Free advice

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DOUG  By Guest Blogger Doug Rowat
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How long have I been in the investment industry? When I started, Yahoo! was the search engine of choice and Britney Spears was better known for her stint with the Mickey Mouse Club.

I’ve been here a while.

A good chunk of my past was spent as an analyst and portfolio manager, and another chunk as a financial advisor. I also had zero grey hairs when I started. Now I’m somewhere in between Mr. Fantastic and Anderson Cooper.

However, every grey hair represents some acquired wisdom. Therefore if I could go back in time and share some advice with my younger, dark-haired self regarding selecting a financial advisor—my current profession—here’s what I might offer:

Favour fee-based advisors. Advisors are generally paid in two ways: by charging commissions or by charging a fee. Commission-based advisors charge for every trade they recommend and execute. Therefore the more trades made, the more the advisor gets paid. Generally speaking, advisors are an ethical bunch, but a commission-based structure doesn’t align advisor and client interests. The risk of unnecessary trades is always present. Fee-based advisors charge an annual percentage (usually staggered monthly) based on the clients’ portfolio asset level. Therefore the advisor makes the same amount whether they make one trade per year for their client or a thousand. Portfolio changes made under this structure always align advisor and client interests—the more money the client makes, the more money the advisor makes.

Fee percentages that advisors charge vary widely. One percent to 1.25% would be at the low end of the range. One-and-a-half percent to 2% (or more) would be on the high end. However, if your advisor charges on the high end they should be able to justify this fee by outlining a broad array of services. See final point below (‘Comparison shop’) for additional detail on this.

Be alert to tilts toward in-house products. Naturally, no advisor’s likely to disclose their exact portfolio holdings to a prospect, but that doesn’t mean that a potential client can’t still ask for details. If an advisor uses ETFs, for instance, ask how many ETF providers are included within the advisor’s models. If the advisor works at a bank-owned firm and only uses ETFs issued by that bank, that’s a concern. Does the advisor get paid more for using in-house products? There are dozens of excellent ETF providers in Canada, why would an advisor restrict themselves to only one? Always ask questions that reveal potential conflicts of interest. Independent advice is what you’re seeking.

Be alert to mutual fund weightings. It’s no secret that we don’t like mutual funds, but we also recognize that they’re widely used by advisors throughout our industry. However, if an advisor’s solely using mutual funds it likely means that they’ve outsourced many of their portfolio management responsibilities. In other words, it potentially represents one less thing that you’re receiving from your advisor in return for what you pay them. Also don’t be afraid to challenge advisors by discussing the independent SPIVA active-fund research, which I’ve highlighted many times on this blog.

If the advisor’s defense of mutual funds seems unconvincing or if they can’t clearly articulate their mutual-fund selection process then stay clear. Here’s a useful exercise: ask the advisor to name the lead manager for each of the funds that they use. It’s the fund managers who, ostensibly, drive all of the mutual fund’s value. Therefore if your advisor can’t name a single manager, or perhaps only one or two, then there’s good reason to be concerned about the quality of their selection process. It’s similar to buying a new car—at the very least the salesperson should be able tell you what type of engine’s under the hood.

Be alert to structured products. Structured products are ‘manufactured’ investments that are linked to a market variable. They can be complex because the market variables are virtually limitless, ranging from a single commodity price to multiple equity benchmarks. And they usually have additional features such as principal protection (at a price) or leveraged returns, which can further increase the complexity. They also tend to reward advisors handsomely. Ask if your advisor uses them, and if so, make sure that they explain them in detail along with the rationale for including them in your portfolio. As with mutual funds, be cautious if your portfolio will include large numbers of them. Always follow this rule: if you don’t understand an investment, don’t own it.

Ask about exit strategies. You want investments that are liquid. Ask your advisor if you’d be able to sell any security in your portfolio at a moment’s notice without penalty. Be circumspect if the answer’s unclear. Fortunately, effective this month, regulators have prohibited mutual-fund deferred sales charges, which are penalties investors used to incur if they sold their mutual funds early (did I mention we don’t like mutual funds?). However, there are plenty of other illiquid securities, ranging from speculative small-cap stocks to GICs, which can also penalize investors when it comes time to sell them.

Level of service. This mainly refers to the time it takes for an advisor or their staff to respond to your questions and the quality of those responses. Naturally, this is difficult to assess when you’re not yet a client, but the response times when an advisor is still trying to win your business offer clues. If response times are lengthy before you’ve even become a client that doesn’t bode well for the future. And if service levels deteriorate once you become a client, remember that you’re never trapped, you can move on.

Comparison shop. By meeting with several advisors you’re given more perspective on the array of services available in our industry. Meeting more advisors also gives exposure to different personalities. It’s like dating: see who you ‘click’ with best. This will be a relationship based on financial advice, of course, but it’s a relationship nonetheless and the more favourable the personal connection the better.

Comparison shopping also ties into my first point above. An advisor may outline a large number of services that justify their higher fees, but meeting with more than one advisor puts these fees into perspective. For example, if two advisors are offering similar services but at different costs, then, all things being equal, the choice of advisor becomes obvious. Services offered should at minimum include portfolio and risk management, detailed financial planning, tax guidance, organized and prompt administrative support, and always-available advisor access (phone, email, etc.) especially during turbulent periods. You don’t want an advisor who hides under their desk when Covid or Putin are taking markets to the woodshed.

So there’s my advice for selecting (and continuing to work with) a financial advisor. It’s an important decision as an advisor can shape your entire financial future and provide critical guidance leading up to your retirement and the same after.

My advice comes hard-earned; and, hopefully, my grey hairs will spare you a few of your own.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

 

83 comments ↓

#1 baloney Sandwitch on 06.11.22 at 10:33 am

Good post today Doug.

Could you comment on advisors who charge on an hourly basis and who charge as a % of assets. What are pro’s and con’s.

What about hedge funds who may charge 1% and then 10% performance fees above a threshold (i.e. above a benchmark). The latter structure appeals to me more.

