Dear Dr. Garth

“Love the blog,” writes Nick, genuflecting deeply. “Been a daily reader for years.”

“It’s been a little while since you’ve delved into asset allocation for new money to invest, and I was wondering if you could touch upon it, given the recent drop in global markets.

“My wife has recently changed employers and has had to take all her workplace investments with her, forced to cash out. She’s got about $75-$100k ready to invest. We are probably going to put it into the recommended balanced portfolio, but were wondering if you think any tweaks to the standard 60/40 are a good idea when buying in today’s somewhat depressed equity markets and increasing interest rate environment. Of course, feel free to use our situation on your blog as I’m sure many others are wondering if the recent events have presented new buying opportunities.”

So, Nick, tell us stuff.

“Married, mid 30s (me 32, she 34), DB pensions at work (hers better than mine), combined salaries of a bit over $200k before bonuses, house worth a little over a million with a mortgage of about half that, investment condo worth about $450k with mortgage of $200k (nets about $8-$9k a year after all taxes/expenses, not amazing the place may also double as our retirement home one day), combined investments of about $300k. No children and no plans to have any (wife wants a dog asap).”

The best time to invest is when you have the money. So why wait? In the sweep of time for two 30-somethings it matters not when you buy securities. But it’s even sweeter when you can do it during a market correction, which is now. Equities have lost about 10% from the highs of late summer, and will like keep on rocking-and-rolling until the midterm slugfest is over next Tuesday night. Following that, it would be reasonable to expect a relief rally. After all, nothing fundamental has changed about the economy, except higher interest rates – and we all knew those were coming.

As for your overall financial picture, $1.4 million in real estate and $300k in liquid assets is not exactly being balanced. Plus you have three-quarters of a million in debt to carry, destined to renew at higher rates in the future. And the condo is cash-flow positive? Nope. Not when you factor in $250,000 of equity which is earning nothing and may even erode steadily as condo values reset. Plus the income gained is taxable at your marginal rate.

Yes, she should invest now in exactly the portfolio this pathetic blog has outlined. Yes, you are doing well. Yes, you could do better. Sell the condo, pay down the house mortgage and get a dog.

Now, here’s Bob, a retired old fart millionaire of the kind Millennials hate. “First off, thanks for your blog.  I read it all the time and enjoy your perspective,” he says, earning points. “You’ve taught me a lot over the years.  I suspect that you put a lot of time into it.”

You have no idea, Bob. I come here every day to fight deplorables.

“So,  a quick question for you.  I’m just a dumb old farmer, so I hire gunslingers to handle my finances.  These guys have fancy models, fancy suits, and fancy offices.  I’m pretty conservative with my retirement plan, about 60% bonds and the rest in equities,  mostly US and foreign, maybe 15% Canadian.  Bottom line: there’s a few mill to play with, they’ve averaged about 8%.  Course, everyone is a genius in a bull market.

“But now things have changed a bit.  The Trumpinator has trade wars on his agenda, the US Fed and Bank of Canuck are raising rates, and as a result debt, deficits, and paying bills is more challenging for everyone – even Uncle Sam.  In September, my guys told me that they thought the party was going to last for another 18 months or so.  Based on what happened to stocks in 2008, I’m not too uncomfortable with a 1/3 drop in the value of my stocks in the next bear market.  What’s going to happen to my bond portfolio though?  It’s supposed to be high quality stuff and have laddered maturities.  Do you think the bond prices will compensate for the change in yield over time?  Or should I get out bonds completely for the next few years?

“The little devil sitting on my left shoulder is telling me to fire my experts, sell all the stocks and bonds – then just buy a triple short S&P500 ETF and hang on for the ride.  The little angel on my right shoulder is sayin that October is always a looney month, hang in there, and go suck martoonies on a warm beach somewhere cuz life is just too short to worry about mundane, unimportant things like money.”

Listen to the angel, Bob. Using big leverage to short the US index has the potential to put you back in the piggery shoveling slop. Interest rates will rise until they hit ‘neutral’ in the view of the central bank – about 1% more. This was evident a long time ago, so your suits hopefully got you into a mess of short-duration bonds which are not much impacted by rising rates. Longer bonds, of course, have been creamed. Prices move in the opposite direction to rates. Yields up, bond value down. Having two-thirds of your money parked there is excessive. So, yeah, you should get the smart guys to review them and justify the holdings. Laddering maturities is not such a hot idea. Did they explain that?

As for October, it traditionally brings increased volatility, nervousness and calls to the inner Chicken Little most people harbour. It’s all been accentuated by the Trump Referendum on November 6, and the same rising rates which have trashed your bonds. The bottom line seems simple. You are old. And rich. And clearly worthy of moister disgust. So just spend it all.

Finally, a few people have been asking about preferred shares which are supposed to rise in value when rates fall, providing some protection against what just happened to Bob’s bonds. So why have pref ETFs like CPD been falling?

Here is the word from my PM buddy, Ryan (of the yellow Porsche):

Definitely an overreaction. I think it’s a combination of a few factors. First, and most importantly is the current recent risk-off environment. With stocks down over 10% in the last few weeks, prefs being the next most risky are down as well. We’ve seen a small widening of credit spreads in the bond markets which captures this current risk-off environment (but nothing significant which supports our still positive view and our expectation for a bottom soon). Second, is we’ve seen increased issuance from the banks over the last few weeks so this is repricing the market. Third, there could be some tax loss selling. I’ve found that when prefs are down in the year you see lots of selling late in the year (generally in late Nov/Dec) to take advantage of tax loss selling. While these are good reasons prefs are down, I do believe it’s just irrational selling and will bottom soon. My favourite pref blog feels the same:

“Due to the retail nature of preferred share investors, the sector is prone to episodes like this, in which the market behaves irrationally for a while until people take a deep breath and look at the comparable after-tax yields. I just wish there was some way of predicting the outbreak and duration of such events!”

This chart of CPD shows how aggressive the selling has been and how deeply oversold the pref market is. We should stabilize soon, barring a recession, which we believe is remote over the next 9-12 months.

About the picture...

Alexa writes: “I’m reaching your today because not only do we enjoy reading updates on the housing market each day, we love seeing a new dog picture. I realize this may not be a standard e-mail you receive but it would mean so much if you could use one of the dog photos attached in an upcoming post. Daisy was my partner’s dog who unexpectedly passed away earlier this year at his 30th birthday while we were celebrating with friends & family. It was devastating, but we think of her constantly. I just know it would mean so much to him if he opened your blog one day and saw her picture. I’ve attached a few for you to choose from should you allow Daisy to be featured on your blog one day. Keep up the amazing work – it’s a breath of fresh air.”

Here’s to you, Daisy.

 

129 comments ↓

#1 HoweStreet.com on 10.30.18 at 5:01 pm

Ross Kay on HoweStreet.com Radio:
Vancouver Housing Correction Notice 2 Years Too Late.
Mortgage Debt is our friend not enemy.

https://www.howestreet.com/2018/10/29/vancouver-housing-correction-notice-2-years-too-late/

#2 Shawn Allen on 10.30.18 at 5:24 pm

Preferred, CPD

So what is the percentage of perpetual preferred in that fund which do go down with higher interest rates?

Rate reset prefs do not necessarily rise with higher interest rates but might just keep pace.

If the market yield of a $25 rate reset is 4% it was set to reset at 4% and trades at $25 and then the market yield on typical high grade rate reset prefs goes to 5% due to higher rates and this particular pref is now set to reset to 5% then all of that is a wash and it could logically stay at $25.

What happened when interest rates fell a few years ago is that the market decided that the market rate on rate reset prefs should not fall as much and therefore their prices had to fall. That was not guaranteed to reverse course in the same way.

#3 technical analysis? on 10.30.18 at 5:44 pm

1.that’s not a chart of the CPD. that’s a chart of CPD including invested dividends. today the CPD closed below its’ lows of June 2017. try using bigcharts, yahoo, freestockcharts… maybe even the tsx site.

2. severe oversold conditions mean nothing. there were plenty of oversold conditions in 2013, 2014 and 2015. and the CPD continued to get more oversold and go lower.

3. there isn’t support on the CPD until ~13$

#4 baloney Sandwitch on 10.30.18 at 5:47 pm

I echo your Porsche driving employee (you prob. pay him too much). The rebound has started – people who don’t buy this week will regret it for the next 3 months.

#5 Penny Henny on 10.30.18 at 5:54 pm

Hey Bob.
You got a FEW mil to play with and you are chasing the highest return?

Why are people so greedy?

#6 SunnyDays on 10.30.18 at 5:56 pm

Who would want to buy CPD with a 4ish% yield (and 0.5% MER), when BCE, BNS and ENB are yielding in the 4-6% range?

#7 Linda on 10.30.18 at 6:07 pm

Great photo of Daisy. Now that’s the kind of face one wants to do business with:)

#8 dakkie on 10.30.18 at 6:12 pm

Vancouver Housing Correction Notice 2 Years Too Late – Ross Kay

http://www.investmentwatchblog.com/vancouver-housing-correction-notice-2-years-too-late-ross-kay/

#9 Shawn on 10.30.18 at 6:28 pm

Nah I don’t think so. The new downtrend in CPD is probably suggesting that short term rates are coming down. Remember what happened in 2015/16? I don’t think it gets that bad but short term rates (ie the FED) have overshot.

#10 Shawn on 10.30.18 at 6:31 pm

Compare PFF to CPD. Short term rates in Canada have significantly overshot. I think this puts downward pressure on the $CAD.

#11 Nineteen84 on 10.30.18 at 6:37 pm

***Equities have lost about 10% from the highs of late summer, and will like keep on rocking-and-rolling until the midterm slugfest is over next Tuesday night. Following that, it would be reasonable to expect a relief rally.***
—-
What we’re seeing is a classic transition from a (lengthy) bull-market into a bear market. Sure, we may get a ‘relief bounce’ as you call it (aka a dead-cat bounce), but a continuation of the bull market is highly unlikely.

