Immediately after Ryan and I told you how to deal with investment fear, along comes something to be afraid of. I mean, how cool is that? Consider this an emotional test. And no cheating.
First, the context.
After soaring for all of 2019, setting new record highs and gaining 15-20% in the course of just seven months, US stock markets laid an egg Monday. Buy-buy-buy! turned into OMG-sell! Classic. Stocks plopped, bonds soared, oil ebbed, gold flowed and risk came flying off the table. When the dust settled, the Dow was down 767 points (2.9%). Scary, but Monday didn’t even come close to being in the Top 20 worst days.
Why did this happen?
Trump.
What next?
More, probably. Trump imposed 10% tariffs on $300 billion of Chinese goods (on top of his last round of tariffs). The crafty Chinese responded by devaluing their currency and wiping out the effect of the taxes. So we can probably expect more from the White House. Not only is the American president catering to the anti-Chinese, anti-globalist, anti-outsourcing sentiment of his political base, but by creating financial chaos he’s pursuing what he really wants – big interest rate cuts. The US central bank is against the wall, forced to consider stimulus to counter the destructive impact of a trade war. A war Trump started. A war he just accelerated. No accident there.
It’s a giant game of presidential chicken. Trump’s gambling he can cause a crisis then pull out a win before the economy hits recession. Given that this is the longest recovery in history, the global economy is slowing and central banks are already turning on the taps, it’s quite the crap shoot. And into the mix is the 2020 American election. Is Trump planning on going into it on a wave of economic growth and market expansion based on deep rate cuts, or will he be a war-time leader mobilizing against the Yellow Peril? How can either of those end well?
What to do?
Just chill for now. Don’t buy. Don’t sell. In a storm you stay put. If you’ve learned anything from this pathetic blog, you have a balanced and globally-diversified portfolio with a track record of quick recovery from market declines. Stocks go down. Bonds go up. Fixed-income assets keep turning out income. Over time, the gale passes. Just look back at the 20% sell-off in 2018, the oil crash in 2015, the debt ceiling crisis of 2011 or the GFC which halved stocks in 2008-9. In every instance investors who reacted to short-term events took a hit. Those who ignored it all, lost nothing. Today those events are curious little jerks on a long-term chart of advance. Like this:
Monday’s 3% clobbering could be followed with more over the next few days or weeks. “We conclude that the stock market is poised for a correction and a valuation reset,” one set of analysts writes. “Based on recent and past history of corrective episodes, we project a S&P 500 downside target of 2598 to 2891, with an average of 2738, or a -9.3% drawdown. From a valuation perspective, this translates into a forward P/E ratio of between 14.7 and 16.4, with an average of 15.5.”
Translation: No recession. A market correction. Maybe Trump backs off. Perhaps the Fed cuts next month. Maybe Beijing blinks. In any case, a 9% or 10% pullback would be what the 20% drop was last year – a chance to trade in those GICs for something more lasting with growth potential. Unless you have a few million bucks or a fat government pension, you need growth. You won’t get it hiding under the hot tub.
But wait. What if it gets worse?
Same advice, if you followed the plan. Otherwise stay tuned for squirrel recipes.
107 comments ↓
Don’t invest in Canada
Bow down and praise Trump Almighty.
He alone is worthy.
Yumm
squirrel meat it tastes like chicken
yabba dabba doo
Canadian Economy WILL CRASH – Historic Inversion Means Recession!
https://www.investmentwatchblog.com/canadian-economy-will-crash-historic-inversion-means-recession/
Fear is just around the corner.
Only if today happens again though.
Otherwise, its apprehension and caution.
Watching Hong Kong as closely as Mr. T’s tweets.
Lots of uncertainty.
I like your advice today Garth.
AND DOWN SHE GOES……
https://www.cnn.com/2019/08/05/investing/dow-stock-market-today/index.html
OMG is RIGHT.
This looks scary, though I know you are trying to keep us calm.
So let’s just say certain member of one of the most powerful countries on earth knows that when he talks the markets move.
Know let’s say that today he and a bunch of his very closest rich friends (who just happen to own an abundance of equities) decided to test this theory…..
IF YOU CAN’T BEAT’EM, JOIN’EM…….
I know what I’m doing
PUT CASH TO WORK
The smart ones who invested in a tangible asset like RE won. The fools who follow this blog with hidden agenda lose. More losses will come. This blog is truly for greater fools.
Every time there is a day on the markets like today I always anticipate Garth’s post. I know what it’s going to say before reading it but I like the reassurance anyway. That being said, I’m eyeing a nice fat squirrel in my backyard right now and thinking of a nice garlic sauce.
Man, sweating my giblets off in So-ON and dealing with the ridiculous taxes and hordes in Niagara only to come back to the hotel and find this… can’t wait to be Alberta bound again…
At least I won’t have to deal with the humidity…
A great entry point coming in good quality equity soon
Between late -August and late October
Hopefully we re-test the lows of dec 2018 but that’s not likely
Just buy sub 25 k Dow
Odds are high the Dow and blue chips have another amazing bull run in 2020-2021
Time to have sold was last week not now
Bond yields sub 1% on 10 years in us and Canada by February at the latest
Love corrections
No notice yet of price increases at all here in Indiana. Because China devalued their currency doesn’t that make the Chinese people foot the bill for the tariffs? Didn’t they do the same on the first tariffs?
Buying opportunities never present themselves in a timely fashion. Retail investors get the heebie jeebies every time when things go south. Human nature I guess?
Emotions are quite potent and need to be conquered if one has what it takes to play with Mr. Market. I call it a game face.
Bring it on! Or hire someone who can.
Is this a good time to buy Yuan?
