Criminal

Almost five years ago Jesse Colombo, a high-falutin’ financial analyst and Houston-based financial advisor wrote a scary piece for Forbes Magazine. “These 23 charts prove that stocks are heading for a devastating crash,” the ominous headline read.

Then it got worse.

“Following the bull market pattern of the past five years, the U.S. stock market continues to climb to new highs while shaking off all reasons for pessimism as well as the warnings of skeptics. Stock market bulls are becoming increasingly brazen as they drive the market to nosebleed heights, which is convincing a greater number of people into believing in the economic recovery. Unfortunately, the public is being fooled because the U.S. stock market and economy is experiencing another classic central bank-driven bubble that will end in a calamity, erasing of trillions dollars of wealth.”

This guru said 'trillions' would be erased

The Dow, when Scary Jesse penned that, was at 17,000. Today – even after the recent crappy sessions – it sits around 25,000. So listening to him might have cost you a 44% return on the US equity portion of your portfolio. It was bad advice. Classic Chicken Little. ‘Things have to go down just because they went up’. In fact, it’s almost always been bad advice to sell, hide, retreat, cower, shelter and try to time the market. Especially in a storm.

Or in 2008. As we know, the three-year period surrounding the Great Financial Crisis were the worst experienced in a lifetime – since back in 1929. The Toronto stock market, for example, lost 55% of its value and those with stock-only portfolios waited seven years to get their money back. That was bad. But not as withering as the early-Nineties collapse in Toronto real estate. Then it took 14 years for average prices to recover.

In any case, equities always regain their value faster than housing, since the stock market is a proxy for the entire economy. Moreover, any investor with a balanced portfolio (40% fixed income, 60% growthy ETFs) in 2008-10, did okay. The assets lost 20% in the mess, recovered in just 12 months then added 17% the next year. People who panicked and sold in the gale lost a fifth of their money. Those who ignored the media experts, other little chicks and blog mecroeconomists, ended up making 5% annually during that time – the worst crisis in a generation. Not bad.

Now, let’s review the last 10 years, including the 2008-9 mash up.

What the market's delivered over 10 years

Five years ago the doomers said stocks were grossly inflated by central bank largess – quantitative easing. When that punchbowl is taken away, they forecast, equities will fold. They didn’t. Trump came along and the party continued, this time bolstered by tax cuts, protectionism, corporate profits, jobs and consumer spending.  Now, nine Fed increases later, the stimulus is being withdrawn and the doomers say higher rates and more debt will crash investors.

In fact, any one day there are a dozen irrefutable reasons why things are about to collapse. Trade wars with China. Romping government deficits. Surging bond yields. Political polarization. Trump. Putin. The crazy bearded Saudi guy. Venezuela. Our wobbling housing market. Or a recession – because it’s time one blew in.

Many people expecting their portfolios to go up every single month they’re invested are upset with 2018. No wonder. Markets have corrected globally after two boffo years in which balanced portfolios made a 20% gain. By Christmas they likely won’t have made much – maybe a GIC rate of return. But they also get to hang on to the ground already gained. That’s how investing works – fluctuations, but we know that more than 70% of the time markets advance in any given year. Hence the wisdom of the old adage that it’s not timing the market, but time in the market that delivers results.

But how about today? Would Jesse still be quivering? Actually, he is. Poor guy. Get him a blankie. Just wrote this: “We believe that the current bull market/bubble is going to end badly, but we respect and follow the market’s trend in the short-term.” Well, if he has spent the last half-decade telling his clients to sit on their hands, like a bunch of other misguided advisors, he failed them. And he should know better.

For the first time in almost a decade, the global economy has been expanding smartly. Corporate profits, especially in North America, are outsized. GDP growth, inflation, consumer spending are all channeling higher. The Canadian jobless rate is the best in a generation while America is at full employment – the most robust numbers in 50 years. Trump continues to throw gas on the fire, so protectionism and trade wars will endure. So will rising rates, knocking back real estate and doing what they’re supposed to – cool the heat.

As my technical buddy Ryan the portfolio manager adds: “We’ve broken the 50 and 200 day MAs (moving averages) but the S&P 500 remains in a great long-term upward channel. Technically markets are oversold, approaching support levels and seasonality turns positive in November so I’m expecting a stabilization over the next few weeks then hopefully a rally into year end.”

Anyone fretting about falling markets needs to remember we’ve been at record highs in New York for most of the year. Just thumb up a few inches and gaze once again at that 10-year chart. Will it look like that in another ten? Yeah, probably.

So, either stop obsessing over your portfolio, or stop investing. Life’s too short. Ask your dog.

About the picture..

Taken from the Vancouver Police 2019 dog calendar – a rollicking look at the life & times of the members of the canine unit. Originally created by retired sergeant Mike Anfield after losing his officer-wife to cancer in 2004, the calendar is yours for 15 bucks. Proceeds go to BC Cancer and the BC Children’s Hospital Foundation. Order here.

150 comments ↓

#1 James on 10.25.18 at 4:02 pm

Gravity Garth, gravity. What goes up eventually comes down. It is only a matter of time. The trick is to know when your falling is it from 1 metre or 1 kilometre? A 1 metre fall wont kill you, the other…………………….

#2 Brian1 on 10.25.18 at 4:05 pm

Donald J Trump has finally come forward——-to claim the Megamillions. He can’t stop winning.

#3 Mr Debt on 10.25.18 at 4:12 pm

What’s 25 basis points, a 1/4 of a percent. Not much you say. A 1% rise in interest rates = a 33% incrase in your mortgage payment.

https://www.hoyes.com/blog/rising-interest-rates-in-canada-could-be-deadly/

PS highly recommend his podcast Debt Free in 30

#4 Rargary on 10.25.18 at 4:12 pm

1st! A dog can guess better than us what will definitely happen ARF

#5 Terry on 10.25.18 at 4:18 pm

Great blogpost Garth!

2018 is a sideways year right now. Alot of stock and ETF prices are ON SALE right now. I’ve been adding more to my positions as the prices keep dropping.

#6 Snoopy on 10.25.18 at 4:21 pm

Garth,
Big fan our your blog. However, with all due respect, and only offering a mild and friendly poke, you might consider having a bit more empathy for one like this guy who offers a stark financial (or real estate) prediction that (one the one hand) might certainly in the long run in the future be shown to be misguided but until conclusively shown through the passage of time, might (on the other hand) simply have been fundamentally correct and worth heading, though offered quite a bit early.

#7 NoOneOfConsequence on 10.25.18 at 4:28 pm

I admire your commitment to your mission. If only more uninitiated would read your blog.

You often talk about rebalancing. When we have broad market increases or declines across sectors, how do we determine what should be balanced, of if anything should be?

#8 Travis Smith on 10.25.18 at 4:32 pm

Noted. Will hold. Can’t hurt to buy more I asume?

#9 dakkie on 10.25.18 at 4:33 pm

Canada Is Spending A FORTUNE! – Debt SKYROCKETS!

http://www.investmentwatchblog.com/canada-is-spending-a-fortune-debt-skyrockets/

#10 Linda on 10.25.18 at 4:42 pm

Prices for goods & services have been increasing. Locally, our city council is mulling over substantial increases to residential property taxes, as the cost of providing services has grown faster than the revenues collected. Whether they will do so before the next civic election is another matter. I anticipate a relatively modest increase prior to the election & a honking big one the year following.

#11 crowdedelevatorfartz on 10.25.18 at 4:47 pm

What a great calendar.

I checked it out online.

The “interrogation room” photo is hilarious…

#12 Stone on 10.25.18 at 4:50 pm

#1 James on 10.25.18 at 4:02 pm
Gravity Garth, gravity. What goes up eventually comes down. It is only a matter of time. The trick is to know when your falling is it from 1 metre or 1 kilometre? A 1 metre fall wont kill you, the other…………………….

——

That’s what rebalancing is for. You’re welcome.

Hey! By the way. You’re First!!! Yay for you!

#13 KLNR on 10.25.18 at 5:12 pm

@#3 Mr Debt on 10.25.18 at 4:12 pm
What’s 25 basis points, a 1/4 of a percent. Not much you say. A 1% rise in interest rates = a 33% incrase in your mortgage payment.

https://www.hoyes.com/blog/rising-interest-rates-in-canada-could-be-deadly/

PS highly recommend his podcast Debt Free in 30
____________________________________

I have no sympathy for anyone who went and got a max mortgage on a variable rate. If a 1 or 2% increase could be a problem for you, why would you do that?

#14 Frank the Tank on 10.25.18 at 5:15 pm

Do you think a 80/20 balanced portfolio is dangerous? Should I realign to 60/40?

#15 Terry on 10.25.18 at 5:21 pm

OREA will no longer be accepting new applicants for the Salesperson Education Program past December 31st 2020. The OREA College will be CLOSING at that time!

https://www.orea.com/Education/The-College-is-Closing

#16 Stan Brooks on 10.25.18 at 5:21 pm

It is good that we speak about the Dow as the ‘stock market’.

As for TSX …

It is up the ‘astronomical’ 0.1 % today while the US and European markets were up 13-16 times that (1.4-1.7 %) and emerging markets up 19 times that.

I guess we do not qualify as emerging markets either, they actually grow.

I guess all the wealthy readers with no debt missed the memo about the rising markets. Or they intentionally skipped TSX (one wonders why in this land of the riches, we have world class cities and are star developed economy (according to the finance minister) after all).

Weed. – Garth

#17 Loon on 10.25.18 at 5:30 pm

Vancouver, Granville strip. Nice K9, good doggo !

#18 Doug t on 10.25.18 at 5:40 pm

There will be another market crash – mark my word on it

RATM

Let me alert the media. – Garth

#19 Remembrancer on 10.25.18 at 5:43 pm

#8 Travis Smith on 10.25.18 at 4:32 pm
Noted. Will hold. Can’t hurt to buy more I assume?
————————————————————-
As long as its w/ $$ you can afford to have sit if your picks fall further…

#20 young & foolish on 10.25.18 at 5:47 pm

Timely post … very welcomed during these volatile times,
though I can’t help wondering what was meant by the coming “Troubles” alluded to a couple of days ago …

#21 Stan Brooks on 10.25.18 at 5:47 pm

This is what I have been warning about:


https://ca.finance.yahoo.com/news/one-third-canadian-workers-will-automated-job-next-15-years-mckinsey-180445100.html

About one in three Canadian workers will be pushed out of their professions in the next 15 years as artificial intelligence and robotics take on more jobs, according to the McKinsey Global Institute.

Note that jobs losses are projected to mostly impact job types in the big cities.

Now imagine suburbs like Vaughan, Mississauga, Scarborough with 36-40% unemployed (adding current 6 % unemployment, job losses in the cities and suburbs will be heavier), what will these people do, grow potatoes in their backyard?

Hey, Stan Brook’s Psychiatrist, please contact McKinsey, I am sure they will be interested in your new patients discount.

