Faith

– Andy Seliverstoff photo

Trump assassinates a senior official from another country on foreign soil. That nation vows revenges and attacks a US base with rockets. Concurrently a deal to eliminate new nukes falls apart. Meanwhile Trump’s impeachment trial approaches. Worried people buy gold, bonds and bitcoin. The world braces.

And Mr. Market? He goes up.

As dawn broke Wednesday morning the CBC Morning business dude was warning the nation of a ‘sea of red’ in futures markets, a scary ‘surge ‘ in oil prices and a ‘market meltdown’ coming after Iran fired a dozen missiles at American interests. He fibbed, of course. Let’s be kind. Maybe just incompetence. Another statement on the quality of news that we’re fed these days.

In any case, the futures were barley pink, before turning green. Oil had dropped (not increased) overnight and all that had spiked was hyperbole. Despite Iran, Kim, Brexit, Trump, Putin, Australia, Erdogan, Hong Kong and that funny guy running Ukraine, the reality is this: the Dow flirts with its all-time high and has gained 5,500 points, or 24%, in the last 52 weeks. Bay Street, too, has followed Wall Street. A boring, pedestrian, painfully uneventful balanced/diversified portfolio added 15% last year.  The small dip (3%) in 2018 looks utterly inconsequential beside the 8.5% return in 2017, the 10.8% growth in 2017 and last year’s 15.2%.

Despite that, the long faces continue. Too much CBC? An irrational fear of risk? Lack of faith in the future?

A new Bloomberg/Nanos poll tells it all: 55% of Canadians think a recession is likely this year. Only a third don’t. The rest are still looking for their keys. And this doomerism is not restricted to sad people who get their news from idiots. There are investment advisors who have kept their clients in cash or near-cash assets for most of the past four years (while collecting fees), in ‘super cautious mode’ because, ‘because things are just too expensive’.

Well, guess what? Things are worth a lot more than a year ago. We’re all a year older. Balanced portfolios are up 30-40% over the past 48 months. Fear has been a failed strategy. And now that Trump confirmed the obvious – Iran is a chicken and he’s got a way out – the rally continues.

But wait. What if 2020’s the year it all comes unglued? Are recession fears valid? Have markets, Icarus-like, flown too high? Is the potential of a downturn, even temporary, enough reason to stay huddled in cash?

If you want to, sure. But be prepared for substandard results. Again. Trump isn’t going to war ten months before a presidential election. He never intended it. Iran aimed its missiles at a parking lot. Intentionally. Figure it out. The market has. This is noise.

The first thing to realize is why Mr. Market is feeling so frisky. It’s a presidential election year, and that has almost always brought expansion and higher stock values. Second, inflation is low and economic growth is reasonable. Third, corporate profits have exceeded expectations and are on track for growth of maybe 5%. Just fine. Unemployment in the US is at a 50-year low. Consumer confidence and spending there are robust. Real estate is on a roll, but not in a bubble. The China trade deal is just days away. The central bank has dropped rates, adding stimulus, three times. And now if the White House and Tehran can stop being bellicose and pissy, Middle-East stability is closer. Meanwhile higher – but not extreme – oil prices help Canada without whacking consumers. And investors think the pro-growth, lower-tax, less-reg American president will be re-elected.

Oh yeah, I know – we’re pickled in debt. The Trump deficit will hit a trillion. The world is full of tribal tensions, whackjob leaders, dangerous populism, swine flu, wealth inequality, commies and incinerated koalas. There’s plenty to fret over.

But markets go up because corporations make money, economies expand and wealth’s created.  We’re in a long, long expansionary phase which coordinated central bank policies, technological advance and global trade have helped create. It’s not over yet. In the absence of a giant disaster or a completely unexpected shock, it will continue. Investors should have learned something from the 20% correction last December, instead of spending the year quivering. Trying to time this market, or this economy, has led to nothing but lost opportunity.

So here we’ve had another lesson. Trump. Soleimani. Iran. Drones. Rockets. ISIS. The Supreme Leader and the Tweetstorm guy.

Are markets valued highly? Yup. They are. As such they reflect not only current economic conditions, but what investors expect will happen. That makes corrections likely when sentiment changes. But this is exactly why smart people (a) invest for decades, not months or even years and (b) they have balanced and diversified portfolios. A 60/40 mix gives you decent growth and down side protection. For example, in 2018 the TSX shed 12% and the BD portfolio was off just 3%. Last year Bay Street made 18% and the BD gave 15%. It’s a strategy that protects against declines yet reaps advances.

Conservative yet aggressive. Works with anything.

 

80 comments ↓

#1 NotLegalAdvice on 01.08.20 at 3:37 pm

I posted this in yesterday’s blog comments and would love to know everyone’s thoughts on it.

Hey,

You ever google the “typical bubble phase chart”? We are definitely in the “Return to Normal” phase. Whether the next phase occurs in 2020 or 2021 or 2022 is irrelevant. The fact is….the FEAR phase is coming. HANG ON!

