Spin, spin, spin

Photo by Andy Seliverstoff

It’s been a vexing year for investors. People trying to time the market have been spun out. Look at Friday. After plunging, oil surged. One Trump advisor said a China deal was likely. Another said big tariffs would happen. Job numbers were great in Canada but so-so in the States. Days ago the Bank of Canada started retreating on rates. Now the opposite.

Meanwhile bond yields are splattered all over the sidewalk. Benchmark US 10-year Treasuries have fizzled while Government of Canada five-year bond yields have crashed almost half a point. In the bond world, that’s like having a Newfie (the dog kind) sit on your face. You feel it. Look:

So here’s an odd thing. The lowest jobless rate in 40 years may convince the central bank to raise its benchmark rate again next month. After all, the economic fundamentals still spell ‘inflation’. But at the same time, fixed-rate mortgages may fall along with long-term bond yields. The chartered banks should already have made a cut, based on the debt market, but haven’t since that costs them money and the mortgage business has croaked lately.

This is an example of what’s called an ‘inverted yield.’  That’s when short-term rates (controlled mostly by the Bank of Canada) get higher than long-term ones (bond yields). The next BoC hike will push its benchmark level to 2%, for example, while (as I write this) the five-year bond is down to 2.02%. This usually means Mr. Market expects things to be slower (and cheaper) in the future than they are now. But, of course, this could all change on Monday.

So the best defence is to set your investment clock for the day you’ll need the money, and forget it. Go balanced (60/40 works well over time) and diversified (use ETFs, not individual stocks and hold bonds, REITs, equities, preferreds etc). Shun high-cost mutual funds, be tax-efficient about where you put assets (RRSP, non-registered account or TFSA). And, for God’s sake, stop reading the comments section of this pathetic blog. It’s toxic. For some unfathomable reason this site attracts moaners and wailers who confuse gambling with investing and have a cow when markets fall five per cent after rising thirty.

In fact, on that note, the number of hateful posts lately in the steerage section (all of them trashed by my bevy of incredibly attractive, unpaid co-op students) has hit the red zone. Keep it up and I’ll send all your IP addresses to my Russian and Nigerian pals. Or Tony Clement.

Now back to this yield stuff.

Two months ago the benchmark Canadian bond yield hit the highest level in almost eight years. Central banks started sounding a lot more like hawks, and we told you they planned four or five rate hikes by the middle of 2019. Two of those have occurred in the States, one in Canada with another set for a few weeks from now. But by then it appears likely five-year mortgage costs will have declined by about a quarter point.

What to do if you’re borrowing?

The safest route is to sign up for a fiver, still available in the 3% range. Sure, a variable-rate mortgage will come with slightly lower monthly payments, but there’s a gamble involved. If the economy grows, Trump and Xi become BFFs, corporate profits are solid and Britain survives Brexit, then central banks will be quick to resume monetary tightening. And withdrawing stimulus is never fun. Up she goes.

Now, given all the crap I wade through daily on this site on your behalf, you’ll sit quietly and endure the following sycophantic praise. It has nothing to do with your portfolio, your property or your mortgage. But it makes me feel better. I may even come back here on Sunday as a result.

First off, the fawning: I’ve been a daily reader for roughly three years now.  I find your blog educational, your writing witty, and the price to be reasonably fair.  At the absolute very least, you’ve helped an unknown number of populace think about real estate differently, you’ve informed your serfdom on regulatory change, you’ve kept the masses updated on political agenda, and you’ve pounded into our brains the importance of balance and diversification.  All you’re missing, is more regular updates on Bandit.  I have often sung your praise, and pointed those who thirst for an investment education, in the direction of Greaterfool.ca.  Like I said, the price is right and the advice is on point.  Recently, I turned my closest friend on to your blog. A highfalutin Cowtown Chiro who was looking for his investment portfolio to reach its Full Potential.  You have also become required reading for newbies onto my team.  Many thanks for your continued teachings, and the dialogue it creates on our trade floor!

You and I share similar views on transparency of real estate statistics, xenophobes, taxes placed on the wealthy & small business owners, and the superiority of dogs over cats.  Where we differ, is the thickness of our skin.  A tip of the hat to you, Sir.  It’s not often that I read the comments section, as I can find more insightful conversation on financial markets in the back of Lloyd and Harry’s Mutt Cutts wagon, than from some of the troglodytes who lurk in the depths of internet anonymity. In return for sound and reasonable advice, free of charge, you receive barbs, scoffs and jeers, from some of the internet’s most sanctimonious keyboard warriors.   You are fair, you believe in free speech, and you take the time each and every day, to provide quality information.  You do this in the face of relentless criticism and disparagement.  Bravo to both you and your genitals, that are clearly forged of tempered steel.

In the spirit of U.S. Thanksgiving, I want to say thank you for your efforts.  Thank you for your continued discourse on personal investment strategy, inheritance, and dampening of one’s personal tax burden.  I’m well aware that the number of good people, who are grateful for your guidance, far outweighs the number of argumentative cave dwellers, who are the self-proclaimed second coming of Steven Cohen.  I fear the day your site goes dark.  Too many souls will be without counsel, left to tread the financial waters on their lonesome.  Until then, I just need you to know there are many fans out there.  Even if we’re often silent, please know of our appreciation.

Thank you, Damon.

147 comments ↓

#1 dakkie on 12.07.18 at 4:55 pm

Canadian Homeowners – One Trillion Dollars Poorer Than You Think – Ross Kay

http://www.investmentwatchblog.com/canadian-homeowners-one-trillion-dollars-poorer-than-you-think-ross-kay/

#2 Ditto on 12.07.18 at 5:04 pm

Long time reader. seldom comment. Ditto to that letter. Thanks Garth for all you do.

#3 greyhound on 12.07.18 at 5:06 pm

What he said.

#4 S on 12.07.18 at 5:13 pm

Ditto

#5 Calgarian Cowboy on 12.07.18 at 5:17 pm

Count me as one of the ‘good people,’ appreciative of the daily enlightenment G-Money. Take a hike Cave Dwellers.

#6 Linda on 12.07.18 at 5:17 pm

Great photo of the day. Dog is SO fluffy! & little girl looks to have had some training, very graceful arms.

Like the letter of the day, thanks for the blog & the effort to educate. As for the markets, ‘keep calm & carry on’.

#7 Djumbe on 12.07.18 at 5:24 pm

Thank you Garth, for your wisdom and humour!

#8 Silent the People on 12.07.18 at 5:27 pm

I too agree with the comment added to todays post! We are very fortunate to get your daily postings and very good advice. It’s a take it or leave it forum! Enjoy or move along! No one is holding a gun to your head….yet

#9 Sensible Albertan on 12.07.18 at 5:28 pm

Damon, Thanks for writing that, trolls be damned.

Garth you are a Hero! Thank you for your Help!!!

#10 Blacksheep on 12.07.18 at 5:30 pm

Who believes:

The Bank of Canada’s Governor Stephen Poloz,

Had no idea that Canadian jobs #’s were about to print 94K + new jobs?

So then why the dovish tone, just 48 hours earlier?

When is the next election?

Self preservation is all I’m sayin…

Align your investments, in accordance with what’s in their best interests.

#11 Alberta Redneck on 12.07.18 at 5:31 pm

Is it not written: Never text and drive, never put a fork in a toaster, never read the comments?

Internet comments were invented as a safe outlet for the loudest and dumbest nutcases. It’s more humane than having them standing on a street corner with a sandwich board selling pencils from a cup.

Anyway, Garth, count me among the grateful (also – full disclosure – among your clients). I’ve been reading for a decade and still never miss a day. I know of no other resource as informative and perceptive as this blog. They day you stop will be a sad day indeed.

#12 Vanrentor on 12.07.18 at 5:34 pm

I too have directed a lot of friends and family to your blog.

I notice that those with the one asset Real Estate strategy stop reading it.

#13 Daughter of Ponzi on 12.07.18 at 5:34 pm

Thanks for the blog. I really appreciate it. Your oppinion is a perfect contrarian indicator for anything financial and the life in general.

#14 Faithful Reader on 12.07.18 at 5:37 pm

I definitely concur with Damon. Your tireless effort to educate the masses is certainly admirable; even if your scorn for the BC NDP is completely misguided ;)
Hats off to you and happy holidays, Mr. Turner

#15 Sold Out on 12.07.18 at 5:38 pm

I cheerfully echo the sentiments of today’s correspondent. There are indeed a number of loons amongst your internet stalkers, and you certainly are a font of fiscal wisdom. Although I’m a recent arrival to this pathetic blog, I already feel smarter. And in this day age, feelings matter more than facts, right?

#16 Bill Grable on 12.07.18 at 5:40 pm

Damon – your note reflects the feelings of so many of us.