Garth
This is a not only a Trump issue. Like all Canadians you fell into the Socialist trap pf blaming a guy trying to clean up a dirty deal of 3 decades with China..
But that aside. These problems have little to do with Trump.
South Korea and Japan have cancelled trade preference treaties with each other, Brexit, The collapse of the EU, etc etc etc
There are global problems and now China is in trouble.
Like CNBC said tonight. We better hope that this is currency war and not a currency crisis.
If it is the latter – this Fall will be ugly.
Thus like all traders one stands on the sidelines until clearer skies are seen
No need to stand in front of this freight train.
Investors as Garth says can simply wait it out I guess. I prefer cash at this point.
And stop with the “cash hurts you” foolishness.
Dry powder is what it is
Otherwise stay tuned for squirrel recipes. -GT
Every day this blog is getting better and better hole bunch of of excitement and mucsle emojis, and me jumping to the ceiling from excitement, ok not quite to the ceiling, but I am working on it.
Wondering if cash will be dead.
https://www.cnbc.com/2019/08/05/fed-to-develop-real-time-payments-system-for-launch-in-2023-or-2024.html
Here you go.
This will be when they deploy negative interest rates
Governments wants every transaction taxed.
Governments simply can’t deploy negative interest rates until you have no place to go with your cash.
Pots and pans will be the next barter asset.
Tupperware will be the change
Gold to get you out of concentration camps
Silver to pay your mistress
Bitcoin to get stolen
It’s all good.
Unlike Nasdaq and NYSE, there is no capital gains for TSX this decade.
2008, 2014, 2019: TSX is roughly at the same level.
Dow Jones freaking doubled since 2008, whereas NASDAQ did x3.5 in that time-span.
What’s up with that? Why don’t Canadian companies grow? Heck, inflation-adjusted, they are shrinking! Is our economy doing that poorly?
The Chinese are highly unlikely to back down. That would mean ‘losing face’. Trump’s own ego requires he be seen as winning any confrontation. I predict ongoing market volatility to at least November 2020. Anyone know if there is an ETF trading in tranquilizers?
In July, a blogdog asked whether investing in 3x leveraged ETF SPXL was a path to endless riches based on its returns over the last 9 years.
Some advice was given to be cautious with leverage. Today’s markets drove the point home further: if you had invested in SPXL 2 weeks ago (hopefully not), you would now be -15% with -8.5% of that from today.
Leverage, like dynamite, is best avoided by the average Joe.
so in your world nobody should have exposure to Bitcoin although its the greatest performing asset since its inceptuon? No exposure to gold huh?
Futures pointing to 500 drop on open.
Nothing happened everyone. Just relax and move on. No need to worry! People who are doing well will continue to do well I promise.
“When the dust settled, the Dow was down 767 points (2.9%). Scary, but Monday didn’t even come close to being in the Top 20 worst days.”
Today was the 7th largest point loss for the Dow.
https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average#Largest_percentage_changes
Meaningless when the index is at a record high. The only stat that matters is the % gain/loss. Today was a non-event. – Garth
Not sure what to do. Just do the opposite of smoking man and win.
Ⓓⓞⓦⓝ ⓢⓗⓔ ⓖⓞⓔⓢ.
Feeling bad for the Waltons
#18 expat
This whole financial repression thingy is getting old. It’s a paper world, deal with it. PMs are a long lost medium of exchange.
Why some gravitate towards commodities thinking they have any intrinsic value is a mystery?
While some do, it seems to be more of an advantage holding producers and miners of the underlying asset that generally enjoy more upside.
Funny how that works?
I wonder if the December lows are coming back for a visit?
Garth, how can a single man (Trump) just slap tarrifs on a country of 1.3 Billion people? How does the system allow this?
It is the Chinese government at fault for constantly devaluing their currency. Also, Canada under the liberals always have a weak or weakening dollar policy.
People have short memories that under Chretien, Martin the Canadian dollar reached at time low of 62.5 cents to Canadian dollar back in 2002. Now, Trudeau, Morneau Liberals we got a 68 to 69 cents in 2016 which will fall again if they are reelected and get ready for the Canadian peso at 55 to 60 cents to U.S. dollar.
Interesting that a large number of today’s posters are Trump’s gormless relatives.
#21 Sail Away on 08.05.19 at 6:06 pm
In July, a blogdog asked whether investing in 3x leveraged ETF SPXL was a path to endless riches based on its returns over the last 9 years.
Some advice was given to be cautious with leverage. Today’s markets drove the point home further: if you had invested in SPXL 2 weeks ago (hopefully not), you would now be -15% with -8.5% of that from today.
Leverage, like dynamite, is best avoided by the average Joe.
———————————————-
Maybe so but I’m looking forward to my HGU.TO at the open tomorrow.
Hey Broadway, us train lovers need to know.
Did you get off the tracks in time?
Choo, choo…
M45BC
Not scared. This is not the real panic I expect to see in the markets when they find out most of the luxury real estate properties bought around the world were purchased by poor people who can’t close on the deals. Or the corporate debt bubble that will deflate once global recessions from developing nations start to become more obvious.
Then the world leaders from around the world will have to have intelligent discussions on how to resolve the debt problems the world is facing.
Hopefully, their solutions won’t be to have long-term negative interest rates like the German government bond market or have central banks invest in the stock market like Japan.
At that point, I will start to worry if all of their ideas to resolve the debt crisis sound like a desperate attempt to keep asset values high instead of writing off bad debts.
The eternal global cycle of violence: Trade war, follows trade imbalance. Currency crisis follows currency war.
Proxy war follows counterfeit currency devaluation. Regional wars follow economic blockade. Global war begins when one side of the conflict has nothing more left to lose.