#2 Andrewski on 06.11.22 at 10:36 am

Thanks Doug, I wonder what’s the percentage of people who work with financial advisors who have little to no idea how their advisor gets paid? Your post today lays it out very well. I also wonder how many people would actually move their money elsewhere?

#3 Honest Realtor on 06.11.22 at 10:39 am

Thank you for this, Doug. You are clearly an ethical and responsible advisor.

What Doug demonstrates, however, is just how perilous the investment game can be for the vast majority of people based on mutual funds, advisor bias and behaviours.

This is why real estate will continue to be the most solid investment you can make.

Don’t be perturbed by the slight downswing in the market right now. Anyone buying wisely in the months ahead (with the exception of boring shacks in places like Ajax or Milton) will do exceptionally well in the years ahead. Expect a 3-4X valuation increase over the next 15-20 years in the 416. Plus you get a roof over your head and a family centrepiece.

When others are nervous is often the best time to buy. Don’t miss out.

#4 Flop… on 06.11.22 at 10:46 am

Robax, I have a solution for your grey hairs.

A couple of years ago I had a botched ankle surgery and an extended period of time off of work.

I was doing research on natural ways to reduce inflammation and pain levels in my body, as I’d also had two hernia surgeries in recent years.

I stumbled upon the use of onion juice, the claim was that it could regrow your hair and return it to your natural colour.

I had lost a lot of hair with aging and a lot of surgeries in a row didn’t help in this department, so with a lot of time to burn hobbling around the house I decided to experiment.

My findings after 2 months my hair stopped falling out, it wasn’t unusual to look on the pillow each morning and see approximately 10 hairs with the bulbs attached.

I now see the occasional one, will still go bald eventually but using onion juice will slow down the process by a decade or two, hopefully to the age when I no longer care about my appearance.

After about 4 or 5 months of a weekly spritz of onion juice, all my grey hairs had grown out and returned to my natural colour.

As usual Mrs Flop thought I was an idiot, but she now does it instead of getting her hair dyed to delay the aging process.

I did not grow any new hair, onion juice only helped with retention and return to natural colour.

Inflation is currently making this process more expensive but I estimate it cost me 50 cents a week and makes me feel a little better about myself, plus cutting up an onion once a week is as good a time as any to let it all out with a good cry…

M47BC

#5 Shawn on 06.11.22 at 10:59 am

Summertime, my triggered groupie

Summertime yesterday said this:

What is truly astonishing is the persistence and stupidity of posters like Shawn who continue to deny inflation despite the fact that even central bankers acknowledge it and are alarmed about it.

The true inflation of food in my view is 20-25 %, energy – 50-100 % in the last year alone.

***********************************
Summertime gets weirdly triggered when I merely give the actual CPI inflation number with a link to the data. It’s 6.8% as of April dude so they are getting closer to what you perceive. The data also gives you the weights in the basket and the individual inflation by component.

He then lies that I deny inflation, of course not quoting me. How weak is that?

Maybe he really lost it when I mentioned watermelons did get way cheaper recently and gave the prices and the store involved.

For the record, here again is the April inflation report:

https://www150.statcan.gc.ca/n1/daily-quotidien/220518/dq220518a-eng.htm

I gave one recently too with the inflation on a whole list of grocery items.

Weird that a guy (and yes I feel safe assuming his gender) gets so triggered by actual facts. But that’s the world we live in now. Trump’s world of alternative facts. Sad.

#6 crowdedelevatorfartz on 06.11.22 at 11:01 am

@#153 georgie

“The Canadians men soccer team is a disgrace. They qualify for world cup and now try to guarantee failure. ”

+++
They were promised a participation medal by the Federal Govt.

#7 [email protected] on 06.11.22 at 11:11 am

When you charge a percent, is it just on the personal financial asset invested in the market (Cash, Stocks, Bonds) or do you also charge a percentage on the business assets of the client, if you are giving integrated financial advice in view of clients total net worth, family members, life state and business stage. I mean in the sense of managing a family office.

#8 Søren Angst on 06.11.22 at 11:22 am

Yesterday Garth wrote:

“Meanwhile stock markets have shed 18% in the US from January’s high, and 8% on Bay Street after cresting in April. A balanced portfolio is off about 7%, after an advance of 36% in the last three years.”

So after yesterday’s US Mr. Market Inflation News melt down and the “off about 7%” part, with trepidation I went to TD WebBroker to assess the damage wrought upon my Threadbare Portfolio. YTD time weighted return:

+17.3%

Up 1.3% from last month.

High yield monthly dividends the savior and of course Value/B&D as much as I can afford (includes my stupid single stock pick of Albatross TWTR).

Amateur, horseshoes up my derriere?

NO. Thus far, have used your FREE advice Doug, Ryan, Garth and other guy, well interpreted and put into good effect.

——————-

Not all fortunate; thus, pay for a descent Advisor per your recommendations.

Thank you Garth and Crew for all that you do.

#9 Shawn on 06.11.22 at 11:26 am

A dollar is ten cents? (Never mind a dollar is a dollar)

Coincidently to Summertime’s lie that I deny inflation I was thinking about how a dollar is now ten cents and $10 million is the new $1 million. (I thought I was exaggerating when I said that recently but maybe not.)

So when is a dollar ten cents?

Well, using U.S. CPI data a dollar today (end of 2021) is worth precisely what ten cents was in 1957. So inflation of ten fold in 65 years. And yes, I do like to use actual data. I don’t have the Canadian data at hand.

Born in 1960 I can attest to a number of items that cost a dollar today but ten cents in my youth. Chocolate bars even in corner stores were ten cents for a long time, now usually $1.00 or more. Two bags of “chips” were ten cents now if you can find the same little ones from back then you might get two for $1.00. Pop at the corner store in 1966 was 15 cents and now often $1.50 for the same in a corner store.

In June 1966 I spent a dollar I got as a prize at then of the school year buying two bottles of pop, two chocolate bars and two bags of chips (to share with little brother) and had change left over. (The memory of that is priceless of course).