The best time to invest is when things are stupid-cheap (think early 2009), methinks. And the worst time to invest is when things are generally expensive (which they are).

All this according to my crystal ball I picked up at the Thrift Store last week for $19.84 +tax

1984

#12 Daisy Rules! on 10.30.18 at 6:37 pm

Daisy rules!

#13 Shawn on 10.30.18 at 6:37 pm

That’s not how RSI works either. The fact that it got that oversold is bearish. You will see rates decline from here.

#14 SoggyShorts on 10.30.18 at 6:38 pm

#136 FOUR FINGERS WATSON on 10.30.18 at 9:00 am
Care to elaborate?
I posted mathematical facts, and asked if proportional representation might be a more fair system.

If my opinion is “Biggest crock of shyt you’ve ever read on this blog” please explain why.

Do you really think that a party with 40% of the vote should have a majority? How does 40%=51% in your mind?

Surely you can defend your position better than that.

#15 Christopher Mewhort, EA on 10.30.18 at 6:57 pm

Mr. Turner:

I spent ~15 years in piggeries shoveling slop. There are worse fates.

Christopher Mewhort, EA
808-261-5005

#16 FOUR FINGERS WATSON on 10.30.18 at 7:06 pm

#14 SoggyShorts on 10.30.18 at 6:38 pm
#136 FOUR FINGERS WATSON on 10.30.18 at 9:00 am
Care to elaborate?
I posted mathematical facts, and asked if proportional representation might be a more fair system.

If my opinion is “Biggest crock of shyt you’ve ever read on this blog” please explain why.

Do you really think that a party with 40% of the vote should have a majority? How does 40%=51% in your mind?

Surely you can defend your position better than that.
………………………………

I provided a link and an example. You provided convoluted bullshyt. Good night Irene.

#17 Brian Ripley on 10.30.18 at 7:09 pm

I mashed up KKRs chart on their projected future returns of each of their investment sectors (cash and 10 year treasuries are their winners over the next 5 years)

http://www.chpc.biz/history-readings/cash-flow

They are very bearish on the real estate portion of their portfolio and expect a 40% drop over the next 5 years.

I make the point on the chart that what will matter in real estate over the next 5 years will be cash flow yield.

In our hot real estate markets we have had outstanding capital gains, if crystallized.

But going forward, Net Operating Incomes are going to be the head lines.

Unless of course your house is your home then it’s just a sunk cost.

Negative yields are a drag.

#18 espressobob on 10.30.18 at 7:10 pm

Prefs act as a diversifier in ones portfolio and slightly down. Equity markets are in correction mode. No comparison.

Dumping some fixed equity and piling into common stock positions in a sense is like rebalancing in reverse.

Nothing is sacred to an investor that actually looks for opportunity. Just one mans opinion.

#19 Marquis de Sale on 10.30.18 at 7:12 pm

I like the spellang misstake on the CPD chart.

#20 Dirty Dirty on 10.30.18 at 7:21 pm

The king has spoken.

https://business.financialpost.com/news/economy/bank-of-canada-will-keep-raising-interest-rates-stephen-poloz-says?fbclid=IwAR2xaqsDwpseVAimr4TwOpUCLauFZ1gA_A_I4K3wD25eqFo7gCUsbFU4rsY

#21 CEW9 on 10.30.18 at 7:27 pm

Far as I know, CPD “includes” rate reset, but I cannot find out at what percentage of holdings.

So far the only true/pure rate-reset pref ETF I have found in Canada is RPF.

Are there others? Or are there current benefits to keeping non-rate resets in a rising rate environment that I am not aware of?

#22 Where's The Money Greedeau? on 10.30.18 at 7:29 pm

Re: #125 SoggyShorts on 10.30.18 at 2:26 am
Serious question:
Has it been confirmed that the “empty high-rise towers in downtown and ghost-neighborhoods on the west side” are predominantly foreign owned? I admit that I don’t follow YVR RE very closely because it’s just a spectator sport for me, but I don’t recall seeing any proof that those aren’t also Canadian’s fault.

For the money laundering casinos, 10m per year doesn’t impress me much. In 10 years 100m vs 360,000m in RE transactions seems a little weak too. Less than 0.03%

I just feel like jumping on the “It’s them foreigners takin our houses” bandwagon is easy and unproven- it’s been called hongcouver for 30 years, and I doubt that even locals can tell what kind of passport someone with Asian ancestry has.
+++++++++++++++

Have a read on Kathy Tomlinson’s very thorough description of money laundering in RE in Vancouver city alone.

https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/
RE lawyer Guo, you have to see what she says:
“I am the biggest Chinese lawyer in the Chinese community. We do 600 million [dollars] a year in transactions. Maybe that is why we are a target for criminal activities. They know we are doing lots of work.”

Methinks it’s much greater than $100 million/year. That number was taken from a preliminary report.
If one lawyer is making $600mm in transactions, just in Richmond, then multiply that by many many lawyers, I can see $600mm EVERY year as feasible all across BC.
RE lawyer Guo was involved in shady activities that got the RCMP involved.
https://globalnews.ca/news/3896853/hong-guo-lawyer-trust-fund-casino/
https://www.richmond-news.com/news/exclusive-richmond-mayoral-candidate-hong-guo-faces-new-legal-allegations-1.23436524

#23 bob the farmer on 10.30.18 at 7:32 pm

“i’m just a dumb ol’ farmer…with a few mill to play with”
Thanks to supply management over the last several decades it seems this refrain is often heard. So glad our Dear Leader defended it most vigorously in recent NAFTA talks but so easily assaulted small businesses with a new and complicated tax regime that gutted our ability to have a “few mill to play with”. I’ll bet Bob will be voting for the Clown Prince again.

#24 AB Boxster on 10.30.18 at 7:32 pm

176 Dolce Vita on 10.30.18 at 4:14 pm

The seeds of discontent in today’s Comments.

——————————
Thanks for this.
Interesting overview of the state of politics in the US.

The question I have though, is why have the Democrats in the US hitched their wagon to the 8% progressives?

There is not doubt that the Democrats in the US have moved dramatically to the left over the past few years, with many of their candidates openly embracing outright socialist principles (Bernie Sanders almost won against Hillary), and supporting such policy issues and unlimited immigration as open borders.

These were never part of the platform of the Democratic party in the past, and this does not seem to be where most Americans fit in the political spectrum

The following post discusses the ‘lost middle’ as a part of a discussion of the impact of social networks.

https://www.zerohedge.com/news/2018-10-30/self-segregation-niall-ferguson-exposes-destructive-power-social-networks

The comments under “Political Implications” where the author comments that :


“One consequence could be that the exhausted majority will form a new party.
The puzzle of America’s future is that there is a political center, but they don’t have a party, according to Ferguson.”

#25 Frank The Tank on 10.30.18 at 7:33 pm

200K+ income (before bonuses). Play condo. House with over 1M. 700K total equity, roughly 700K in debt (easily serviceable with that income and no kids) 75-100K ready to invest. 300K combined in investments already. In early to mid 30s.

You are more than ok. Go worry about which movie to watch on Friday night.

#26 Nonplused on 10.30.18 at 7:37 pm

Is it just me or does that dog bear an uncanny resemblance to Garth?

I heard that. – Garth

#27 For those about to flop... on 10.30.18 at 7:37 pm

Just so the self appointed blog police don’t kick down my door I did edit this one as it was longer than normal.

Click on the link to see all seven maps…

M44BC

“Mapping Extreme Poverty Around the World.

A new report from the World Bank just landed, finding that a record low of 10% of humanity now live in extreme poverty, down from 11% in 2013. But poverty rates aren’t anywhere close to equal between continents or even countries, as our new series of maps clearly demonstrates.

The World Bank provides an in-depth explanation for its methodology, which you can find in Appendix A of the full report here. We focused on the percentage of people in each country living below what the World Bank defines as extreme poverty, or $1.90/day. We’ll let the researchers defend this definition on their own, but there is one caveat to keep in mind. It can be extraordinarily difficult to collect reliable data from so many countries on a regular basis, and in fact we used the latest year in which numbers were available whenever possible. For example, in some of these maps we compare 2011 figures against 2015. In short, our maps provide the clearest possible apples-to-apples comparison for extremely poverty from around the world.
To start, there are several dark and light green countries scattered around the globe, from the United States down to Argentina and from Russia to Australia, there are lots of developed countries where very few people experience a subsistence standard of living. This is what people mean when they refer to the global North and South. To be fair, there are also several gaps in the available data in places like Saudi Arabia, Afghanistan, Poland and Greenland. But none of these countries would change the overall story, that developed countries are much wealthier than everyone else.

And lastly, consider North America, where the rate of extreme poverty declines the further north one travels from Mexico (2.5%) to the United States (1.2%) and Canada (0.5%). There is actually an interesting comparison here, which is to say that the United States is proportionally home to more people subsisting on $1.90/day than China (0.7%). That being said, there aresubstantially more extremely wealthy people in the US than any other country in the world, not to mention the world’s largest economy at $19.4 trillion.”

https://howmuch.net/articles/people-living-in-extreme-poverty-2018

#28 -=jwk=- on 10.30.18 at 7:43 pm

hate to break it to you Nick, but your house ain’t worth a million dollars anymore, and I wouldn’t plan to spend all that condo cash flow too far in the future.

In 2004 the haircutter at the SuperCuts on beach blvd in Buena park owned a million dollar home and several investment condo’s. Things change. Sometimes, suddenly.

#29 SoggyShorts on 10.30.18 at 7:45 pm

#16 FOUR FINGERS WATSON on 10.30.18 at 7:06 pm
#14 SoggyShorts on 10.30.18 at 6:38 pm
#136 FOUR FINGERS WATSON on 10.30.18 at 9:00 am

I provided a link and an example. You provided convoluted bullshyt. Good night Irene.

*********************************
Convoluted? You seriously find it hard to understand that maybe a party which gets 40% of our votes should not have 54% of the voting power?

