Losing alpha

“What,” Trevor asked, “can I tell ya? I’m a millennial…”

That was the response when he wrote  me, said he saying he owned one weed stock, plus $8,000 at a roboadvisor in an aggressive-growth fund – and I asked why.

“I’m still young and don’t mind taking risks because of that. I don’t need the cash flow right now, so I figure I can ride out any volatility that comes along. Why wouldn’t I be 90% in high-risk stuff?”

Here’s why.

Everyone’s a cowboy until it all hits the fan.  Human nature is as much your enemy when you’re 23 as when 65. It makes you crave inflating assets and shed falling ones. To withstand tumbling markets and asset values, when the media is negative, sentiment bearish and with the blog’s steerage section is moaning like a bloviating speared walrus, you need experience. Living through big crashes in the past – like 1987 or 2008 or 2011 – gives perspective. You learn that over 70% of the time markets go up. That corrections are scary but normal. That bear markets last a couple of years and show up about once a decade. That it always ends.  Always followed by a surge. And that people who sell into a storm are fools while those who buy are usually geniuses.

The odds are – virtually 100% – that novice investors will fold in the first crisis that hits them.

Second, gambling isn’t investing. Buying individual stocks is rolling the dice, especially if you can only afford a few of them, have little diversification and got them because some anon Internet dude told you it was a good idea. Or, worse, your BIL. People make the same mistakes, over and again because they think they know things. Oil and gas guys buy resource stocks. IT guys get tech stocks. It’s just like realtors ‘investing’ in condos. But when your profession runs into trouble, you find risk has doubled.

Third, a B&D portfolio is built more for the world we live in than to reflect the age, gender or risk tolerance of an investor. We all live here. The cost of money is going up. Debt is epidemic. The US president is weird. There’s a trade war raging. Growth and inflation have come back. Real estate’s a trap. Populism and nationalism are spreading. Markets are high. Technology’s changing everything. People are polarizing. Washington got shut down over a fence. In short, it’s not what you’d call ‘normal.’ Investing safely in a world like this, yet still growing your wealth, requires balance and diversification. No matter the age.

Hence the wisdom of a 60/40 split. The safe stuff should be half bonds and half preferreds, using ETFs. If you have a lot of money, ideally this part of the portfolio will include government, corporate, provincial and high-yield bonds. Together with the preferreds (they pay tax-reduced dividends) the yield is currently a tad over 4%. Rain or shine. Moreover, most of the time fixed-income assets like these rise in value when stocks fall (because that’s where worried money flees), so there’s a built-in portfolio shock absorber, keeping volatility and losses down.

On the growth sides are REITs (real estate investment trusts) and ETFs holding equity in Canada, the US and international markets, in roughly equal weightings. Because you never have a clue where things are going, hang on to all asset classes. One year US stocks may shine, but the next may be Canada’s turn. Rebalance once or twice a year, selling off the overweight portion of good assets and using the money to buy the under-performers. Again, this is the opposite to what inexperienced investors do. They never take profits. They buy what goes up. No perspective.

Finally, why would anyone be an aggressive investor? More risk does not always mean more return, especially when most people are emotionally crushed by negative years. When tax shelters like the TFSA exist, just keep in your lane and stay invested. The younger someone starts, the more impressive the result.

In short, tactical investing doesn’t work. Picking stocks is, for most investors, like throwing darts. Advisors who tell you they ‘add alpha’ by being smarter than everyone else are the ultimate con guys and salesmen. Absolutely nobody knows when the next Trump tweet will punch the market or a corporation run rogue.

So, Trevor, get off your horse, lose the chaps and keep it in your pants. Sell the weed, fire the robot and get some balance. And no vaping.

146 comments ↓

#1 Guy in Calgary on 01.08.19 at 4:27 pm

I think saying that buying individual stocks is “gambling” is a little extreme. One can conduct extensive research by reviewing financials, Q10’s, sector etc. It is not like you are putting all your chips in before the hand is dealt.

Individuals have done very well investing in individual stocks as either their whole portfolio or using “core and explore”. If the individual understands the risks, I think holding some stocks can be appropriate.

Nope. Not for the person addressed in this blog, nor for 95% of those who try it. – Garth

#2 greyhound on 01.08.19 at 4:45 pm

Gotta keep up with the latest paranoia on Twitter, otherwise you’ll get too relaxed:

“Canada Deposit Insurance Company (CDIC) is running TV ads to state the fact that they protect your deposits in the bank. Why? Why now? Why would we need it? This screams trouble ahead imho, especially for the banks. Bail-ins anyone?”

“Relax, no need to worry as the #CDIC protects $774 billion CAD insured deposits. CDIC’s ex ante funding level is $4.2 billion, representing 55 basis points of insured deposits!”

I feel better already…

They do it every year at this time, wasting your taxpayer dollars. – Garth

#3 Dirty debtor on 01.08.19 at 4:47 pm

Investing in individual stocks is gambling. But it’s a lot better of a habit than visiting the casino. Nothing wrong with having a little fun money. Like all vices, have some moderation. (Say 5% Max of your portfolio)

It can scratch that testosterone charged itch for the average idiot.

#4 Penny Henny on 01.08.19 at 4:51 pm

That was the response when he wrote me, said he saying he owned one weed stock, plus $8,000 at a roboadvisor in an aggressive-growth fund – and I asked why.-GT

/////////

I say why not.
He’s young and time is on his side.
It’s only $8000.
Even if he loses half it will be a worthwhile lesson.
And, to boot, 2008 is not coming around again. (or so I’ve read).

How is losing half his wad possibly ‘worthwhile’? Glad you’re advising nobody. – Garth

#5 Penny Henny on 01.08.19 at 4:53 pm

The odds are – virtually 100% – that novice investors will fold in the first crisis that hits them.-GT

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

Hey MF, that’s you!

#6 dakkie on 01.08.19 at 4:58 pm

Worldwide Real Estate Crash & Why

https://www.investmentwatchblog.com/worldwide-real-estate-crash-why/

#7 SmallTownSteve on 01.08.19 at 5:13 pm

As far as I can tell, the only time it would make sense to buy individual stocks +safe stuff is if you have 7figures to invest thereby basically being able to build your own “ETF”. Perhaps you may pull ahead a bit by not paying excessive “MER”? Personally if I had 7 figures, I’d just hand it over to Garth and Ryan.

#8 Bob Dog on 01.08.19 at 5:16 pm

According to Warren Buffet people should just invest in bonds and the S&P 500. Why bother with a complicated portfolio.

#9 Gradie McHurlie on 01.08.19 at 5:22 pm

Garth, I love your advice to add to weaker markets and stay invested. It’s helped many of us get through times like December 24th. Markets have rallied hard since then and those of us who stayed put can now breathe a little and enjoy that single malt just a little bit more.

#10 Tech Guy on 01.08.19 at 5:26 pm

Thanks for all the advice Garth!

I don’t often leave comments, but just wanted to leave a thank you for keeping us in check. Glad to hear I’m not crazy staying away from the nasdaq 100 given I work in Tech (I favour SP500 instead).

#11 Doom Incarnate on 01.08.19 at 5:27 pm

Lordy Garth!

You’re such an old fogey.

Was that kid on your lawn? Did he disturb a gnome or flamingo?

;-)

I jest, but still.

Sheesh!

#12 Gamble on 01.08.19 at 5:33 pm

You would have better odds in Vegas playing a slot machine. Weed stocks and Bitcoin stuff resemble nothing more than a pyramid scheme of sorts.

#13 yorkville renter on 01.08.19 at 5:36 pm

speaking of youth with lots of time… my kids have about $1000 each in their piggy banks and the ‘oldest’ one turns 3 in a few months. In other words, they ain’t spending 1 cent of what they got.

should I open an account in their name and buy some divvy bank stock or ETFs? I’d hate to have inflation eat away…

#14 reynolds531 on 01.08.19 at 5:36 pm

I will never understand the fascination with the latest greatest thing. Six months ago I tried to talk someone out of borrowing $135k and throwing it at MJ stocks. A so called advisor was giving very poor, probably illegal advice.

#15 MF on 01.08.19 at 5:58 pm

#5 Penny Henny on 01.08.19 at 4:53 pm
The odds are – virtually 100% – that novice investors will fold in the first crisis that hits them.-GT

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

Hey MF, that’s you!

-Lol…I actually held on to everything I owned, but didn’t buy any more out of fear for a few years. Still B&D though (and up a bit).

MF

#16 tccontrarian on 01.08.19 at 6:04 pm

“Finally, why would anyone be an aggressive investor? More risk does not always mean more return,…” GT
———–

In the proper sense of the word, being ‘aggressive’ does NOT equal to ‘more risk’. It’s actually the other way around!
The ‘aggressive’ you’re talking about is really being ‘reckless’, by not understanding the risk/reward profile of what you’re participating in.

So yes, Trevor is definitely being ‘reckless’ with the abovementioned choices – I agree. But please don’t confuse the two; I’m sure you already know.

TCC

#17 Biddy on 01.08.19 at 6:06 pm

Always wise advice. But pretty much guaranteed anyone who invests young in anything cashes in those investments while still young. It’s pointless until you own a detached house–you know, an investment you can live in, learn from, improve, redevelop, borrow against etc…

Not that this is smart, or a good strategy, but my approach to TFSAs is 80% in 10 laddered GICs, 1-5 years, with 2 GICs maturing at different times of the year. The remaining 20% goes into a high-growth index fund (1% MER; set and forget).

This gives me two opportunities a year to roll GICs into something else–ETFs, funds, or back into wonderfully secure, zero fee, zero risk GICs.

It’s no brilliant strategy, but since capital retnetiontion should always be 1st priority, it’s a fairly secure ways to self direct without allowing yourself to make rash decisions.

#18 yvrguy on 01.08.19 at 6:08 pm

warren buffet says retail investors should do 90% S&P 500, 10% short term bonds.

personally, i’m 80/20, internationally diversified, 10 bonds, 10 prefferds, 4% Canada low volatility equity.

Q4 last year was a fun ride watching the red build, now it’s gone green just as fast.

#19 Jacques Strappe on 01.08.19 at 6:11 pm

I’ve been an all equity cowboy for all my life. Thought about balancing a few years ago, can’t be bothered. Never pulled my money out, not even in 2009.

#20 Biggy on 01.08.19 at 6:12 pm

Always wise advice. It’s pretty much guaranteed anyone who invests young in anything cashes in those investments while still young.

It’s pointless until you own a detached house–you know, an investment you can live in, learn from, improve, redevelop, borrow against etc…

Not that this is smart, or a good strategy, but my approach to TFSAs is 80% in 10 laddered GICs, 1-5 years, with 2 GICs maturing at different times of the year. The remaining 20% goes into a high-growth index fund (1% MER; set and forget).

This gives me two opportunities a year to roll GICs into something else–ETFs, funds, or back into wonderfully secure, zero fee, zero risk GICs.

It’s no brilliant strategy, but since capital retention should always be 1st priority, it’s a fairly secure ways to self direct without allowing yourself to make rash emotional investment decisions.