Thank you for expressing your thoughts so eloquently.

#17 Jeffrey Smith on 12.07.18 at 5:41 pm

Long time reader here Garth. Missed very few posts in the last ten years since first reading your book, GreaterFool. Was educated and entertained years ago here in Calgary when you dropped by. Steered my eighty year old mother your way but she panicked in your office and bailed, which at her age I fully understand, though she would have benefitted from sticking around. My estranged wife has placed some savings with you.
But what I really want to say is this place is a treasure and you have built it up with incredible tenacity, honesty, humour and wisdom. You or any well-meaning blog hoster are under no obligation to put up with foul mouthed boors and internet know-it-alls with their own agenda utilizing your place as a sounding board. Kick them out and tell them to set up their own site. That is the essence of civil free speech. Demand a certain degree of decorum in your place and know you are in no way impeding the so-called ‘free speech’ of others who trade in cynicism, abuse and hatred by banishing them with the full encouragement to set up their own blog.
All the very best. Oh, and I’ve even come to appreciate the bi-monthly posts written by your fancy pants suspender wearing hot-shot propellerhead partners.

#18 Jerry on 12.07.18 at 5:51 pm

What Damon said.

I haven’t missed a day for three years and I, too, find the price extremely reasonable.

Thank-you indeed for all your efforts, Garth.

#19 Victoria Real Estate Update on 12.07.18 at 5:52 pm

Garth I’m sure plenty of Canadians (and Americans apparently) appreciate what you’ve done over the years with your blog. Unfortunately those who like to complain are usually the most vocal. It would be a mistake to base your overall impression of the level of appreciation from your readers on the negative opinions of what is likely a small minority.

#20 crowdedelevatorfartz on 12.07.18 at 5:57 pm

Well said Damon well said…..

#21 Rob on 12.07.18 at 5:59 pm

Feel exactly the same way

Thank you Garth

#22 Canuckinoz on 12.07.18 at 6:00 pm

Garth
Ditto. I never venture into the swill of your comment section but I wanted you to know how much I appreciate your efforts to educate us. I’m grateful for all of your insightful and considerate commentary on a daily basis. Those other two blokes are not too shabby either.

I’ve been reading your blog for many years and I’ve tamped down my house horniness in both Canada and Australia. We have friends in both countries who think we are suffering from a mental deficiency. I avoid discussing real estate as I equate it to religion and politics – not a good idea.

But we’ve got over $600k in a balanced portfolio, I make over $100k per year (with a DB pension) and my husband is about to start a business in the new year. Little brats and an oversized lap dog, to boot! A granite countertop isn’t what satisfies be at night. A balanced portfolio and no debt, ensures I sleep well.

I am grateful for your ongoing dedication to us, despite those annoying sharts in the comment section. I can only hope you continue with the site so that us quiet but open-minded folks can continue to absorb your thoughtful insights.

#23 Duffy on 12.07.18 at 6:01 pm

God yes, when it comes to thick skin you probably have to call the Red Cross ahead to see if they have any Extra Length Turner Needles in house so you can donate the gift of life. The probability of you getting into heaven is higher than most.
Speaking of heaven, I would love to hear that conversation between God and J.Trudeau as Justin preaches and instructs how things in general could be improved upon for everyone there.

#24 Ed on 12.07.18 at 6:07 pm

Never before have I felt aligned with the comments section. Damon’s letter resonates. Thanks for taking the time to share the knowledge and, taking all the abuse.

The same people really appreciate it even if we’re rarely visible in the comments section.

#25 Joe Schmoe on 12.07.18 at 6:10 pm

I only read the comments FOR the garbage. Comic relief.

#26 SoggyShorts on 12.07.18 at 6:16 pm

I have what’s probably a dumb question:

If companies pay dividends quarterly, what’s to stop an investor from “yield hopping” by buying a bunch of stock the day before and then moving on to the next company?

#27 Ben Smith on 12.07.18 at 6:17 pm

I extremely rarely comment on here but have been reading every single day for over 5 years now.

Well done and very well written Damon. You sum up all my thoughts. Never forget a whole bunch of us don’t find it worth it to comment here but we read you religiously on a daily basis.

Thanks Garth!

#28 Heddok on 12.07.18 at 6:22 pm

Daily reader X 7 years. I will post here every day telling the world how great you are.

Because you are

#29 Ace Goodheart on 12.07.18 at 6:23 pm

Local band. Playing in one of my favorite walkable craft breweries. Belting out The Rolling Stones “Brown Sugar”.

Guitarist is butchering it badly. Sounds like my one year old trying madam butterfly on his fisher price keyboard.

What is wrong?

These guys have otherwise been pros. They sounded dead on with their Deep Purple tributes, were amazingly on note with their rendition of The J. Geils Band’s “Angel is the Centerfold” and “Freeze Frame”.

They could even expertly handle some April Wine.

Why can’t they get “Brown Sugar”?

Well, Keith Richards, after learning a thing or two about banjos, decided that a six string guitar actually only needed five strings, and that those five strings should be tuned GDGBD as opposed to the usual EADGBE.

So if you want to play any later Rolling Stones Songs and you want them to sound right, you have to tear a string off your guitar and re tune it.

Hence the problems my local garage band was having at my favorite craft brewery.

Moral of the story?

There is no normal.

Whenever you find yourself in a seemingly impossible situation, check your premises. You will find that one or more of the assumptions you are making about your base reality are wrong.

#30 Sask to AB on 12.07.18 at 6:28 pm

Thank you Garth, for all that you do.

#31 Fortunate one on 12.07.18 at 6:35 pm

Thank you Damon for letting Garth know how a lot of us feel about him even though we have not expressed it.

Garth you are loved.

#32 Loonie Doctor on 12.07.18 at 6:37 pm

Hi Garth. I avoid commenting here too often for fear of waking up with an unwanted rash on my own internet nether regions. However, I will brave it today to second Damon’s comment that you published. We are fortunate for what you give us. And for free. Thanks.
-LD

#33 Ian on 12.07.18 at 6:38 pm

You are certainly right about inflation, but for the wrong reasons.

You need to go back to how Milton Friedman won the Nobel, it’s about money supply, NOT the wonderful economic conditions and tight labour market you are still in a delusional cloud about.

The reason there is inflation is because money has been in an unprecedented period of long, low rates. Which means that inflation will explode. I’ve already established on here how absurdly inflation is underreported. And the government doesn’t hide this by the way. They define it right on their websites. The only small problem is their definition is designed for politics, to show the public all is good. The public well knows that their personal cost of living is rising much more quickly than is being reported.

I’ve told you that the way unemployment is reported isn’t even close to defining the true picture. U6 is much closer, but even that doesn’t count people who have given up searching. Much like inflation, the government has an interest in underreporting the true picture of unemployment, or functional unemployment.

If the US economy is so wonderful, then why are homebuilders and auto stocks at 52wk lows? Why is student debt north of a trillion? Why is auto debt the new subprime?

As always Garth I respect your open debate on here, you’re one of the few people who allow dissent without freaking out, and I commend you!

And you are VERY right about the GTA housing market which attracted me to this blog in the first place.

#34 Udar on 12.07.18 at 6:38 pm

“I fear the day your site goes dark” – Gee Damon, what are you thinking? In the last decade, Mr. Turner was only late and only one single time. Against what we might think, it wasn’t a [email protected] attack or Adelle concert. The reason for that was the crowded Hardware department at Home Depot. The doctors were quite fast to add the bolts in that forged tempered steel foot. Amateurs! They could simply weld it!
Also, I missed the paragraphs where financial concepts are explained using the references to Amazonians, Harleys and chiselled abs!
Thank you greatly, Mr. Turner!

#35 KLNR on 12.07.18 at 6:44 pm

couldn’t agree more Damon.
been reading Garth’s words of wisdom for almost a decade. hopefully this blog will be around for another decade. stay under your bridge trolls.

#36 enarhem on 12.07.18 at 6:51 pm

Nice letter. Only been here for a year, but have learned lots. Don’t be discouraged.

#37 Random Gibberish Man on 12.07.18 at 6:57 pm

#12 crossbordershopper on 12.06.18 at 5:10 pm
investors are not being compensated for the significant variability of stock prices. Volatility is risk , and investors especially in Canada collect dividends. many stocks are trading at a reasonable dividend yield, but their stocks have bounced around for years and many are at the same place they were years ago. My point is simple if i invest in Bank of Nova Scotia, (i can input 100 more names, all the same) of Tier 1 Canadian companies, that are trading at the same price they were 5 years ago. What do we get for going on a wild ride, 4.25 percent div.
I have a meridian savings account that gives 3.15%, sure only for 6 months, but in six months you shop around, Oaken Financial, etc all giving no brainer interest at near the same div return (putting the tax credit aside, TFSA sheltered account etc)

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

You put your money in a mattress?

