEE ETFs are easily his best best, why would you think they wouldn’t be?

Also, $30-40k is tons of money to start a portfolio with.

Mike sounds fishy if he doubts an ETF portfolio of $30-40k.

#14 db on 11.07.17 at 6:35 pm

So perhaps to add a bit to the GT portfolio advice for your son:
1) is Jr. employed? Before socking money into a TFSA consider investing money in a career upgrade/training. If the training is very specific to the job approach your employer with a business plan (cost benefit, revenue potential)they may be open to paying the full cost; if the training is more general (MBA, post-dip.) but still potentially beneficial be open to a 50/50 split or cost sharing with your employer. Between tax benefits for training and the potential for a salary boost if you play your cards right the increase in income may easily beat the 7% investment return, even in the tax advantaged TFSA
2) is he living away from home? Does he live alone? Consider getting a roommate for a few years to reduce costs and boost savings.
3) Does he know how to cook? Eating out is very expensive. No need to invest in an expensive Cordon Bleu program, just a few hundred bucks and weekends at the community college should get him squared on the basics. If he’s got at least the basics than a couple of comprehensive cookbooks and Youtube should suffice.
4) Does he own a car? Does he need a car where he lives/works? If not a combo of cycling, walking, transit and car sharing can free up thousands of dollars for savings
5) Saving is a great skill to have but without investing knowledge you get none of the benefit of compounding which is the greatest advantage the young have. So if he’s swayed by the temptation of hot stock tips suggest he have a separate account at his online brokerage where he puts no more than 5% of his investments. Follow the advice Garth offers for 95% of his money but let him try his hand at speculating in the smaller account. If he makes millions, he can Tweet smarmy I told You So emoticons at Garth and be all smug and cocky… if his speckers blow up in his face and he loses his shirt…meh, older and wiser and he probably would have flushed the same amount away on liquor and low grade hydroponic weed anyway…

#15 young & foolish on 11.07.17 at 6:36 pm

Garth makes it all sound soooo easy!

#16 Dwilly on 11.07.17 at 6:40 pm

“With that little capital he won’t be able to build in much balance or diversification.”

Mike….common mistake by simply not true at all. He needs just three transactions to make up 10,000 different equities and bonds.

Buy 10,000 worth of XIC – 300 Canadian stocks, basically the whole TSX
Buy 10,000 worth of XAW – holds over 10,000 global stocks. Basically, the world
Buy 10,000 worth of XBB – holds a basket of safe Canadian bonds

Garth’s portfolio is fine, but there’s something to be said for KISS. Three transactions, more diversity and balance than 90% of investors have.

#17 Ron on 11.07.17 at 6:40 pm

The banks are even worse than one can imagine.

Look at what they are doing. Charging over 2% MER fee to manage a fund, and that fund owns nothing more than a few other mutual funds that the bank provides which also have their own MER fees. So your MER fee is actually a lot higher than what many think. Someone should crack down on this. It’s boarderline fraud.

http://quote.morningstar.ca/quicktakes/fund/f_ca.aspx?t=F000002ESE&region=can&culture=en-CA

#18 Joshua on 11.07.17 at 6:41 pm

Hey Mike,

While Garth offers great services for high net worth individuals a portfolio like the one he mentions for $40-$50k would be eaten up by trading commissions at most brokerages.

My advice: Just buy two ETFS. One that tracks the TSX (i.e. VCN, XIC) and one that tracks the entire world excluding Canada (i.e. XAW, VXC). Allocate a 1/3rd of the portfolio to Canada and 2/3rds to the ex-Canada fund. As your son gets older encourage him to gradually purchase bonds for stability (unless he has a great pension).

Is it perfect? No. Will it offer greater returns than 90% of high cost mutual funds over time? Yes.

If you open a brokerage with TD Direct Investing look into the TD e-series. They are index mutual funds that cost a bit more but are free to buy and sell and are great for beginners adding small amounts each week or month.

Also search this blog for posts by Doug Rowat. He talks a bit about behavioural finance that can often times cause the largest drag on returns.

Finally, if your son becomes a multimillionaire don’t let him shelter his coin in any off-shore holding company. It’ll probably come back to bite him in the ass

#19 akashic record on 11.07.17 at 6:44 pm

When you hit $500,000, call me. You can buy lunch.

—-

Ain’t gonna happen in two years.

#20 Andrewski on 11.07.17 at 6:49 pm

Great (free) information for investors of any age! & it’s FREE, concise advice.

#21 Good grief on 11.07.17 at 6:53 pm

Way too complicated for a portfolio of $50k

And introducing market timing (decreasing exposure to sectors ) ?Studies have shown its useless

Geez

#22 akashic record on 11.07.17 at 6:53 pm

#11 BC_Doc

Fair and balanced, like CNN.

You may have just killed the kid’s confidence in investment.

#23 TheDood on 11.07.17 at 6:55 pm

#8 Johnny D on 11.07.17 at 6:23 pm

_______

LOL!

Don’t forget AbCann and Aurora!

#24 prairie person on 11.07.17 at 6:57 pm

It is no wonder that more and more Americans believe the game is rigged. It is no wonder that they buy houses they cannot afford and then walk away from the mortgage when they can no longer pay. Once the social contract is shredded, once the deal is off, only suckers still play by the rules.

George Packer’s The Unwinding is published by Faber & Faber at £20

#25 rainclouds on 11.07.17 at 6:58 pm

Listen up whippersnappers the man speaks truth.

We saved RRSP/TFSA/investments over the decades but if I had followed the advice given here 30 yrs ago instead of 10. Badda boom.

Don’t waste your money on crap, get by without being a spendthrift or a mizer but look after #1. YOU. Realize you will be 60 one day. having a nest egg is a wonderous thing, makes life a lot more enjoyable even more so if it was your long term goal that came to fruition. I can garantee your less diciplined peers will be wondering “how you were so lucky”

priorities and long term goals……set em and follow through, you will be amazed at the outcome

#26 Vanguard on 11.07.17 at 7:03 pm

#11

BC_Doc is spot on: just pick three Vanguard ETFs.
Done.

If you want to know what you are paying on management fees:

https://en.wikipedia.org/wiki/List_of_Canadian_exchange-traded_funds#Vanguard_Investments_Canada_Inc.

(Typically 0.2% or so.)

#27 Yanniel on 11.07.17 at 7:04 pm

Thanks for this post Garth. Incidentally, it answers the question I posted on that weekend post while recovering from a hernia repair surgery at Shouldice :-)

Now, for the bonds portion: Are you referring to Canadian issued bonds? For instance, Canadian High yield bonds offer a lower yield than junk bonds South of the border. So, does it make sense to buy American bonds instead?

As for sticking your money in a TFSA first, I think that advice does not apply to every body. Ex. for a guy/gal making +100k, is it not better to stick the money in the RRSP first?

Your input is greatly appreciated.

#28 Keith on 11.07.17 at 7:04 pm

In order to have sufficient funds for retirement, you need to save enough money, at a high enough rate of return, at low enough risk, at as low a cost as possible, for a long enough period of time – probably 30 years minimum. How many wage earners are getting it done?

In order to do that yourself, you need to have mathematical skills, financial knowledge, discipline and to have studied the history of financial markets.

If you have someone do it for you, most of the financial industry charges substantial fees to do so, defeating the requirement of low cost.

The substantial loss of the company pension plan is a recent situation. Consider a new generation of retirees, more likely to have a mortgage or other debt going in to retirement. More likely to not have a company pension. More likely to have children who need financial help.

The fastest growing demographic in Canada is those aged over 100. The new demographic of bankruptcy is seniors. We have a shrinking working middle class. We will have the same in retirement, haves and have nots.

Shrinking private sector union density. No more company pension plans. Inadequate and undersubscribed defined contribution retirement schemes. Inadequate private sector financial planning expertise for ordinary wage earners. Declining real wages. A one asset net worth strategy. Oh Canada.

A society of rich and poor – retirees.

#29 TS on 11.07.17 at 7:09 pm

The best way to get somebody to look at your money is to have a parent with money :)

If your parents have million+, it’ll be easy to find somebody at a TD Waterhouse or Dominion Securities to handle your money in a garth style portfolio whether you have $30,000 or $200,000

#30 n1tro on 11.07.17 at 7:12 pm

Take the money, start a business. A lot more rewarding. If you fail, you got time to build a portfolio later.

#31 FahtCoot on 11.07.17 at 7:15 pm

… or sock it all into WEED (Canopy Growth Corp.)
You’ll be a millionaire in no time… or broke. Either way, what a ride!!!

—————————————————————

Wish I timed that stock like the housing market!!!!
Was down nearly 100k at one point today. Have all the greater fools been found yet?

#32 dakkie on 11.07.17 at 7:22 pm

NAFTA Explained – Tim Moen of The Libertarian Party Of Canada Rips Apart Misconceptions

http://investmentwatchblog.com/nafta-explained-tim-moen-of-the-libertarian-party-of-canada-rips-apart-misconceptions/

#33 MF on 11.07.17 at 7:23 pm

#4 Vancouver Brit on 11.07.17 at 6:17 pm

“It’s really not hard or scary in anyway, as much as it might seem daunting. Take the plunge and don’t look back.

Oh, and go more aggressive than 60/40 like Garth recommends. At that age, more like 80/20 or even 100% stocks wouldn’t be inappropriate and would provide much greater returns than 60/40, albeit in a highly volatile way.”

-That volatile way will likely destroy the young investor, whether he is prepared or not. Take heed and listen to the diversification message, however boring it is.

I know because that was me about 3 years ago. Spent years studying the markets, reading books/blogs to prepare myself, and was certain I could stand the volatility because “stocks always come back” and I am young/educated.
Was I wrong.

I took the plunge with my 50k that took years to amass working jobs I hated and sacrificed so much for. Took guts and I was nervous as all hell doing it but I got it done.

Well that was right before the oil collapse, china’s collapsing market, the ebola threat, threat of rising rates by the fed, and yet another EU crisis etc.

Literally the next day after creating the balanced portfolio that I was very proud of, it all went south..and continued to go south for months. The psychology is nothing short of panic. The first thing you realize is how far markets can fall and how quickly. Then you remember how it will take bigger and bigger gains to make up for the losses.

After months of losses, all you want to do is break even and get your money the heck out -Oop! another day of red. Without even looking my money should be even deeper in the red and further from getting it out. Who cares about gains?? What are those? It can sullen your mood a bit too. Back to work to make money back I feel I have lost.

By far the worst feelings in all this, is hearing how “house prices have roared ahead 20%” while your stock portfolio is down 15.

Of course, if you ignore it all and realize you are balanced, you don’t see the red day to day numbers and feel it as much and it won’t weigh on you as much. The problem is if you have any interest in finance (doesn’t everyone)? If you frequent a blog as pathetic as this one, read a newspaper, happen to glance at a TV, or talk to anyone..you will be reminded of how your money is shrinking.

The point of my post is not that investing is the wrong route (my portfolio became positive around 1.5-2 years later) but it’s that young investors have no tolerance for corrections and that volatility will sink 90% of us.

MF

#34 HoweStreet.com on 11.07.17 at 7:25 pm

DELETED

#35 Engineer on 11.07.17 at 7:25 pm

I’m currently throwing $10k a month at my portfolio. Should I contribute in the same ratios each month or use this money to rebalance monthly?

Only an engineer would ask that. — Garth

#36 BobC on 11.07.17 at 7:31 pm

Ok so you invest in etf’s by percentage and rebalance once a year to get back to those percentages.
What do you do with additional money to invest during the year? Do you invest it as per the original percentages or invest it in what’s down to sort of rebalance it?

#37 MF on 11.07.17 at 7:33 pm

#27 Keith on 11.07.17 at 7:04 pm

” Declining real wages. A one asset net worth strategy. Oh Canada.

A society of rich and poor – retirees.”

-Not entirely. A lot of those retirees bought their homes in 1975 for 8k..and now they worth 1.2 million. When they sell (the market is still hot, just takes a little longer to sell then April/March) they have their retirement.

The one asset strategy has lifted A LOT of people from mediocre retirements to comfortable.

MF

#38 crowdedelevatorfartz on 11.07.17 at 7:36 pm

I’m getting a little worried.
Happy Housing Crash Everyone hasnt vented his spleen in three days…..should we send out a search party?

#39 NoName on 11.07.17 at 7:40 pm

#10 jess on 11.07.17 at 6:24 pm

About that croatian dude in arrested uk, and company in question is 3rd biggest ice cream maker in eu. it’ll suck on balkan next sumer if ice crem bussines goes down…

http://www.ledo.hr/hr-en/products/ice-creams

#40 akashic record on 11.07.17 at 7:41 pm

Happy Housing Crash Everyone hasnt vented his spleen in three days…..should we send out a search party?

The medicine kicked in eventually.

#41 Yanniel on 11.07.17 at 7:44 pm

“I’m currently throwing $10k a month at my portfolio. Should I contribute in the same ratios each month or use this money to rebalance monthly?” – Engineer.

My two cents: use your contributions to keep the portfolio as balanced as possible. Alternately, if buying opportunities arise, then use your monthly contributions to temporarily overweight the positions that went on sale.

#42 Greater Fool on 11.07.17 at 7:46 pm

Garth, I listen to you, I save every penny and this year I will manage to save ~$50k after taxes and my investments will yield me another ~$20k, awesome! $70k Total. House prices are up ~$200k this year and my dark, stinky basement rent is up BIG TIME. I want to kill myself or burn down the parliament building here in Victoria, which one should I do? BTW, my place is not pet-friendly so I can’ have a doggo.

So, move. — Garth

#43 Steve B. on 11.07.17 at 7:48 pm

Garth,
I agree with you 90% of the time, but today is not one of those days. Junior should find a robo-advisor and let them take care of everything. Most Canadians don’t have the time, knowledge, desire or temperament to take care of their own investments.
SB

And, given your advice, they never will. — Garth

#44 Newbie ishares investor on 11.07.17 at 7:48 pm

So, a while back I thought I would dip my toes in the water and experiment with a self-directed TFSA at the red bank. Put a very small amount in a few ETFs: XGB, XSP, XIU, and XPF.

So here’s the part where I swallow my pride and come to you blog dogs for some advice with my tail between my legs. I thought that XGB and XPF were supposed to be “fixed income”, but so far no income is magically flowing into my account like I thought it would. I don’t know one person that invests in ETFs and don’t even know where to look for information so here I am asking on this pathetic blog.

Please be kind.

P.S. The whole reason for this experiment is that I’ll soon be coming into a small inheritance, but my confidence is shot now. Any recommendations for a fee based adviser on YVR island?

#45 Dwilly on 11.07.17 at 7:50 pm

#27 Yanniel

Unless you have a very large portfolio or large fixed income position, most people generally advise against using foreign bonds. The bond position is meant to be your “safe” stuff, holding foreign bonds adds currency volatility, and most likely bonds that are lower quality than Canadian. Stick to basics.