Get ready if interest rates go negative that stock markets will be 50% below current levels. I guess Garth won’t post this because you know.
It will not recover like the last 11 years since 2008. Look at Japan and China’s main stock markets, 30% to 45% lower today from their peaks in years in China’s case or decades in Japan’s case.
I own a squirrel ranch. I use their fur for fashion and their meat for freeze drying for the future. Squirrel, according to Eddy from Christmas Vacation is high in cholesterol. Not so. It is very nutritious and good brane food.
When I heard China devaulated their currency today against Cadet Bonespurs threats I nearly soiled myself laughing. Talk about a bitchslap!
Do I ever wish I had more cash to invest.
I’m neither crazy or stupid. I can look at every chart of every market over the past zillion years and see that there has never been a permanent decline of any of them.
So the dust will settle, I will do what I normally do and when I get more cash I will buy more index ETF’s and stay in balance.
THE BATTLE FOR HONG KONG
Nobody seems to be paying much attention to what could soon be a sea-state change for Hong Kong, its people and the Hang Seng exchange.
News reports say units of the Chinese Army may soon be ready for deployment to put down the nascent “revolution” ongoing on the streets of Hong Kong.
Beijing and the local Hong Kong political leader are losing patience with the street demos and want them stopped. Cries for more democracy are going unanswered except for the possible incoming mailed-fist.
Whither, therefore, the Hang Seng stock market?
It is fabled and famous and necessary, an exchange of great international importance and gravitas in Asia and the world.
If the troops move in what then?
How will that exchange look? Will those who work there continue to do so or try and escape? And go where?
Will other countries’ exchanges move in to grab whatever spoils may be left behind?
Will the Hang Seng, therefore, lose “face”?
If so what comes after that.
Apart from what might happen to the millions of residents, the exchange’s future is pretty important.
Meanwhile the tariff war between the world’s two principal empires, the US and China, continues to rachet up.
Today the US declared the Chinese yuan a “manipulated” currency.
A day or two ago, Trump upped the tariffs ante by 10 per cent.
Where this ends no one knows.
My personal investment “life” now spanning more than the last half century, has “seen” a lot of market moves.
This one is a tad different.
The markets dropped you say? I briefly checked my U.S. trading account, before going back outside to enjoy the fast moving on weather of summer and barely noticed a difference. In other words, another tempest in a tea pot. If a REAL correction comes send me a text and I’ll check my investments later after doing something fun like mountain biking at Boler or flyboarding, jet skiing, or parasailing if I’m off to Grand Bend.
“The smart ones who invested in a tangible asset like RE won. The fools who follow this blog with hidden agenda lose. More losses will come. This blog is truly for greater fools.”
RE is great as long as you like getting paid in turnips…
Re: #13 BobC
I wasn’t defending Trump or his tariffs. It is a serious question because I seriously don’t know. Does anybody? I just remember the big fear of the c$ falling and cauliflower going up in price.
If you read my posts you already knew how the negotiations between China and the USA would proceed. There are no surprises so far.
The way I laid it out is exactly how it is going.
Bottom line is that the people in China have to feel the pain and protest. If the government chooses to shoot some of the protesters it is likely that some citizens may get upset. Hopefully the discontent leads to some action on the part of the government that is unrelated to killing more of their own people and come to the bargaining table.
Either way Trump is telling them that stealing from the West is no longer an option.
This battle is sure to give Trump his second term. No Democrat is able to handle this battle.
We may well be at the most dangerous financial moment since the 2009 Financial Crisis with current developments between the US and China.
Markets are now suggesting the highest risk of recession since 2011. Only slightly less than half over the next year. The collapse in medium and long term interest rates is ominous.
-Lawrence Summers
#35 SimplyPut7
Agree that deleveraging and its consequences is somewhere on the horizon. While I would normally agree that a 2-3% market drop is a non-event – the fact that it was precipitated by Chinese currency devaluation may prove significant. If they’ve run out of patience with Trump, they may have decided that this will either force him to capitulate (giving some token trade-offs so he can claim victory) or that economic turmoil leading up to the 2020 election is worth it to get someone different (more traditional) in the White House. The next few months should be telling.
U.S.A. #1 China 0
Well, I went to work today and put a fair shift in for Queen Elizabeth II.
I would like to think of myself as conscience and hard working.
Bill Morneau probably thinks of me as a tax cheat…
M45BC
“Visualizing America’s Student Debt by State.
Outstanding student loan debt in the U.S. has tripled over the last decade to $1.5 trillion, surpassing auto and credit card debt and only second to housing debt. In an earlier HowMuch article, we provided a state-by-state overview of this increase. Here, we look at current student loan debt burden per capita by state.
84% of adults report that student loans are negatively impacting the amount they are able to save for retirement
A record $1.5 trillion in student loans nationwide carries a wide variance of per capita debt burden across states
The District of Columbia’s student debt capital is higher than any state’s at over twice the national average
Wyoming, Hawaii and West Virginia lead the states with the lowest student loan debt per capita
The data comes from the New York Fed’s Household Debt and Credit report. Our viz plots each state’s per capita debt burden on a map of the U.S., along with the District of Columbia (a clear outlier in the data). A darker shade and larger size indicates a higher debt burden. Student debt balance per capita is calculated as the total amount of outstanding student debt held by citizens in each state, divided by the total number of citizens in each state. To look at how much debt recent graduates alone are holding, check out this HowMuch article.
