In praise of balance

If you told your diary (you have one, right?) that “2018 sucks,” it might agree. Interest rates have swollen. Financial markets have wobbled. Trade wars have erupted and NAFTA’s on life support. The real estate market’s weakening. Trump seriously dissed T2. And ten years after the 2008 crash, financial doomers abound. At least Adele  has stopped touring.

So what do we make of those who say we’re on the cusp of a recession, toppling markets, investors losses and a big rerun of the GFC? They point to inverting yields, over-valued equities, stocks and bonds no longer correlated, the impact of central bank rate hikes and the wee vibrating hairs on their necks as concrete proof.

Of course, they’ve been doing this for a few years. In that period of time (2016, 2017 and so far in 2018), a balanced and diversified portfolio of low-cost ETFs has rewarded an investor with a return of a little over 25%. If done the correct way (taking advantage of taxless TFSAs, RRSP and the lower levies on dividends and capital gains), that’s a sweet return. It beats the pants off real estate in Toronto, Vancouver, Victoria, Calgary or Montreal. It’s outsized when compared to inflation, wage gains or Max Bernier’s ego (almost).

This portfolio (40% safe stuff – a mix of bonds and preferreds plus 60% growth – global equity ETFs and REITs) gave almost 11% last year, 8.5% in 2016 and in the first eight months of this year, 4.06% (that’s an annualized 5.5% – not bad for a sucky year). This means that when you get a period of time in which things go sideways more than up, the gains of the past are retained. So the conclusion’s obvious. Stick with the plan. Ignore the short-term. Stop reading blogs. Shun books written by people who have degrees and no money.

But, I hear the rabble from under decks cry, what if we have a crash? Another 2008? A recession? Ain’t we due?

No, we’re not. Just because markets go high does not mean they will fall. The depth and length of the economic morass following the GFC dictated that the recovery period would be elongated. Asset values were coaxed higher by collapsing interest rates for almost eight years, but have since jumped based on macroeconomics. Global growth was 0%. Now its nearing 4%. Deflation has turned into inflation. US unemployment of 10% has collapsed to 4%. Corporate profits are historic, and rising. Technological advance is stunning, boosting productivity and cutting costs.

So despite Trump, trade wars, rising rates and Coke planning to add cannabis, the good outweighs the ugly. Why wouldn’t you remain invested, instead of trying to time a market that has momentum? Unless you need your money back to spend in a year or two, history shows fear is a bad advisor.

I see the eggheads at Goldman’s came to the same conclusion this week. The odds of a recession occurring within the next three years, GS says, are a mere 36% – which is actually lower than the historical average for any period of time.

Concluding their model paints “a benign picture” of what’s to come, Goldman Sachs says it “remains sanguine about the outlook,” for the years ahead. And why not? All Donald Trump needs to do to ignite big market gains is dial back his trade rhetoric, not nuke any countries with good social media and stay unimpeached. Remember this: markets go up because companies make money. So there has to be a fundamental reason for profits to reverse and erase in order for a correction to occur. Right now, there isn’t one. Certainly not central banks which are smoothly and gently goosing rates. Not the US government which has dropped taxes and costly regs. Not consumers, bristling with confidence and spending intentions.

Of course, not everything goes up at the same time in any portfolio. If you have the wrong kind of bonds or bond funds, they’ll be hurt as rates swell, for example. If a hard Brexit comes, the UK may dip your international ETF. There are always risks, and a mild recession in Canada is one of them. But in a volatile, changeable world, you collect serious points for being fully invested in a commonsense way, and tuning out the crap you are about to read in the comments section.

109 comments ↓

#1 Flamen Lupanares on 09.17.18 at 5:56 pm

The strategy el T2 is betting on is drag its NAFTA feet until mid-term elections will deprive the orangutan of its Rep majority. Then, supposedly, Trumpo wont be able to pass a new treaty past Congress. Stupid as it gets because the Trumpster will slap auto tariffs and more – that much he can do without Congress. All this to keep T2’s plutocrats above law and let the milk guys milk Canadians at leisure. Because, ensuring Canada’s food is not the same thing as a food cartel.

#2 Suede on 09.17.18 at 5:59 pm

Since 1980…

Whenever the S&P 500 makes a new 52 week high, the avg 1 year return is over 11%

That’s my quants tell me anyway. But they don’t drive Panameras.

#3 Hugh Jassel on 09.17.18 at 6:01 pm

I don’t understand how you can think that since we have seen expansion due to low interest rates, the elimination of the latter wont cause a subsequent contraction.

Equal and opposite reactions…..

In housing, yes. But not for financial assets. Higher rates (higher than now) have been factored in for a while. – Garth

#4 Jungle on 09.17.18 at 6:03 pm

Any estimates on returns for the next 1-3 years then, if no recession?

Will we see US take a breather, CAD and INT step up?

#5 Calgary Chris on 09.17.18 at 6:09 pm

Hey Garth, I’m a moister with my money in the robo-advisor Wealthsimple. Don’t worry, I plan to use a breathing advisor when I have the appropriate funds. In the meantime, why do you promote 60/40 portfolio vs 80/20 – I’m told that I’m young and shouldn’t worry about the dips?

If you live on a different planet than me, go ahead. But in my world there are enough systemic risks to justify greater balance. Being young means you have time to build money in a predictable fashion. It doesn’t mean you are a cowboy. – Garth

#6 Felix on 09.17.18 at 6:18 pm

This picture nicely illustrates IQ geometry. The turtle is on top because it is 33% more intelligent than the canine.

#7 Alessio on 09.17.18 at 6:29 pm

The past three year returns aren’t reality. I wouldn’t use these years return to support your narritive Garthy.

They happened. Seems real. – Garth

#8 mogulrider on 09.17.18 at 6:29 pm

The stock market was grown on share buybacks and CEO’s jacked their paychecks by driving up their stock.

Not really an issue however, share buybacks were done on the backs of corporate debt markets. This have caused corporate balance sheet debt to explode.

Earnings are the mothers milk of capitalism, hard to earn when your 4 billion dollar bonds now have to pay 5% versus 2%

But like all things – history will be the arbiter

Companies buying back stock with earnings increases shareholder value. If that includes you, how is this a bad thing? – Garth

#9 In Garth We Trust on 09.17.18 at 6:30 pm

“Stop reading blogs. Shun books written by people who have degrees and no money.”

Easy now Captain Garth. That should have read, “stop reading blogs by financial illiterates and doomsdayers…” Sheesh!
What they should be reading is a blog like this pathetic one written by the all knowing, all wise, bearded financial oracle who also writes great books and has degrees and money to back up his words!

#10 Shawn on 09.17.18 at 6:41 pm

Fasten your seat belts, big Q4 rally coming.

#11 Dolce Vita on 09.17.18 at 6:46 pm

On America I agree with you and GS.

Mild recession in Canada, perhaps overall. Some sectors will be hit harder than others. For example, as things are now AB still in the doldrums but BC and ON are chugging along just fine.

You say, 50% have no mortgage. That means the other 50% are in debt up to their eyeballs and they are the young.

The young are the big spenders in the economy not the wrinklies.

If RE prices do drop by a lot, which is what we are now at the start of, there will be a contingent of the amateur RE investors with underwater properties that will try and get out at any cost. Others will hang on but cut back spending on other purchases.

It will depend how big in size that group is. Gossip on this blog says everyone and their uncle that is young is an amateur RE investor. If so, it will be worse than a mild recession.