#35 Engineer

Since you’re an engineer, it probably doesn’t matter, mathematically. Unless you already have a massive amount saved, then if you are contributing $10k/mth, your contributions over a period of a few mths are >>> than your portfolio. Therefore contributing in your original weightings will probably in aggregate keep you on track, and you can rebalance whenever. Honestly, not a decision to sweat.

#36 BobC

Same as above. Not going to have a measurable impact either way. Do whatever is easier / least stressful for you / least likely to make you do something dumb, and minimize trading costs. (no sense paying a $10 commission to buy $100 worth of something)

#46 Hamilton Guy on 11.07.17 at 7:56 pm

Blog Dogs,

I would appreciate some investment advice. The wife and I are both 30, sold our house last October and opted to rent it back from the new owners. After paying off some debt, we have about 110k to invest and dumped it into five mutual funds at the end of the year last year.

The fund names are Scotia Canadian Bond Index, Dynamic Aurion Total Return Bond, Dynamic Dividend Fund, Dynamic Small Business Fund and Scotia US Index. The cash was split evenly among the five funds and the total fee is 1.57% per year.

My question is, should I pull the money and go to a robo advisor or is this a decent start? Returns for the first nine months were 3.73% which makes me nervous since some of you have mentioned 7-8% so far this year. Thank you in advance and may the chirping commence.

What an awful mix. Get some help. A person. — Garth

#47 The Limited Sage on 11.07.17 at 7:57 pm

Garth,

What happened to the REITS?

Part of Canadian equity. Too many positions for a 30K portfolio. — Garth

#48 FahtCoot on 11.07.17 at 8:01 pm

YOU KNOW YOURE IN TROUBLE WHEN:

Examples of denial are both profound and unacknowledged.

https://un-denial.com/2017/01/06/you-know-you-are-in-trouble-when/

#49 NoName on 11.07.17 at 8:01 pm

@ that dude and his son and 30-40k

Pay attention here!

If you are unsure to do it yourself get hold of blackrock lifepath and keep feeding it until you have enough.

#50 madcat on 11.07.17 at 8:04 pm

Garth, do you take on clients that have less than 500k to invest?

If you have a dog. — Garth

#51 will on 11.07.17 at 8:05 pm

Never did get my statement from CRA this year. Finally went online 3 weeks ago and got the crucial stuff. Maxed the rrsp yesterday. Anyone else experience Extreme Tardiness from CRA this year? Or do they only hate MY guts?

#52 FOUR FINGERS WATSON on 11.07.17 at 8:05 pm

#38 crowdedelevatorfartz on 11.07.17 at 7:36 pm
I’m getting a little worried.
Happy Housing Crash Everyone hasnt vented his spleen in three days…..should we send out a search party?
…………………….

Maybe his posts got shitcanned like mine. Sometimes they don’t even show as deleted.

Around here you have to earn a DELETED. — Garth

#53 604 on 11.07.17 at 8:06 pm

What portfolio size $ do you need to invest with a pro fee based advisor typically ?

#54 JSS on 11.07.17 at 8:08 pm

Wait till junior gets married. Then portfolio is gone bye bye

#55 Dwilly on 11.07.17 at 8:09 pm

#44 Newbie ishares investor

No shame in asking for questions. Single best site you can possibly go to is http://www.canadiancouchpotato.com. Read EVERYTHING there and it will improve your financial live immeasurably.

As to your comment re. “no income”, that cannot be correct. Both of those funds pay distributions monthly, meaning that you should see a payment in your account for every month you’ve held them. Depending on the amounts you hold, don’t expect it to be massive (XPF, let’s say yields about 4% annually, meaning each month you’ll get 0.33% of your invested amount – $3.33 for each $1000 invested)

#46 Hamilton Guy

1.57% is way too high. Anything over 0.5% is overpaying. The funds themselves are probably no good either (I didn’t even bother to look them up, but can tell from the name that they’re stinkers). See website above, read it all, use low-fee, diversified, broad market ETFs like Garth says.

#56 looniedoctor on 11.07.17 at 8:10 pm

I am sure there are many ways to rebalance or add to your portfolio monthly, but I would try to do it in a way that minimizes fees and taxes. Will share what I do, realizing it may not be the right answer and happy to hear other opinions.

I tend to add the money to whatever position is lagging the most. In my tax sheltered accounts, it avoids brokerage fees from buying/selling monthly on multiple etfs. May not matter if you have no trading fee, but mine is about 9$. Negilible for my portfolio size but my genetically cheap ways die hard. My grama actually cooked us porcupine once…. In my non-registered accounts it avoids triggering capital gains taxes which the longer they are deferred the better to allow compound growth. It requires some effort and a spreadsheet for me and my allocations may not be spot on 100% of the time, but they are usually close enough I think.

Nothing wrong with 30-40K to start – that suggests the kid is a good saver. Hate to see him squander that by not investing the way Garth is suggesting. He is young and a good saver which means he also has leaway to make some mistakes anyway – especially if he is saving on advisor fees by getting free top notch advice from Garth. Starting early in life is key.

#57 Re: Hamilton Guy #45 on 11.07.17 at 8:10 pm

Garth,

I’m a little embarrassed to say, this mix was recommended for us by a “Scotia Advisor.” What would be the best way to clean this up?

Thank you

Fire him. Follow the plan. — Garth

#58 jess on 11.07.17 at 8:11 pm

Sturm, Ruger -$12.5m

Remington Arms – $84.8m

Smith & Wesson – $6.5m
Total $103.8

https://www.goodjobsfirst.org/blog/top-three-gun-manufacturers-have-received-more-100-million-subsidies
Source: Subsidy Tracker

Most of those subsidies came in the wake of the school massacre in Newtown, Connecticut. When legislators in Connecticut and other northeastern states that are part of “Gun Valley” passed more restrictive gun laws, firearm makers let it be known they wanted to move to more friendly locales. Southern states with loose gun regulations launched a bidding war to lure the companies.

#59 -=jwk=- on 11.07.17 at 8:14 pm

#132 Ponzius Pilatus on 11.07.17 at 3:27 pm
#119 Fake News Again on 11.07.17 at 1:31 pm
Meanwhile gas is $1.45 in Greater Van – the most expensive place to buy gas in Canada. And the parasite called Govt wonders why I have not bought gas in Canada in two years. Sumas, WA – 20 minutes away – 95 cents after Cdn conversion.
————–
Good for you.
I trust you are an honorable man and go to Sumas when you need medical help.
___________________

1. Are you suggesting that the GAS TAXES I am not paying are supposed to be going to health care? Here in BC that is what MSP and income taxes are for.
===================

Yes, that is exactly what he is saying.

The federal portion of the gas tax ~ 20c/litre goes to the provinces as part of the Canada Health Act. MSP only pays a portion of BC’s health bill. Some of the rest comes from sales taxes including tax on gas.

So who’s your doctor in washington?

#60 Yanniel on 11.07.17 at 8:15 pm

Good point about minimizing fees and taxes looniedoctor. Thanks for sharing.

#61 saskatoon on 11.07.17 at 8:16 pm

average growth of 7% over the next 20 years?

dream on, garth.

you got your own recency effect.

lol.

That replicates performance over the last few decades. Do you have a better benchmark? — Garth

#62 Yanniel on 11.07.17 at 8:22 pm

Thanks for your input Dwilly. I agree that buying Canadian bonds is the way to go, except when it comes to junk bonds. I think the junk bonds in Canada are not as appealing as the ones in the US. But then, junks bonds are a small part of the portfolio and some investors might not even hold such securities.

#63 10k on 11.07.17 at 8:22 pm

#35 Engineer

I’m currently throwing $10k a month at my portfolio. Should I contribute in the same ratios each month or use this money to rebalance monthly?

One purchase a month will do fine of course.
Why pay the extra trading fees, just to be perfectly distributed to the T?

Don’t forget that buying a single ETF is often buying hundreds of companies, so more diversity than you can shake a stick at, already.

#64 akashic record on 11.07.17 at 8:22 pm

#58 jess

What are you trying to say?

#65 Larry from ON on 11.07.17 at 8:23 pm

#44 Newbie ishares investor on 11.07.17 at 7:48 pm
So, a while back I thought I would dip my toes in the water and experiment with a self-directed TFSA at the red bank. Put a very small amount in a few ETFs: XGB, XSP, XIU, and XPF.

So here’s the part where I swallow my pride and come to you blog dogs for some advice with my tail between my legs. I thought that XGB and XPF were supposed to be “fixed income”, but so far no income is magically flowing into my account like I thought it would. I don’t know one person that invests in ETFs and don’t even know where to look for information so here I am asking on this pathetic blog.

Please be kind.

P.S. The whole reason for this experiment is that I’ll soon be coming into a small inheritance, but my confidence is shot now. Any recommendations for a fee based adviser on YVR island?
———————————————-

Ditto what Dwilly said – don’t be ashamed to ask questions! Learn everything you can.

All 4 of your holdings should pay dividend/interest. XSP pays twice a year, XIU pays quarterly, and XPF and XGB pay monthly. Which account are you looking for the income? It won’t be in your chequing or savings account, it will be paid into your investment account, so log into your bank, find your investment account, look for “Activity” or something like that, and you should see deposit(s) for DIV or INT with some cash paid to you.

Write back if you have more questions, blog dogs here are generally helpful.

#66 oncebittwiceshy on 11.07.17 at 8:24 pm

MF: “When they sell (the market is still hot, just takes a little longer to sell then April/March) they have their retirement.

The one asset strategy has lifted A LOT of people from mediocre retirements to comfortable.”

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Uhmmm except they're not, MF. I guess those boomers aren't as bright as we hoped.

https://www.chip.ca/reverse-mortgage-resources/retirement-planning/changing-lifestyle-candian-seniors-2017

"The study reveals that among Canadian seniors, 91% of Canadians aged 65+ value the importance of staying in their home, but only 78% of those Canadians have savings and investments, and among those, 40% have less than $100,000 saved. The study also showed that among Canadian seniors, 15% still carry a mortgage, 30% carry unsecured lines of credit (LOC) and 10% have a home equity line of credit (HELOC). Seniors seem to be getting more comfortable with their debt."

#67 AGuyInVancouver on 11.07.17 at 8:27 pm

#1 Fake News Again on 11.07.17 at 6:08 pm

1. Are you suggesting that the GAS TAXES I am not paying are supposed to be going to health care? Here in BC that is what MSP and income taxes are for.

2. Not one media station EVER talks about reducing the size of fat inefficient bloated wasteful govt that taxes the living crap out of me. SHOULD that change and taxes go down, I will spend more of my “after tax” income in Canada.
_ _ _
LOL, are you that naive that: a) you thought MSP premiums covered all the medical systems costs b) hat gas taxes don’t go into general revenue?

As the others said, go to Sumas for your medical care next time, and don’t drive on a road you didn’t help fun through gas taxes. Oh, and contemplate how little you value your time that going across the border for gas and cheese actually seemed like a winning strategy to you.

#68 Capt. Serious on 11.07.17 at 8:28 pm

Garth’s allocation is pretty much what I use, with slightly higher percentage allocated to growth.

People recommending XBB don’t understand what the bond portion is for — duration is way too high. Use XSB or similar.

Also, everyone starting out should go read The Four Pillars of Investing. Excellent writing and it’s bang on. Slightly US centric so the model portfolios are not entirely relevant for Canadians, and it’s getting a bit dated but the main points are well presented: the importance of staying the course, understanding your own biases and blind spots, understanding market history, asset allocation choices, using low cost instruments, saving enough. It also has a good reading list for further reading. I can’t recommend it enough.

#69 jess on 11.07.17 at 8:31 pm

#39 NoName on 11.07.17 at 7:40 pm

the fate of the country (austerity/higher interest rates)

debts of about 6 billion euros ($7 billion).
It is now trying to keep it alive through restructuring and negotiations with major creditors, which include Russia’s Sberbank and VTB bank, to which it owes 1.4 billion euros.

#70 lurkeyloo on 11.07.17 at 8:33 pm

my financial advisor recently recommend a 50/50 split between TDB332 and FID2204. He said it was balanced and assertive growth.

any thoughts guys?

#71 Smoking Man on 11.07.17 at 8:36 pm

Trying to connect the dots. Today’s pic vs headline.
Perhaps I’ll figure it out after a Jack or two

#72 Long-Time Lurker on 11.07.17 at 8:38 pm

Hey, Ace.

More Tesla troubles. Tesla’s Battery Division Director resigned and Musk found out that the manufacturing of the batteries at source has a bigger problem than earlier revealed. That was where the big bottleneck was in his production line. Tesla had to re-assemble each battery by hand and install it. It’s on Zero Hedge.

#73 no on 11.07.17 at 8:43 pm

. Anything over 0.5% is overpaying. The funds themselves are probably no good either (I didn’t even bother to look them up, but can tell from the name that they’re stinkers). See website above, read it all, use low-fee, diversified, broad market ETFs like Garth says.

…………..

‘anything over .5% is overpaying.’

Categorically incorrect

you are looking at only ONE metric.

product A– mer .35% average return 7.8% SD- 5%
product B– mer .90% average return 8.7% SD- 5%

(over a 10 yr period)

which porduct would you choose?

#74 Dwilly on 11.07.17 at 8:46 pm

#68 Capt. Serious

Your comment suggests that only a very short duration bond fund is ever suitable for a “safe” position. If your investment horizon is considerably longer than the duration of the bond fund, then there’s relatively little risk (providing you are not psychologically antsy). For a young investor with a long time horizon like the subject of Garth’s post, a mid-duration general fund like XBB or VAB or ZAG is more than fine.

#75 For those about to flop... on 11.07.17 at 8:46 pm

Recent Sale Report.

This one must have sold in the last day or two as zolo hasn’t updated it as sold only removed and some of the realtors still have it up.

The realtor who’s listing is was has it marked as sold.

Fresh meat for dinner.

3527 w 13th ave Vancouver.

Asking 2.59

Sold 2.55

Tax assessment 2.7

So probably the most compact set of numbers I have presented since starting to report recently sold properties in the last week or so…

M43BC

https://www.zolo.ca/vancouver-real-estate/3527-w-13th-avenue

#76 NoName on 11.07.17 at 8:48 pm

#58 jess on 11.07.17 at 8:11 pm
Sturm, Ruger -$12.5m

Remington Arms – $84.8m

Smith & Wesson – $6.5m
Total $103.8

https://www.goodjobsfirst.org/blog/top-three-gun-manufacturers-have-received-more-100-million-subsidies
Source: Subsidy Tracker

Most of those subsidies came in the wake of the school massacre in Newtown, Connecticut. When legislators in Connecticut and other northeastern states that are part of “Gun Valley” passed more restrictive gun laws, firearm makers let it be known they wanted to move to more friendly locales. Southern states with loose gun regulations launched a bidding war to lure the companies.