The Top 5 Student Debt Balances by State (Compared to National Average)
1. District Of Columbia: $13,320 (+147.1%)
2. Georgia: $7,250 (+34.5%)
3. Maryland: $6,740 (+25.0%)
4. Minnesota: $6,280 (+16.5%)
5. Ohio: $6,220 (+15.4%)
The Top 5 Student Debt Balances by State (Compared to National Average)
1. Wyoming: $3,610 (-33.0%)
2. Hawaii: $3,780 (-29.9%)
3. West Virginia: $4,020 (-25.4%)
4. Alaska: $4,030 (-25.2%)
5. New Mexico: $4,070 (-24.5%)
Adults are feeling the effects of this debt pileup in both their personal and professional lives. Many young people have postponed such rites of passage such as getting married and buying a first home until they can tame the tens of thousands in debt they may have — which can take decades to pay off.
High debt has also made it difficult for people to pursue career goals. More than half of people who owe $55,000 or more in student debt say they took a job outside of their field, compared with 29% of those with no debt. These high debt burdens could draw people away from taking on high-risk professional paths like entrepreneurship or low-compensation paths like public service.
Student loans are also causing delays in retirement savings. A recent study from TIAA and the MIT Agelab found that three out of four (73%) adult borrowers report they are putting off maximizing their retirement savings because they want to pay off their student loans first. Among adults not saving for retirement at all, more than one quarter (26%) state to the need to pay off student loan debt as the reason.
Some areas of the country are particularly hard-hit by college debt. At over $13,000, the District of Columbia’s per capita debt exceeds any state, but should not entirely be a surprise — the U.S. Census Bureau has named Washington, D.C. the most educated metro in the U.S.
It’s clear that student loans are impacting young people’s well-being nationwide. Should something be done about it? Leading Democratic presidential candidates such as Elizabeth Warren have proposed student debt cancellation plans. Some critics are wary that these plans would actually support the demographic that needs it, while others question their fairness and practicality.”
5 August 2019
Visualization
https://howmuch.net/articles/americas-student-debt-by-state
https://www.cnn.com/2019/08/05/economy/trade-war-china-yuan/index.html
I wrote conscientious.
iPad thinks I need a conscience…
M45BC
#33 Howard on 08.05.19 at 7:15 pm
#21 Sail Away on 08.05.19 at 6:06 pm
—————————–
Leverage, like dynamite, is best avoided by the average Joe.
———————————————
Maybe so but I’m looking forward to my HGU.TO at the open tomorrow.
——————————-
Fair enough, if you know what you’re doing and are comfortable with it. Just keep that gold-miney talk on the downlow so Garth doesn’t get all worked up.
Has anyone looked at the US yield curve today? The only rate higher than the one month, is the 30 year.
In addition, most economic indicators are pointing down. Large truck orders, auto sales, retail closings, the manufacturing index, auto loan defaults.
This factors point to a recession, yet we are told there won’t be one. Can someone explain why?
Recessions are inevitable. So is your cheering for one. – Garth
How one megalomaniac leader can wreak so much havoc for his own narrow self-interests with one tweet or stroke of the pen is beyond me. How has no one stopped this guy?
Guys, why aren’t Millennials buying houses?
https://imagizer.imageshack.com/v2/1280x1024q90/921/TsY4Co.png
#9 With the raising interest rates shelved for the time being it’s probably time to consider the fact interest rates may never normalize. This may be our new normal. Never trust the government when they say a policy is temporary.
So can we call a bubble a bubble if it never bursts? Or do we just call it inflation?
This is nothing out the ordinary for the equity market. The S&P 500 has been down 2% or worse on a single day 70x this decade.
It’s been down 3% or worse on a single day 19x.
Chill. Nobody knows what will happen in the short term. Stick to the long term plan.
The Balanced and diversified accounts is the way. This helps when going to sea for 4 weeks at a time with poor or no internet. It helps to be able to set it and forget it. I did nothing Q4 2018 and made that up in in Q1 of 2019. I did not change anything or sweat it when Brexit first happened, and all the little corrections in between.
Corrections, adjustments, pull backs, what ever they end up getting called are needed in a healthy market, keeps people honest, tones down irrational exuberance.
You must expect a few drops, Garth showed some time ago this happens a couple of times a year, and only a few end up being a major correction, even then if your balanced and diversified a 20% correction will look much like a 10% correction and take about 1/3 to 1/2 the time to recover. I have seen this with my own accounts over and over.
I’m staying put.
#31 Frank DiMonte on 08.05.19 at 7:11 pm
The C$ is a commodity price driven currency. The government has nothing to do with the exchange rate (beyond basic maintenance of a functioning government). Learn, it’s really useful.
Wall Street and money managers will always tell you to stay invested and never sell. Same here. Who knows if this is just a correction or a beginning of a bear market. Buy and holders will eventually get burned, you can’t time the market, but be prepared that your portfolio may get halved
Yes, an equity-only portfolio can get munched in a bear market. A balanced and globally-diversified portfolio has never been halved. – Garth
That chart above made me think.
Might it be, that our parameters are wrong?
Our fiat money, that we use to measure “worth” of things is as stable as quicksand.
How many “today-dollars” can we buy with one dollar from 1970?
How would a chart like the one above look like, when it would be expressed in “1970-dollars”? Nearly horizontal?
In 1980 a 100 dollars at 10% interest would be nearly 7,000 dollars now.
That sonds really good, doesn’t it?
But even, if we compute just oficial inflation, not the real one, we did not get the 70-fold purchasing power, we stayed just a little bit ahead of inflation.
Economies the world over grew very much, if we look at the numbers in fiat money.
But in reality? Do we have so much more production, extraction and processing?
Or do we have just more I.O.U.s? Like bonds, hedgefunds, gold certificates and credits?
Sometimes i get the feeling, that we all are just sitting around a giant Monopoly-board and play economy.