#2 JacqueShellacque on 01.08.20 at 4:01 pm

2 wins for Trump against Iran, after Obama all but surrendered to them. First he takes out one of their top organizers and strategists, then watches them publicly pants themselves by launching rockets at bases after sending a warning they were coming.

I have a feeling history will be rather more kind to the Orange One than to his 3 predecessors (arguably the worst US presidents ever to be re-elected, each worse than the last). He may not be to everyone’s taste, but that’s what you get when the last quarter century delivers you the worst run of presidents since before the Civil War.

But Garth is right…it was always move along people, nothing to see here.

#3 David Pylyp on 01.08.20 at 4:33 pm

Happy New Year Garth!

Best to you and the family for 2020!

David Pylyp
Toronto

#4 Alessio on 01.08.20 at 4:36 pm

So long as Mr Fed continues to pump trillions of printed money into the system Mr Market will continue to go up. Everything else is just noise – for now.

#5 MF on 01.08.20 at 4:49 pm

Gonna agree fully with Garth’s analysis.

Laughable hearing people talking about a wider conflict.

Between who? There’s only one super power, and it will stay like that for a long long time.

MF

#6 FreeBird on 01.08.20 at 4:51 pm

The truth about lying.

https://youtu.be/5ShqDvP02ZQ

#7 Re., Alessio on 01.08.20 at 5:04 pm

Spot on . It’s the Fed that drives the buss. Saved the day last Jan as this poor US economy couldnt handle a rate hikes .

Lol

#8 TSX? on 01.08.20 at 5:16 pm

People invest in this index ?

Why? Over the last decade it’s earned just over 4% or year dividends in. I truly don’t know why people out their hard earned in this index .

Seriously, do people believe in will outperform the spy?

#9 Figmund Sreud on 01.08.20 at 5:29 pm

In any case, the futures were barley pink, before turning green.
_________________________

Surprised? I’m not! After all, Esper and Trump spoke most reassuringly today! Yes, indeed:

Mr. Esper carefully reiterated that the U.S. does not want war with Iran! That the U.S. does not want to leave Iraq, because, … well, many/most Iraqis want the U.S. to stay put to protect them from evil. All not a fake statements, …

And Mr. Trump? Mr. Trump reiterated that the U.S. armed forces are the best in the history of this galaxy, … that he will never allow Iran to have nukes, … and besides, Iran just demonstrated to be a proverbial chicken, …

… here is one pics depicting the damage they just caused:

https://pbs.twimg.com/media/ENxVG-ZWkAEjvws?format=jpg

Anyway, he further expanded that, … to be really, really helpful to him, – and Iran, too, the Europeans need to abandon the Joint Comprehensive Plan of Action, … plus, needs to get further involved in the affairs of the Middle-East – through NATO. Yes!

… and did I also mention that Mr. Trump also mentioned that the U.S. military forces are the very best in the history of our galaxy? [ … mind you, from today’s pressers what was significantly missing was a bunch of promotional foam-rubber finger/gloves! Pity, … ]

This is far from over!

Best,

F.S. – Calgary, Alberta.

Futures were published before the Trump statement, not after. – Garth

#10 Paul on 01.08.20 at 5:34 pm

Iranian rocket may have hit a parking lot.But something hit the plane and took 63 Canadians to their maker,

#11 Tyberius on 01.08.20 at 5:39 pm

Most of it is fake news, ok.

Now, to a financial (tax strategy) question:

As stated here, if we’re to assume the inclusion rate on Capital Gains to go from the current 50% to 70%, is it advisable to wait until after budget day before selling losers (stocks that have little or no hope of recovering)?
My thinking is that I’d capture 70% of the ‘losses’, to be carried forward and offset future gains.

Concurrently, I also have some healthy ‘winners’ – so, should I sell these to crystallize the gains at the 50% inclusion threshhold (and buy them back if desired).

Anyone been thinking of this? Garth?

#12 Tyberius on 01.08.20 at 5:42 pm

Re: selling the winners:

To clarify my question above, I meant to say ‘sell winners BEFORE budget day’, while the inclusion rate is still 50%

#13 Dog Breath on 01.08.20 at 5:52 pm

I hate to throw a wet blanket on all this market euphoria, but am I the only one who is slightly concerned about the fact that the FED has seen the need to pump 500 Billion (that’s with a B) dollars into the Repo market since September 2019? We’re told everything is fine, nothing to see here. But what’s going on?

#14 conan on 01.08.20 at 5:58 pm

Iran aimed its missiles at a parking lot. Intentionally. Figure it out. -Garth

Trump just lost the mission/war in Iraq. 3 trillion dollars down the drain. 100 % they are going to be asked to leave.

That missile attack from Iran? That was just showing capability, as there was no reason anymore, to hurt or kill anyone.