Whats funny states with stricter gun laws spend more money on incarceration than on education, for some time now. If they reverse spending (edu/jail) at this very moment it will be decades to before you see any difference.

10 states that spend more on prisons than education

california
vermont
pensilvania
delavare
rode island
new york
michigan
georgia
arizona
washington

10 states with the toughest gun laws

pensilvania
Illinois
rode island
Maryland
hawai
connecticut
new york
massachusetts
new jersy
california

And when it comes to subsidieas those subsidies you mention are nothing comparing it to the subsidy for electric cars. 2500-7500usd per vehicle. if google is correct us fed gov will spend 7.5 Billion for batteries and cars.

https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/electricvehiclesone-col.pdf

Drinking and driving killes roughly same amount of people as homicide in us. Its all about education i gues…

#77 Lee on 11.07.17 at 8:49 pm

Democrats win governorships in Virginia and New Jersey tonight. Trump era is over.

#78 akashic record on 11.07.17 at 8:52 pm

#71 Smoking Man on 11.07.17 at 8:36 pm

Trying to connect the dots. Today’s pic vs headline.
Perhaps I’ll figure it out after a Jack or two

—-

Perhaps.

#79 Gravy Train on 11.07.17 at 8:55 pm

#33 MF on 11.07.17 at 7:23 pm

I suspect that the following quote will be completely lost on you, MF, but l’ll present it to you anyway on the off chance that you might learn something from it:

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” — Warren Buffett

#80 Yanniel on 11.07.17 at 8:55 pm

“#73 – no” Could you please answer your own question?

Also, what’s SD-5%? Standard deviation 5%?

#81 Yanniel on 11.07.17 at 8:57 pm

Smoking Man, I could not figure out the meaning of today’s post pic either :-(

Anyone knows?

#82 NoName on 11.07.17 at 8:57 pm

#73 no on 11.07.17 at 8:43 pm
. Anything over 0.5% is overpaying. The funds themselves are probably no good either (I didn’t even bother to look them up, but can tell from the name that they’re stinkers). See website above, read it all, use low-fee, diversified, broad market ETFs like Garth says.

…………..

‘anything over .5% is overpaying.’

Categorically incorrect

you are looking at only ONE metric.

product A– mer .35% average return 7.8% SD- 5%
product B– mer .90% average return 8.7% SD- 5%

(over a 10 yr period)

which porduct would you choose?

Trick Question, i sea. Now you answer my question.

Which is the first letter of alphbet?
Correct answer is?

a:C
b:D
c:A
d:B

#83 Steve Stoy on 11.07.17 at 8:58 pm

Thank you Garth! I was looking how to allocate my portfolio with ETFs. Very very helpful!

#84 Cool Guy Zone on 11.07.17 at 8:58 pm

Doesn’t Garth’s advice to maintain 60% in non-Canadian ETFs contradict his advice to maintain 40% fixed income and another 20% in Canadian stocks?

I’d always assumed the fixed income ETFs would be Canadian, so the extra 20% in stocks would take you to 60% domestic holdings. Am I wrong in this assumption?

#85 re., 70 lurkeyloo on 11.07.17 at 9:02 pm

sir, both of those funds are similar. BOTH are expensive.

there is nothing wrong with investing with mutual funds. HOWEVER, they are sold with different tiers;

a/b series funds – are stupid expensive. Pay high trailer fee back to the advisor/bank. Yours are 2.20 % for a balanced fund. THAT IS RIDICULOUS and will eat into YOUR wealth longterm. a/b series funds are banned in australia/england. Canada has yet to follow suit

there are mutual fund companis that DO NOT pay trailer fees , so their expense ratio is way low– .90% for a balanced fund. Keep in mind this includes all rebalancing costs, managerial sector moves etc etc.

#86 Democracy Is Mob Rule on 11.07.17 at 9:07 pm

The City of Vancouver will begin mailing notices this week to more than 180,000 city homeowners to explain Canada’s first empty home tax.

properties deemed vacant will be subject to the tax at a rate of 1% of the property’s 2017 assessed taxable value.

https://www.biv.com/article/2017/11/vancouver-rolls-out-empty-home-tax/

#87 akashic record on 11.07.17 at 9:10 pm

#72 Long-Time Lurker

More Tesla troubles. Tesla’s Battery Division Director resigned and Musk found out that the manufacturing of the batteries at source has a bigger problem than earlier revealed. That was where the big bottleneck was in his production line. Tesla had to re-assemble each battery by hand and install it. It’s on Zero Hedge.

The men who was first to land reusable rocket at the same time while he created the first electric cars that are taken seriously is likely to succeed landing batteries into his cars.

The other part of the news is that he purchased two companies that designs and builds robots for production lines.

#88 Newcomer on 11.07.17 at 9:10 pm

A major correction is not even on the radar. … — Garth

—————–

They are never on the radar. That’s why they happen, the whole nothing-on-the-radar thing makes people pay too much for stuff.

#89 Ponnaps on 11.07.17 at 9:12 pm

that 93% who haven’t maxed is misleading.. I am $500 short of maximizing my tfsa and would fall under the 93% as well…

#90 NoName on 11.07.17 at 9:15 pm

#69 jess on 11.07.17 at 8:31 pm
#39 NoName on 11.07.17 at 7:40 pm

the fate of the country (austerity/higher interest rates)

debts of about 6 billion euros ($7 billion).
It is now trying to keep it alive through restructuring and negotiations with major creditors, which include Russia’s Sberbank and VTB bank, to which it owes 1.4 billion euros.

i care and i dont at same time, ill tell you why, years back i would read news about over there, than one day i come across article something like ~croatia is running out of land to sell to foriners~, and i had my epifany moment… i am here, over there they can do whatever they sea fit.

But, i am seriously worried about ice cream business lots of nice memories. Only ice cream i would ever eat back home, so it doesnt suprise me whem my son ask for cup instead of cone. geens i gues.

http://www.journal.hr/wp-content/uploads/2017/06/sladoled-u-loptici.jpg

#91 joni on 11.07.17 at 9:19 pm

still nothing about the Paradise Papers….

want to block the sun with a finger?

#92 For those about to flop... on 11.07.17 at 9:32 pm

Recent Sale Report.

Here is another one so fresh not everything is updated.

3493 20th ave Vancouver.

Originally asking 3.89 then 3.78 then 3.58 then 3.38

Sold for 3.1

Tax assessment 3.65

Dunbar area appears to be melting quicker than the surrounding more prestigious neighborhoods…

M43BC

#93 Smoking Man on 11.07.17 at 9:47 pm

Got the pic.

In the begining Gog created heaven and earth.

#94 Dwilly on 11.07.17 at 9:49 pm

#73 no

Your A and B are a false dichotomy, because that’s not the real nature of the choice.

You can have any basic, cap weighted, broad market ETF today for 25bps or less in most cases. Suggesting that there is a fund that will return better than those (for a slightly higher cost) is ignoring the fact that there ARE no funds that return better. Many say they do, none actually do, consistently. So you pay 5bps for Canadian equity, 15bps for US equity, etc. Maybe slightly more depending on your account parameters and logistics. But thinking something else is going to consistently net you higher returns isn’t going to work, nevermind the fees. If you’re paying 1.5%, you are overpaying, or paying for something you won’t get.

#95 For those about to flop... on 11.07.17 at 9:49 pm

Recent Sale Report.

Another fresh one and this is the most affordable one I have presented in this format yet.

1018 Lillooet St,Vancouver.

Asking 1.23

Sold 1.19

Tax assessment 1.24

Another example of how some of the cheapest detached options in Vancouver can no longer get ask ,even if it was reasonable as it was in this case…

M43BC

#96 Yanniel on 11.07.17 at 10:22 pm

#94 Dwilly. Some ETFs in the same category offer better yield than others, in which case I would substract the MER from the Yield in order to determine which one to pick.

For instance, XRE vs VRE: the latest has the lower MER, but still I would pick XRE because it’s (yield – mer) is bigger than the one of VRE.

What’s your take on this? Thanks.

#97 Vancouver Brit on 11.07.17 at 10:24 pm

#33 MF on 11.07.17 at 7:23 pm

-That volatile way will likely destroy the young investor, whether he is prepared or not. Take heed and listen to the diversification message, however boring it is.

I know because that was me about 3 years ago. Spent years studying the markets, reading books/blogs to prepare myself, and was certain I could stand the volatility because “stocks always come back” and I am young/educated.
Was I wrong.

I took the plunge with my 50k that took years to amass working jobs I hated and sacrificed so much for. Took guts and I was nervous as all hell doing it but I got it done.

Well that was right before the oil collapse, china’s collapsing market, the ebola threat, threat of rising rates by the fed, and yet another EU crisis etc.

Literally the next day after creating the balanced portfolio that I was very proud of, it all went south..and continued to go south for months. The psychology is nothing short of panic. The first thing you realize is how far markets can fall and how quickly. Then you remember how it will take bigger and bigger gains to make up for the losses.

After months of losses, all you want to do is break even and get your money the heck out -Oop! another day of red. Without even looking my money should be even deeper in the red and further from getting it out. Who cares about gains?? What are those? It can sullen your mood a bit too. Back to work to make money back I feel I have lost.

By far the worst feelings in all this, is hearing how “house prices have roared ahead 20%” while your stock portfolio is down 15.

Of course, if you ignore it all and realize you are balanced, you don’t see the red day to day numbers and feel it as much and it won’t weigh on you as much. The problem is if you have any interest in finance (doesn’t everyone)? If you frequent a blog as pathetic as this one, read a newspaper, happen to glance at a TV, or talk to anyone..you will be reminded of how your money is shrinking.

The point of my post is not that investing is the wrong route (my portfolio became positive around 1.5-2 years later) but it’s that young investors have no tolerance for corrections and that volatility will sink 90% of us.

MF

_________________________________________________

To an extent I can agree with you. I began investing in a 60/40 portfolio with just a few thousand dollars about 4 years ago, and at first it’s scary as shit. Losing even a few hundred dollars over a month was extremely alarming. I’m thankful I learned the trade with such a small portfolio as I undoubtedly made many a mistake. I can only imagine what it would have been like if I was 100% equity at the time. You might be right, I may have backed out entirely if I was 100% equity, especially if a market crash had hit during this time.

That being said, just a few years on I’m 90/10 in equity with significantly more money invested and couldn’t care less if my portfolio dropped 20% in a year (or worse). Over time you begin to realize it makes no difference as you will never be withdrawing that money anyway, you will only keep adding to it. At least, that’s how it should be. I wouldn’t be investing if I needed this money for something other than to provide long-term returns. Eventually the investment is just a number on a screen and a bunch of colorful graphs. As long as you always know long-term your investment WILL go up, market crashes are an opportunity, not something to fear. I actually hope the market crashes soon so I can take advantage of it.

I suppose Garth’s balanced portfolio might be good to learn the ropes if you’re young, but I wouldn’t stick with it forever. I moved on from that after about 2 years once I was comfortable (heck, confident) with investing. 60/40 might get you 6-7% average per year, 90/10 should get you 8-10%+. Compound that over 30 years and you’re talking hundreds of thousands of dollars more by accepting more volatility.

#98 Yanniel on 11.07.17 at 10:25 pm

SM- “In the begining Gog created heaven and earth.” That is so deep. Thanks for sharing.

#99 Gravy Train on 11.07.17 at 10:42 pm

#91 joni on 11.07.17 at 9:19 pm
“still nothing about the Paradise Papers…. want to block the sun with a finger?”

“Irish musician Bono is listed in the papers as an investor in a Lithuanian shopping centre via a Malta-based company….

“According to the papers, United States Secretary of Commerce Wilbur Ross holds stakes in businesses which deal with Russian oligarchs Leonid Mikhelson and Gennady Timchenko who are subject to U.S. sanctions, as well as Russian president Vladimir Putin’s son-in-law Kirill Shamalov.”
https://en.m.wikipedia.org/wiki/Paradise_Papers

#100 Entrepreneur on 11.07.17 at 10:43 pm

The dog in the picture has a quizzical/puzzle look, wondering which one is the master but was told to stay. Which can be interpreted as a beginner in investing, looking but not moving forward.

Good post, GT and blogger!

#101 Capt. Serious on 11.07.17 at 10:45 pm

#74 Dwilly
You are not rewarded enough for taking the interest rate risk in XBB etc. Take risk by taking equity exposure. You don’t want your bonds going down while your equities are tanking. Most people can’t handle everything going down at once — also inconvenient for rebalancing.

#102 Questionner on 11.07.17 at 10:47 pm

Can you hold American stocks in your Tfsa?

#103 Steve French on 11.07.17 at 10:51 pm

They haven’t invested preferred shares in Australia yet?

Steve-O

#104 For those about to flop... on 11.07.17 at 11:04 pm

Recent Sale Report.

This house sold 23 days ago.

Here is another affordable house by Vancouver standards that couldn’t get ask or assessment.

5806 Rupert st,Vancouver

Asking 1.19

Sold 1.05

Tax assessment 1.24

And so it is still classified as a million dollar house but by whose standards…

M43BC

https://www.zolo.ca/vancouver-real-estate/5806-rupert-street

http://robertcrowe.ca/officelistings.html/details-70091678

#105 saskatoon on 11.07.17 at 11:07 pm

#61 saskatoon

we’re post-benchmark, garth :)

#106 FOUR FINGERS WATSON on 11.07.17 at 11:16 pm

#81 Yanniel on 11.07.17 at 8:57 pm
Smoking Man, I could not figure out the meaning of today’s post pic either :-(

Anyone knows?
…………………………….

Dog ears are following the parachutes.

#107 Newbie ishares investor on 11.07.17 at 11:21 pm

#55 Dwilly and #65 Larry from ON

Thank you for your replies. They were helpful. I will keep learning!

#108 Nonplused on 11.07.17 at 11:26 pm

cryptocurrencies got a mention so let’s go:

https://oilprice.com/Energy/Crude-Oil/How-Many-Barrels-Of-Oil-Are-Needed-To-Mine-One-Bitcoin.html

I can’t confirm if this analysis is correct but all I can say is that if it is, we are wasting a lot of energy on nothing. Maybe it would be a good idea to go back to gold after all. At least the gold still exists when the lights go out and it isn’t much more expensive to produce. At least yet. Peak gold is as real as peak oil and both are history.

(PS don’t tell me about OPEC’s 3.2 million they are holding off the market. I know about that. I also know that if they were to release that to the market then they would just deplete their reserves faster, which is why they don’t. And also don’t get me going on shale oil. It’s too expensive to produce, and only makes sense because we’ve already invested in the oil consuming economy. Nobody is going to build new demand for oil at $100 a barrel. Just can’t afford it. The stuff you already bought, like your car, sure. But you won’t be buying another car at $100 a barrel. You just can’t afford it.)