As a bonus, financial guys hate this strategy.

#21 Nineteen84 on 01.08.19 at 6:13 pm

If bear markets come about once every decade, and the last bear market was in 2008-9, does this mean we’re due for one? It’s been 10 years.

1984

#22 David McKenna on 01.08.19 at 6:14 pm

Why fire the robo? Sounds like a small investor and a novice — isn’t this an ideal candidate for a robo? He just needs to move it to a 60/40 split at the robo, no?

#23 Arctic Gringo: Qalunaaq on 01.08.19 at 6:17 pm

Who spears a walrus anymore? A rifle is appropriate for those 2 tonne behemoths.

What…are we talking about Stefan Halper or Craig Stadler?

#24 tccontrarian on 01.08.19 at 6:17 pm

Wasn’t there a survey done a couple years ago that asked Canadians about their ‘retirement plans’? To this about 25% replied, “The Lottery”.

tcc

#25 Steve on 01.08.19 at 6:19 pm

Well, there are other winning strategies too.

I started investing in ’95, as a total novice. I lived frugally and invested most of my earnings. By the end 2001 I retired from a highly paying corporate job. My investments had grown to a point where I realized I had more than I need to live comfortably for the rest of my days.

My investing strategy at that point was 50% conservative, dividend paying funds (in those days), 25% growth + dividend stocks, 25% higher risk individual stocks. No bonds, (there were no REITS then), no preferreds.

Among the individual stocks there were some of the technology startups from the dot com era, then later a few of the now big technology names. There were also the banks, after the 2008 crash, which have returned over 300% since then, besides the steady stream of dividends.

I only invested in three sectors: technology, financial, and resources. Later, after 2005, I reduced this to two sectors only: technology and finance. Technology because I knew and understood the sector inside out (through my career), finance because I know how it worked (again, through my career).

In my case it was always the individual stocks that paid the greatest return, 2-300%, or more. Yes, I also lost on some, but I made a lot more on others.

The real beauty of it all was and still is, that the entire portfolio income is taxable far less than the money one earns through hard work while taking a lot less time. And I can do it wherever I happen to be, around the globe.

During the first five years I traded frequently, based on price movements, tracking fundamentals and quarterly financial results. After 2000 changed my strategy and become a contrarian. I loaded up on stocks in my two sectors during market crashes. Also, I learned not to be greedy. I took profits regularly and reinvested when the market went down.

My 5year ROI, even today, is 30.57% and my portfolio is a multiple of what I retired with.

The point of this comment is that investing a part of your portfolio in individual stocks is not gambling, not if you know what you’re doing.

#26 Renter's Revenge! on 01.08.19 at 6:31 pm

“Everyone’s a cowboy until it all it all hits the fan.” – Garth

I Wanna Be a Cowboy

https://www.youtube.com/watch?v=s05jcrJw0as

#27 Loonie Doctor on 01.08.19 at 6:32 pm

Totally agree. This young fellow is gambling with the weed stock. One roll hoping to win or lose big. He is right in thinking long term, but no one really knows their risk tolerance until their inner emotional investor beast has been poked in the eye a few times. Then you wake up with a smashed portfolio wearing nothing but torn purple jean shorts.

http://www.looniedoctor.ca/2018/10/26/investor-behavior/

#28 -=jwk=- on 01.08.19 at 6:34 pm

I think saying that buying individual stocks is “gambling” is a little extreme. One can conduct extensive research by reviewing financials, Q10’s, sector etc. It is not like you are putting all your chips in before the hand is dealt

You are making a dangerous assumption that stock prices are somehow related to rational things. They aren’t. Massive computers push stocks around all day using algorithms that have nothing to do with a 10-k. Facebook takes a 70B hit while their profits jumped 17%.

It is not rational. You can’t beat Goldman sachs supercomputer. You will lose

#29 Figure it Out on 01.08.19 at 6:36 pm

Well SOMEBODY’s letting the Fed push him around. If you want to be in bonds that move opposite to equities, do that, and take the hit in the form of currently low rates. Or if you don’t like the rates on IG bonds, don’t buy ’em. Pull up a chart of CPD vs. XIC or of HYG vs. SPY and the correlations look pretty darn positive to my untrained eye. But I’m not paying the monthly for a Bloomberg, so what do I know?

#30 Figmund Sreud on 01.08.19 at 6:37 pm

gambling isn’t investing.
____________________

Well, … it doesn’t have to be, … and it doesn’t have to be passive, either. For example, if you garnered enough $s to invest with, … say, in just 10 individual stocks – and your trading costs are only a penny or three per each share, and you do poses a bit of investing acumen and perseverance, … you can actually do quite well on your very own, … but, as you commented to an earlier commenter, this is not for 95% of those who try it.

Anyway, … perhaps a germane harrangue? A short snip first:

… As of early December, index funds control 17.2 percent of U.S. listed companies – up from 3.5 percent in 2000. On top of that, 81 percent of all indexed assets are under management of BlackRock, State Street, and Vanguard. In other words, these three asset managers own roughly 14 percent of all U.S. listed assets. …

… and enchilada:

The Downside of Mindless Investing
https://economicprism.com/the-downside-of-mindless-investing/

Best,

F.S. – Calgary, Alberta.

#31 Loonie Doctor on 01.08.19 at 6:37 pm

Totally agree. This young fellow is gambling with the weed stock. One roll hoping to win or lose big. He is right in thinking long term and a roboadvisor doesn’t seem bad to me if he can actually ignore it. However, no one really knows their risk tolerance until their inner emotional investor beast has been poked in the eye a few times. Then you wake up with a smashed portfolio wearing nothing but torn purple jean shorts.

http://www.looniedoctor.ca/2018/10/26/investor-behavior/

#32 Guy in Calgary on 01.08.19 at 6:38 pm

#20 Biggy on 01.08.19 at 6:12 pm

As a bonus, financial guys hate this strategy.

————————————————————

Not true. Financial guys are fine with the strategy if it makes sense for the investor.

#33 Stan Brooks on 01.08.19 at 6:43 pm

#124 Stan Brooks, A Lifetime of Incompetence on

You keep putting in my mouth words I have never said/written, by implying a non-existing link with another reader/person on this blog.

Basic psychological profile shows that you have the ‘hungry and delusional real estate professional’ written all over you. Hence the emotions, normally related to the cry of the empty stomach. I am so sorry for you, the good old times are not coming back.

The reason I pay attention to your posts is to highlight the desperation and the real state of the affairs to the audience here.

Otherwise you don’t deserve more attention than a fart in the elevator. A little inconvenient but hey, I guess one has to breath after all. Part of the society’s digestion system, I guess.

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

On Trevor:

He is doing what he is seeing around and what he is told is the ‘recipe for success’, that reckless risk taking is good for you.

Media, real estate cartels, adds masked as news, CMHC, lenders, governments implementing the most reckless policies that create the illusion of wealth for some while destroying economies and lives, examples are all around you. Pot legislation, people’s retirement plan reduced to ‘win from the lottery’ and then the killer:
‘all is good’, ‘be a good citizen’, ‘pay your fair share’, ‘suck it up and move on’ closing lines.

Read the media, there are only positive news about pot industry in order to make some idiot politicians look good with their ‘breakthrough’ policies.

Not a word on the pipelines lately, I guess losing 80 millions a day in order to prop up some wealthy friends in the transportation business (cough, cough, the railways) while screwing Alberta is perfectly fine in the today’s world.

So Trevor is a typical representative product of the society and the times we live in.

Criticizing him without pointing out the reasons for such (prevailing) mentality is a hypocrisy.

#34 Reynolds531 on 01.08.19 at 6:43 pm

In other news rbc and blackrock partnering on etfs. Discuss amongst yourselves.

#35 Stan Brooks on 01.08.19 at 6:43 pm

#124 Stan Brooks, A Lifetime of Incompetence on

You keep putting in my mouth words I have never said/written, by implying a non-existing link with another reader/person on this blog.

Basic psychological profile shows that you have the ‘hungry and delusional real estate professional’ written all over you. Hence the emotions, normally related to the cry of the empty stomach. I am so sorry for you, the good old times are not coming back.

The reason I pay attention to your posts is to highlight the desperation and the real state of the affairs to the audience here.

Otherwise you don’t deserve more attention than a fart in the elevator. A little inconvenient but hey, I guess one has to breath after all. Part of the society’s digestion system, I guess.

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

On Trevor:

He is doing what he is seeing around and what he is told is the ‘recipe for success’, that reckless risk taking is good for you.

Media, real estate cartels, adds masked as news, CMHC, lenders, governments implementing the most reckless policies that create the illusion of wealth for some while destroying economies and lives, examples are all around you. Pot legislation, people’s retirement plan reduced to ‘win from the lottery’ and then the killer:
‘all is good’, ‘be a good citizen’, ‘pay your fair share’, ‘suck it up and move on’ closing lines.

Read the media, there are only positive news about pot industry in order to make some idiot politicians look good with their ‘breakthrough’ policies.

Not a word on the pipelines lately, I guess losing 80 millions a day in order to prop up some wealthy friends in the transportation business (cough, cough, the railways) while screwing Alberta is perfectly fine in the today’s world.

So Trevor is a typical representative product of the society and the times we live in.

Criticizing him without pointing out the reasons for such (prevailing) mentality is a hypocrisy.

#36 Barb on 01.08.19 at 6:55 pm

In a few years, Trevor will look back and admit he knew nothing BGE (Before Garth Era).

And his finances will prove it.
Especially if we’re beginning a two-year bear.

#37 Not everyone can be a cowboy on 01.08.19 at 6:58 pm

https://www.youtube.com/watch?v=iRER1Rbg9_o

#38 Blacksheep on 01.08.19 at 7:03 pm

We are big fans of Cabo and Playa Del Carmen and have been visiting Mexico a couple times a year, for a while now.

We were making plans for Cancun in Feb. After stumbling across this video, we will be changing our destination.

https://www.youtube.com/watch?v=Rz6t2FEablA

#39 Ed on 01.08.19 at 7:08 pm

What you don’t buy is more important for portfolio’s…eliminate the junk and you’re golden.

#40 ASho on 01.08.19 at 7:12 pm

Hi Garth – for balance I assume it’s overall I.e. I can be all or heavier in equity etfs in TFSAs but have the safe stuff outside, given the tax benefit of TFSAs?

#41 Stan Brooks on 01.08.19 at 7:12 pm

Our economy is so ‘hot’ and ‘stable’ that 1.75 % interest rates is apparently an overkill.

https://ca.finance.yahoo.com/news/almost-no-chance-interest-rate-hike-maybe-even-cut-2019-190950976.html

That was it with the rate hikes.
But hey folks, all is normal, life is good.

Entering next phase of currency wars with inflation and cost of living raging up while rates go down.

Cheers retirees and savers. Expect ‘deflation’ readings by the trustworthy statisticians.

And load on bonds as such incredible bargains of 2 % on 10 years bonds won’s last long.

#42 conan on 01.08.19 at 7:17 pm

Buy low and sell high works well. If, you are more right than wrong, that is.