My family’s Motel was charging about $10 for a room in the late 60’s. Today the same room (of course renovated several times) is at least $100.

So yeah inflation is real. Most of it occurred in the 70’s and 80’s. For the past 25 years or more inflation was not much of a concern. Its bite was slow. But now yes it is biting hard.

I never worried much about he idea that money was depreciating fast. It was depreciating slow and I could easily outpace it in stock investments.

But yeah when houses and cottages that were $100k circa 1990 are now $1 million there may come a time to blame currency debasement.

I remember stories of bank CEO’s making too much money such as $300k or $500k circa 1985 when companies began to be required to report executive pay. Now multiply that by at least 20. Partly debasement or just demented? Making executive pay public was supposed to shame them into lowering it. Instead it quickly became a race to the top.

When Dustin Johnson is getting $125 million apparently upfront from LIV Golf I have to start thinking about currency debasement.

Well, anyhow, nothing we can do about it except keep investing wisely. (Oh, and get a job with an indexed DB pension.)

#10 Honest Realtor - Not on 06.11.22 at 11:29 am

Thank you for this, Doug. You are clearly an ethical and responsible advisor.

What Doug demonstrates, however, is just how perilous the investment game can be for the vast majority of people based on mutual funds, advisor bias and behaviours.

This is why real estate will continue to be the most solid investment you can make.

Don’t be perturbed by the slight downswing in the market right now. Anyone buying wisely in the months ahead
—————————————————-
Wow…what a snake oil salesman!

#11 Dave on 06.11.22 at 11:43 am

BoC kept interest rates way too low for too long and now we have unbelievably high inflation.

Would BoC potentially take interest rates too high? Would severe inflation truimp recession?

#12 Ustabe on 06.11.22 at 11:47 am

I got a little bit lucky right out of high school, made a chunk of money up north. Long story made short that allowed me to buy a house, go to university, cover my then girl friend’s university and play with entrepreneurship. My laundromats and take away pizza joints phase.

She became a vet, I diddled around with cafes and diners. We married each other. My brother and I at one point embarked upon a side gig of rentals in and around Calgary.

Again, fast forward, sell the last diner, sell the practice, sell the Calgary real estate and retire. Probably over a ten year period, both fully retired before 60.

So, where was this column at that point in my life?
Hadn’t really thought about investments until there we were with no businesses but way more money than ever. Go from worker bee to Scrooge McDuck in a couple of years. Fighting with CRA is costly, specialist lawyers and accountants need their cut…

I ended up at one of the old school management firms, now owned by a Big Bank. Surely they would be OK for us investment illiterates, right?

We ended up with zero ETFs, majority of the money in a mutual that was simply a fund made up of other funds.

That is all changed now but the point remains, even a seasoned, serial entrepreneur and a highly trained and skilled medical type person can stumble on matters financial.

So, keep on doing Dog’s Work Turner and Friends, it is needed.

#13 Stone on 06.11.22 at 11:58 am

#83 CL on 06.10.22 at 5:42 pm
I don’t know why people are complaining about the price of a litre of gas at around $2. I just bought a 591ml bottle of water and it was $3 so $5/litre. Inflation is being used as an excuse to charge more. I won’t buy water like that again.

People complain about a commodity called oil that costs not only huge sums of cash to get out of the ground, process and transport but yet buy water like this all day long. Ridiculous.

———

You didn’t pay $3 for a 591 ml bottle of water. You paid $3 for convenience.

$3 makes me think you bought that water from a conveniently located vending machine or from some tourist trap. Airports are even more expensive. A little trot (with the added benefit of some exercise) to a grocery store would have probably saved you loads.

#14 Shawn on 06.11.22 at 12:06 pm

The 401k system in America is far superior to the rrsp here where you are hung out to dry. Worthless parasite advisors will milk you dry in Canada.

My 401k is the best performing investment I have and requires me to do no work. The fees paid are something like 0.5%

Canada is an odd place. We will have millions of people entering retirement with nothing saved. Do you think your traitorous politicians care? You are a worthless disposable worker who is easily replaced by migrants when you get too old to work.

#15 Søren Angst on 06.11.22 at 12:07 pm

Shawn

Precision on inflation using StatCan and a Paleo perspective, all very good. Still, have a care.

StatCan also published in essence “Our Youth is getting Hammered by Inflation” by another title, a short read:

“Rising prices are affecting the ability to meet day-to-day expenses for most Canadians”
https://www150.statcan.gc.ca/n1/daily-quotidien/220609/dq220609a-eng.htm?HPA=1

The Young income earning per CRA tax brackets 2020, StatCan Net Wealth 2019, used my Twitter account for expediency:

https://twitter.com/bsant54/status/1535651483659780100
https://twitter.com/bsant54/status/1535651825038331905

Cdn Youth in trouble now cash flow wise and more of that to come as CB raises rates and RE value drops all the while Inflation persists.

Look at the Under 35 yr old Median Net Wealth, and their Median RE Asset value and calculate a 20% home price drop

= Negative Net Wealth.

Average is skewed by the few wealthy in that cohort. Median the more representative number for them.

So have a care with the Inflation talk (and DB pension reminder, only 36% of them have a Employer Pension Plan, rub salt into the wound).

There are and will be a lot of our Youth hurting now and more so well into this year and longer as you describe the 80’s you and I lived.

Our Youth is in a sad state of affairs. I feel very bad for them. Less anecdote, more commiseration.

#16 Yukon Elvis on 06.11.22 at 12:19 pm

#9 Shawn on 06.11.22 at 11:26 am

Born in 1960 I can attest to a number of items that cost a dollar today but ten cents in my youth. Chocolate bars even in corner stores were ten cents for a long time, now usually $1.00 or more. Two bags of “chips” were ten cents now if you can find the same little ones from back then you might get two for $1.00. Pop at the corner store in 1966 was 15 cents and now often $1.50 for the same in a corner store.