#30 -=jwk=- on 10.30.18 at 7:45 pm

On topic: I bought 300 CPD years ago to show a friend how it worked. Spent ~1500. Happy with the steady 14.70 a month since then. Still up $688 too. Leaving it alone.

#31 Troy McClure on 10.30.18 at 8:07 pm

About the picture…

You, sir, are the greatest blogger guy ever.

#32 espressobob on 10.30.18 at 8:11 pm

#21 CEW9

ZPR is straight rate reset. Good for a T3 at the end of each year as long as its in a non-registered account.

https://www.bmo.com/gam/ca/advisor/products/etfs?fundUrl=/fundProfile/ZPR#fundUrl=%2FfundProfile%2FZPR

#33 Bill Grable on 10.30.18 at 8:19 pm

Your posting of the picture of Daisy was very kind, Mr. Turner.

#34 regular reader YYC on 10.30.18 at 8:22 pm

Thanks for the follow-up on CPD! Many readers, including myself, own this and are pleased by your insights. I hope we are near the bottom on this as this is not a part of my portfolio where I expect much volatility.

#35 Long-Time Lurker on 10.30.18 at 8:26 pm

Back from perusing the madhouse which is the comments section. (Yesterday’s.)

Well, I know Smokey is still posting. Someone’s getting all the DELETEDs.

More finesse, Smokey. Like this:

https://www.youtube.com/watch?v=8kpHK4YIwY4

#36 young & foolish on 10.30.18 at 8:26 pm

“And the condo is cash-flow positive? Nope. Not when you factor in $250,000 of equity which is earning nothing and may even erode steadily as condo values reset” — Garth

With all due respect … why is not the condo, with it’s cash flow yield, not a suitable stand in for bonds?

#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

#29 SoggyShorts on 10.30.18 at 7:45 pm
#16 FOUR FINGERS WATSON on 10.30.18 at 7:06 pm
#14 SoggyShorts on 10.30.18 at 6:38 pm
#136 FOUR FINGERS WATSON on 10.30.18 at 9:00 am

I provided a link and an example. You provided convoluted bullshyt. Good night Irene.
*********************************
Convoluted? You seriously find it hard to understand that maybe a party which gets 40% of our votes should not have 54% of the voting power?
…………………………….

Link was provided. Check it out. The voters decide, not politicians making back room deals…..Rumour has it that Depenz really absorbs moisture from those soggy shorts. You could check that out too.

#38 NoName on 10.30.18 at 8:36 pm

@Nick

Nick sorry to brakeit to you with some many in their pocket and two brain cells now is in no hurry to buy your house, there is fear of missing upside anymore. I am in same boat per sea but luckily for me i can always sell mine to two working stiffs, price just sits in that sweet spot. I know that doesn’t make me genius i just got lucky.

Hey blacksheep do you agree with me?

#39 SoggyShorts on 10.30.18 at 8:55 pm

#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

Twice now you’ve claimed that you posted a link, and I still can’t find it. Did you post it under another name?

Also, why can’t you answer a simple question?

Why do you think a party with 40% of the votes should have 54% of the voting power?

#40 FOUR FINGERS WATSON on 10.30.18 at 9:03 pm

DELETED

#41 Canadian Moose on 10.30.18 at 9:14 pm

Daisy looks like she just uttered Trumps only famous speech “your fired”! Lol

RIP Daisy

#42 FOUR FINGERS WATSON on 10.30.18 at 9:17 pm

#40 FOUR FINGERS WATSON on 10.30.18 at 9:03 pm
DELETED
…………….

Hahhaa. Alright then.

https://en.m.wikipedia.org/wiki/Two-round_system

#43 IHCTD9 on 10.30.18 at 9:18 pm

This winter, the IHCTD9 bunker complex will be layering on another 12” of Portland. Once the the dark and cold sets in and regular household projects come to an end, work will resume on the tax offsetting projects. I’ll be putting in the hours on the Lathe and Vertical Mill whittling up more mechanical liberty.

Right now, I’m feeding a 496 cubic inch, 7500 lb climate change accelerator to get to work every day, but next year it just might cost less to drive this thing than a Tesla C (…and I’m not insinuating that’s because no one can take delivery of one of those and actually put miles on it.).

If all goes well, 6K in highly taxed energy consumption will fall off the roster, replaced by an hour of work per week, a bit of driving around; and some free solid fuel.

Hope you’re doing well Smokey.

#44 For those about to flop... on 10.30.18 at 9:22 pm

Regarding my poverty post at #27.

At first I was a little disappointed that Antarctica was not included.

But then I realized there was no Penguin poverty, as when they’re hungry they just feast on the Calgary Flames…

M44BC

#whereswully

#45 FOUR FINGERS WATSON on 10.30.18 at 9:23 pm

#39 SoggyShorts on 10.30.18 at 8:55 pm
#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

Twice now you’ve claimed that you posted a link, and I still can’t find it. Did you post it under another name?

Also, why can’t you answer a simple question?

Why do you think a party with 40% of the votes should have 54% of the voting power?
…………………
https://en.m.wikipedia.org/wiki/Two-round_system

#46 ANON on 10.30.18 at 9:36 pm

Technical charts. Always there when you need them!

#47 Brier Barrington on 10.30.18 at 9:42 pm

35 Long-Time Lurker on 10.30.18 at 8:26 pm
Back from perusing the madhouse which is the comments section. (Yesterday’s.)

Well, I know Smokey is still posting. Someone’s getting all the DELETEDs.

More finesse, Smokey. Like this:

https://www.youtube.com/watch?v=8kpHK4YIwY4

I don’t think he’s posting. No obvious typos out there. I think he’s gone for good.

#48 bdwy sktrn on 10.30.18 at 9:46 pm

30 -=jwk=- on 10.30.18 at 7:45 pm
On topic: I bought 300 CPD years ago to show a friend how it worked. Spent ~1500. Happy with the steady 14.70 a month since then. Still up $688 too. Leaving it alone.
———————–
“years ago”….the dividend was 0.69 in 2012. today it’s 0.49.

“steady 14.70 a month since then”….you got a special class of shared with a fixed dividend?

#49 NoName on 10.30.18 at 10:00 pm

somewhere super secret on ihctd9 compound

https://www.youtube.com/watch?v=bKjEgHv5jbw

just be careful, i know first hand that those “biodiesel” running cars are known to cardio vascular problems.

#50 SoggyShorts on 10.30.18 at 10:01 pm

#45 FOUR FINGERS WATSON on 10.30.18 at 9:23 pm
#39 SoggyShorts on 10.30.18 at 8:55 pm
#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

So your link is to an explanation of the 2 round system? It’s pretty basic and doesn’t really need one but OK.
I thought you had a link for why it’s better than proportional representation, or perhaps even some thoughts of your own on the comparison.

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

#51 Jimers on 10.30.18 at 10:13 pm

“In the two months from May to June, 30 Republican members of Congress were attacked or threatened”.

-The reason there is so much confusion about Lefty violence is because the MSM wont report on it, and lie about and falsely exaggerate any violence associated with the Right.

Who let you in? – Garth

#52 NoName on 10.30.18 at 10:14 pm

addendum to my post above, video is longer but gets very interesting around min 6, and on a side note construction of secondary condensor (min 9) is ingenious. now i now i can use same pot that we usto use for making tea at campsite can be used as condensor…

#53 DON on 10.30.18 at 10:18 pm

#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

#29 SoggyShorts on 10.30.18 at 7:45 pm
#16 FOUR FINGERS WATSON on 10.30.18 at 7:06 pm
#14 SoggyShorts on 10.30.18 at 6:38 pm
#136 FOUR FINGERS WATSON on 10.30.18 at 9:00 am

I provided a link and an example. You provided convoluted bullshyt. Good night Irene.
*********************************
Convoluted? You seriously find it hard to understand that maybe a party which gets 40% of our votes should not have 54% of the voting power?
…………………………….

Link was provided. Check it out. The voters decide, not politicians making back room deals…..Rumour has it that Depenz really absorbs moisture from those soggy shorts. You could check that out too.
*******************

Prime Minister Justin Trudeau promised electoral reform in 2015 at the Federal level and sadly reneged on his promise.

In 2017 Provincial elections in BC both the BC Green Party and New Democratic Party campaigned on electoral reform. And while the NDP/Green minority government were waiting for the BC Liberal government to vacate post election the BC Liberals in their (interim) throne speech promised electoral reform (yes they were trying to suck up) just before they got the boot.

I usually have to vote strategically in every election as I am a fiscal conservative with a conscious. I do not like corruption and First Past the Post has a slippery path to outright corruption.

In life we all have to work together and so should our political parties. But a minority speaking for a majority doesn’t sit well in my Political and Democratic best practices handbook. Democracy needs to be both maintained and improved over and over again if need be.

Vested interests are making this a political issue worth voting against and the media has engaged in the political divide. No thought on having electoral experts to debate the referendum. Need to divide and conquer as their is big money on the NO side.

Funny thing…even the BC Liberals don’t use First Past the Post to elect their party leader.

40% does not warrant a majority of the power in a democracy.

#54 Ghost of Longbranch on 10.30.18 at 10:32 pm

#47 Brier Barrington on 10.30.18 at 9:42 pm

35 Long-Time Lurker on 10.30.18 at 8:26 pm
Back from perusing the madhouse which is the comments section. (Yesterday’s.)

Well, I know Smokey is still posting. Someone’s getting all the DELETEDs.

More finesse, Smokey. Like this:

https://www.youtube.com/watch?v=8kpHK4YIwY4

I don’t think he’s posting. No obvious typos out there. I think he’s gone for good.
..
Yeah right Jim.

#55 Annek on 10.30.18 at 10:38 pm

Daisy was my partner’s dog who unexpectedly passed away earlier this year at his 30th birthday while we were celebrating with friends & family.
……
I was trying to figure out if Daisy passed away at 30yrs ( record) or if her partner passed away at his birthday.
Had to read it a few times.

Lol

How is this humorous? – Garth

#56 SunnyDays on 10.30.18 at 10:38 pm

#18 espressobob on 10.30.18 at 7:10 pm
Prefs act as a diversifier in ones portfolio and slightly down. Equity markets are in correction mode. No comparison.