Some people are.

Anyone predicting anything good from Trump’s mouth tonight? My bet is on zilch.

#43 kommykim on 01.08.19 at 7:25 pm

RE:#4 Penny Henny on 01.08.19 at 4:51 pm
I say why not.
He’s young and time is on his side.

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

Because a balanced portfolio can actually be better than an all stock one.
Take this very simple brain dead example:

$6000 stock etf
$4000 cash
$10,000 total

stocks drop 25% and now you have:

$4500 stock etf
$4000 cash
$8500 total

You rebalance by buying more stock with the “fixed income” cash and you have:

$5100 stock etf
$3400 cash
$8500 total

Markets recover with a 33% gain from lows:

$6783 stock etf (Up 33%)
$3400 cash
$10183 total

But in an all stock scenario, your $10,000 would have dropped to $7500 (-25%) and then only come back to $9975 with the 33% recovery.

Note: I used cash to keep the math simple, but that cash would usually be a bond ETF which would give further gains over the long term.

#44 Pat on 01.08.19 at 7:29 pm

I second that comment from David, Garth. Why fire the robo? Moving to a more ‘balanced’ robo, should work, right?

Read Doug Rowat’s latest post. – Garth

#45 Insolvency rising on 01.08.19 at 7:31 pm

https://www.bloomberg.com/news/articles/2019-01-08/more-people-are-going-broke-in-canada-as-interest-rates-rise?srnd=premium-canada

#46 not 1st on 01.08.19 at 7:38 pm

Trudeau and Horgan getting a little taste of their own medicine today.

https://www.cbc.ca/news/politics/trudeau-reconciliation-protest-forum-1.4970204

Cant wait until the convoy gets there.

#47 Drill Baby Drill on 01.08.19 at 7:49 pm

China has been buying Gold and stocking up it’s reserves over the past few months. It is thought that China will need a large Gold reserve for when they really push for Yuan hegemony. If this begins to happen then US interest rates will spike.

#48 Oshawa Is No More on 01.08.19 at 8:01 pm

https://www.ctvnews.ca/autos/gm-rejects-unifor-proposals-to-keep-oshawa-plant-open-past-2019-1.4245407
In the meantime, Mexico has $billions rolling in for numerous new investment developments.

#49 Midnights on 01.08.19 at 8:02 pm

I could care less who’s buying but this came out 4 hours ago. Since this seems to get some people’s feathers ruffled.

Chinese buyers expand their reach in the US housing market as the middle class gets in on the act

https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/08/chinese-middle-class-buying-up-american-residential-real-estate.html

#50 expat on 01.08.19 at 8:02 pm

I had pointed out yesterday why interst rates would rise as pension funds face massive losses and become dramatically underfunded.

Well Andrew Coyne at the Post wrote about the extremes occuring at Canada Pension Plan

https://nationalpost.com/opinion/andrew-coyne-cpp-ads-on-nfl-playoffs-your-pension-dollars-at-work-for-the-liberals#comments-area

You should understand what is happening to your public pension plan.

It’s invested in highly highly speculative ventures from shopping malls, toll bridges and roads, wind and solar power creation, stocks etc.

In the age of zerobound – pensions like these have had to go far out into the speculative edge for yield.

It may crash in their faces and ultimately raising rates to 7-8% is assured in my opinion.

Actuarially I believe they need something like 7% a year to break even.

Someone may correct that. But the whole point is this.
Pensions – both public and private – are in terrible terrible shape.

Many municipalities in the US and elsewhere are raising property taxes to cover these pensions. Chicago is a classic.

Ask aorund your town how your public sector pension plans are doing…

The central banks know this.

Martin Armstrong talks alot about this in his blog.

Its worth your time to understand how serious this may be.

Everyone and everything has participated in these speculative frenzies. Zero Bound created excess spec.

Central Bank tightening is showing who is definitely swimming naked.

BTW CPP has gone from 5 employees in 2000 to 1500 employees now.

#51 Ustabe on 01.08.19 at 8:05 pm

And no vaping…Garth

I grew up when there were sand urns dotted all around the supermarket. You smoked while doing your banking at the teller wicket…sharing the ash tray with the teller.

You smoked at the movies, at hockey games…Doctors recommended mentholated cigarettes for sore throats.

My own mother smoked Sweet Caporal plain ends.

When I went to boarding school in Grade 6 the senior boys introduced me to smoking…9 years old. Mentioned only because that is why I remember my start date so clearly.

50 some odd years later I had the booze under control (amazing what having kids does to that), I have basically aged out of drugs as I age into prescribed ones but I was totally unable to leave tobacco cigarettes behind.

I tried cold turkey, hypnosis, tapering, Champix, talk therapy, anything the heart and lung people came up with. I switched brands, I even once booked myself onto a secluded Island retreat with no stores. All this spread over years of trying, honestly, but failing.

Then 5? or maybe more years ago an associate handed me a piece of tech out of China, unknown in Canada but taking Asia and Australia by storm. He put me onto where to order supplies. I taught myself to use a personal e-cigarette vapourizer over the next ten or so days. 4 days after that I smoked my last tobacco cigarette and haven’t had one since.

I still have a vape, much advanced from those early days, in case I am overcome with the desire to have a smoke.

Which I still am if I pass someone lighting up on the street for instance.

All that to say first piece of bad advice you’ve given me, eh?

#52 Godth on 01.08.19 at 8:12 pm

FDA Admits: Euthanyl in Pet Food is A BIG Problem
https://www.youtube.com/watch?v=z7dDOnKkBYE

https://healthypets.mercola.com/sites/healthypets/archive/2018/11/14/pentobarbital-in-dog-food.aspx

pets and kids $$$$$$$$$$

#53 Fish on 01.08.19 at 8:16 pm

Retirement savings gap
Learn more about the upcoming changes to the Canada Pension Plan (CPP) and how you benefit.

https://www.ontario.ca/page/retirement-savings-gap

#54 tccontrarian on 01.08.19 at 8:27 pm

My 3rd and last post for today…

I read somewhere (too late to benefit myself), that getting ‘stung’ by huge losses early in life is actually a good thing – as you tend to ‘respect’ what the market can do on the downside.
When I first started with some DYI investing (actually it was speculating in the junior resources), I was lucky to have jumped in right at the bottom and did really well for 3 years (with >100%/year returns). I thought it was my ‘skill’ and so never saw the other side coming (2008-9):

The market giveth, and the market taketh away!

Add margin to the mix and it I found out that you could actually lose more than what you put in!
Yes, a tough lesson – the kind that most wouldn’t rebound from.
But I’m not like everyone else – I went back in, to win this time. But I’ve dome my homework and this time I feel that I’m better prepared. I know when and how to get aggressive (meaning, ‘put more $$ in play in a given idea’), and I know when to be cautious. One day, myself and Tater may actually open a Hedge Fund together; he’s got the right temperament for a partner. LOL

TCC

#55 Gandalf on 01.08.19 at 8:47 pm

Doesn’t having 20% preferred in your portfolio only apply if you hold some of it in unregistered accounts? Tax preferred dividends don’t matter in a TFSA or RRSP.

#56 The Real Mark on 01.08.19 at 8:49 pm

Just checking in. Still alive. Don’t know whether my fan club misses me or not. CAD$ is finally going up, and deflationary trends in the Canadian economy are accelerating. BoC governor will probably leave rates unchanged tomorrow, but its just a façade — anyone with a brain knows that the CAD$ yield curve isn’t going to unflatten itself in deflation and hence monetary policy will have to do some pretty heavy lifting to keep the Canadian economy liquid.

The problem with robo advisors is that their models are backwards looking.

Anyone see today’s news of the Canadian iShares (formerly iUnits) “merging” with the Royal Bank of Canada? Anyone think there’s any implications for “mom and pop” types who have a million or two in the Canadian iShares like XIU? Of which, ironically RY stock is the largest holding.

#57 young & foolish on 01.08.19 at 8:53 pm

I can understand the diversification with annual re-balancing concept. However, I am also mindful of the growing popularity of ETFs (they are outstripping mutual funds for the first time this year).

Is there any credibility to the “mindless investing” danger?

#58 Nonplused on 01.08.19 at 8:57 pm

“And no vaping.”

So even when a new form of indulgence comes along that by most estimates is 95% less harmful than the one it replaces, we still aren’t allowed to do it? Go hipsters, vape all you want! It must be better than smoking. It’s a lot cheaper too. More money for the portfolio.

I’m not entirely sure about Garth’s advice here for the average man or woman, because the fact is that most people don’t have any money to save. Putting zero money into a balanced portfolio still leaves you with zero money. I mean if you are a doctor or a lawyer sure you should be putting a lot away and it should be safe, but what about an unemployed carpenter? Nope, you need a get rich quick scheme. It’s the only hope.

I’ll use my dad as an example. He was, surprise surprise, a carpenter come general contractor. He and his partner lost everything in the great collapse of 1982. Tools, trucks, duplexes they rented out, lots they had bought and half built pre-sold houses on, everything. This for a man who was in his late 30’s was a significant setback.

So what did he do? Well, he got a new partner and the 2 of them being more or less only half employed started working for anybody they could. “Need a concrete pad for your new grain silo? No problem.” But they also used what money they could to get back into what was now very cheap real estate wherever they could and develop it themselves. They were at points highly leveraged. They would have to work up in the frozen north to pay the interest while they waited for the pavers to put down some asphalt in their subdivision. But 1982 ended, as I am sure Garth will say all such things pass, and by the time he was 50 he was able to substantially retire. It was a one asset strategy, but one he knew well.

Was Bill Gates diversified when he and his nerd friends started Microsoft? No. But I bet he is now.

None of the greats started by being diversified. They started by sticking to their knitting, as the great Ron Southern used to say. Job one is to get some money. That means putting all your efforts into your own productivity. If that pays off and runs it’s course, then you diversify.

Folks, when there are 2 down and nobody on, you swing for the fence.

So if you are a mechanic, getting your own shop is more important than diversifying. If you drive a tow truck, owning your own is more important than diversifying. If you are a plumber or electrician, starting your own company is more important than diversifying. If you are a barista at Star Bucks, well, you are screwed either way.

But I agree with Garth buying pot stocks doesn’t count. The tobacco industry is going to eat this thing alive in just a few years. They are already into vaping and have bought much of that up. They provide the nicotine. They have all the infrastructure. They have no moral restrictions in this area. They have money. If you want to swing for the fence with pot you need to buy a suitable farm in southern Ontario or BC, and work it yourself. Most of the so-called pot companies are nothing more than shells that will go the way of Pets.com. You can’t swing for the fence unless you are the batter.

Nobody should smoke anything. And, no, this is not a blog for unemployed carpenters. – Garth

#59 Dazed & CONfused on 01.08.19 at 9:10 pm

9:00 PM, President Rush Limbaugh and First Lady Anne Coulter are addressing the nation.

#60 Long-Time Lurker on 01.08.19 at 9:15 pm

Okay, who let in the moaning, bloviating, speared walrus in here?