Then, there is Trump and tariffs. THAT is the wild card. I do not trust him one iota. He has been cavalier with China on tariffs and now he wants to tariff them even more. Mexico’s so called deal was his way or the highway on auto.

RE is on its way down but Trump worries me the most. He can turn mild to deep for everyone in Canada with a stroke of his pen.

#12 Adam on 09.17.18 at 6:52 pm

#8 mogulrider on 09.17.18 at 6:29 pm

Not really an issue however, share buybacks were done on the backs of corporate debt markets. This have caused corporate balance sheet debt to explode.

——–

Really, I thought share buybacks were done on the back of the collapse in corporate tax rates? Companies all of a sudden had much more after-tax cash and decided the best thing they could do with it was to buy back there shares at already inflated stock prices (why would this be a good investment?)

Where’s your evidence for corporate balance sheet debt exploding?

#13 Dolce Vita on 09.17.18 at 6:57 pm

THIS was good. Part response to:

#5 Calgary Chris

“It doesn’t mean you are a cowboy. – Garth”

For precision Garth, you should add “drugstore” in front of “cowboy”.

Plenty of them during Stampede.

#14 Capt. Serious on 09.17.18 at 7:05 pm

#10 Shawn on 09.17.18 at 6:41 pm
Fasten your seat belts, big Q4 rally coming.

I like this post.

#15 House logic? on 09.17.18 at 7:10 pm

Here is some different logic, perhaps the blog needs some humour or perhaps its makes sense?
If I bought a house 5 years ago for 450,000 and now it’s worth 700,000. I sell minus commissions taxes and so forth. Let’s say $650,000. Now I buy a new house for 600,000 and let’s say the market as forecasted by this blog drops 30 percent or 180,000. Or even 40 percent at $240,000. Did I really loss any money? Lost opportunity perhaps. Anyway my wife says so what if my house drops 40 percent then all houses are down 40 percent. We can still buy and sell without losses any real money it was a paper gain or loss.

#16 Axehead on 09.17.18 at 7:10 pm

What – No caustic dissention directed towards Kias in this blog? Maybe, Garth, you’re becoming … nice?

#17 S.Bby on 09.17.18 at 7:11 pm

Everybody I know has their fingers in the real estate pie.

#18 Nonplused on 09.17.18 at 7:12 pm

They’ve been digging for 2 years to find some sort of dirt on Trump to impeach him without any success. Maybe we should start calling him “Teflon Don”. Now they are trying to work the “unfit for office” angle. The whole lot of them are “unfit for office”. Is there a way to impeach congress? The whole of it I mean. Just send them all packing.

But I guess this is what politics has descended to. If you don’t like the results of an election, overturn the election. Don’t wait until 2020 and then vote him out, impeach him now! But my guess is that if there is an impeachable offense they’d have found it by now. Teflon Don has been in the public eye his whole life. If they can find a woman who vaguely recalls being assaulted at a party 35 years ago by someone who might have been the current Supreme court nominee, they should be able to find something on Teflon Don by now.

Politics has always involved smear. But it’s getting out of hand. Hillary is still at it, lately she called all the states that did not vote for her (so, most of them) “backwards”. That’ll help her odds in 2020 no doubt! Are these people incapable of thinking before they speak?

We’ve definitely lost the ability to conduct reasoned discourse. Take the Serena Williams thing. She was losing that match fair and square before she threw her tantrum, but somehow it became a “women’s rights” issue. What right? The right to break your racket and abuse the ref? Clear violations of the rules. The penalties were clearly a result of her behavior and it’s all on video. It had nothing to do with the fact she is a woman. Osaka is a woman too but she didn’t smash her racket and abuse the ref.

The “Russian” thing is another great case in point that I have been following closely. If the mainstream media is to be believed Putin has an agent in every location in the world and has compromised every system and somehow managed to affect every major event. Of course no evidence is ever given.

We now live in an evidence free world. Flat earth is as good a theory as a globe. Science is a lie. Accusations are facts unless you can disprove them, and even then they are still facts. It’s propaganda 24/7.

#19 I'M Sure China's Stock Market Collapse is Only a Problem Over In the Other Part of the World on 09.17.18 at 7:19 pm

This is a big milestone:

Below the low of its last collapse on January 28, 2016 (2,655.66)
Down 25.5% from its recent peak on January 24, 2018, (3,559.47)
Down 49% from its bubble peak on June 12, 2015 (5,166)
Down 56% from its bubble peak on October 16, 2007 (6,092)
Below where it had been for the first time on December 29, 2006 (2,675), nearly 12 years ago. That’s quite an accomplishment.

But what makes Chinese stocks interesting is not the collapse of one bubble and then the collapse of the subsequent recovery, but the longer view that is now taking on Japanese proportions.

By comparison, the US stock market is now in its third bubble since the 1990s – and this one is more magnificent than the prior ones, and it’s not just stocks but most other asset classes, and there is the hope that this Everything Bubble will go on forever, just like there was that kind of hope in China in 2015 and 2007, and in Japan in 1989.

In China, auto sales, which had been super-hot, suddenly plunged in July and August. What could be the reason?

#20 Karl on 09.17.18 at 7:20 pm

Adele? Why hit Adele?!

She has a tremendous voice. If you like the music or not, the vocal talent cannot be denied.

The rest of the post is fine.

#21 Nova Johnny on 09.17.18 at 7:24 pm

As AIG collapsed in 08, Goldman was next. Why listen to a company that only exists because of a taxpayer funded bailout. US debt is up 114% since then and GDP 38%. Unprecedented Easy money has driven stock gains, and corporate share buy backs now exceed capital investment. Nobody knows when or how this will end … but end it will!

#22 YVR cut off at the legs on 09.17.18 at 7:31 pm

For all the morons out there not realizing the price crash is happening now all over BC.

50 x 122 lot, Arbutus in Vancouver just crystallized a $510,000 loss.

This is below the 2015 price point.

22% below last years BS (I mean BC) Assessment.

The BS ( I mean BC) Assessment from 2016 to 2017 on this one dropped 300,000 or 9%.

In total this property is has had the BC Assessment and recent sale drop its value by 31% in just two years.

That is a $974,600 loss in value since 2015 (as peak price on this showed in 2016 before violently reversing).

These owners are lucky to only have lost $510,000.

There are going to be far greater losses in the coming 2-years. Those hanging on will never recover because they are in serious denial, which is all Vancouverites are left with now.

On another note, Canadian household debt service ratio reached 14.2% in the second quarter, the highest level since the end of 2008.

#23 Let's Talk Calgary RE on 09.17.18 at 7:34 pm

Ain’t pretty.

In the month of June Calgary had a record number of homes available for sale EVER. Sales down 13% over last year. And yet values barely budged down 1.5%.

Essentially it has gone no-bid.

My friend has been waiting for a rebound to sell their nice 3-car garage home since 2015. They have lost 285k so far in value and don’t want to take the hit by selling. It is will fetch for 635k right now in Calgary.

#24 saskatoon on 09.17.18 at 7:40 pm

you mean the same goldman sachs that was charged (5 billy) with “serious misconduct” for “falsely assuring investors that securities it sold were backed by sound mortgages” just before the gfc?