———————-

For the last 10 years.

A basket of equally weighted ENB, BNS and BCE had:
max drawdown, best year, CAGR: -30%, +34%, 9%

CPD had:
max drawdown, best year, CAGR: -27%, +25%, 2.6%

Not sure about CPD’s role in an already well diversified portfolio. Upside is limited, while downside is similar to common stocks behaviour.

#57 For those about to flop... on 10.30.18 at 10:42 pm

Race to a million.

Here’s the latest entrant to try a grab a heap of cash before it diminishes anymore.

They were asking 1.35 way back May and now it’s on for 999k

Assessment comes in at 1.28

I wrote a post yesterday about a house on Falcon Drive that took a loss even though they bought way back in 2012.

People want to know did this really happen and how can you find out about older purchases that aren’t on b.c assessment anymore.

The answer is yes it happened and to find out older sold prices you have to use REW Insight.

Someone trying to fight the realtors on Reddit linked my blog and now I have to deal with cheeky sockheads.

How come such a tech savvy generation can’t find out what they should be paying for real estate?

Get off my lawn…

M44BC

Price Event
Oct 30, 2018 $999,999 Price Reduced
Jun 25, 2018 $1,288,000 Price Reduced
May 4, 2018 $1,358,800 Listed For Sale

https://www.zolo.ca/vancouver-real-estate/7296-inverness-street

#58 yvrmc on 10.30.18 at 10:45 pm

PFF ??, CPD ?? acronyms Ive not heard before , help …

#59 Shawn Allen on 10.30.18 at 10:51 pm

First past the Post

SoggyShorts at 39 asks: “Why do you think a party with 40% of the votes should have 54% of the voting power?”

***********************************
Well, the main reason is that is simply how it works under the rules.

And those rules have almost always resulted in stable governments Federally and provincially since about forever.

Under these rules we usually get majority governments which are inherently stable.

I am certainly not convinced that a system that would result in minority governments most of the time would be a good idea. With three or four, much less six or whatever parties, majority governments (with their stability) would be rare under proportional representation.

In short, a party with less than 50% of the votes can get a majority of voting power in the legislature because those are the rules under a system that has served the country and provinces well.

Those asking for change may want to be careful what they ask for; they just might get it!

#60 Shawn Allen on 10.30.18 at 11:02 pm

CPD and ZPR
So, even the pure rate reset ZPR went down with higher rates.

A possible explanation is that even though those preferred will eventually reset to a higher rate, there will be a delay averaging perhaps 2.5 years. Meanwhile you get below market yields.

Rate Reset preferred do offer SOME protection against rising rates but no one should have ever promised it was going to offer 100% protection.

But if you don’e like CPD and ZPR falling, imagine how a basket of pure perpetual preferred has done. Has to have fallen harder.

What does happen with CPD and especially ZPR is that the coupons the dividends go up with higher rates at the reset date. The price does not have to. The coupons do.

Some people truly buy these things for the income and in that case the price decline is of little consequence… except the darn broker statements keep putting the loss in your face… hard to ignore.

#61 GaryGarfeld on 10.30.18 at 11:03 pm

Garth,

Nick should dump the condo and have a kid. Dogs and cats are overrated.

#62 Shawn Allen on 10.30.18 at 11:04 pm

Is that two posts or three?

Wait. Have I reached my self-imposed limit?

Buffett has said there are only three kinds of people in the world. There are those who can count and those who can’t.

#63 BS on 10.30.18 at 11:06 pm

This chart of CPD shows how aggressive the selling has been and how deeply oversold the pref market is. We should stabilize soon, barring a recession, which we believe is remote over the next 9-12 months.

LOL, “stabilize soon”. Anyone who put significant money in prefs is a fool. Toxic waste for amateur investors.

#64 Ponzius Pilatus on 10.30.18 at 11:24 pm

#154 crowdedelevatorfartz on 10.30.18 at 12:41 pm
@#149 past the peak
” proportional representation at the federal level will be the end of Canada.”
++++
Total agreement.
First Past the Post with “run off” elections for a clear majority.
Nothing more simple than that.
———–
The Green Party just got 18% in Bavaria, the wealthiest State in Germany.
Tell me what is wrong with that?
Time to take your myopic blinders off.
Canada is a big country, but tiny in the realm of politics.
Time to grow up.

#65 Ponzius Pilatus on 10.30.18 at 11:33 pm

Garth,
Just wondering what kind of dog you will be reincarnated as.
Pit bull?
Because you never let go.

#66 FOUR FINGERS WATSON on 10.30.18 at 11:33 pm

#50 SoggyShorts on 10.30.18 at 10:01 pm
#45 FOUR FINGERS WATSON on 10.30.18 at 9:23 pm
#39 SoggyShorts on 10.30.18 at 8:55 pm
#37 FOUR FINGERS WATSON on 10.30.18 at 8:29 pm

So your link is to an explanation of the 2 round system? It’s pretty basic and doesn’t really need one but OK.
I thought you had a link for why it’s better than proportional representation, or perhaps even some thoughts of your own on the comparison.
……………………………….

My post stated that this was an example of how it could be done……My thoughts : it would be better for the electorate to have the final say rather than have 2 politicians make a coalition deal in a back room.

#67 Bobs ur uncle on 10.30.18 at 11:35 pm

#56 SunnyDays

I agree. How are the prefs going to keep you from panic selling if they can fall just as much as equities? Doesn’t sound like safe stuff to me.

#68 MyHouseDream on 10.30.18 at 11:36 pm

https://ca.reuters.com/article/idCAKCN1N42T4-OCABS

Bank of Canada reiterates interest rates need to keep rising

The central bank raised rates last week – the fifth hike in 15 months.

“it might speed up the pace of tightening given the economy was running at almost full capacity. Even with last week’s increase … monetary policy remains stimulative. In fact, the policy rate today is still negative in real terms, that is, once you adjust for inflation,” said Bank of Canada Governor Stephen Poloz. “The policy rate will need to rise to neutral to achieve our inflation target,” he told legislators on the House of Commons Finance Committee.”

Bank of Canada senior deputy governor Carolyn Wilkins said the economy was strong, households were adjusting to higher rates and businesses were finalizing investment plans. “If there’s any time to get back to normal … it would be during this period,” she told the committee.”

#69 Victor V on 10.31.18 at 12:01 am

Canadians should get used to idea of 3% interest rates: Poloz

https://www.bnnbloomberg.ca/canadians-should-get-used-to-idea-of-3-interest-rates-poloz-1.1160654

OTTAWA – Bank of Canada governor Stephen Poloz wants Canadians to get used to the idea of three per cent interest rates as the new normal, now that the era of rock-bottom borrowing costs is gradually fading away.

Poloz raised the benchmark rate last week for the fifth time in just over a year to 1.75 per cent – its highest level in about a decade.

He sent signals that future hikes could arrive sooner than previously expected, in large part due to the economy’s resilience and the removal of some business uncertainty following the recent agreement on an updated North American trade pact.

#70 Fortune500 on 10.31.18 at 12:04 am

Roughly $850,000 in real estate equity, $300,000 in investments, plus two DB pensions at 32 and 34. That is amazing. Good on them. We certainly have not been as good at the game.

#71 mousey on 10.31.18 at 12:57 am

Little Daisy – what a sweetheart. Lucky to have had her, even for a short time.

#72 Brier Barrington on 10.31.18 at 1:01 am

54 Ghost of Longbranch on 10.30.18 at 10:32 pm

#47 Brier Barrington on 10.30.18 at 9:42 pm

35 Long-Time Lurker on 10.30.18 at 8:26 pm
Back from perusing the madhouse which is the comments section. (Yesterday’s.)

Well, I know Smokey is still posting. Someone’s getting all the DELETEDs.

More finesse, Smokey. Like this:

https://www.youtube.com/watch?v=8kpHK4YIwY4

I don’t think he’s posting. No obvious typos out there. I think he’s gone for good.
..
Yeah right Jim
………
Smoking Man gave me a lot of wisdom. My favourite from
10 years ago. Don’t remember the exact words. They went Something like this.

“The desire for a positive experience is in itself a negative experience. And paradoxically, the acceptance of one’s negative experience is in itself a positive experience.”

He bragged about his addictions, problems with his life, kids, wife, job,
His bad teeth, bald head, fat belly, and proclaimed I give no shit what anyone thinks of me.

That is the ultimate blueprint for true happiness, he knows it.
So few get it. Don’t know what spooked him?

Going to his old place on James St this weekend to search for some empty discarded bottles. Lots of wisdom at the bottoms of those empties.

#73 Fred Mertz on 10.31.18 at 1:56 am

https://www.bnnbloomberg.ca/canadians-should-get-used-to-idea-of-3-interest-rates-poloz-1.1160654

Don’t be fooled by the Poloz/Trudeau/Moroneau cabal. As real economists have said, the dog and pony show out of the BOC is utter nonsense better spewed during flapjack season by flatulent politicians. As we see, there is no independent BOC.

You are being set up for a recession, where rates will once again have to be cut radically to zero in time for the ’19 election. Trudeau will need the zero rates to bribe his way through the cycle. Canada’s economy according to responsible economists has taken a dark turn.

Piece it together, Moroneau announced that Canada will experience the pain of another recession. Poloz is jacking up rates and spouting aggressive sounding nonsense. Trudeau, has talking points that should scare the shit out you, but polls say Canadians are asleep at the switch .

Be prepared say the economists, and I concur.

#74 Dolce Vita on 10.31.18 at 3:31 am

#24 AB Boxster

You know, I posted yesterday largely because I felt sorry for Garth. I tried to shed some light as to why there were have been so many vehement Comments as of late (and Unsinkable Garth rising to each occasion and the rare time, a bit heavy handed, still I like his style and that is not a Mandatory Suck Up as I have differed with him enough times not be some blind anti-cogito ergo sum babe in the woods acolyte of his).