#22 crossbordershopper on 10.25.18 at 5:48 pm

hundreds of canadian stocks are at new lows now, go down the lost, all the oil and thousands of junior miners, but lots of other companies,
even the banks are at looses for the year, start there, everything is down
the dow rebounds while Canada just goes down and never recovers

Buy low, sell high. This is low. – Garth

#23 Penny Henny on 10.25.18 at 5:50 pm

https://business.financialpost.com/news/economy/foreign-affairs-minister-laid-down-in-pms-office-after-usmca-was-inked

/////////

at least she didn’t cry

#24 Jeff Moore on 10.25.18 at 5:54 pm

Hey Garth, I will admit to being a bear when it comes to the markets (especially now)…but I think you’re cherry picking your time frames. With all due respect, I can look at my semi in the GTA and show a chart with exponential growth.

Just like the real estate market, let’s give it a bit more time.

Just my 2 cents.

I picked a decade. Seems reasonable. – Garth

#25 Howard on 10.25.18 at 6:03 pm

Trump is increasingly on Powell’s case about the interest rate hikes. It seems Trump is pissed off because Obama had ZIRP whereas he doesn’t, and he sees rate hikes as sabotaging “his” economy.

So don’t expect the hikes to continue at their current clip.

Yes, you should expect that. – Garth

#26 rce on 10.25.18 at 6:05 pm

With what little I know – that graph is starting to look like bitcoin…..

Not even close. – Garth

#27 John Smith, Member of OPC on 10.25.18 at 6:10 pm

We must condemn the criminal act by a possible welfare recipient, Liberal or unemployed bum who vandalized our great Minister Ms. Scott’s office on October 24th.

My friends, Kathleen Wynne has made Ontario bad for business because of raising the minimum wage. Freezing the minimum wage until 2021 will allow Ontario to be open for business.

We are also going to merge Ontario Works with Ontario Disability Support Program, and CPP, if allowed by Trudeau’s government.

My friends, merging OW, ODSP and CPP within one ministry will save Ontario $4,000,000 annually for administrative costs.

My friends, giving each welfare recipient a sum of $500 monthly, for anyone on OW, ODSP and CPP is generous and we will help them get back into work.

Our great Minister Ms. MacLeod has taken the time to consult business owners, corporate elites and nationalist groups on how to make welfare recipients on OW, ODSP and CPP more productive and contribute to our great province.

#28 The Limited Sage on 10.25.18 at 6:19 pm

Garth, for a minute there I thought you were going to pull a Keyer Soze with Jesse Colombo and reveal him as The Real Mark.

#29 whiplash on 10.25.18 at 6:27 pm

#9 dakkie

Canada is spending a fortune! Debt SKYROCKETS

Last November the Federal Borrowing Authority Act set Canada’s debt ceiling @ $1.168 Trillion, to surpass that limit parliament has to approve the increase. Where are we now, in the last federal budget our glorious finance minister tax/spend Bill noted that “outstanding government and crown corp. market debt is projected to reach $1.066 trillion in 2018-19.

Not to worry, there a new revenue stream to save the day, cannabis!

#30 Doug t on 10.25.18 at 6:29 pm

Let me alert the media – Garth

I will gladly put my money where my mouth is Garth – care for a wager? Mind you I didn’t say when :)

RATM

#31 AK on 10.25.18 at 6:30 pm

“In fact, any one day there are a dozen irrefutable reasons why things are about to collapse. Trade wars with China. Romping government deficits. Surging bond yields. Political polarization. Trump. Putin. The crazy bearded Saudi guy. Venezuela. Our wobbling housing market. Or a recession – because it’s time one blew in.”
=====================================
You just described the daily BNN schedule. :-)

That’s why Warren Buffett is my hero….

#32 AK on 10.25.18 at 6:33 pm

#22 crossbordershopper on 10.25.18 at 5:48 pm
“the dow rebounds while Canada just goes down and never recovers”
===================================

The TSX will continue to underperform until the Liberals get the boot in 2019. After that, look out…

#33 LP on 10.25.18 at 6:35 pm

#27 John Smith, Member of OPC on 10.25.18 at 6:10 pm

Our great Minister Ms. MacLeod has taken the time to consult business owners, corporate elites and nationalist groups on how to make welfare recipients on OW, ODSP and CPP more productive and contribute to our great province.
***********************************

Did she, by chance, take the time to consult with OW, ODSP recipients? As to CPP, I suggest the Provincials leave the Federal program the heck alone.

And…

#4 Rargary on 10.25.18 at 4:12 pm
1st! A dog can guess better than us what will definitely happen ARF
******************************

And that would be after asking Cat for advice. MEOW

#34 You know val on 10.25.18 at 6:37 pm

Hey Garth, You forgot to add that Canada in Justin Trudeau has the biggest dope dealer in the world.

#35 MF on 10.25.18 at 6:39 pm

“In any case, equities always regain their value faster than housing, since the stock market is a proxy for the entire economy. Moreover, any investor with a balanced portfolio (40% fixed income, 60% growthy ETFs) in 2008-10, did okay.”

1) Even if the value of your house goes down, you can still live in it and enjoy it for years while it gains value. A portfolio can’t give you that.

2) The 2008 crisis saw interest rates slashed to zero and bond prices increase, helping the balanced portfolio. This time rates are rising and bond prices decreasing. There is nowhere to hide during a market correction anymore.

MF

Why would you hide? – Garth

#36 Mountain camper on 10.25.18 at 6:43 pm

Is this correction good time to buy for long term spousal RSP investment?

#37 Leo Trollstoy on 10.25.18 at 6:56 pm

#2 The Real Mark on 10.23.18 at 5:12 pm
Maybe the BoC won’t go for a rate cut, but a rate hike, seriously?? It looks like the financial media has been seriously trolled by Poloz if they actually believe that nonsense.

Does it feel weird to be wrong all the time?

#38 crowdedelevatorfartz on 10.25.18 at 7:12 pm

@#36 mountain Camper
“Is this correction good time to buy for long term spousal RSP investment?”
+++++

Only if you trust your spouse……….

#39 Steven Rowlandson on 10.25.18 at 7:17 pm

The most recent dooms day date is 11/11/18. It could be just another day.

#40 FOUR FINGERS WATSON on 10.25.18 at 7:21 pm

David Rosenberg. Very smart man. 14:40 on the video.

https://www.bnnbloomberg.ca/rosenberg-floored-by-boc-s-economic-optimism-1.1157698

#41 Rentin on 10.25.18 at 7:21 pm

Since we are talking about market today, buy boring stuff, its on sale. VISA, AMT, etc…

Things that will get used every day regardless of the economy.

#42 JSS on 10.25.18 at 7:28 pm

Today I bought some common shares of RBC at $94.
Today’s price gives me a 4.1% dividend yield, and at a 52 week low price.
Will I sell? Never. Because I want to rub tummy in February 2019, which will be when the next dividend increase arrives.

Man, the smoking deals on Tsx blue chip conservative stocks – is just crazy. Banks, railroads, insurance, pipelines, utilities, grocers, …

#43 Edward Bear on 10.25.18 at 7:29 pm

Judging from some of the ridiculous comments on here lately one must ask if you folks are in pain? It must hurt fearfully when they bore a hole in your cranium and aspirate 3/4 of your brain. I guess they stop when you raise your arms and squeal Booyah, Make Canada Great Again !

#44 D C on 10.25.18 at 7:32 pm

#14 Frank the Tank on 10.25.18 at 5:15 pm
Do you think a 80/20 balanced portfolio is dangerous? Should I realign to 60/40?

a) If you are asking, it’s dangerous for you
b) Hang on a few more down market days and that rebalance will have been done for you ;)

#45 mitzerboyakaQueencitykidd on 10.25.18 at 7:45 pm

Dogs mans best friend

#46 k on 10.25.18 at 7:57 pm

Dear Doug in London….. I apologize for my smart ass comments regarding your comments on Garth’s previous blog. I must have been reading comments quickly and didn’t scroll back enough to see that your comments were sarcastic. The lack of quotation marks threw me off a bit . Apparently it doesn’t take much to throw me off …according to my wife. Anyway I am sorry and I was being a smarty pants……speaking of which I bet I can still knit better than you…..just sayin’.

#47 AB Boxster on 10.25.18 at 8:03 pm

This article is becoming a little dated but the point it makes around asset allocation is still interesting.

https://canadiancouchpotato.com/2010/03/09/how-much-risk-do-you-need-to-take/

As article mentions, historically even a 20/80 equity/ fixed ratio produced an annualized return of 8.2%

So is 60/40 equity/fixed really the best asset mix at all stages of life?

8% is not too shabby and there seems to be far less impact from volatile nature of markets.

#48 Nonplused on 10.25.18 at 8:06 pm

Just got back from my semi-annual face to face with my financial guy, and he suggested buying preferreds in 2 Canadian banks with significant US operations. His reasoning was that the prices were down a bit and he didn’t think they were exposed to rising rates, indeed might benefit. It was only going to be about 4% of the portfolio but I would own the shares directly, not through an ETF. Garth, your thoughts? I know you like banks but is it ok to hold 4% of your money in direct preferred shares?

I like having a financial guy because when I look back on it, I only made 3 really good trades, that produced most of my money and paid off the house. So he didn’t make no 7% last year, closer to 5% after fees, but I am still able to sniff around for my next big trade while he keeps the 5% rolling in. He does seem kind of expensive unless I compare it to the cost of getting a leaky exhaust fixed on my wife’s car. Or my son’s braces. Well all my kids braces. No wonder the English all have crooked teeth.

He also wants to buy some kind of “water” ETF. Seemed crazy to me at first but looking at the holdings, almost all of them are first world and only about 33% are actual utilities, the rest are suppliers and manufacturers that probably cross many sectors. Any thoughts on something that specific? Again would be a small investment.

He also wanted to get some NASDAQ 100 ETF. My first question was “do they hold Tesla because then no”, but they don’t. I think he’s “chart riding” here but what are your thoughts? 10% of the fund is Apple, and of course Microsoft, Alphabet, Facebook, etc. all figure heavily. But I remember what happened to RIM.

#49 Debtslavecreator on 10.25.18 at 8:08 pm

The long term trend in US stocks could potentially see a 20-30% decline within 18 months but make no mistake the long term trend remains up
One day that will change but the level of bearishness among the retail crowd is astonishing
I picked up a whack of sp500 index yesterday and hope to buy even more by Election Day
A major crash is not likely
Yes a 20-30% decline is possible but even then it will trigger a global QE party the likes of which you’ve never seen
Once that starts you need to be on the look out for the top. It will come when the average Joe and media all want in on US equities
Bonds are the problem into 2021, not US stocks
The most hated bear market ever

#50 Debtslavecreator on 10.25.18 at 8:08 pm

The most hated BULL market ever, not bear market !