Trump 0 Iran 1

He puts the B in Bozo

#15 Double Decker Nothing Burger with extra cheese on 01.08.20 at 6:05 pm

Iran is a chicken and he’s got a way out – the rally continues.
———————————————
Garth they are attacking his precious embassy again !

#16 SharkTank on 01.08.20 at 6:12 pm

“Conservative yet aggressive. Works with anything.”

If only young master Scheer had listened to this sage.

#17 Deplorable Dude on 01.08.20 at 6:19 pm

Iran is refusing to hand over the flight recorders of the downed plane.

Nothing sketchy there then.

#14 Conan “100 % they are going to be asked to leave.”

That’s kinda the point.

Big win for Trump, who campaigned on ending wars and bringing troops home.

He’s got a route to withdraw now.

The Dems (and Rep’s) despite all the noise about restraint want war…..huge money maker for the swamp.

#18 crazyfox on 01.08.20 at 6:33 pm

#5 MF on 01.08.20 at 4:49 pm

Between who? China of course.

The U.S. has been able to bully other nations at will because it sports 11 air craft carriers with fighters and bombers that are the best in the world. This gives the U.S. the ability to conduct warfare throughout most regions of the world. The problem is, they are floating ducks:

https://www.reuters.com/article/us-china-army-rockets-specialreport-idUSKCN1S11DH

If the U.S. loses it’s aircraft capability, it loses it’s international influence to fix prices on oil, or secure it for domestic consumption. If this article is true (reuters carried it, it may well be), then the true game of chicken has just begun.

Conventional wisdom has dictated that the geographical location of China has been to U.S. advantage with u.S. presence in the Persian gulf. The physical barriers of bordering nations between China and Iran, the Himalayan Mountains and sheer distance would be enough to discourage missile strikes on U.S. air craft carriers and in the past, that was likely the case. That may have all changed. Just ask yourself, why did Trump break this nuclear arms treaty? (losing the advantage on missile tech)

https://www.theguardian.com/world/2018/oct/20/trump-us-nuclear-arms-treaty-russia

But hey, Trump says all is well so we should believe him right? Have faith. Trust. Its only the middle east where rockets go off every few days, what could go wrong.

https://canoe.com/news/world/rockets-fired-at-iraqi-airbase-hosting-american-forces-u-s-official

#19 PetertheSeparatistfromCalgary on 01.08.20 at 6:36 pm

Does anyone really believe this airplane crashed in Iran due to mechanical problems?

The fact that the airplane crashed at a time when many in the Iranian military were anxious about US retaliation coming from an airplane is just a coincidence.

#20 PYF on 01.08.20 at 6:43 pm

It looks that there was a that ”whatever it takes” moment at the Fed : https://www.reuters.com/article/us-usa-fed-bernanke/bernanke-fed-has-ample-clout-to-fight-downturn-if-toolkit-used-properly-idUSKBN1Z400J

#21 Flint on 01.08.20 at 6:53 pm

The markets go up because the fed balance sheet goes up. That’s all 2019 has been. Can they do it forever? Who knows how it ends

#22 Welcome to Slurrey on 01.08.20 at 7:12 pm

Since feb of 2017 , my balanced porrfolio has given me a 4% annulaized return ( post fees ) ………… slow clap

Then you have it wrong. – Garth

#23 Bob Dog on 01.08.20 at 7:14 pm

A friend was in tears today because his co-worker and his co-workers wife were blown out of the sky by a missile. Is that something to worry about?

Have you considered the possibility that mr market is actually a computer algorithm that has no concept of fear, pain, pity or remorse. Take human emotion out of the loop and the market will go up regardless of what’s happening in the real world.

#24 conan on 01.08.20 at 7:16 pm

That’s kinda the point.- Deplorable Dude

Yes, but he lost a strategic foot hold.

Also, I don’t think he would have won the Presidency by saying, he would do this, by making Iran a super power in the region.

The only way forward is peace with Iran. Israel sent a lot of dollars Trump’s way, so they might not like that.

For now, I am solidly in the Trump screwed up camp. If he some how blunders his way into a fantastic world peace initiative, then I will switch sides.

#25 AK on 01.08.20 at 7:18 pm

“As dawn broke Wednesday morning the CBC Morning business dude was warning the nation of a ‘sea of red’ in futures markets, a scary ‘surge ‘ in oil prices and a ‘market meltdown’ coming after Iran fired a dozen missiles at American interests. He fibbed, of course.”
====================================

CBC is doing a great job in imitating CNN. They are a disgrace.

#26 Figmund Sreud on 01.08.20 at 7:20 pm

#9 Futures were published before the Trump statement, not after. – Garth
________________________

Well, very true that, … Trump and his entourage, right after learnings about hits last night, simply went to bed – unalarmed – and in most casual style deferred any pressers to mid-next day.

That was most telling, … at least to moi, and today’s pressers just became confirmations – and that’s what I meant.