#13 yorkville renter on 01.08.19 at 5:36 pm
speaking of youth with lots of time… my kids have about $1000 each in their piggy banks and the ‘oldest’ one turns 3 in a few months. In other words, they ain’t spending 1 cent of what they got.

should I open an account in their name and buy some divvy bank stock or ETFs? I’d hate to have inflation eat away…

>My take: Buy a balanced fund and forget it or go 1/2 stock, 1/2 bond etfs and rebalance once a year. Garth said not to go with a single etf (etf failure risk) but I wouldn’t want the rebalancing hassle with small amounts. Also, consider an RESP.

Garth might have written something on this. Try a search.

https://www.vanguardcanada.ca/individual/mvc/loadImage?country=can&docId=12397

https://www.canada.ca/en/employment-social-development/services/student-financial-aid/education-savings/resp.html

#40 ASho on 01.08.19 at 7:12 pm
Hi Garth – for balance I assume it’s overall I.e. I can be all or heavier in equity etfs in TFSAs but have the safe stuff outside, given the tax benefit of TFSAs?

>Answered in his posts. Try a search. Look up Garth Turner, TSFA, equities. You’re on the right track.

#61 Paul on 01.08.19 at 9:16 pm

#48 Oshawa Is No More on 01.08.19 at 8:01 pm
https://www.ctvnews.ca/autos/gm-rejects-unifor-proposals-to-keep-oshawa-plant-open-past-2019-1.4245407
In the meantime, Mexico has $billions rolling in for numerous new investment developments.
————————————————————————————————
‘Billions rolling in’ maybe Trump is right they will pay for the wall.

#62 Drill Baby Drill on 01.08.19 at 9:19 pm

I think this dog of a blog should have a pool on when Selfie Boy actually grows a pair and puts a on a pair of Leadership pants and remind the pipeline protestors where the treaty check comes from.

#63 Nonplused on 01.08.19 at 9:20 pm

I guess Garth is being slow with updates because like me he is watching the presidential address.

So far my take is that they should just build the wall. It’s going to cost less than a few F-35’s. And people voted for it.

#64 DON on 01.08.19 at 9:23 pm

“I’m still young and don’t mind taking risks because of that. I don’t need the cash flow right now, so I figure I can ride out any volatility that comes along. Why wouldn’t I be 90% in high-risk stuff?”

LOL – I remember my friends and myself saying the same thing in the dot.com bubble, who knew companies that produced nothing would fail. Learned experience bites! But when you are young you have many priorities and research and planning get the lesser of the time commitment. “I’m Young” how fleeting Youth is.

“Living through big crashes in the past – like 1987 or 2008 or 2011 – gives perspective.”

Stuff you cannot learn from a book, context, sentiment, impacts. You learn things and start to see patterns over time and remember how things are connected and how things really work.

But every generation goes thru the same mentality (human nature) at that age. How many stupid youthful injuries come back to bite you in the ass for the rest of your life?

Yes you can’t time the markets but you can see things slowly building year over year until it tips. Things are never exactly the same but they are never really that different thanks to human nature repeating.

MF: Sooner or later all those little negative markers compound together and gain momentum, people start to take notice as more become affected and then sentiment starts to change and human nature kicks in on the down side. Private sector takes a beating (sucks being laid off in a downturn) until the next growth period. I am sorry to report that even with the invent of the internet human nature has yet to evolve to the next step.

Not many people see a storm on the horizon, doesn’t mean it’s not brewing. The point is to have a realistic viewpoint to prep for any blows. For instance might be the wrong time to buy an investment condo if you already have one. Knowing how indebted people are and the current unaffordable prices. Who cares about interest rates, economy, houses are out of reach for the average person. What happens next, a never ending stream of millionaire immigrants moving to the Frozen North rather than a multitude of other safe fair/good weather locations.

It’s not doom and gloom, just plain reality. Today we hear that bankruptcies are going up in Alberta, once the highest wage area in the country. A lot more examples out there if you care to look. Generalizations never work.

#65 Party on Garth on 01.08.19 at 9:24 pm

Outstanding speech by (U.S.) President Donald Trump tonight.

Yeah. Migrants = murderers. Shame. – Garth

#66 Terry on 01.08.19 at 9:25 pm

Just finished watching Trumps speech to the nation. He made alot of great points for border funding to secure the their southern border. What took me aback was the Democratic response to Trumps speech. In a short sentence Democrats and Liberalism is just plain wrong and filled with evil intent. These people have no spirit of any goodness in them. Keep up the fight Mr Trump. We will continue to support you.

#67 Stan Brooks, A Lifetime of Incompetence on 01.08.19 at 9:26 pm

#35 Stan Brooks on 01.08.19 at 6:43 pm
#124 Stan Brooks, A Lifetime of Incompetence on

“You keep putting words in my mouth…”

Are you suffering from memory loss Stanley? All your diatribes against Toronto? Shall I waste my time and dig them up?

“Basic psychological profile shows that you have the ‘hungry and delusional real estate professional’ written all over you. Hence the emotions, normally related to the cry of the empty stomach. I am so sorry for you, the good old times are not coming back.”

You crack me up Stanley! You are a bona fide whack job of the highest order! You are a textbook case of paranoid personality disorder in which you think everyone who disagrees with your mindless dribble is a real estate agent. You are seriously mad cowboy. I have never been a real estate agent and am in a totally unrelated field of which I am the co-owner of a successful business. As for my empty stomach this is your best line yet. I have a net worth that would make most Canadians envious with jealousy. Absolute mindless delusional conjecture on your part. You are truly a sad and pathetic case. Tell your psychiatrist to increase the shock treatments or get better meds and if I continue this dialogue with someone as insane as you, I deserve to be confined to a mental ward as you are…

#68 Fish on 01.08.19 at 9:42 pm

Trump makes his case for border wall in address to nation

Critics say Trump’s talk of risk is overblown and that illegal crossings are down
Thomson Reuters · Posted: Jan 08, 2019 3:20 PM ET | Last Updated: a minute ago

https://www.cbc.ca/news/world/trump-address-prime-time-border-1.4970140

#69 JM on 01.08.19 at 9:47 pm

Very good point about not investing solely in your own industry, really sucks to lose your job and have your investments crater at the same time. Other danger is buying shares in the company you work for, talk about having your eggs in one basket.

#70 kommykim on 01.08.19 at 10:24 pm

RE: #57 young & foolish on 01.08.19 at 8:53 pm
However, I am also mindful of the growing popularity of ETFs (they are outstripping mutual funds for the first time this year).
Is there any credibility to the “mindless investing” danger?

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

Nah. There are a ton of actively managed, specialty ETFs, to help the cowboy/amateur investor continue to under-perform. Besides, 90% of stock market volume is from institutional investors. I think the fear that “index funds will ruin the market” is bogus because of human nature. Almost everyone thinks they know how to beat the market.

BTW, there are also index mutual funds for those without a trading account.

#71 The Real Mark on 01.08.19 at 10:25 pm

“#69 JM on 01.08.19 at 9:47 pm
Very good point about not investing solely in your own industry, really sucks to lose your job and have your investments crater at the same time.”

Basically, in my experience, that describes most Realtors. Nearly every one I’ve had the pleasure of talking to over the years owned a few rentals. And had set their kids, brothers and sisters, in-laws, etc., up with rentals. On credit of course. So of course there’s huge built-in incentives to deny stagnation in RE (as has been occurring in the post-2013 peak environment), create hype, etc. Rather than providing unconflicted opinion.

Ross Kay, a former Realtor himself, in his interviews goes into extensively how the industry basically only represents the sell-side, and never the buy side. Definitely worth a listen when he comes up on Howestreet, that’s for sure.

#72 akashic record on 01.08.19 at 10:49 pm

President Reagan offered amnesty for undocumented immigrants in 1986.

Nancy Pelosi became lawmaker in 1987, she is in office ever since. Chuck Schumer is law-maker since 1981.

Since Reagan’s amnesty, while Pelosi and Schumer are in office, an estimated 22 million illegal immigrant lived in the US by 2016, before Trump was elected.

Tonight for Nancy Pelosi the biggest issue with illegal immigration is that Trump “spreading”misinformation and malice”.

Chuck Schumer accuses Trump with “manufacturing crisis”, as if the 22 million illegal immigrant wasn’t the crisis.

Pelosi and Schumer, after 3 decades in office, that resulted in 22 million new illegal immigrants, demand more time for themselves.

After 3 decades of complete failure they claim with straight face in front of the country: “We can secure our border without an ineffective, expensive wall. We can welcome immigrants and refugees without compromising border security.”

The only question one can ask: why didn’t you?

Imagine if they were not among the most respected, most experienced, most senior members of the political elite, leaders of a party, leader of a legislative branch, but some incompetent, inexperienced idiot, randomly meddling with politics.

#73 TRUMP on 01.08.19 at 10:56 pm

GOODBYE GM OSHAWA!!!!

Thank your LAME DUCK prime minister trudeau for his generous condolences and bailouts given and written off by our TAXPAYERS for nothing.

CORPORATE WELFARE backed up by GOVERNMENT.

Only the WEED FARMERS benefit from THE trudeau show.

#74 Gravy Train on 01.08.19 at 11:19 pm

From Jon Meacham’s Twitter feed:
America should “build a wall of steel, a wall as high as Heaven” against the flow of immigrants. — Georgia Gov. Clifford Walker, at a 1924 convention of the Ku Klux Klan, then a powerful force at a time of strain for the white working class. #PastIsPrologue

“Wherever the people are well informed they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.” — Thomas Jefferson, January 8, 1789

#75 For those about to flop... on 01.08.19 at 11:23 pm

Recent sale report.

O.k so I stopped watching Gold Rush long enough to do this report.

The details…

11140 Blundell Rd, Richmond.

Paid 2.96 July 2017

Just sold for 2.8 December 2018

So they lost over 10% after expenses or roughly 300k.

Buying Blundell was a blunder…

M44BC

https://www.zolo.ca/richmond-real-estate/11140-blundell-road

#76 Justmarried on 01.08.19 at 11:27 pm

Hi Garth, first time poster, long time reader. Great blog you have. My husband and I are 35 we have 300k roughly and all invested in stocks. We have 2 utility stocks, 2 financials, 2 telecoms and 2 low yield high growth. I don’t see how we can go wrong, especially with owning bns, fortis, cn & bce. How can fortis go bankrupt? I pay their bill monthly, I use the bank of Nova Scotia. Can you shed some light on this so I understand a little more.
Thanks
Irene

#77 DON on 01.08.19 at 11:43 pm

I watched a segment of Trump’s address to the nation, he is scripted for sure, but took his time to make his case. I expected much worse. Hmmm, what will Americans voters think. His case wasn’t exactly based on verifiable facts, but how did it resonate with Americans in the thick of things.

I think he made a case in the minds of Americans. The guy knows how to negotiate away from the table. The wall is Trump’s hill, and its not exactly a new radical thought. Have to wait this one out, looks like Trump is willing to do so. CBC says he would face possible legal action if he were to declare an emergency and build the wall. I don’t think that would stop him if he needs the wall for a second term. Who wants to be the first President to get elected to only one term in the 2000s.