#109 David on 11.07.17 at 11:27 pm

What happens in 25 years when demographics are total going in the wrong direction and the T3 government decides, you know those TFSAs, well, we are going to start taxing them when you withdraw. The same way that failed firms go, you know those pension benefits we promised to pay, well, maybe we pay you a third of what you expected. There is virtually nothing that is guaranteed to be tax free (maybe life insurance benefits). Government could, if needed, even cut the defined benefit pension payments for all the civies – sure unlikely, but it is possible. The one thing I like about RRSPs is that at least I get the deduction up front knowing with certainty that it is taxable in the end. All they can do to me is hike the rate in 25 years. Oh and about that capital gains exemption for your cozy little house…

#110 Ponzius Pilatus on 11.07.17 at 11:38 pm

#98 crowdedelevatorfartz on 11.07.17 at 7:57 am
@#91 Where’s the Money
“Well I guess the machinations of the elite made the Paradise Papers disappear from the newspapers”
++++++

Or.
Like Wikileaks and the Panama papers……no one cares?
There’s more important things to read about!
The Canucks! The latest Hollywood Kevin Spacey, Weinstein revelations ! Game of Thrones!
My gawd Guido, get with current events!
Paradise Papers are so…like …yesterday.
—————
I hear Prince Charles is Involved.
This should get interesting.

#111 Lost..but not leased on 11.07.17 at 11:41 pm

The dog in the pic?

Guilt for DELETING posts…

No human would stoop that low.

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

PS whats that pink coloured thing to their front-right?

#112 Russ on 11.07.17 at 11:48 pm

.
When you hit $500,000, call me. You can buy lunch.
.
107 comments ↓
======================

Seriously, I ask.

What is the level where you buy lunch?

Cheers, R

#113 Russ on 11.07.17 at 11:56 pm

Engineer on 11.07.17 at 7:25 pm

I’m currently throwing $10k a month at my portfolio. Should I contribute in the same ratios each month or use this money to rebalance monthly?

Only an engineer would ask that. — Garth

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

Yup.

And then they will argue your answer.

#114 Ponzius Pilatus d on 11.08.17 at 12:04 am

#59 -=jwk=- on 11.07.17 at 8:14 pm
#132 Ponzius Pilatus on 11.07.17 at 3:27 pm
#119 Fake News Again on 11.07.17 at 1:31 pm
Meanwhile gas is $1.45 in Greater Van – the most expensive place to buy gas in Canada. And the parasite called Govt wonders why I have not bought gas in Canada in two years. Sumas, WA – 20 minutes away – 95 cents after Cdn conversion.
————–
Good for you.
I trust you are an honorable man and go to Sumas when you need medical help.
___________________

1. Are you suggesting that the GAS TAXES I am not paying are supposed to be going to health care? Here in BC that is what MSP and income taxes are for.
===================

Yes, that is exactly what he is saying.

The federal portion of the gas tax ~ 20c/litre goes to the provinces as part of the Canada Health Act. MSP only pays a portion of BC’s health bill. Some of the rest comes from sales taxes including tax on gas.

So who’s your doctor in washington?
———–
Thanks for the support.

#115 AACI Homedog on 11.08.17 at 12:11 am

I know my advisor requires new clients to have at least $10k to start with. And with the proviso that you stay invested long term.

#116 Morrey on 11.08.17 at 1:00 am

TFSA are a no brainer. Odlum Brown has been building me a nice tax free nest egg over the years. Other firms, like Garth’s, can help you too.

#117 A Yank in BC on 11.08.17 at 2:21 am

#67 AGuyInVancouver on 11.07.17 at 8:27 pm

This is so dumb. All FNA was trying to point out in his original post was that gas prices are much cheaper just across the border in the U.S., primarily because taxes are far lower. You and others seem to insinuate that health care (and roads?) only exist on the Canadian side. Gosh.. that would be news to the good people of Washington State, who, despite paying far less in gasoline taxes, somehow do not suffer from a lack of excellent health care, offered to them by providers who compete in the marketplace for their business. Having sampled health care on both sides of the border, I can attest to that system working far better for the customer.

#118 Fake News Again on 11.08.17 at 2:28 am

#67 AGuyInVancouver on 11.07.17 at 8:27 pm
#1 Fake News Again on 11.07.17 at 6:08 pm

1. Are you suggesting that the GAS TAXES I am not paying are supposed to be going to health care? Here in BC that is what MSP and income taxes are for.

2. Not one media station EVER talks about reducing the size of fat inefficient bloated wasteful govt that taxes the living crap out of me. SHOULD that change and taxes go down, I will spend more of my “after tax” income in Canada.
_ _ _
LOL, are you that naive that: a) you thought MSP premiums covered all the medical systems costs b) hat gas taxes don’t go into general revenue?

As the others said, go to Sumas for your medical care next time, and don’t drive on a road you didn’t help fun through gas taxes. Oh, and contemplate how little you value your time that going across the border for gas and cheese actually seemed like a winning strategy to you.
_________________

This is exactly why so many smart Canadians leave Canada and never come back.

The electorate is so dumb……they absolutely find no problem paying more and more and more taxes to a parasite tapeworm called govt. Eventually everyone will be the working poor because the taxes will be so high to feed Govt expenses. And you will remember this blog when it happens.

#119 Rexx Rock on 11.08.17 at 2:40 am

On Vancouver Island about half of the people between 60 and 70 are still working because they have no choice.The cost of living is so high here just like Vancouver.Went to walmart in Nanaimo today and half of the workers are in their 60’s slaving away while they should be relaxing in Mexico!Its never been this bad on Vancouver Island,not as bad as the movie The Road but pretty close.

#120 Femdom Fist on 11.08.17 at 3:22 am

So Garth, how do you decide on the exact allocation percentages? Is it a science or an art?

My little ~$40k portfolio is needlessly complex: 30% US, 20% International, 5% Beaver, 5% Beaver REITs, 15% each in short and regular bonds, 10% Preferreds. 2% cash might be a good idea.

#121 Dharma Bum on 11.08.17 at 6:35 am

Hey kid:

XIU 30%
VUS 50%
VAB 20%

Keep adding in these proportions for 30 years.

Then , become a Dharma Bum.

#122 Dolce Vita on 11.08.17 at 6:42 am

#66 oncebittwiceshy

Good info and post.

Consistent with other studies about the soon to be or retired Boomers.

Way too many people to be on that thin a financial thread.

From the article and as expected, only asset they have is RE and that is melting.

Oh well, what you end up with when living it up with other peoples money most of your life (extend and pretend, still alive and kicking for the vast majority):

” HomEquity Bank and Ipsos Canada in August 2016, 86% of those studied showed an unwillingness to forgo their own lifestyle choices…

spending by senior couple households (couples without children at home) increased at an average annual rate of 4.7 per cent”

Well, at least Garth is trying to turn the Millennials away from the path of their parents, single asset, extend and pretend with HELOCs, refinancing a mortgage for more etc.

#123 Stone on 11.08.17 at 7:14 am

#97 Vancouver Brit on 11.07.17 at 10:24 pm
#33 MF on 11.07.17 at 7:23 pm

-That volatile way will likely destroy the young investor, whether he is prepared or not. Take heed and listen to the diversification message, however boring it is.

I know because that was me about 3 years ago. Spent years studying the markets, reading books/blogs to prepare myself, and was certain I could stand the volatility because “stocks always come back” and I am young/educated.
Was I wrong.

I took the plunge with my 50k that took years to amass working jobs I hated and sacrificed so much for. Took guts and I was nervous as all hell doing it but I got it done.

Well that was right before the oil collapse, china’s collapsing market, the ebola threat, threat of rising rates by the fed, and yet another EU crisis etc.

Literally the next day after creating the balanced portfolio that I was very proud of, it all went south..and continued to go south for months. The psychology is nothing short of panic. The first thing you realize is how far markets can fall and how quickly. Then you remember how it will take bigger and bigger gains to make up for the losses.

After months of losses, all you want to do is break even and get your money the heck out -Oop! another day of red. Without even looking my money should be even deeper in the red and further from getting it out. Who cares about gains?? What are those? It can sullen your mood a bit too. Back to work to make money back I feel I have lost.

By far the worst feelings in all this, is hearing how “house prices have roared ahead 20%” while your stock portfolio is down 15.

Of course, if you ignore it all and realize you are balanced, you don’t see the red day to day numbers and feel it as much and it won’t weigh on you as much. The problem is if you have any interest in finance (doesn’t everyone)? If you frequent a blog as pathetic as this one, read a newspaper, happen to glance at a TV, or talk to anyone..you will be reminded of how your money is shrinking.

The point of my post is not that investing is the wrong route (my portfolio became positive around 1.5-2 years later) but it’s that young investors have no tolerance for corrections and that volatility will sink 90% of us.

MF

_________________________________________________

To an extent I can agree with you. I began investing in a 60/40 portfolio with just a few thousand dollars about 4 years ago, and at first it’s scary as shit. Losing even a few hundred dollars over a month was extremely alarming. I’m thankful I learned the trade with such a small portfolio as I undoubtedly made many a mistake. I can only imagine what it would have been like if I was 100% equity at the time. You might be right, I may have backed out entirely if I was 100% equity, especially if a market crash had hit during this time.

That being said, just a few years on I’m 90/10 in equity with significantly more money invested and couldn’t care less if my portfolio dropped 20% in a year (or worse). Over time you begin to realize it makes no difference as you will never be withdrawing that money anyway, you will only keep adding to it. At least, that’s how it should be. I wouldn’t be investing if I needed this money for something other than to provide long-term returns. Eventually the investment is just a number on a screen and a bunch of colorful graphs. As long as you always know long-term your investment WILL go up, market crashes are an opportunity, not something to fear. I actually hope the market crashes soon so I can take advantage of it.

I suppose Garth’s balanced portfolio might be good to learn the ropes if you’re young, but I wouldn’t stick with it forever. I moved on from that after about 2 years once I was comfortable (heck, confident) with investing. 60/40 might get you 6-7% average per year, 90/10 should get you 8-10%+. Compound that over 30 years and you’re talking hundreds of thousands of dollars more by accepting more volatility.

——

A 60/40 split is not just for learning the ropes. Run your 90/10 portfolio from let’s say 2004 to present with an annual rebalance. As the selection of ETFs is a bit sparse back then, I used XBB, XIC, XSP 10/45/45 and used December 30 as the rebalancing date. On a $1,000,000 start balance, the difference is around $16,000 to present day. Is $16,000 worth the volatility of a 90/10 split? If you enjoy marital unbliss, increased stress and everything else that goes with it, be my guest. Peace of mind is worth more than $16,000. With 4 years of investing in a fairly easy market, that is not sound advice. If another 2008-9 hits us again, you will be crying.

#124 Howard on 11.08.17 at 7:18 am

They’re risk averse because they started their careers in the midst of the worst financial collapse in 80 years.

People just starting out in 1929 were likely also risk averse throughout their lives.

Get over it. — Garth

#125 Andrewt on 11.08.17 at 7:46 am

#24 prairie person on 11.07.17 at 6:57 pm
It is no wonder that more and more Americans believe the game is rigged. It is no wonder that they buy houses they cannot afford and then walk away from the mortgage when they can no longer pay. Once the social contract is shredded, once the deal is off, only suckers still play by the rules.

George Packer’s The Unwinding is published by Faber & Faber at £20

The Unwinding is a fantastic book. Thoughtful, well written journalism, it really captures the human stories behind the headlines. But its moral, if it even has one, isn’t that only suckers play by the rules. If anything, its message is that we need to be more engaged in the political process to ensure the rules work.

#126 kiteporschedude on 11.08.17 at 7:49 am

Garth

Much better to pick an advisor into kitesurfing rather than Porsches. Kites are much cheaper than porsches. Unfortunately the dude will never be able to be found when the wind picks up!

#127 Eyestrain on 11.08.17 at 7:53 am

Today is a re-run on why only experienced, successful investors can afford to seek guidance from a pro. Discussions were remarkably civil, on-topic, and included exactly where and how often to poke your anthill, and art interpretation/animal psychology. Many touted the wisdom of Mr. Potato Head, who has the uncanny ability to predict the past in his analyses of long-term returns for short-lived ETFs.

In the beginning …..
Children were the parent’s retirement fund. Men wore beards. Sex was dirty. Then came WWI, income tax, and Mutual Funds. The shoeshine boys came late to a party that was ending. Hitler took a dump on Europe and the smart money (and people) went to North America, increasing GDP and IQ. The kids stopped buying crap, grew beards and made love not war. The kids aged, greed was in, beards were out, sex was dangerous. Markets soared, until they didn’t. In the nowness, beards are in, greed is out, sex is dirty, and kids don’t buy, they rent as they wait (patiently) for their parents to finance their own retirement. What me worry?

My defined benefit plan told me the kids on the schoolyard are chanting naughty rhymes about Trump. In Canada! I am long Gillette and Trojan and short everything else, but please consult with a professional soothsayer before making any investment decisions.

#128 Renter's Revenge! on 11.08.17 at 7:59 am

#118 Fake News Again on 11.08.17 at 2:28 am
#67 AGuyInVancouver on 11.07.17 at 8:27 pm
#1 Fake News Again on 11.07.17 at 6:08 pm

The electorate is so dumb……they absolutely find no problem paying more and more and more taxes to a parasite tapeworm called govt. Eventually everyone will be the working poor because the taxes will be so high to feed Govt expenses.

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

Yeah, but it makes for epic virtue signalling!

#129 crowdedelevatorfartz on 11.08.17 at 8:14 am

@#119 Rexx Rock

“Went to walmart in Nanaimo today and half of the workers are in their 60’s slaving away while they should be relaxing in Mexico!Its never been this bad …”
+++++

Perhaps too many vacations in their Boomer youth is the root cause of their destitution now?
I have friends that have prepared for retirement and friends that will work til they drop dead…..( The latest financial lunacy was a 60+ co worker that cashed in the last of her RRSP’s to…..wait for it……buy a motorcycle so she could hang out with her new boyfriend…..she’s still taking lessons to learn how to ride it……..)

Millenials should take a hard look at all those “lucky” Boomers that squandered their work years urinating their savings against any wall they could find on “toys”, “Travel” and “Timeshares”…..
One has to go no further than the local WalMart to find examples.

#130 Re.,118 fake news again on 11.08.17 at 8:14 am

Actually some consider me a ‘very smart Canadian ‘, employ 8 , net worth 5 mill. I’m damn glad your ‘smart ‘ pathetic ass is long gone

Just one question – why do you post DAILY at a Canadian site ? Angry ? Haven’t made any foreign friends yet ?