Please forgive me for not being a bit more precise with my thoughts as expressed. Shirt happens at times, … and I’m sorry.

Best,

F.S.

#27 AK on 01.08.20 at 7:21 pm

“Trump’s impeachment trial approaches.”
========== ===========================
What are the Democrats waiting for.?
I am looking forward to the trial. It’s going to be a complete Circus act. Just like their articles of impeachment. LMAO.

#28 noe on 01.08.20 at 7:22 pm

DELETED

#29 AK on 01.08.20 at 7:25 pm

“Well, guess what? Things are worth a lot more than a year ago.”
=====================================
And it will be higher at the end of 2020 as well.

We are in a secular Bull Market that has quite a few years to run.

#30 Sam on 01.08.20 at 7:28 pm

The point is , the unless you can trade the market, just stay invested . Most don’t have emotional to trade – not an iq issue

#31 Yukon Elvis on 01.08.20 at 7:31 pm

#15 Double Decker Nothing Burger with extra cheese on 01.08.20 at 6:05 pm
Iran is a chicken and he’s got a way out – the rally continues.
———————————————
Garth they are attacking his precious embassy again !
………………………..

Business as usual. Iranian aggression by proxy. When they go too far again Trump will blow away the Quds leadership again.

#32 acdel on 01.08.20 at 7:32 pm

#105 JB

#122 Sail away on 01.07.20 at 7:48 pm

#121 acdel on 01.07.20 at 6:46 pm

Holy crap; at least Smoking Man made sense. These comments on this blog will make Smoking Man start smoking again.

—————————-

He’ll only stop when he’s dead. Which could come fast when you drink yourself senseless and hotbox cigarettes all day every day.

You still alive Smokey?
_____________________________________________
RIP Smoking Man AKA Tinfoil hat man!
https://www.youtube.com/watch?v=1OkStZhbZ20
—————————————————

He’s been abducted! He should have watched this first before moving to California!

https://www.youtube.com/watch?v=3Gf6fueM37Q

#33 Armpit on 01.08.20 at 7:45 pm

“Dow flirts with its all-time high and has gained 5,500 points, or 24%, in the last 52 weeks. Bay Street, too, has followed Wall Street. A boring, pedestrian, painfully uneventful balanced/diversified portfolio added 15% last year. The small dip (3%) in 2018 looks utterly inconsequential beside the 8.5% return in 2017, the 10.8% growth in 2017 and last year’s 15.2%.”

Sounds like the market is experiencing “inflation”. Something Remarkable is going to happen as this is not the new “normal”.

#34 Treasure Island CEO - 81,239,434.88 Offshore on 01.08.20 at 7:46 pm

People might want to pay attention to the polls stating how Canadians think a recession is coming. If people feel broke, think about it. Consumption is going to tank at some point. Self fulfilling prophecy Delinquencies are rising.

I will buy back in the next dip. 6 months? Totally worth the wait. Never going back down? I guess I will be sidelined forever. Future without recessions? Good luck.

#35 Nonplused on 01.08.20 at 7:53 pm

I don’t think this Soleimani thing is over. Iran usually retaliates for assassinations of its scientists and leaders with some sort of terrorist attack, sometimes months later and often against unexpected targets.

I think this assassination crosses some sort of a red line. Just because Obama put the guy on the terrorist list doesn’t mean it’s a good idea to take him out. They knew where he was and what he was up to most of the time. They could have waited until he was in the field and claim it was a military strike. Ambushing him while he was on a diplomatic mission doesn’t seem to have been a good idea.

I worry that it sets a very bad president. After all if the US can assassinate anyone they want just by putting them on a list, what’s to stop other countries from doing so? Well, they probably already do, I’ve seen James Bond movies before, but usually countries don’t do it so openly and publicly. But now they can.

So although not much has changed on the ground, Iran has been lobbing missiles at US bases using proxies since 2003 and was probably already planning to continue to do so, 2 things have change; they are now lobbing larger missiles from within Iran itself and they now have licence to target American officials if they have an opportunity. Although it might be argued they were already doing that, just without much success.

The airplane crash seems just to coincidental, given Khamenei’s “290” reference (the US “accidentally” shot down an Iranian airliner in 1988, killing all 290 on board). Although it seems like a pretty dumb thing to do to shoot down this jet given that most of the passengers were Iranian. Perhaps it was an error given the heightened tensions in the area. It was not a MAX so technical problems seem unlikely as an explanation. But I bet we will never know.

#36 Ustabe on 01.08.20 at 7:54 pm

First you gather together a real bakery loaf of un-sliced white bread.
Now you need a waffle iron, a George Foreman grill or your gas BBQ outside. I prefer the waffle iron.

now lay out all the fixins for a great sandwich. Onion slices, dill pickle, cheeses, tapenade, mustards, spiced mayo…whatever floats.

A couple of cans of whatever is brewed locally.