Don’t know about you, but I live in dollars. Investing gives me more of them. Seems simple. – Garth
#45 Reality is stark on 08.05.19 at 8:43 pm
“stealing from the West is no longer an option.”
The West has lost all self-respect, a blind eye turned at the behest of Global capitalist’s and simply selling our citizen’s prosperity down the river.
China is an old school nation-state; with a long term strategic plan and a long memory of humiliation at the hands of the West.
Engaged in espionage at every level, if we approve Huawei in our critical communications infrastructure we will deserve what we get.
https://www.cbc.ca/news/canada/manitoba/ebola-henipah-china-1.5232674
PORTFOLIO: THREE INDEX FUNDS~US stocks:30%.~FOREIGN STOCKS. 30%.~ US BONDS.40%~ ITOT-A: VWO-A: SCHZ-A:
WHY BLAME TRUMP?
He did not create all the policies that dragged the American people over the hot coals for decades. The tariffs on American goods are one-sided around the globe and created by unionized career politicians who didn’t care about the benefit of Americans as much as they cared about the voting polls. He wasn’t the first president to start building walls across the border, or to take a hard stance on illegal immigration. He is standing up and taking out the incompetence of Washington that has been in place for so long.
So back off of the man who’s going to make the western world great again.
Rest assured the central bankers will pull a few more rabbits out of their hats. They won’t go down without a fight. $20 bet says they’ll call up the PPT (Plunge Protection Team) tomorrow if the market(s) tanks again.
I could careless if the whole damn ship sinks and takes everyone with it…
when there’s blood on the streets…
Don’t know about you, but I live in dollars. Investing gives me more of them. Seems simple. – Garth
—————
Sure, seems simple. As long, as you don’t suffer any big changes in rules.
My family lost their agriculture lands, when after WW1 the fresh founded Poland evicted the Germans.
They lost much in the hyperinflation during the ’20s and the following currency devaluation.
During WW2 most of our rental buildings were bombed out.
After that war another currency devaluation and obligatory “rebuilding mortgages” on the real estate, that was left.
I have been lucky. here in Paraguay, i lost only about half the worth of my ranch and my little hotel from the aftermath of the ’89 coup d’état.
since then i could rebuild some fortune with a small supermarket.
Now, at 67, I got two small and simple apartment buildings, am building my sixth small brickbuilding for renting out. (rent about 1%/month (C$330) of the building costs of C$30,000)
Minimal wage here at C$700, my cost of living about C$3,000/month.
And… zero dept of any kind.
I started some years ago to read your blog, because I had the idea to diversify by investing in Canada.
Now I’m staying for the pics and to observe, when and how your goverment will change the rules.
“Recessions are inevitable. So is your cheering for one. – Garth”
Okay, let’s cheer for a strong economy. Evidence please.
Flop… on 08.05.19 at 7:21 pm
Hey Broadway, us train lovers need to know.
Did you get off the tracks in time?
Choo, choo…
M45BC
_________________
I mentioned I was already out.
So no blood here except missed the last leg up in gold.
Let us pray for the bear again. I love a good sale!
How simple it is.
The prefs add cash to the holdings.
This cash is sitting there waiting for the dips.
Trump is providing the dips but it is you who must act.
He provides these with astonishing regularity and I’ve missed a few dips. Might catch the next one.
It’s a rather elegant way to balance my hobby portfolio.
cheers, R
#20 Linda on 08.05.19 at 6:02 pm
The Chinese are highly unlikely to back down. That would mean ‘losing face’. Trump’s own ego requires he be seen as winning any confrontation. I predict ongoing market volatility to at least November 2020. Anyone know if there is an ETF trading in tranquilizers?
—————-
Agree.
Chinese are a proud people.
Tired of being pushed around by white devils.
#9 Mark
Advices from this blog did a great job for my family. I can’t thank enough to Garth & company for all what they do. And you should show some respect at least to yourself and start avoiding blog you assume to be for “real greater fool”
Btw. What’s a big deal? Volatility is necessary part of investing in stock market. There is always some reason for it. And it always passes. So, simply stay invested and everything’s gonna be ok.
AI was programmed by coders who can spell.
I,m a bad ass.
Dogs can you not see it….
https://youtu.be/MjUqfRrWwcM
Living in California
https://youtu.be/kE32pvvaDT8
Kids the day I met your mother.
40 years later she’s still hot..
https://youtu.be/URwX1oWdnUY
Sounds like a good time for a squirrel recipe!
I like to cook for hunger. That being said, we will need 4 squirrels (preferably shot and killed instantly, with no fear embedded in the meat ;) and an 8 quart pot, in case of guests and other surprises.
Ingredients:
4 fresh de-furred, dressed squirrels.
Salt (go easy on the salt, not good on BP. The true test of any good cook is to not use too much salt to overpower the taste in any case unless, of course, fresh is not on the menu… )
Herbs. (assorted store bought herbs are acceptable but read the labels. Excess salt and added sugar is to be avoided, calorie restrict where one can for long term health) Any kind of Basil fresh or dehydrated, Rosemary, Thyme, pepper etc. and be careful with hot spices!
Too add after 45 minutes to an hour of slow boil.
Onions
Garlic cloves (5 minutes before taking off boil)
Peppers (any color)
Potatoes (if you own majority small caps)
Celery
Chopped Tomatoes
Let simmer until serving over a bed of brown rice, or can be mixed in with your choice of precooked beans or lentils (if invested in large caps and or bonds).
