What to do with fixed income

RYAN   By Guest Blogger Ryan Lewenza
.

With the pandemic-induced global recession, interest rates around the world have plumbed to new all-time lows, putting even more stress on investors who need the income to fund their spending and retirement. Sure it’s great for millennials who can borrow money hand over fist at stupid low interest rates, but on the flip side, it hurts investors who depend on the interest income from these investments. As I sometimes (crassly) say to clients, “central banks are screwing retirees with these record low rates!” So today I review the fixed income landscape and discuss how we’re structuring client portfolios in this low rate environment.

With the Federal Reserve (Fed) and the Bank of Canada (BoC) cutting interest rates in response to the global recession, the Fed funds rate and the BoC Overnight Rate currently sit at just 0.25%. This matches the all-time lows hit back in 2008/09.

As central banks slashed their benchmark rates, this has brought down interest rates across all bond types and GICs. Currently, 10-year government bond yields – the most important bond yield to focus on – are below 1% in Canada and the US. Looking at the broader FTSE Canadian All Government Bond Index, which includes all the different maturities, yields just 2.07%. The similar FTSE Canadian All Corporate Bond Index yields 2.76%.

I reviewed our firm’s GIC list and GICs with a 3-year maturity range from 0.6% from most banks to 1.3% from the higher risk trust companies. And you’re locked in with GICs so I see little reason to invest in them right now.

If we look at higher risk bonds, Canadian and US high-yield bond indices yield 4.53% and 4.98%, respectively. While this looks attractive on the surface, it’s important to stress that these high-yield bonds can fall hard during recessions, which is exactly what happened in March. Thankfully we got out of these early last year.

So from high-quality fixed income investments, you’re looking at roughly 0.5% to 2.7% depending on the maturity and quality of the issuer. For further context, I used to trade bonds and fixed income some years back and I could easily find high-quality bonds yielding 4-5%. Boy how things have changed!

Current Yields on Various Investments

Source: Bloomberg, Turner Investments

So how do we position portfolios in this low rate environment?

First, we have a low government bond weight given their puny yields and in fact, we’ve lowered our exposure to these bonds in recent months.

Second, we prefer high-quality corporate bonds or ‘investment-grade’ corps. We prefer investment-grade corporate bonds as we get a decent yield ‘pick up’ and I see them outperforming government bonds next year.

I capture this in the chart below, which measures ‘credit spreads’ for US corporate bonds. A ‘credit spread’ is simply the additional yield of corporate bonds over government bonds of a similar maturity. Currently, credit spreads for US corporate bonds (BAAs) is 225 basis points (bps), which means the average corporate bond yields 2.25% higher than the US 10-year government bond yield. With a historical spread average of 200 bps, this suggests there is some value in US corporate bonds, which is a key reason why we prefer this area. Keep it simple. We prefer corporate bonds yielding around 2.5-2.75% to government bonds, many of which yield below 2%.

US Credit Spreads

Source: Bloomberg, Turner Investments

Third, in the downturn we changed our tune and added back some high-yield bonds, after selling them last year. Specifically, we’ve been adding bank loans to client portfolios, which are loans made from banks to small and medium-sized companies. We decided to add these to client portfolios since: 1) bank loans yield an attractive 5-6%; 2) bank loans are, on average, trading at 90 cents on the dollar, so as the economy recovers these bank loans should increase in value back to par; and 3) bank loans are floating rate loans so when central banks reverse course and start hiking rates, we’ll get paid more interest on these investments. We’re already up nicely on this investment and I see more gains coming in 2021.

Lastly, we continue to recommend preferred shares to our clients and see them continuing to recover in the coming year. As seen in the table above, the Canadian preferred share index currently yields 4.9%, which is well above government bonds yielding below 2%. And these pay dividends so on an interest-equivalent basis, this is closer to 7%. But it’s not just the yield that we like.

I see two key positives for the Canadian preferred share market over the next few years. First, I see government bond yields slowly moving higher as the economy recovers and inflation picks up. The key government bond yield for the Canadian pref market is the Government of Canada (GoC) 5-year bond yield and that currently sits at just 0.5%. As illustrated below, the Canadian pref market is highly correlated with the GoC 5-year yield, so when this starts to rise over the next 1-2 years (and it will), the pref market should rise along with it.

Second, some of the Canadian banks have started to issue a new type of debt instrument called a ‘limited recourse capital note’ or LCRN, to shore up their balance sheets. For example, Royal Bank issued $1.75 billion of these notes during the summer. With these new proceeds the banks are then turning around and redeeming some of their outstanding preferred shares, as preferred share dividends are more expensive than bond interest for the banks. So as the banks redeem more and more of their outstanding preferred shares it reduces supply and in Econ 101 we learned that less supply generally means higher prices. The combination of more pref redemptions and higher government bond yields in the coming years, should boost preferred share prices.

Canadian Prefs and the GoC 5-Year Yield

Source: Bloomberg, Turner Investments

So there you have it. In this low interest rate environment there are still opportunities out there, you just need to know where to look. We’ve positioned our client’s fixed income portfolios with more investment-grade corporate bonds, bank loans, and preferred shares. The corporate bonds provide stable income and help protect against deflation, while the bank loans and the preferred shares provide higher yields and a hedge to rising inflation and interest rates. There’s that balance again!

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

96 comments ↓

#1 truefacts on 12.19.20 at 11:39 am

Ryan – thanks for this – good info.

Question, would rate-resets with a guaranteed minimun be the best of both worlds right now – high yields and a guarantee (in the UNLIKELY event that we do go to negative interest rates).

You can get some with yields of 6% or so now – which might be competitive with returns from stocks going forward…

I would realy value your thoughts on this?

#2 TurnerNation on 12.19.20 at 11:54 am

Two blogs ago at least two blog dogs related someone they knew suffered due to lack of access to needed cancer treatments. Let me add a third example to that
Yet not a peep about the supposed wave of CV affecting people?!

Anyway with new years coming, for years I tried to learn/discern the significance of Price’s song “Party like it’s 1999”. A harbinger for sure. Until this week.
It was pointed out that culture basically died after 2000
Put this way: if you held a 1990’s themed party you know what you would get. Same with a 1980s or 1970s party theme.
What about a 00’s party? Or 10’s? Any defining culture? No.

Only that 2000 onwards was the era of the screens. And cameras. Trained on you. 2000s onwards brought non-stop global t3rr0r beamed to us 24/7. Numbing us.
We gave up our rights for ‘safety’. Unlimited detention clauses, ‘Patriot act’, surveillance, secret trials and no-fly lists. Our global elites tightened the screws.
(They breaked this year, CV was better to scare us with.)

Anti-social media was introduced 2000 onwards.
2000s onwards is the era of Narcissism and Autism.
This WW3 we are in is the final battle for our minds. All the programming and training we’ve bene exposed to let up to this 2020.

A likely outcome is that they open things up again then next Fall say Whoops, Covid 20/21 is here! Would they run this again until 2022-23 then once everyone is throughly broke/broken introduce a new global monetary system? Dunno. I don’t watch movies.

#3 Peter McLean on 12.19.20 at 12:00 pm

NOICE!

#4 Ponzius Pilatus on 12.19.20 at 12:03 pm

Gotta give it to the banks.
Ever so resourceful. “limited recourse capital note”.
The new “mortgage backed securities”?