#25 Thank you Trump on 09.17.18 at 7:54 pm

Another $200 billion tariffs to china

Markets sea of red . Futures red

qqq will threaten to lose its 50sma

Emerging markets hammered

A traders dream

#26 2018 on 09.17.18 at 7:57 pm

Will barely beat inflation .

Sorry Garth

#27 marcus on 09.17.18 at 7:57 pm

A French Frigate just launched an attack against Russian forces in Syria. A Russian AWAC plane with 14 airmen has been shot down. Russia has used it’s S-400 air defense system to shoot down cruise missiles launched from American and Israeli planes and ships/submarines. Invest accordingly.

#28 luc on 09.17.18 at 8:02 pm

read… https://www.nytimes.com/interactive/2018/09/12/business/the-next-recession-financial-crisis.html

#29 OttawaMike on 09.17.18 at 8:02 pm

If it’s noot Scotish it Greaterfool comment section!

https://youtu.be/bzG_J7RCGS0

#30 Re., Shawn on 09.17.18 at 8:03 pm

So you hope

Here’s hoping China stings back . We’d see the S&p lose the 50 SMA easy , may not to it without it. The qqq’s lose it tomorrow .

Fight back China.

#31 crossbordershopper on 09.17.18 at 8:03 pm

i dont know about you but i am american i expect more than 6.5% return a year.
i mean bce stock alone yields 5.8%. the truth is this money management is about collecting assets from people hard earned money and charging them a fee, relatively quite a large fee to keep their money warm for them. i remember back in 70 ‘s of stockbrokers they used to trade stocks and stuff they dont now.
canada is a socialist country and so is the return of its stock market. just enough to get you from being hungry.
life is short, you either try to make a lot its part of our responsibility to max our potential. really cant do it here.

#32 ANON on 09.17.18 at 8:05 pm

…and the photo to go with the blog post. :)

#33 CEW9 on 09.17.18 at 8:08 pm

No one here has mentioned Bill 69.

It has the potential to tank investment in Canada for decades to come.

#34 Out Of Work CEO, Will Travel on 09.17.18 at 8:21 pm

My offspring broke up with her common law partner and now the only problem to solve is custody of the pooch…should I tell my offspring to just give the mut to the ex or encourage “shared custody?” This blog is professional so I know I am barking up the right tree.
The one year old pup needs “doggie college” as it is like a hurricane on a leash and the ex is an out-of-town musician with no time.

#35 Renting in Vic on 09.17.18 at 8:21 pm

Of course, the worst recessions happen when everybody says they aren’t coming…

Prove it. – Garth

#36 For those about to flop... on 09.17.18 at 8:23 pm

Flop’s update for the month.

I will give you a quick update on some developments in the last month or so.

Detached houses in East Vancouver have started selling below a million dollars again.

This is a big deal because during the epic spring market of 2016 the same sort of places were asking and getting 1.2-1.3′,some extreme cases even more.

Hardly dream houses but the bottom rung is now below a million for sure.Mainly land values, obviously.

I’ll give you a couple of examples.

First one…

2171 e 36th ave ,Vancouver

Paid 1.03 June 2016

Asking 1.1

Assessment 1.2

https://www.zolo.ca/vancouver-real-estate/2171-east-36th-avenue

Recently sold for 975k, and so even though they bought one of the cheapest options at the peak they still lost money.

Second one…

6174 Bruce st,Vancouver.

Originally asking 1.25

Assessment 1.18

Sold 975k for May 2018

https://www.zolo.ca/vancouver-real-estate/6174-bruce-street

As I wrote on my blog 5009 Somerville st was a similar type structure and someone paid 1.4 in the summer of 2016 and then bulldozed it and built a new house.

20-30% less off the bottom end of the market in 2 years.

$$$$$$$$$$$$$$$$$$$$

Biggest loss recently?

3595 Puget Dr,Vancouver.

Paid 3.5 November 2016

Asking at the time of sale believed to be 2.75

Multiple sources.

Rumoured sale price 2.6m

So 900k loss,plus expenses,waiting for confirmation.

What else is going on?

Do you remember the tale of the elderly neighbour ,they struggled to sell and then died?

Even though the flippers bought one of the cheapest options in 2017 for 1.2m ,they only moved in for a few months and then they moved out,and all the neighbors thought they had gotten out of trouble.

It turns out after trying two realtors and they realized how quickly the market was deteriorating,the best option was to let someone sign a one year lease to rent the place until the dust settles apparently.

If things continue they will struggle to get 1 million next spring .

Also another neighbour tried to flip a relatively cheap detached as well,and then when they realized they weren’t going to make any money decided to double down and remove it from the market and build a new one.

The moral of the story,people are being forced into situations they weren’t planning on to stave off taking a loss….

M44BC

#37 alsak on 09.17.18 at 8:26 pm

But in a volatile, changeable world, you collect serious points for being fully invested in a commonsense way, and tuning out the crap you are about to read in the comments section

yes but commonsense is something common people don’t have.

#38 FOUR FINGERS WATSON on 09.17.18 at 8:27 pm

#27 marcus on 09.17.18 at 7:57 pm
A French Frigate just launched an attack against Russian forces in Syria. A Russian AWAC plane with 14 airmen has been shot down. Russia has used it’s S-400 air defense system to shoot down cruise missiles launched from American and Israeli planes and ships/submarines. Invest accordingly.
…………………………
Maybe not.
(CNN)A Russian maritime patrol aircraft with multiple personnel on board was inadvertently shot down by Syrian regime anti-aircraft artillery on Monday after the Syrians came under attack by Israeli missiles, according to a US official with knowledge of the incident.
The US official said the regime was actually trying to stop a barrage of Israeli missiles. A second official confirmed that Israel was responsible for the missile strikes on the Syrian regime.

#39 Tom from Mississauga on 09.17.18 at 8:34 pm

Bank of Canada Household Credit overview says consumer credit growth is still strong but mortgage credit growth is about to go negative. It must be getting hard to qualify for mortgage refinancing. This is going tip over retail sales 2nd half of this year.

#40 Mike on 09.17.18 at 8:45 pm

Hey Garth,

I topped up my TFSA and invested the whole thing in options. I’m up almost 220% since June. Any suggestions?

Take the profits. Thank God for having been spared. Promise her you won’t do it again. – Garth

#41 AGuyInVancouver on 09.17.18 at 8:48 pm

#17 S.Bby on 09.17.18 at 7:11 pm
Everybody I know has their fingers in the real estate pie.
_ _ _
They should watch that move “The Help”. Then they’d know what they’ve really got their fingers into.

#42 Smoking Man on 09.17.18 at 8:51 pm

Great day for anti-globalists. Bad day for Soros.

Trump to declassify all FBI and DOJ witch hunt docs.

T2 loses the first of many to follow MPs

The left wing activist teacher going after a supreme court judge will get her day to testify and will be shown to be what she is.

#43 Linda on 09.17.18 at 8:53 pm

How long does it take to impeach a POTUS? The Donald is nearly halfway through his first term & some are predicting he will win the next election to boot. So I’m not holding my breath here.

Maybe Canada’s economy will tank given the high levels of household debt, NAFTA concerns etc. For now however I side with the prediction of modest growth for Canada. Those with balanced portfolios should not expect lumps of coal in the year end stocking:)

#44 fishman on 09.17.18 at 9:00 pm

Marcus is right, Looks like a Russian AWAC plane was shot down. You’ll know if the Ruskies & Yanks start going at one another if your GPS on the phone goes out>Either the Ruskies take out the satellites or the Yanks de-civilianize their signal. I think I’d invest in a nice warm Linus blanket & a soother.