An excellent choice meal for hard times especially if adept at gardening and natural forage and can load your own shells. (quick hunting tip. If you scored on rising coupon values with bonds partially offsetting losses in equities, go buy a nice .225 cal semi auto. They have more powder than a regular .22 and have better accuracy and range as a result, a quick edge in squirrel hunting.) If you live in the prairies, some gophers are quite fat this time of year. If you did not diversify and dwell in the city, one can always try slingshots in the park. At night. With chunks of gravel. In case of emergency, do not break glass. You may want to consider going vegetarian (and fruitarian, there’s that too, when in season, Rome, etc.)
Remember, cooking is an excellent way to decompress from the challenges of the world. It connects us back to nature, reminding us that we do indeed need to nourish off of life itself to survive. It is a reminder of diversification and adapting to survive, getting us back to the humble basics. Like communicating with our spouses or dating again if this cooking too much challenge on its own. Or not when communication itself is challenging. I know I know, when we are fragile, sometimes we just want to be held. Happy cooking and remember, material misfortune is always better on a full stomach!!
My company recently introduced RRSP matching. Put everything in “aggressive allocation” 5% + 2.5% match.
Wondering if I made a mistake given the news on the markets today. I got 25 years to invest though I’d rather go abit risky for the next 15 years or so.
My globally diversified, balanced, and liquid portfolio has shed $4,800 in the last 10 days.
How do ya all like ‘dem apples?
Stay calm Stevey boy…… stay calm!!!!
Do you appraise your house every week? – Garth
Fear of the END!
The sky is falling! The sky is falling!
Well Garth, I am laying here on a deck chair in the North Sea aboard the Viking Sky just quivering in fear.
Life is too damn short to sweat the little things.
I have my health.
I have an adviser to do that. (As you told me to) A balanced portfolio.
What else do I REALLY need. ( Oh, and a great wife.) LOL. Must Never forget that.
Life is good.
I hope for you too.
Al ( out of lotus land for a wile)
(Vancouver Island)
#76 Crazyfox on 08.06.19 at 2:11 am
I know you are in to that green reuse and recicle, here is info on squirrel tails recycling. Play they refund shipping on 50 tails or more.
https://www.mepps.com/squirrel-tail/
“#77 Carlyle on 08.06.19 at 2:34 am”
“My company recently introduced RRSP matching. Put everything in “aggressive allocation” 5% + 2.5% match.
Wondering if I made a mistake given the news on the markets today. I got 25 years to invest though I’d rather go abit risky for the next 15 years or so.”
_______________
If you’re watching the “news” on the markets day to day and having a reaction about it, while investing for 25 years–you need to check yourself.
Do the max you can to get the match (although 7.5% is really low, aim for 15% gross at least into retirement and max out your TFSA contribution as well).
It sounds like you’re in some wacky mutual fund “aggressive” – in Canada we have the horrible misfotune of paying the most in the world for mutual fund fees because we’re stupid sheep. Garth is trying to fix that.
Scan your options for investing. If you can find ones that have equity index in the name (and not just a TSX index, but USA and international), and has fees less than 0.5%, those will be better for you than some 2% all Canada aggressive fund.
Garth has given previous advice on how to weight a portfolio, basically 60% equity (split between Canada, USA, and overseas index funds) and 40% fixed income (mix of bonds, prefs, and REITs). You can usually get close to that with employer funds, and it is better because of the 50% matching your company does.
Somebody blathered: “And stop with the “cash hurts you” foolishness. Dry powder is what it is”
Dry powder that goes DOWN in value every year as inflation eats it’s value.
Sheesh. Economics ain’t that complicated!
I’m offended that you may one day share a squirrel recipe.
“Is Trump planning on going into it on a wave of economic growth and market expansion based on deep rate cuts, or will he be a war-time leader mobilizing against the Yellow Peril? How can either of those end well?
What to do?”
Skip the Spanish and Hebrew lessons and learn Mandarin Chinese. The surviving Americans will need to communicate with their new masters after the war.
Here is how the stock market works:
https://www.youtube.com/watch?v=P7X8aIfqfCA
Can you dig it, dogs?
Yah.
#71 Ponzius Pilatus on 08.06.19 at 12:52 am
#20 Linda on 08.05.19 at 6:02 pm
The Chinese are highly unlikely to back down. That would mean ‘losing face’. Trump’s own ego requires he be seen as winning any confrontation. I predict ongoing market volatility to at least November 2020. Anyone know if there is an ETF trading in tranquilizers?
—————-
Agree.
Chinese are a proud people.
Tired of being pushed around by white devils.
*****************************
And the West is tired of China abusing the rules. They’ve been in the WTO since 2001 and they have yet to play by the rules, time to pay the piper. China is not innocent in this mess, far from it. The West is angry, China is angry, this won’t end well.
Me worry about a dip in the markets? Are you serious? Here’s a hot tip, ENB is on sale now. If you buy some at today’s price of $43 and change you’ll get a generous yield of 6.67%. Is there a future for oil and gas transported by pipelines? I don’t know. I’ll think about it as I take a shower with water heated by a GAS WATER HEATER, followed by going out later today in a GASOLINE FUELED CAR.
#83 SmarterSquirrel – My squirrel sanctuary with many nests established among the backyard trees had dozens to feed three times a day. Needed to buy 50 lb. bags at the farmers co-op. They feasted on shelled peanuts, sunflower stripped seeds, and water placed in a birdbath container. Cost me a fortune.
TREB gingerly tiptoes around the fact average detached home price in the 416 is down 9% yoy. Benchmark franken number has detached 416 +2% yoy.
http://www.trebhome.com/files/market-stats/market-watch/mw1907.pdf
Detached home now less than 2x the price of an average condo. How much more can the two trendlines converge?
Unfortunately I was unable to panic about the drop on Monday as I was at a barbecue and didn’t check my phone.
This opinion piece below suggests Trump’s attempt to gain influence over the Fed – which would be bad news for the market. Your thoughts on this scenario, Garth?