#131 crowdedelevatorfartz on 11.08.17 at 8:19 am

@#110 Ponzi Pilot
“I hear Prince Charles is Involved….”
++++++

Chuck, that elephantine eared, serial womanizer has another realtionship?
After dumping Diana for “the Rotweiler” ( as Diana so endearingly referred to Charles’ latest conquest).

Who’s upChuck “involved” with?

#132 Re.,117 a yank in bc on 11.08.17 at 8:24 am

Fascinating . Guess it’s all shades of grey . Have numeosus colleagues in heathcare across the border – the consensus is it’s a ‘shit show ‘. Trump has done nothing to streamline . Actually , he said he’d remove Obamacare . The red guys have control of congress and the senate ,….we r in November ….guess obamacare has merit ?

And no , I never asked the chap to clarify ‘shit show’ :)

#133 IHCTD9 on 11.08.17 at 8:40 am

#25 rainclouds on 11.07.17 at 6:58 pm

… look after #1. YOU. Realize you will be 60 one day. having a nest egg is a wonderous thing, makes life a lot more enjoyable even more so if it was your long term goal that came to fruition.
____________________________

Good advice. I want to look forward to retirement, not dread it.

#134 crowdedelevatorfartz on 11.08.17 at 8:41 am

@#50 madcat
“If you have a dog. — Garth”
++++++

A “proof of life” photo should work

https://www.google.ca/url?url=https://en.wikipedia.org/wiki/Cheeseface&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjXyIS0iq_XAhUN1WMKHWj3CEkQwW4IFjAA&usg=AOvVaw1gdJVFp-fmUOmKdHSKsZSJ

#135 nick on 11.08.17 at 8:49 am

Housing starts up ‘unexpectedly’ in October.

https://ca.investing.com/news/stock-market-news/canada-housing-starts-rise-unexpectedly-in-october–cmhc-710121

LOL. Developers scrambling to get started before its too late. They see the writing on the wall. Been getting crazy amounts of emails in the last month or so advertising new openings.

#136 IHCTD9 on 11.08.17 at 8:59 am

#33 MF on 11.07.17 at 7:23 pm

Literally the next day after creating the balanced portfolio that I was very proud of, it all went south..and continued to go south for months. The psychology is nothing short of panic. The first thing you realize is how far markets can fall and how quickly. Then you remember how it will take bigger and bigger gains to make up for the losses.

After months of losses, all you want to do is break even and get your money the heck out -Oop! another day of red. Without even looking my money should be even deeper in the red and further from getting it out. Who cares about gains?? What are those? It can sullen your mood a bit too. Back to work to make money back I feel I have lost.
____________________________________________

If you feel panic again someday, maybe you have an acquaintance like my ex co-worker you can think about in order to feel better. He bought a house for 100K, and then put 100K into it over the next 5 years repairing foundation walls, and tearing down a nice garage and replacing it with an identical new garage. The house remained essentially the same as viewed from the curb. Then our employer went bust, he moved for a new job, and unloaded the house for – 100K. He deals with the loss by saying he sold it for what he paid for it.

#137 Old Ron the Realtor on 11.08.17 at 9:01 am

#118 Fake News Again: When you get out more around this tiny planet, you begin to realize that the best words you will ever hear upon returning to this country are uttered by the nice lady in the Canadian Border Services Agency uniform :
“Welcome home”

We are so blessed to live here, and you are so wrong.

#138 Gonkman on 11.08.17 at 9:06 am

Good timing… I just Maxed out our TFSA yesterday.

Took just under 3 years of bi-weekly deposits to go from $0 to $104,000 (2 of us).

I swapped from paying the Mortgage to TFSA filling when we paid off our mortgage 3 years ago.

Now the $104,000 invested is worth $118,000.
$14K Gain in 3 years as we slowly built it up.

Will Keep maxing every year until 55 (11 Years) to start raiding if needed.

Should pay out $2K a month Tax Free forever at that point. :)

Go go Gadget TFSA!!

#139 Howard on 11.08.17 at 9:07 am

#129 crowdedelevatorfartz on 11.08.17 at 8:14 am

@#119 Rexx Rock

“Went to walmart in Nanaimo today and half of the workers are in their 60’s slaving away while they should be relaxing in Mexico!Its never been this bad …”
+++++

Perhaps too many vacations in their Boomer youth is the root cause of their destitution now?
I have friends that have prepared for retirement and friends that will work til they drop dead…..( The latest financial lunacy was a 60+ co worker that cashed in the last of her RRSP’s to…..wait for it……buy a motorcycle so she could hang out with her new boyfriend…..she’s still taking lessons to learn how to ride it……..)

Millenials should take a hard look at all those “lucky” Boomers that squandered their work years urinating their savings against any wall they could find on “toys”, “Travel” and “Timeshares”…..
One has to go no further than the local WalMart to find examples.

————————————-

Lesson learned.

Boomers liked to accumulate “things”. Millennials like to accumulate experiences.

It’s one of the biggest philosophical differences between the two generations.

It’s true that “experiences” can involve expensive travel, but it can also involve taking courses, reading the complete works of Voltaire or Kant, trying different types of cuisine (not necessarily at expensive luxury restaurants), and other low-cost ways to enrich one’s life.

Just ask the car manufacturers that are pulling their hair out trying to appeal to a generation that couldn’t care less whether the industry lives or dies.

Home ownership represents both a “thing” and an “experience”, explaining why members of both generations lose their minds over it.

#140 Tater on 11.08.17 at 9:11 am

Bonds as a hedge for Equity declines? Well, for most of the last 130 years, their prices have moved in tandem more often than not. The last 20 years have been a massive anomaly and when those correlations go back to historical levels a bunch of “balanced” portfolios are going to have a very rough ride.

#141 Howard on 11.08.17 at 9:11 am

#131 crowdedelevatorfartz on 11.08.17 at 8:19 am

@#110 Ponzi Pilot
“I hear Prince Charles is Involved….”
++++++

Chuck, that elephantine eared, serial womanizer has another realtionship?
After dumping Diana for “the Rotweiler” ( as Diana so endearingly referred to Charles’ latest conquest).

Who’s upChuck “involved” with?

—————————-

Serial womanizer??

By anyone’s count, Charles has been involved with exactly TWO women in his life.

You must be remarkably purist to consider that womanizing, or otherwise you misunderstand the meaning of the word.

Yes he was unfaithful to Diana with Camilla, but the latter is and was his one true love, so good on him for eventually marrying her despite tepid public support.

#142 LivinLarge on 11.08.17 at 9:17 am

“A major correction is not even on the radar. Besides, people with balanced portfolios who stay invested did just fine in the last one. — Garth”… now Fearless Leader, I know you have told us before about the TI results post ’08 crash and burn but would you remind us again just how badly your clients weren’t hit and for how long?

In 2008-9 the equity market lost 55%. The balanced portfolio lost 20%. It took stocks seven years to recover. The balanced portfolio recovered in one year. The next year it gained 17%. Three-year average return: about 5%. The only losers were the fools who sold when asset values declined (just like the fools buying houses today). — Garth

#143 Buy/Sell/Hiring on 11.08.17 at 9:20 am

Not sure if ads are OK here?

I bought the patent rights for a solar-powered Bitcoin generator from a Russian emigre with a price on his head. Need seed capital asap. Serious investors only.

Also, looking to buy approximately 10,000 acres of flat land, preferably in a sunny locale. Buy or trade??

Also hiring 8 electricians and 8 comp sci. grads. That will give me, I think, twice as many employees as “Re.”. Not one to brag, but let’s just say I get by comfortably.

#144 IHCTD9 on 11.08.17 at 9:27 am

Blog Dogs,

I would appreciate some investment advice. The wife and I are both 30, sold our house last October and opted to rent it back from the new owners. After paying off some debt, we have about 110k to invest and dumped it into five mutual funds at the end of the year last year.
_______________________________

That’s a nice start, and at 30 you’re young enough to make it pay if you get on the ball as Gath suggests. To me you’ve got the time to be a little more aggressive, save the bond stuff for your 50’s. Make a plan to dump money into your portfolio on a weekly or monthly basis. Pound it into your RRSP’s as well and reinvest the tax return

If you can dump 500.00 every month into your investments, and get 4.0% minimum, by 65 you’ll have 900K or so. Now you can collect 34K+CPP+OAS in retirement. If you and your wife worked your whole lives you’ll likely end up with a safe 2600.00/Month combined from CPP+OAS, then the portfolio would top you up to 5433.00/ month. That’s 65K per year without even draining the portfolio. It’s also a lowball scenario.

After that, keep the wife happy, watch your cost of living, and don’t lose your marbles getting into some fool 7 figure mortgage.

#145 crowdedelevatorfartz on 11.08.17 at 9:34 am

@#118 Fake News
“This is exactly why so many smart Canadians leave Canada and never come back….”
++++++

Just make sure your “out of country” travel insurance is paid up.
Early 1980’s in Blaine Washington.
Two married couples drove together into the US for cheap gas and groceries.
Husbands stood out side the car talking and filling the car. Wives sat in the back seat.
KaBoom.
Gas caught fire.
Car exploded.
Both wives dead.
Both husbands horribly burnt.
Medi-Vac to Seattle.
Both men survived. Scarred for life.
One man had Travel Insurance….
The other man?
Financially ruined.

#146 Dissident on 11.08.17 at 9:41 am

Finally. A decent blog post followed by even decenter comments. Give yourselves a pat on the head.

Just confirms what I know about ETFs, Index Funds, diversification, dollar cost averaging, re-balancing, and not paying someone to handle my money. At least for now. Keep it simple.

Comments have some notable pieces for further research.

Speculation is tempting but all too often its a shirt-losing game. See latest Shopify shennanigans with that Citron short-selling troll and his “research” piece.
Step 1) Buy a short position into a fledgling company with no real revenues
Step 2) then publish a damning “research” paper on how its a sham and a pyramid scheme
Step 3) Profit
I see people I know buying hard into speculative stocks with zero EBITDA, and that game is quickly losing its taste with me. If you ain’t got no EBITDA, then I don’t f* wit chu. After all, you’re buying a company, not just a stock. God forbid it turns into a Sino Forest situation overnight. You could be speculative for your entire investing life and lose as much as you gain (I’ve seen those people), or, you could stay the course, put blinders on, and stick with a balanced ETF/Index portfolio and ride it out above water. It all depends on how much you’re comfortable losing.

#147 NewInvestor on 11.08.17 at 9:44 am

Can someone break down the PROS and CONS investing in ETFs vs Dividend Stocks.

Lets say someone with 50k has the 2 following options (just an example):

Vanguard US Total Market ETF (VUN.TO)
Price: $46.07
YTD Return: 5.51%
Yield: 1.55%
Expense Ratio (net): 0.16%

National Bank of Canada (NA.TO)
Price: $63.71
Dividend & Yield: 2.32 (4.08%)

I know 2 different sectors but need to understand the difference in how much money the investor will make each year.

Is my analysis correct?

Buying NA, with a 50k, you get approx 784 shares.
Yearly, you will make 4.08%, $1818.88

VS

Buying VUN, ith a 50k, you get approx 1085 shares.
Yearly, you’re guaranteed 1.55% – 0.16% = 1.39%, $695
However, YTD investors made 5.51% -0.16% = 5.35%, $2675

#148 Howard on 11.08.17 at 9:51 am

The first line of one of the Star’s daily 300 articles about real estate:

Denser is better, say Toronto’s highly educated, high-earning young professionals….

Indeed, when one thinks about Toronto young professionals, “DENSE” is the first word that comes to mind.

https://www.thestar.com/business/real_estate/2017/11/08/make-toronto-housing-denser-say-young-professionals.html

#149 mike from mtl on 11.08.17 at 10:04 am

#97 Vancouver Brit on 11.07.17 at 10:24 pm

/////////////////////////////////////////////////////////////////

Sounds nice in theory and was going good right until 2008 in all equity MF at the time was breaking -60%. Took many years to bounce back. In the end that decade with all that ‘risk’ annualised was 1%.

Learned my lesson about risk tolerance, not trusting mutual hockers, ‘active’ funds and balance.

#150 Boonerator on 11.08.17 at 10:08 am

In hospital for a week. It is scary the number of workers in their late 60s pushing stretchers all day. Bad luck, bad planning? Either way, incentive to invest.

Question for the smarter dawgs here, I.e. Everyone but me.
Canopy growth, aphria a few others in the marijuana field are rocketing. I still have 95% in the balanced accounts but I think I can take losses in such a small part of the portfolio.

Does anyone here think that Canopy, maybe Aphria have first mover advantage in the industry?
I think there is real potential as well as a lot of hype to make some serious capital gains.

If I keep my exposure to 5%, I can’t see serious harm to the portfolio.

Maybe Garth can weigh in on using mad money (5%) as a way to “play the market” without getting burned.

#151 Dissident on 11.08.17 at 10:08 am

#139 Howard on 11.08.17 at 9:07 am

Home ownership represents both a “thing” and an “experience”, explaining why members of both generations lose their minds over it.

– – – – – – – – – – – – – – – – – –

You hit the nail on the head, Howie. You can’t live in your car (esp if its a Maserati coupe), and why spend money on exotic, fleeting vacations when you can ‘staycation’ in a nice home, 24/7. Crack a cold one and light up the barbie. Why always have the urge to run away from your crappy living space to Cancun or to one of Susur Lee’s doucheterias for a brief moment, when you can exist in a space that you like, for as long as you like, and don’t have the anxiety of being evicted from? Yep, when you can’t afford anything else, at least you have a home that doesn’t suck…even if it sucks at you a little bit, lol.

Oh, and don’t forget, families are also an “experience”…and guess what makes that a better situation? That’s right, a 2 or 3 bedroom situation. Kids. How else are you gonna rack up 100+ likes on facebook :P

#152 Dissident on 11.08.17 at 10:12 am

#142 Buy/Sell/Hiring on 11.08.17 at 9:20 am
Not sure if ads are OK here?

I bought the patent rights for a solar-powered Bitcoin generator from a Russian emigre with a price on his head. Need seed capital asap. Serious investors only.

Also, looking to buy approximately 10,000 acres of flat land, preferably in a sunny locale. Buy or trade??

Also hiring 8 electricians and 8 comp sci. grads. That will give me, I think, twice as many employees as “Re.”. Not one to brag, but let’s just say I get by comfortably.

– – – – – – – – – – – – – – – – –

Do you also need our help to liberate a hefty inheritance from a Nigerian prince?

#153 re., 94 Dwilly on 11.08.17 at 10:13 am

#73 no

Your A and B are a false dichotomy, because that’s not the real nature of the choice.