#5 Coastal Zapper on 12.19.20 at 12:04 pm

I took a significant loss in my RBC Direct Inv. account 20 years ago. Account has since been closed. Is there any way for me to get this loss documented so I can use it for future gains.
Calling RBC with a cell phone is near impossible so far.
Local RBC could not help me, go figure.
Any help would be appreciated.
Happy Holidays to you all.

#6 earthboundmisfit on 12.19.20 at 12:06 pm

Thank you for this Ryan. Call me a contrarian but I still have to question the wisdom of having preferred shares on the FI side of the equation. The experience with prefs over the last decade has been miserable, and they certainly didn’t provide any downside protection last spring. Is that not the purpose of FI? To be extolling the virtue of them now suggests both “chasing yield” and “recency bias”. I’m not going there, and will remain content to use one of the big guys who put together the FI component of a “one click” balanced ETF.

#7 Andrewski on 12.19.20 at 12:14 pm

Thanks Ryan & Merry Christmas, like you I’m a big fan of Canadian preferred shares & have increased my position for the balancing you refer to!

#8 Bank loan ETF on 12.19.20 at 12:23 pm

I did a quick google are these the ETFs you talk about for bank loans

https://etfdb.com/etfs/bond/bank-loans/

Thanks for the blog Garth
Thanks for the post Ryan

#9 TurnerNation on 12.19.20 at 12:42 pm

Confirmed this current global Ww3 is a bankers war.
Is this sounding like a social credit score they are floating?
It’s as if every crazy conspiracy over control, global control, A.I. is coming true. Why else did they built this stuff?? For our health Comrade?

https://blogs.imf.org/2020/12/17/what-is-really-new-in-fintech/

Fintech resolves the dilemma by tapping various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches and purchases. Recent research documents that, once powered by artificial intelligence and machine learning, these alternative data sources are often superior than traditional credit assessment methods, and can advance financial inclusion, by, for example, enabling more credit to informal workers and households and firms in rural areas.

#10 bub on 12.19.20 at 12:42 pm

Is there a good ETF for investing in preferreds?

#11 Truth or consequences on 12.19.20 at 12:50 pm

I find it amusing that a few days ago, there were at least 27 commenters on this site calling out the “cake lady” and hundreds of thousands of other Canadians , even resorting to referring to them as “thieves”. I expect that many more felt this way but just didn’t comment. I won’t quote all the comments here as it would take pages and pages but you know who you are.

The fact of the matter is, as I pointed out on numerous occasions here, that the CERB application instructions were anything but clear. In fact, the government has now even admitted this on several occasions.

Now the government is even talking about forgiving some or all of these transactions, yet this blog steerage section has taken it upon themselves to besmirch a large number of people who were just doing what they believed they were entitled to do.

I said it before … I’ll say it again. Shame on YOU! … for judging others so quickly and without all the facts. The steerage section of this blog gives new meaning to “artificial intelligence” and groupthink!

#12 Faron on 12.19.20 at 1:08 pm

Thanks for the post today Ryan. I always find your commentary very useful and pleasantly rooted in data.

#4 Ponzius Pilatus on 12.19.20 at 12:03 pm

MBS got a bad name during the GFC, but there’s nothing inherently wrong with them. As long as the mortgage issuers are doing proper diligence on the borrowers’ ability to pay, they can be accurately rated. In the GFC, that diligence was not being done such that high rated MBS were getting packed with adjustable rate sub-prime mortgage time bombs. This was being done because they were selling like hot cakes and issuers were pressured to generate as many of them as they could.

Although there is always risk, there is much less in MBS now than there was then. Furthermore, they were, until recently, heavily bought up by the BoC, so the risks to the banking sector were lower.

#13 Ryan Lewenza on 12.19.20 at 1:19 pm

truefacts “ Ryan – thanks for this – good info. Question, would rate-resets with a guaranteed minimun be the best of both worlds right now – high yields and a guarantee (in the UNLIKELY event that we do go to negative interest rates).”

Yes I like those given the embedded floor on the yield. I don’t think we go negative but it never hurts to have some added protection. – Ryan L

#14 cuke and tomato picker on 12.19.20 at 1:26 pm

If you want a good read google Times Colonist Former
Legislature clerk charged with fraud and breach of trust.
Also in BC we had some of our covid 19 people spend money on modifying their offices in Vancouver so they could have a better view of Burrard Inlet and the North
Shore plus exotic breakfasts and lunches. Nice work if you can get it.

#15 Bill on 12.19.20 at 1:39 pm

#11 Truth or consequences

I said eons ago….free money handed out with no accountability or cost assessment analysis has consequences. They could have offered no interest loads with certain terms to pay all or most of it back and we wouldn’t be sinking the country into a black hole. That makes people responsible and accountable like myself..
Trudeau or better known as IDIOT that couldn’t run a lemonade stand has wasted approx $100,000,000,000.00.
But that’s what he does, he buys votes and rewards failure like Bombardier and all the others.

#16 Prince Polo on 12.19.20 at 1:48 pm

Ryan – you make some excellent points about switching it up from gov’t bonds to things with juicier yields. I know that rates are supposed to rise, but it’s been that way for at least 3-5 years now and I have little faith in the bond market being able to sustain higher yields before Central Bankers collaborate on their next fresh idea. In order to provide additional protection against the small likelihood of negative rates, is it time to also consider a 65/35 or 70/30 B&D portfolio split?

Still waiting for CanadCoin to become a thing. Will Garth’s face be etched onto the $100 CAD e-bill? You and Doug can co-share the $50.

#17 Camille on 12.19.20 at 1:52 pm

Thank you Ryan for that detailed bond information it was very interesting. In your writing you address getting yield in this low rate environment. Obviously you are an expert in bonds and asset management so without getting into long bonds, Tips, treasuries etc., I know what you are doing is to meet a specific need.

My question is more how do you address risk? Is everyone just moving up the risk/yield curve having no other choice?

#18 espressobob on 12.19.20 at 2:50 pm

As a contrarian it was obvious back in the spring how fixed income was quite risky.

Rolled most of my positions in prefs back into common stock indices. Even the quality short term laddered bond etfs took a hit? Go figure…

Today, maintain a large cash position as ammo for the next correction. The upside potential has proven successful buying into a storm. That’s worked out just fine over the years.

Is it any wonder why a few of us relish downside?

#19 Dr V on 12.19.20 at 2:57 pm

Talk about free advice! Thanks Ryan!

#20 IHCTD9 on 12.19.20 at 2:58 pm

#15 Bill on 12.19.20 at 1:39 pm
#11 Truth or consequences

I said eons ago….free money handed out with no accountability or cost assessment analysis has consequences. They could have offered no interest loads with certain terms to pay all or most of it back and we wouldn’t be sinking the country into a black hole. That makes people responsible and accountable like myself..
Trudeau or better known as IDIOT that couldn’t run a lemonade stand has wasted approx $100,000,000,000.00.
But that’s what he does, he buys votes and rewards failure like Bombardier and all the others.
———

Not to mention that it looks like the bulk of the ineligible are self employed folks who took deductions against their income which subsequently lowered their net below the 5k threshold. Without understanding how taking deductions affects their income, of course.

Exactly what kind of people are we talking about here? They made less than 5k last year, were busy signing themselves up for 14k in benefits, and no one thought this was a little strange?