Bank of Nova Scotia went on a wild ride today, up +0.17 (0.24%).
Dividends and capital gains are set lower for investments – in one case it’s negative tax.

https://www.taxtips.ca/taxrates/canada.htm

#38 Gdogg on 12.07.18 at 6:58 pm

Thanks, Garth! Where is the best place for REIT ETFs for tax efficiency – rrsp or tfsa? Tfsa is of course zero tax, but I’m not certain if it’s best to utilize tfsa room for all the growthier stuff instead.

#39 joblo on 12.07.18 at 6:58 pm

https://business.financialpost.com/opinion/lawrence-solomon-if-alberta-turns-separatist-the-rest-of-canada-is-in-big-trouble

Alberta, consider your option after the non productive Firzt Ministars meetings in the “Post Nation State”.

#40 Alberta Ed on 12.07.18 at 7:00 pm

Amen, and then some!

#41 espressobob on 12.07.18 at 7:01 pm

I remember having a difficult conversation with a stranger at the local watering hole about a year ago. He was singing the praises over his position in bitcoin. This was going nowhere if you know what I mean.

Having found the greater fool on a gold site, Garth was warning investors to lighten up on gold positions. I thought he was nuts. That was years ago.

I kept reading this blog while my positions in PMs melted. Dumped those positions and took my lumps. Learned more about global investing here and even bought one of Garths books. Never looked back.

Nice work Garth, thanks. Damon said it best.

#42 WUL on 12.07.18 at 7:01 pm

Nice, true and well deserved tributes today to you Hon. Turner, M.P., P.C., Curmudgeon.

WUL

#43 Remembrancer on 12.07.18 at 7:02 pm

#26 SoggyShorts on 12.07.18 at 6:16 pm
I have what’s probably a dumb question:

If companies pay dividends quarterly, what’s to stop an investor from “yield hopping” by buying a bunch of stock the day before and then moving on to the next company?
—————————————————————
Pick a couple (REITs for example paying monthly) of your favourite would-be fishing holes and watch them for awhile to track what happens…

#44 JettaFlair on 12.07.18 at 7:02 pm

@FLOP

If you haven’t already come across this one, consider it for your list. Keep up the good work. You can even make a pun using “Colfax” instead of “Cold Hard Facts” ;)

2087 COLFAX AVENUE COQUITLAM V3K 3C9

Sept 2018: 1,299,800
Dec 2018: 1,190,000

Sales history (last 3 full calendar years)

07-03-2016 $1,226,000

#45 John Fahey on 12.07.18 at 7:03 pm

If your comment section had an up/down vote capability, your loyal following would make short work of these deplorables.

#46 Bob Dog on 12.07.18 at 7:03 pm

If you allow anonymous posting on the internet you are in for a trailer load of trouble. Look what anonymous Facebook posts have done to the us election. The internet has been weaponized. The only way to prevent madness is to force people to sign in with legit credentials and take responsibility for what they say.

#47 Shawn Allen on 12.07.18 at 7:07 pm

Dividend Hopping?

#26 SoggyShorts on 12.07.18 at 6:16 pm

I have what’s probably a dumb question:

If companies pay dividends quarterly, what’s to stop an investor from “yield hopping” by buying a bunch of stock the day before and then moving on to the next company?

********************************
In theory, the market is efficient and the price reflects the pending dividend and then all else equal drops by the amount of the dividend as soon as the stock goes ex-dividend, that is no longer eligible for that dividend.

I imagine there have been many academic studies that looked to see if such dividend hopping would work in practice and I strongly suspect the answer was “no” especially after trading costs including he buy / sell spread.

#48 just a dude on 12.07.18 at 7:11 pm

What Damon said.

Seriously, thank you much, Sir Garth. Greatly appreciate all that you have done and continue to do.

I’m nowhere near the wordsmith Damon is so I will leave it at that. Well done, Damon.

#49 kommykim on 12.07.18 at 7:14 pm

RE:#26 SoggyShorts on 12.07.18 at 6:16 pm
I have what’s probably a dumb question:

If companies pay dividends quarterly, what’s to stop an investor from “yield hopping” by buying a bunch of stock the day before and then moving on to the next company?

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

Trading costs which include bid/ask spreads.
You need to hold the stock longer than a day or two. Google “ex-dividend date”.
Stock prices usually dip after the dividend payout and slowly recover making you hold them longer.
Thus most dividend investors hold dividend stocks for the steady income and avoid trading them excessively.

#50 Ian on 12.07.18 at 7:15 pm

The Fed chairman saying rates are ‘normal’ does not make them normal. You actually should not listen to that dribble and actually look at history.

Here is the reality: the Fed, for political reasons, has used all their easing tools to battle the 00 and 07-08 issues.

Explain in what environment 2% rates are ‘normal’?

They aren’t.

They are instead symptomatic of an absurd push to combat the two previous bubbles, which tricked people because rates as measured by Fed Funds were near 6% in both cases.

Time is running out. Now QE4 doesn’t have the bullets to reduce rates. 2% is not 6% and the USD is about to collapse when the market finally realises this, as if it wasn’t obvious.

#51 will on 12.07.18 at 7:15 pm

i wonder what a poodle looks like that hasn’t had it’s hair all shaved carved and sculpted… probably wouldn’t be recognizable as a poodle. got any photos of an unsculpted poodle Garth?

#52 Long-Time Lurker on 12.07.18 at 7:35 pm

Think of dogs, Garth. Dogs. See worked!

#53 AB Boxster on 12.07.18 at 7:36 pm

26 SoggyShorts on 12.07.18 at 6:16 pm

I have what’s probably a dumb question:

If companies pay dividends quarterly, what’s to stop an investor from “yield hopping” by buying a bunch of stock the day before and then moving on to the next company?
_————-
If you look at a stock like Enbridge, you will see a number of dividend dates.

The ex-div date is the date you must own the stock by, in order to receive the dividend.

For the last dividend the ex-div date was Nov 14, 2018 to receive the Dec 1 ,2018 dividend. Also, prior to the ex -div date the price of the stock may rise , and then fall after the ex-div date.

#54 Smith X on 12.07.18 at 7:36 pm

Probably better to refrain from opinions on governments and taxes , and simply reposition your assets depending upon the circumstances. If there is speculation tax, a school tax or a payroll tax then one must determine the implications to your own situation and act accordingly, instead of complaining about it . My assessment is that the confluence of multiple factors including interest rates, regulations, taxes, credit contraction and new, expensive presale supply make it a virtual certainty that housing prices will drop . You can make your own conclusions

#55 SoggyShorts on 12.07.18 at 7:36 pm

#43 Remembrancer on 12.07.18 at 7:02 pm
#47 Shawn Allen on 12.07.18 at 7:07 pm
#49 kommykim on 12.07.18 at 7:14 pm
************
Thank you, makes sense that the price dips after a dividend since anyone buying that day wouldn’t get one for a while.

Also hey 3/3 responses were non-toxic!
See Garth there’s still good in the world (and the steerage section)

#56 fifer on 12.07.18 at 7:38 pm

“have a cow when markets fall five per cent after rising thirty.”

…..now where have we heard that before? Real estate bad – stock market good.

#57 Canadian Moose on 12.07.18 at 7:38 pm

The Mrs and I just got back from Cancun, we stayed at the NYX Hotel in the Hotel Zone, great week, drinks galore and the best food anywhere. If you are looking check this one out on Trip Advisor.

I missed my daily reading cuz well I am on holidays and rules are rules. I will add this though. Mr Turner and his pros are simply the best free financial info you are going to get anywhere in the world. It certainly has turned around my fortunes post divorce and for that I say.

Thank you Garth and your team. Keep up the amazing work and contributions to your craft and human kind.

Cheers from the Hinterland

#58 Paully on 12.07.18 at 7:40 pm

Hear, hear!!

#59 Brian Ripley on 12.07.18 at 7:40 pm

My 4 interest rate charts are updated with November data
http://www.chpc.biz/yield-curve.html

The 10 yr less 2yr spread is now only 12 beeps away from inversion; last month it was 16 bps away.

In May June & July 2007 the 10-2yr spread was negative 10 bps & the TSX Real Estate Index tipped over into plunge-ville

#60 Surfsideboomer on 12.07.18 at 7:42 pm

Another daily reader for many years. About to dip into buying a REIT ETF. I always search your blog for information before buying any investment. I feel I get educated in political matters as well as financial and real estate matters.
I actually enjoy reading the comments as well.

#61 Kelowna on 12.07.18 at 7:43 pm

Great comment Damon and I could not agree more! Thank you Garth to you and your “propeller partners” for your patience and perseverance each day to try and educate all your readers in an interesting, thought provoking and instructive manner!