You can have any basic, cap weighted, broad market ETF today for 25bps or less in most cases. Suggesting that there is a fund that will return better than those (for a slightly higher cost) is ignoring the fact that there ARE no funds that return better. Many say they do, none actually do, consistently. So you pay 5bps for Canadian equity, 15bps for US equity, etc. Maybe slightly more depending on your account parameters and logistics. But thinking something else is going to consistently net you higher returns isn’t going to work, nevermind the fees. If you’re paying 1.5%, you are overpaying, or paying for something you won’t get.

………….

wrong wrong wrong

i can post numerous SPECIFIC examples, but Garth wont allow it. The fact that you think there are NO examples of man beating the index despite higher fees OVER an extended of time, tells me you have swallowed the Cool Aid

that’s not a bad thing tho, as most CANNOT beat the index

#154 Halifax on 11.08.17 at 10:13 am

Thank you for spelling this out, oh bearded one. The algebra rebalance equation in my spreadsheet thanks you.

#155 IHCTD9 on 11.08.17 at 10:15 am

#67 AGuyInVancouver on 11.07.17 at 8:27 pm

_ _ _
LOL, are you that naive that: a) you thought MSP premiums covered all the medical systems costs b) hat gas taxes don’t go into general revenue?

As the others said, go to Sumas for your medical care next time, and don’t drive on a road you didn’t help fun through gas taxes. Oh, and contemplate how little you value your time that going across the border for gas and cheese actually seemed like a winning strategy to you.
____________________________________

Nice, I’d like your advice for a guy like me that will, in the next ~2-3 years; have the option to not buy, and therefore not pay the taxes levied onto the following products:

Gasoline
Heating Fuel
Electricity

Also, I have made many changes to my consumption habits that have drastically lowered by remittance of HST.

I have also recently adopted several strategies around investing and earning that chopped 5 figures off our household income tax bill for 2016.

I made/am making these changes explicitly due to the taxes extracted from me in ever increasing amounts have NOT benefited me one bit compared to 20 years ago. I’ve drawn a line in the sand.

In fact, while my tax load has soared, the level of services I receive for same has actually gone down, or have had fees added on top of the regular taxation.

I expect this trend to continue with more turbo-spending left wing activist governments in the future. I am planning around this expectation.

You can expect that every loop hole and strategy to lower, eliminate, offset, and avoid supplying an overweight paycheque to our gender balanced cash incinerating lords and ladies in Ottawa has been exploited to the maximum at the IHCTD9 compound. All perfectly legal too.

So Mr. Guy – where should I be going for Medical care?

#156 IHCTD9 on 11.08.17 at 10:33 am

#79 Gravy Train on 11.07.17 at 8:55 pm

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” — Warren Buffett
_________________________________________

In other words, don’t buy a 90’s Dodge Ram 2500 with a Cummins engine under the hood at the moment.

That market is currently void of any value as it is infected with a bad case of Millennialsgottahavitatanycostitis.

#157 mike from mtl on 11.08.17 at 10:34 am

#146 NewInvestor on 11.08.17 at 9:44 am
Can someone break down the PROS and CONS investing in ETFs vs Dividend Stocks.

/////////////////////////////////////////////////////////////////////

You’re comparing one bank to a broad index fund.

All I can say is with dividends, there’s no free lunch – equity risk for a few per cent in dividends must be considered.

Ask any investor how they felt about preferreds since 2013.

#158 Ace Goodheart on 11.08.17 at 10:37 am

“all the geniuses on the Internet telling you to load up on gold, cryptocurrencies or (shudder) an investment condo.”

These guys are running banks. For fun I signed up for a couple of the platforms so I could poke around and see what they are up to.

They are conducting virtual banking in cyberspace.

They allow you to “loan” your balance of cryptocurrencies (or US dollars) to other users of the platform, at interest.

You can purchase cryptocurrencies “on margin”.

This is something else. I have not seen anything like this in a while. Still poking around in the two platforms I have gained access to.

#159 Stone on 11.08.17 at 10:44 am

Forgot to mention, yesterday’s YTD return was 8.87%. I was thinking not to post it anymore but then I thought, screw the arses who take my posting as an offence.

After reading the other posts above, some may consider looking at the return of a balanced and diversified passive ETF portfolio boring as f. Some may consider me obnoxious. On the other hand, it appears that the taboo of not discussing it in a more open way appears to be crippling the majority into not investing whatsoever or making serious improper investment decisions.

Maybe it ‘s time that everyone stopped feeling inadequate about their investing prowess and hating on those who are able and decide instead to invest a little time and effort on the subject for their own benefit.

And for the haters, the commentary above shows how irrelevant you are. Many people need help and encouragement investing, in whatever form it comes. You are the reason that so many can’t seem to invest because you try to shame them. On that note, I’ll repeat again, 8.87%. If that gets people to want to achieve the same or better, all the better. For the rest, may the teeth grinding continue.

#160 re., 140 tater on 11.08.17 at 10:48 am

Bonds as a hedge for Equity declines? Well, for most of the last 130 years, their prices have moved in tandem more often than not. The last 20 years have been a massive anomaly and when those correlations go back to historical levels a bunch of “balanced” portfolios are going to have a very rough ride.

……………

rough ride? says WHO?

give me some data, …or is this pure opinion, you have created a story in your mind

#161 Lisa on 11.08.17 at 10:50 am

He ONLY had 30-40k to invest?!?
I am screwed then!
“The Wealthy Barber” will be have to be my advisor I guess.
I thought I was doing ok…SIGH.

#162 aa3 on 11.08.17 at 10:51 am

According to our media, Canada is a flawless democratic socialist country.

All elderly people in our socialist state are enjoying free health care, generous public funded pensions, affordable housing and cheap government controlled utilities.

So while you think you saw many elderly scraping by working low paid jobs – perhaps your eyes misled you?

#163 Tccontrarian on 11.08.17 at 10:55 am

No, not another 2008 crash on the horizon. It will be worse!
Why?

Well, several reasons:
Huge debt everywhere
Complacency
Loftier levels for major indexes
We’re at ‘everything-bubble’

Be careful out there!

TCC

Uninformed fears. There are no indicators of recession, economic decline or a market crash. Central bank monetary policies are coordinated as never before and global growth is healthy for the first time in almost a decade. There is no crash coming. Corrections? Of course. They are normal, and temporary. — Garth

#164 IHCTD9 on 11.08.17 at 11:22 am

#109 David on 11.07.17 at 11:27 pm

The one thing I like about RRSPs is that at least I get the deduction up front knowing with certainty that it is taxable in the end. All they can do to me is hike the rate in 25 years. Oh and about that capital gains exemption for your cozy little house…
_____________________________________

Some of the stuff you mentioned is always floating around in the back of my head as there’s nothing you can legally do to prevent it – all you can do is react to it. I have started using some of my tax returns for expenses as a result – “crystalizing the gains” if you will.

If the government ever passed a law allowing my personal retirement savings to be raided to cover shortfalls in government revenues after a lifetime of sacrifice and resolve – I’d pack up and leave the Country.

That would be the end of the Canada I grew up with. I’d take my family with me, and would think no more of the Great White North.

#165 Josh in Calgary on 11.08.17 at 11:36 am

#44 Newbie Ishares investor,
XPF pays a 4.57% dividend. That’s the “fixed income” portion. It is also DRIP (dividend re-investment program) eligible. That means instead of taking cash with your dividend they give you more shares. DRIP is the way to go if you’re trying to grow your money. If you’re trying to take monthly income then likely not.

XGB pays 3% but is not DRIP eligible so you should be seeing money in your account from that one. In my trading account I can see it under “activity history”. If you want a DRIP eligible bond fund XBB is almost exactly the same, but is DRIP eligible.

And don’t worry, you’re on the right track. I’d add some international exposure to your mix. Right now you just have Canada and US. There are lots of choices out there but XEF would be one example.

#166 re., Eyestrain on 11.08.17 at 11:44 am

oday is a re-run on why only experienced, successful investors can afford to seek guidance from a pro. Discussions were remarkably civil, on-topic, and included exactly where and how often to poke your anthill, and art interpretation/animal psychology. Many touted the wisdom of Mr. Potato Head, who has the uncanny ability to predict the past in his analyses of long-term returns for short-lived ETFs.

In the beginning …..
Children were the parent’s retirement fund. Men wore beards. Sex was dirty. Then came WWI, income tax, and Mutual Funds. The shoeshine boys came late to a party that was ending. Hitler took a dump on Europe and the smart money (and people) went to North America, increasing GDP and IQ. The kids stopped buying crap, grew beards and made love not war. The kids aged, greed was in, beards were out, sex was dangerous. Markets soared, until they didn’t. In the nowness, beards are in, greed is out, sex is dirty, and kids don’t buy, they rent as they wait (patiently) for their parents to finance their own retirement. What me worry?

My defined benefit plan told me the kids on the schoolyard are chanting naughty rhymes about Trump. In Canada! I am long Gillette and Trojan and short everything else, but please consult with a professional soothsayer before making any investment decisions.

…………..

kindly,let nurse Marge know I say hi. I love her

#167 Josh in Calgary on 11.08.17 at 11:47 am

#146 New Investor,
The difference between buying ETFs and buying a dividend paying stock is diversity. Both in terms of the number of companies and in terms of the sectors and countries.

Let’s say you own a bank stock. And then that bank gets sued or has a bad quarter. You’ll feel the hit from that quite a bit more than owning an ETF with 100 different companies in it.

Also different sectors are rising and falling at different times. One time financial stocks are surging. Then resources. Then consumer. Then tech. etc. You’ll never get the timing right to jump from one to the other. But if you own them all then you’re in for a smoother ride. With just a few ETFs you can own them all.

Same basic idea for countries. A rookie mistake is to invest only in your home country. Canada is a little volatile as we’re exposed a great deal to resources. Plus we’re small potatoes compared to the US market and overseas markets. They all surge at different times so owning a “balanced” mix helps with risk and volatility.

#168 Howard on 11.08.17 at 12:00 pm

#151 Dissident on 11.08.17 at 10:08 am

#139 Howard on 11.08.17 at 9:07 am

Home ownership represents both a “thing” and an “experience”, explaining why members of both generations lose their minds over it.

– – – – – – – – – – – – – – – – – –

You hit the nail on the head, Howie. You can’t live in your car (esp if its a Maserati coupe), and why spend money on exotic, fleeting vacations when you can ‘staycation’ in a nice home, 24/7. Crack a cold one and light up the barbie. Why always have the urge to run away from your crappy living space to Cancun or to one of Susur Lee’s doucheterias for a brief moment, when you can exist in a space that you like, for as long as you like, and don’t have the anxiety of being evicted from? Yep, when you can’t afford anything else, at least you have a home that doesn’t suck…even if it sucks at you a little bit, lol.

Oh, and don’t forget, families are also an “experience”…and guess what makes that a better situation? That’s right, a 2 or 3 bedroom situation. Kids. How else are you gonna rack up 100+ likes on facebook :P

———————————

You’ve illustrated well why the “don’t put all your money in one asset” lecture misses the mark.

It’s true that those who put 5% down and take out $900K mortgages are courting financial ruin. But that represents extreme cases or, at least, the far end of mainstream. Most new homeowners put much more than 5% down and wisely avoid mortgages that will absolutely cripple them. They might borrow a little more than what would make them comfortable, but most can handle it.

And at the end of the day, you have a home.

Btw, is “eviction risk” really an issue to worry about? In my many years in Toronto, I never heard of a single person among my friends or acquaintances to have been evicted. Granted I’ve been out the city, and country, for several years now but the risk seems overblown.

#169 NoName on 11.08.17 at 12:01 pm

#156 IHCTD9 on 11.08.17 at 10:33 am

I6 if you don’t mind dealing with cracked block and replacing injection pump every so many km 90s ram 2500 is perfect choice.

#170 Shona on 11.08.17 at 12:04 pm

I’m surprised you recommend bonds as part of the investment portfolio as you talk about interest rates going up. Don’t they work inversely? – bond prices go down as interest rates go up.

Buy short government bonds, obviously. Corps and hi-yield are different animals. Rate-reset prefs rise with rates. — Garth

#171 Giver - AB on 11.08.17 at 12:06 pm

Re: #46 Hamilton Guy

Good for you for having the courage to post your current investments. I generally think you’re on the wrong track with the Scotia mutuals – it is a pretty bizarre mix of funds, with high fees and low returns in a pretty great year. It doesn’t seem to me that you are getting good advice.

The robo-advisor route would likely be a much better option for you than the Scotia mutuals. Working with a fee only advisor or DIY are also better options. I think it depends on your personality a little – if you have a genuine interest in learning about financial matters then do it yourself. If you’d rather not spend time learning/reading then consider the robo or fee only advisor route.

If you DIY, then follow Garth’s asset mix or consider one of the simpler portfolio options presented by other by other posters. As you learn more and your portfolio grows you’ll probably migrate from a simple option to something closer to Garth’s recommendations. As you can see from the variety of comments here, ultimately there is no one right answer.

Good luck.

#172 jeff on 11.08.17 at 12:07 pm

Durham region housing prices are down. The dollar value is pretty stunning.

See this Reddit thread:
https://www.reddit.com/r/toronto/comments/7bfw3k/durham_house_prices_march_to_october/

Meanwhile Toronto realtors are calling people at work, telling them it’s the last price dip we will see. Those who were interested to buy, but decided not to earlier this year.

I don’t understand why the government didn’t apply the prime + 2% qualification rule on Nov 1. It’s not like lenders had to reprint all their materials for the new rule to be applicable by them.

#173 Fake News Again on 11.08.17 at 12:19 pm

#130 Re.,118 fake news again on 11.08.17 at 8:14 am
Actually some consider me a ‘very smart Canadian ‘, employ 8 , net worth 5 mill. I’m damn glad your ‘smart ‘ pathetic ass is long gone

Just one question – why do you post DAILY at a Canadian site ? Angry ? Haven’t made any foreign friends yet ?
____________

WOW – 5 mil !! I bet the CRA dogs are salivating knowing that smart guys like you that STAY here will be around with their dough to keep the parasite called Govt fed !!

Why do I post? Easy. I wonder how many of you keyboard warriors know that only 3% of the Americans took part in the American Revolution. The rest just did whatever the British said. Just like you people. I’m actually trying to do something while you BRAG about your cash. Enjoy your Johnny Walker Blue……

#174 When Will They Raise Rates? on 11.08.17 at 12:24 pm

Segwit2X cancelled

#175 IHCTD9 on 11.08.17 at 12:26 pm

#148 Howard on 11.08.17 at 9:51 am
The first line of one of the Star’s daily 300 articles about real estate:

Denser is better, say Toronto’s highly educated, high-earning young professionals….

Indeed, when one thinks about Toronto young professionals, “DENSE” is the first word that comes to mind.

https://www.thestar.com/business/real_estate/2017/11/08/make-toronto-housing-denser-say-young-professionals.html
______________________________________

Just admit it, you DO think Moosonee is better than the GTA.