I gotta say he is entertaining to watch and his negotiations tactics are interesting.

We should lobby him for a concrete wall on the US Northern border – stop that vile weed from leaving Canada.

#78 Dtree on 01.08.19 at 11:45 pm

Rob advisor is actually perfect for this guy. Free for accounts under 10k. Let them rebalance your portfolio while you learn a thing or two.

Good luck.

#79 DON on 01.09.19 at 12:20 am

Ok Trump’s trade talks added to the fear in equity markets.

Trump wants his wall, campaign promise, possible re-election path. Shutting out drugs, cartels, deplorables and setting up humanitarian aid.

But can’t have a bad stock market at the same time. He gets on the fed and receives a degree of compliance then he says talks are going well as they move into the 3rd day. But compliance and automatic enforcement are the real meat of any honored deal. But hey the stock market is going up, we are saying money on public sector workers and we need the wall to protect our American way of life and values.

At some point he will circle back become more hard nosed with China and demand compliance and enforcement and put the ball and blame in their court.

American retail has been buying there spring stock prior to the increase in tariffs from 10 – 25% come the end of the 90 day truce. Explains why inventories were up in the last quarter.

#80 LG on 01.09.19 at 12:41 am

@38 Blacksheep

Cdn Government travel advisory website has been warning ppl of extreme violence, drugs, kidnappings & murders in Mexico for years now.

Wouldn’t step one foot in Mexico, not worth your life no matter how cheap it is.

#81 Nonplused on 01.09.19 at 12:46 am

“Nobody should smoke anything. And, no, this is not a blog for unemployed carpenters. – Garth”

Vaping isn’t smoking even though it looks like it. Nothing is getting burned. The number of dangerous chemicals is way less. The “juice” comes in various strengths so the idea is if you are a smoker you can slowly dial back the nicotine content and break your chemical addiction. People beside you can hardly smell it. It doesn’t stain your teeth or make your clothes smelly. All in all it is a great product and to the extent it helps people get off the weed it is a great idea.

That said, I would agree that if you aren’t smoking now, there is no reason to start vaping. But if you are a smoker, consider vaping as an alternative.

Now on to the unemployed carpenter comment. I think this is a blog for carpenters, plumbers, electricians, tow truck drivers, all of the working men and women out there. But we often get comments or Garth highlights a letter from someone who does not have any money. My point would be that job number one is to get some money. Get that degree, it’s still cheap in Canada. Go to that trade school. Get your journeyman’s. Build a client base. Start your own business, even if all you can come up with is yard maintenance. For most people that is the first step to becoming one of Garth’s clients.

My dad did it, and he likes to brag that he has a grade 9 education. (Although he leaves out the fact that he did attend trade school and get his journeyman. You didn’t need grade 12 in his day so he went as soon as he could.) I did the university-corporate route but the university was the key to getting on that gravy train of stock options. I had to be useful.

The first thing you young folks need to do is go out and make yourself useful. Then perhaps you’ll end up with some money to invest. Maybe you’ll end up like my dad and countless other people I know who got rich quick after 30 years of hard work.

#82 SoggyShorts on 01.09.19 at 12:48 am

#17 Biddy on 01.08.19 at 6:06 pm
capital retnetiontion should always be 1st priority
*********************************
How long have you been doing that? You actually lost money 5 out of the last 10 years on GICs in Canada.

https://www.tangerine.ca/en/rates/historical-rates/index.html
https://www.inflation.eu/inflation-rates/canada/historic-inflation/cpi-inflation-canada.aspx

#83 Nonplused on 01.09.19 at 12:56 am

And PS Garth at this point I would very much like to see my dad the unemployed carpenter sell off at least 50% of his real estate holdings and invest in a B&D portfolio. Even with you as his adviser! Unfortunately he knows nothing else and as he puts it “you have to dance with the girl that brought you”. I can’t change his mind and he’s so far in the money he doesn’t think he really has much risk. He’s wrong, as I know you’ll be quick to point out, but it’s all he knows.

#84 Smoking Man on 01.09.19 at 1:23 am

I’m Qs Principle secretary.

I have 4000-word thesis on what it’s all about.
Garth, I know you don’t like long-winded shit on here. Can I post it to my dead blog and share a link. Or risk a direct post on here only to vanish because you never were man enough to wear Walmart flip flops.

Please advise. It’s a good one.

https://youtu.be/cnNSo0hq_Zo

#85 Not So New guy on 01.09.19 at 1:28 am

This is why the comment section of this blog is so valuable. It is the human condition on full display.

It is amazing how people can have opinions (not all of them of course) that are exactly opposite each other and yet both be perfectly sincere and convinced of them

It is both humanity’s strength and weakness depending on how applied

#86 Bottoms_Up on 01.09.19 at 1:40 am

Guy in Calgary on 01.08.19 at 4:27 pm
—————————————–
Garth makes a good point. There is unknown risk associated with any given stock, regardless of what you may read in their financial reports or understand about the market. Think BRE-X, nortel, enron. There will always be unknown risk. By using ETFs you effectively dilute this unknown risk close to zero.

#87 Nobel Laureate on 01.09.19 at 1:43 am

A lesson on narcissism. Seems appropriate because of the bad orange man.

First of all we are all narcissistic. Yes you are and if you don’t know it it is because you haven’t been particularly honest when self-reflecting.

Now sometimes it can go to the extreme where it is considered a disorder. Yes, that’s true. But we only diagnose it as such when it becomes criminal.

Many people do good things and it raises their self esteem and public standing. But why are they really doing it? Well, because it raises their self esteem and public standing. Should we tell them to go away? Can we find people who will do good for no reason of their own?

Who will coach our youth sports if we point out to the coaches they are just trying to relive their glory days long since gone?

Who will teach our children if we tell the teachers to all to go away because they are just seeking to be a leader, like the teachers they respected as a youth?

Who will work our EMS once we make it clear we have no space for those who would be heroes?

I could go on, but let’s not. We all do what we do for deeply personal reasons. The bad orange golum of greatness may be deeply narcissistic, but that isn’t what matters. Every single person is, probably more so. What needs to be evaluated is what he is trying to do, and whether it helps or not. You can’t just say “cops are bad” because you got pulled over for speeding. That makes you the narcissist.

#88 Stan Brooks on 01.09.19 at 2:05 am

#67 Stan Brooks, A Lifetime of Incompetence on

Are you suffering from memory loss Stanley? All your diatribes against Toronto? Shall I waste my time and dig them up?

You said that I post under the name of a specific reader here which is not true. I also never said ‘toronturds’.
You imply emotions while I only state facts.


I am the co-owner of a successful business. As for my empty stomach this is your best line yet. I have a net worth that would make most Canadians envious with jealousy.

Sure. This is why you are here, selling ‘lifestyle’ in order to cheat clients from their money. You are so transparent, your very reaction to a ‘real estate professional’ label tells it all.

Explains also the emotions and the personal attacks, normally last resort when you can’t argue with the facts.

Relax, chilax and cool down, last thing I want to cause you is heart attack (given the state and waiting times of the emergency rooms in GTA)

#89 Stan Brooks on 01.09.19 at 2:36 am

#50 expat on 01.08.19 at 8:02 pm

Pretty good assessment on CPPIB. They spent 3.2 billions a year, around 1 % of their/our assets while beaten down by most passive ETFs or a basket of such with 1/10 the cost.

I am sure at some point they could start buying MBS and bonds as mandated by government, as BoC is doing currently.

An no, interest rates will not go up in the next 20 years even in a currency crisis as any deficit will be monetized by BoC (no sane buyer will buy it given the investment alternatives in the world) so you need to take care of your retirement alone.

CPP will basically melt down to 30 % from current payout in real terms (purchasing power) despite the increase in contributions. Cost of living increasing north of 8 %, CPP indexation of sub 2 % (just wait when they start reporting deflation)

This (the melt down of the CPP) is why I believe that private funds could be targeted in some pension reform down the road either through taxation on withdrawal or through some form of expropriation in exchange of ‘safe returns’ /read government bonds/ that nobody wants in order to ‘safe guard the interest and ensure the well being of all Canadians’. They always think about you, remember that.

And property taxes will keep increasing, for sure, now it is done through re-assessments (congrats to the rich homeowners), in the future it will be done through percentage increases.

Normal retirement is oxymoron, not gona happen.

#90 Dolce Vita on 01.09.19 at 2:59 am

A new ALPHA FOUND.

Video from Clayton Achen (CPA) about the Liberal’s claiming they saved Small Business $7,500.

It is priceless, precise. He debunks their claim in a calm, matter of fact walk in what looks like a cold Calgary night.

Tweeted by Pierre Poilievre and others today. Gives me HOPE FOR CANADA.

https://twitter.com/PierrePoilievre/status/1082825796639690753

————————-

You have to admire and love people like this. If I didn’t know how to do my taxes he’d now be my very 1st choice to do them.

PROOF that Cdn’s are not stupid like big Gov thinks we are.

#91 Dolce Vita on 01.09.19 at 3:28 am

Here are BNN and CBC parroting that Insolvency is up in Canada with dire headlines like:

“More people are going broke…”,

“Canadian insolvencies increased 5.2 per cent…”.

Such utter bull shit by the World’s dumbest, numbers challenged, Cdn. MSM (yet, great with %’s).

Table 2: Insolvencies Filed by Consumers, Canada.

Nov. 2017 = 122,412
Nov. 2018 = 124,918

Difference = 2,506 more people.

What was the population of Canada again?

Half of f*** all, is still f*** all.

———————————————–

http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br04024.html

#92 Howard on 01.09.19 at 5:23 am

#68 Fish on 01.08.19 at 9:42 pm
Trump makes his case for border wall in address to nation

Critics say Trump’s talk of risk is overblown and that illegal crossings are down
Thomson Reuters · Posted: Jan 08, 2019 3:20 PM ET | Last Updated: a minute ago

https://www.cbc.ca/news/world/trump-address-prime-time-border-1.4970140

——————————————-

There are a minimum of 20 million illegals currently living in the US and some estimates put that number upwards of 30 million.

The risk is not overblown and nothing has worked to stem the tide. A physical barrier is the only solution.

This conversation is over. We’re heard enough of the Fox New talking points and that all migrants are inferior people. The American moral malaise is not going to spill over on to this blog. – Garth

#93 LivinLarge on 01.09.19 at 8:15 am

“It’s going to cost less than a few F-35’s. And people voted for it.”…presuming for a second that every single voter who voted for The Don voted for a wall (stupid presumption BTW)…he didn’t win the popular vote by a long shot so it’s totally immaterial. Let’s say as much as 50% of his “base” thought a wall a great idea then less than 25% of all voters thought it a must to build one.

H L Menken said a very long time ago “No one ever goes broke under estimating the intelligence of the American people”. Still valid after all these years.