Slice an inch thick slab of true bung bologna (you might have to hit up a real butcher shop for this.)

Assemble the cold parts on thick slices of that bakery white and run the bologna through the waffle iron, place it sizzling hot onto the cheese and slap both sides together, crack the second beer and enjoy.

Way better time spent than reading the foreign policy experts making themselves freely available here tonight.

I miss the housing/investment blog I first came here for…

#37 Barb on 01.08.20 at 7:56 pm

Switched from CBC news to BBC Canada (TV) a year ago.

Non-lefty news is frankly refreshing.

#38 Barb on 01.08.20 at 8:10 pm

“(a) invest for decades, …”

Wal Mart stock 1999 ~$43.00, today $116.00.
Proof that decades is the answer.

#39 Steven Rowlandson on 01.08.20 at 8:33 pm

Let the politicians without sin start the next war and or borrow money.

#40 Deplorable Dude on 01.08.20 at 8:34 pm

#27 AK “What are they waiting for”

This….. (outcome on 2 supreme court cases).

https://theconservativetreehouse.com/2019/12/28/anticipate-house-impeachment-articles-after-january-3rd-2020-oral-arguments-for-mueller-grand-jury-material/

#41 Steven Rowlandson on 01.08.20 at 8:49 pm

“Iran aimed its missiles at a parking lot. Intentionally.”

If that is the case it means that the missiles are better than Scuds and secondly it means that the Iranians sent a message. They can reach out with their weapons and hit their enemies deliberately and precisely. If the Americans or Israelis mess with Iran they just might get a ballistic missile landing in or on some politicians or generals office or some other important target. Once upon a time manners were invented and taught in order to to reduce violence.
It is the doom of men that they forget.

#42 Boris Corbyn on 01.08.20 at 8:51 pm

#10 indeed, beyond money and markets a civilian plane was downed, Real people, kids etc. but hey, the markets are not going down. Just fleshy pawns in this game of fools

#43 Gravy Train on 01.08.20 at 8:56 pm

#35 Nonplused on 01.08.20 at 7:53 pm
“[…] I worry that it sets a very bad president.[…]” It also sets a very bad precedent, but I like your pun, if that’s what it was. :)

#44 Yukon Elvis on 01.08.20 at 9:01 pm

#35 Nonplused on 01.08 The airplane crash seems just to coincidental, given Khamenei’s “290” reference (the US “accidentally” shot down an Iranian airliner in 1988, killing all 290 on board). Although it seems like a pretty dumb thing to do to shoot down this jet given that most of the passengers were Iranian. Perhaps it was an error given the heightened tensions in the area. It was not a MAX so technical problems seem unlikely as an explanation. But I bet we will never know.
……………………….

If Iran refuses to release the black box and voice recorder we WILL know for sure they did it. Not their air plane, not their airline. Why would they withhold it if they had nothing to hide?

#45 BS on 01.08.20 at 9:05 pm

I was expecting all those with Trump Derangement Syndrome to show up tonight admit they were wrong (again) and commit to upping their meds. Nope, instead they double down on the most pathetic fake news talking points. Hilarious. Guys, once you realize Trump always wins life will be so much easier.

#46 ImGonnaBeSick on 01.08.20 at 9:14 pm

#41 Steven Rowlandson on 01.08.20 at 8:49 pm

I would wager a guess that if the Iranians can target a parking lot, the Americans can target the head of a pin… And I think the message sent by the Americans was a lot more to point…

#47 Young Boomer on 01.08.20 at 9:20 pm

Defund CBC

#48 MF on 01.08.20 at 9:27 pm

#41 Steven Rowlandson on 01.08.20 at 8:49 pm

^^^here’s an example of someone who has no idea what he is talking about.

-The main message, which went totally over your head (get it?) is that Iran should leave Iraq and Lebanon and stop fomenting violence by supporting terrorist proxies there. Where scuds can land was never the point (although Saddam tried that and failed in 1991 anyways).

-The second “message” was that Iran can’t afford an all out conflict with the US.

The reason why is threefold: first they can’t win. Second the Iranian people are not on side the regime. 3rd an all out conflict with the US would foil their aspirations for regional hegemony because their meddling in Iraq and Lebanon would be thwarted too. Israel would also have the ability to deal with Iranian proxies without fighting with one hand behind its back (because they now have both Arab and American support).

I don’t know if people are stuck in the early 2000’s, or that they just hate trump so much anything he does is criticized. But anyone with an objective eye can see this was a good outcome for him.

MF

#49 jim on 01.08.20 at 9:31 pm

Iran started it

Since last May, Iran has launched a series of brazen attacks against oil tankers in the Gulf, downed an American drone over international waters and struck Saudi Aramco with cruise missiles and unmanned aerial vehicles, all the while seeking to pressure the United States to lift its sanctions and fracture its alliances. Iran’s victims not only avoided pushing back; most were reluctant even to name the evident perpetrator.

https://www.newsweek.com/irans-war-united-states-started-long-before-soleimanis-death-opinion-1480671

#50 Doghouse Dweller on 01.08.20 at 10:04 pm

#13 Dog Breath

We’re told everything is fine, nothing to see here. But what’s going on?
————————————————————-
This guy George Gammon explains things quite well on his youtube channel.