#62 Vision on 12.07.18 at 7:44 pm

#51 will
Picture of pooodle not shaved.
See link
https://www.itv.com/news/2015-01-23/amazing-transformation-of-dogs-so-neglected-they-could-not-see-or-stand/

Thanks Garth for all your time and efforts.
I appreciate it.
Love reading your blogs. Incredible wit and humour.

#63 earlybird on 12.07.18 at 8:02 pm

Long time visitor, and I fear the day your site goes dark as well Best read on the net hands down…

#64 TurnerNation on 12.07.18 at 8:02 pm

People are broke because they are children. I mean when was the last time you heard an elevator convo or NFLX show or ad at anything other than a Grade 5 level of reasoning?

Some decent quotes I found elsewhere – not mine:

“”It is difficult for most to consider that there are Bodies Politic who plan events and outcomes years, decades and centuries in advance when the majority are living “paycheck to paycheck” and being inundated with “daily news” and “current events” which may be handy for water cooler conversation AKA “small talk” but is utterly useless for an individual attempting to realistically plan for the future state of things to come.

My final thought here is that it is “hate” (not love) that drives everything. Hate is a word that is misunderstood in my opinion. We hate to be hungry, therefore we work for food. We hate being cold therefore we work to stay warm with clothing and shelter. We hate being alone so we seek and find a mate or companion. We hate being wrong so we try to prove that we are right.

You see it is “hate” that leads to love, comfort, knowledge, progress, building, etc. Without hate for one condition, the opposite condition could not be realised.””

#65 For those about to flop... on 12.07.18 at 8:14 pm

Pink Pumpkins being carved in Coquitlam.

Time to down tools and pick up the iPad as someone that has helped me out before named JettaFlair wanted me to add this to Santa’s Pink List.

Have they been naughty or nice?

I dunno but it looks like they’re about to get spanked.

The details…

2087 Colfax Ave,Coquitlam.

Paid 1.22 March 2016 (sold in six days,man we were on some good drugs back then…)

Originally asking 1.29

Now asking 1.19

Assessment 1.23

Now they asked me to finish with a particular pun.

What am I, a performing monkey?

Of course I’m a performing monkey, here is your pun.

Since January 2017 I have been documenting in my own special way the correction a Greater Vancouver is currently experiencing.

You don’t read my posts if you are annoyed by poor punctuation.

You don’t read my posts if you can’t handle bad grammar.

But you know what, people read my posts to try and find out what’s really going on since the Sell Squad seems to have no conscience.

You want the facts?

You can’t handle the Colfax…

M44BC

P.S Here is what it looks like on my blog.

As a tribute to you helping out I put a picture of a pink Jetta.

I will help anyone out.

I got my stubbornness from my Dad.

I got my compassion from my Mum.

Lethal combination for Greaterfool readers…

M44BC

https://pinksnow103480648.wordpress.com/2018/12/07/pink-pumpkins-being-carved-in-coquitlam-4/

https://www.zolo.ca/coquitlam-real-estate/2087-colfax-avenue

#66 Yann on 12.07.18 at 8:18 pm

Garth, Dorothy, and, last but definitely not least, Bandit: thank you.

#67 Nonplused on 12.07.18 at 8:19 pm

This is probably more applicable to yesterday’s post, but can we please stop bemoaning the loss of a GM plant? They truly make the worst cars you can buy. Of course they were going to go broke. Getting rid of them will be a benefit to tax payers. It’s been a shame that taxpayers have been bailing them out for so long as we have. Sooner or later you have to let an old horse die, and there is no use propping up the body.

We let Blackberry (or RIM) go near broke with no bailouts, and they had a decent product.

The Koreans make better small cars at better prices than GM does at this point, at least for the North American market. How this came to be is a sad tale but it mostly involves unions over pricing themselves and GM’s cost cutting measures in response. You can’t have 30% of the cost of a car being “employee benefits” (not wages, but health care and the biggie being pensions) and not go broke when there is competition. We can’t afford to bail out the GM pensions anymore.

They used to say of Japanese cars that they were great until 200,000 miles and then the whole thing was junk at once, so don’t fix it. This was true. With a GM today, the whole thing is junk when it roles off the line. This wasn’t always true, in 1960 they probably made the best car you could buy. But not anymore.

I just recently had to replace the “wheel bearing assembly” in my wife’s Ford at 180k. Who ever heard of a wheel bearing failing before? It’s normal now, according to my mechanic. And you can’t just replace the bearing like in the old days, you have to replace the whole assembly including electronics for the traction control and anti-lock brakes. It’s crazy. And I don’t think my mechanic was lying, the grinding noise went away after he did the work.

Not that foreign cars are perfect either, the last thing you want to do is buy a German design. Money pits. You don’t want an automatic transmission unless it’s a Toyota. They all have their weaknesses. But GM has managed to build in weakness at every point in the assembly of the vehicle.

Ford and GM have both announced they will stop making cars. Why? Because they don’t know how to make them at a profit anymore. It’s nothing to do with “changing consumer preferences”, they know as well as anyone that oil prices go up and down and they are currently down. What are they going to do when oil prices go back up? The F150 won’t sell as well and then they will have no factories or designs to compete with the Koreans or the Japanese. Doubly screwed, glued, and tattooed.

If you own GM, Ford, or Chrysler shares, sell now and avoid the rush. Trump’s tariffs won’t save them because the foreign companies already assemble many of their cars here, tariff exempt. They will move additional production here as necessary.

So what is the cause of this calamity? Well, it’s pretty simple and widespread throughout government and unions. It is the idea that you can continue to pay people after they quit working and retire. It’s just kicking the can down the road. Even if you say, as the government employees and unions do, “well we are accepting lower wages now for the pension in the future”, you still don’t get the fact that they were not being productive enough in the now. Otherwise they should have got paid more and built their own damn retirement plans.

Good-bye GM, have fun in China. I won’t miss bailing your ass out anymore as nobody ever bails me out, and I think your cars are crap.

#68 Yukon Elvis on 12.07.18 at 8:21 pm

That is a nice dog you have there.

#69 Jason on 12.07.18 at 8:26 pm

Thanks Garth!!

#70 Fish on 12.07.18 at 8:32 pm

FACT, of some listing’s of realestate now come with CHANGE Of Font size WITH BOLD PRINTING FOR SALE

surprising only for approximately a couple of months they slowly be gradually changing FONT SIZE, BOLD PRINTING etc, like the average person would not notice ,

it will be interesting to see where it goes

in 2019

#71 Art Vandelay on 12.07.18 at 8:35 pm

Garth-Bandit 2020

#72 Heather Hallam on 12.07.18 at 8:36 pm

Oh I hope this site does not go dark. I read it every day. I rely on it for my financial and real estate education. It’s the only one I trust. I would feel lost without it.

Heather

#73 Tenugi0 on 12.07.18 at 8:37 pm

Amen and well said, Damon!

#74 mitzerboyakaQueencitykidd on 12.07.18 at 8:44 pm

I’m Happy to be part of this Dog / Money thingy community
party on Garth

#75 Prairie rose on 12.07.18 at 8:46 pm

Daily reader for the last decade. First time posting, just to echo Damon’s comments. This blog has helped me stay sane and solvent through turbulent times.

Hard to fully describe the respect and gratitude I feel for Garth, Dorothy, Bandit, Ryan and Doug. All Canadian heroes providing a tremendous public service.

Thank you.

#76 Steve French on 12.07.18 at 8:56 pm

My posts are being blocked!!

SteveO.

Not by me. – Garth

#77 Rick on 12.07.18 at 9:01 pm

Nice graph. 2.30 to 2.027 is hardly as disastrous as you try to make it by enlarging the graph for effect.

Not my graph. – Garth

#78 PastThePeak on 12.07.18 at 9:05 pm

Damon
#17 Jeffrey Smith
===========
Garth, count me in with Damon and Jeffrey. Appreciate the wisdom, wit, and entertainment you (with Doug and Ryan) provide each day of the week. It takes a steely nerve (and perhaps a good dose of whisky) to manage the bilge section here.

And for those of us that try to be civil (for the most part:), appreciate you providing the opportunity to get things off of our chests…

#79 Dolce Vita on 12.07.18 at 9:06 pm

God Almighty Garth, had I known you’d fall for Harlequin Romance I’d have littered Comments with frothy, wordy, lengthy, flowery, heaps of praise with the perfunctory parallel Biblical deity comeback reference.

Your more Kierkegaard in your authenticity (and bitchiness) and Nietzsche in “That which does not kill us makes us stronger.”

To those 2 and you, I’ll raise a glass to.

To Hardy Boys, Nancy Drew, sugar and spice, everything nice, common, pandering…ah, NO.