#51 jess on 10.25.18 at 8:10 pm

OECD
Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.
====================================

Saskatchewan-based Cameco Corp is the world’s largest publicly traded uranium company. It was formed when two previous publicly-owned crown corporations were privatized 30 years ago. Two decades ago they established a subsidiary in the tax haven of Zug, Switzerland to shift their profits there and avoid Canadian taxes. By selling their uranium at an artificially low price to this Swiss subsidiary, which then resells it at much higher prices, they’ve been able to report no profits in Canada while registering $8.4 billion in profits for their Swiss subsidiary, which then transfers these profits to subsidiaries in other tax havens.

Through this tax scam, they haven’t paid a cent in Canadian corporate taxes in years, while they’ve paid out billions in dividends to shareholders, pay their CEO $6 million annually, and yet just laid off hundreds of workers in Saskatchewan. Meanwhile the federal government is spending $1.3 billion to clean up the radioactive mess left in Port Hope by Eldorado nuclear, one of Cameco’s predecessor companies.

Tax lawyers and corporations are looking at this case intently to see if they can engineer similar deals to also avoid paying taxes. The $2.2 billion in taxes avoided by Cameco work out to about $150 per Canadian household.

Allan Lanthier, former chair of the Canadian Tax Foundation, recently wrote about this case in the Globe and Mail, concluding “So, do large Canadian corporations avoid billions of dollars of taxes each year? You bet they do. And other taxpayers – you and I – have to ante up the shortfall.”

https://www.taxfairness.ca/en/action/appeal-cameco-tax-ruling

#52 For those about to flop... on 10.25.18 at 8:15 pm

The state of play…

M44BC

“A Visual Guide to State Taxes.

The midterm elections are right around the corner, and President Trump just announced he wants to cut middle class taxes by 10 percent. It’s obvious people don’t like paying taxes, and letting workers keep more of their paychecks could be a ploy to boost GOP turnout ahead of a pivotal election. But state tax rates vary wildly across the country, and the media’s focus on Trump’s announcement ignores a more complicated reality of taxation. In fact, our maps indicate that lots of people in a high-tax burden state might not even notice an additional tax cut.”

https://howmuch.net/articles/visual-tax-guide-in-every-state-2018

#53 BS on 10.25.18 at 8:35 pm

But how about today? Would Jesse still be quivering? Actually, he is.

Once someone makes a bad call like this, it is hard to walk back. If you sell everything, like advised in 2013, and markets continue to go up, like they did from 2013 until today, the guy pretty much has to stick with the bearish calls in hopes one day he is right. After five years of missed double digit returns all he has is hope.

At this point there is no way he can recover. Even if markets crashed and miraculously he buys the bottom, he will still be way behind. The chances of a perma bear buying the bottom is also close to zero. If you are too scared to be invested today, you will be too scared to buy after markets have just gone done substantially.

#54 Shawn Allen on 10.25.18 at 8:36 pm

Cameco Tax scam

Jess at 51 quoted about Cameco:

By selling their uranium at an artificially low price to this Swiss subsidiary, which then resells it at much higher prices, they’ve been able to report no profits in Canada while registering $8.4 billion in profits for their Swiss subsidiary, which then transfers these profits to subsidiaries in other tax havens.

Through this tax scam, they haven’t paid a cent in Canadian corporate taxes in years, while they’ve paid out billions in dividends to shareholders, pay their CEO $6 million annually,

***************************
This kind of crap is going on all the time. I call it legalized theft. It needs to stop. Meanwhile there is lots of support for even lower corporate taxes.

We may need a global agreement to ban tax havens of all kinds.

Like personal taxes, if it were not for corporate tax cheats and big corporate tax evaders the average corporate tax rate could come way down.

#55 BS on 10.25.18 at 8:42 pm

26 rce on 10.25.18 at 6:05 pm
With what little I know – that graph is starting to look like bitcoin…..

Not even close. – Garth

Stock prices are based on earnings. They go up and down based on earnings. Earnings are still strong and will continue to be.

Bitcoin is based on nothing and has no earnings. There is no bottom for bitcoin and no earnings to support a price.

#56 SoggyShorts on 10.25.18 at 8:46 pm

#48 Nonplused on 10.25.18 at 8:06 pm

You should really consider a couch potato portfolio.
At least compare them with your current one. If your guy took you down from 7% to 5% with fees, then he is eating 28% of your profits. You meet with this guy 2x a year, and presumably, rebalance each time. Are those 3-4 hours a year worth 28% of your income?
I hope you at least are getting great tax and estate advice like other advisors give with their 1% fees.

#57 BG on 10.25.18 at 8:55 pm

This pictures is so 80’s… Neon lights in rainy night…

“Blade Runner K9”

#58 Kaganovich on 10.25.18 at 8:56 pm

QE stops, interest rates rise, asset classes drop…..i would think twice before ‘buying the dip’ lol….especially in Canada, consumption gets whacked once everyone is ‘loaned up’ and rates start to climb

#59 TurnerNation on 10.25.18 at 9:00 pm

Planet remax? No we’re all awaiting the coming spaceship that will be taking us to Planet TurnerNation.
A home to stern risk managers and a dying Amazonian tribe in dire need of an intensive breeding program.

Any day now!!

#60 jojo on 10.25.18 at 9:01 pm

It’s all about capitla flows.
When socialism threatens properity capital flees.

The US election is causing this not interest rates.
Capital is taking profits due to fear of the Democrats.
It’ll sit somewhere until teh election is over.

I pulled a ton out of the markets after they elected Occasio in NY and celebrated.

The Dems have turned so far left – Trudeau looks like a conservative.

The rise of the Alt Left is what all should fear.

Gray buildings, all workers making 500 bucks amonth and food stamps from the state, appratchiks sending you to the Yukon for re-education, Thought police telling you what to think and do..

The glorious leader will save all etc…..

So no smart capital is sitting this one out. Once the dust settles in the US and repubnlicans still control power then the market will continue to climb due to overall prosperity.

If the Dems take congress, when Trump took power the markets exploded the next day.

Look a the charts they don’t lie.

LOOK OUT!

#61 CEW9 on 10.25.18 at 9:31 pm

#18 Doug t on 10.25.18 at 5:40 pm

There will be another market crash – mark my word on it

RATM
——————

Here’s my prediction: the markets will see new highs. (But I didn’t say when).

Of course they will “crash” again. And go higher. And crash. And go higher. And nobody can say when, because nobody really knows when. Will this bull market turn into a bear? Of course. Then that bear will turn into a bull.

We are used to that kind thing in the west. Like the bumper sticker says: “Please let there be one more boom, I promise I won’t piss it away this time.”

#62 georgist on 10.25.18 at 9:32 pm

> Stock prices are based on earnings.

I’m not saying the market is going to tank, but I have to object at this.

Recently a lot of stocks have been pushed higher by buybacks, which are possible due to the very low cost of debt.

The FED raising rates will end that avenue, which will have an effect on stocks. Perhaps real growth will be sufficient to paper over this, but it does exist.

#63 baloney Sandwitch on 10.25.18 at 9:36 pm

I have been 80% in stocks and its worked fine for me. I started investing at age 39. I got fired/laid off from my job at 55. Here is our net worth chart (does not include house – its fully paid for). https://i.imgur.com/hpj4eDC.png
I “lost” a million and half in the great recession, but it came back in about 3 years and then really took off like a rocket. Note – I am heavily into puts and calls – so there is hidden leverage which is not reflected in the chart.

#64 The Real Mark on 10.25.18 at 9:36 pm

#54 Shawn Allen on 10.25.18 at 8:36 pm
“This kind of crap is going on all the time.”

How exactly is it ‘crap’? If the profits from such transaction are ever to be paid to the benefit of Cameco’s owners, then they will be subject to Canadian tax, less a partial credit for tax already paid in the offshore subsidiary. The case before the CRA, had Cameco lost, most likely would have required Cameco to issue a large amount of debt and equity, destabilizing a company that employs literally thousands of Saskatchewan and Ontario residents.

Individuals are able to defer taxes through RRSPs, TFSA’s, etc., which I am sure you have maxxed yours out personally and promote their use when the topic arises. But when a corporation like Cameco comes up with a RRSP-like scheme to defer their tax burden until such a time when it is in its favour , you then call their actions ‘crap’.

BTW, for the record, I’m in favour of abolition of RRSPs, RPPs, TFSA’s, and actually agree with you that such offshore tax gimmickry should be banned when conducted by individuals or corporations (individuals could conceivably concoct similar schemas!). But it should be done across the board. Not just selectively. As it stands, the Tax Court of Canada has ruled that Cameco’s effective creation of its own corporate RRSP was fully in accordance with tax law.

#65 KLNR on 10.25.18 at 9:38 pm

@#60 jojo on 10.25.18 at 9:01 pm

_______________________________________

jojo are you just smokingman posting under another alias? similar lack of grammar/spelling and logic :)

#66 Joizey Boins on 10.25.18 at 9:50 pm

#42 JSS on 10.25.18 at 7:28 pm

Today I bought some common shares of RBC at $94.”

Looking at the 5 year chart, I see some resistance at $90 and then if it breaches that, the next resistance is at $70. Not sure if the 4% will will compensate for the heart attack inducing drop.

#67 Barb on 10.25.18 at 10:13 pm

H refuses to sit in front of a computer.

But after I heard him twice in one week mumble to himself the words “…should move to all cash”, I’m tying him to my laptop so he can see Garth’s chart.

#68 Nonplused on 10.25.18 at 10:13 pm

56 SoggyShorts

I’m not sure it’s fair to say he “took me down” to 5% with his fees, more like his picks didn’t do 7% like Garth’s did. However he’s had better years. It does warrant monitoring though, maybe if he continues to under perform I need a different adviser.

Ya and it does seem like a lot of money for only a few hours face time a year, but I assume there is some research that goes into it as well. Plus they send me monthly reports and such, and call every now and then, and a Christmas and birthday card.

#69 Spiacog on 10.25.18 at 10:18 pm

With interest rates going up, is now a good time to allocate the 40% in cash into an self directed rrsp mortgage. Pay yourself the %… at 3% it did not make sense but at 5% and climbing….

Expensive to set up plus you must buy CMHC insurance. – Garth

#70 Doug in London on 10.25.18 at 10:42 pm

I’ve seen many business cycles before and seen trends. Presently a lot of investors are still skittish about the stock market, that tells me it still has room to go. When most investors get overconfident that’s when you should take a more defensive stance. In the past, the traditional rule has been your age is the percent of fixed income investments you should have. In 2006 or 2007 I read where some analyst said you should have a higher percent of equities. On reading that I figured (correctly) it was time to take a more defensive stance, cashing in more equities and buying more bond funds. One observation is I’m hearing and reading about labour shortages with all the Baby Boomers retiring. The last times I heard about labour shortages were 1989, 2000, and 2006. Coincidence? I think not, and say don’t panic yet but it’s an amber alert. My favourite one was in 2007 I read where some analyst said something about how the economy is so well managed these days that recessions are a thing of the past. After breaking into a fit of hysterical laughter, to this day I don’t know why I wasn’t escorted out of the library where I had read that article. After that the amber alert became red alert. In summary, the stock markets probably still have room to go so now’s the time to take advantage of those early Black Friday sales.