#45 Shawn Allen on 09.17.18 at 9:02 pm

Impact of New China tariffs on Interest rates?

Trump just imposed new 10% tariffs on @200 billion of U.S. imports, set to rise to 25% January 1. Big ratheting up of trade war.

This is inflationary, therefore could accelerate rate hikes?

But it will also cool the U.S. economy somewhat as prices rise and consumer spending declines? Therefore less need to for interest rate hike?

Well, I don’t know the future but then neither does anyone else.

Reaction from China should be interesting. Trump craves a real war to enhance his popularity. He will settle for a trade war. Damn the consequences.

#46 Tony on 09.17.18 at 9:07 pm

Martin Armstrong predicts or states one or the other this Wednesday will be a crossroads for the U.S. stock market and for the price of gold. According to me right now the angle to use to invest is still “laziness in America” and betting America will turn communist like China. If you can see these laws enacted before they become law you can reap a fortune. These are the two things to look for when investing long or short in U.S. stocks.

#47 SimplyPut7 on 09.17.18 at 9:10 pm

Matthew Boswell, Interim Commissioner of Competition, issued the following statement today regarding the Toronto Real Estate Board’s (TREB) compliance with the Competition Tribunal’s June 2016 order addressing their anti-competitive conduct:

“Following the Supreme Court’s recent decision not to hear TREB’s appeal, the Bureau understands that TREB will implement the Competition Tribunal’s Order on September 18, 2018. The Order requires TREB to end its anti-competitive practices, thereby giving home buyers and sellers in Canada’s largest real estate market access to a greater range of innovative service options, delivered through greater competition among TREB’s members.

We will be closely watching to ensure that the letter and spirit of the Tribunal’s order is adhered to, so that consumers can finally benefit from the competition and innovation they have been waiting for.”

https://www.canada.ca/en/competition-bureau/news/2018/09/statement-from-the-interim-commissioner-of-competition-regarding-the-toronto-real-estate-board.html

—————————–

So is it really over tomorrow?

What could TREB try next?

#48 Smith on 09.17.18 at 9:13 pm

The American indices are the way to go. Even the nasdaq with the tech bubble collapse and the 2008 financial crisis has returned over 10% from 1991 to 2018. Given a long enough time horizon and decent starting capital you will end up well off.

If your parents put $10000 into an index fund on the day you were born and did nothing you would have almost 5 million by the time you are 65.

Even factoring inflation that’s not bad money.

#49 Permiller on 09.17.18 at 9:14 pm

Not a single instance of word “debt” in today’s post about BALANCE?

#50 TRUMP on 09.17.18 at 9:15 pm

When too SELL????

Thats the real question.

Because 1 simple beautiful morning you may wake up and all the gains you made and all the right moves you made over10 years can be erased.

Thats it done. Bragging rights is over.

#51 The Fat Lady on 09.17.18 at 9:17 pm

BALANCE WON’T MEAN A DAMN.

WHEN THE MARKET CRASHES.

Between 2008-10, the worst crash in a century, a balanced portfolio averaged a 5% annual return. So, yes, it means a lot. – Garth

#52 Remembrancer on 09.17.18 at 9:22 pm

#15 House logic? on 09.17.18 at 7:10 pm

Like any loss, its only real if you lock it in under duress or fear / get called on it…

#53 Remembrancer on 09.17.18 at 9:25 pm

#6 Felix on 09.17.18 at 6:18 pm
This picture nicely illustrates IQ geometry. The turtle is on top because it is 33% more intelligent than the canine.
——————————————————————-

Pretty sure that turtle isn’t moving on its own. It does nicely illustrate that no matter much you try, its hard to look good in a turtle hat, though.

#54 Nova Johnny on 09.17.18 at 9:26 pm

Financial crisis do not happen because all have loaded up on high risk assets….they happen because everyone has accumulated assets that they believe to be low risk…….

#55 AnotherMoister on 09.17.18 at 10:03 pm

“If you have the wrong kind of bonds or bond funds, they’ll be hurt as rates swell, for example”
What would be the right kind of bond ETF in the rising rate environment?
Would an ETF following DEX bond universe index be a good choice?

#56 D.D. Corkum on 09.17.18 at 10:06 pm

#40 Mike on 09.17.18 at 8:45 pm

Hey Garth,

I topped up my TFSA and invested the whole thing in options. I’m up almost 220% since June. Any suggestions?

—–

1) I don’t believe you. My lie detector is going off.

2) In case I’m wrong, congratulations for inviting CRA scrutiny by adopting an all-option portfolio which suggests you are conducting “business” and therefore liable to report everything as “income” (not even capital gain) despite being in a TFSA.

#57 Ponzius Pilatus on 09.17.18 at 10:22 pm

If Garth had two boys playing hockey from the age of four to 18 and beyond if talented.
He’d know that all the money goes into hockey until parents are about 55.
No money left for saving for retirement.
Most of them have HELOC’c on their houses.
that’s the Canadian working class reality.
I see that every day at the rink.
They don’t mind spending all that money.
Because their kid wll be the next Gretzky

#58 Bdwy sktn on 09.17.18 at 10:30 pm

We’re taking over. It’s gonna be quite the show.

***

Not happening, unless you vote PPC. Millenials don’t even vote.

………….
Ahem, cough, gen x here. It will a long time before mills outnumber boomers plus genx and we are certainly not voting for your communist idiocy.

Quebec voters are very good at getting themselves heard. PPC sweeps queBEC and the ROC conservatives will hold their noses and vote scheer.

Mark my words. Sox is out.

#59 Debbie Downer on 09.17.18 at 11:05 pm

@ #18 & #43: Remind me again what terrible things Bill Clinton did to get impeached and then compare that to 45… Can someone make a list or meme and dumb it down as much as possible because, well, his followers.. ;)

#60 MF on 09.17.18 at 11:09 pm

8 Bdwy sktn on 09.17.18 at 10:30 pm

Nope.

T2 just got re elected.

Thank Bernier for splitting the opposition.

Lol at Gen x. Your entire generation benefitted off of government policy. You and your dumb RE investment especially.

You are more “communist” than anyone.

MF

#61 CEW9 on 09.17.18 at 11:45 pm

8 Bdwy sktn on 09.17.18 at 10:30 pm

Nope.

T2 just got re elected.

Thank Bernier for splitting the opposition.

* * * * * *

I dunno… if the Conservative can occupy the middle (centrist) ground, they have a good chance of taking more ‘blue’ Liberals than they lose far-right to the PPC.

Also, if the Libertarian party merges with PPC, watch out – I know a lot of “Left” wing, and I mean far-left wing, younger friends who like the Libertarians. So that could actually be another drain on the left.

People forget that along with the horizontal left-right axis there is the vertical authoritarian/libertarian axis as well. Breaks the political spectrum into 4 quadrants.
Many people think authoritarianism has gotten out of hand, and if PPC capitalizes on that they might sway some left of centre votes. We alsways need a bit of authoritarianism, like we need a bit of taxes for public defense and our health system, but how much is enough? How much is too much?

Either way it will be an interesting election I think. Burnaby byelection, then Alberta, then the nation. Watch the pendulum swing.