Yup, EVERYONE loves a romance with a good ending including you Garth. But alas, in times of turmoil, reassurance a good thing.

Rest Assured Garth, you Rock the minds of many.

#80 JettaFlair on 12.07.18 at 9:15 pm

@65 For those about to flop…

“You want the facts?

You can’t handle the Colfax…”

————————————————————-
Flop, thank you for the hearty laugh and tribute!

Those were the coolest pink rims ever!

Happy Holidays!

#81 Dolce Vita on 12.07.18 at 9:24 pm

PS:

The poodle and ballerina, that’s SO not you Garth.

Take a Nobilta di Dame bow on a Harley with a dog at your side…ya, that’s you.

#82 Renter's Revenge! on 12.07.18 at 9:29 pm

#12 crossbordershopper on 12.06.18 at 5:10 pm
investors are not being compensated for the significant variability of stock prices.

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

Say you do all your retirement saving between the ages of 25 and 35, which they say you should do, and you plan on retiring at 65. So you have a 30 year time horizon for your investments.

Now look at the 30 year history of any popular dividend stock in Canada (BNS in your example), or the 30 year history of any equity index. Looks pretty good, doesn’t it? Plus you got dividends all along the way.

Now think about the fact you might live until you’re 95, so you’ve got another 30 years after you’re 65.

Now compare your quality of life in retirement if you put your money in a savings account vs dividend stocks and equity index funds. Stocks are starting to look pretty good now, aren’t they?

#83 DON on 12.07.18 at 9:37 pm

“In fact, on that note, the number of hateful posts lately in the steerage section (all of them trashed by my bevy of incredibly attractive, unpaid co-op students) has hit the red zone. Keep it up and I’ll send all your IP addresses to my Russian and Nigerian pals. Or Tony Clement.

Now back to this yield stuff.”

**********

This blog is bloody well brilliant! It should continue forever by like-minded folks. I’ve learned a hell of a lot since its inception on a wide range of debated topics. Wouldn’t change it (less the bad comments).

The Greaterfool Lighthouse is a welcome site in a storm of disinformation! Provides a blueprint for balance, diversity, patience and success. And I have yet to come across another blog that compares.

“(all of them trashed by my bevy of incredibly attractive, unpaid co-op students)”

The Amazons?

#84 MicroGX on 12.07.18 at 10:01 pm

Another fan…. Mirror Damon’s comment…. Avoid regular commenting scared to catch something, when I do paruse the comment section, I hear my newfie buddys Voice ” ..the world’s full of idiots b’y “

#85 DON on 12.07.18 at 10:05 pm

#76 Steve French on 12.07.18 at 8:56 pm

My posts are being blocked!!

SteveO.

Not by me. – Garth
***********************

Did you piss off the Amazons…Ah, I mean co-op students?

#86 Fish on 12.07.18 at 10:10 pm

New Countdown
**** HAPPY New Year 2019****

https://www.timeanddate.com/countdown/newyear?p0=%3A&msg=%2A%2A%2A%2A+HAPPY+New+Year+2019%2A%2A%2A%2A&font=hand&csz=1

#87 GLK on 12.07.18 at 10:17 pm

Garth, I l agree with Damon.
Thank you very much for the blog.
A daily reader for years.

#88 Renting Happy on 12.07.18 at 10:18 pm

Thanks Garth for the daily read. Very greatful to have guidance beyond the frankennumbeea. Can easily charge for this type of content but you provide it free. Ditto to Damon.

-happy reader since 2013

#89 Dolce Vita on 12.07.18 at 10:20 pm

Yes, MIXED signals from the economy.

A pithy “November Labour Force Survey” of +94 K jobs and a mixed signals “GDP, Income and Expenditure” third quarter 2018 report of +0.5% growth, +2% thus far annualized (mixed in that all but one Sector summary title used the words: decline, slowing, falls, in them).

SO 3rd Qtr 2018 passé.

A lot has happened in December with oil, auto, RE sales/price declines and of course, a schizophrenic MR. MARKET.

Things do indeed turn on a dime. None for the better it seems.

A lot of NEGATIVE SENTIMENT.

That never ends well economically if history is a guide. I hope for the best but economic reality has been CRUEL in the blink of an eye.

#90 Stan Brooks on 12.07.18 at 10:21 pm

People are bombarded with meaningless numbers.

The number of jobs is nothing without accounting for the kind of jobs (2nd, 3rd part-time to pay off the giant mortgage), the pay etc.

The federal bond yield bears no correlation to the economy or inflation as it is driven by:
– mandatory purchases by pension funds and insurance companies who are required to maintain bond portfolio
– indicated purchases by BoC who conducts silent bond purchase programs that is about to explode. How come they accumulated 100 billions in bonds and MBS and nobody is even talking about that? CMHC and private mortgages MBS market is huge, there are other ‘federal agencies’ on the hook for that.
– speculators who see the picture/that rates can not go higher bet on reducing rates so they hope to gain as existing bonds go higher when rates go down.

The biggest problem is debt as rates can not meaningfully go over 2 % due to it, bonds and rates are not the free market that everyone is talking about that are the bedrock of capitalism, this is manipulated market full with half truths, outright lies, deception.

There is no way for the real cost of living to be going up less than 6-8 % annually, maybe more.

We are just spreading the risk around so when the whole thing comes down and inflation explodes everyone will be doomed.

Having a house in a place with no work and high taxes is meaningless, you can’t grow potatoes in your backyard.

Again, people on fixed income and retirees should be extremely concerned. Not that whoever still has job will be much better but those younger will still have the chance to move out.

These things work like avalanche, the pressure is building and spread around until the whole thing suddenly collapses.

Can’t build a skyscraper, even a glass condo on sandy foundation.

And I am very positive (no negativism here) about it.

#91 Drill Baby Drill on 12.07.18 at 10:29 pm

“to my Russian and Nigerian pals. Or Tony Clement”
Ok I can take a visit from a Rusky or an African but the visual I just got of Clement well I will now need meds.

#92 fishman on 12.07.18 at 10:54 pm

As a frequent reader I really appreciate Garth’s pearls of investment decorum. Though I must confess my portfolio is chock full of maples under the ScotiaBank , plumped up with GIC’s at the Gulf & Fraser, & yes, west side Van R/E. I did manage to put a small portion into a diversified portfolio handled by a pro but the statements are so boring I really don’t have a clue how much I’m up or down.
I know I’ve been neglectful & am willing to start my punishment. I hereby license Mr. Turner to give my IP address to the Nigerians (attention penis extension department). Its a start to rebalancing my neglected portfolio. When this successful transfer is completed feel free to give my IP address to Tony Clement. We could then compare portfolios over Instagram. I’ll be in position to contribute to this blog in greater length.

#93 James van Oort on 12.07.18 at 10:56 pm

Never commented before, but had to add my appreciation for the information that you distill in these posts. Very informative and helpful. I agree 100% with the comments Damon submitted.

#94 yvrmc on 12.07.18 at 11:05 pm

My ex wife made me start reading this pathetic blog 2 years ago. Best thing she ever did for me. Ive learned a ton about managing money over the long haul. Thanks Garth and your two side kicks . Also , kind of interesting hearing from some of the characters on here. Smokey , TCContrarian , Ace , Stan , especially Flop . Even SCM made some good points though in an incredibly insulting arrogant kind of way . Missing HHCE though , come back you raging ranting fool !!

#95 Dolce Vita on 12.07.18 at 11:07 pm

A lot of kudo’s today about your Blog Garth.

Defenders of the Faith.

Your own army of Knights Templar and Xerxes Persian Immortals.

You are in no need of defending, you do that more than adequately by yourself I’d say (Cpt. Obvious understatement).

Yes, your’s is my favorite Blog but there are others out there that are pretty good too on different topics.

Like this one today from the sardonic World of Shrink:

https://jordanbpeterson.com/political-correctness/the-gender-scandal-part-one-scandinavia-and-part-two-canada/

BUONANOTTE and it will get better soon enough Garth (damn the inverted yield curves and full speed ahead…even if full speed ahead comes at the end of a correction and in a few Qtr’s time).

#96 Ponzius Pilatus on 12.07.18 at 11:10 pm

Re: Picture
That poodle is on steroids. Pretty sick if you ask me.
I’ll call the SPCA.
Animals are not toys.

#97 Busty Amazon on 12.07.18 at 11:11 pm

I suspect value stocks that are buying back stick and increasing dividends will far outpace the dreary 60/40 by a long shot. People need safety and growth, they will flick to value. Russell and S&P finding Death Crosss territory might scare the crap out of media pundits, but I’m sure of getting my gas bill etc, and paying it, so value will vacumn up all the panic driven market maniacs .

https://www.cnbc.com/2018/12/07/scary-chart-pattern-signals-more-stock-market-selling.html

#98 mike from mtl on 12.07.18 at 11:11 pm

#82 Renter’s Revenge! on 12.07.18 at 9:29 pm

Now look at the 30 year history of any popular dividend stock in Canada (BNS in your example), or the 30 year history of any equity index. Looks pretty good, doesn’t it? Plus you got dividends all along the way.