In June 1966 I spent a dollar I got as a prize at then of the school year buying two bottles of pop, two chocolate bars and two bags of chips (to share with little brother) and had change left over. (The memory of that is priceless of course).

My family’s Motel was charging about $10 for a room in the late 60’s. Today the same room (of course renovated several times) is at least $100.
++++++++++++++++++++

Born in ‘49. I remember those days. Draft beer was .20 cents in the pubs and short beers were .10 cents. Peanuts were free in some places. I got served when I was 17.

#17 Doug Rowat on 06.11.22 at 12:20 pm

#1 baloney Sandwitch on 06.11.22 at 10:33 am
Good post today Doug.

Could you comment on advisors who charge on an hourly basis…

—-

That’s fee-only, which is fine if you want some lightweight financial planning advice.

Useful financial and investment advice requires a long-term relationship.

—Doug

#18 Overheardyou on 06.11.22 at 12:37 pm

Thanks for the excellent article Mr. Rowat!

#19 Søren Angst on 06.11.22 at 12:38 pm

Past 2 days I read and still Sail Away you do not relent in your snow goose culinary self-congratulatory skills.

For other Commenters, wild waterfowl (geese, ducks) after frolicking in the nations sloughs for most of their lives acquire the same pungent slough odor (and taste) in their meat. Called “gaminess” or plain “gamey”.

I know how to get rid of that 100%.

Sail Away uses ridiculous sauces and accompaniments because he does not know how. Tries to mask the gaminess and passes that off as culinary expertise.

Almost worthy of pity.

My Mother taught me how to get rid of the gaminess (besides meat and potatoes Italian on a restaurant scale every day on a farm in NE Italia she learned Haute Cuisine from her French Cordon Bleu School Chef Aunt). Never ate a gamey tasting roast wild duck or goose at my parents home.

I learned how to cook from my Mother.

You can fool and/or impress the don’t know dung from clay crowd Sail Away with your culinary BS, but not me.

TIP:

Ditch the Snow Goose and its greasy meat for late hunting season Northern Mallards. Should be obvious as to why. If there are few of them in the West Coast Flyway, use some of your large HELOC and hunt in AB instead. Plenty of them there then, plump and grain fed from plundering AB farm fields.

———————

As for your beach Mollusc exploits:

BC Cholera flavoured Clam Bake for that je ne sais quoi.

Yum. Yum.

https://www.timescolonist.com/local-news/treating-greater-victorias-sewage-cleaner-ocean-but-kinks-remain-5155298

https://theprovince.com/opinion/anna-santo-and-natasha-klasios-stop-using-b-c-s-oceans-as-a-toilet#:~:text=The%20bad%20news%20is%20that,have%20proper%20sewage%20treatment%20facilities.

I like it that Justin surfs in Tofino.

#20 Ponzius Pilatus on 06.11.22 at 12:41 pm

Doug.
You are wise beyond your years.
And a touch of grey
Kinda suits you anyway.
But, ditch the bath robe.
You’re back at the office.

#21 Stone on 06.11.22 at 12:43 pm

So there’s my advice for selecting (and continuing to work with) a financial advisor. It’s an important decision as an advisor can shape your entire financial future and provide critical guidance leading up to your retirement and the same after.

———

Good post however one piece of advice was missing.

Pay to acquire knowledge, not for people to simply manage things for you. It means that they instead have the knowledge (and power in the relationship) and can potentially fleece you. Nothing wrong with delegating management of certain things to others but never, ever abdicate knowledge acquisition to others.

Real advisors on any subject are actually teachers. If the “advisor” you’re using isn’t teaching you something new regularly, flush them.

#22 DON on 06.11.22 at 12:44 pm

#10 Honest Realtor – Not on 06.11.22 at 11:29 am
Thank you for this, Doug. You are clearly an ethical and responsible advisor.

What Doug demonstrates, however, is just how perilous the investment game can be for the vast majority of people based on mutual funds, advisor bias and behaviours.

This is why real estate will continue to be the most solid investment you can make.

Don’t be perturbed by the slight downswing in the market right now. Anyone buying wisely in the months ahead
—————————————————-
Wow…what a snake oil salesman!

*************
A lesson from Sesame street revisited??

“Oh, who are the people in your neighborhood?
In your neighborhood?
In your neighborhood?
Say, who are the people in your neighborhood?
The people that you meet each day…”

I have no problem paying an advisor for their expertise and experience that’s the whole point.

#23 Sell Strategy on 06.11.22 at 12:46 pm

Why don’t investment advisers have more skin in the game?

I would be happy to share 50% of all gains if they also shared in 50% of the losses…

If not – why not?

Or, if they cannot stomach the risk of loss (of my assets) share 25% of all gains (less inflation) based on a fiscal year of my choosing. That is, they only make money when I do.

Why not?

Maybe this is why passive investing does so well.

#24 Ponzius Pilatus on 06.11.22 at 12:50 pm

#13 Stone on 06.11.22 at 11:58 am
#83 CL on 06.10.22 at 5:42 pm
I don’t know why people are complaining about the price of a litre of gas at around $2. I just bought a 591ml bottle of water and it was $3 so $5/litre. Inflation is being used as an excuse to charge more. I won’t buy water like that again.

People complain about a commodity called oil that costs not only huge sums of cash to get out of the ground, process and transport but yet buy water like this all day long. Ridiculous.

———

You didn’t pay $3 for a 591 ml bottle of water. You paid $3 for convenience.

$3 makes me think you bought that water from a conveniently located vending machine or from some tourist trap. Airports are even more expensive. A little trot (with the added benefit of some exercise) to a grocery store would have probably saved you loads.
———————
What’s wrong with tap water?
People who drink bottled water probably also drive an F-150.
And then complain about inflation.

#25 Ponzius Pilatus on 06.11.22 at 1:00 pm

There’s a shortage of Lifeguards in the States this summer.
Maybe I’ll apply and see who’s swimming naked when the tide goes out.