@k, post #46:
Apology accepted. You’re probably better at knitting than I am, but it appears we both know where interest rates are headed in the foreseeable future.

#71 Risktopia on 10.25.18 at 10:42 pm

A housing decline could last anywhere from 5-11yrs from peak to trough.

https://www.risktopia.com/2017/04/how-long-would-toronto-house-price.html

#72 WUL on 10.25.18 at 10:48 pm

Poor Calgary. My hometown.

Western Canada Select heavy oil blend – $27/barrel and a $60 differential to West Texas Intermediate.

Now, Penguins up 7-0 over Flames before the end of the 2nd period.

Pass the spliff.

WUL

#73 Kilt on 10.25.18 at 10:58 pm

I wouldn’t bet again’t the US market, but the TSX is in trouble. As is Canada. Oil is going to take a beating in the next few years. $40 would not surprise me. Lenders will tighten once the recession hits because of the housing market and you will see a lot of weaker hand’s fold. Reits areally looking weak as weĺl. Can’t wait til the panic sets in.
Kilt.

#74 Ponzius Pilatus on 10.25.18 at 10:58 pm

#66 Joizey Boins on 10.25.18 at 9:50 pm
#42 JSS on 10.25.18 at 7:28 pm

Today I bought some common shares of RBC at $94.”

Looking at the 5 year chart, I see some resistance at $90 and then if it breaches that, the next resistance is at $70. Not sure if the 4% will will compensate for the heart attack inducing drop.
————–
So you paid $94 for a 4% dividend of 3.8 dollars.
You are even a greater fool than a Re speculator.
Bail, buddy bail.

#75 PGer on 10.25.18 at 11:06 pm

Yup – this one is a yawner. Company earnings are good – the market is just getting ahead of the midterms, which the Dems are likely to win.

The wife and I hold mainly good companies and ETFs that pay good dividends and/or interest (including REITS and Preferreds). Also quite a bit of professionally managed stuff, like BAM.A and BRK.B. Every now and then I reinvest the accumulated divs/ interest into more shares or “harvest” into something really safe.

Last year, being recently retired, I stuck 5 years worth of our “fun money” (the extras) into GICs (in our RRSPs), which started to pay at least something – just so we don’t have to worry about the next 5 years (financially at least).

I will ladder the GICs next year to get the right amount maturing every year, and let the rest of the portfolio ride, pretty much no matter what (only will sell individual stocks if the fundamentals change significantly). Boring, I know, but that’s how I sleep at night.

#76 Roman on 10.25.18 at 11:22 pm

That graph does look like a bitcoin a little. I’m seeing right now bonds are trashed and they dragging down equities. Which were propelled by handful of names: so-called faang stocks, while broad market is on life support.

Bonds and stocks were sckyrocketing together for a decade, now they are going down together, and probably going to underperform for years and years.

The passive investing is the timing the market to me: hope that exit at the high of cycle, with inflation under control, with trillion dollar company becoming even bigger etc

It’s not that easy to have automatic 8% average return.

By hey, I’m not complaining – our self directed ira acccounts are up multiples of 8% this year alread.

#77 Kilt on 10.25.18 at 11:23 pm

#48 Nonplused.
4% in bank preferred’s is fine. But I would read up on them. Check if they are rate reset and see when they reset. Resets would benefit from rising rates, but other preferred’s could go down on face value as rates rise, similar to bonds as new issues would pay more.
I hold 10% Nasdaq ETF in each of my accounts. It seems to do well. I just go with the index ETF that has the lowest fee.
Kilt

#78 Miss Construed on 10.25.18 at 11:45 pm

You’re gonna get a chuckle outta this one, Gartho.

http://canlii.ca/t/hvl92

#79 SoggyShorts on 10.26.18 at 12:21 am

#68 Nonplused on 10.25.18 at 10:13 pm
56 SoggyShorts

I’m not sure it’s fair to say he “took me down” to 5% with his fees, more like his picks didn’t do 7% like Garth’s did.

******************************
Is your portfolio complicated? Does he have you in 30+ stocks or is it mostly just a handful of ETFs?
To make the 2% in fees worth it, he has to consistently beat a GT-like 1% advisor by at least 1%. Maybe he can do this when things are good by being a cowboy, but in a flat or poor year like this one, those extra fees kill you.
On a 1 million dollar PF we are talking about a $10,000 difference.
Lets face it, what are the chances that you found a guy who is twice as good as GT, and if he isn’t, then are you happy paying twice as much?

#80 NoName on 10.26.18 at 12:23 am

Interesting read

In one example occurring in 2016, “China Telecom diverted traffic between Canada and Korean government networks to its PoP in Toronto,” the report says. “From there, traffic was forwarded to the China Telecom PoP on the U.S. West Coast and sent to China, and finally delivered to Korea. Normally, the traffic would take a shorter route, going between Canada, the U.S. and directly to Korea.” The telecommunications company is able to reroute the traffic by announcing fake routes via the BGP, which “governs data flow between Autonomous Systems, the large networks operated by telcos, internet providers and corporations.”

https://slashdot.org/story/18/10/26/023257

#81 Jason on 10.26.18 at 12:26 am

Talk about misguided souls. People saying adding to losing positions. “Things are on sale right now!”, they say. Throwing good money after bad. Again, losers average losers. Cash is a position also. If you have strict sell rules you would be 100% cash right now with very little drawdown. People who invest in stocks only, usually get in trouble because they have no set rules or know what the hell they are doing.

#82 This Dump Is Because GOP Will Lose Control of The Senate on 10.26.18 at 1:13 am

I’m kind of shocked that Garth hasn’t even touched on this yet. Trumpian tax cuts = bullish markets. Reversal of this = what? Come on Garth. Time to take the blinders off. This recent drop is Wall street predicting the GOP will lose control of the senate, impeachment hearings will proceed, and Trump will be forced out. Plain and simple.

#83 Howard on 10.26.18 at 3:59 am

#66 Joizey Boins on 10.25.18 at 9:50 pm

#42 JSS on 10.25.18 at 7:28 pm

Today I bought some common shares of RBC at $94.”

Looking at the 5 year chart, I see some resistance at $90 and then if it breaches that, the next resistance is at $70. Not sure if the 4% will will compensate for the heart attack inducing drop.

—————————————-

You mean support, not resistance.

Resistance refers to upside targets.

#84 NoName on 10.26.18 at 5:48 am

Facebook the gift that just keep giving.

https://www.newstatesman.com/politics/elections/2018/10/we-don-t-know-who-just-spent-250k-pro-brexit-facebook-ads-should-worry-us?amp&__twitter_impression=true

And on a side note there was a British comedy show titled newstatesman, and that show was funny, like this Brexit fiasco.

https://youtu.be/rAiI9z7X2_c

#85 Frank The Tank on 10.26.18 at 6:37 am

#55 BS on 10.25.18 at 8:42 pm
26 rce on 10.25.18 at 6:05 pm
With what little I know – that graph is starting to look like bitcoin…..

Not even close. – Garth

Stock prices are based on earnings. They go up and down based on earnings. Earnings are still strong and will continue to be.

Bitcoin is based on nothing and has no earnings. There is no bottom for bitcoin and no earnings to support a price.

————————————————————-

I find that equities actually really move on guidance more than earnings. Companies report a quarter with monster earnings, but if they even utter a quiet hesitation about guidance moving forward, the stock goes negative.

Is that not what we are seeing now in the markets? It’s volatile and lowering because of guidance not earnings (i.e. rising rates, political concerns, trade concerns, etc…).

#86 crowdedelevatorfartz on 10.26.18 at 8:00 am

@#57 BG
“This pictures is so 80’s… Neon lights in rainy night…”
+++++

Uhhhh,
Its called Granville St.(where the drunks/fights/police gather)
At night.
In the rain.
Which tends to happen a lot in Vancouver….

#87 crowdedelevatorfartz on 10.26.18 at 8:18 am

@#91 Risque
“A housing decline could last anywhere from 5-11yrs from peak to trough.”
+++++

Really?
Tell that to people in Tokyo who bought in 1990 and are only now… in 2018… seeing gains ( due to the speculative run up in prices with the 2020 Olympics?).
Booms and busts in real estate can be like a Donald Trump speech…….painful and unnecessarily prolonged.

#88 maxx on 10.26.18 at 8:18 am

@ #23

P.A.T.H.E.T.I.C.

#89 dharma bum on 10.26.18 at 8:43 am

Poor guy. Get him a blankie. – Garth
——————————————————————–

https://www.google.ca/url?sa=i&source=images&cd=&ved=2ahUKEwjT0fKqkKTeAhUo94MKHZ–DvAQjRx6BAgBEAU&url=https%3A%2F%2Fgiphy.com%2Fstickers%2Fsnoopy-5djUNejnu5mRW&psig=AOvVaw1c7jUI9JHGHsYJ698VCgTr&ust=1540643993342436

#90 Rob on 10.26.18 at 8:45 am

#87

You would prefer someone who can speak eloquently and get nothing done?

#91 dharma bum on 10.26.18 at 8:50 am

#21 Stan Brooks

About one in three Canadian workers will be pushed out of their professions in the next 15 years as artificial intelligence and robotics take on more jobs, according to the McKinsey Global Institute.
——————————————————————-

A good rule of thumb is to take these timeline predictions by global think tanks, and quadruple them, minimum.

Goes for climate change fear mongering predictions too.

If at all.

#92 dharma bum on 10.26.18 at 8:55 am

#39 Steven Rowlansdon

The most recent dooms day date is 11/11/18. It could be just another day.
——————————————————————–

It’s called Remembrance Day.
Veterans Day in the US.

#93 jess on 10.26.18 at 9:30 am

#54 Shawn Allen on 10.25.18 at 8:36 pm

Co-operation and transparency …some say the words but what would we know if not for investigative journalists, hackers and whistleblowers
see icij

EXPOSING GLOBAL CORRUPTION
http://visar.csustan.edu/aaba/jerseypage.html
The US giants have been charged in one of the largest corporate tax victories for the UK’s HM Revenue and Customs
The case, which is one of the largest corporation tax triumphs for HM Revenue and Customs (HMRC), relates to a tax avoidance scheme set up in 2006-07 when the two firms jointly owned the now-defunct Teesside power station.
https://www.europeanceo.com/finance/goldman-sachs-and-cargill-fined-e89m-in-uk-tax-avoidance-case/

================
https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8807-us-allows-child-slavery-suit-against-nestle-cargill

#94 crowdedelevatorfartz on 10.26.18 at 9:31 am

@#90 Rob
“You would prefer someone who can speak eloquently and get nothing done?”
++++

ahahahaha.
Sure because it beats Trudeau who speaks idiotically and gets nothing done……

#95 Frank The Tank on 10.26.18 at 9:37 am

I find that equities actually really move on guidance more than earnings. Companies report a quarter with monster earnings, but if they even utter a quiet hesitation about guidance moving forward, the stock goes negative.