#62 Mike on 09.18.18 at 12:11 am

#56 – DD Corkum

My USD TFSA represents about 11% of my total investments. Does the TFSA really want to expose themselves to the possibility that if I’m required to pay “business tax” that I, and every other Canadian, would also be allowed to declare losses in TFSA’s?

And yes, it really is true. I can’t post screen shots here, but if I could you would see for yourself.

#63 Smoking Man on 09.18.18 at 12:51 am

Responding to a long time blog dog. Who is off of the Trump train.

Old man, you have never worked a blue collar job in you’re life have you. I did.

I don’t think you understand the evilness of globalism. China is not a friend. They are ruthless competitors influencing our kids that think competition is evil. It’s not.²

If you wanted to take over the world. A one world govt with ultimate power and no elections this is how you do it., first disarmed citizens.

Get control of the school system and MSM, destroy western culture.

Make men and woman hate each other so they don’t breed. Crush them economically so you can own there loyalty with a few bits of gaurateed income dollars.

Bring in an army of welfare recipients who will always vote for a hand out, never asimulate and always vote you in..

I’m a deplorable alien, drunk and proud.

#64 Myra on 09.18.18 at 3:25 am

Stats for Greater Vancouver from realtor Paul Boenisch

Sept 17 New 360 Sold 93 TI: 13,339

Sept 14 New 143 Sold 85 TI: 13,239
Sept 13 New 225 Sold 58 TI: 13,240
Sept 12 New 268 Sold 90 TI: 13,147
Sept 11 New 325 Sold 77 TI: 13,057
Sept 10 New 487 Sold 87 TI: 12,916

Sept 7 New 197 Sold 87 TI: 12,681
Sept 5-6 New 609 Sold 195 TI: 12,653
Sept 4 New 498 Sold 53 TI: 12,439

Inventory at the end of August was 12,510

#65 Nonplused on 09.18.18 at 3:35 am

#27 marcus

Let’s follow the story but me thinks there is no way France would actually shoot at Russian assets unless it was an accident. It would take Russia about 15 minutes to wipe France off the map. The only thing they have in their defense is that the US might respond, but why respond to save a country that no longer exists?

France is just trying to pretend they still matter, same as Britain. They don’t and everybody knows it. Canada gave up the game long ago and that was wise.

There are only 3 countries that matter right now in the “Great Game”, and those are the US, Russia, and China. Everybody else is cannon fodder.

#66 Oft deleted much maligned stock picker on 09.18.18 at 4:58 am

There was a pivot in markets when it was at long last for sure that Obama was getting gone…and the gridlock of his losing 60 seats in Congress during his first mid term was the catalyst. I would wager that if Trump loses a few seats we will once again have a fear free market condition where a steady assurance of transition and gridlock is exactly what the markets likes….surety. Yes….there’s going to lots of noise , but who cares…as long as political camps are balanced. I still say Canada in recession Q1…..but bank stocks and others reporting in USD will blast off and take the House rich cash poor into the closest House of Pain. 2019/20 , purely on fundamentals, could be a rock star years for Financials, Telecom and EM. Canadian resources will have been shut down by C-69 and while markets jump, so will unemployment. There will be two camps fighting in Canada….civil service unions/ special interest ethnics….now at 39% of the vote….and everybody else. If Junior wins again in seats…..there’ll be an exodus of capital never before seen . But, as my dear friend and mentor, God bless his gin soaked soul, once told me while we watched the strippers at the xmas Le Arch Hotel after the market had closed. ” It don’t matter if they pay me in rubles or dollars….I’m still getting paid”.

And PS….for all the potsters out there….the shorts are growing faster than tulips in the spring.

#67 Ian on 09.18.18 at 5:21 am

#51 Fat Lady

I agree fully, balance will not matter, regardless of whether it’s 80/20 or 60/40 or any other ratio between stocks and bonds, because both are going to be murdered. Stocks are more expensive than before the Great Depression, and ten year yields at 3% when the US is about to pass 22t in debt is just laughable.

There is a big difference between this bubble and the housing 08 and stock market 00 ones: in those two, the Fed had about 6% in the Fed Funds rate to take to zero and simply reflate the bubble.

Now they have 1.75%. Which means, this is it. No more reflating. No more road to kick the can down.

Of course all this balanced approach has worked for the past years. What I’m saying is it won’t going forward, so you have been warned.

Textbook comments on why most investors fail. Emotion. – Garth

#68 mogulrider on 09.18.18 at 6:04 am

Adam here is an example
Covenant – lite is relative of the corporate debt markets.
There are many more examples,
use your fingers
type corporate debt in google and all will be revealed

#69 Honey Dripper on 09.18.18 at 6:26 am

Free PF advice getting panned. Why? For those who don’t want to DIY give Garth a call and do this. What’s wrong with you and your hollow critique? Think long term on all things life!

#70 Karl on 09.18.18 at 6:30 am

#15 House logic? on 09.17.18 at 7:10 pm
Here is some different logic, perhaps the blog needs some humour or perhaps its makes sense?
If I bought a house 5 years ago for 450,000 and now it’s worth 700,000. I sell minus commissions taxes and so forth. Let’s say $650,000. Now I buy a new house for 600,000 and let’s say the market as forecasted by this blog drops 30 percent or 180,000. Or even 40 percent at $240,000. Did I really loss any money? Lost opportunity perhaps. Anyway my wife says so what if my house drops 40 percent then all houses are down 40 percent. We can still buy and sell without losses any real money it was a paper gain or loss.

————————————————————-

I’ve been begging Garth for a post on “move up” buying, it’s pros/cons and the ideal financial situation required. Maybe one fine day…

#71 Karl on 09.18.18 at 6:32 am

Textbook comments on why most investors fail. Emotion. – Garth

——————————-

To me this has always seemed to be such an easy concept to follow. I wonder why so many people fail at it? I guess it must be harder to do during a big downturn than I realize as I have only known good times in my investing career.

#72 SimplyPut7 on 09.18.18 at 7:11 am

#40 Mike on 09.17.18 at 8:45 pm
#56 D.D. Corkum on 09.17.18 at 10:06 pm
#62 Mike on 09.18.18 at 12:11 am

I believe you.

I met a lot of people investing in risky securities they would have never looked at based on their fundamentals if it weren’t for the fact that these securities were going up in value by double digits.

Just remember hindsight is 20/20.

#73 FOUR FINGERS WATSON on 09.18.18 at 7:47 am

#65 Nonplused on 09.18.18 at 3:35 am
#27 marcus

Let’s follow the story but me thinks there is no way France would actually shoot at Russian assets unless it was an accident. It would take Russia about 15 minutes to wipe France off the map. The only thing they have in their defense is that the US might respond, but why respond to save a country that no longer exists?

France is just trying to pretend they still matter, same as Britain. They don’t and everybody knows it. Canada gave up the game long ago and that was wise.
………………………………………

France has nuclear weapons too, including deployed ballistic missile submarines. France could wipe Russia off the map too, and would not need anyone’s help to do it.

#74 Morally Hedged on 09.18.18 at 8:04 am

“Remember this: markets go up because companies make money. So there has to be a fundamental reason for profits to reverse and erase in order for a correction to occur. Right now, there isn’t one. Certainly not central banks which are smoothly and gently goosing rates.” Mr. Turner™

Foie gras, (French: “fat liver”) a delicacy of French cuisine, the liver of a goose or duck that has been fattened by a process of force-feeding.

Simply Magistral!