#26 Summertime on 06.11.22 at 1:02 pm

Good advice for the 5-10 % who can save after the horrific inflation and ultra high cost of living.

For the rest there is Vaseline.

#27 Shawn on 06.11.22 at 1:16 pm

The Real Shawn here

#14 Shawn on 06.11.22 at 12:06 pm

The 401k system in America is far superior to the rrsp here where you are hung out to dry. Worthless parasite advisors will milk you dry in Canada.

My 401k is the best performing investment I have and requires me to do no work. The fees paid are something like 0.5%

Canada is an odd place. We will have millions of people entering retirement with nothing saved. Do you think your traitorous politicians care? You are a worthless disposable worker who is easily replaced by migrants when you get too old to work.

**************************************
Dude, you have a great name and the correct spelling. But that name has been reserved for me on this blog since 2008 or so, so perhaps use an initial after your name.

#28 Shawn on 06.11.22 at 1:24 pm

Too much debt?

When it comes to borrowing the rule with the average Joe is if the banks will lend it he/she will borrow it.

Something like: “If you will lend it, he will come (and borrow it”.

I don’t criticize the banks in that regard any more than I criticize the bar owners, the fast food owners or the liquor stores.

But excess debt is mostly a matter of sort of excess willingness to lend. When lenders know that the borrower will find a way to repay (including taking out a new loan elsewhere) then they will lend with both hands. The average Joe will back up the truck.

Even with corporate borrowing it’s a bit of a circularity. The ability to pay old debt depends on the ability to borrow new debt if needed to repay. Corporations and governments call this “rolling over” the debt.

Turn off the willingness to lend and watch things get ugly in a hurry.

Pass the popcorn.

#29 Summertime on 06.11.22 at 1:26 pm

#27 Shawn on 06.11.22 at 1:16 pm
The Real Shawn here

Yes, please do not delude his status of Ignorantus Exceptionale.

#30 Ustabe on 06.11.22 at 1:43 pm

#26 Summertime on 06.11.22 at 1:02 pm

Good advice for the 5-10 % who can save after the horrific inflation and ultra high cost of living.

For the rest there is Vaseline.

Hey Summertime, my two early 30’s kids are both in decent positions, one where he wants to be and stay, the other having worked his way up from assistant to the GM to Assistant GM is on track too.

But, just to help out a bit in these trying times one delivers pizza on the weekends and the other works as an on call porter/whatever for a local brew pub.

Put the cap back on that jar of Vaseline and go get em, you can do it!

Got a house? Rent rooms. Put a basement suite in, grow a food garden, set up a Internet storefront and sell used underwear to perverts.

Got a job? Make sure you are indispensable. Find stuff to do that directly benefits management and make sure they see you doing it. Ask for a raise. Demand a raise. Quit and become a bartender.

Got a cottage/cabin? Forgo using it for a couple of years and rent it out for the max you can.

Get a utility trailer and a lawnmower and start cutting old folks lawns. Its $60 for mow, blow and go around here and you can easily do ten yards a day, Sat and Sun. Maybe a couple of evenings too.

Maybe become a roofer…I need a complete re-deck and all new shingles. You should see the quotes for a 2 day job, all of them 5 figures.

#31 The other Doug in London on 06.11.22 at 1:58 pm

You mentioned Britney Spears, from Louisiana. I gather you were in this business when we saw that the would would survive the date rolling over to Y2K. During that time was also the Nortel craze. I kept away from it all and took up the fun sport of skydiving instead, back in Y2K.

#32 Faron on 06.11.22 at 2:25 pm

For those who like to hear expert analysis of market and geopolitical goings-on, this is a great podcast:

https://hiddenforces.io/

Dimitri Kofinas is very good.

Just listened to a good interview on the US/Russia situation that VladTor, The Jaguar and Ponz may agree with. Other great episodes on commodities and others on the return of dividend investing. Highly recommend. Has a free and pay tier. I get a lot out of the free.

#33 Quintilian on 06.11.22 at 2:28 pm

About the picture…. is that Honest Realtor?

#34 Doug Rowat on 06.11.22 at 2:35 pm

#23 Sell Strategy on 06.11.22 at 12:46 pm
Why don’t investment advisers have more skin in the game?

I would be happy to share 50% of all gains if they also shared in 50% of the losses…

—-

Long term on, say, the S&P 500?

You’ve just paid a horrendous price to spare yourself some volatility. You’ve created a structured product without realizing it.

—Doug

#35 Look out below on 06.11.22 at 2:41 pm

It should be highlighted that advisors will almost certainly receive direct compensation from a mutual fund company and likely not inform their clients. Most mutual funds will pay a trailing fee of 1% annually to advisors for putting the clients money into the expensive mutual funds. So the advisor receives the fees that the client pays and then receives an additional 1% from the mutual fund on top of this.

Easy fix: don’t buy mutual funds. – Garth

#36 Shawn on 06.11.22 at 3:35 pm

#23 Sell Strategy on 06.11.22 at 12:46 pm
Why don’t investment advisers have more skin in the game?

I would be happy to share 50% of all gains if they also shared in 50% of the losses…

********************************
First thought, find an advisor that does not lose 50%.

Second thought, that’s called your wife.

But look up what Warren Buffett charged on his Limited Partnership back around 1956 through 1969.

I have the exact someplace but from memory it was that he took 25% of ONLY any gains over 6%. And if he made less than 6% (never happened) then he did not get paid the next year unless he got 6% plus the shortfall from the prior year.

Incentivizing anyone to profit from outsized portfolio gains means they’re motivated to take outsized risks with your money. An utterly bad idea. Additionally, an advisor is not paid just to create wealth but to craft a financial plan, help you mitigate taxes, set up an estate strategy and ensure a lifelong flow of tax-efficient retirement income. You know better, Shawn. Oh wait, you have two fat DB pensions in the house – forgive me, I forgot. – Garth

#37 Sail Away on 06.11.22 at 3:44 pm

I consider obsessing over food as falling firmly in the realm of those who are suspiciously light in their loafers.