As for a physical barrier being the only solution, sure in some distant past when virtually no one traveled more than 20 miles from home for their entire life. Serious physical barriers like walls don’t work effectively when everyone has access to an airline ticket and thinks nothing about vacationing 3,000 kms from home every year. Remember, even the Berlin “wall” or even Israel’s were constructed to keep people in, not out. It’s too simplistic to think that thousands of miles of concrete or steel slats will keep anyone out of the US. It’s not like there is mass migration across the border in the hinterland of Mexico. The masses are crossing close to the major metropolises because there’s no sense in blazing a trail to the hinterland of Mexico only to then have to blaze hundreds of miles in the US to get anywhere.

I have no morality issue with a sovereign state building a physical barrier to entry to their country, it just doesn’t work unless they’re prepared to shoot to kill anyone trying to enter and frankly that doesn’t cut it in the 21st C.

#94 KLNR on 01.09.19 at 8:17 am

@#80 LG on 01.09.19 at 12:41 am
@38 Blacksheep

Cdn Government travel advisory website has been warning ppl of extreme violence, drugs, kidnappings & murders in Mexico for years now.

Wouldn’t step one foot in Mexico, not worth your life no matter how cheap it is.
__________________________________

LOL, they advise the same for most American cities as well. Mexico is as safe as any other vacation destination. 99.9% of the time you’ll only get yourself in trouble if you go looking for it.

#95 For the Greater Good on 01.09.19 at 8:19 am

As always, our esteemed blog host (EBH), he of the chiselled hair and sculpted, wavy, and dark abs makes very good points and clearly illustrates why one should always seek the help of qualified experts. And yet again, I read in the comments the numerous expressions of loss and remorse fixed firmly in each rogue’s self interest. Would you unbelievers and “dimfidels” argue against the merits of maintaining your car’s brakes because you felt that it was a scam perpetuated by the auto industry who were in collusion with big government?

What all of you miscreants seem to lose sight of is that you are surrounded by frail, misinformed, and shallow people just like all of you (and me, I am no saint). We are all prone to misgivings, given over to misunderstanding, and exhibiting irrational behaviour. If the evidence suggests that what our EBH advises works most of the time, to a higher degree of certainty than what the weather forecasters can predict, then it makes sense to accept it.

#96 Stan Brooks, A Lifetime of Incompetence on 01.09.19 at 8:25 am

#88 Stan Brooks

Any time you want to meet me in person in my office Stanley and see that I am not a realtor, we can get in touch via Captain Garth. You are truly mad. My reaction is to your thinking that anyone on this blog who doesn’t buy your deranged views and who defends Toronto is a realtor. Make my day Stanley and meet me in person. I will give Captain Garth my email.

#97 Tater on 01.09.19 at 8:29 am

#13 yorkville renter on 01.08.19 at 5:36 pm
speaking of youth with lots of time… my kids have about $1000 each in their piggy banks and the ‘oldest’ one turns 3 in a few months. In other words, they ain’t spending 1 cent of what they got.

should I open an account in their name and buy some divvy bank stock or ETFs? I’d hate to have inflation eat away…
————————————————————–
If you haven’t already, get it in an RESP. If you put away $2500 in a year, the gov gives you $500.

Beyond that, an investment account is a fine idea. Give them a nice jump start on filling the TSFA at 18.

#98 LivinLarge on 01.09.19 at 8:31 am

Totally off topic but yesterday a great sign of the times arrived in my physical mail box. A flyer for a bankrupsy auction of Persian carpets to be held at a local hotel for “3 days only”. Apparantly our economy must be robust and booming. These stupid come ons only come out when economies are booming.

#99 Godth on 01.09.19 at 8:33 am

What Donald Trump, Chuck Schumer, and Tony Soprano Have in Common – Comment on Trumps Speech
https://www.youtube.com/watch?v=GOKBtVrfxLk&t=147s
Archie Bunker: “The Coons Are Coming!”
https://www.youtube.com/watch?v=sOnTZipv03M

#100 LivinLarge on 01.09.19 at 8:55 am

“I will give Captain Garth my email.”…no need to, he has it every time you sign in here.

#101 Tater on 01.09.19 at 8:58 am

#89 Stan Brooks on 01.09.19 at 2:36 am
#50 expat on 01.08.19 at 8:02 pm

Pretty good assessment on CPPIB. They spent 3.2 billions a year, around 1 % of their/our assets while beaten down by most passive ETFs or a basket of such with 1/10 the cost.
—————————————————————-

10 year CAGR of 9.1% and 5 year at 12.1%, after fees. How would you propose beating those numbers in a passive portfolio?

#102 Tater on 01.09.19 at 9:05 am

#54 tccontrarian on 01.08.19 at 8:27 pm
My 3rd and last post for today…

I read somewhere (too late to benefit myself), that getting ‘stung’ by huge losses early in life is actually a good thing – as you tend to ‘respect’ what the market can do on the downside.
When I first started with some DYI investing (actually it was speculating in the junior resources), I was lucky to have jumped in right at the bottom and did really well for 3 years (with >100%/year returns). I thought it was my ‘skill’ and so never saw the other side coming (2008-9):

The market giveth, and the market taketh away!

Add margin to the mix and it I found out that you could actually lose more than what you put in!
Yes, a tough lesson – the kind that most wouldn’t rebound from.
But I’m not like everyone else – I went back in, to win this time. But I’ve dome my homework and this time I feel that I’m better prepared. I know when and how to get aggressive (meaning, ‘put more $$ in play in a given idea’), and I know when to be cautious. One day, myself and Tater may actually open a Hedge Fund together; he’s got the right temperament for a partner. LOL

TCC
—————————————————————–

Nothing I want less in life than to run a hedge fund, tbh. At some point in the future I’ll open up a small private investment fund for friends and family, but I can’t imagine taking outside money. The hassle just isn’t worth it.

#103 dharma bum on 01.09.19 at 9:19 am

Metaphorically speaking in a financial sense, time heals all wounds.
80/20, 70/30, 60/40, or whatever your choice of “balance” is, just hang in there for decades, and all will be well.

#104 yorkville renter on 01.09.19 at 9:30 am

#60 & #97 – Thanks for the reply. Both RESPs are maxed, including 2019

I will try searching the blog

#105 BillyBob on 01.09.19 at 9:53 am

#96 Stan Brooks, A Lifetime of Incompetence on 01.09.19 at 8:25 am
#88 Stan Brooks

Any time you want to meet me in person in my office Stanley and see that I am not a realtor, we can get in touch via Captain Garth. You are truly mad. My reaction is to your thinking that anyone on this blog who doesn’t buy your deranged views and who defends Toronto is a realtor. Make my day Stanley and meet me in person. I will give Captain Garth my email.

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

You are frightening. I guess not having a sale in the last year or so is starting to fray the nerves, understandable.

No one I’ve ever met who was truly successful ever felt the need to try and convince anyone they were.

The only crazy thing I can think of would be to agree to meet you in person. You’re giving off the frothy-mouthed Hannibal Lecter vibe while Stan is calmly owning your arguments. He’d probably end up wrapped in a rubber sheet in the trunk of your Audi if he accepted your weird offer.

#106 David Driven on 01.09.19 at 10:01 am

Garth, the advice you give is sound but, the return on a balanced portfolio will take 40 years to mature, much too long to offer much benefit to anyone except the near dead. What’s the point? 6% return is fine yes but, when consumer inflation is doubling every five years it means your million at 65 is a pack of smokes and a jug of the cheapest wine. If all I’d achieved was 6% I would have never retired on my portfolio, but rather have hoped to be sponging off the taxpayer after a Rip Van Winkle career in the civil service. Only a good stockpicker gets rich in the stock market, anything else is just a sales pitch. BTW, vote again for Trudeau and your disposable income will sink faster than ever before. The $C is collapsing, that will force consumer prices up faster. Manufacturing is imploding, that makes durables more expensive because everything has to be imported. Productivity goes down with a weak Trudeau Loon because businesses can’t upgrade making consumers pay more for fewer choices on the shelf ( does this sound like Venezuela?) Only civil servants have indexed pensions, the rest of you are screwed. Simply put, if you’re not making money faster you’re falling behind. It’s likely cat food for you 6%ers. Get with it or get stuffed. Do you think your already outrageous taxation won’t keep creeping higher to pay for those indexed pensions and the salaries for the ” otherwise unemployable” ( liberals definition not mine) who Trudeau is becoming increasingly reliant on for votes.

#107 Howard on 01.09.19 at 10:02 am

#94 KLNR on 01.09.19 at 8:17 am
@#80 LG on 01.09.19 at 12:41 am
@38 Blacksheep

LOL, they advise the same for most American cities as well. Mexico is as safe as any other vacation destination. 99.9% of the time you’ll only get yourself in trouble if you go looking for it.

———————————-

Can you prove this statement? I have never heard of the Canadian government issuing a travel advisory on American cities.

#108 Ace Goodheart on 01.09.19 at 10:12 am

RE: #4 Penny Henny on 01.08.19 at 4:51 pm

“I say why not.
He’s young and time is on his side.
It’s only $8000.
Even if he loses half it will be a worthwhile lesson.
And, to boot, 2008 is not coming around again. (or so I’ve read).”

Have a look here:

https://www.budgetworksheets.org/invest/invest.php?amount=8,000

$8000.00 put away safely for 30 years (in a TFSA, set up in high quality type stuff returning an average of 6% per year) will be worth $45948.00

Weed stocks are mostly going to zero (there will be one or two that end up becoming the benchmark for the weed market, but people have to be careful even with that, as remember what happened to Big Tobacco once it came out that tobacco causes cancer – lots of law suits – yeah, weed, which is also burning a carcinogen and inhaling it, probably also causes lung cancer).

I just don’t see the point in throwing away 8 grand. I mean, if you aren’t going to bother investing it properly, then just take a vacation or buy an expensive dog or something. At least that way you get to enjoy the money.

#109 Ace Goodheart on 01.09.19 at 10:21 am

“The odds are – virtually 100% – that novice investors will fold in the first crisis that hits them.-GT”

This is interesting. This is actually the most common way that people invested in the markets, lose money.

They radically change their investment strategy, and liquidate their assets, during market downturns. This happens particularly during “bear” markets, and is to a large extent the reason why bear markets persist following the original market depressing events.

If it looks like stuff is going down, and people start seeing red ink on their portfolio screens, they sell all their holdings, and invest in something “safer”.

9 times out of 10 the “safe” investment is cash based, usually a GIC or a HISA.

They then wait until markets start going up again, and buy back in, having lost a lot of money in the downturn.

They then wait for the next down turn, holding onto all of their “winnings” until markets crash again, and then selling at a loss.

This is the human investment behavior, the human nature, that people have to fight themselves on. You have to push past this, ignore the primal urge to jump ship, and stay invested. You also have to put more money into the declining, bear market, for the duration of the slump.

So, what you should be doing is holding onto all of your equities, and buying more, during a bear market.

Very few people do this. Those who do, become very wealthy, particularly if the market downturn is severe (like 2008).