You can do it!

#176 When Will They Raise Rates? on 11.08.17 at 12:27 pm

Bitcoin ATH incoming

#177 Eyestrain on 11.08.17 at 12:31 pm

#166 re.,

kindly,let nurse Marge know I say hi. I love her

Do you mean “large” Marge from Jamaica? She’s got a bun in the oven and she claims it’s yours. She wants you to call her.

All day long all we hear is “Irie did dis to me”. It’s driving us all crazy. Do the decent thing man.

#178 Braj on 11.08.17 at 12:36 pm

#174 When Will They Raise Rates? on 11.08.17 at 12:24 pm
Segwit2X cancelled

***

and the price flew up!

#179 Renter's Revenge! on 11.08.17 at 12:49 pm

I have often wondered what to do with bond holdings in a portfolio when faced with a rising rate environment. At first, it seemed better to hold short duration bonds because, as we all know, “bonds go down when rates go up, etc., etc.”. However, if you hold individual bonds to maturity, then the price changes don’t matter, because the bonds mature at par value. I figure as long as bond index funds hold their bonds to maturity as well (which I assume they do) then the same applies.

Here is a nice piece on the topic:

https://www.schwab.com/resource-center/insights/content/should-you-hold-bonds-or-bond-funds-when-interest-rates-rise

According to Rob Williams, “Since 1976, more than 90% of the total return for a broadly diversified portfolio of U.S. investment-grade bonds (represented by the Bloomberg Barclays U.S. Aggregate Bond Index) has come from income payments rather than a change in price.”

So it seems to me that the threat of rising rates is not a very good reason to go short on bonds. Plus, if and when we have another recession, interest rates will probably go back go down, sending your bonds or bonds funds back up in price, just in time to buy more equities at a discount.

#180 Stone on 11.08.17 at 12:51 pm

#130 Re.,118 fake news again on 11.08.17 at 8:14 am
Actually some consider me a ‘very smart Canadian ‘, employ 8 , net worth 5 mill. I’m damn glad your ‘smart ‘ pathetic ass is long gone

Just one question – why do you post DAILY at a Canadian site ? Angry ? Haven’t made any foreign friends yet ?

——

$5 million. Woah there cowboy! Sounds like you throw numbers out there like your useless posts, re. You employ 8? 8 what? Imaginary employees? Come on buddy. You laugh at me for posting my returns. At least they’re real returns and I’m consistent. Good luck with your $5 million in monopoly money. Loser.

#181 IHCTD9 on 11.08.17 at 1:01 pm

#169 NoName on 11.08.17 at 12:01 pm
#156 IHCTD9 on 11.08.17 at 10:33 am

I6 if you don’t mind dealing with cracked block and replacing injection pump every so many km 90s ram 2500 is perfect choice.
_________________________________________

I don’t think the Cummins is a bad motor (although you’re right that certain code blocks will crack, and a dead lift pump will kill certain injection pumps, and then there’s the killer dowel pin), but $7-8+K for a 3-400K km total rust bucket truck with big stacks sticking out of the once useable bed?

I just bought a good used truck with a little over 100K from the original owner that looks just like new. Zero rust anywhere, oiled since new, most winters spent in Florida (5th wheel hauler) perfect interior, MINT. It was 10K. ~3 measly K more than the rust buckets with 300K I looked at previously.

I can’t understand how anyone would NOT ante up an extra 3-4K for an essentially mint truck compared to these other trucks unless they absolutely could not muster the financial horsepower to spend over 10+K.

#182 Samantha @ LifeOnCredit.ca on 11.08.17 at 1:10 pm

#147 NewInvestor on 11.08.17 at 9:44 am

Can someone break down the PROS and CONS investing in ETFs vs Dividend Stocks.

————————————————
Two things to consider:

– Past performance is not a guarantee of future returns
– Direction of CAD : USD exchange rate

#183 Re., 173 on 11.08.17 at 1:10 pm

That’s why you navigate to a Canadian site ?

Wow . And here we all thought
You’re so terribly smart …..oops . The social misfit left town , but always keeps In arms length :) . Well done

#184 Lost...but not leased on 11.08.17 at 1:12 pm

#173 Fake news again

I too hate braggers…probably lying…maybe part of T2 and Moroneau’s lucky bloodline inner circle…maybe should scan a copy of the relevant documents.

PS:Excuse me while I have Jeeves wash my KIA

#185 Tazi Bnu on 11.08.17 at 1:24 pm

#86 Democracy Is Mob Rule on 11.07.17 at 9:07 pm
The City of Vancouver will begin mailing notices this week to more than 180,000 city homeowners to explain Canada’s first empty home tax.

properties deemed vacant will be subject to the tax at a rate of 1% of the property’s 2017 assessed taxable value.

https://www.biv.com/article/2017/11/vancouver-rolls-out-empty-home-tax/
__________________________________________
I foresee roving bands of Xenophobic Vancouverites knocking on doors and stalking properties to see if they’re occupied. Keeping a list they submit to the government for cross checking so ‘justice’ can be fulfilled. This is getting pretty close to mob rule, exercising ‘social justice’.

#186 calgaryPhantom on 11.08.17 at 1:34 pm

As always, nice and simple portfolio model by Garth.
One change that i would make for myself for next couple of years would be to hold XEG in instead of XRE.

#187 Jacque Shellacque on 11.08.17 at 1:39 pm

“ignore all the geniuses on the Internet telling you to load …cryptocurrencies.”

Should cryptocurrencies not be considered a possible addition to a portfolio though, low say 5% of the total? Especially given the potential for something like the Ethereum project (powered by cryptocurrency eth) to literally redo the internet and turn banking, finance, insurance, and law into sunset industries the way we see retail and meat packing today?

No. — Garth

#188 Re.,184 on 11.08.17 at 1:41 pm

NOT bragging. My point was lost . Let me try again : that clown is stating all ‘very smart Canadians ‘ bail . He’s a troll. Many people , incorrectly , use wealth as a measure of iq , or somewhat correlated . Hence I shared my personal numbers – that is, like many other ‘high net worth ‘ folks I’m NOT bailing country. That this ‘smart Canadian ‘ is not leaving

Got it ?

Btw – 5 mill ain’t a lot of money . More importantly , employ 8 Canadians . They put food on the table because of this small business . Am proud of this

#189 Lost...but not leased on 11.08.17 at 1:43 pm

Agenda 21, and other so- called conspiracies.

Henry Ford when asked about certain documents floating around at the time , rather than comment directly, took the more diplomatic tact of saying (and I paraphrase) Can’t say for certain, but they sure parallel what’s unfolding as we speak.

“DENSE” aka Hi Density housing. This reminds me of the classic Twilight Zone episode “To Serve Man”. People cannot see the flip side of what is a noose being slowly tightened.

CMHC origins were, in essence, to rebuild Canadian society after WW2, aka in essence the family unit by providing affordable housing. This seemed to work quite well till the Big Banks were not only allowed to enter the home mortgage field, but CMHC became the Banks ultimate insurer.

With various political movements ie Women’s Liberation etc…the family unit is often deemed a liability..yet we have had what amounts to unbridled inflation whereby the banks are somewhat predatory via lending while interest rates are low, but when the RE party shows signs of dying…CMHC to the rescue.?!?

What I foresee is the continual herding of people into smaller and smaller sky boxes aka condos till some magic number of say 200 sq ft is achieved at say $2000/sq.ft. Then your High DENSE-ity unit has all the hallmarks of a jail cell, and you are at the whims and mercy of the powers that be.

This is happening globally, whether one considers it a “conspiracy “or not.

#190 When Will They Raise Rates? on 11.08.17 at 1:45 pm

#178 Braj on 11.08.17 at 12:36 pm

#174 When Will They Raise Rates? on 11.08.17 at 12:24 pm
Segwit2X cancelled

***

and the price flew up!
————–

… And then tanked. lol

Just made 10% in alts in less than 20 minutes. Mass confusion among noobs… Expect a spike up in BTC once the market figures out that this is bullish for bitcoin.

#191 Guy in Calgary on 11.08.17 at 1:59 pm

#35 Engineer on 11.07.17 at 7:25 pm
I’m currently throwing $10k a month at my portfolio. Should I contribute in the same ratios each month or use this money to rebalance monthly?

Just use the new contributions to rebalance and you will be fine.

#192 Lost...but not leased on 11.08.17 at 2:00 pm

Bitcoin (again)

Another concern should be if a given market is intentionally crashed, as has happened before in history.

The big boys pull the trigger, and buy up the carnage for pennies on the dollar. Then simply reload for the next cycle.

For those that maintain a crash can’t happen, this implies the economy is so controlled that winners and losers will be cherry-picked via some global chessgame.

PS: One to watch is Elon Musk and Tesla cars….

#193 Tater on 11.08.17 at 2:03 pm

#160 re., 140 tater on 11.08.17 at 10:48 am
Bonds as a hedge for Equity declines? Well, for most of the last 130 years, their prices have moved in tandem more often than not. The last 20 years have been a massive anomaly and when those correlations go back to historical levels a bunch of “balanced” portfolios are going to have a very rough ride.

……………

rough ride? says WHO?

give me some data, …or is this pure opinion, you have created a story in your mind
—————————————————————-
The theory behind the 60/40 equity/bond split is that bond and stock prices are negatively correlated. And while that has been true for 20 year or so, it isn’t accurate over longer time frames.

Pimco has this piece:
https://www.pimco.ca/handlers/displaydocument.ashx?fn=PIMCO_Quantitative_Research_Stock_Bond_Correlation_Oct2013.pdf&id=zdVcShqiEMNUg7uf5lz9gz%2ffdtpZAxKCLsuDGmVqEEL9K6VxjAwuETyKmVNZSF6m%2bcwmMMY724kVAjVehk1ya6fz3ELNCiDJbrNwMbtWtozAkjCDLNE6JnGRN4SvPkXrkfMXXWZ%2fG9JbK0YT7CTnR%2fcjuIae6UxSAOryZ9paMv43z9Pw8Gj%2bLuiecPrLww1GSf9Bg8QJS6U2TKYW3hVWzNnBiL8bJqdyQdpq1Iq9DaHVgZrBy9mDO9%2bdvQPj92C%2bl0MhLO5N5cPnVMJS%2bb0wu6v9BG3xxstLvA97HCuTXcABp7JfFBOYW7d9P3Z%2bWJ%2bNmEKPHJ6a8ri4nTG1ukQhicswFHs683rZDuzVByjO%2fMaHb%2bQ6ykbSDrbQcvmuGIpnjaqg87DnYvSwLpsNdprDf5f5Edg0JrkQlSZsRHjJwbBWhIvzCWkMtiXkt0ee%2fepNTtfdQM7EmxDAHmG3N1%2bWQYVshgKM4Sf5j06DZwI7jx6%2bsxgL5TjvduX2Bxnp4L2z3j05y02WsTgN9GTBoElbZA%3d%3d

I’d also tell you to read Chris Cole’s stuff at Artemis, but you need a pretty solid finance background to get the most out of it.

#194 Fake News Again on 11.08.17 at 2:09 pm

#185 Tazi Bnu on 11.08.17 at 1:24 pm
#86 Democracy Is Mob Rule on 11.07.17 at 9:07 pm
The City of Vancouver will begin mailing notices this week to more than 180,000 city homeowners to explain Canada’s first empty home tax.

properties deemed vacant will be subject to the tax at a rate of 1% of the property’s 2017 assessed taxable value.

https://www.biv.com/article/2017/11/vancouver-rolls-out-empty-home-tax/
__________________________________________
I foresee roving bands of Xenophobic Vancouverites knocking on doors and stalking properties to see if they’re occupied. Keeping a list they submit to the government for cross checking so ‘justice’ can be fulfilled. This is getting pretty close to mob rule, exercising ‘social justice’.
______________

Had the Govt done something about the money laundering 30 years ago……..we would not be having this discussion. But we are talking about Govt so…..

#195 Newcomer on 11.08.17 at 2:10 pm

Here’s a question:

If a guy or gal uses a Canadian-controlled private corporation for tax deferment and would like to take advantage of the up-to-50-k in passive earnings that Bill has granted us, can they get an advisor like Garth to manage the funds held in the company?

Of course. Many self-employed clients have personal and corporate assets that they want managed holistically, and for maximum tax minimization. (Memo to Justin: tax avoidance is 100% legal. Your rant against it in he House of Commons last week was churlish). — Garth

#196 Braj on 11.08.17 at 2:25 pm

#195 Newcomer on 11.08.17 at 2:10 pm
Here’s a question:

If a guy or gal uses a Canadian-controlled private corporation for tax deferment and would like to take advantage of the up-to-50-k in passive earnings that Bill has granted us, can they get an advisor like Garth to manage the funds held in the company?

Of course. Many self-employed clients have personal and corporate assets that they want managed holistically, and for maximum tax minimization. (Memo to Justin: tax avoidance is 100% legal. Your rant against it in he House of Commons last week was churlish). — Garth

***

More than churlish! It’s straight up malignant.

#197 Braj on 11.08.17 at 2:26 pm

#190 When Will They Raise Rates? on 11.08.17 at 1:45 pm
#178 Braj on 11.08.17 at 12:36 pm

#174 When Will They Raise Rates? on 11.08.17 at 12:24 pm
Segwit2X cancelled

***

and the price flew up!
————–

… And then tanked. lol

Just made 10% in alts in less than 20 minutes. Mass confusion among noobs… Expect a spike up in BTC once the market figures out that this is bullish for bitcoin.

***

Amazing, where do you trade?

#198 dumpster fire on 11.08.17 at 2:31 pm

#27 Yanniel on 11.07.17 at 7:04 pm

As for sticking your money in a TFSA first, I think that advice does not apply to every body. Ex. for a guy/gal making +100k, is it not better to stick the money in the RRSP first?

* * *

If you have a high income already then filling RRSP before TFSA is a little better than the other way around, but you lose the flexible access to your sheltered money that a TFSA provides.

Other general guidelines I have picked up (here, probably):
– fill registered accounts before non-registered
– prioritize TFSA before RRSP if you expect your income to increase in the future
– RRSP becomes less advantageous the closer you are to retirement, TFSA is always good
– turbocharge your investing by putting RRSP refund back into RRSP or TFSA
– prefer to put US dividend producers in an RRSP
– once registered accounts are full, Canadian qualified dividend producers can be moved to a non-registered account
– in non-registered accounts: prefer to rebalance by buying instead of selling to minimize tax consequences

~ breathe deep

#199 tccontrarian on 11.08.17 at 2:31 pm

“Uninformed fears. There are no indicators of recession, economic decline or a market crash. Central bank monetary policies are coordinated as never before and global growth is healthy for the first time in almost a decade. There is no crash coming. Corrections? Of course. They are normal, and temporary.” — Garth
***********************************************

Fears? Who’s afraid? Certainly not I! The greater the mispricings on either end, the greater the opportunity for profit (or ‘outsized gains’, if you like).
All I know is that bull markets don’t (can’t) last forever and mean-reversion is a mathematical certainty. To that end, I just increased my AMZN short (again), at $1,134.
I don’t think the likes of Ray Dalio and a few others whose net worth is in the ‘billions’ are worried for no reason. IMO they’re better informed than most of us.