#75 Steve on 09.18.18 at 8:23 am

Parents spend a lot on kids sports, hockey is expensive due to fact that rinks are expensive.
There are many life lessons to be learnt playing team sports. Hockey is a school of life.
Most intelligent people realize early on that the probility that your kid will earn money at any sport is very very low. It beats playing computer games or hanging out in a mall.

#76 jess on 09.18.18 at 8:27 am

Libertarian party perhaps bernier will get a little help from his friends?

read about what i360
koch and the freedom foundation and why australia?
Following the 2008 election, it was merged with the Koch-funded nonprofit Themis, a right-wing voter database project
https://www.sourcewatch.org/index.php/I360

Cambridge Analytica Ain’t Nuthin: Look Out For i360 and DataTrust
https://canadiandimension.com/articles/view/cambridge-analytica-aint-nuthin-look-out-for-i360-and-datatrust

#77 dharma bum on 09.18.18 at 9:02 am

#18 Nonplused

Accusations are facts unless you can disprove them, and even then they are still facts. It’s propaganda 24/7.
——————————————————————–

It’s as if the U.S. is regressing into fascism.

“All propaganda has to be popular and has to adapt its spiritual level to the perception of the least intelligent of those towards whom it intends to direct itself.”

~ Adolf Hitler, Mein Kampf (“My Struggle”), Vol. I

#78 IHCTD9 on 09.18.18 at 9:10 am

#65 Nonplused on 09.18.18 at 3:35 am

There are only 3 countries that matter right now in the “Great Game”, and those are the US, Russia, and China. Everybody else is cannon fodder.
_______

When looking at militarily powerful nations, you have to ask if any country in the world (strong or not) would ever launch a nuke in anger.

If the answer is yes, then any country who has reliable nukes on ICBM’s is just as powerful as any other.

If the answer is no – then there is only one country in the game – the USA.

Russia and China have influence, but neither could stand against the USA in a bout of conventional warfare, even combined. It’s either launch the nukes, capitulate; or hand over the keys.

All the sabre rattling in the world by countries other than the USA can only be interpreted as they might launch a nuke, or they’re just bluffing – because they can’t go down that road and win any other way.

In fact – there is no way opponents of the USA could win at all. If hostilities broke out, it’s they die; or we all die. Lose/Lose.

#79 M. Towne on 09.18.18 at 9:10 am

“This portfolio (40% safe stuff – a mix of bonds and preferreds plus 60% growth – global equity ETFs and REITs) gave almost 11% last year, 8.5% in 2016 and in the first eight months of this year, 4.06% (that’s an annualized 5.5% – not bad for a sucky year).”

Garth, I have a portfolio that’s set up as you’ve repeatedly described, a self-directed investment account rebalanced once or twice a year, and otherwise leave it alone. (Well, the non-registered part is more complicated, because I put money into it every two weeks, having maxed out my TFSA. Bonds are in my RRSP.)

But I’m looking at just my TFSA, which contains all my international, US and Canadian equities and nothing else. They’re all in ETFs (they happen to be from BMO.) Plain vanilla stuff that tracks S&P 500, TSX 60, Europe and emerging markets, plus some specifically China and India.

And my year to date is 2.36%. None of their MERs seems out of whack (except the China one which is about .7%, but it’s a small part of the whole mix.) I can see how I might actually be getting 5.5%/year if my preferreds and bonds were getting well above that. But it’s the equities that are supposed to be doing the heavy lifting now.

All that being the case, where the hell is the money going? I don’t see deductions, subtractions or other things that look like fees or anything like that on my transaction history.

#80 Jim Brooks on 09.18.18 at 9:15 am

#57 Ponzius Pilate

“They don’t mind spending all that money. Because their kid will be the next Gretzky.”

What delusion and mathematically challenged folks…. Do they realize the odds of making in to the NHL? One in millions make it. There are millions of kids playing hockey around the world and less than a 1000 playing in the NHL. A former colleague of mine had his son drafted 49 in the 2011 NHL draft. Lasted a couple of seasons in the NHL and bounced back and forth with the AHL. He has now played in the KHL, Swedish and Finnish leagues. Would have been on the Canadian Junior team except an injury stopped him. Give your heads a shake hockey parents. Unless your child is putting up Wayne Gretzky like numbers when he was a junior you are living in hockey la-la land…

#81 professor pineapple on 09.18.18 at 9:55 am

I beg to differ that stocks have outperformed RE.

1 million down on a 5 million home that has gone up even as little as 10% will blow away 1 million on your basket of whatever that has gone up 25%

And you have $4.5 million in variable-rate debt. Funny guy. – Garth

#82 Ace Goodheart on 09.18.18 at 10:07 am

Biggest problem western civilization has and will have is its massive pile of government debt and government backed consumer debt.

All this debt is backed by the US military which maintains control of the global financial and shipping industries by force.

Trump does not understand this at all.

He will make friends with US enemies and topple this delicate balance of power completely by accident.

If he does that all bets are off. Western currencies are worthless and our complex military backed industrial and banking systems are just a house of cards.

#83 I Had Faith In U on 09.18.18 at 10:08 am

#43 Linda on 09.17.18 at 8:53 pm

How long does it take to impeach a POTUS?

It takes a while to come up with dirt on someone who doesn’t play in the mud. They are still trying find a scheme they can fictionalize that will result in a means to that end, regardless of the cost.

Until then enjoy the benefits of a God fearing POTUS who is for the people and not a puppet for the global elite left

#84 Smoking Man on 09.18.18 at 10:29 am

A long time friend asked me why I strongly support trump.

My answer was simple. When MSM starts praising him, that will be my Q to turn against him.

My logic is this. MSM never talked about building 7 in 17 years . There for they are dirty to the core. There exist a nasty deep state un elected power force with zero morals running the show behind the curtains .

The second MSM endorces Trump that’s when I’m off the Trump Train.

#85 Ubul on 09.18.18 at 10:31 am

Between 2008-10, the worst crash in a century, a balanced portfolio averaged a 5% annual return.

in the first eight months of this year, 4.06% that’s an annualized 5.5%

—-

What makes this year so bad so far? Why are you optimist, that the rest of the year will boost the performance of the first 8 months to annualized 5.5%?

#86 Dissident on 09.18.18 at 10:41 am

Lol, Garth is on a roll in the comments section today.

Good post.

#87 KLNR on 09.18.18 at 10:42 am

@#81 I Had Faith In U on 09.18.18 at 10:08 am
#43 Linda on 09.17.18 at 8:53 pm

How long does it take to impeach a POTUS?

It takes a while to come up with dirt on someone who doesn’t play in the mud. They are still trying find a scheme they can fictionalize that will result in a means to that end, regardless of the cost.

Until then enjoy the benefits of a God fearing POTUS who is for the people and not a puppet for the global elite left
______________________

satire?

#88 SimplyPut7 on 09.18.18 at 10:48 am

TREB issued a statement on Tuesday saying it would be sending additional property listing information to agents beginning at noon to use on their password-protected websites.

This information will include sold, withdrawn, expired, suspended or terminated listing information, TREB said. It reminded agents to comply with privacy laws.

https://www.cbc.ca/news/business/treb-house-sold-data-1.4827236

When do we get to see the MLS occupancy of Vacant or New (Never Occupied)? Also bringing back the words ‘foreclosure’, ‘power of sale’ or ‘court ordered sale’ to the description of the home, would also be nice.