Is that not what we are seeing now in the markets? It’s volatile and lowering because of guidance not earnings (i.e. rising rates, political concerns, trade concerns, etc…).

———————————————-

As I said, DOW plunging again even with 3.5% GDP growth. Investors are looking at what they believe is coming (right or wrong), not what is now.

#96 jess on 10.26.18 at 9:46 am

review

The passport king who markets citizenship for cash
https://www.theguardian.com/world/2018/oct/16/the-passport-king-who-markets-citizenship-for-cash

st kitts:

Oct 16, 2018 – “Election campaigns here sank to a new low,” recalls Jude Knight, of Searchlight, a local newspaper. “Stuff we have never experienced in this

#97 IHCTD9 on 10.26.18 at 9:56 am

#79 SoggyShorts on 10.26.18 at 12:21 am

On a 1 million dollar PF we are talking about a $10,000 difference.
Lets face it, what are the chances that you found a guy who is twice as good as GT, and if he isn’t, then are you happy paying twice as much?
_____

It’s easy to overlook fees I found. Investing for a long time with small deposits taking a couple decades to amount to anything. Most of the time the MER I was paying seemed like a hill of beans.

Once you have a bit of a pile going though, it starts adding up. The 2.4% MER we are paying to the [email protected] is getting to be a solid chunk of change. In the future, if things go as expected – the cost would become insane.

Take that and then realize [email protected] and Co. still under performed Garth and Co.’s efforts despite much higher management costs. I am getting squat for the additional costs.

Take that and realize our [email protected] also knows very little outside of how to get folks signed up for Mutual funds (with 2.0+ MER’s). Little about estate planning, zip about taxes. She can hand you a risk assessment, and have you sign on the dotted line – that’s about it.

To think at retirement – we could be paying almost 30K/yr. to the bank to “manage” our investments. That’s a brand new Grizzly 700 SE EVERY YEAR I am throwing away compared to utilizing someone like Garth, keeping that Griz, and very likely getting better performance and access to a lot more expertise on top of it all!

As you may know, forsaking the opportunity to own a brand new Grizzly 700 SE every year is NO TRIVIAL MATTER around IHCTD9 headquarters. We’re looking at going fee based.

#98 jess on 10.26.18 at 9:57 am

FOR IMMEDIATE RELEASE
October 23, 2018
Contact: Bryan Hubbard
(202) 649-6870
OCC Assesses $100 Million Civil Money Penalty Against Capital One

Capital One Bank fined $100 million for anti-money laundering failures
(23 Oct 2018)
Money Laundering: OCC Assesses $100 Million Civil Money Penalty Against Capital One (23 Oct 2018)

WASHINGTON—The Office of the Comptroller of the Currency (OCC) recently assessed a $100 million civil money penalty against Capital One, N.A., and Capital One Bank (USA), N.A. for deficiencies in the bank’s Bank Secrecy Act/Anti-Money Laundering program.

The deficiencies, cited in the OCC’s 2015 order against the bank, included weaknesses in its compliance program and related controls; deficiencies in its risk assessment, remote deposit capture and correspondent banking processes; and failing to file suspicious activity reports. In assessing this civil money penalty, the agency found that the bank failed to achieve timely compliance with the OCC’s 2015 order, as required.

The bank paid the assessed penalty to the U.S. Treasury.
Related Links

Consent Order for Civil Money Penalty (PDF)
2015 Cease and Desist Order (PDF
https://www.occ.treas.gov/news-issuances/news-releases/2018/nr-occ-2018-112.html

#99 neo on 10.26.18 at 10:25 am

Hi Garth,

So let’s review. The bond market got a little ahead of itself and something did break in the stock market. S&P 500 got to that 2,700 level that I mentioned and we had a dead cat bounce and more selling. If we get to below 2,600 I mentioned things will get interesting as there is a big gap down at that point.

The 10 year was at about 3.34% when things broke. Where are we this morning? 3.08% and falling. By remembrance day we should be back below 3% again. How fitting.

All that said, the market was too expensive and it’s on sale now. It’s not even Black Friday yet! Time to put some extra cash lying around to work.

#100 Stan Brooks on 10.26.18 at 11:03 am


#91 dharma bum on 10.26.18 at 8:50 am
#21 Stan Brooks

About one in three Canadian workers will be pushed out of their professions in the next 15 years as artificial intelligence and robotics take on more jobs, according to the McKinsey Global Institute.

——————————————————————-

A good rule of thumb is to take these timeline predictions by global think tanks, and quadruple them, minimum.

Goes for climate change fear mongering predictions too.

If at all.

McKinsey is not a think tank.

It is the # 1 (by far) strategic consulting company in the world. They consult governments, global companies, even IMF/The world bank.

I would advise you to pay close attention to what they say.
They have a great number of research papers on the topic of AI and automation. Read it.

They charge in the millions to bring a team to analyze/tackle a global problem.

These people are not the likes of your bureaucrats/the likes of Bill Morneau or Steven Poloz.

Go and see their headquarter, on Charles St in Toronto from the outside. If you can see from the inside/if you pass the buzzer, you will be amazed.

Much more modern than the KPMG offices in downtown Toronto, the Gluskin Scheff top floors on University avenue or the RBC open concept top floors in their new building on LakeShore overseeing the lake.

I have seen all from inside for quite some time while running from my ‘psychiatrist’.

In my mind they/McKinsey are optimistic, my prediction is for 50-60 % job losses in the next 10-15 years.

Everything that we do can and will be automated.

So you better get ready, can’t afford to be ignorant on the topic as no one will help you, on the contrary, the governments will come after the few working with higher taxes as the whole tax/revenue/budget thingy/philosophy is based on taxing the workers and the small contractors/businesses, not the big businesses.

#101 Another Deckchair on 10.26.18 at 11:03 am

@97 IHCTD9

If it helps, a few years ago I went through IN DETAIL monthly reports from our professional financial institution (tied to a coloured bank), and did find lots of time fees would be 2.5%.

I started going to an on-line brokerage, and now have almost all of our stuff there. (joint accounts, TFSA, my business “retained earnings” etc)

My partner has some stuff from work with a different financial institution, tied to a different coloured bank. We will see – they want to manage all of our money, they know the story, and will see if they come in at 1% or under for the service.

The partner’s stuff is NOT something we can handle ourselves, due to it’s structure, so we are tied to them, anyway.

Lessons learned:
1) We should have been looking at our financial statements more closely (but, excuse: life with kids gets in the way of that)

2) Reading every day and learning and listening means that, the new bank knows that if they want 1% of our “other” money, they have to lower our fees.

3) The best time to have been reading and handling the money better was 2 decades ago, the 2nd best time is NOW.

4) The on-line broker can likely move lots of your stuff over; you have to give them a listing of what you have. We were lucky; 100% of what I’ve moved over so far has gone in without issue, and zero cost.

5) I’m not a stock picker. ETFs are my way to go, despite the less potential return. My reason? My work, which I get paid incredibly well for, is more fun, and, it’s well within the top 5% of income in Canada.

6) I should call Garth, but, as mentioned, we are tied due to something from my partner’s work with this institution.

Don’t be afraid to look at the on-line brokerage.

#102 Ubul on 10.26.18 at 11:09 am

#99 neo on 10.26.18 at 10:25 am

All that said, the market was too expensive and it’s on sale now. It’s not even Black Friday yet! Time to put some extra cash lying around to work.

Too early for that cash. There is much more room towards the bottom.

#103 PastThePeak on 10.26.18 at 11:30 am

#102 Ubul on 10.26.18 at 11:09 am
#99 neo on 10.26.18 at 10:25 am

Too early for that cash. There is much more room towards the bottom.
++++++++++++++++++++++++++++++++++++

I agree that the bottom is likely to be (a fair bit) lower than what we are at, but that bottom is only visible in the rear view mirror. At the bottom is the market as a whole, so there are some companies / ETFs that have gone down a good amount, that may not go down that much further into a bottom (have support in dividend yields, as example).

Use a watch list to track items that fit your portfolio and if the price drops, it is still OK to add to it, even if there is a “potential” that the price to go lower.

Case in point, Enbridge is a pretty solid name, the price is down considerably from its high, it has a top rating on Morningstar, and a 6.7% dividend yield. It is trading at ~$40/share right now. Might it go down to $35? Maybe – but maybe not. The CAD energy sector is not in favour at the moment, but natural gas is a pretty stable business. Put some cash to work with good dividend yielding equities / preferreds.

#104 SoggyShorts on 10.26.18 at 11:31 am

#97 IHCTD9 on 10.26.18 at 9:56 am
#79 SoggyShorts on 10.26.18 at 12:21 am

The good news is that if you are paying 2.4% MER now, you can switch to either a DIY potatoe portfolio or a GT-1% advisor with very little risk.
There’s almost no chance GT will underperform [email protected] by 1.4% since he could put you in the exact same holdings that those terrible mutual funds have for less.

#105 n1tro on 10.26.18 at 11:47 am

#98 jess on 10.26.18 at 9:57 am

Good! Capital One sucks. Just cancelled my card with them yesterday. Long overdue.

Blocked me funding my Coinbase account beginning of the year and just yesterday blocked a $1USD preauthorization when I was trying to link the card.

#106 Linda on 10.26.18 at 11:51 am

Decided to check out prices for building a house. I used the low end of quoted costs for building materials & $15 per hour for labor (yes, I am aware that skilled trades make a LOT more than that). The cost to build a house under 2,000 square feet – cost does not include land, driveway or any landscaping but does include building materials & labor – is over $250,000. As per the cost of living post for September 2018, the average cost of a house in Vancouver is $1,087,500. Even if housing prices drop by 50% the cost of a house would still be north of $500,000. Using a 3.5% mortgage rate & 20% down, the monthly cost to service a $400,000 mortgage is $2,285 per month as per the mortgage calculator.

Realistically, the actual cost to build a house under 2,000 square feet today (including land & driveway::) would likely be north of $350,000. Costs per foot are roughly $255. Thus a 1,500 square foot house would cost at least $382,500 before any markup by the builder/developer to provide a return on investment.

My point is that any decrease in housing prices will eventually run up against the cost factor of building them. It is unlikely that houses will end up selling for less than the cost of replacement. As per the mortgage calculator, a household family income of $72,000 per annum would not permit the purchase of a property valued at $500,000 (20% down; $400,000 mortgage). Seems like ‘priced out of the market’ is a literal fact.