Food is good, food is great… but in the end, it’s sustenance. Simplicity is best when cooking, especially when part of a hiking/hunting/camping trip. Waste no time, use one pot with carrots, onions, salt plus anything foraged or killed.

#38 Faron on 06.11.22 at 3:54 pm

Slipped by the notice of commenters that Trump’s special counsel looking into the Russia interference special counsel struck out on its first indictment. Sussman was found not guilty on May 31st. Funny how certain commenters didn’t notice that. I wonder why.

#39 Ustabe on 06.11.22 at 4:19 pm

#37 Sail Away on 06.11.22 at 3:44 pm

I consider obsessing over food as falling firmly in the realm of those who are suspiciously light in their loafers.

Hey, Sail Away, could you, would you define “suspiciously light in their loafers” for me? I am unfamiliar with the term. Please use solid Anglo Saxon, old stock words so I really get what you are trying to say, OK?

#40 Dr V on 06.11.22 at 4:25 pm

35 Look out

“It should be highlighted that advisors will almost certainly receive direct compensation from a mutual fund company and likely not inform their clients.”
—————————————————

It is very much a consumer awareness issue. Canadians have historically been charged excessively high fees.

My advisor sends a statement of money received from
any imbedded fees.

You can also check fundlibrary.com for the loads and trailer fees on any MF. Site also has ETF information.

#41 Faron on 06.11.22 at 4:43 pm

#37 Sail Away on 06.11.22 at 3:44 pm

Your’s has to be one of the all time greatest self owns in the history of the comments. You post more frequently about food, eating, dieting and weight than anyone else in comments by far. You know, obsessing. And you managed to work in some homosexuality shaming while also pointing the finger at yourself. Phenomenal.

Luckily for you certain Christians have conversion therapies for people who are “light in their loafers”.

Just… wow!

#42 Faron on 06.11.22 at 4:50 pm

yours not your’s

#43 CJohnC on 06.11.22 at 4:52 pm

#38 Faron. Why are you always trying to start something? (And it’s not even on topic)

Your comment should/could have read: “Trump’s special counsel looking into the Russia interference special counsel struck out on its first indictment. Sussman was found not guilty on May 31st.”

Your preface; “Slipped by the notice of commenters that” and postscript;”Funny how certain commenters didn’t notice that. I wonder why.” are just designed to start an argument.

It is tiresome.

#44 604sam on 06.11.22 at 4:59 pm

Question for Doug (or Garth)-

I manage all my own investments through questrade. My RRSP is a mix of about 6 different etfs. I am interested in rebalancing them but am not really knowledgeable enough. Would you guys do a one time consulting fee to give advice on my allocation? If so, how much would that cost? A percentage of the portfolio, or a nominal fee?

Thanks
Sam

Nope. Since DIY investors almost always buy and sell on emotion, lack the correct weightings, fail to rebalance to crystallize gains or buy losers and fall behind on tax changes, while lacking the time to grasp macroeconomic and monetary changes, it’s a wasted effort for everyone. Growing portfolios deserve routine attention. – Garth

#45 G on 06.11.22 at 5:14 pm

Hey Doug really good post today, I’ve been hoping for one like this. Would you say CI direct investments (formerly wealthbar) would be a good one to stick with? It’s all online but I have spoken to an advisor on the phone before. I was hoping you guys would provide your take on the self directed investing companies like CI, questrade, and wealth simple.

#46 Atheist on 06.11.22 at 5:34 pm

Be careful man. Every gray hair and bald spot means that you are not going to get dates, married and reproduce as the sad beings we are, acting like a cancer on this planet, cutting down the trees, taking over habitats.

I’m the first Atheist Communist Marxist who is trying to get my employer to allow me to wear a religious hat in the workplace.

The first people to complain are the opposite gender. I want to hide my bald spot.

HR does nothing when female coworkers laugh at me, but suddenly when I want to become religious I’m somewhat of a threat?

#47 Doug Rowat on 06.11.22 at 5:55 pm

#45 G on 06.11.22 at 5:14 pm
Hey Doug really good post today, I’ve been hoping for one like this. Would you say CI direct investments (formerly wealthbar) would be a good one to stick with? It’s all online but I have spoken to an advisor on the phone before.

—-

They’re not advisors. And proof that they don’t really seek to continuously understand your finances, you’ll speak to a different one next time you call.

—Doug

#48 Dr V on 06.11.22 at 6:24 pm

44 Sam – There was a firm on Saltspring Island that would advise on a financial plan on a “fee for service” basis, then let you assemble the portfolio on your own. I
dont believe they gave specific advice on which securities or funds to be purchased. Also dont know if they are still around or accepting new clients. They were featured in articles in moneysense from time to tine.

I wont provide the name out of respect for our hosts.

#49 Shawn on 06.11.22 at 7:18 pm

No Disagreement with Garth – sort of

I said:

But look up what Warren Buffett charged on his Limited Partnership back around 1956 through 1969.

I have the exact someplace but from memory it was that he took 25% of ONLY any gains over 6%. And if he made less than 6% (never happened) then he did not get paid the next year unless he got 6% plus the shortfall from the prior year.

Garth responded:

Incentivizing anyone to profit from outsized portfolio gains means they’re motivated to take outsized risks with your money. An utterly bad idea. Additionally, an advisor is not paid just to create wealth but to craft a financial plan, help you mitigate taxes, set up an estate strategy and ensure a lifelong flow of tax-efficient retirement income. You know better, Shawn. Oh wait, you have two fat DB pensions in the house – forgive me, I forgot. – Garth

*****************************
Sure, but surely you are not criticizing the great Warren Buffett? The comment I responded to was about such incentives. I just mentioned how Buffett did his fund way back. When he closed it the partners had the option of cashing out partly in Berkshire Shares in 1969 which Buffett said he himself would do. Those that did and stuck with Buffett became billionaire families. A guy like Buffett was and is pretty impervious to incentives. He has his own strong moral compass.