How about the highschool kids living at home who just eeked out 5k last year and then enjoyed a nice 14k payout? Hey, that one is totally legit.

Trudeau was literally begging for maximum fraud with this bird brained plan of his, and now he’s got it.

FWIW, the money is gone, no one will be paying it back. The CBC is already running interference for the “self employed” professionals who made $4500.00 net in 2019 working in their high tech fields.

#21 BCWally on 12.19.20 at 2:59 pm

Great post Ryan and thanks for addressing one of the most important financial issues of our time.
I am middle aged but I have a great deal of contact with seniors through church and family. They are a wise and gentle group of people who have been forced in to volatile investments to maintain a basic acceptable standard of living. In the case of market downturns it becomes the main topic of discussion among them. The stress and fear in their faces as they speak is painful to watch.
I will be passing this post on to as many of them as I can so you may get some phone calls in the near future.
I feel the same way about this situation, and am equally if not more crass in my criticism of this low interest rate policy. Every time I speak to my 82 year old mother it becomes harder to explain why she has preferreds for cash flow she needs for daily living. She only sees an unrealized loss at this point in time.
There doesn’t seem to be an investment product that does increase in capital value as equities decrease (that doesn’t have extreme risk, is morally questionable, or has dubious value) which would replace what bonds have done forever.
Thanks again and please continue to be as crass as you can get, our seniors need that voice.

#22 Red falcon on 12.19.20 at 3:14 pm

Fixed income is exactly that… fixed… change won’t happen but if it does it’ll be worse to the detriment of the sheeple. It’s like fixing a dog or cat and expecting said Animal to reproduce lol.
This type of income won’t beat inflation even if you look for 2.5%… still not enough to keep out of water. You will not float on this and this will not fly. Sheeples will always be sheeples… there to be sheared by their masters.

#23 Barb on 12.19.20 at 3:31 pm

” “central banks are screwing retirees with these record low rates!””

—————————————————
Thank you!
The much-maligned retiree group appreciates your candor.

#24 Long-Time Lurker on 12.19.20 at 3:33 pm

Given the global situation right now I’m more interested in not losing money than in trying to make money.

I might start trading again next month.

Now let’s see if I got this right:

Gold starts a down-move around this coming mid-week (Nov 23).

Reason: Positive vaccine news (Moderna).

#25 Long-Time Lurker on 12.19.20 at 3:35 pm

American Medical Association

Memo to: Delegates, Alternate Delegates
Executive Directors, Member Organizations of the House of Delegates
From: Bruce A. Scott, MD, Speaker, House of Delegates
Lisa Bohman Egbert, MD, Vice Speaker, House of Delegates
Date: October 30, 2020

Resolution: 509 (November 2020)
Page 3 of 6

1 Whereas, The COVID-19 pandemic is a serious medical issue, people are dying, and
2 physicians must be able to perform as sagacious prescribers; therefore be it
3
4 RESOLVED, That our American Medical Association rescind its statement calling for physicians
5 to stop prescribing hydroxychloroquine and chloroquine until sufficient evidence becomes
6 available to conclusively illustrate that the harm associated with use outweighs benefit early in
7 the disease course. Implying that such treatment is inappropriate contradicts AMA Policy
8 H-120.988, “Patient Access to Treatments Prescribed by Their Physicians,” that addresses off
9 label prescriptions as appropriate in the judgement of the prescribing physician (Directive to
10 Take Action); and be it further

https://www.ama-assn.org/system/files/2020-10/nov20-handbook-addendum.pdf

#26 espressobob on 12.19.20 at 3:59 pm

#24 Long time lurker

Mr market is a tough contender. Gold is a useless position like any other commodity play.

Owning the major indices might prove advantageous.

#27 Yukon Elvis on 12.19.20 at 4:05 pm

#21 BCWally on 12.19.20 at 2:59 pm

There doesn’t seem to be an investment product that does increase in capital value as equities decrease (that doesn’t have extreme risk, is morally questionable, or has dubious value) which would replace what bonds have done forever.
………………………………….

I buy the Big5 common shares when the divvy is over 5%. I pig out when the market dips. Example: Bought TD @ $59 paying 5.5% early Nov. Now at $72 and I still get 5.5% tax advantaged div paid quarterly. I don’t need the cash flow so I drip the divs quarterly. Been doing this since ‘09. I’ve done well. I average 10-11 % per year. Uber safe div that increase from time to time. Big5 have not reduced or suspended dividends. Ever. For like150 years. Not even during the Great Depression or in 08/09. It is not complicated until someone wants to baffle u with their brilliance and sell u etfs or preferreds or bonds and charge u a fee. Check out the charts for the Big5. Take u maybe 10 minutes. Ask the “experts” if the Big5 will cut divs. E

#28 westcdn on 12.19.20 at 4:09 pm

I have to consider the implications of debt never being repaid and merely rolled over. Governments are the greatest sinners and have no intention to repay. Corporations and individuals can be just as bad but far from all.

Governments can monetize most new debt and increase taxes to pay interest. But increasing taxes often leads to less overall tax revenue. One solution would be to digitize money so you can’t hide it – bye bye crypto. This only conjecture and won’t happen for years at best so there is time to watch and plan.

As for corporations and individuals it is so sad too bad for the equity owners when the monthly can’t be made. I was a preferred shareholder of a company “reorganization”. It didn’t work out the way I expected and I got a big haircut. Still, I pity the common shareholders.

#29 Ryan Lewenza on 12.19.20 at 4:18 pm

Camille “ Thank you Ryan for that detailed bond information it was very interesting. In your writing you address getting yield in this low rate environment. Obviously you are an expert in bonds and asset management so without getting into long bonds, Tips, treasuries etc., I know what you are doing is to meet a specific need.

My question is more how do you address risk? Is everyone just moving up the risk/yield curve having no other choice?”

Unfortunately yes, investors are being forced to increase risk in their portfolios due to these record lows rates. We currently recommend a 13% weight in prefs and this wouldn’t be so high if we’re getting higher rates from our traditional bonds. The problem with this is while we’re getting nice dividends from the prefs, it does come with more portfolio volatility during downturns. So we’re still providing similar income levels but their overall portfolio will be more volatile than in past decades. We try to counter this by focusing on diversification, holding some lower risk/volatility positions and keeping costs low through cheaper ETFs. We’re still able deliver on our stated return goals but it just takes more creativity and diligence. – Ryan L

#30 Lead Paint on 12.19.20 at 4:20 pm

Great write up Ryan! Glad you’re managing my money:-)

#31 Ryan Lewenza on 12.19.20 at 4:27 pm

Prince Polo “ Ryan – you make some excellent points about switching it up from gov’t bonds to things with juicier yields. I know that rates are supposed to rise, but it’s been that way for at least 3-5 years now and I have little faith in the bond market being able to sustain higher yields before Central Bankers collaborate on their next fresh idea. In order to provide additional protection against the small likelihood of negative rates, is it time to also consider a 65/35 or 70/30 B&D portfolio split?”