You are in essence asking “What is the root cause of all this vitriol?”

That is one hell of a question. I have some ideas but in the end, who really knows what goes on in people’s minds?

I actively sought out an answer to your question over the past year after reading the merciless attacks on people, institutions, political parties…ad nauseum, I was reading in Twitter, Fakebook (could not resist) from the Progressives and the Traditional/Devoted Conservatives (I read from both camps as I believe, somewhere in the middle lies the truth).

I think the Progressives think the World is not keeping up. The Traditional/Devoted Conservatives think the World is moving too fast. Both would impose their way on the rest of us. And I do believe that Trump, the person, with his comments has emboldened those on the periphery of mainstream thinking (Left and Right).

Both go overboard with outlandish acts and comments to be heard and seen above today’s voluminous cacophony that is MSM and Social Media.

The “Exhausted Majority” are no new phenomenon. They used to be called the “Silent Majority” decades ago.

Why I prescribe to Stoicism these days, complain like existentialist Kierkegaard and think that Nietzsche was right (as in correct) all along (and for the simple of mind, he was not a Fascist, his sister was and selectively groveled his work to Adolf after Friedrich’s death and while when he was infirm…if you read him extensively you would know better and that to be true).

My way of saying, it is NOT THE ONE THING.

I also believe Garth’s “Economic Distress” theory has merit. People get upset feeling left behind economically and voice there anger (and act out at times). If that were wrong, then throw Maslow out the door.

There are probably an infinite number of reasons. Best remain Stoic thru it all.

And yes, Garth was correct in chiding bullies from the Right that Comment here (and he has done the same to the Left, recall the petulant and perpetually malcontent enfant terrible Millennial Commenter that he ultimately banned after numerous warnings).

At the end of the day, it HIS BLOG and a valued one at that from what I read today in the Comments and from the email sent to him.

I know he was upset yesterday as he typed back to me “Far Enough” instead of “Fair Enough”…if ever there was a FREUDIAN SLIP, that would be one. He had had enough, clearly (and I do not blame him).

Still, the above does not go far enough to answer your root cause question. The human is a complex thing at the end of the day.

In lieu, Stoicism a good thing (as in Seneca and Marcus Aurelius).

And let Garth say what the majority of us are thinking (maybe, a bit more gentle).

#75 Dolce Vita on 10.31.18 at 3:52 am

“…genuflecting deeply.”

“Sell the condo, pay down the house mortgage and get a dog.”
– – – – – – – – — – – – – – –

THAT was good.

You and Rex Murphy.

I have a inherent weakness for silver tongued wordsmiths.

Yesiree, I’ll admit that.

And ya, the “Economics, RE, Money & Road Ahead” advice is not bad either.

…Yes Garth, that’s it from me today.

Let others have their say on topic.

Back to “Il Bel Far Niente”.

#76 Nonplused on 10.31.18 at 4:11 am

Garth on #26

“I heard that. – Garth”

Not meant as an insult. It is (or I guess was – condolences to Daisy’s family) a beautiful dog. If only people could be so good as dogs. Instead they tend to act more like cats or monkeys.

So you know that the Orange Gollum of Greatness called Stormy Whoa! Seen to much! a horse face. The problem with this and president Doritos mistake was it was an insult to all horses. Our animals are beautiful. Thankfully horses don’t have Twitter accounts because they realize social media is a CIA plot and thus don’t realize how badly the Bad Orange Man had insulted them.

(Don’t go off on me about the CIA thing, it was sarcasm.)

#77 Dolce Vita on 10.31.18 at 5:52 am

One more post Garth, permit me that as I forgot to weigh in on #24 AB Boxster’s solution for the Silent Majority and their voice being heard. Delete me if you like, fair enough as you would say.

I look for evidence.

What I see happening is more incendiary divisive political outcomes, even in Canada (witness Bernier’s new party, Libertarian out of the mainstream thinking to the Right of the Conservatives).

Then, their is the rise of AMATEUR & PANDERING Journalist Commentators on YouTube with subscriber bases larger than almost all MSM daily readership’s/viewership’s (e.g., Right winger Paul Joseph Watson has a subscriber base of 1,424,155 as of today, boggles the mind).

THERE IS HOPE though #24 AB Boxster, well, at least I think there is.

I am captivated by BC’s upcoming vote flirting with PROPORTIONAL REPRESENTATION.

In between abandoned puppy dogs in YVR hinterlands, disappearing Amazon parcels from your porch and their ubiquitous rain report, there was this GEM of JOURNALISM on October 29th by CTV Vancouver on the subject. They looked at what past legislatures would have looked like if Proportional Representation had been in place (well UBC did – they had the common sense to report it):

Mixed Member Proportional BC Election Results 2013

https://i.imgur.com/NnkYlik.jpg

Dual Member Proportional BC Election Results 2017

https://i.imgur.com/1GMSPQE.jpg

Rural Propostional BC Election Results 2001 (when Garth’s “Dippers” were near wiped out)

https://i.imgur.com/Ds0oM7x.jpg

A bit more PLURALISTIC than the current “Largest Minority Voting begets a Landslide Seat Majority” Legislature or Parliament as is the norm as of late we enjoy in Canada.

I like this brand of pluralism.

YET, vive la difference of opinion (rightly, many will point out that this will further polarize Government into minority factions; thus, paralyzing it; and how then does this fix the current political polarization problem?…fair enough). Glass half full. Glass half empty. You either distrust politicians to come together and act on the greater good or you distrust them to do this and fracture into petty squabbling, freezing the legislative process.

If it passes, it will change Government and fiscal policy…THAT, is for certain.

There is no easy solution to have the voices of the Silent Majority heard, that’s for sure.

We’ll see what La La Land comes up with. If anyone has the fortitude to see it thru, it will be them.

#78 att on 10.31.18 at 6:51 am

Preferred shares shouldn’t be considered in the “safe stuff” part of your portfolio and this us case in point.

Preferreds are normally less volatile than common stocks, pay a superior dividend and provide some protection from rising rates. Like all securities, the price can fluctuate, but they should be held long-term, rendering such movements moot. You want safe, low and highly-taxed? Get a GIC. – Garth

#79 Tater on 10.31.18 at 7:58 am

Anyone who thinks its a good idea to buy and hold any 3x daily ETF doesn’t understand math, or the ETF or both.

#80 Evangeline on 10.31.18 at 8:34 am

Daisy is a beautiful, sad, and wistful looking girl, and it pains me to think she may have died alone.

#81 crowdedelevatorfartz on 10.31.18 at 8:42 am

@#64 Ponzis’ Piles

Babbling again I see.
The only thing wrong with First Past the Post is the millions and billions of dollars lobbyists contribute to get”their” party elected.
And if you thing that will end with “Propertional Representation” smoke and mirrors….dream on.

Keep First past the post. ( Its worked pretty well for almost 150 years until Lobbyist money took control of politicians)
If there is no clear winner by majority have a “run off vote for the top two candicates.
For example( and I’ll keep it simple for you Ponzi)
Election results: Libs 35%, Cons 25%, Ndp 20%, Greens 15%, Other 5%.

No clear majority.
Hold a run off election for the top two. Libs and Con.
There must be a clear winner.
We have fewer and fewer people voting and the powers that be want to make the electoral system even more complicated?????
Keep it simple for the voters ( again, I’m thinking of people like you Ponzi).
Not the Proportional smoke and mirrors crap.
I find it interesting that more and more elections everywhere on the planet are “minority govts”.
No one is winning anything wiith a clear majority and we are all reverting into an Italian type of “democracy”.
Legions of different Party’s squabbling to be heard in a minority coalition that lurches right or left until it collapses into another election….achieving nothing but the slow motion decline of their economy, country, and democracy.
Toronto City clowncil wasnt much better. 26 people all screeching to have THEIR personal special interests agenda heard. No unity, nothing getting done, costing billions in tax dollars.
Now? Reduced by almost half. “Stop screeching. Do your job. Get to work. Get something done.”

Financial markets want stability not chaos and that is what proportional misrepresentation will bring.

OR….
Ban all financial contributions or paid “volunteers” “loaned” to political election campaigns to any Party.
No more lobbying of any kind.
Its poisoned the democratic process.

#82 IHCTD9 on 10.31.18 at 9:05 am

#49 NoName on 10.30.18 at 10:00 pm
somewhere super secret on ihctd9 compound

https://www.youtube.com/watch?v=bKjEgHv5jbw

just be careful, i know first hand that those “biodiesel” running cars are known to cardio vascular problems.
_____

No worries, I’m not doing biodiesel.

#83 When Will They Raise Rates? on 10.31.18 at 9:07 am

#74 Dolce Vita on 10.31.18 at 3:31 am

#24 AB Boxster

You know, I posted yesterday largely because I felt sorry for Garth. I tried to shed some light as to why there were have been so many vehement Comments as of late (and Unsinkable Garth rising to each occasion and the rare time, a bit heavy handed, still I like his style and that is not a Mandatory Suck Up as I have differed with him enough times not be some blind anti-cogito ergo sum babe in the woods acolyte of his).

You are in essence asking “What is the root cause of all this vitriol?”

That is one hell of a question. I have some ideas but in the end, who really knows what goes on in people’s minds?

I actively sought out an answer to your question over the past year after reading the merciless attacks on people, institutions, political parties…ad nauseum, I was reading in Twitter, Fakebook (could not resist) from the Progressives and the Traditional/Devoted Conservatives (I read from both camps as I believe, somewhere in the middle lies the truth).

I think the Progressives think the World is not keeping up. The Traditional/Devoted Conservatives think the World is moving too fast. Both would impose their way on the rest of us. And I do believe that Trump, the person, with his comments has emboldened those on the periphery of mainstream thinking (Left and Right).

Both go overboard with outlandish acts and comments to be heard and seen above today’s voluminous cacophony that is MSM and Social Media.

The “Exhausted Majority” are no new phenomenon. They used to be called the “Silent Majority” decades ago.