I respect your opinion Garth – we’ll see how things play out. Not easy to take a contrarian point of view – but the herds usually get slaughtered (eventually).
TCC

#200 LivinLarge on 11.08.17 at 2:35 pm

“Can someone break down the PROS and CONS investing in ETFs vs Dividend Stocks.

————————————————
Two things to consider:

– Past performance is not a guarantee of future returns
– Direction of CAD : USD exchange rate” ……..well IMO you don’t compare them as an either/or.

So, as for dividend delivering shares, yes, absolutely there is no absolute guarantee that they will continue to even pay a dividend but you certainly can reduce the risk they won’t by buying very conservatively. Identify stocks that have paid their dividends like clockwork for at least 50 years without reducing, cutting or ever eliminating their div payments. This demonstrates that the underlying company has weathered the post war boom and bust cycles while always generating enough net income to maintain their div payments.

Then look at the company’s history of raising their dividends over decades. Raising dividends is the clearest indication of a company’s ability to grow their net incomes AND their confidence that they can maintain that dividend regardless of the intervening market volatility.

Last and certainly not least, look at whether or how often the company has split their stock. Companies split their stocks when share prices have risen above and stayed above their internal benchmark for afforability to the retail investor and this rise in stock price is also an excellent benchmark for the company’s ability to grow income moving forward. Remember also that there are even some external benchmarks for splitting shares. When any share price exceeds and stays above $100 a board lot of the shares is over $10,000 and that has long proven to be a wet blanket on further price appreciation.

So, while on any given Sunday the share price can drop even precipitously like 2008-10 and you can see capital and past capital growth evaporate, if you bought conservatively then there is a very real likelihood that the company can and will continue to pay their dividends on time and without reduction. Then you just wait for the over all market to rebound and bring your capital value back with it.

There is one scenario that as a div investor I fear like the plague. That is a specific industry elimination or specific company collapse. If a specific industry is eliminated after decades of strenght then you’re screwed and it isn’t coming back. A specific company can also collapse especially if there is some hidden illegal activity discovered unique to that company’s management.

So, long history of uninterupted div pmts, long history of div growth, long history of splitting their shares and you have identified what is very likely a company able to maintain income in almost any circumstance.

#201 Big Daddy on 11.08.17 at 2:35 pm

Here’s one way to do it. Buy a small basket of stocks that pay dividends, monthly, quarterly, semi annually annually and reinvest the dividends. These days of $6.95 trades make this a no brainer.

Stocks vs ETF’s because the individual companies send you real money by way of cash distributions every month. These companies pay anything from 3.5% to 7.5% and you can average them out in balance for whatever timeline you’ve set. But the consistent cash flow is where it’s at because you’re buying more stock every month, without rebalancing, let the winners run and pour the cash into the laggards….after all…they’re spitting out great divvies. Some of the issues you pick are rock solid and barely move….while others are more growthy.

I just did this for someone: put in $28500 into a TFSA in March 17 …variety of cash flowing equities and some of them grew…and some went sideways paying divvies every month…..one did 50% of the capital gains heavy lifting while the others always paid monthly.

Between March inception and yesterday we’d made $2520 including reinvestment of dividends on the acct in eight months and used the cash profit to make an RRSP contribution with the tax free cash spinoff out of the TFSA…into the tax deferred RRSP…voila….$2500 tax free out of nothing!!! This isnt a profit on after tax dollars….this is profit untaxed on any level. Worked out to be a 13.6% annualized return over the 8 month period…..zero fee’s or MER’s.

I’ll try to convince the kid to continue to trade this strategy and max his TFSA ….even with $100 p/m….more would be better…..but even at this rate he’ll turn $28500 into a compounding million dollar perpetual motion money machine long before he’s 65 guaranteed even if he never makes another deposit. Thats one way to do it.

#202 Big Daddy on 11.08.17 at 2:39 pm

Oh…I didn’t mention that the kid will also generate a tax return for his RRSP contribution…..hahahahahahahahaha…..calculate that into the averaage annual return and it’s over 15%…..nice.

#203 Stone on 11.08.17 at 2:48 pm

#188 Re.,184 on 11.08.17 at 1:41 pm
NOT bragging. My point was lost . Let me try again : that clown is stating all ‘very smart Canadians ‘ bail . He’s a troll. Many people , incorrectly , use wealth as a measure of iq , or somewhat correlated . Hence I shared my personal numbers – that is, like many other ‘high net worth ‘ folks I’m NOT bailing country. That this ‘smart Canadian ‘ is not leaving

Got it ?

Btw – 5 mill ain’t a lot of money . More importantly , employ 8 Canadians . They put food on the table because of this small business . Am proud of this

——

Smart? Questionable. Arse? Definitely. It’s good to be proud of one’s achievements. I’m proud of mine too so don’t make the stupid comments like you made to me in the previous days post and try to diminish my achievements. The knife can cut both ways. Doesn’t feel so good when you’re on the receiving end, does it? Do YOU get it?

If someone on here provides blatantly bad advise, including myself, by all means they should be called out for it. Otherwise, as in the civilized world, let them go about their day. We’re all entitled to an opinion. If you can do that, my job here is done.

#204 When Will They Raise Rates? on 11.08.17 at 2:48 pm

#197 Braj on 11.08.17 at 2:26 pm

Amazing, where do you trade?

————–

Poloniex and Bittrex for alts

#205 Braj on 11.08.17 at 2:53 pm

#158 Ace Goodheart on 11.08.17 at 10:37 am
“all the geniuses on the Internet telling you to load up on gold, cryptocurrencies or (shudder) an investment condo.”

These guys are running banks. For fun I signed up for a couple of the platforms so I could poke around and see what they are up to.

They are conducting virtual banking in cyberspace.

They allow you to “loan” your balance of cryptocurrencies (or US dollars) to other users of the platform, at interest.

You can purchase cryptocurrencies “on margin”.

This is something else. I have not seen anything like this in a while. Still poking around in the two platforms I have gained access to.

***

Ace, do you mind listing the two platform names so I can look into them?

#206 Overheardyou on 11.08.17 at 3:03 pm

Two words: Thank you. This is by far the best financial advice I have ever received and the craziest part is it’s free. Thank you to all the commentators as well, your knowledge and experience is very helpful to a new investor. Hope to be able to buy you lunch one day!

#207 LivinLarge on 11.08.17 at 3:04 pm

Big Daddy “used the cash profit to make an RRSP contribution with the tax free cash spinoff out of the TFSA…into the tax deferred RRSP…voila….$2500 tax free out of nothing!!!”…. Ooooo, that’s a little dicey. You have just taken tax free income and made it taxable in the future. Sure, there is a little bit of a larger refund come April but once you put the tax free income from the TFSA into an RSP then you have forever converted it into a taxed form. For that little increase in refund you have forever killed the tax free growth.

#208 Yanniel on 11.08.17 at 3:16 pm

Re: #198 dumpster fire

Thank you.

#209 Tazi Bnu on 11.08.17 at 3:37 pm

#194 Fake News Again on 11.08.17 at 2:09 pm
#185 Tazi Bnu on 11.08.17 at 1:24 pm
#86 Democracy Is Mob Rule on 11.07.17 at 9:07 pm
The City of Vancouver will begin mailing notices this week to more than 180,000 city homeowners to explain Canada’s first empty home tax.

properties deemed vacant will be subject to the tax at a rate of 1% of the property’s 2017 assessed taxable value.

https://www.biv.com/article/2017/11/vancouver-rolls-out-empty-home-tax/
__________________________________________
I foresee roving bands of Xenophobic Vancouverites knocking on doors and stalking properties to see if they’re occupied. Keeping a list they submit to the government for cross checking so ‘justice’ can be fulfilled. This is getting pretty close to mob rule, exercising ‘social justice’.
______________

Had the Govt done something about the money laundering 30 years ago……..we would not be having this discussion. But we are talking about Govt so…..
_____________________________________
So a really bad policy, that gives the government more money and power, should be enacted to fix government negligence. That negligence made the government lots of money in the first place. You do see the problem with this right?

#210 LivinLarge on 11.08.17 at 4:25 pm

Big Daddy, I really hope you aren’t doing this kind of advising for a living.

If the guy was 60+ with a terminal illness then maybe things would break even otherwise you have simply taken a big lump of perpetually tax free capital and turned it into a marginally bigger bundle of perpetually taxed capital. This is what I call “Jack and the Beanstock” investing.

To make all this even more crystal clear, let’s look at this over say 30-35 years if the kid is 30 now.

So, let’s the kid is a good earner and in the 30% marginal bracket. In thirty years due to inflation he needs a lot more than today to even maintain his standard of living. Inflation is compounding all those years so he needs at least 2x current income to maintain that standard of living and really likely more like 4x.

Now, sure the RSP has been compounding too but do you think it has quadrupled in capital value? So, he retires but he needs at least 3 times as much to live on as he did when he put the money into the RSP so when he takes the money out of the RSP he’s taking out 3x as much and that puts him into the highest marginal rate rather than the lower marginal rate he saved the tax on initially.

Every cent that goes into an RSP will be taxed at some point and unless the kid’s income and cost of living remain constant then inflation is going to slam him in a big way. Cost of living inflates, income inflates and marginal tax rates all inflate over time.

Far better to have left that $2500 in the TFSA where it and it’s resultant growth is perpetually non taxable.

#211 re., 203 stone on 11.08.17 at 4:35 pm

what are you babbling about? who was diminishing your achievements?

reading comprehension issues?

#212 maka on 11.08.17 at 4:50 pm

When you invest with mutual fund guy….

https://www.youtube.com/watch?v=UJ5NWSqKzoo

#213 Gravy Train on 11.08.17 at 5:01 pm

#206 Overheardyou on 11.08.17 at 3:03 pm
“Thank you to all the comment[ers] as well, your knowledge and experience is very helpful to a new investor.”

Now you just have to figure out which of us know what we’re talking about! :)

#214 espressobob on 11.08.17 at 5:14 pm

Short term thinking. It’s the mindset many millennials can’t see past.

Saving is the key to investing. Investing is the road to personal financial freedom, the day when one finds their left foot passing through the geriatric door.

Ignored the future and ran out of capital. Bummer.

#215 crossbordershopper on 11.08.17 at 5:23 pm

most people dont plan, so they dont save, they litterly just are zombies.
sure i started saving when my daughter was born, and now she is entering grade 8 in sept and has like 47 grand saved. great.
but, tuitiion is highly subsidized now in Ontario. so. i guess things change and planning is well for the prudent.
i meet so many people that really dont know or care.
the goverment especially in ontario, or quebec, is highly socialized, no wonder these immigrants love it.
kids get free meds if under 25, ohip for everyone, gtd money when your 65 years old. kids either get a free pass or an almost free pass at university.
its relatively safe, food is cheap, weather is so so.
sure you wont be super rich the system was not set up that way, but for most it works out.
for the adventurist, america is the only place, so go and try and if it doesnt work out, come back to ontario.
the vast majority of investors do poorly in Canada, investors group, bank funds, brokers that no nothing.
traders that trade,
i am still waiting for people who have socked away money and now have millions, life generally gets in the way and it never gets to that stage.

#216 LivinLarge on 11.08.17 at 5:58 pm

Late last week I went off on one of my periodic rants about how RSPs weren’t as lucrative a retirement savings vehicle as, what seems like, everyone thinks they are.

I was aske here if I thought the great bulk of the run of the mill “advisors” were deluded. I said, not deluded just not fully informed and not required to be fully informed.

Mutual fund pushers sell funds to earn a living…full stop. A large proportion f them have little experience with the income tax system in Canada beyond doing their own taxes each ear.

I mention this because n the verynlate ’80s , possibly early ’90s, there was a fundamental change in the way our income tax liability is calculated. Before the change we had “deductions to gross income” to arrive at our individual taxable incomes. This meant that ecery dollar in deduction was a deduction at our highest marginal rate. Then the Feds, without any fanfare, switched deductions to “Non Reundable Tax Credits” and those credits were (and are) calculated at the lowest marginal tax rate. So in one year everything changed for the worse, lot worse.

When these changes came into effect, my refund ammount went into a negative I oweed $$) on essentially the same income.

So, my point from Friday is reinforced. Basic, [email protected] advisors are simply not qualified to comprehend the complex implications of the tax code as it relates to keeping the most money at the end of the day. As I have said repeatedly, it is never, ever, about how much you make, only about how much you actually keep in 30 or so years that should govern our decisions on where to allocate our saving for retirement.
Lthat late ’80s change was the single largest tax grab for any Federal government since the introduction of income tax in the first place and it fundamentally changed the “future value of savings” calculations.

Just as anothter point, since the 1999 tax year, the Basic Personal Ammount” has increased 52% but has your total cost of living gone up only 50% in thoese intervening 18 years? I ‘m betting your cost of living, if still working, has gone up a lot more. And that Basic Amount” is credited to you at the lowest marginal rate…oh lucky us.

#217 Courage and Poo on 11.08.17 at 6:20 pm

In other news: ‘$300m in cryptocurrency’ accidentally lost forever due to bug. Effectively, a user accidentally stole hundreds of wallets simultaneously, and then set them on fire in a panic while trying to give them back.

BAHAHAHAHAHAHAHAHA

#218 When Will They Raise Rates? on 11.09.17 at 2:59 am

#217 Courage and Poo on 11.08.17 at 6:20 pm

In other news: ‘$300m in cryptocurrency’ accidentally lost forever due to bug. Effectively, a user accidentally stole hundreds of wallets simultaneously, and then set them on fire in a panic while trying to give them back.

BAHAHAHAHAHAHAHAHA
————

^ Only idiots were affected. It’s called offline storage.

#219 RC on 11.09.17 at 12:46 pm

Garth, does Turner Investments have a minimum amount that clients must have before working with you?

Yes. One dog. All else is negotiable. (email me: [email protected]) — Garth

#220 Overheardyou on 11.09.17 at 1:45 pm

#213 Gravy Train on 11.08.17 at 5:01 pm
#206 Overheardyou on 11.08.17 at 3:03 pm
“Thank you to all the comment[ers] as well, your knowledge and experience is very helpful to a new investor.”

Now you just have to figure out which of us know what we’re talking about! :)

It’s all about the learning process, I guess. Of course, it’s the internet and I know never to take things at face value. ;) I’ve still got a long way to go but I am glad to have found this blog and group of experienced individuals