He’s ousted so many dudes who didn’t bend to his will, in true dictatorial fashion. What’s to say he won’t do the same to Powell? The market will no longer be objective (or less so than it is now, anyways). I’m guessing in the short-term, it will be tolerable, but long-term if he stays and exerts influence, or if he loses 2020 election and abandons ship, then what…both scenarios seem not so good. I’m hoping Powell stays strong.
https://www.marketwatch.com/story/trumps-war-on-the-fed-could-shatter-the-stock-market-2019-08-06?mod=mw_theo_homepage
Also, the market line graphs over the last 2 years are starting to resemble Trump’s jagged signature…volatility embodied.
#49 Flop… High debt has also made it difficult for people to pursue career goals. More than half of people who owe $55,000 or more in student debt say they took a job outside of their field, compared with 29% of those with no debt. These high debt burdens could draw people away from taking on high-risk professional paths like entrepreneurship or low-compensation paths like public service.
___________
This, although it can also be applied for debt in general across the board as well too. A great many of us would love to be able to start our own businesses; the only challenge being a combination of lack of capital and need for a current income to pay those debts while we get a business off the ground. In this day and age, current income and consistent cash flow is the golden rule (which, like our host says, you can’t rent).
Went to Greece for a few days, with friends – 1 family from GTA, 1 family that happily left GTA 3 years ago.
Had a good laugh at condo prices – apparently a glass condo in downtown ‘going’ for 1200/cad pesos per square feet.
The most stressed out – the family from GTA who has their house paid in full and has 1 rental property, no retirement in sight, folks.
Repeat with me: no retirement.
Rents and food prices skyrocketing, a lot of new-coming idiots willing to pay 30 years of wages for a crappy shack or glass condo and start (the whole 6-7 k monthly net carrying cost of it + maintenance and property taxes).
Looking from outside of the mental institution:
Life is good folks. Life is great.
I am voting T2. Call it shadenfreunde.
Cheers.
Capt. Serious, if this is the case then why is it that wen the Liberals are in power we have a weakening and weaker Canadian dollar versus U.S.
It is because they believe and implement a weaker Canadian dollar versus the U.S. Check your historical charts and see who is in power, it it not a coincidence.
#41 VICTORIA TEA PARTY on 08.05.19 at 8:10 pm
THE BATTLE FOR HONG KONG
Nobody seems to be paying much attention to what could soon be a sea-state change for Hong Kong, its people and the Hang Seng exchange.
News reports say units of the Chinese Army may soon be ready for deployment to put down the nascent “revolution” ongoing on the streets of Hong Kong.
Beijing and the local Hong Kong political leader are losing patience with the street demos and want them stopped. Cries for more democracy are going unanswered except for the possible incoming mailed-fist.
Whither, therefore, the Hang Seng stock market?
It is fabled and famous and necessary, an exchange of great international importance and gravitas in Asia and the world.
If the troops move in what then?
How will that exchange look? Will those who work there continue to do so or try and escape? And go where?
Will other countries’ exchanges move in to grab whatever spoils may be left behind?
Will the Hang Seng, therefore, lose “face”?
If so what comes after that.
Apart from what might happen to the millions of residents, the exchange’s future is pretty important.
Meanwhile the tariff war between the world’s two principal empires, the US and China, continues to rachet up.
Today the US declared the Chinese yuan a “manipulated” currency.
A day or two ago, Trump upped the tariffs ante by 10 per cent.
Where this ends no one knows.
My personal investment “life” now spanning more than the last half century, has “seen” a lot of market moves.
This one is a tad different.
_______________________________________
After spending the fantastic weekend up on the Lake I come back to two more mass shootings in the USA, who would have guessed? Trump could make America Great Again by stopping these gun crazed idiots in the USA with Automatic weapons. Now that I could respect him for, but alas the Republican party has no guts and is owned by the gun lobby and Herr Trump. Talk, talk, talk, sorry, sorry, sorry for your loss, blah, blah, blah. If they could actually do something meaningful to stop this blight on America people in the world could respect the country again. This whole mess is truly a sad statement on American society. :(
I just got into a discussion here with one of my workers who also loves this block about the Yuan. He believes that the Chinese are going to cave completely to Herr Trump. While I think otherwise. The Yuan is and has been manipulated for many years by the Chinese. No surprise there and the USA just discovered this? BTW its not at the 7.1 but it will creep up over time. The Chinese didn’t get where they are now by following rules and the Orange Man is merely a flea on their dogs a$$ to them. One scratch and hes gone.
Interesting read and it makes sense if you have ever liver in the USA in different regions.
https://fivethirtyeight.com/features/political-confessional-the-man-who-thinks-the-u-s-is-better-off-as-a-bunch-of-separate-countries/?utm_source=pocket-newtab
So much talk about squirrel recipes lately but lets get real here…all you really need is Shake and Bake.
No surprise there – i just moved all my investments from cash to a balanced etf portfolio last week. I was worried this was coming but the advice from this blog is ‘don’t try to time the markets’. I can’t win.
A one-day drop so far. Get a grip. – Garth
#83 SmarterSquirrel on 08.06.19 at 7:47 am
I’m offended that you may one day share a squirrel recipe.
—
Are you ofended with crazyfoxy presumably lady, step bye step instructions, that in detiel explains what precision high pressure instruments to use to get the squrel, to actually very decent recipe, only thing different that I would do is that I would fry meat first than I would boil.
And that 225 forget about to big it it’s a just a squirl not coyote!
Few weeks ago I am taking to dude at work and he asked me how about spring turkey hunting, I sad nah birds are to smart for me, plus ticks…
Than he sad, you know what I gave up on a beer and coffee to save up for t1x in 17hmr, and he he went on how he is impressed with performance and went on to tell me how it’s much better for hunting squirrels than 22.