With us rebalancing portfolios near the low and the big recovery since March, many of our clients are slightly overweight equities (ie 62-63%), which we’re good with given our view that we’re going to exit this recession in 2021 and start a new expansion cycle. But we’re not recommending all our clients move up to a 70/30 portfolio since that’s too risky for us and most of our clients. We’re boring guys and that’s what our clients are looking for. So yes, given where we are in the business cycle, it’s okay to have a bit more than 60% but I would continue to stick with the 60/40 over the long run. – Ryan L

#32 Ronnie Gregson on 12.19.20 at 4:48 pm

So I guess my 10 year 3.30% RRSP, TFSA GIC’s compounded annually with Westoba Credit Union here in Manitoba back in 2019 was a decent choice. The only thing I really cared about was the $23,000 a year compound interest my RRSP, TFSA GIC’s would accumulate until their 2029 maturity from the charts, printouts given and shown to me by the credit union.

I scooped up in early on in 2020 some EQ 2.70% Bank 10 year regular GIC’s that will payout $2,170 a year interest but with already lower interest rates compared to 2019.

I just got laid off at that time after 28 years at age 57 in 2019. My $84,000 savings reserve account, severance $89,000, decent LIRA annual payments of $9,600 a year and EI of $26,000 will give me plenty to live on until 2023 until getting my early CPP at 60 of $8,525 a year in 2022 and my OAS of $9,000 a year in 2027.

I had no debts in 2019 and still have no debts at this time and a modest 1,300 square foot home so modest living and other expenses, property taxes etc. I really need a modest $1,800 a month right now and factor in a $900 a month increase to all my cost of living by the time my 10 year RRSP, TFSA GIC’s mature in 2029.

#33 Willinsc on 12.19.20 at 4:51 pm

#6 earthbound
I agree. I have difficulty with placing preferreds in the “safe” side of a portfolio. I think it disingenuous to call that, a 60/40 balance and compare returns to a typical 60 growth 40 bond portfolio.
Thanks again to all at Turner Investments and Merry Christmas to all.

#34 Stone on 12.19.20 at 4:55 pm

#29 Ryan Lewenza on 12.19.20 at 4:18 pm
Camille “ Thank you Ryan for that detailed bond information it was very interesting. In your writing you address getting yield in this low rate environment. Obviously you are an expert in bonds and asset management so without getting into long bonds, Tips, treasuries etc., I know what you are doing is to meet a specific need.

My question is more how do you address risk? Is everyone just moving up the risk/yield curve having no other choice?”

Unfortunately yes, investors are being forced to increase risk in their portfolios due to these record lows rates. We currently recommend a 13% weight in prefs and this wouldn’t be so high if we’re getting higher rates from our traditional bonds. The problem with this is while we’re getting nice dividends from the prefs, it does come with more portfolio volatility during downturns. So we’re still providing similar income levels but their overall portfolio will be more volatile than in past decades. We try to counter this by focusing on diversification, holding some lower risk/volatility positions and keeping costs low through cheaper ETFs. We’re still able deliver on our stated return goals but it just takes more creativity and diligence. – Ryan L

———

13%? I thought your pref allocation was 18%. Was that a typo?

#35 mark on 12.19.20 at 4:56 pm

Fixed interest is fixed interest. If you’re increasing your risk, you may as well be compensated for it and just hold stocks, not stuff that behaves like fixed interest while it’s calm and stocks when it’s rough.

#36 crowdedelevatorfartz on 12.19.20 at 5:15 pm

Excellent comments today Ryan.
Easy to understand and follow.
I’m somewhat shocked at the late year rally in the markets with all the dire news but what the hell…… I’m not complaining. about my balanced and diversified portfolio.

Thanks for all the hard work over the years to keep us dogs at bay..

#37 DON on 12.19.20 at 5:17 pm

Way back when we were worried about the retirement crisis. Then along came a housing/retirement boom enabling people with houses and no pension to cash out to the millenials (and others), who paid higher prices at low low interest rates – with incomes barely moving. Now the investors srike back…with a ‘Show me the MONEY’ (higher interest rates) battle cry. Full circle.

Say it ain’t so Joe.

Thank you for the info and analysis. I have to reaf it again though. lol

#38 Sheesh on 12.19.20 at 5:20 pm

#25 Long-Time Lurker on 12.19.20 at 3:35 pm

However, the AMA statement has not been rescinded. It’s still there on their website. Their Twitter feed says the proposal (your link) to change the statement was discussed, but the decision was made to leave it as is.

https://mobile.twitter.com/AmerMedicalAssn/status/1339266283536314370

#39 Apocalypse2020 on 12.19.20 at 5:21 pm

BREAKING NEWS

“Heated Oval Office meeting included talk of martial law.”

Michael Flynn justifies this, saying “…martial law has been invoked 64 times in our history…”

https://www.cnn.com/

Folks, if you do not understand what is about to happen, you are clueless and will soon be just a memory for the few survivors who recall you.

STOP YOUR CHRISTMAS PLANNING, NOW!

PREPARE

#40 DON on 12.19.20 at 5:22 pm

My MBA friend remembered this from her studies.

“The response to induced demand is to stay low.”

#41 Uncle Charlie on 12.19.20 at 5:31 pm

The bank I’m with has index funds with allocations of:

30% equities/70% Canadian bonds
60/40
75/25
Plus, a couple of other funds.

I noticed today the one that has performed the best YTD (7.60%) is the 30/70 fund that has 70% bonds.

I found this surprising. It beat out the 60/40 (7.35%) and the 75/25 (7.12%).

I’m pretty green when it comes to investing – any idea why the 30/70 fund would have done better this year than the 60/40 and 75/25 portfolios?

#42 Faron on 12.19.20 at 5:55 pm

#25 Long-Time Lurker on 12.19.20 at 3:35 pm

American Medical Association

The text you cite is a proposal (from Georgia of all places) and was rejected. Any resurfacing of this as a claim that the AMA has changed its stance is misinformation. I’m assuming you didn’t intend it as such…

#43 short horses on 12.19.20 at 6:12 pm

Great post, Ryan. You present some interesting points. I’ve already added an allocation to high yield bonds (US) because of earlier posts on this (not pathetic) blog, now I’m interested in finding exposure to corporate loans by Canadian banks.

Is there a way to get exposure to these using ETFs? Is it equivalent to investing in convertible bonds, or are these investible instruments very different?

#44 short horses on 12.19.20 at 6:25 pm

#10 bub on 12.19.20 at 12:42 pm
“Is there a good ETF for investing in preferreds?“

There are close to a dozen Canada-listed ETFs of varying quality, of which five have good to very good liquidity due to higher AUM (around $500M or greater).

Compared to actively managed common share ETFs, the fees for actively managed preferred share ETFs are a bargain, but whether you choose an active or passive ETF depends on your comfort with risk.

#45 CJohnC on 12.19.20 at 6:31 pm

“Specifically, we’ve been adding bank loans to client portfolios, …….”

Ryan, Specifically, are theses loans from Canadian banks which are solid, or US banks which are all built on air?

Also are they packaged in an etf?

#46 IHCTD9 on 12.19.20 at 6:36 pm

I’ve read Mr L’s post twice now. I began having a strong urge to put down the ipad, go outside, and stack some wood for a while.

Let’s just say I’m happy to pay a pro to handle our investments…

#47 mark on 12.19.20 at 6:39 pm

I always chuckle, everyone realizes that you can pluck any reasonable portfolio with reasonable assets and there ALL going to preform with in a couple of percent over the long 15+ years or more right, with about a 20 percent draw down, and I do mean all, and ALL money managers know this………… think about it when your agonizing about what the market is doing, really pointless. Any asset mixer can tell you this………

#48 Penny Henny on 12.19.20 at 6:46 pm

I would easily switch out preferreds for Canadian high dividend payers. Same volatility but less chance of divy’s being reduced year after year. And before you say rates can only go up please remember you have been saying this for years on end. Look at CPD, divy’s have been cut for years on end.