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

Only if you hold, never sell, wait 20+ years, always contribute with new saving cash, yes for sure. Same is true of RE or basically anything.

Take RY for example, invest at 2007 at around 50$ blow back to 30$ for the next year, wait until around 2011 to stabilise to that same number, only to be back there during the oil bust in late 2015 – 2016.

The way things are going will be back to 50$ in no time, like ’19 or ’20.

Collecting 2-5 % whilst losing 10 -20 % in the same year and next, which is very possible, is stupid kind of like preferreds.

BNS has basically gone nowhere since 2010, collecting their DIV was a total waste of time. Better to invest in the 4-5% long Bonds avoiding the very real volatility of the time.

The ’09-’17 run up is pure FED induced heroin.

#99 Ponzius Pilatus on 12.07.18 at 11:17 pm

#66 Yann on 12.07.18 at 8:18 pm
Garth, Dorothy, and, last but definitely not least, Bandit: thank you.
———
You’re thanking a DOG!?

#100 Jon B on 12.07.18 at 11:35 pm

Thanks GT.

#101 Smoking Man on 12.07.18 at 11:47 pm

Green card soon, now it’s get my kids here.

Compact on migration. Carbon tax. Canada will become a shit show very soon. Thanks to mad max T2 is going to get 4 more years to completely destroy Canada. Butts dream to take us back to the stone age is going to happen. He’s not bad for a newfee.

If you can run dogs, RUN. No yellow vests up north.
Wealth confiscation is what’s coming down the pipe line.
Too bad it wasn’t oil.

#102 Salutations Sally on 12.07.18 at 11:59 pm

#67 Nonplused, excellent post!

Garth, Bandit & Co., your blog is part of my daily routine, sortof like coffee in the morning, except it happens at night…Thank you for your excellent and thought provoking posts.

#103 animal lover on 12.08.18 at 12:32 am

I too need to second Damon’s post, so thoughtful and well articulated. Tempered. Steel!

And like #17 Jeffery Smith, I don’t think I’ve missed a post since reading your book Greater Fool back in the day.

Yours is the only blog I ever recommend to people.

In the meantime I’ve taken control of my portfolio transferred from one of the big banks, avoided a real estate purchase inappropriate for my circumstances, and learned SO much along the way.

A few years ago I shared the status of my portfolio with a friend who is an investment industry professional, in the executive suite of a massive Canadian fund company (purposely vague here)… his opinion: keep doing what you’re doing. Quite the endorsement, I must say.

In the early days my handle was Cat Lover. Now it’s Animal Lover. My favourite show on Netflix right now is Dogs. If you haven’t seen it, OMG stop reading now and tune in. I always look forward to the pic of the day, and very much love the anecdotes of those who have submitted them. So heartwarming.

I really don’t know how to thank you Garth, except to express my deepest gratitude for everything you’ve done for all of us humble readers out here in the ether, trying to make our way in this crazy world.

Cheers!

#104 YVRchick on 12.08.18 at 12:39 am

Long time blog bitch, rare commenter. You deserve a Canadian knighthood Garth. As a millenial urbanite, I have been sheltered from the lust of owning leaky condos, and managed to amass a nest egg in my 20s with my squeeze, all while my colleagues complain about credit card debt while buying presale Yaletown studios. We are deeply grateful.

#105 Smoking Man on 12.08.18 at 12:42 am

Big corps and globalist Davos bitches.

The golden rule of making it to the top as T2 has clearly demonstrated. Kiss ass, learn to lie, you don’t even need to be that good, MSN has your back.. Say shit that don’t make sense and if someone calls you out on it call them racist..

And DM thinks he’s a bad ass intellectual. I’m calling him stupid with shit stains and sent of cow shit on his lips.

Sucking up is not in my DNA.

Dear God if I only played along and these metal cases would be off my back. Life would be boring.

I fear no man or God. Don’t piss me off. Let me drink myself into oblivion and I won’t seek revenge.

Take my bozze away, or call hr that funds my addiction you will have no idea what a bad ass I can be.

#106 VICTORIA TEA PARTY on 12.08.18 at 1:15 am

KEEP ON KEEPING ON, ST. GARTH

Not trying to suck-up here, but my major point is your advice and comments on stock and real estate markets are indispensible.

My wife and I have been stock market investors for the last half century.

Invested during the following events: the recession caused by the Vietnam War (1969-70), President Nixon’s drowning of the Gold Standard (1971), OPEC oil crisis (1973), double digit interest rates (various years), Black Monday (1987), 2008-09 apocalypse, pretty much the whole nine yards.

We stayed invested throughout, and we’re still at it.

Now we get to TODAY, the tenth yard.

Where to from here?

I’m studying my old “investment navigation charts” to guide us through these shoals, reefs and tides, never mind the terrifying storm warning forecasts, wherein things now get complicated.

Your general advice to stick with your balanced investment program is the baseline for most investors.

But there will be some big moves amongst those, especially moves that are influenced by outsized monetary policy and international trade matters.

We all know about those don’t we? Look at recent market moves.

I see some investment opportunities as being more condusive to making people feel better than others.

In Canada it’s the five biggest banks, each one a multinational financial powerhouse that rivals others everywhere else.

Next, utilities. You will get dividends out of those forever, because their customers need electricity, natty gas, oil, coal for warmth and continued living.

Health care and hi-tech stocks are important but we let a favourite mutual fund deal with those.

If we buy individual stocks it’s ONLY those with which we are familiar and whose track records speak for themselves, hence the banks.

Energy. Right now this is a desperate situation in Canada, so which will it be, upstream, midstream or downstream? Tough call, but no advice from us.

I wish Rachel Notley and Alberta the best.

I believe she and the Official Opposition should combine into a coalition and run in the next election as a way of announcing to the rest of Canada and the world, that Alberta is rebuilding, retooling, rebirthing.

It’s a desperate situation for sure. I wish Alberta and its good people all the best.

As for the rest of Canada’s political/economic future, and how markets will be influenced, I am dismayed at the lack of leadership, save for the brave Ms. Notley, the Margaret Thatcher of Canadian politics.

T2 and his cohorts have left the rest of the world wondering just what the hell is going on here. Very worrying.

I worry, also, about the lefter-leaning USA.

With the Democrats in power in the House of Representaives for the next two years at least it will be vital to see who wins that fractious battle for control of policies and agendas.

Will it be the moderate, generally business-friendly folks or the far-left nutbars who wish for blanket socialism because Millennials, Gen Zedders, and the ageing diapered masses can’t get their act together and be aggressive Yankee Traders, ranging about the world grabbing up this and that and making dough?

Europe? Forget it.

The rest? Leave it up to “professionals” you trust, then worry about whether or not you actually trust them!

As for real estate, a home is to live in. Period.

Using your home for borrowing cheap money doesn’t make sense especially if you don’t know the direction of short, medium and long-term interest rates.

The inverted yield curve amongst two and five year US treasuries is alarming and keep that in mind for months to come.

Monetary policy implementation is no picnic. This is where the big boys make or break the little folks. Their power is nuclear.

Back to the non-residential markets, you want capital gains but more important you NEED dividends.

Investing is not the only game in town because it is not a game; it is extraordinarily serious business because your lives depend on good outcomes, especially for kith and kin.

#107 Mr Wang on 12.08.18 at 1:17 am

China is collapsing, the veil has been torn back, it’s a mess. Peak China is behind us. The myth of immortality has been replaced by burned fingers and retreating capital. Trump the Dragon Slayer has emerged victorious.

https://www.wsj.com/articles/american-entrepreneurs-who-flocked-to-china-are-heading-home-disillusioned-1544197068

IMHO , this communism thing was never going to last anyway, it never does. Trudeau, take note. Liberal dictatorship can only lead to the end of Canada. A separation of the Western Alliance is easily understood.

#108 jane24 on 12.08.18 at 1:42 am

Well I claim the prize of Garth’s longest reader as I used to follow his RE column in the Toronto Sun years before he was elected to govt!!

In my 64 years on this planet I have never seen such volatility in everything. Most based on a Trump tweet that reverses what he had tweeted the day before. His family and friends must be making out like bandits shorting the markets! Your best solution is to follow Garth’s advice and stay balanced and spread your risks. Every day you will lose on something but every day you will gain on something too.