I’ve never criticized your approach but surely your ego can allow that someone like Buffett with a different approach is also valid. Or maybe not. You are a my way or the highway kind of guy, that’s your right.

And you are also right that I have two government DB’s in the house. One of my sons is several years into a government DB plan but moved out after getting that job.

I don’t think I say much to offend you. If you happen to be in Cape Breton, zip over to the Clansman for lunch or a stay. Mention my name and get the VIP treatment. It’s motor cycle friendly. Nice pool. Nice huge grouds. Watch for my 91 year old dad out picking dandelions on the property. He hates them almost as much as he hates Covid rules.

Peace and out.

#50 the Jaguar on 06.11.22 at 7:21 pm

Picking a trusted financial advisor is no easy task. Comes down to faith, trust, and transparency, I suppose. Nobody can be right all of the time, but knowing the person has your best interests in mind and is trained, qualified and ready to follow the north star is a good start. They’re all so damned cute at Turner Investments, however could one choose?

On a clear day in Calgary from certain elevations one can look west toward the great Rocky mountains and it’s like they are in your backyard, not 110 kilometers distant. Quite a bit of snow still on them only a week ago on a very clear day. It’s only Saturday, yet this special weather statement has been issued. Sure hope it won’t turn out to be ‘deja vu all over again’. Keep your powder dry local peeps.

3:28 PM MDT Saturday 11 June 2022
Special weather statement in effect for:
City of Calgary
Significant rainfall is expected early next week, with 75 to 100 mm expected by Wednesday morning.
A long duration rainfall event will impact the eastern slopes of the Rockies on Monday and Tuesday. A broad area from Hinton to Waterton is expected to see at least 50 mm by Wednesday morning, with 100 mm or more possible in some regions of the foothills. Currently it appears as though the greatest rainfall amounts will be near Kananaskis, west of Calgary. Monitor your local forecasts and warnings for the most up to date information.

#51 Damifino on 06.11.22 at 7:28 pm

And of course… fee-based advisor costs are fully tax deductible, which is often mentioned on this blog, but curiously, not today.

I’ve heard it argued (by past commenters) that it’s not really an advantage over a commission-based advisor.

The logic went something like this:

Commissions come off the top, ahead of client gains. Thus, one may earn a little less but pays no fees. In the other case, one may make a little more, but the advisor gets a cut. Therefore, its a wash.

Personally, I don’t believe it. I’ve had it both ways. Fee-based is far better. That’s provided you have honest, competent and dedicated people managing your wealth.

#52 Faron on 06.11.22 at 7:31 pm

#43 CJohnC on 06.11.22 at 4:52 pm

Oh, sorry I didn’t and don’t tailor my comments to your liking. But, I’ll still answer your question.

I added that because it’s material that people who complain about bias and intellectual honesty and witch hunts and “facts bro” are hypocritical in those claims. If you are offended by that, it’s not my problem.

#53 Flop… on 06.11.22 at 7:37 pm

So I just got back from a drive to Tsawwassawasawsawsawsan (sp?).

Went to Boundary Bay Regional Park, didn’t go to Point Roberts, if I’m going to get shot by a semi automatic rifle, I want that to be in Corpus Christi, so some smug turkey on the blog can prattle on about crime rates.

Gas wasn’t that much cheaper down there like it used to be, but when I pull up at the petrol bowser a familiar critter is staring back at me.

Justin…not the one with the paralyzed face, the one that polarizes this fair nation, is on a sticker right beside the price per litre pointing towards the numbers saying “I did that”

It’s probably not fair to blame The Metrosexual Messiah for the price of gas, but he sure doesn’t lobby to get anything under control.

I still have to drive by a “Stop Harper” sign every morning on the way to work, so all’s fair in love and political war.

They stopped him alright, and now people refer to that time as the good ol’ days…

M47BC

#54 Sail Away on 06.11.22 at 8:33 pm

#49 Shawn on 06.11.22 at 7:18 pm

Watch for my 91 year old dad out picking dandelions on the property

———

Dandelions are good for bees. Especially first thing in the season.

#55 AlisonS on 06.11.22 at 9:21 pm

#43 CJohnC on 06.11.22 at 4:52 pm

My advice, save yourself the whole entire drama JohnC, and just skip ‘Faron’ comments. He makes a hill out of beans on the daily cause his life sounds pretty dull.

#56 I don't know on 06.11.22 at 9:22 pm

Spot on advice, as usual from our weekenders. At the end of the day a good advisor is a good baby sitter. That’s because when it comes to investing, the investor himself is his own worst enemy. He/She is always at the mercy of the 24 hour news cycle and complete mess that is social media. Markets usually advance 2/3 of the time. That means they go down 1/3 of the time. According to social media and the news, every down turn is 2008 or 1929 all over again. Most amateur investors are either excessively greedy, which leads to increased risk and leverage, or, excessively pessimistic, which leads them to sit in depreciating junk (cash) frozen by fear (and also greed).

A good advisor will baby sit these people (who make up the vast majority) and keep them invested properly so they can both make and not lose money.

IDK

#57 bdwy on 06.11.22 at 10:40 pm

He makes a hill out of beans on the daily cause his life sounds pretty dull.

—————–
i figured it was because of inner conflict from making a living off the taxpayers dime promoting agenda driven bad science(climate models) used to stifle human advancement.

#58 bdwy on 06.11.22 at 10:41 pm

and how ’bout that bitcoin. makes stock and re hits look downright playful.

#59 Unpinned on 06.11.22 at 10:52 pm

Women are prone to turn down the volume when money is a subject of contention. Discover your cash flow and avoid fast food giants so you don’t waste time at Jenny Craig. Summer, what’s not to love? Ottawa is on cruise control or automatic and Wall Street is happy to let the logjam er well be a logjam. Ah America the 4th of July, wake me when we get ther. Is this Bear a ripper or what…so cuddly.