Why I prescribe to Stoicism these days, complain like existentialist Kierkegaard and think that Nietzsche was right (as in correct) all along (and for the simple of mind, he was not a Fascist, his sister was and selectively groveled his work to Adolf after Friedrich’s death and while when he was infirm…if you read him extensively you would know better and that to be true).

My way of saying, it is NOT THE ONE THING.

I also believe Garth’s “Economic Distress” theory has merit. People get upset feeling left behind economically and voice there anger (and act out at times). If that were wrong, then throw Maslow out the door.

There are probably an infinite number of reasons. Best remain Stoic thru it all.

And yes, Garth was correct in chiding bullies from the Right that Comment here (and he has done the same to the Left, recall the petulant and perpetually malcontent enfant terrible Millennial Commenter that he ultimately banned after numerous warnings).

At the end of the day, it HIS BLOG and a valued one at that from what I read today in the Comments and from the email sent to him.

I know he was upset yesterday as he typed back to me “Far Enough” instead of “Fair Enough”…if ever there was a FREUDIAN SLIP, that would be one. He had had enough, clearly (and I do not blame him).

Still, the above does not go far enough to answer your root cause question. The human is a complex thing at the end of the day.

In lieu, Stoicism a good thing (as in Seneca and Marcus Aurelius).

And let Garth say what the majority of us are thinking (maybe, a bit more gentle).

——————————————-

It’s a lot simpler than that… If you don’t get it yet, unfortunately you never will. I could easily explain it to you in one or two sentences, but Garth has made it abundantly clear that the views of deplorables are unwelcome here.

But feel free to blather on with your psychobabble nonsense.

#84 PastThePeak on 10.31.18 at 9:14 am

For those wondering why the BoC is making the statements regarding the expectation of future rate hikes, you need to keep in mind that the target inflation is only part of the BoC mandate. It also includes maintaining financial stability, secure currency, etc.

Ultra low interest rates were causing significant debt accumulation that can lead to financial instability. It was the BoC’s fault of course – Poloz specifically – with the ill thought out 50 basis point drop back in 2015.

Unwinding this monetary stimulus is a job to be done. It is being done in the USA, and so Canada has to see if it can follow suit given the linkages in economies. You will notice the terminology is around “can the economy withstand the rate increases” – meaning we need to withdraw the stimulus and it seems the economy is functioning.

And lastly, it seems everyone expects inflation to increase in the USA – further reduction in unemployment rate, continued economic expansion, increased costs with tariffs. If the US has increasing inflation, you can bet that Canada will not be immune.

So…quit yer whinin’ about brining the BoC rate back to a more sensible figure…it is long overdue.

#85 PastThePeak on 10.31.18 at 9:20 am

Hi Garth,

Hoping you can provide a bit more context to this statement regarding bonds:

“Laddering maturities is not such a hot idea. Did they explain that?”

What is the issue with a bond ladder? Is the purpose of bonds not to provide stability to portfolio, while giving a higher rate of return than fixed income instruments like GICs? Isn’t purchasing and holding bonds to maturity the most stable – provided you have some diversity in the bonds?

Is not a bond ETF which can experience losses (often as equities decline) as bond prices fluctuate “less stable” for the portfolio?

Thanks in advance.

#86 Victor V on 10.31.18 at 9:22 am

Vancouver sees world’s biggest drop in luxury home prices

https://www.bnnbloomberg.ca/vancouver-sees-world-s-biggest-drop-in-luxury-home-prices-1.1160723

#87 dharma bum on 10.31.18 at 9:24 am

Ignoring the stock market mayhem.

On the road, Arizona bound.

Just passing through Amarillo, Texas, via the depths of Trumpland.

https://www.google.com/url?sa=i&source=images&cd=&ved=2ahUKEwibwID_4rDeAhUKI6wKHb0eBToQjRx6BAgBEAU&url=https%3A%2F%2Fwww.tripadvisor.com%2FRestaurant_Review-g30165-d470906-Reviews-Big_Texan_Steak_Ranch-Amarillo_Texas.html&psig=AOvVaw0lDj3xO8GEb2vZxHJ8HCrD&ust=1541078498958243

#88 crowdedelevatorfartz on 10.31.18 at 9:33 am

@#82 IHCTD9
“No worries, I’m not doing biodiesel.”
++++

Steam?

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwi096a-5bDeAhV0ITQIHZB-Au8QtwIwAXoECAYQAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DkA0E7kRhd6M&usg=AOvVaw0rgxdhalnBBsY6q9Nel8L-

#89 waiting on the westcoast on 10.31.18 at 9:41 am

Like Dolce Vita, I have watched Italy suffer under fragmented parties that gave too much leverage to smaller fringe parties.

I like the idea of smaller political bases having a voice but not at the expense of stability and centrist policies that our system provides in Canada. Perhaps we should make the Senate an elected body with proportional representation so that those groups could have a voice but maintain its limits on power as it’s currently used.

Effectively, we have a dictatorship in Canada but we get to kick the dictator out after 4 years. This gives us a government that has the ability to act on its agenda that we voted for but also allows for us to vote them out if we don’t like their policies at the end of that window.

#90 NoName on 10.31.18 at 10:33 am

@87 Amarillo

One of my highschool girlfriends lived there, every time we would talk over the phone she kept talking about moving to dallas or san Anto nio soon as she is done with colledge. Her parents are still there working or recently retired from one of the meat processing plants. If i remember correctly they lived somewhere in dry county, and they were always pisst about driviy 45mim to get booze, and yes their used f150 came with gun rack on rear window.

#91 TurnerNation on 10.31.18 at 10:39 am

The pride of our 2nd World nation Dollarama gets trashed in this newly released research report.

https://www.newswire.ca/news-releases/spruce-point-capital-releases-a-strong-sell-forensic-research-opinion-on-dollarama-inc-toronto-dol-dlmafotc-699144821.html

#92 Five Eyes on 10.31.18 at 10:44 am

376 MPG http://www.race-cardrivers.com/Shell%20Opel.htm Additionally, there were steam catalyst technologies around the turn of the last century that are not exactly what you are taught to believe. Here is described a ‘relic’ because it was environmentally friendly but Big-Oil unfriendly. http://heroicrelics.org/info/redstone/a-7-steam-generator.html

#93 IHCTD9 on 10.31.18 at 10:48 am

#88 crowdedelevatorfartz on 10.31.18 at 9:33 am
@#82 IHCTD9
“No worries, I’m not doing biodiesel.”
++++

Steam?
____

Woodgas

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

#94 Aidan on 10.31.18 at 11:10 am

Hi Garth, I think its fairly irresponsible to be advocating people move into equities at the moment, or be using Porsche driving PMs as a mouth piece for this. Equity valuations are extremely high (CAPE), as are debt levels, and interest rates are rising. Moreover, the correlation between equity and bond returns is returning to a POSITIVE correlation. In short, people who take your advice will get goosed!

The message is simple. Stay invested & ignore people like you. – Garth

#95 crowdedelevatorfartz on 10.31.18 at 11:14 am

@#93 IHCTD9
woodgas.
Wow! Interesting. Never heard of it before.
Next up.
Mr Fusion , beer and banana peels……

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwi5jpbd-7DeAhXKZt4KHbiLD6EQwqsBMAB6BAgFEAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DptlhgFaB89Y&usg=AOvVaw30FxhAflu5gy_vqKpwSuvw

With my garbage and methane….I’d be a perpetual motion machine.

#96 Penny Henny on 10.31.18 at 11:39 am

#91 TurnerNation on 10.31.18 at 10:39 am
The pride of our 2nd World nation Dollarama gets trashed in this newly released research report.

https://www.newswire.ca/news-releases/spruce-point-capital-releases-a-strong-sell-forensic-research-opinion-on-dollarama-inc-toronto-dol-dlmafotc-699144821.html
//////////////

From your link
‘Faced with years of negative average traffic growth and an increasingly saturated market, Dollarama is driving comparable store sales growth by abandoning its roots as a dollar store and selling items at progressively higher price points– a move which, while supporting margins, has angered its discount-driven customer base and put further pressure on store traffic.’

This is exactly what I mentioned in this space about 1-2 months ago.

#97 Guy in Calgary on 10.31.18 at 11:50 am

#36 young & foolish on 10.30.18 at 8:26 pm
“And the condo is cash-flow positive? Nope. Not when you factor in $250,000 of equity which is earning nothing and may even erode steadily as condo values reset” — Garth

With all due respect … why is not the condo, with it’s cash flow yield, not a suitable stand in for bonds?
—————————————————————

Risk

#98 IHCTD9 on 10.31.18 at 11:56 am

#95 crowdedelevatorfartz on 10.31.18 at 11:14 am
@#93 IHCTD9
woodgas.
Wow! Interesting. Never heard of it before.
Next up.
Mr Fusion , beer and banana peels……

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwi5jpbd-7DeAhXKZt4KHbiLD6EQwqsBMAB6BAgFEAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DptlhgFaB89Y&usg=AOvVaw30FxhAflu5gy_vqKpwSuvw

With my garbage and methane….I’d be a perpetual motion machine.
_______

Woodgas is super cool. It was huge during WW2 powering a good chunk of Europe when gas supplies dried up. There are just a hand full of folks on the planet driving daily on wood in 2018 – but their numbers are growing. Trucks are getting 80+ mph sustained nowadays, and a few guys have logged over 100,000 miles using wood instead of gasoline. It’s cleaner at the tailpipe too :).

I have been threatening my kids for years that I’ll rent those BTTF movies! :).

#99 Renter's Revenge! on 10.31.18 at 12:09 pm

#176 Dolce Vita on 10.30.18 at 4:14 pm
#182 Dolce Vita on 10.30.18 at 4:58 pm
#24 AB Boxster on 10.30.18 at 7:32 pm
#74 Dolce Vita on 10.31.18 at 3:31 am
#83 When Will They Raise Rates? on 10.31.18 at 9:07 am

Do you think it’s any coincidence that the so-called “Exhausted Majority” and the labour participation rate are roughly the same percentage of the population?