#107 SoggyShorts on 10.26.18 at 11:59 am

#100 Stan Brooks on 10.26.18 at 11:03 am

#91 dharma bum on 10.26.18 at 8:50 am
#21 Stan Brooks

In my mind they/McKinsey are optimistic, my prediction is for 50-60 % job losses in the next 10-15 years.

*******************************
HAAHAHAHAHAHAHAHAAAHA
I don’t even know where to begin with this steaming pile of a prediction.
HALF of jobs will be replaced in the next decade?
HALF?!!?
Unless someone comes up with a way to mass produce $1000 androids that haven’t been invented yet really soon there is just no way that automation could progress so quickly.

Physical jobs can certainly be reduced by better automation, but a 50%-60% replacement is not happening before the end of the century.
What about construction? Do you really think that in the next 10-15 years we are going to create so many cheap machines/robots that roofers, carpenters, cribbers, masons, painters, road workers etc. will become 50% obsolete? Suddenly (and 10 years is hella sudden) all new homes will be pre-fab from some mega factory?

Just think about a few jobs that could be replaced and aren’t:
♦Massage therapist: There are dozens if not hundreds of machines that you can buy to do their jobs, and yet we still have those jobs.
♦Teachers: We have video cameras, and yet we aren’t just watching recordings of teachers in the classroom.
Better yet, we have internet and we only have 3% homeschooling.
♦Calgary has garbage trucks with the robot arm for garbage collection, theoretically taking half of garbage collector jobs away (still need a driver) but did that happen yet across Canada? No? It’s been years, so why not? Will it happen in the next 10-15? Very doubtful, even for an idea that is really good.

Automation is improving, but 50% of ALLjobs in 15 years is an idiotic prediction.

#108 Brett in Calgary on 10.26.18 at 11:59 am

Yep we’re getting pumped all over the place. Tough times in Calgary.

=====================================
Poor Calgary. My hometown.

Western Canada Select heavy oil blend – $27/barrel and a $60 differential to West Texas Intermediate.

Now, Penguins up 7-0 over Flames before the end of the 2nd period.

Pass the spliff.

WUL

#109 In Dog We Trust on 10.26.18 at 12:16 pm

$15 for the pleasure of ogling VPD pooches and fueling the anti-cancer movement. done!

A VPD mutt shout out. Growing up in the burbs of Lotus land our neighbour was on the VPD Canine unit and lived with a working pooch. In 15 years the only time I ever heard that dog bark was when some misguided moister attempted to break into his neighbour’s (my family’s) house. The moister fled and order was restored. In Dog We Trust!

#110 Shawn Allen on 10.26.18 at 12:22 pm

Dear Real Mark: “Git”

Real Mark responded to me at 64.

This after he complained about a response to him that he felt was a personal attack and I offered to never respond to him if he would agree to never respond to my posts.

Mark, I’d prefer if you never again respond to my posts.

Unilaterally, I have decided to never again respond to Mark. Please do me the same favor.

#111 James on 10.26.18 at 12:27 pm

#60 jojo on 10.25.18 at 9:01 pm

It’s all about capitla flows.
When socialism threatens properity capital flees.

The US election is causing this not interest rates.
Capital is taking profits due to fear of the Democrats.
It’ll sit somewhere until teh election is over.

I pulled a ton out of the markets after they elected Occasio in NY and celebrated.

The Dems have turned so far left – Trudeau looks like a conservative.

The rise of the Alt Left is what all should fear.

Gray buildings, all workers making 500 bucks amonth and food stamps from the state, appratchiks sending you to the Yukon for re-education, Thought police telling you what to think and do..

The glorious leader will save all etc…..

So no smart capital is sitting this one out. Once the dust settles in the US and repubnlicans still control power then the market will continue to climb due to overall prosperity.

If the Dems take congress, when Trump took power the markets exploded the next day.

Look a the charts they don’t lie.

LOOK OUT!
_____________________________________________
Define exploded Jojo? I have the charts.

Oh and please learn how to craft a sentence and spell.
I’m looking at the charts and the trend was already there before Trumpo took power. It was essential like being in a track & field relay where Obama was ahead of the other competitor by a league when he passed the baton to Trumpo. So other being a total F up Trumpo has continued to enjoy the lead he was given.

http://www.valueline.com/Markets/Daily_Updates/Stock_Market_Today__January_20,_2016.aspx

http://www.valueline.com/Markets/Daily_Updates/Stock_Market_Today__January_21,_2016.aspx

http://fortune.com/2017/01/20/thanksobama-heres-how-stocks-did-during-obamas-presidency/

#112 Oakville Rocks! on 10.26.18 at 12:27 pm

#100 The babbling brooks does it again. Hey, lay off the meds it is affecting your critical thinking and attention span.

Not sure you even bothered to read the whole article you linked to.

Only a simpleton judges the quality of someone’s advice based on how impressive their office is No doubt you wash your meds down with McKinsey Koolade..

I have worked with McKinsey too (on a banking project). The contact person from McKinsey was fresh out of McGill MBA. Last I checked, they are all human, many with very little actual business experience and capable of mistakes.

You know who was a McKinsey alumni? Jeff Skilling – Enron?

Consider also that McKinsey has been advising the banks and FIs to the tune of millions of dollars in fees for decades, yet it was not a McKinsey consultant who saw the problem with the subprime mortgage business that precipitated the credit crisis and the failure of many of their clients. Why? Because more often than not, McKinsey is happy to sell the advice that their clients are most receptive to buy.

McKinsey sells advice. It is in their interest to project problems and then offer consulting to solve them.

No doubt robots will displace workers but that does not mean it will lead to massive unemployment. Read the rest of the article and engage what is left of your addled brain.

#113 IHCTD9 on 10.26.18 at 12:38 pm

#104 SoggyShorts on 10.26.18 at 11:31 am
#97 IHCTD9 on 10.26.18 at 9:56 am
#79 SoggyShorts on 10.26.18 at 12:21 am

The good news is that if you are paying 2.4% MER now, you can switch to either a DIY potatoe portfolio or a GT-1% advisor with very little risk.
There’s almost no chance GT will underperform [email protected] by 1.4% since he could put you in the exact same holdings that those terrible mutual funds have for less.
____

Ms. IH and I are lazy (obviously, since we’re still at the bank paying 2.4) and also sport dunce caps when it comes to investing, so we are looking at someone like Turner Investments to handle things.

They way it looks right now, the costs will go down, and performance would likely be better. We don’t have millions, but we’re starting to close in on some real money at a 2.4%, and thanks mostly to my reading here – it has gotten under my skin!

The other thing I didn’t mention is my concern over all these small town banks closing up, and the fact that we are on our third [email protected] in two years. I think the human element is getting stripped out of the bank branches. One [email protected] told me that the ‘writing was on the wall” for them, and that is why she bailed out.

#114 Stan Brooks on 10.26.18 at 12:40 pm

#107 SoggyShorts on 10.26.18 at 11:59 am

So you are basically smarter than McKinsey?

And you charge 5 digits fee for 1 days of consulting work per person as well/as they do?

When you achieve that, come back here and express your opinion, contradicting McKinsey. This is not your pot head/T2 type of authority.

In 10-15 years there will be no taxi drivers, but automated self driving cars.

No cashiers or baristas.

15 % of high tech jobs TODAY are with no university degree, people just take online/video courses.

Check out what these robots can do now:

https://en.wikipedia.org/wiki/Boston_Dynamics

Deep Mind beats the world GO champion any time they play. People are inferior in chess to simple chess programs for quite a while.

It does not matter what you think, automation will happen one way or another.

Loose that ignorance, empty confidence and read their papers:

https://www.mckinsey.com/featured-insights/artificial-intelligence

Our single threaded rudimentary reactionary instincts driven intelligence based on elementary nervous system can’t compete with the AI of tomorrow. You can not even comprehend what it is capable of, including the group/super intelligence.

#115 Frank The Tank on 10.26.18 at 12:42 pm

#44 D C on 10.25.18 at 7:32 pm
#14 Frank the Tank on 10.25.18 at 5:15 pm
Do you think a 80/20 balanced portfolio is dangerous? Should I realign to 60/40?

a) If you are asking, it’s dangerous for you
b) Hang on a few more down market days and that rebalance will have been done for you ;)

———————————————————-

I just saw this DC, thanks for the input. I actually don’t get emotional about it at all, I just wonder about whether a balanced 60/40 makes more sense than a 80/20 at this moment. I have more money to buy, which I will be doing.

#116 IHCTD9 on 10.26.18 at 12:57 pm

#106 Linda on 10.26.18 at 11:51 am

Decided to check out prices for building a house..

_____

Good guesswork. A guy in my extended family is a builder, and he says it costs about 300K just to build the house – no land/well/septic etc. This would be a pretty nice 2.5Ksf house nicely finished with double garage and finished basement. These sell for about 500K new.

#117 Doug in London on 10.26.18 at 1:00 pm

Say, has anyone checked out the amazing deals in the stock market today? Next Wednesday a lot of kids will be out on Halloween trick or treating, hoping to get some treats. I’m too old to join the kids out trick or treating, but I’ve got my Halloween treats early this year with all those deals in stocks and ETFs. Trick or treat!

#118 HardTotomach on 10.26.18 at 1:00 pm

Sorry if this is a double post, I didn’t see any gratification that it took or not after the submit button.

So. I fallow all the advice from blogs like this, and authors of books like – Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School. And of course other research and advice. Took me a few years of research before I pulled the trigger.

I go to my bank (RBC) ask them to cash out my mutual funds (only a couple years old, don’t know how they convinced me…) in both RRSP and TFSA, for me and my wife, with a lot of protest on their part. And basically give them the metaphorical middle finger “look” as we walk away.

Open a Questrade self directed account for me and my wife with a RRSP and TFSA accounts equaling 100K (Halfway through last August). Balanced my portfolio with researched ETFs in US, CAN, International, and a little Cnd Bonds (So essentially the whole world global market).

Fast-forward to today, it’s really hard to stomach this advice. I know it’s not a long term portfolio yet. But it’s hard to see our “UNREALIZED GAINS (LOSSES)” at negative 9K+, a heck of a lot of money to loose in which we are not used to seeing.

We have always been very cautious savers and investors, like laddered GIC of sorts and have never really been in any negative situation, basically always posative.

It’s nerve racking to see all this advice and go through an instant lose of this proportion and speculate that’s it’s only going to get way worse before it gets better.

Feels like we definitely got in at the top and we are on the way down. Really really hard to not be emotional when that money could have gone into a GIC or something, gaining more than 2%, instead of loosing.

Would have it been better to speculate the bottom rather than being in at a top while at least getting 2%+ in the meantime?

To late now.

What will we do if our portfolio is 50% negative in the future??? – hopefully my research pays off.