#89 Gravy Train on 09.18.18 at 10:50 am

Garth, will you, Doug or Ryan soon be doing a blog post on emerging markets? It looks like a buy (e.g., low P/E ratios), but with tightening monetary policies of central banks worldwide and the ongoing U.S.-China trade war—started by that nutjob in the White House—who knows?

#90 viorelli on 09.18.18 at 10:50 am

#57, Ponzius Pilatus

“if Garth had two boys playing hockey from the age of four to 18 and beyond if talented.
He’d know that all the money goes into hockey until parents are about 55.
No money left for saving for retirement.
Most of them have HELOC’c on their houses.
that’s the Canadian working class reality.
I see that every day at the rink.
They don’t mind spending all that money.
Because their kid will be the next Gretzky”

My both kids played hockey, but mind you they just played house and I remember getting up for early morning practices and games. Teaches them discipline and commitment, also prevents them from stupid habits. Oldest played in the former USSR up until atom 2, was excellent hockey and school and was completely free, parents only had to pay for skates. When we moved to Vancouver in late 80’s he was the top player on his pewee team for scoring and defence. Coaches asked him to try out every year, but I explained to him the odds of NHL and he played with friends on house teams where they had tons of fun. Instead of rep hockey fees we provided decent education (child tutors), he went to public school, free rent while attending post secondary, and in house financial education. Today even here in BPOE he is way ahead of most of his peers. Hockey can be a great sport, just don’t spend like a drunken sailor, use your money for tutoring math, chess, finances, and literature. I wish he read Garth’s blog in his teens!

#91 -=jwk=- on 09.18.18 at 11:05 am

@#18
They’ve been digging for 2 years to find some sort of dirt on Trump to impeach him without any success.

There is no investigation looking to impeach Trump. Although Trump supporters state that so often I wonder if they secretly want it to happen?

There is an investigation into foreign interference in the 2016 election. This is an extremely serious issue, and is being treated as such.

This investigation so far has half of Trump’s campaign team is in jail, along with his lawyer. They’ve got multiple confessions, multiple guilty pleas and have indicted over 20 people. Facebook, twitter have both confessed to allowing massive (~ $400,000,000) ad campaigns by foreign buyers for the 2016 election,and have had install technology to look for and seek out these type of fake ads going forward.

Let’s compare that ‘no success’ to the 4 years and nearly 100M spent on Hilary, shall we?

#92 IHCTD9 on 09.18.18 at 11:10 am

#15 House logic? on 09.17.18 at 7:10 pm
Here is some different logic, perhaps the blog needs some humour or perhaps its makes sense?
If I bought a house 5 years ago for 450,000 and now it’s worth 700,000. I sell minus commissions taxes and so forth. Let’s say $650,000. Now I buy a new house for 600,000 and let’s say the market as forecasted by this blog drops 30 percent or 180,000. Or even 40 percent at $240,000. Did I really loss any money? Lost opportunity perhaps. Anyway my wife says so what if my house drops 40 percent then all houses are down 40 percent. We can still buy and sell without losses any real money it was a paper gain or loss.

______

You’re on board “riding the wave” once you own. You never win, but never lose either so long as you buy back into the same market you sold out of. If you move and buy into a different market – then you can win or lose depending on what you get for your money there.

But are you losing money in real life?

Yep, you are. Interest, taxes, CMHC fees, maintenance, insurance, renos, upgrades, land transfer taxes, Realtor commissions, Lawyer fees – most of these are long term and reoccurring – all are hard losses. These ALWAYS add up to hundreds of thousands of dollars over a couple decades.

You need a RE bubble of epic proportions to get those dollars back.

Then there is an opportunity loss on the mortgage payments that pierces the soul, but that comes part and parcel with home ownership.

#93 MF on 09.18.18 at 11:15 am

#65 Nonplused on 09.18.18 at 3:35 a

Actually the only country that matters is the US as the lone superpower. Russia hasn’t mattered since 1989 and China is just another paranoid communist state located in a crappy area with many enemies.

In a real nonnuclear conventional conflict the US navy, the most well equipped, biggest, and most powerful in the world would put an end to oil supplies to both countries, eventually rendering their militaries useless and at the mercy of US armed forces.

MF

#94 IHCTD9 on 09.18.18 at 11:53 am

#88 viorelli on 09.18.18 at 10:50 am
_______

I agree with your ideas about the benefits of hockey. I really think any kind of physical or mental challenges of a sporting nature are good for kids one way or another.

My boys are the opposite of your son – not interested in sports at all. They’ve always competed though – except it was Math competitions, Chess tournaments, Spelling bees, etc..

I can tell that these events (which they did very well at) boosted their status among their peers, and their confidence really grew. My youngest even spoke alone on a stage in front of 5-600 people this past summer as part of his Gr.8 graduation.

From where I sit – confidence is what the kids mostly get out of competition.

I’m trying to talk to them regarding investments too, but it does not look like I am lighting any burning fires of curiosity or ambitious desire just yet…

#95 LP on 09.18.18 at 11:57 am

#88 Viorelli

Our son never got used to skating. He got unusally tall real early and never got the hang of moving his upper body along with his way too long legs. Think water strider.

One of my husband’s nephews-in-law began to think both of his sons were pro material and then he bent his whole thinking and life focus to getting the boys on whatever team would realize the dream. He even moved his family to another town, too far away from his job, because he heard that scouts went often to the local rink on Saturday mornings. That cost him his job and almost his marriage too.

Fast forward to now, the boys are adults or almost so and neither one progressed beyond rep hockey. More importantly, maybe, neither one ever laces up even for a fun skate. I think their dad ruined skating just for the pleasure of it.

#96 TheDood on 09.18.18 at 12:00 pm

#79 professor pineapple on 09.18.18 at 9:55 am
I beg to differ that stocks have outperformed RE.

1 million down on a 5 million home that has gone up even as little as 10% will blow away 1 million on your basket of whatever that has gone up 25%

And you have $4.5 million in variable-rate debt. Funny guy. – Garth
____________________________________

Again…..Financial illiteracy on full display.

#97 Headhunter on 09.18.18 at 12:39 pm

Wouldn’t trade the $$$$ I spend on my 3 kids sports programs for anything. Lots of good memories and friends. Taught them all to compete at a high level and be accountable to their peers. When they all got to High School they were excellent athletes and made it real fun for them playing on all those teams. Other kids just wanted to be around them and was nice..

Its only money. It’s meant to be spent and it does make the world go round. Hope you get to enjoy it one day. I live my life like every day is my 2nd last! You never know when your # will be called by the man upstairs.

Had a good friend just drop dead from a heart attack recently at 53 years young.. Really hits home.

#98 Jungle on 09.18.18 at 12:44 pm

#77 M Towne

It’s likely the emerging market and china ETF dragging down your TFSA

Also check and be sure you are measuring performance accurately. Don’t trust your broker because often they don’t add distributions / dividends to your total return.

#99 Blacksheep on 09.18.18 at 1:10 pm

Jwk # 89,

“There is no investigation looking to impeach Trump.”
———————————–
That, is the funniest thing I’ve read on this blog, in a long time.

#100 Ian on 09.18.18 at 2:21 pm

Someone mentioned Chris Hedges on here the other day.

I started reading “America: The Farewell Tour” last few days. I highly recommend it. Especially if you think the US is doing well, has low unemployment and everything’s fine.