#100 Steerage Gas on 10.31.18 at 12:11 pm

#95 crowdedelevatorfartz on 10.31.18 at 11:14 am

@#93 IHCTD9
woodgas.
Wow! Interesting. Never heard of it before.
Next up.
Mr Fusion , beer and banana peels……

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwi5jpbd-7DeAhXKZt4KHbiLD6EQwqsBMAB6BAgFEAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DptlhgFaB89Y&usg=AOvVaw30FxhAflu5gy_vqKpwSuvw

With my garbage and methane….I’d be a perpetual motion machine.

Good stuff……

“When not carefully designed and used, there exists considerable potential for injury or death due to wood gas containing a large percentage of poisonous carbon monoxide (CO) gas.”

#101 -=jwk=- on 10.31.18 at 12:20 pm

@ bdwy sktrn #48

30 -=jwk=- on 10.30.18 at 7:45 pm
On topic: I bought 300 CPD years ago to show a friend how it worked. Spent ~1500. Happy with the steady 14.70 a month since then. Still up $688 too. Leaving it alone.
———————–
“years ago”….the dividend was 0.69 in 2012. today it’s 0.49.

“steady 14.70 a month since then”….you got a special class of shared with a fixed dividend?

Yes, yes indeed. Sucks to be you, huh? You didn’t know about the B class?

#102 Linda on 10.31.18 at 12:21 pm

StatsCan is apparently working on a plan to access detailed data on all Canadians. They are defending this by saying ‘the old methods’ of data gathering do not provide ‘accurate information’ regarding economic trends. Thus the plan to access ‘raw’ data on phone records, utility bills, credit card usage and – wait for it = banking records. Yep, they apparently want to know every single transaction in depth – deposits, withdrawals & what that money is spent on.

My take on this is that they likely already have been accessing all this data. In their own words ‘efficiencies can be achieved’. So presumably what they have already been doing is cumbersome & costly & they simply want to streamline the process already in place. Of course, there is no ‘intent’ to ‘use’ the data for ‘anything’ other than statistics. And ‘your individual privacy will be protected’. Really? How? When it no longer exists, because every financial transaction you do is fully scrutinized. Consent on your part not required, either.

On the other hand, once all this data is fully compiled & efficient, it will be so much easier to determine how much in additional tax revenues can be gathered, since there will be ‘accurate’ records as to how much money is available to be taxed. Maybe those folks who stuff the mattress or bury the jam jar in the back yard are on to something…..

#103 Russ on 10.31.18 at 12:27 pm

Nick, IMHO a 60-40 ratio is way too conservative. You’re young so your equities have close to thirty years to grow. There will be corrections along the way but over that amount of time stocks have historically always beaten bonds.

You have two DB pensions providing a guaranteed back stop in retirement. Personally I think of my DB pension as the bond portion of my retirement and I go 100% equity with my tfsa, rrsp etc. If you were to retire during a major market correction you can live off your pension and postpone selling equities until things recover.

My .02

#104 CEW9 on 10.31.18 at 12:36 pm

#32 espressobob on 10.30.18 at 8:11 pm

#21 CEW9

ZPR is straight rate reset. Good for a T3 at the end of each year as long as its in a non-registered account.

https://www.bmo.com/gam/ca/advisor/products/etfs?fundUrl=/fundProfile/ZPR#fundUrl=%2FfundProfile%2FZPR

ZPR is currently based on the Solactive Laddered Canadian Preferred Share Index (contents available here: https://www.solactive.com/indices/?index=DE000SLA08K6) and definitely not fully Rate-Reset. By my back of the envelope calculations and a quick word search, it currently indexes about 5.25% of its shares in rate-reset vehicles.

Other thoughts? Are some types of rate reset shares in the index labelled/titled without the words ‘rate reset’ in them? Am I missing something?

To me it still looks like RPF is the only strictly r-r pref etf.

#105 Blacksheep on 10.31.18 at 12:40 pm

Noname #38,

“I am in same boat per sea but luckily for me i can always sell mine to two working stiffs, price just sits in that sweet spot.”

“I know that doesn’t make me genius i just got lucky.”

“Hey blacksheep do you agree with me?”
———————————————-
100%.

Except when your decision to own runs tangent to 90% of this blogs common belief that a harsh RE correction is just around the corner, as soon as event “X” happens. Your choice to ignore the group think here, puts you solidly in a contrarian position.

It’s been 10 years and dozens of “X” events, yet still the RE market has barley moved down for the entry level of a half decent single detached home.

Taking a little credit for going your own way, is OK too.

#106 IHCTD9 on 10.31.18 at 1:00 pm

“In 2018, anger motivates American voters more than anything else”

https://www.cbc.ca/radio/day6/episode-413-canada-s-forests-at-risk-the-politics-of-rage-canada-s-spookiest-places-eden-robinson-and-more-1.4878598/fear-and-loathing-in-2018-anger-motivates-american-voters-more-than-anything-else-1.4878614

Sounds about right.

Folks down there better start pulling back the reins on this stuff before it blows. I think it’s pretty clear lots of people are starting to lose their minds.

Think about where it could go.

Maybe all those Doomsday Preppers will be right after all – albeit as a result of an event no one saw coming…

#107 JB on 10.31.18 at 1:10 pm

#102 Linda on 10.31.18 at 12:21 pm

StatsCan is apparently working on a plan to access detailed data on all Canadians. They are defending this by saying ‘the old methods’ of data gathering do not provide ‘accurate information’ regarding economic trends. Thus the plan to access ‘raw’ data on phone records, utility bills, credit card usage and – wait for it = banking records. Yep, they apparently want to know every single transaction in depth – deposits, withdrawals & what that money is spent on.

My take on this is that they likely already have been accessing all this data. In their own words ‘efficiencies can be achieved’. So presumably what they have already been doing is cumbersome & costly & they simply want to streamline the process already in place. Of course, there is no ‘intent’ to ‘use’ the data for ‘anything’ other than statistics. And ‘your individual privacy will be protected’. Really? How? When it no longer exists, because every financial transaction you do is fully scrutinized. Consent on your part not required, either.

On the other hand, once all this data is fully compiled & efficient, it will be so much easier to determine how much in additional tax revenues can be gathered, since there will be ‘accurate’ records as to how much money is available to be taxed. Maybe those folks who stuff the mattress or bury the jam jar in the back yard are on to something…..
……………………………………………………………………..
I agree one hundo P.
T2 and his bag of slimy creatures are grazing on the last few corpses that lay rotting on the slimy thoroughfare of money. They have spent way beyond their means with our money and now they have run out of it. They are looking to suck up that last morsel so they can keep themselves in power through the next election. I’m tired of his empty promises and Johnny do good-er attitude as the savior of Canada. The Liberals have no plans other than stealing our hard earned cash and then throwing some of it back at us during the next election with more broken promises. These guys have had their eyes on our last bastions of capital for years figuring out how they can access it. I say we vote them out and vote anyone in that will shut this porthole down.

#108 Smartalox on 10.31.18 at 1:21 pm

Flopper @ #57:

Wow! That house on Inverness at 57th Ave is ahead of the curve for East Van, priced at 28% below (July 1 2017) assessed!

Things are starting to look scary this Halloween. Lots of zombie listings. I’m sure that there will be a few nightmares after the REBGV stats for October are released later this week.

#109 Overheardyou on 10.31.18 at 1:26 pm

Happy Halloween! Looks like 3% interest rates are the scariest thing this year to home owners with debt haha

#110 paracho on 10.31.18 at 1:34 pm

I found this funny. If anyone wants a good laugh ..please do not hesitate to read this .

https://www.livabl.com/2018/10/3-predictions-2019-store-canadian-housing-market.html?fbclid=IwAR1JUP-yyHGOL0Fy3AHm2OUj4oQ0uGkOaQlwzfK_XrRmMWAUmA8OG2gm4vs

#111 KS on 10.31.18 at 1:41 pm

Question for someone;

According to Garth,
1. Thou shalt fill up their TFSA first
2. Thou shalt invest with ETFs
2. Thou shalt keep a 60/40 split between stocks & safe stuff

Got it, but I’m curious about the allocation of funds inside the TFSA. My balance is only $30K split between; Maple, US, Int, Emerg & rate-reset prefs. With $20K in RRSP; some bonds, prefs & USD currency ETF

I understand TFSA should be used for growth based stocks, therefor is it more important to fill that bad boy up with stocks ASAP or keep a split with safe stuff and shovel some $$ into the RRSP while the TFSA is not yet fill?

#112 espressobob on 10.31.18 at 1:41 pm

#104 CEW9

Just got of the phone with a BMO rep and am assured the holdings in ZPR are indeed all rate reset. There website is a tad cloudy.

Solactive is some outfit that provides ETF suppliers with info, while this is outside my area of study. Cheers.

https://www.solactive.com/

#113 jess on 10.31.18 at 1:50 pm

GM offers buyouts to 18,000 employees

https://www.ctvnews.ca/autos/gm-offers-buyouts-to-18k-salaried-workers-in-north-america-1.4157504

#114 crowdedelevatorfartz on 10.31.18 at 2:09 pm

@#57 Flop
“Someone trying to fight the realtors on Reddit linked my blog and now I have to deal with cheeky sockheads.”
++++ Classic.
Typical.
#108 Smartalox called them
“Zombie Listings”
Another great saying.

Realtors and their Zombie Listings:
They’re dead. Listlessly staggering around looking for blood…… Any blood.
Zombies of the Real Estate apocalypse….They just don’t know it.

#115 Remembrancer on 10.31.18 at 2:12 pm

#113 jess on 10.31.18 at 1:50 pm
GM offers buyouts to 18,000 employees

https://www.ctvnews.ca/autos/gm-offers-buyouts-to-18k-salaried-workers-in-north-america-1.4157504
————————————————————–
Bets its mainly a middle management / staff-level and thinly veiled middle-ageist higher white collar salary culling given targeted at 12+ years of service. That largely leaves out recent R&D hiring in infotainment and autonomous labs in the GTA for example…

#116 crowdedelevatorfartz on 10.31.18 at 2:15 pm

@#113 jess

18,000 white collar workers( middle management) offered severance …most in the US Michigan area. and GM states, ” In preparation for an economic downturn…..”
( Thank’s for your decade of service….Get out.)