Repo Market Update: Is The Entire Financial System Broken? (ANSWERED)

https://www.youtube.com/watch?v=vw6fymmI9B0

#51 Ronaldo on 01.08.20 at 10:22 pm

#38 Barb on 01.08.20 at 8:10 pm
“(a) invest for decades, …”

Wal Mart stock 1999 ~$43.00, today $116.00.
Proof that decades is the answer.
————————————————————
Exactly. Gold $287 today $1560 443%.

Vancouver House price – $281,000 today $928,000 223%

#52 DON on 01.08.20 at 11:55 pm

@ CrazyFox and Nonplused

To add one or two tid bits. Iran’s initial threat was at those who arranged the assassination. Trump’s ‘all is well’ statement is odd for him given what he just authorized.

Interesting also that Trump mentioned the super sonic missiles that are in development to counter what Russia already has. Russia focuses on repelling the enemy at the gates while the US since WW2 has been focused on projecting power, but a new weapon can be an immediate game changer in this technical revolution.

Putin is busy doing business, and rebuilding their economy. China reconfirmed their allegiance to Iran the other day, prior to Iran showing the US that their missiles can penetrate. Why didn’t the US air defense systems shoot down the missiles (perhaps no air defense or ???). Countries throughout the World have been purchasing Russian S 300’s and 400’s. The 500 series is out now too. No doubt the US was using the drone that Iran shot down to test air defenses.

The other tidbit is as I have mentioned before – the fact that Trump also assassinated some higher ups in the Iraqi Shia Militia that has been engaged in fighting IS was a mistake, unless he planned on leaving Iraq. People are pissed in Iraq also, add in Yemen, Syria etc.

We as in NAmerica, should stay the hell out and focus on our own economic, issues etc.

Israel has nukes so no sane leader of a country is going to attack without the whole region going up in smoke. Nuking Iran or Israel will pollute the whole region. Hence the rush to get the upper hand via faster undetected missiles.

Special thanks to Remembrancer for the How IS was created link – the other day. I admit the question was somewhat rhetorical, I appreciate the refresh. I got lazy.

#53 DON on 01.09.20 at 12:04 am

@ CrazyFox and Nonplused

To add one or two tid bits. Iran’s initial threat was at those who arranged the assassination. Trump’s ‘all is well’ statement is odd for him given what he just authorized.

Interesting also that Trump mentioned the super sonic missiles that are in development to counter what Russia already has. Russia focuses on repelling the enemy at the gates while the US since WW2 has been focused on projecting power, but a new weapon can be an immediate game changer in this technical revolution. Not to say that the US couldn’t deploy enough older model nukes to ensure MAD. So that won’t happen either, Trump is imposing new sanctions.

Putin is busy doing business, and rebuilding their economy. China reconfirmed their allegiance to Iran the other day, prior to Iran showing the US that their missiles can penetrate. Why didn’t the US air defense systems shoot down the missiles (perhaps no air defense or ???). Countries throughout the World have been purchasing Russian S 300’s and 400’s. The 500 series is out now too. No doubt the US was using the drone that Iran shot down to test air defenses.

The other tidbit is as I have mentioned before – the fact that Trump also assassinated some higher ups in the Iraqi Shia Militia that has been engaged in fighting IS was a mistake, unless he planned on leaving Iraq. People are pissed in Iraq also, add in Yemen, Syria etc.

We as in NAmerica, should stay the hell out and focus on our own economic, issues etc.

Israel has nukes so no sane leader of a country is going to attack without the whole region going up in smoke. Nuking Iran or Israel will pollute the whole region. Hence the rush to get the upper hand via faster undetected missiles.

Special thanks to Remembrancer for the How IS was created link – the other day. I admit the question was somewhat rhetorical, I appreciate the refresh. I got lazy.

And like someone mentioned this is a slippery slope we are dealing with here.

#54 DON on 01.09.20 at 12:11 am

#37 Barb on 01.08.20 at 7:56 pm

Switched from CBC news to BBC Canada (TV) a year ago.

Non-lefty news is frankly refreshing.
*****************

BBC is just as lose with their reporting as CBC is, lump in CNN and FOX etc. The financial post is schizophrenic from one article to the very next. Follow the financial post for a bit and you will witness it.

#55 Sail Away on 01.09.20 at 12:15 am

#36 Ustabe on 01.08.20 at 7:54 pm

Assemble the cold parts on thick slices of that bakery white and run the bologna through the waffle iron, place it sizzling hot onto the cheese and slap both sides together, crack the second beer and enjoy.