#49 crowdedelevatorfartz on 12.19.20 at 6:49 pm

@#39 Apocalypse2020

Some day…… in the far distant future, I’ll think back to this blog and wonder if you’re still holding up a “The End is Nigh 2039 !” sign in your ward at the hospital.

#50 Stairway to Kevin on 12.19.20 at 6:49 pm

#39 Apocalypse2020 on 12.19.20 at 5:21 pm

BREAKING NEWS

“Heated Oval Office meeting included talk of martial law.”

Michael Flynn justifies this, saying “…martial law has been invoked 64 times in our history…”

https://www.cnn.com/

Folks, if you do not understand what is about to happen, you are clueless and will soon be just a memory for the few survivors who recall you.

STOP YOUR CHRISTMAS PLANNING, NOW!

PREPARE

____:::::___________________

Seems like somebody not following their COVID protocol…..
Bars are supposed to stop serving at 10 p.m.

#51 IHCTD9 on 12.19.20 at 6:51 pm

#36 crowdedelevatorfartz on 12.19.20 at 5:15 pm

I’m somewhat shocked at the late year rally in the markets with all the dire news but what the hell…… I’m not complaining. about my balanced and diversified portfolio.

Thanks for all the hard work over the years to keep us dogs at bay..
——

November and December repaired all the damage of 2020, and then some. I’m not complaining either, I quit trying to understand around 2012.

Garth has really picked out a crack team, real pros right across the board. Even though I don’t understand half the technical stuff, I always enjoy reading the blogs posted by Ryan, Doug, and Sinan. You can tell they live and breath this stuff.

#52 Penny Henny on 12.19.20 at 6:56 pm

#26 espressobob on 12.19.20 at 3:59 pm

Mr market is a tough contender. Gold is a useless position like any other commodity play.

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

Really?
I guess I was doing something wrong when I bought in April 2019 and recently sold to realize gains of approx 60%. (XGD)

Thanks for the advice

#53 Ponzius Pilatus on 12.19.20 at 7:15 pm

#12 Faron on 12.19.20 at 1:08 pm
Thanks for the post today Ryan. I always find your commentary very useful and pleasantly rooted in data.

#4 Ponzius Pilatus on 12.19.20 at 12:03 pm

MBS got a bad name during the GFC, but there’s nothing inherently wrong with them. As long as the mortgage issuers are doing proper diligence on the borrowers’ ability to pay, they can be accurately rated. In the GFC, that diligence was not being done such that high rated MBS were getting packed with adjustable rate sub-prime mortgage time bombs. This was being done because they were selling like hot cakes and issuers were pressured to generate as many of them as they could.

Although there is always risk, there is much less in MBS now than there was then. Furthermore, they were, until recently, heavily bought up by the BoC, so the risks to the banking sector were lower.
————
Correct, nothing inherently wrong with the MBS.
Originally, they were a vehicle through which banks could expand lending without running into Capital requirement issues.
As you stated, the problems began when banks started to securitize and sell packages containing sub-prime mortgages.
And as they say, the rest was history.
As for the present and future developments in the derivative market, I can’t share your optimism.
As long as bank’s sole mission is to make the shareholder’s happy, and bonuses are paid based on the bottom line, there will always be banks that will  ignore the regulators and push the envelope. 
It’s kinda like doping. The doping athletes are always ahead of the regulators. Once in a while a famous athlete gets caught and then there is selfrightious outrage, and calls for reform.
It is true that the Canadian Banks are safer because of stricter regulations and CMHC.
However, when things go wrong, it’s taxpayer to the rescue.
Because banks can never fail.
Can you spell MORAL HAZARD.

#54 crossbordershopper on 12.19.20 at 7:26 pm

use options to create a secured income, higher yield and technically risk free is properly structured, you could easily make 1% a month, on some technical trade but its better than clipping coupons.

#55 Habitt on 12.19.20 at 7:28 pm

Thanks Ryan. Very informative and timely post. Thanks as well to our host and the dogs. Good comments today. Thank you all.

#56 espressobob on 12.19.20 at 7:28 pm

#52 Penny Henny

Stating something in hindsight regarding a trade is usually amusing.

A forecast on a commodity play may prove even more so.

#57 Smoking WEED on 12.19.20 at 7:33 pm

#52 Penny Henny on 12.19.20 at 6:56 pm
#26 espressobob on 12.19.20 at 3:59 pm

Mr market is a tough contender. Gold is a useless position like any other commodity play.

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

Really?
I guess I was doing something wrong when I bought in April 2019 and recently sold to realize gains of approx 60%. (XGD)

Thanks for the advice

______________________

Yes, and I bought shares of a penny stock company 7 years ago that eventually became Tweed… which became Canopy Growth (WEED) when I sold it not long after.

But i stopped recommending cannabis stocks to anyone 3 years ago.

#58 Ryan Lewenza on 12.19.20 at 7:40 pm

CJohnC “ Ryan, Specifically, are theses loans from Canadian banks which are solid, or US banks which are all built on air? Also are they packaged in an etf?”

The banks loans are made by global banks so not focused on the Canadian economy. And yes packaged in an ETF. There are a few hundred loans so good diversification. – Ryan L

#59 Nonplused on 12.19.20 at 7:41 pm

I took an econ 101 course when I was in university all those many years ago. I thus boggles my mind how the “time value of money” has dropped to near zero.

Let me explain how I recall it was supposed to work: Money is more valuable (or desirable might be a better word) today than at some distant point in the future. You can get a new car or boat or solar panels now, rather than at some future point. So to encourage people to buy bonds instead of boats they had to be paid to do so, hence interest rates. The higher inflation went, the more need for ready money so interest rates had to rise to attract investment (which also tempered inflation).

So that all seems to make sense to me. Anyone who has ever raised a child knows that a candy today is worth much more than a candy tomorrow so you have to incent the child with 2 candies tomorrow. Interest and dividends are similar; the promise of more income tomorrow than the cash you have today. It was never some altruistic “social contract” to fund people’s retirement. On the contrary it was a way of getting people to invest in capital projects rather than blowing all the money on boats.

So what do near zero rates mean? Why is it that the time value of money has collapsed? Why is it that a dollar today is no more valuable than 1.0025 dollars a year from now? Is it deflation? Disinflation? Stagflation? Is the economy in such dire straits that they need people to spend money on boats today regardless of what it means for the future? Is our productive capital so overbuilt that we need to stop investing in it and start consuming more to utilize the existing productive capital? I am not sure but something is up. The time value of money is a well established idea but now it has none, or close to none.

Color me nonplused.

#60 Nonplused on 12.19.20 at 7:56 pm

#5 Coastal Zapper on 12.19.20 at 12:04 pm
I took a significant loss in my RBC Direct Inv. account 20 years ago. Account has since been closed. Is there any way for me to get this loss documented so I can use it for future gains.
Calling RBC with a cell phone is near impossible so far.
Local RBC could not help me, go figure.
Any help would be appreciated.
Happy Holidays to you all.

————————-

I am no tax accountant but I believe there is a time limit on declaring capital losses, and it is shorter than 20 years (7 comes to mind).