On a happy note my Spring bulbs are up here on the South coast of England. There will be cold patches in Jan and Feb but the next gardening year is underway. Happiness. Don’t understand why people live in Scotland other than the pubs are very good!

#109 waiting on the westcoast on 12.08.18 at 2:27 am

Yeah, what Nomad says….

#110 Buy? Curious? on 12.08.18 at 4:48 am

Are charts the financial equivalent to cowbells in classic rock songs?

#111 Mike in Toronto on 12.08.18 at 6:18 am

“…In fact, on that note, the number of hateful posts lately in the steerage section (all of them trashed by my bevy of incredibly attractive, unpaid co-op students) has hit the red zone. Keep it up and I’ll send all your IP addresses to my Russian and Nigerian pals. Or Tony Clement….”

I was wondering where all the investing fear and hate went. I kind of miss it.

Years ago a friend and I wrote a kill filter for a website. Rather than the killed comments disappearing, we had the comments appear… but only for the IP address of the person who was killed. So they’d think their vitriol was still up on the site. It was extremely effective, these guys didn’t know they were killed, and just thought people were ignoring them.

I toyed with the idea of taking it a step further and having a “land of the dead” where the killed IPs could see the other comments from killed IPs, they could be as perverse and horrible as they wanted, but only other perverse and horrible people would see it.

Membeship to that club would require you to post something horrible enough to get on the killfile.

Wait…. *was* I on a killfile?

#112 Merci on 12.08.18 at 7:22 am

Thanks mon ami, you are making a difference.

#113 Hamsterwheelie on 12.08.18 at 8:59 am

Whoever thought I would consistently read any blog? (Certainly not me, much less a financial one!) Up until recently we had nothing to play with but real estate changed that for us. I look forward to the day I can talk to [email protected], open a TFSA, max that out and start investing online within it.
I’ve learned a few things about taxes and a lot of things I wish I had known since high school – still learning – thanks for all the fish. :-)

#114 DLee on 12.08.18 at 9:07 am

#98 mike from mtl on 12.07.18 at 11:11 pm

Annualized return on RY shares bought on Jan 3 2007 and held until present day is 7.57%. So rule of 72 says you more than doubled your money in 10 years.

Good try though.

#115 dharma bum on 12.08.18 at 9:10 am

Garth’s posts are always phenomenal. That’s a given.
I am definitely a fan.

But let’s face it: the comments section is hilarious!

The more deplorable the commenter, the funnier.
This blog just wouldn’t be the same without it.

Hateful, insightful, cynical, humorous, ignorant, intelligent, misguided, accurate, educational, irrelevant, racist, heartfelt, philosophical, significant, critical, or trollworthy, whatever the case, the comments must go on!

#116 dharma bum on 12.08.18 at 9:20 am

#64 Turner Nation

“You see it is “hate” that leads to love, comfort, knowledge, progress, building, etc. Without hate for one condition, the opposite condition could not be realised.”
——————————————————————–

Yin Yang, baby.

When people see things as beautiful,
ugliness is created.
When people see things as good,
evil is created.

Being and non-being produce each other.
Difficult and easy complement each other.
Long and short define each other.
High and low oppose each other.
Fore and aft follow each other.

~Tao Te Ching

#117 NoName on 12.08.18 at 9:21 am

#111 Mike in Toronto on 12.08.18 at 6:18 am

Censorship, this and that, you should move to some oppressive country you would trive and make killing overthere. Plz tell us what were you moderating comment section for snow flakes.

#118 NoName on 12.08.18 at 9:47 am

#108 jane24 on 12.08.18 at 1:42 am

In my 64 years on this planet I have never seen such volatility in everything. Most based on a Trump tweet that reverses what he had tweeted the day before. His family and friends must be making out like bandits shorting the markets! Your best solution is to follow Garth’s advice and stay balanced and spread your risks. Every day you will lose on something but every day you will gain on something too.

—-

Why you say that, i am not fan of the guy but yhat idea of him manipulating market is floting arond for a while and its make no sense. If he is able to do that for his buddys than market is a corupt beyond comprehension.

There is always some insider thing going on but mot to the scale that comment would insinuate.

Considering robot that write news and robot that read news and make trade based on news writen by people or boots, and speed of trade execution it makes sense why market is bit wobbly now days, fundamentals good, fundamentals bad, intrest rates up, interst rate down, tarifs on tarrifs off… Ok this is over simplifying but will conway a point.

A programmer is going to the grocery store and his wife tells him, “Buy a gallon of milk, and if there are eggs, buy a dozen.” So the programmer goes, buys everything, and drives back to his house. Upon arrival, his wife angrily asks him, “Why did you get 13 gallons of milk?” The programmer says, “There were eggs.

I dont know do you remember from few yrs ago i think half ay thru average dayall of the sudde market dropped because some one hacked i think AP twitter account and posted a some stupid tweet…

https://www.reuters.com/article/net-us-usa-whitehouse-ap/hackers-send-fake-market-moving-ap-tweet-on-white-house-explosions-idUSBRE93M12Y20130423

If you dont believe me aks mike the censor he’ll explain in more diteils.

#119 Mr Wang on 12.08.18 at 9:49 am

DELETED

#120 Guy Fawkes on 12.08.18 at 9:51 am

Been a reader of this blog for over a decade opened the door to everything I know about finance. Sadly, it was many years after I had my first newfie face sitting.
Damon is also a wordsmith. If the boys need a vacation, give him his 15 minutes.

#121 CEW9 on 12.08.18 at 10:30 am

Thanks Garth. For what its worth, you were a big influence in getting my financial ship righted.

#122 CEW9 on 12.08.18 at 10:32 am

Oh, and poodles are actually awesome, though I really don’t like how people cut their hair. A shaggy poodle is a beautiful dog. One of the world’s oldest hunting breeds!

#123 crowdedelevatorfartz on 12.08.18 at 10:42 am

@#108 jane24
“Don’t understand why people live in Scotland other than the pubs are very good!”
++++

Eventually they will be in the EU and England wont? :)

P.S.
My crocuses are starting to poke out. I expect them to make their usual Vancouver arrival in Jan-Feb thereabouts

#124 LP on 12.08.18 at 10:42 am

#96 Ponzius Pilatus on 12.07.18 at 11:10 pm
Re: Picture
That poodle is on steroids. Pretty sick if you ask me.
I’ll call the SPCA.
Animals are not toys
********************************

I agree with you 100%. In all my years living with dogs the only commands they were taught was “sit, stay, and down”. They are living creatures with sensitivites we can only guess at.

Once we had a neighbour in a small town whose dog was allowed to roam at will. He always came home at dinnertime and the whole town knew him. His name was Skippy. Every summer the neighbours had him bathed and his coat clipped (not decoratively). Poor Skippy was so embarrassed he wouldn’t leave his property until the coat grew back acceptably long – about six weeks worth. Then he went back to roaming.

#125 raider on 12.08.18 at 10:52 am

I second that! Garth keep up the good spirit.

#126 Ponzius Pilatus on 12.08.18 at 11:04 am

Too many Johnny Goody Shoes commenters on this blog.
Grow some balls, will ye.
Tough world, out there.

#127 Rob on 12.08.18 at 11:12 am

The “Order of Canada” will be coming soon Garth.

#128 crowdedelevatorfartz on 12.08.18 at 11:24 am

Hmmm, this Huawei “thingy” might be growing “legs” ….especially if Canada extradites the billionaire’s daughter to the US to face a potential 30 YEAR conviction sentence….

https://www.reuters.com/article/us-usa-china-huawei/china-calls-on-canada-to-free-huawei-cfo-or-face-consequences-idUSKBN1O70HU

The Communist Red Dragon is revealing it’s claws.

And then we have Iran threatening to “flood the world with bombs, drugs and refugees” if the US doesnt lift sanctions……

https://www.reuters.com/article/us-iran-usa-sanctions/irans-rouhani-says-sanctions-may-lead-to-drugs-refugee-bomb-deluge-idUSKBN1O709I

Nice……and these people feel its their “right” to own nuclear weapons….

As much as I hate to admit it.

Trump (or his foreign policy makers) is (are) right to call out the Chinese and the Iranians for who and what they are. Corrupt, evil and unchecked by any rule of Law.

Its a shame the Russians havent pulled something this weekend to make it a Trifecta of “outraged” dictatorships.

#129 Ponzius Pilatus on 12.08.18 at 11:47 am

Arise, ye faithful!
Ryan The Chartman cometh.

#130 For those about to flop... on 12.08.18 at 11:51 am

Race to a million.

North Vancouver edition.

So after establishing during the summer that detached properties were in fact sell below a million dollars in Vancouver proper, I decided to have a look around at a few more jurisdictions like Burnaby,Richmond and North Vancouver to see if this was the case there also.