#110 Toronto_CA on 01.09.19 at 10:30 am

60/40 is too conservative for me; but for the average joe investor I can see why this is very sensible in that it will reduce anxiety during a crash or bear market by softening the unrealized LOSS red ink. As well, if there is something completely urgent where one needs to liquidate, you would have a substantial amount of fixed investments to cash out versus someone who is all in equities or nearly so. I think that would be beneficial in a bear or a bull market.

For me, I have liquid savings and a strong safety net that would support me in the event of a job loss or illness or tragedy. As such I’m more 75/25 at the ripe old age of 42.

#111 Remembrancer on 01.09.19 at 11:04 am

#98 LivinLarge on 01.09.19 at 8:31 am
Totally off topic but yesterday a great sign of the times arrived in my physical mail box. A flyer for a bankrupsy auction of Persian carpets to be held at a local hotel for “3 days only”. Apparantly our economy must be robust and booming. These stupid come ons only come out when economies are booming.
————————————————————–
I’ve never seen a Persian carpet store that wasn’t having a going out of business sale or auction, sometimes for years at the same location.

Also, if you are really are interested in carpets, unless you know what you’re looking at, watch out as some people have a broad definition of the borders of Persia, not saying its anyone in particular, just saying…

#112 Godth on 01.09.19 at 11:05 am

#108 Ace Goodheart
“$8000.00 put away safely for 30 years” lmao
i keep reading about 10, 20, 30 yrs. down the road here. the projected population of the planet is 8.6 billion in 2030 – do you really think that’s going to happen?
a few yrs. ago garth ran the numbers for all sorts of gov’t finance and they all came up a bust by 2030. what have you people been smoking? among the doomerati it’s called hopium but whatever it is it’s rendered you completely delusional.
Eco-Philosopher Rupert Read: “This Civilization Is Finished”
https://www.youtube.com/watch?v=5mddAgYXClA&t=55s
The Perfect Storm: Food, energy, water security and climate change: Sir John Beddington
https://www.youtube.com/watch?v=LEDARAfXqtg&t=2547s
you people are truly mad as hatters, sociopaths or psychopathic – there’s no other explanation.
How to Identify a SOCIOPATH
https://www.youtube.com/watch?v=nsWE_8ZIPQg

#113 Stan Brooks on 01.09.19 at 11:05 am

#101 Tater on 01.09.19 at 8:58 am
#89 Stan Brooks on 01.09.19 at 2:36 am
#50 expat on 01.08.19 at 8:02 pm

Pretty good assessment on CPPIB. They spent 3.2 billions a year, around 1 % of their/our assets while beaten down by most passive ETFs or a basket of such with 1/10 the cost.
—————————————————————-

10 year CAGR of 9.1% and 5 year at 12.1%, after fees. How would you propose beating those numbers in a passive portfolio?

Dow returned 12.86 % annualised net for the last 10 years:
https://dqydj.com/dow-jones-return-calculator/

Just buy DIA?

#114 Mr Wang on 01.09.19 at 11:09 am

Chinese buyers abandon Canuckistan and head south in droves.

https://www.cnbc.com/2019/01/08/chinese-middle-class-buying-up-american-residential-real-estate.html

Trudeau’s wacko tax policy, business hate, lack of opportunity is causing wealthy immigrants to flush Canada.

#115 Stan Brooks on 01.09.19 at 11:10 am

#101 Tater on 01.09.19 at 8:58 am

BTW the performance of the CPP fund is irrelevant, the payout from it is as it is calculated based on fake inflation numbers.

Even if they make 10 % + annualised, you get the ‘CPI Indexed pension’, i.e sub 2 % indexed, the rest stays with the government/like the billions in EI that it ‘used’.

#116 Blacksheep on 01.09.19 at 11:16 am

#94 KLNR on 01.09.19 at 8:17 am
@#80 LG on 01.09.19 at 12:41 am
@38 Blacksheep

“LOL, they advise the same for most American cities as well. Mexico is as safe as any other vacation destination. 99.9% of the time you’ll only get yourself in trouble if you go looking for it.”

———————————-

“Can you prove this statement? I have never heard of the Canadian government issuing a travel advisory on American cities.”

————————-
I love Mexico and its friendly people.

If you watched the video you would have discovered, this violence is not random cartel turf battles, where the odd tourist catches a stray bullet.

That shit / risk I can deal with.

This is bad guys, extorting $’s from a singular retailer/ restaurateur at a time. If the vendor doesn’t pay them the required 30-40% of the monthly profits, the place gets shot up and tourists / local customers die, old school mafia style.

This is exactly what ended tourism in Acapulco.

I hope the government gets a handle on this shit before the tourism trade is completely destroyed, again
love Mexico and would like to spend some time there in retirement.

#117 Remembrancer on 01.09.19 at 11:16 am

#107 Howard on 01.09.19 at 10:02 am
#94 KLNR on 01.09.19 at 8:17 am
@#80 LG on 01.09.19 at 12:41 am
@38 Blacksheep

Can you prove this statement? I have never heard of the Canadian government issuing a travel advisory on American cities.
———————————————————–
Let me help Howard…

While it is true that trouble can find you if you go looking for it anywhere and sometimes even when you’re not, the travel advisories for US and Mexico are not at all similar…

https://travel.gc.ca/travelling/advisories

US – https://travel.gc.ca/destinations/united-states
Mexico – https://travel.gc.ca/destinations/mexico

#118 IHCTD9 on 01.09.19 at 11:18 am

#51 Ustabe on 01.08.19 at 8:05 pm

Then 5? or maybe more years ago an associate handed me a piece of tech out of China, unknown in Canada but taking Asia and Australia by storm. He put me onto where to order supplies. I taught myself to use a personal e-cigarette vapourizer over the next ten or so days. 4 days after that I smoked my last tobacco cigarette and haven’t had one since.

I still have a vape, much advanced from those early days, in case I am overcome with the desire to have a smoke.

Which I still am if I pass someone lighting up on the street for instance.

All that to say first piece of bad advice you’ve given me, eh?
_____

I’ll have to second that. I quit using an e-cig too. I had a little initial trouble doing the switch from ciggies to the vape, but it was so similar to the real thing that I didn’t miss ’em after only a few days.

After about 6 weeks on the vape I was able to quit that too. Quite amazing considering I had never once quit before and I started smoking in high school.

I know several folks who quit tobacco via an e-cig – some still vape, others quit the vape too. IMHO, if you smoke, and can’t remember what it was ever like not to – and want to quit – e-cigs are the way out 100%. Don’t even bother trying anything else. I wish these things were available decades ago.

#119 Figure it Out on 01.09.19 at 11:21 am

“$8000.00 put away safely for 30 years (in a TFSA, set up in high quality type stuff returning an average of 6% per year) will be worth $45948.00 […] I just don’t see the point in throwing away 8 grand. I mean, if you aren’t going to bother investing it properly […]

Sure, but $8,000 @ 7% for 30 years is $60,898 — an extra $15,000. Plus that extra 1% on all the other money you’ve been saving and investing over the decades. So if you can learn to invest yourself and save 1% a year in fees, you come out way ahead. In which case the $8,000 could be considered non tax deductible tuition.

Of course, this doesn’t work if it takes you ten years to figure out investing. But on the other hand, I’ll betcha that there’s lots of people whose professional advisors have them in weed stocks and other crap.

Never underestimate the exponential compounding power of an extra 1% over long periods.

#120 PastThePeak on 01.09.19 at 11:31 am

#43 kommykim on 01.08.19 at 7:25 pm

Because a balanced portfolio can actually be better than an all stock one.
Take this very simple brain dead example:

$6000 stock etf
$4000 cash
$10,000 total

stocks drop 25% and now you have:

$4500 stock etf
$4000 cash
$8500 total

You rebalance by buying more stock with the “fixed income” cash and you have:

$5100 stock etf
$3400 cash
$8500 total

Markets recover with a 33% gain from lows:

$6783 stock etf (Up 33%)
$3400 cash
$10183 total

But in an all stock scenario, your $10,000 would have dropped to $7500 (-25%) and then only come back to $9975 with the 33% recovery.

Note: I used cash to keep the math simple, but that cash would usually be a bond ETF which would give further gains over the long term.
++++++++++++++++++++++++++++++++++

Not arguing against a balanced portfolio at all, but your example depends on perfectly timing the purchase of additional equity during a downturn. Calling the bottom in real-time isn’t as easy as with hind sight…

I certainly add to positions of some equities during big pullbacks like we have just seen, but that is based on analyzing the equities and when the price looks good/great, rather than trying to find a bottom.

#121 Snowbird1 on 01.09.19 at 11:43 am

Garth, I was a bit surprised to see a 10% drop across the board for the preferred ETFs like ZPR and CPD over the last 3 months. Even the actively managed one (DXP) that your team prefers wasn’t close to stable during the mini-melt heading into Jan 1 and fell with stocks. Where exactly can one find the built-in portfolio shock absorption that keeps volatility and losses down?

In a sell-off most assets are impacted. But I am sure you saw an uptick in your bonds. Preferreds are far more stable than commons, and pay a plump tax-efficient dividend. Ignore the noise. – Garth

#122 Stan Brooks, A Lifetime of Incompetency on 01.09.19 at 12:07 pm

#105 BillyBob

How else can I prove to Mr.Stanley I am not a realtor? You are another one who assumes everyone on this blog who doesn’t hold Stanley’s views is a realtor. Do you also suffer from a delusional disorder like poor Stanley? Stanley owning me in an argument? You must be as mad as Mr. Stan if you think that is so. I have just pointed out how deranged his diatribes against Toronto are. You wouldn’t be sharing the same rubber room as Stanley would you?

#123 Penny Henny on 01.09.19 at 12:16 pm

#96 Stan Brooks, A Lifetime of Incompetence on 01.09.19 at 8:25 am
#88 Stan Brooks

Any time you want to meet me in person in my office Stanley and see that I am not a realtor, we can get in touch via Captain Garth. You are truly mad. My reaction is to your thinking that anyone on this blog who doesn’t buy your deranged views and who defends Toronto is a realtor. Make my day Stanley and meet me in person. I will give Captain Garth my email.

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

I hope you have security officers in your building

#124 LivinLarge on 01.09.19 at 12:24 pm

Remembrancer, “I’ve never seen a Persian carpet store that wasn’t having a going out of business sale or auction, sometimes for years at the same location.” I’m not going do dispute any of that. But, this is a 3 day auction in the wilds of SWO so it doesn’t really qualify as a normal course of business activity. There isn’t even a single dedicated Persian carpet dealer within a hundred mile radius of here so this is just an out of town accumulator of carpets doing the sales.

I guess my point is that these “bankruptcy” carpet auctions disappeared for about the last decade and now suddenly they reappear in force. No longer a 1 day auction but now a full three days, that’s a hell of a lot of carpets.

Back a decade or so ago the ads often implied “customs seizures” or bankruptsy and that’s IMO just marketing bafflegab.

Again, IMO these things pop up only when the organizer figures there’s sufficient free cash floating around and thus “a sign of the times” indicator of the economic health.

BTW, I couldn’t agree with you more about the risk of buying garbage at these things. The really good carpets have always held their value unless decorating tastes change dramatically and even then the good stuff just doesn’t get offered anywhere in volume.