Happy holidays to you as well! And all the other commentators including Faron. It is the time of year to set aside our differences.

I have Muslims to the left of me a Buddhists to the right, but they have all stated that they find my Christmas lights enjoyable in these dark nights. I don’t put them out for religious reasons, my son doesn’t even know what the inside of a church looks like. And anyway it started as a Pagan tradition, which we “culturally appropriated” because there was a buck to be made selling these otherwise useless trinkets.

The Muslims to the left of me inherited a permanent eave display when they bought the house and even they are lighting them up. It’s kind of festive. It’s just fun lights and it is nowhere prescribed in the bible so lets just all enjoy the season.

#61 Nonplused on 12.19.20 at 8:06 pm

#39 Apocalypse2020 on 12.19.20 at 5:21 pm
BREAKING NEWS

“Heated Oval Office meeting included talk of martial law.”

Michael Flynn justifies this, saying “…martial law has been invoked 64 times in our history…”

https://www.cnn.com/

—————————–

Oh please. How is it that Putin has a better handle on US politics than we do?

Trump is not leaving politics, he can’t as he has 75 million supporters. But he isn’t implementing martial law either.

Biden will be inaugurated on Jan. 20th but Trump won’t be going away anymore so than Obama did. Pence 2024.

#62 kc on 12.19.20 at 8:07 pm

Released from The World Health Organization that they even come out and say now that the PCR CT testing for covid should not be used to find cases…. damn what is that saying about all these positive cases???

cheers

https://www.who.int/news/item/14-12-2020-who-information-notice-for-ivd-users

#63 Emma Zaun - GreaterFool Unpaid Intern #007 on 12.19.20 at 8:09 pm

Attention: TurnerNation

Your post here today confirms you are a priority for COVID vaccination.

Remove your pants and underwear.

Bend over.

Follow the direction of the arrows on the floor. Do not go the other way.

Keep yourself masked.

Follow all instructions.

Warm your buttock cheeks against those of Crowdedelevatorfartz if you feel cold.

#64 cuke and tomato picker on 12.19.20 at 8:29 pm

I enjoyed Emma Zaun ‘s comment. Keep it up 007.

#65 kommykim on 12.19.20 at 8:30 pm

RE: #5 Coastal Zapper on 12.19.20 at 12:04 pm
I took a significant loss in my RBC Direct Inv. account 20 years ago.

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

Did you declare your loss to the CRA at the time of disposition when you did your taxes for that year? They may have a record of it. I know that’s how it works today. The CRA keeps track of your capital losses that you carry forward and lists it on your assessment you get every year. Since you are asking, I would guess that the answer is no. Strange that you should now remember it 20 years later….

#66 Dogman01 on 12.19.20 at 8:35 pm

Turner Nation

Outdoor Skating in Calgary illegal.

I am sure others have seen this.
Crazy – Nuts, find some of the other videos where it shows they bring out Tasers.
https://globalnews.ca/news/7531847/video-arrest-calgary-rink-police/

Come on now – a 21 years old, skating outdoors, they cut off his skates – Deadly Weapon you know.

This is what happens when those whom still value Liberty and are willing to make a stand for reasonableness are swamped by a society that wants safety enforced, apparently by minions whom follow orders, with low IQ’s, and can’t use de-escalation.

Just gross.

#67 reynolds 531 on 12.19.20 at 9:12 pm

In a past life I helped run a medium sized pension fund, where we did the bank loan thing for a while. 10-20% of those loans are always non performing. So you need to be really careful your loan picker is choosing the right borrowers.

Also I’m impressed you actually published my comment the other day on the ten year mortgage post. Again, why take the other side of that trade? Fixed income right now is a minefield.

#68 chris on 12.19.20 at 9:26 pm

What is you take on CPD ? I bought in March around $8.5 .. should keep it for long haul ?

#69 What a croc! on 12.19.20 at 10:24 pm

Brazilian President Jair Bolsonaro has launched an attack on coronavirus vaccines, even suggesting that the one developed by Pfizer-BioNTech could turn people into crocodiles or bearded ladies.-

__________________________________________________

Yes, but the real question is….do I get my choice?

#70 IHCTD9 on 12.19.20 at 10:28 pm

#60 Nonplused on 12.19.20 at 7:56 pm

The Muslims to the left of me inherited a permanent eave display when they bought the house and even they are lighting them up. It’s kind of festive. It’s just fun lights and it is nowhere prescribed in the bible so lets just all enjoy the season.
— ————

I have a customer, and my contact there is an Indian dude (Hindu guy). I said “have a good holiday” upon departing on my annual Christmas visit. He ripped me a new one. “What is this crap? Merry Christmas!” For some reason, that made my day.

#71 In God we Trust on 12.19.20 at 10:44 pm

#60 Nonplused on 12.19.20 at 7:56 pm
#5 Coastal Zapper on 12.19.20 at 12:04 pm

The Muslims to the left of me inherited a permanent eave display when they bought the house and even they are lighting them up. It’s kind of festive. It’s just fun lights and it is nowhere prescribed in the bible so lets just all enjoy the season

________::::::::::____:::::::::_______

Me thinks otherwise.

And God said, “Let there be light,” and there was light. – Genesis 1:3-5

#72 Stan Brooks on 12.20.20 at 1:26 am

The rates would have been cut anyway. The pandemic just speeded that up.

The monetary policies are idiotic as they depend on ever cheaper credit and on the ability of the borrower to pay, not on the willingness of the savers to loan.

Oh wait, there are no real savers, all those deposits are made up by credit and liquidity injections, not by past labour or sale of capital.

So the central banks stepped up and ‘provided liquidity’ in order to ensure that credit orgy and lenders profits continue unabated.

Releasing tons of new cash in the process.

Countries with real savings (not the fake savings induced by mad money printing and irresponsible handouts) rely on it and have much smaller deficits and borrowing while hit harder by the virus, their currencies strengthen.

Our currency is melting down before our eyes/when not compared to the USD that is in a weak cycle due to their own credit situation.

As Kyle Bass stated, be aware of inflation with central banks stuck at zero rates for a very long time.

The more this idiocy continues, the more banks will be stuck at zero and the more there would be nothing they can do in order to fight inflation.

I would not be surprised if house prices go even higher by 30-50 %, after all this is shat the governor of BoC wants as he openly and shamelessly stated.

Food prices doubling or tripling in just a few years.

While incomes stagnate as virus rages and real economy disappears.

Folks, this credit situation is like a cancer, the more it goes, the more it distorts the economy by channeling money in non-productive activities as financials and housing and reducing further it’s competitiveness.

If the world really reopens as we all dream of, we and most of countries with huge debt are doomed economically.

The low rates are result of bad policies and theft, not because of the virus. It is used as an excuse to justify the existence of a failed credit system not based on savings.

So yes, retirees and savers are screwed.
So are the taxpayers.

So who precisely will dig us out of this hole? Central bankers, who if competent, would have been making 100 times more on the free market out there as fund managers vs being bureaucrats who screw with a smile and their incompetency millions?

I put zero trust in their policies and a result I am diversifying out of their economies and currencies.

Whoever is left, well, will pay the price.

The rush in cryptocurrencies and other risky assets so much mocked by traditional investors is precisely because of distrust in national currencies.

My personal opinion on preferreds is that it is pure trash. What fixed income of 3-4 % in an era of currency destruction and much higher increase of cost of living?
Of course GICs and bonds are even bigger trash.