#119 HardToStomack on 10.26.18 at 1:03 pm

Really really sorry if this is my 3rd post. I’m just thinking something is wrong on my end. After hitting the submit button, it just refreshes the page.
___

So. I fallow all the advice from blogs like this, and authors of books like – Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School. And of course other research and advice. Took me a few years of research before I pulled the trigger.

I go to my bank (RBC) ask them to cash out my mutual funds (only a couple years old, don’t know how they convinced me…) in both RRSP and TFSA, for me and my wife, with a lot of protest on their part. And basically give them the metaphorical middle finger “look” as we walk away.

Open a Questrade self directed account for me and my wife with a RRSP and TFSA accounts equaling 100K (Halfway through last August). Balanced my portfolio with researched ETFs in US, CAN, International, and a little Cnd Bonds (So essentially the whole world global market).

Fast-forward to today, it’s really hard to stomach this advice. I know it’s not a long term portfolio yet. But it’s hard to see our “UNREALIZED GAINS (LOSSES)” at negative 9K+, a heck of a lot of money to loose in which we are not used to seeing.

We have always been very cautious savers and investors, like laddered GIC of sorts and have never really been in any negative situation, basically always posative.

It’s nerve racking to see all this advice and go through an instant lose of this proportion and speculate that’s it’s only going to get way worse before it gets better.

Feels like we definitely got in at the top and we are on the way down. Really really hard to not be emotional when that money could have gone into a GIC or something, gaining more than 2%, instead of loosing.

Would have it been better to speculate the bottom rather than being in at a top while at least getting 2%+ in the meantime?

To late now.

What will we do if our portfolio is 50% negative in the future??? – hopefully my research pays off.

All that reading should have told you fluctuations are the norm and declines are temporary. Stop whining. – Garth

#120 The Real Mark on 10.26.18 at 1:07 pm

“My point is that any decrease in housing prices will eventually run up against the cost factor of building them. It is unlikely that houses will end up selling for less than the cost of replacement. “

Have to disagree here. Houses are a lot like cars, they depreciate, in the physical sense, pretty much from the time that they’re manufactured. In a normal housing market, resale housing should always cost less than the cost of replacement, simply because all resale housing is, by definition, older than brand new. Brand new housing, of course will be at or even slightly above the cost of replacement.

Used cars, with a few rare exceptions, always cost less than brand new cars. Yet the market for vehicles continues to function in an orderly manner. Now brand new cars can’t sustainably go beneath the cost of production for long without bankrupting the manufacturers, but the used market nearly always trades at a discount to replacement cost. As the housing market normalizes, I’d expect exactly the same in houses. So your calculation of the cost of constructing an average house would be an absolute ceiling on housing prices, definitely not a floor. Or stated differently, the price of houses has been hyperinflated by the availability of relatively cheap credit, and the withdrawal of such unduly cheap credit will be devastating for housing prices and for those who have levered their entire family balance sheets or even their career choices to such.

#121 Carl Spackler on 10.26.18 at 1:10 pm

So maybe a few got away.

I take my orders from the owner of the club/golf course. The man himself, Mr. T, said deal with it.

Gophers, democrats – same difference, right smokie?
Both standing in the way of Making America Great Again.

Mr T. is right, the Chinese been feasting on our cheap postal service for too long.
Bout time an American put that free ride to good use.

Au revoir, Gophers!

#122 The Real Mark on 10.26.18 at 1:12 pm

“Good guesswork. A guy in my extended family is a builder, and he says it costs about 300K just to build the house – no land/well/septic etc. This would be a pretty nice 2.5Ksf house nicely finished with double garage and finished basement. These sell for about 500K new.”

Sounds about right. And as housing prices fall across the board, even those costs themselves will fall. There’s a lot of profit in the supply chains, and even fairly decent wages in the construction industry which can, in a depression in the industry, be wrung out of the cost structure.

Give it a few years, and with the combination of falling land prices, and falling prices on the inputs to housing construction, those same houses could cost $200k instead of $300k to build. The deflation in the sector is likely to be quite profound as demand dries up, the result of the supply onslaught over the past decade or two fully satiating demand.

#123 n1tro on 10.26.18 at 1:16 pm

#107 SoggyShorts on 10.26.18 at 11:59 am
#100 Stan Brooks on 10.26.18 at 11:03 am
#91 dharma bum on 10.26.18 at 8:50 am
#21 Stan Brooks

In my mind they/McKinsey are optimistic, my prediction is for 50-60 % job losses in the next 10-15 years.
*******************************
HAAHAHAHAHAHAHAHAAAHA
I don’t even know where to begin with this steaming pile of a prediction.
HALF of jobs will be replaced in the next decade?
HALF?!!?
Unless someone comes up with a way to mass produce $1000 androids that haven’t been invented yet really soon there is just no way that automation could progress so quickly.
——————————
Do sex robots count as automation? They do displace the entrepreneurs working the streets of downtown. No #metoo blowback either.

https://www.thestar.com/business/2016/06/04/sex-robots-to-become-a-reality.html

#124 The Real Mark on 10.26.18 at 1:16 pm

“Mark, I’d prefer if you never again respond to my posts.”

Wow, real mature. Can’t even handle the most trivial of push-back to your rather provocative claim that legal use of tax deferral techniques by corporations was “crap”. If you post here, any comment is basically open to debate unless the host rules otherwise.

#125 Batman at RBC on 10.26.18 at 1:24 pm

One of smoking man’s RBC trainees….

“RBC Capital Markets head of US equity strategy Lori Calvasina noted in a report that this pattern of two record highs in a span of just a few months — so-called “Twin Peaks” — also happened in late 1999 and early 2000 before the dotcom bust and in 2007 before the Great Recession.”

#126 IHCTD9 on 10.26.18 at 1:24 pm

#101 Another Deckchair on 10.26.18 at 11:03 am
@97 IHCTD9

If it helps, a few years ago I went through IN DETAIL monthly reports from our professional financial institution….

____

All good points – thanks. We are just hoping to carry on as we always have getting decent returns, doing auto deposits every month, and hopefully the bun in the oven has risen sufficiently by the time we hang up the gloves. I like that the fee for service is tax deductible too – any time I cut back my tax remittances, it’s like a warm bowl of soup on a cold winters’ day :).

I’ve already discussed things with Mr. T – I think he’s worth a call for you too. You never know what he may know that you don’t.

#127 Stan Brooks on 10.26.18 at 1:26 pm

#112 Oakville Rocks! on 10.26.18 at 12:27 pm

So you worked with one junior BA with MBA and little experience (probably still top 1 % in their class) and feel qualified to judge/express opinion for the company…

Next thing is you will tell me how their AI consultants or advisers including Andrew Ng have no idea what they are talking about because YOU do not like it.

It is a global company that is a magnet for the world top talent. Junior staff is still selected among the top candidates.

Their expertise is not in your intellectual league. Did you read their research? Oh, I forgot, you know already all about AI from your selected social network sources.

Next thing you will start teaching/expressing opinion about string theory or quantum computing because you ‘heard’ and ‘know’ stuff.

Like the ‘psychiatrist’ here with his straight jacket and lobotomy ‘tools’.

A senior partner at McKinsey makes around 2 million + per year. Have you applied for a job there?

Oh, I forgot, you are smarter and in fact make much more than that.

Did you even read the damn papers?

#128 IHCTD9 on 10.26.18 at 1:41 pm

#118 HardTotomach on 10.26.18 at 1:00 pm
____

If this stuff churns your guts, get a Pro to do it, pay the cost, live life and check in on it 10 years from now.

I barely even looked at ours in it’s 20 year history – other than the 1/4ly reports – even some of those went unopened into the filing cabinet. If it was higher than the last one (if I could even remember what it was) that was good enough. Right now, I know we have taken a $h!t kicking since our last report – I’m not planning on even looking at it. Why bother? I’m not selling out.

I never had a chance to freak out over the 23% loss we suffered during the GFC (as noted on our funds’ historical chart) and glad for it since it bounced right back the next year. Stress for no good reason, there are much more enjoyable ways to shorten your life!

The last bloody thing I’d do is try and invest as an individual – my life’s expertise lies in other things. I’m a total dunce – and just don’t give a rip – about the nuts and bolts of investing. Go and get 2-300+K together and see a fee based specialist with good credentials, staff, and history and forget about it.

#129 baloney Sandwitch on 10.26.18 at 1:44 pm

@HardTotomach
Worst thing you can do it cash out now. You will lock in your losses. In the last crash it took me over 3 years to break even – however since then my networth has quintupled.

#130 Damifino on 10.26.18 at 1:48 pm

#118 HardTotomach

Take heart.

I first entered the market in Feb 2000 after exercising and immediately selling a considerable number of tech company employee incentive share options issued at a small fraction of their sold value. In 2007 I sold a recreational property and netted a reasonable gain. That was also invested. Then…

The ‘Dot Com’ bust hit. Although I was fairly well diversified, it took about 18 months to get back into positive territory. Then things went swimmingly for quite a while… until…

The ‘Global Financial Crisis’ hit in 2008 at which point I dropped about 28%. It took over a year to recover from that but then I did very well for a few years. In 2010, I sold a house and invested quite a large sum the following spring, just minutes before…

The ‘Summer Plop of 2011’. That one wasn’t too bad but it took about a year to recover. Then, of course, there was the rather ugly year of 2015, followed by two super years.

I was getting dividends all that time and, since 2007, have been retired and drawing monthly living expenses. As of today, I still have every dime of capital I’ve ever invested, and I’ve spent a whack cash since then.

Things change. Then they change back. Then they change again. I hardly look at my accounts any more. Someone else gets paid to do that. I’m busy.

#131 PastThePeak on 10.26.18 at 1:49 pm

#118 HardTotomach on 10.26.18 at 1:00 pm

Feels like we definitely got in at the top and we are on the way down. Really really hard to not be emotional when that money could have gone into a GIC or something, gaining more than 2%, instead of loosing.

Would have it been better to speculate the bottom rather than being in at a top while at least getting 2%+ in the meantime?

To late now.

What will we do if our portfolio is 50% negative in the future??? – hopefully my research pays off.
++++++++++++++++++++++++++++++++++

I could give a long winded response, but the short answer is:
– history
– math

You are investing in RRSP and TFSA “for the long haul” – not to save for a car or RE down payment next year. So you need to take a long term view.

Look at the *history* of returns of the different asset classes over decades. You will see that equities have produced a much higher “compound average growth rate” (the old CAGR) than bonds, and certainly than GICs. This means, over the long term, you will earn more (vastly more in some cases) with a predominantly equity based portfolio.

Do the *math*. Create a simple spreadsheet to see the difference. In one scenario, you put into GICs with 2-3% guaranteed each year. In another, the portfolio models equities which would go up most years (10%, 20%, 5%,…look at “history” as your guide to model), sideways others, and down badly a couple.