Way better time spent than reading the foreign policy experts making themselves freely available here tonight.

I miss the housing/investment blog I first came here for…

——————————-

Great sandwich!

And I agree with your assessment of the comments these last few days- total waste of time reading other peoples’ guesses about what could possibly somehow happen somewhere.

Let’s talk money.

#56 Karlhungus on 01.09.20 at 12:40 am

My all stock portfolio only lost 4% in 2018. Essentially the same downside risk, yet it gained 21% in 2019.

#57 DON on 01.09.20 at 12:51 am

#34 Treasure Island CEO – 81,239,434.88 Offshore on 01.08.20 at 7:46 pm

People might want to pay attention to the polls stating how Canadians think a recession is coming. If people feel broke, think about it. Consumption is going to tank at some point. Self fulfilling prophecy Delinquencies are rising.

I will buy back in the next dip. 6 months? Totally worth the wait. Never going back down? I guess I will be sidelined forever. Future without recessions? Good luck.
************

It all comes down to sentiment when the boom is not booming like it used to boom. A slow melt over years may be more destructive than raising rates and ripping off the band aide. ‘I didn’t see it coming, no one did’ will be the justification for not paying attention to things.

Who buys housing on the way down? The Greater Fool. My family, brothers and sisters etc all got lucky and bought in low, but no one treats their house as more than a place to call home except for my younger brother who wants to buy an even more expensive house to AirBnB in a back water small city that has really nothing to offer. But his wife is a former realtor so it is a no brainier. Now he caught on about the CRA, so we shall see what happens.

Houses are expensive to maintain, repair, remodel but those costs are never factored in. Over the years it adds up, even new builds can be riddled with shotty construction but everything looks so modern and cool…ha ha.

#58 John in Mtl on 01.09.20 at 1:10 am

That has to be one of the nicest pictures you ever posted, Garth. How life is beautiful !

#59 Nonplused on 01.09.20 at 1:15 am

#43 Gravy Train

Ha, ha good catch, the Greater Garth input box doesn’t check grammar. But now that you point it out I am willing to own the pun. Because it could in fact be both.

#60 Fog of War on 01.09.20 at 1:26 am

I had my tinfoil hat on today because they built a new 5G tower near my house, and this is what came to me as the tinfoil was vibrating and getting hot due to the 5G transmissions:

What if Khamenei is actually happy that Suleimani got the wrong end of the barrel because he had gone rogue? Suleimani is probably the guy that most sabotaged the JCPOA with all his terrorist activities. Oh geez, I’ve got to go my popcorn is burning. Damn 5G.

#61 Fortune 500 on 01.09.20 at 2:45 am

Garth, would you alter or modify your ‘Rule of 90’ for someone planning to purchase a home in cash?

For example, if a a couple in their early 40s has $1,000,000 in total assets and buys a home for $400,000 all-in, would you see that as a good or bad strategy at this time in the cycle, with these rates.

#62 Steven Rowlandson on 01.09.20 at 3:29 am

#48 You really need to give up your addiction to kosher
media kool aid and read Exodus 32:10 and John 8:44. Better yet read the bible from gods point of view instead of the point of view of false prophets like Hagee and his ilk. Now here is a law and not an opinion. I am more intelligent than all you people put together and I absolutely do know what I am talking about.

#63 milly on 01.09.20 at 8:29 am

How is housing not in a bubble? An average income has no hope of buying a home (or condo..) in the GTA or Van.

#64 Book to read on 01.09.20 at 8:40 am

Hi Garth,

A good read for the discouraged Blog Dogs: Factfulness: Why Things Are Better Than You Think by Hans Rosling. (recommended by Bills Gates and President Obama)

Great pic btw.

#65 Dharma Bum on 01.09.20 at 8:57 am

It seems like this blog has turned into a forum for a York University Poli Sci 101 course.
All the foreign policy “geniuses”, religious whack jobs, bible thumpers, and closet racists embroiled in a puerile argument about the end of days, and other such nonsensical gibberish. Amusing.

But, more to Garth’s point, and what really matters:

Work hard early in life.
Save methodically.
Invest often.
Invest regularly.
Invest consistently.
Ignore the noise – it’s all BS.
Stay in the financial game for the long term.
Delay frivolous gratification and eschew debt.
Retire early.
Have fun.
Laugh.

#66 Dharma Bum on 01.09.20 at 9:01 am

#62 Steven Rowlandson

“I am more intelligent than all you people put together and I absolutely do know what I am talking about.”
——————————————————————–

https://www.youtube.com/watch?v=a84KUyLynDA

Not-knowing is true knowledge.
Presuming to know is a disease.
First realize that you are sick;
then you can move toward health.

-Lao Tzu

#67 Dog Breath on 01.09.20 at 9:34 am

#50 Doghouse Dweller

That’s a great explanation, thanks DD. For us simple folks it means Wiley Coyote has run off the cliff, but hasn’t looked down yet. When he does, look out below!!