East Vancouver is definitely the lowest selling prices of detached in places that I think of as the Inner Ring.

The three others that I mentioned are closing the gap with the leading edge just dipping below a million now.

I just showed a house in Richmond built in 1985 that was on the market for 999k but let’s have a look at one in North Van that actually sold.

The details…

1640 Riverside Dr, North Vancouver.

Originally asking 1.31

Just sold for 1.04

Assessment 1.31

So yeah,needs some work.

Seems solid enough and just by ripping out the panelling and the carpet you can take 20 years off this puppy.

Curtains could probably be cut from material made this century as well, couldn’t hurt.

This place has got some potential and the new buyers will surely have noticed one thing in their favour before they touch a thing.

They say you can’t change the location, and this house has a decent one…

M44BC

https://www.zolo.ca/north-vancouver-real-estate/1640-riverside-drive

2018-08-29 : $1,319,900

P.S.

A couple of things,this post is mainly for yvrmc who sent me a nice message and I know is looking at things over that way.Hope this helps.

Thanks MikeJ.for pointing out this the other day, I wasn’t gonna run it but then I thought yvrmc might appreciate it.

Also someone just gave me my Malaysian flag,that’s cool.

What my wife would really like is if someone could get their cousin from Brazil or Argentina to visit my blog as that would keep me quiet for a while as I pull out the crayons and colour them in…

#131 Rapier Wit on 12.08.18 at 11:54 am

Once more – with feeling. I have admit that I stopped reading the Comments Section a couple of years ago. Wingnuts seems too mild an epithet for the vast majority. That said, thank you for the reasonably priced education. I direct many here for excellent education and low cost tuition. I too am a terrible politician- ask anyone. But the trick is not caring. Stand up straight and tell the truth just works. Keep up the good, if not great, work.

#132 Geoffrey Laudat on 12.08.18 at 12:08 pm

Thank you Damon. I applaud and endorse your appreciation for Garth.

#133 Eyeguy on 12.08.18 at 12:15 pm

Ditto Damon. I’ve read your blog from the beginning and appreciate your insights and humour.

#134 Boots on the Ground in Ptown on 12.08.18 at 12:17 pm

Garth-

I too, in the spirit of US Turkey day, had intended to post some thankful prose but alas too much lemon cream and i forgot. Better late than never.
Daily reader for 3 years and I thank my lucky stars for finding this blog. On a personal note, you’ve facilitated contact with a couple other blog dogs when I’ve asked for region specific advice in the comments section. Above and beyond sums up my opinion of your character.

What i would have written on Thanksgiving was about verbatim Damon’s sentiments. I couldnt concur more. Seeing the many commenters here today that i havent seen much before, I’d say you have a large silent majority. Call it the collective subconsious that propelled Damon to write on behalf of all of us who shake our heads in disbelief that you continue to CHOOSE to donate your time to us plebes.

Shout out to Dorthy, Bandit of course as well as Doug and Ryan who prod me into learning new concepts every Saturday.

#135 For those about to flop... on 12.08.18 at 12:23 pm

Race to a million.

North Vancouver edition.

So after establishing during the summer that detached properties were in fact sell below a million dollars in Vancouver proper, I decided to have a look around at a few more jurisdictions like Burnaby,Richmond and North Vancouver to see if this was the case there also.

East Vancouver is definitely the lowest selling prices of detached in places that I think of as the Inner Ring.

The three others that I mentioned are closing the gap with the leading edge just dipping below a million now.

I just showed a house in Richmond built in 1985 that was on the market for 999k but let’s have a look at one in North Van that actually sold.

The details…

1640 Riverside Dr, North Vancouver.

Originally asking 1.31

Just sold for 1.04

Assessment 1.31

So yeah,needs some work.

Seems solid enough and just by ripping out the panelling and the carpet you can take 20 years off this puppy.

Curtains could probably be cut from material made this century as well, couldn’t hurt.

This place has got some potential and the new buyers will surely have noticed one thing in their favour before they touch a thing.

They say you can’t change the location, and this house has a decent one…

M44BC

https://www.zolo.ca/north-vancouver-real-estate/1640-riverside-drive

2018-08-29 : $1,319,900

P.S.

A couple of things,this post is mainly for yvrmc who sent me a nice message and I know is looking at things over that way.Hope this helps.

Thanks MikeJ.for pointing out this the other day, I wasn’t gonna run it but then I thought yvrmc might appreciate it.

Also someone just gave me my Malaysian flag,that’s cool.

What my wife would really like is if someone could get their cousin from Brazil or Argentina to visit as that would keep me quiet for a while as I pull out the crayons and colour them in…

#136 Yuus bin Haad on 12.08.18 at 12:35 pm

Oh, c’mon Garth – just as the Comments Section was getting interesting!

#137 Whitey on 12.08.18 at 1:13 pm

I read this blog daily. Rarely comment. Rarely read the comments. Absolutely love the author and his blog. Kudos to a great gift that you give so many every day Garth.

#138 AGuyInVancouver on 12.08.18 at 2:27 pm

Speaking of real estate, did anybody notice the accused Huawei heiress owns not one, but two multimillion dollar houses in Vancouver? But foreign buyers aren’t a problem, no really, don’t laugh.

https://vancouversun.com/news/local-news/huawei-executive-arrested-at-yvr-appears-to-have-family-ties-to-vancouver-homes

Best jot down the addresses for reporting to the Empty Homes enforcement branch.

#139 penguin on 12.08.18 at 2:44 pm

Ditto with Daman.

#140 TurnerNation on 12.08.18 at 3:04 pm

I’ll just leave this peppercorn here in consideration.
¤

#141 Evangeline on 12.08.18 at 3:52 pm

#99 Ponzius Pilatus on 12.07.18 at 11:17 pm “You’re thanking a DOG!?” [replying to
#66 Yann]

Dogs get thanked a lot:

Police dog honored with ceremony at War Dog Memorial
There are currently 23 dogs which have been buried at the memorial — about 40 percent military dogs, 40 percent police dogs and the remainder other dogs, such as those trained for search and rescue.
https://www.hometownlife.com/story/news/local/novi/2018/11/19/police-d

Military Dog Honored at special ceremony at Camp Nelson
Dozens of people came out to honor a local military hero at Camp Nelson National Cemetery in Nicholasville this afternoon. But this type of hero’s salute was a first for the cemetery, that’s …
https://www.wtvq.com/2016/09/10/military-dog-honored-special-c

Military War Dogs Honored with K-9 Medal of Courage
Members of Congress and military leaders joined American Humane to present four retired U.S. military dogs with K-9 Medal of Courage Awards last week on Capitol Hill.
https://www.breitbart.com/radio/2018/05/28/military-war-dog-honored

U.S. Dying service dog who did three tours in Afghanistan with Marines honored in tear-filled ceremony
http://www.nydailynews.com/news/national/dying-service-dog-served-af...https://www.nydailynews.com/news/national/dying-service-dog-served-af

etc etc

#142 Nancy Vieira PREC on 12.08.18 at 5:17 pm

Wow, Damon; thank you for your remarks. Garth is very talented and intuitive, making my life so much easier when I need to bring my clients into current investing in life. Well done. Thank you Garth for being who you are and for sharing. xoxo N

#143 yvrmc on 12.08.18 at 5:20 pm

Re #135 Flop …. I appreciate you keeping an eye on NV … I had been eyeing that particular house on Riverside. Its location was very good very near Seymour river. It had good bones but needed some serious serious cosmetic assistance. Good to know places are working their way downward slowly but surely…. Cheers brother…

#144 Dwayne on 12.09.18 at 7:13 am

True dat Damon!

Keep ‘er Steady

#145 Prince Polo on 12.09.18 at 10:47 am

Thanks Garth for saving me from a YYZ mortgage in 2014. I can now afford to take vacations two times per year while being an ungodly & pathetic renter! Howe’er, I’ll still venture into the comments section for shiny nuggets (hidden amongst the many stinking turds). Do you have any airsickness bags you can send my way?

#146 Edward on 12.09.18 at 1:11 pm

Thank you Garth. Your comments and those of your guest writers are read with pleasure. I do agree that the comments section is getting increasingly difficult to stomach. As we are approaching Christmas and the New year, and as I am not a poster on this or any site (regular reader however), I will take the opportunity to thank you for sharing your insight. I wish you and your family all the best through the holiday season.

#147 Which Mortgage? on 12.09.18 at 7:34 pm

The safest route may be the 5 yr fixed, but is it actually the best? Variables are going for prime-1% or so, so the lower risk fixed rate will cost ~0.65% right now. With only two rate hikes forecasted, you’d still be ahead with the variable next year. Moreover, the bond yields seem to be in free fall so there’s a good chance you could lock in at a lower rate in the future.

Thanks for the insight and entertainment!