See which has more money in 30 years. And don’t forget to consider inflation at 2%…

And then you can do what Garth says, which is have a 60:40 balanced portfolio. My preference is to have more preferred shares / REITs than bonds in the fixed income part, along with good dividend producing equities on the other side, but to each their own.

#132 Fish on 10.26.18 at 1:51 pm

Furry friends could be costing you hundreds more on your hydro bill

BC Hydro study found 52% of pet owners say comfort of their animal more important than saving electricity
Zahra Premji · CBC News · Posted: Oct 26, 2018 5:00 AM PT | Last Updated: 3 hours ago

https://www.cbc.ca/news/canada/british-columbia/bc-hydro-bc-hydro-electricity-bills-pets-expensive-1.4879217

#133 Ace Goodheart on 10.26.18 at 1:51 pm

And the budget has balanced itself, to the surprise of the Federal Libs, who had no idea they would end up running a surplus:

https://www.theglobeandmail.com/politics/article-federal-finances-in-surplus-so-far-this-year-in-spite-of-deficit/

Sort of like finding that extra hundred bucks in that old bank account you forgot you still had.

I guess to some extent, this is a good thing, and sort of validates T2’s election promise that budgets would simply balance themselves, with no help from him.

But then again, it also seems a bit careless somehow, to not even know whether you are in a deficit or a surplus position, budget wise, while acting as leader of a G7 country.

#134 Stan Brooks on 10.26.18 at 1:51 pm

I applied all techniques described here, but to no avail:

https://www.forbes.com/sites/stevenberglas/2013/01/11/the-top-5-ways-to-manage-closed-minded-defensive-truth-resistant-people/#58d9a42460f8

Maybe my subconsciousness tells me to express it/the truth/ in a way as to force rejection and ignorance, laughter and development of a baseless complex of superiority as to leave some closed-minded-defensive-truth-resistant-people completely unprepared to what waits them… until it comes and then it is too late to react…. who knows, folks but time will tell, time will tell…

For now enjoy the ride.

#135 Hana on 10.26.18 at 2:04 pm

What is happening with preferred shares? Rates went up but my ZPR and CPD are down. Does anyone understands why is this happening? Garth, would you mind to comment :)?
Thanks!

#136 Stan Brooks on 10.26.18 at 2:04 pm

#130 PastThePeak on 10.26.18 at 1:49 pm
Agree completely,

#118 HardTotomach on 10.26.18 at 1:00 pm

Just hire an investment adviser, invest and forget about it. Don’t look at your balance on daily basis and resist any urge to trade frequently unless you see a bargain or need to re-balance.

It is a psychology game as is real estate, pocker and the regular shepple almost always gets burned.


On patience

It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.

Patience is an underappreciated but critical component of investing success. You might double your money in a year if you’re lucky, but to make 10 or 20 times your investment, you need a well-chosen investment and the patience to endure inevitable ups and downs. Investors with patience can also enjoy an easier kind of investing, as Munger explained on another occasion:

If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing

Can you say: ‘ I ‘lost’ 70-80 k in the last month but I do not care’ with a smile’?

#137 AGuyInVancouver on 10.26.18 at 2:07 pm

And we have the MAGAbomber, exactly the type you’d expect:

https://www.theglobeandmail.com/world/article-one-person-arrested-in-connection-with-us-mail-bombs/

#138 TurnerNation on 10.26.18 at 2:15 pm

Also the atmosphere of planet TurnerNation is noted for its lack of the element “H”.

Blackish Monday coming up? !

#139 PeterL on 10.26.18 at 2:26 pm

“America is at full employment”. True, but labour force participation is down from 10 years ago. Probably doesn’t make a lot of difference to the “gasoline on the fire” economy, but is a bit worrisome, especially for political stability.

https://tradingeconomics.com/united-states/labor-force-participation-rate
(click on the 10Y and MAX buttons)

#140 James on 10.26.18 at 2:26 pm

Well, well, well so far this guy doesn’t sound to far left to me. He does sound like many other whack jobs on social media. Most definitely a sick Trump supporter.

A Twitter account that appears to belong to Sayoc, @hardrock2016, includes memes denouncing Florida gubernatorial candidate Andrew Gillum, including a photo of Soros made to look like he’s holding a puppet that resembles Gillum.
Other posts called Parkland shooting survivor David Hogg “fake phony.” He posted memes repeatedly attacking Hogg in July. He also called Gov. Rick Scott “greatest Governor Ever” in a posting that shows the Republican governor alongside Trump.
In June, he praised Trump in a birthday message saying: “Happy Birthday President Donald J. Trump the greatest result President ever.”
Per ABC news
https://abcnews.go.com/Politics/wireStory/bomb-suspect-long-arrest-record-including-bomb-threat-58774766

#141 Sands of Time on 10.26.18 at 2:31 pm

If we think of energy for a moment….

In physics, the law of conservation of energy states that the total energy of an isolated system remains constant, it is said to be conserved over time. This law means that energy can neither be created nor destroyed; rather, it can only be transformed or transferred from one form to another.

#142 jess on 10.26.18 at 2:48 pm

polluter pay carbon fee

https://grist.org/article/dont-call-it-a-tax-inside-washingtons-attempt-to-pass-a-fee-on-pollution/

#143 Oakville Rocks! on 10.26.18 at 2:53 pm

Actually, I have a degree in Applied Physics, what you want to know about string theory?

Babbling brooks, I feel safe in saying, McKinsey could be wrong and likely is. To believe someone based on their hype or how much they are paid makes you a fool or a sycophant.

Tell me again about all the things McKinsey got wrong or missed, even when they were paid millions for advice.

Maybe look up critical thinking and start applying it.

I am not saying they are wrong. I am saying they are likely wrong and to say they are right because they are McKinsey or because they have impressive offices or because they demand high fees and have high paid employees is foolish and typical babbling brooks.
But wait, you know even better than McKinsey because you predict 50-60% job losses in a shorter period of time. Why are you not working for them, apparently you are smarter than they are? Probably they do not hire pessimistic trolls because who needs that.

Maybe you should do some reading on McKinsey and understand a thing or two about hype.

Personally I have no need to apply for a job with McKinsey. I am happy with the business I run with my brother… and being happy is what it is all about.

My opinions are more balanced and measured than a troll who lives to post here and can judge the quality of a multi-million dollar home from a drive by in a car or how little there is to do in Toronto by sitting watching people at a mall.

You are a troll who himself has likely not read the reports apart from the titles, headlines and authors. Why, too busy looking down your nose at others to roll up the sleeves, do a little reading and a little critical thinking?

#144 RyYYZ on 10.26.18 at 3:03 pm

I’ve not been enjoying the last couple of months, watching my portfolio, I’ll admit.

However, reading this board has given me the boot in the arse I needed to get myself a personal trading account set up (non-registered) so that I can (hopefully) take advantage of some of the bargains that are around today. I’ve got a good chunk of cash sitting around, so this seems like an opportune time to move it into some investments.

As for my RRSPs and TFSA, it seems like it’s too late too worry about it now, in any case, so I’ll just let them ride – balanced portfolio of equities and bonds. Not so sure my choice of bond funds is the best, something for me to think about going forward. Or just get myself a decent advisor and let them worry about this stuff.

#145 Remembrancer on 10.26.18 at 3:44 pm

#120 The Real Mark on 10.26.18 at 1:07 pm
Or stated differently, the price of houses has been hyperinflated by the availability of relatively cheap credit, and the withdrawal of such unduly cheap credit will be devastating for housing prices
—————————————————————–
Hmm, interesting premise, but applying the car comparison again for a minute – cheap credit (really cheap credit – for example a 0.5%, 0% and 0% 3 year, 5 year and 5 year car loan respectively in last 10 years) hasn’t had the same hyperinflationary effect for cars. Why do you think that is?

#146 crowdedelevatorfartz on 10.26.18 at 3:52 pm

@#119 Hard to Stomach

The market usually craps its pants in Oct.
You’re down 9k ?
Pfffft .
Chicken feed to what my portfolio is down.

Relax.
It’ll come back.

#147 NoName on 10.26.18 at 3:53 pm

#135 Hana on 10.26.18 at 2:04 pm
What is happening with preferred shares? Rates went up but my ZPR and CPD are down. Does anyone understands why is this happening? Garth, would you mind to comment :)?
Thanks!

—-

answer to your question explain here

https://www.greaterfool.ca/2018/03/03/preferreds-101/

Despite this I still view and lump them in with bonds since their prices and returns are driven by the same factors that impact bond prices – RL

and here

Some have argued that the preferred share market faces an upcoming wave of resets at weak spreads that will drive dividends (and ultimately prices) lower. This is a risk, but we think it’s a muted one. There are currently 191 rate-reset preferreds on the market, but only 27 (14%) face a reset next year with a relatively attractive average reset spread of 3.07%. Even fewer preferreds (24 or 13%) face a reset in 2018 at a still-reasonable average spread of 2.59%. – DR

https://www.greaterfool.ca/2016/10/29/very-attractive/

#148 IHCTD9 on 10.26.18 at 4:08 pm

#123 n1tro on 10.26.18 at 1:16 pm

Do sex robots count as automation? They do displace the entrepreneurs working the streets of downtown. No #metoo blowback either.

https://www.thestar.com/business/2016/06/04/sex-robots-to-become-a-reality.html

——-

I see they’ve got a nice selection of boobs hanging on the wall there in the background lol!

“Putting those violent misogynistic actions and beliefs behind closed doors and pretending that there’s no effects on society and on women is a bit naïve.”

Looks like the feminists are already super offended over this one too!

FWIW, even though this is weird science to a guy my age, when I consider everything going on in the West between the sexes, if these things ever get to a certain point price and quality wise – I think they could really shake things up. I’ll probably have huge problems not laughing like crazy reading about the backlash against these things in the future if so.

I also can’t help but recall an episode of Star Trek TNG where Lieutenant Tasha Yar took Commander Data for a little “spin” heheheh…

#149 Shawn Allen on 10.26.18 at 4:12 pm

Why would CPD decline (even a little) with higher rates?

Rate reset preferred shares should protect from rising rates by not falling, but necessarily rising either.

But CPD also contains regular perpetual preferred shares which do fall with higher interest rates.

Looking at Blackrock, it is not easy to see what CPD includes in terms of what percent is rate reset, what percent is regular preferred and it appears it even holds things other than preferred shares! Top 10 holdings show mostly bank common shares??

https://www.blackrock.com/ca/individual/en/products/239836/ishares-sptsx-canadian-preferred-share-index-fund?nc=true&siteEntryPassthrough=true

#150 MGTOW Oberon on 10.29.18 at 2:31 am

House prices ‘falling by over $1,000 a week’ in Sydney and Melbourne, Deloitte says:
https://www.abc.net.au/news/2018-10-23/house-prices-falling-as-interest-rates-wage-growth-move/10418278