#68 crowdedelevatorfartz on 01.09.20 at 9:36 am

@#63 milly
“How is housing not in a bubble? An average income has no hope of buying a home (or condo..) in the GTA or Van.”

++++

Didnt you hear?

Houses and condo’s are for the “above” average, the money launderers, and those who hound the bank of Mom and Dad….

Speaking of which.
I wonder if Harry and Megan will plunk down some of that Royal jewelry at a Van pawn shop for a down payment on a million dolla East Van crack shack……
I wonder what a Duke of Sussex medal goes for on E-bay?

Patience little milly.
All comes to those who wait.

#69 Mattl on 01.09.20 at 9:54 am

#22 Welcome to Slurrey on 01.08.20 at 7:12 pm
Since feb of 2017 , my balanced porrfolio has given me a 4% annulaized return ( post fees ) ………… slow clap

Then you have it wrong. – Garth

—————————————————————–

I’m at 5.72% net fee’s for the same period, which isn’t great. And my returns track Garths fairly closely so I suspect his numbers are similar.

Not great but that if you go back to Nov 2016 it’s 6.5%, Sept 2016 7.2%. So there is something to say about picking an arbitrary date and calculating a return.

Bottom line I think is Garth talks about 6-7% after fees return over the long haul and my portfolio is trending that (7.19% since inception).

#70 Fuzzie Wuzzy on 01.09.20 at 10:29 am

Garth,

I think Trudeau’s attempt at growing a beard is more worrisome than the global geopolitical sabre rattling. You should give him a few pointers on how to grow a proper one.

#71 SoggyShorts on 01.09.20 at 10:32 am

#63 milly on 01.09.20 at 8:29 am
How is housing not in a bubble? An average income has no hope of buying a home (or condo..) in the GTA or Van.
*****
And they dont really need to own, do they?
With about 70% ownership in Canada, it seems like enough own.

A market can apparently keep rolling without average income people buying because there are so many climbing the ladder plus the above average earners.

M40Belize (renter for life)

#72 Sail Away on 01.09.20 at 10:32 am

For maybe the first time ever, T2 appears tp have used a little tact when commenting on the actions of Trump and the US. This is encouraging, and hopefully a harbinger of things to come.

#73 Blog Bunny on 01.09.20 at 10:41 am

News ? What news ? Written by a bunch of hienas looking to tear anyone apart. I stopped watching the news a log time ago. My time is better spent petting my rabbits and staying invested ;)

#74 Ronaldo on 01.09.20 at 11:06 am

#72 Sail Away on 01.09.20 at 10:32 am
For maybe the first time ever, T2 appears tp have used a little tact when commenting on the actions of Trump and the US. This is encouraging, and hopefully a harbinger of things to come.
——————————————————————
Highly doubt it.

#75 Damifino on 01.09.20 at 11:48 am

#73 Blog Bunny

News ? What news ? [….] I stopped watching the news a log time ago.
—————————–

Me too. Well… not quite. There’s still greaterfool.ca

But I’ve quit CBC’s ‘The National’. And local TV news? Forget about it… utterly useless. I record Global National and rip through it at 7:00 PM. Sometimes there’s five minutes worth of real news there. Sometimes not.

I keep links to about 15 mainstream news sites. I read only the headlines looking for something that’s actually new. That is rare. I never open anything posed as a rhetorical question and ignore any and all clickbait.

I’m at least as informed as before, but now a happier individual with extra time to spend on more worthwhile activities, like posting on blogs and such.

#76 Mr Fundamental on 01.09.20 at 12:59 pm

I like this:
“But this is exactly why smart people (a) invest for decades, not months or even years”

I’d like to replace decades with “forever”! :)

#77 Reza on 01.09.20 at 1:19 pm

“That nation vows revenges and attacks a US base with rockets.”
Correction: It was missiles, not rockets.

What powers missiles? – Garth

#78 James on 01.09.20 at 1:40 pm

#74 Ronaldo on 01.09.20 at 11:06 am

#72 Sail Away on 01.09.20 at 10:32 am
For maybe the first time ever, T2 appears tp have used a little tact when commenting on the actions of Trump and the US. This is encouraging, and hopefully a harbinger of things to come.
——————————————————————
Highly doubt it.
____________________________________
Tact is not his forte and I am genuinely surprised he didn’t dis him. Both T2 & Trump are bad actors who will always fall back to their true nature. Our issue is Trump has his finger on the button while T2 has his finger up his nose.

#79 YVR Expat on 01.09.20 at 2:33 pm

Iran has been provoking the US for the last 12 months, they had to expect something was coming. I would assume this Persian mess is over, no one wants a war (Iran or the US), especially Trump in an election year.

#80 Drill Baby Drill on 01.09.20 at 5:04 pm

The CBC is a great waste of time and tax dollars.