Inflation protected assets is the key in the next 3-5, maybe even 10 years.
And hey that includes overblown real estate.

As for the bonds ‘appreciating’, that is capital ‘gains’ due to the fact that rates declined.

That is sustainable only if they/the rates go even further down and I will absolutely rejoice negative nominal real rates combined with even accelerated increase in the cost of living, that path that we are pretty much locked on.

The important part is for the music to keep playing while the ship is sinking as when it stops and if you don’t have a place in the life boats it will become ugly in the cold water.

Cheers,

#73 crowdedelevatorfartz on 12.20.20 at 7:20 am

@#64 cuke

I’m somewhat mystified.
All the vaccinations I’m seeing on tv…… are in the arm.

#74 David Hawke on 12.20.20 at 7:42 am

Good work TurnerrNation keep the insightful comments coming.

#75 KLNR on 12.20.20 at 8:03 am

@#11 Truth or consequences on 12.19.20 at 12:50 pm
I find it amusing that a few days ago, there were at least 27 commenters on this site calling out the “cake lady” and hundreds of thousands of other Canadians , even resorting to referring to them as “thieves”. I expect that many more felt this way but just didn’t comment. I won’t quote all the comments here as it would take pages and pages but you know who you are.

The fact of the matter is, as I pointed out on numerous occasions here, that the CERB application instructions were anything but clear. In fact, the government has now even admitted this on several occasions.

Now the government is even talking about forgiving some or all of these transactions, yet this blog steerage section has taken it upon themselves to besmirch a large number of people who were just doing what they believed they were entitled to do.

I said it before … I’ll say it again. Shame on YOU! … for judging others so quickly and without all the facts. The steerage section of this blog gives new meaning to “artificial intelligence” and groupthink!

You sound guilty.

#76 maxx on 12.20.20 at 8:29 am

@ #21

Excellent post. We need hordes more people like you, who advocate for seniors.

Seniors in the western world comprise a marginalized stratum of society. They are perceived as no longer fresh, effective, current, not worth paying attention to and decidedly not “in the game”: an inevitable state to be feared. What a wussy attitude. What a crass and stupid approach to life by ascribing some kind of “value” to everything.

Many other cultures revere seniors for their life experience, wisdom and sympathy. They recognize the value which was ALREADY contributed and continues to be contributed to family and society in general.

Without any doubt, Canada is an ageist society. Canada is meant to be a peace-making, communicative player on the global stage. Full of humanity…….full of something else is more like it. Scratch just a little bit of its varnish and this pervasive, anti-senior sentiment in all its magnificent ugliness is alive and kicking.

How else could we explain the absolute dreck that is the system of senior “care” homes we’ve witnessed, most especially over the past 9+ months?

Canada is nothing without respecting every single cohort of society. It needs to realize, learn and act on that.

Seniors can just be left to lie in it is one of the greatest things we’ve learned through COVID-19. To be clear, it’s not the workers in these homes, it is the lack of money to allocate proper care.

#77 Wrk.dover on 12.20.20 at 8:47 am

Mr. Market is high/year end corporate suite bonuses to follow their yearly ritual.

All stimulus cheques issued in the USA will be used to make payments on long ago purchases.

Growth? Nah!

Want something tangible for this years TSFA contribution amount? Solar hot water systems pay back twice as fast as solar electric systems do.

My 2014 installation has paid for its self, but what to do with the resulting savings, oh I know, self insert interest onto my ledger!

#78 Penny Henny on 12.20.20 at 8:49 am

#57 Smoking WEED on 12.19.20 at 7:33 pm
#52 Penny Henny on 12.19.20 at 6:56 pm
#26 espressobob on 12.19.20 at 3:59 pm

Mr market is a tough contender. Gold is a useless position like any other commodity play.

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

Really?
I guess I was doing something wrong when I bought in April 2019 and recently sold to realize gains of approx 60%. (XGD)

Thanks for the advice

______________________

Yes, and I bought shares of a penny stock company 7 years ago that eventually became Tweed… which became Canopy Growth (WEED) when I sold it not long after.

But i stopped recommending cannabis stocks to anyone 3 years ago.
//////////////////

So I guess we can agree there is a time and place for everything and anything. Haven’t heard much from Bitcoin Millionaire, he must be counting his dough somewhere.

#79 crowdedelevatorfartz on 12.20.20 at 9:16 am

It’s official.

Trump is sulking over his loss.

https://www.dianomi.com/click.epl?url_id=638299317&ru_variant_id=103

#80 crowdedelevatorfartz on 12.20.20 at 9:24 am

@#71 Whomever we trust

And then Greta said, “Let there be L.E.D. light,” and there was L.E.D light. Crowdiefartz 20:12-20

#81 Catalyst on 12.20.20 at 9:26 am

A good post – low interest rates are the #1 issue of the day imo. Alot of top financial minds won’t touch fixed income here and I tend to lean towards their thinking.

As far as the boomers complaining about not being able to hack it at low rates, I would argue low rates have hurt the millennials more. We have to buy/rent houses at 10x annual wages and low rates benefit those with assets which is overwhelming boomers. Rising interest rates is not what a boomer should want unless they would be happy to collect 5% yields in return for a 500k loss on thier house.

Low rates are making 40-50x PE comparable to a 2% earning yield which is blowing a massive asset bubble. I’m personally watching the 10yr US rate and it has failed to break 1% several times despite the continued stock rally. Eventually the credit and equity markets converge and I think it will be equities correcting downwards.

#82 Ryan Lewenza on 12.20.20 at 9:27 am

short horses “ Great post, Ryan. You present some interesting points. I’ve already added an allocation to high yield bonds (US) because of earlier posts on this (not pathetic) blog, now I’m interested in finding exposure to corporate loans by Canadian banks.

Is there a way to get exposure to these using ETFs? Is it equivalent to investing in convertible bonds, or are these investible instruments very different?”

Here’s an article on these types of loans and they provide a few ETFs that invests in these loans. – Ryan L

https://www.investmentexecutive.com/news/products/the-allure-of-floating-rate-etfs/

#83 millmech on 12.20.20 at 9:33 am

#62 kc
I do not see the worry about the virus, I am more worried about how we are going to be spending the last ten years of human existence on this planet(Little Greta must be so happy, .) It was not too long ago that if you questioned climate change you were labelled a “denier”.
What was it before that, peak oil was going to be the end of human civilization, over population and lack of food, extinction level events that humans are also causing also.
The thing is the media gets everyone whipped up into a frenzy , the numbers or system that they used is found to be incorrect no one is held accountable and no is allowed to question the information because just asking about the science makes you a denier/anti. Science is the new religion, to question it is to show a lack of faith and one is to be exile for having such weakness.

#84 In Trudeau they Trust on 12.20.20 at 9:38 am

#71 In God we Trust

I have this both sides of me and across the road. Wish they had bylaws against this where I am in Kitchener, it feels like I spent good $ only to be in the middle of a commercial area beside stores. It’s nothing more than a pi$$ing contest between the neighbours.

#85 Sheesh on 12.20.20 at 9:45 am

#62 kc on 12.19.20 at 8:07 pm
…. damn what is that saying about all these positive cases???
……
Well, from your mit link from the other day…..