So i aksed him do you know why, he sad not wrely, I sad because of science, one (17hmr) is 1/2 of weight other but travels almost faster and deliver 60-70% more of the speed and 25-30% more of the energy.
I can’t wait to see him discovering 17 wsm.
You know crazy I like you how long you are not spreading panic. Education not indoctrination and squirel.stew and maybe some roasted grasshoppers, here and thaere is only way of savin a plannet.
Those nokia people are already doing it. My wife tells me every one in a while how good roasted crickets are. You should just see her plucking a chicken…
I just rebalanced and bought stocks. I think today is the low and the markets rebound from here in August. Let’s see if I got this right. For Garth & crew.
#1 Randy,
It would be crazy to think that Canada and the USA will always be great places to invest. If AOC and her bunch gain enough power expect the markets to respond negatively. Might be no more 6 years off. I don’t believe in the motto: Never bet against America. Diversify as much as possible (real estate, gold, cash, stocks, bonds, onshore/offshore, real marketable skills, and even storing necessities).
#95 James on 08.06.19 at 12:55 pm
______________________________________
After spending the fantastic weekend up on the Lake I come back to two more mass shootings in the USA, who would have guessed? Trump could make America Great Again by stopping these gun crazed idiots in the USA with Automatic weapons. Now that I could respect him for, but alas the Republican party has no guts and is owned by the gun lobby and Herr Trump. Talk, talk, talk, sorry, sorry, sorry for your loss, blah, blah, blah. If they could actually do something meaningful to stop this blight on America people in the world could respect the country again. This whole mess is truly a sad statement on American society. :(
———————————————–
Take it easy with the finger-pointing James. When crazies don’t have guns, they use cars, fire, bombs, or anything else that inflicts mass casualties. This isn’t to be blamed on a country’s leadership.
#92 Drew on 08.06.19 at 12:02 pm
A great many of us would love to be able to start our own businesses; the only challenge being a combination of lack of capital and need for a current income to pay those debts while we get a business off the ground. In this day and age, current income and consistent cash flow is the golden rule (which, like our host says, you can’t rent).
———————————————
Really? You have to use your own money and take risk to start a business?
Not everybody knows this, apparently.
According to the ‘tax the companies’ bloggers a few weeks ago, companies unfairly game the system to their owners’ great benefit. Who knew it wasn’t all sunshine and roses…
I think the markets will go higher too.
But let us look at the situation we are in right with extreme records, floods, melting icebergs, etc. We have come together, sort of, in that climate change is real. This acceptance took while and finally acknowledged.
Now is the time to use our knowledge and apply common sense to “to fit the bill”, to correct. We also know that when we don’t respect earth, it gets angry with physical consequences. A balance, common sense.
We have learnt overtime to pulled back, remove, divert, reused, recycle to improve our errors, mismanagement.
Different times and time to upgrade our respect. No more sugar-coating, no more beating around the bush, and no more cognitive bias.
I think Trump is both American First, mostly, with American Only. He understands business and the taxpaying working class.
Do we know enough about earth’s makeup to keep on disrupting? We know what we can see, experience, on a smaller scale but can we vision it on a bigger scale?
Sweden suggested we plant a million or trillion trees. I say go for it but make sure to plant them in strategic areas and mark them so they do not get cut down ever.
And of course, keep a record.
#102 Sail away on 08.06.19 at 3:12 pm
#95 James on 08.06.19 at 12:55 pm
______________________________________
After spending the fantastic weekend up on the Lake I come back to two more mass shootings in the USA, who would have guessed? Trump could make America Great Again by stopping these gun crazed idiots in the USA with Automatic weapons. Now that I could respect him for, but alas the Republican party has no guts and is owned by the gun lobby and Herr Trump. Talk, talk, talk, sorry, sorry, sorry for your loss, blah, blah, blah. If they could actually do something meaningful to stop this blight on America people in the world could respect the country again. This whole mess is truly a sad statement on American society. :(
———————————————–
Take it easy with the finger-pointing James. When crazies don’t have guns, they use cars, fire, bombs, or anything else that inflicts mass casualties. This isn’t to be blamed on a country’s leadership.
____________________________________________
I didn’t blame the leadership or lack of therefor. I merely established the facts that the Senate and House are bought and owned by the gun lobbyist groups and the NRA. If they really wanted to make a change on this matter they could stand up and make a real difference. Automatic and modified weapons have no place in the civilian world. The ease of access to guns in the USA is astounding and there is no way to prevent interstate transportation of such weapons. Yes the crazies can easily acquire weapons and if they cannot then they will use whatever weapon of choice is easily available. You have no idea of the gun culture in the United States until you have lived there. Some whack jobs spend enormous amounts of money to also modify standard semi-automatic weapons to fully automatic increasing the firing rate significantly. Anyway leadership starts at the top and real leaders are leaders not pawns. So if you don’t stand up as a leader then move aside.
https://www.cheatsheet.com/culture/states-loosest-gun-laws.html/
https://www.huffpost.com/entry/the-easiest-states-to-buy-a-gun_n_5735cfa8e4b08f96c182dc38
“There are two times in a man’s life when he should not speculate:
1. when he cannot afford it, and
2. when he can”
– Mark Twain
– – – – – – –
Now we need to define ‘speculate’ better. To me, it’s when the odds of losing are equal (or greater) than the odds of winning.
Being ‘long’ the US markets these days, according to the above definition, is speculating. And this is why I am short that market.
tcc
silly question. If things are going to stabilize and go back up isn’t now a good time to buy, if not why?