Mr. Hedges would be happy setting himself alight. – Garth

#101 Shawn Allen on 09.18.18 at 2:44 pm

The Canadian Economy – Remains strong

Many won’t believe it but the Canadian economy is strong. Maybe a recession will come soon, but so far so good.

Statistics Canada just reported that Canadian manufacturing sales were up (seasonally adjusted) 0.9% in July versus June. This was the third straight month of increases.

Now 0.9% seems unexciting. But on a year over year basis manufacturing sales are up an average of 6.4% over the past five months. That is impressive. Some of that was likely price increases but some of it was surely increased output.

See for yourselves:

https://www150.statcan.gc.ca/n1/daily-quotidien/180918/dq180918a-eng.htm?CMP=mstatcan

But you have to do some work to calculate the five month average or whatever period you want.

From another report today, I calculated that sales at large retailers are up an average 4.1% year over year in the past five months.

https://www150.statcan.gc.ca/n1/daily-quotidien/180918/dq180918b-eng.htm?CMP=mstatcan

Yeah, I know, many will say this is all debt financed and therefore fake. Whatever. Debt financed or not, the Canadian economy is doing well, so far at least.

#102 KB on 09.18.18 at 2:56 pm

Millennials on FIRE by not buying a house in Toronto (see last line “9. Refused to buy a house”).

https://www.forbes.com/sites/alexandratalty/2018/09/17/the-9-craziest-ways-these-millennials-are-saving-money-to-retire-early/amp/

I thought this might cause some cognitive dissonance – enjoy!

(Love the blog and agree with 99 and 44/100 % of it!)

#103 Entrepreneur on 09.18.18 at 3:04 pm

“Companies go up because companies make money” above article. So true, and we need to keep inventing and making companies not only to make money but to grow and be a sustainable country, well balanced.

On P&P last week a discussion about “What is Canadian values?” No one knew.

My opinion on our Canadian values: “with our different cultural backgrounds we have kept cultures at home and transformed our thinking to critical thinking with scientific facts and figures. Our dress code is “jeans” with different tops for the occasion and our dishes are “clean.” We like to see truthfulness and prosperity in people and not just for elite groups but for anyone that is willing to work.

We need a Canadian superhero!

#104 crowdedelevatorfartz on 09.18.18 at 3:22 pm

Once again I must thank Flop and Myra for their information today.
Very informative.
The slowly boiling frogs out there in Realtorland may finally be figuring out that the shite is about to hit the fan…..

Prepare for construction site fires to increase.

#105 IHCTD9 on 09.18.18 at 4:28 pm

It keeps being said that robotic automation and AI have as little as 5 years from making major inroads into manufacturing and white collar professions. 40-50+% of all traditional jobs in Canada could be gone by 2025.

Also, in and around 2025, the ITER Tokamak will be switched on. If it works, the practical end of fossil fuels could actually happen. Widespread use of electric cars suddenly makes sense for the first time ever. C02 emissions have a real pathway towards eventual elimination.

Gazillions of dollars could be saved across all economies over the following decades if it is not simply usurped by government.

Alas, even more will be out of work. Cheap robots designing and building everything under the sun and running on cheap clean electricity.

I’m starting to think that our lives could change beyond recognition in just 30-40 years. Near free clean energy, all consumer products becoming cheap enough for anyone in the world to afford. Not sure how the job problem will get worked out, but so many will be in this boat that it will have to be dealt with – and quickly.

Hopefully I’ll be retired by then.

#106 Grantmi on 09.19.18 at 8:43 am

#22 YVR cut off at the legs on 09.17.18 at 7:31 pm
For all the morons out there not realizing the price crash is happening now all over BC.

50 x 122 lot, Arbutus in Vancouver just crystallized a $510,000 loss.

This is below the 2015 price point.

22% below last years BS (I mean BC) Assessment.

The BS ( I mean BC) Assessment from 2016 to 2017 on this one dropped 300,000 or 9%.

In total this property is has had the BC Assessment and recent sale drop its value by 31% in just two years.

That is a $974,600 loss in value since 2015 (as peak price on this showed in 2016 before violently reversing).

These owners are lucky to only have lost $510,000.

There are going to be far greater losses in the coming 2-years. Those hanging on will never recover because they are in serious denial, which is all Vancouverites are left with now.

Link????

#107 KLNR on 09.19.18 at 1:09 pm

@#103 IHCTD9 on 09.18.18 at 4:28 pm
It keeps being said that robotic automation and AI have as little as 5 years from making major inroads into manufacturing and white collar professions. 40-50+% of all traditional jobs in Canada could be gone by 2025.

Also, in and around 2025, the ITER Tokamak will be switched on. If it works, the practical end of fossil fuels could actually happen. Widespread use of electric cars suddenly makes sense for the first time ever. C02 emissions have a real pathway towards eventual elimination.

Gazillions of dollars could be saved across all economies over the following decades if it is not simply usurped by government.

Alas, even more will be out of work. Cheap robots designing and building everything under the sun and running on cheap clean electricity.

I’m starting to think that our lives could change beyond recognition in just 30-40 years. Near free clean energy, all consumer products becoming cheap enough for anyone in the world to afford. Not sure how the job problem will get worked out, but so many will be in this boat that it will have to be dealt with – and quickly.

Hopefully I’ll be retired by then.
______________________
wars would be fought over fresh water sources instead of oil

#108 jess on 09.19.18 at 3:15 pm

Danske CEO Resigns After Money-Laundering Probe Expands to $230 Billion in Transactions
Wall Street Journal · 2 hours ago
Bank at Center of Money-Laundering Probe Knew of Russian Blacklist Clients
Wall Street Journal · 1 day ago
Danske Bank probes $200B in suspect transactions
MarketWatch · 9 hours ago

#109 jess on 09.19.18 at 3:41 pm

What is Tax Project 17?

…”Corporate tax reform is one of the most important issues facing the legislature today. Tax Project 17 (TP 17) is a new version of the third corporate tax reform, that was rejected by nearly 60% of voters in a referendum held on February 12, 2017. The objective of TP 17 remains the same: to comply with international requirements by eliminating special tax rebates for foreign companies, while retaining Switzerland’s attractiveness as a low tax destination for all companies. FP 17 is therefore a second attempt at passing the failed tax reform measures by making them more palatable: tax reductions are, for example, retained for patents and research and development, but are offset by an increase in the dividend tax.

Why is TP 17 such a high priority?

Switzerland has undertaken to comply with international company tax standards by the end of 2018.

The rules developed by the Organisation for Economic Co-operation and Development (OECD) require, among other things, the abolition of special tax status for foreign companies. Last December, the European Union (EU) placed Switzerland on a grey list of countries that have not yet taken the necessary measures to comply with the new standards. If the parliament does not pass an adaptation of the law, Switzerland could find itself on the black list of jurisdictions considered as non-cooperative by the EU next year.

https://www.swissinfo.ch/eng/tax-project-17_linking-corporate-taxation-and-pensions–a-risky-compromise/44407414

What exactly is the link between TP17 and pensions?

The parliament decided to introduce social compensation component into TP 17: CHF2 billion will have to be paid into the old age insurance fund. This means that employees’ contributions will increase by 0.15%, as will employers’ contributions. The federal government will also gradually increase its share. Thus the TP 17 package will require the amendment of several laws including the Federal Act on Old Age and Survivors’ Insurance. …”