Given our community’s experience with Covid Pass testing so far, Ferullo doesn’t believe subclinical positives are prevalent. “In proof of this, as of the end of October, we have done more than 156,000 tests on asymptomatic individuals through COVID Pass and have had fewer than 90 positives,” he notes. “If this was a pervasive problem, I’d expect to see many more than that.”

And:

MIT has been able to maintain a monthly positive-test rate of 0.05–0.06 percent since August,” he says. “I do believe the test may be identifying some sub-clinical cases, but based on our current understanding of the virus, we’d rather err on the side of caution than put our community at risk.”
The last sentence says it all.

#86 Tax rules on 12.20.20 at 10:08 am

To the person who lost money 20 years ago,
Disregard people who post without referencing CRA

Please read CRA guideline
Capital losses of other years

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25300-net-capital-losses-other-years.html

They even have a section for losses prior to 1985

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/capital-losses-deductions/other-year-losses-carried-forward/losses-incurred-before-may-23-1985.html

I would assume if this loss was with a stock broker the appropriate documents would have been submitted 20 years ago. It’s up to you to write to CRA and make inquiries.
Also look at your account with CRA it shows all your history of capital losses and other great information.

Good luck

#87 Dharma Bum on 12.20.20 at 10:38 am

PIMCO Monthly Income Fund

Set it and forget it.

https://marketsandresearch.td.com/tdwca/Public/MutualFundsProfile/Summary/ca/PMO005

For part of your fixed income allocation.

Sleep well, my dogs.

#88 Dharma Bum on 12.20.20 at 11:00 am

For investor rookies, young folk, or those disciplined folks with some dollars to invest on a monthly basis, why not keep it simple?

Vanguard has 3 index ETFs that split your allocation between growth equities and fixed income 80/20, 60/40, or 20/80. VGRO, VBAL, and VCIP.

Pick your comfortable allocation and get the ETF accordingly.

https://www.youtube.com/watch?v=rSn2CT6lDlA

Don’t over think it. Until you have amassed enough money to diversify further, you are wasting your time.

Easy Peasy.

Sleep well.

#89 KLNR on 12.20.20 at 11:14 am

@ #84 In Trudeau they Trust on 12.20.20 at 9:38 am
#71 In God we Trust

I have this both sides of me and across the road. Wish they had bylaws against this where I am in Kitchener, it feels like I spent good $ only to be in the middle of a commercial area beside stores. It’s nothing more than a pi$$ing contest between the neighbours.

The grinch is alive and well apparently

#90 crowdedelevatorfartz on 12.20.20 at 11:17 am

@#117 Linda
“About that cottage in Brittany, or some other warm country locale like Spain, Portugal, Italy etc.”

+++++
Warm?
Brittany isnt exactly le cote d’azur

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

Parisians flock to its beaches in the summer to escape the oppressive heat and humidity of the city.

Think Britain with slightly less rain and better food.

#91 Nonplused on 12.20.20 at 9:00 pm

#71 In God we Trust on 12.19.20 at 10:44 pm
#60 Nonplused on 12.19.20 at 7:56 pm
#5 Coastal Zapper on 12.19.20 at 12:04 pm

The Muslims to the left of me inherited a permanent eave display when they bought the house and even they are lighting them up. It’s kind of festive. It’s just fun lights and it is nowhere prescribed in the bible so lets just all enjoy the season

________::::::::::____:::::::::_______

Me thinks otherwise.

And God said, “Let there be light,” and there was light. – Genesis 1:3-5

————————-

I think Genesis was talking about the big one. And Muslims read Genesis too.

#92 Nonplused on 12.20.20 at 9:04 pm

#70 IHCTD9 on 12.19.20 at 10:28 pm
#60 Nonplused on 12.19.20 at 7:56 pm

The Muslims to the left of me inherited a permanent eave display when they bought the house and even they are lighting them up. It’s kind of festive. It’s just fun lights and it is nowhere prescribed in the bible so lets just all enjoy the season.
— ————

I have a customer, and my contact there is an Indian dude (Hindu guy). I said “have a good holiday” upon departing on my annual Christmas visit. He ripped me a new one. “What is this crap? Merry Christmas!” For some reason, that made my day.

———————-

My experience is that Hindus are very tolerant religious wise. They don’t try and convert, but assume you’ll get it right in one of your future lives. Don’t start a war with them though, they don’t fear death.

#93 Nonplused on 12.20.20 at 9:10 pm

#80 crowdedelevatorfartz on 12.20.20 at 9:24 am
@#71 Whomever we trust

And then Greta said, “Let there be L.E.D. light,” and there was L.E.D light. Crowdiefartz 20:12-20

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That was funny. I think you win the chirping contest.

#94 Nonplused on 12.20.20 at 9:24 pm

#89 KLNR on 12.20.20 at 11:14 am
@ #84 In Trudeau they Trust on 12.20.20 at 9:38 am
#71 In God we Trust

I have this both sides of me and across the road. Wish they had bylaws against this where I am in Kitchener, it feels like I spent good $ only to be in the middle of a commercial area beside stores. It’s nothing more than a pi$$ing contest between the neighbours.

The grinch is alive and well apparently

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Well said KLNR. But I guess it is like Halloween. Some people put out all the ghoulie decorations and hand out full sized candy bars, others turn out the lights and hide in the basement.

For kids Halloween is the best holiday of the season because they get to dress up as their favorite anime or Disney character and get as much candy as they can collect. For adults it is New Year’s Eve because you get to party with your friends and exclude relatives you don’t like and nobody cares if you drink too much. Much drunken dancing occurs.

But I think Christmas is my favorite because I like the festive lights and a chance to see my daughters.

And even though I no longer have a subscription to the church and haven’t for years, the redemption of this otherwise unredeemable flock of questionables still seems like a good idea to me.

#95 Prince Polo on 12.21.20 at 8:58 am

#66 Dogman01 on 12.19.20 at 8:35 pm
Turner Nation

Outdoor Skating in Calgary illegal.

I am sure others have seen this.
Crazy – Nuts, find some of the other videos where it shows they bring out Tasers.
https://globalnews.ca/news/7531847/video-arrest-calgary-rink-police/

Come on now – a 21 years old, skating outdoors, they cut off his skates – Deadly Weapon you know.

This is what happens when those whom still value Liberty and are willing to make a stand for reasonableness are swamped by a society that wants safety enforced, apparently by minions whom follow orders, with low IQ’s, and can’t use de-escalation.

Just gross.

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Outdoor skating is still legal. If you had read the article you yourself had posted, you would have noted this:
” ‘You’ll see most of the rink operators have placed a capacity sign somewhere near where you would enter the ice,’ Henry said.
‘Those capacity signs are based on what they believe the most safe approach to having a number of people on the ice is.’ “.

Any attempt for me to judge the public & police action would be folly, as I was not there.

#96 Convince Me on 12.21.20 at 12:04 pm

“As I sometimes (crassly) say to clients, ‘central banks are screwing retirees with these record low rates!'”

Woe is me. The value of my parents SF detached has grown 5 fold over their original purchase price. We’ll see if my house in the burbs of Van (purchased a year prior to pandemic FOMO) is worth 4 million in 30 years or if my salary has increased commensurately… I can give you my guess on both fronts.

I’m not looking for handouts, but in comparison with people a little younger than myself, at least boomers have options. You want to talk about getting screwed, let’s look at housing policy across the board.

Otherwise, always appreciate your numbers based approach and insights, Ryan!