Wow.
Mr MAGA ” I’m bringing the jobs back to ‘Merica!” got some NAFTA ‘splainin to do !

#117 IHCTD9 on 10.31.18 at 2:21 pm

#100 Steerage Gas on 10.31.18 at 12:11 pm

Good stuff……

“When not carefully designed and used, there exists considerable potential for injury or death due to wood gas containing a large percentage of poisonous carbon monoxide (CO) gas.”
___

I spent years trying to run the vehicle on Carrot Cake and blueberry muffins, but in the end, I ended up having to use a fuel that actually burns…

#118 Damifino on 10.31.18 at 2:26 pm

#14 SoggyShorts

Do you really think that a party with 40% of the vote should have a majority?
——————————

Personally, I’m OK with it.

That describes approximately the how the current NDP government in BC came to hold majority power. I know they also had to collude with three Green members, who were also elected by ‘First Past The Post’. But for the most part, the NDP took about 40% of votes.

The NDP was definitely not my choice but they now hold power fair and square. The great thing about the current system is that the incumbents get to give it their best shot with a functioning majority.

Fortunately though, an opposition sits across from them who quite possibly can form the next government. That is a wonderful thing. A wonderful thing that slips away under various, complex, easy-to-diddle-with forms of proportional representation.

In BC they’re asking us #1: if we want ‘First Past The Post’ or ‘Proportional Representation’. The second part of the mail-in ballot (optional) asks which of three convoluted systems we’d prefer. They all require a major redrawing of election boundaries and several back flips involving multi-member Ridings (in urban cases) and some representatives selected from party lists (by the parties themselves).

In my opinion, this is a thousand time worse than any current gerrymandering threat under the preset system.

This is the third time they’ve asked this question in a dozen years. What part of NO didn’t they understand?

#119 Where's The Money Greedeau? on 10.31.18 at 2:31 pm

Calgarians and Alberta better hold onto their wallets instead of voting to host the 2026 Winter Olympics.
Nenshi, Calgary’s mayor and their YES side say they can put on the winter games for $5.2 mm.
S. Korea’s cost was $15 B. Vancouver’s was easily over $10 B, even though they fudged their costs (my take closer to the S. Korea cost).
My belief is this is the back door way of Calgary mayor Nenshi getting his buddy, billionaire Flames owner Murray Edwards, his new hockey rink, without Edwards paying a nickel. Nenshi has spent his last four year campaign trying to get Calgarians to foot the bill for a new venue and when that didn’t work, put the games bid in motion.
Sleaze ball. How did that guy get re-elected?
And now we hear that Trudope saying he is willing to commit more of MY BC tax dollars for the bid.
Must be tied to his UN bid.

https://calgaryherald.com/news/politics/braid-todays-olympic-event-all-about-saving-face-while-saving-the-bid?utm_source=on_network&utm_medium=native_ads&utm_campaign=pgr_boost&utm_content=product&utm_source=distroscale

#120 CEW9 on 10.31.18 at 2:32 pm

#111 KS on 10.31.18 at 1:41 pm

Question for someone;

According to Garth,
1. Thou shalt fill up their TFSA first
2. Thou shalt invest with ETFs
2. Thou shalt keep a 60/40 split between stocks & safe stuff

Got it, but I’m curious about the allocation of funds inside the TFSA. My balance is only $30K split between; Maple, US, Int, Emerg & rate-reset prefs. With $20K in RRSP; some bonds, prefs & USD currency ETF

I understand TFSA should be used for growth based stocks, therefor is it more important to fill that bad boy up with stocks ASAP or keep a split with safe stuff and shovel some $$ into the RRSP while the TFSA is not yet fill?

I think it depends on your tax situation. If you get a big benefit from RRSP contributions then it would make sense to dump money into RRSP’s, then take the tax credit and throw it back in to either RRSP or TFSA. It’s highly personal. You should do a full tax plan for yourself, or talk to a tax advisor.

For example, if a 10,000 year RRSP donation nets you a 4000 tax refund (higher income bracket) then that is already a 40% return on your 10,000 investment, isn’t it? You are not going to make that in a year in your TFSA. So you could take the RRSP credit and dump it in a TFSA in April.

That’s why tax evaluation is such a big deal – it has way more influence on your investment than you think, especially when starting out.

#121 NoName on 10.31.18 at 2:57 pm

Ok, tangent i get it, things are not selling around me same properties different agents…

Now that i got your attention, what i really wanted to ask you is this.

I would like to buy table top milling machine (one that actually looks like small mill) up to 2k range. They look solid enough for what i want to do, aluminium. Are they any good any experience? In same price they have leith mill combo, but that cant be good.

it make no sense to buy old used bridge port, for same money, no space no real need for accuracy plus wife would not be to happy about it. I would be not walking dead, just dead.

As per re my house we live in for 13yrs and house at the best was adding 1% per year at the best, and all of the suden, in a last 3 maybe 4 and years since it did doubled, what makes no sense. In that time some house sold but majority, maybe 70% are same people that we remember being here when we moved in.

Whats interesting many of those for sale houses that were sold were sold twice some 3 times, old owner, new and new. So iam.thi kind that is how big gain in price came from 2nd to 3rd sale me thinks.

Nebourhood didn’t become any better during that time some face lift, but especially same. “they” closed 2 banks and opend 1 payday loans… Yes LCBO looks better now, but i preferred old one.some.store.fronts are empty for years, and couple of buildings leveled, taxes i guess.

I think to that it will go down from here. I need that answer on mill plz. Thanks

#122 Michael (in qc) on 10.31.18 at 3:10 pm

Do your fancy pants guys still like DXP.to?

You know, actively managed in order to actually get some upside on rate reset preferreds rather than just dumbly following an index (à la ZPR, CPD) who sometimes sell at a discount…

#123 Nineteen84 on 10.31.18 at 3:18 pm

“Buffett has said there are only three kinds of people in the world. There are those who can count and those who can’t.”

Or…those who count, and those who don’t.

Just ask my ‘leftist’ friends (soon to be ex-friends)!

-1984

#124 Shawn Allen on 10.31.18 at 3:27 pm

Is the RRSP refund a “return on investment”?

CEW9 at 120 asked:

“For example, if a 10,000 year RRSP donation nets you a 4000 tax refund (higher income bracket) then that is already a 40% return on your 10,000 investment, isn’t it?”

**********************************
It looks that way and many people think that way, but NO, in most cases, that refund is not a return on investment.

Now it could be if you are going to figure out a way to get the whole $10,000 out tax free such as by having a few years where you have zero other income and you can get out maybe $15,000 tax free. But very few people who can put $10,000 into an RRSP are likely to have years of zero other income. Even those on maternity leave are typically getting some income from EI. A spousal RRSP might be such a case though where the spouse never works and can pull $15k or something like that out tax free after its been in for a few years.

But let’s consider the more normal case of a high income earner putting $10k into RRSP and doing so for many years. This would have to be someone not in a DB plan.

They could easily amass $500k or $one million or more in an RRSP and in that case even taking a few years off to draw $15k out tax free is a drop in the bucket.

And I understand there are strategies where you borrow money to invest and you generate interest deductions to offset RRSP withdrawals. That can only work if the invested money makes little or no taxable income. Maybe it can work but if it does you could just as easily borrow to offset your salary income too. It seems risky to me and I have never been a fan and don’t think many people would do it.

So, we are left with the fact that you should plan on paying tax on RRSP withdrawals. If the tax rate in retirement remains at 40% then your $4k refund here is no return at all but rather will grow to pay your withdrawal tax bill (a huge benefit). Your net $6000 share will grow tax free in this scenario.

If you can get your money out later at 25% tax then not only has your $6000 share grown tax free (a huge benefit!) but you effectively did in that case turn part of the refund into a return.

So, in conclusion, an RRSP can be a great way to invest but it is NOT (as commonly thought) because the refund is in any way free money. Instead the benefit comes from the probable effectively tax-free compounding of your own net cost of the RRSP after deducting the refund. Consider the portion of “your” RRSP that the refund effectively funded to belong to the tax man your silent 40% partner in this example.

I do agree with CEW9 that tax evaluation is a very big deal!

And if thinking the refund adds to your net worth (most personal balance sheets wrongly show it as doing so) motivates you to invest in RRSP and if you don’t spend the refund as free money then it all works out. People do the right thing, invest in RRSP, for the wrong reason. That’s okay.

#125 Shawn Allen on 10.31.18 at 3:46 pm

CEW9’s RRSP strategy

“So you could take the RRSP credit and dump it in a TFSA in April.”

*****************************
To be clear, this is absolutely the correct strategy for most people. My post above just explained that viewing the refund as an instant 40% return is not correct mathematically. But what is more important is CEW9 is doing the right thing here.

#126 KS on 10.31.18 at 3:46 pm

#120 CEW9

— THANK YOU!!!

#127 espressobob on 10.31.18 at 4:05 pm

#122 Michael (in qc)

DXP? Not that prefs are easy but I question the quality?

https://www.blackrock.com/ca/individual/en/literature/etf-summary/dxp-info-sheet-en-ca.pdf

Not so sure about a managed pref or bond fund, along with higher risk and mer. I’ll stick with passive indexing.

#128 KLNR on 10.31.18 at 4:47 pm

@#123 Nineteen84 on 10.31.18 at 3:18 pm
“Buffett has said there are only three kinds of people in the world. There are those who can count and those who can’t.”

Or…those who count, and those who don’t.

Just ask my ‘leftist’ friends (soon to be ex-friends)!

-1984
______________________

LOL, you don’t have any friends

#129 CEW9 on 10.31.18 at 4:56 pm

Shawn Allen:
Thanks very much for the insight. Gives me plently to think about! Also emphasizes the need for a professional opinion.