#125 Ace Goodheart on 01.09.19 at 12:25 pm

#112 Godth:

“i keep reading about 10, 20, 30 yrs. down the road here. the projected population of the planet is 8.6 billion in 2030 – do you really think that’s going to happen?”

Well, if the planetary order on our humble little blue ball is going to break down in 30 years, then I would rather have $45,948.00 in hand to get me through the apocalypse, than $8000.00 worth of worthless weed stocks.

#126 Stan Brooks on 01.09.19 at 12:59 pm

#122 Stan Brooks, A Lifetime of Incompetency on 01.09.19 at 12:07 pm

Before sharing any personal email I would advise you on consulting your lawyer (you must have one as you have a Business, remember), just show him/her the content of your posts here and see what he/she will say.

You are looking at min. 5-7 years jail time for uttering threats.

#127 MikeF on 01.09.19 at 1:08 pm

Long time reader here, I’ve never commented but felt I would add my bit here. Most people I know use whatever investment program their bank offers (e-series, RBC direct, etc…) we don’t have the money to have a firm like Garth’s manage our meager funds nor are we going to take the risk to take on investing based on the advice here. I went off the deep end with my investing and while everyone else was using bank managed funds, real estate, robo-advisors or ETFs; I decided to try and trade individual companies. I had to time to do research and learned a lot of lessons in the process. I certainly would not recommend it for anyone and I would have made more gains following the advice here; but, I can also tell people how I bought Tweed at 3.70 or how I lost money on 3x ETFs (which are really gambling and should not be touched). But I also learned how to read charts, financial statements, understand market catalysts and discipline in terms of price targets (I sold CGC at $11 and have no regrets) and what it truly means to be the ‘greater fool’.

#128 Alistair McLaughlin on 01.09.19 at 1:22 pm

@#2 greyhound, the CDIC has been running those ads for a quarter century. I recall hearing them on the radio in my old beater car when I was a starving student circa mid-1990s.

While I have never been a big fan of government departments advertising themselves under the guise of “informing the public” (and using our money to do it) it hardly qualifies as something to worry about.

#129 Doug in London on 01.09.19 at 1:30 pm

Aggressive growth portfolio or more balanced conservative portfolio? That depends on where equities are at. If you were investing in those days leading up to Christmas when equities were dirt cheap then an aggressive portfolio would make sense. Otherwise go for the more balanced portfolio. If another correction should occur, then cash in some of those boring conservative fixed income investments, which went up slightly, and scoop up some dirt cheap equities. I don’t know why more investors don’t try that strategy, rather than bailing out of equities at the worst possible time.

#130 Time is #1 on 01.09.19 at 1:49 pm

Ryan’s blogpost on Dec 31st re preferred shares sure aged well. Bang on. Hit the bullseye!

#131 Persian Carpets on 01.09.19 at 1:52 pm

There is a lot of junk on the market. The older the better, knots per square inch about 400, prayer rugs are valuable, condition is important, a silk carpet is highly rated, and look for the vegetable dye. The newer carpets use a chemical dye.

#132 IHCTD9 on 01.09.19 at 1:54 pm

#106 David Driven on 01.09.19 at 10:01 am
Garth, the advice you give is sound but, the return on a balanced portfolio will take 40 years to mature, much too long to offer much benefit to anyone except the near dead. What’s the point? 6% return is fine yes but, when consumer inflation is doubling every five years it means your million at 65 is a pack of smokes and a jug of the cheapest wine. If all I’d achieved was 6% I would have never retired on my portfolio, but rather have hoped to be sponging off the taxpayer after a Rip Van Winkle career in the civil service. Only a good stockpicker gets rich in the stock market, anything else is just a sales pitch.
____

I guess what you speak of here might be considered “conventional wisdom”, but with a closer look it’s not so doom and gloom.

For instance, many here speak of inflation making your portfolio worthless a couple decades from now. All I know is compared to our income, just about everything is getting cheaper on the consumer goods front. I cringe at what we paid for our first TV, Sofa, Fridge, Vacuum etc 20+ years ago. Much of it costs less today, for something much better. A bag of chips might be up 25-30% in 25 years, a good used car costs the same (less actually) as in the late 80’s, and today’s car is way better on every front. My truck cost ~43K new 16 years ago, a brand new 2019 equivalent is about ~50G’s.

Also, our portfolio will turn 39 years old when I turn 65, so 40 years is not too long. This also maximizes the return compared to the deposits.

There is really only one area that you have to watch and adjust for increased costs that are out of whack – and that is basically anything where the government has it’s fingers firmly embedded.

Education, electricity, transportation fuels, alcohol, tobacco, heating fuels, taxes and fees of all kinds – you get the picture. You have many ways to side step/offset these taxes, I do all I can – and our CCB statement which shows our after tax household income proves it works. Our income tax return is almost always 5 figures. How you spend your after tax dollars also has a huge effect on how much you turn over to Ottawa for burning.

If you compare my after tax income to my costs of living – you’ll see my cost of living is getting more affordable the more things I do to level the load government laces onto my back.

By the time I retire, my tax load should be pretty small, but my costs of living will probably be lower than at any time in my life since 1997.

#133 NoName on 01.09.19 at 2:02 pm

Of topic as usual…

If world population as per predictors is corect by 2050 this little tiny planet will house 9.5-10Billion breading souls. As an average human breads out 2.3 lbs per day of co2 iam thinking that is lots of co2 in 2050.

But breathing co2 is not what i am concerned, now anyways. It kind of concerning to see all that cement being produced, if i numbers correct for each ton of cement produced anywhere from 250 to 500 kg of co2 is relised.

I did use gargler to look in to cement production, cement per capita and as a good measure i added steel production because more often than not its used wot cement to make concrete. What is interesting 1.8tons of co2 is produced for each ton of steel.

I am sure smater people than me though of impozing tax in canada so it can offset global polution and emissions. For now ill just du my part and kust paying carbon tax, and fast as i can morph in to buldozder dude so i don’t have to change life style.

Some people thay i know already have started this quest but iam sure i can catch up… My goal/resolution for this year is to become astute used merchandise buyer, minus few items here and there.

In order to help our fight against global warming I’ll be sheading few, preferably few hundred pounds just as a good measure, according to science and Phil Edwards, from the London School of Hygiene and Tropical Medicine, fat people are carbon heavy.

https://www.theguardian.com/environment/2009/apr/20/obesity-climate-change

Fartz you got lucky that methane is not taxed, yet…

#134 Time is #1 on 01.09.19 at 2:07 pm

Oops. I meant Dec 21st.

#135 kommykim on 01.09.19 at 2:08 pm

RE:#120 PastThePeak on 01.09.19 at 11:31 am
Not arguing against a balanced portfolio at all, but your example depends on perfectly timing the purchase of additional equity during a downturn.

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

I just used those numbers to keep the math simple. It wouldn’t have to find the exact bottom either. The balanced portfolio would have been rebalanced on a rules based methodology. If it was rebalanced every time the stock portion changed by 10%, it would have out performed the all stock ETF portfolio which lacks any money to buy more stocks.
Sure you can rebalance between sectors or even individual stocks but, during broad market declines like we’ve just seen, this isn’t very effective. The balanced approach allows you to harvest volatility even when the markets go nowhere.

#136 For The Smoker on 01.09.19 at 2:51 pm

https://www.youtube.com/watch?v=1NJayW1kOeM
#84 Smoking Man – Your not a Canadian anymore, and here is a better song with the lead singer from Nova Scotia – a real Canadian unlike you.

#137 Tater on 01.09.19 at 3:00 pm

#126 Stan Brooks on 01.09.19 at 12:59 pm
#122 Stan Brooks, A Lifetime of Incompetency on 01.09.19 at 12:07 pm

Before sharing any personal email I would advise you on consulting your lawyer (you must have one as you have a Business, remember), just show him/her the content of your posts here and see what he/she will say.

You are looking at min. 5-7 years jail time for uttering threats.
————————————————————

I’m not sure you could convince a judge that anyone is a big enough coward to view those post as threats. But may be you are?

And you’re wrong about putting a pension fund solely in a long equity ETF portfolio, but I don’t have time to get into that. Look up asset and liability matching for a start.

#138 LivinLarge on 01.09.19 at 3:30 pm

Persian Carpets, many people are misunderstanding my only point in making the original post. It really had nothing to do with advocating oriental carpets in the least. All I was opining on was that certain hucksters must be thinking that the economy is now robust enough to roll this “distressed sale” hustle again after what seems like a decade.

#139 LivinLarge on 01.09.19 at 3:39 pm

Re: the CDIC advertising and the timing. Right now we are approaching the 60 day cut off period for 2018 RSP contributions and now is when an awful lot of folks just go into their banks panicking to get make the contributions they failed to make throughout the year and far too many of these neophyte “investors” will just default to some fixed income product that the NLATB puts in front of them. So, CDIC reminding people that their fixed income products are protected (up to a limit) isn’t a terrible idea since CDIC exists to protect savers.

#140 Stan Brooks on 01.09.19 at 3:55 pm

#137 Tater on 01.09.19 at 3:00 pm

I gave it/one ETF as an example. You could pick several. CPP is mostly long equities, check their balance sheet.

One has to be very very bold to think he/she can beat the markets as they shape for the next 2 decades.

However you miss the point again, it was not of CPP returns which I doubt will beat major markets, IT IS WHAT YOU GET FROM THOSE RETURNS – a CPI indexed CPP, i.s notning.

As for the other part of your comments I have no argument with you, so keep it for yourself.

#141 AGuyInVancouver on 01.09.19 at 4:29 pm

#114 Mr Wang on 01.09.19 at 11:09 am
Chinese buyers abandon Canuckistan and head south in droves.

https://www.cnbc.com/2019/01/08/chinese-middle-class-buying-up-american-residential-real-estate.html
– – –
Great news, thanks for sharing!

#142 Tater on 01.09.19 at 8:08 pm

Less than 40% is public equities, Stan.

#143 Lang on 01.10.19 at 9:37 am

Garth is right, if you don’t know what candle sticks are , and support and resistance lines, and your “investing” in a stock because you think it will go up a lot and you’ll get a profit is gambling.
Unless he’s really doing his research on the fundamentals of the company and has an idea of where or how the company is going to be doing even then it’s pretty risky, especially if his full-time job is not a stock expert.

#144 Doug in London on 01.10.19 at 2:57 pm

@AGuyInVancouver, post #141:
That’s odd, now that prices have dropped shouldn’t there be MORE Chinese buyers flocking to Canada? As for buying in The States, shouldn’t they have been buying back in 2012 when houses were quite cheaper than now?

#145 John H. on 01.10.19 at 3:03 pm

CPP IB is running feel good TV ads during NFL play offs. They say nothing meaningful. If they really want to spend money , they should enlighten the public about the enhanced CPP. In an election year this seems like free liberal campaigning.

#146 Jacqualine Latsko on 01.12.19 at 12:04 am

No one can ever say this site is boring!