#60 Stealth on 06.11.22 at 11:14 pm

Doug,
What industry credentials should advisors defined in your blog have? Or is there a cross functional team?

Thanks

#61 Satori on 06.11.22 at 11:20 pm

#54 Sail Away on 06.11.22 at 8:33 pm

THE FIRST DANDELION by Walt Whitman, once of my favorites… to your Grandpop! Clink!

“Simple and fresh and fair from winter’s close emerging,
As if no artifice of fashion, business, politics, had ever been,
Forth from its sunny nook of shelter’d grass—innocent, golden,
calm as the dawn,
The spring’s first dandelion shows its trustful face.”

#62 Tom from Mississauga on 06.11.22 at 11:24 pm

Dominion Securities was horrific for selling (gouging) on in house products + a fee. That’s why I moved mom’s money to you guys. I fall prey to individual stocks so my brother was never going to let me manage it directly.

#63 Dr V on 06.11.22 at 11:41 pm

Good response from [email protected], good comment from [email protected] as well as others. Yes, I have an advisor and she helps me keep a lid on it.

#64 Ponzius Pilatus on 06.11.22 at 11:51 pm

#54 Sail Away on 06.11.22 at 8:33 pm
#49 Shawn on 06.11.22 at 7:18 pm

Watch for my 91 year old dad out picking dandelions on the property

———

Dandelions are good for bees. Especially first thing in the season.
—————————-
I used to eat a lot of dandelion salad in my youth.
Full of essential vitamins and nutrients.
And it’s free.
Another inflation buster.

#65 Faron on 06.12.22 at 12:55 am

#57 bdwy on 06.11.22 at 10:40 pm

i figured it was because of inner conflict from making a living off the taxpayers dime promoting agenda driven bad science(climate models) used to stifle human advancement.

Curious, do you also think Earth is 6000 years old? Columbus discovered America? Smoking is good for your health? Just guaging dinosaur level.

#66 Game Warden on 06.12.22 at 2:38 am

Hey Dolce,
That “gamey” taste is a result of what Wildlife eats. Migratory Birds in much of Canada still eat wild feed. This results in the delicious flavouring that a tenderfoot would complain about as “gamey”. If you want grain fed fowl, stick to you store bought chickens.
Leave the geese, ptarmigan, moose and musk ox to those who can appreciate wild game.
Ciao… or whatever…

#67 Niagara bound on 06.12.22 at 9:40 am

Garth you may have mentioned it in the past so sorry to ask. What is the minimum investment amount for your organization to take on clients?

It makes economic sense to seek a fee-based advisor when your household has $200,000 or more to be managed. – Garth

#68 Sail Away on 06.12.22 at 9:46 am

#64 Ponzius Pilatus on 06.11.22 at 11:51 pm
#54 Sail Away on 06.11.22 at 8:33 pm
#49 Shawn on 06.11.22 at 7:18 pm

Watch for my 91 year old dad out picking dandelions on the property

———

Dandelions are good for bees. Especially first thing in the season.

———

I used to eat a lot of dandelion salad in my youth.
Full of essential vitamins and nutrients.
And it’s free.
Another inflation buster.

———

Agreed. But Dolce is the only one who knows how to prepare dandelions.

#69 crowdedelevatorfartz on 06.12.22 at 9:52 am

@#56 I don’t know
“A good advisor will baby sit these people (who make up the vast majority) and keep them invested properly so they can both make and not lose money.”

+++
True.
But a bad advisor will shovel you investment money into high fee, low return garbage….because its all about the commission.
A used car salesman would have achieved the same dismal results
It took me too long to figure that out.
Now I’m balanced and diversified.
Huge change.

#70 SHANE GALLANT on 06.12.22 at 10:21 am

Alot of firms will only manage a 1 million plus min before they sign you up

Patently untrue. – Garth

#71 Shawn on 06.12.22 at 11:29 am

Dandelions

#64 Ponzius Pilatus on 06.11.22 at 11:51 pm
#54 Sail Away on 06.11.22 at 8:33 pm
#49 Shawn on 06.11.22 at 7:18 pm

Watch for my 91 year old dad out picking dandelions on the property

———

Dandelions are good for bees. Especially first thing in the season.
—————————-
I used to eat a lot of dandelion salad in my youth.
Full of essential vitamins and nutrients.
And it’s free.
Another inflation buster.

********************************
I’ll ask my dad to save the dandelions for Ponzius. He has a large busy restaurant so maybe send the recipe. Perhaps Ponzie can come and make the dandelion wine?

https://clansmanmotel.com/home/

One of the family near by is a big time bee keeper. He has lots of land for dandelions.

#72 Happy Housing Crash Everyone! on 06.12.22 at 11:46 am

Great SHYSTER photo, Doug!

Trust these dudes!

Buy a house in Brampton before you miss out, everybody!

Happy Housing Crash!!!!!!!

#73 Faron on 06.12.22 at 12:18 pm

Last week I noted the briefly positive VIX/SPX correlation and how that is usually a good warning that equities are getting shaky. That was followed by a plop in equities. In that note I suggested that crypto was resisting the plunge and indicating that this might be a brief dip.

Well, it seems that this weekend, crypto has been showing some serious weakness. Lets see if that translates to an equity risk off on Monday. I see crypto as an indicator of excess in the financial markets that simply has to die as the world shifts to a high rate, high inflation regime that demands productive assets (cash gushing equities, bonds etc., commodities, etc.) Crypto is not productive in the least, thus cannot survive inflation approaching double digits and rates rapidly rising.

I don’t care what your narrative is about crypto, it’s more or less speculative garbage that is worth, at most, the cost of production (energy and some computer hardware) and a margin to cover overhead and some profit, just like any business. The algorithms behind it are fantastically useful, but they are all free and open source software for the most part, so there is little value in it. And especially little value in the multitude of crap coins out there.

Anyhow, keep your eyes peeled for Bitcoin falling below 28k and staying there. I expect Tesla and ARKK to follow if crypto finally loses its footing.

#74 Old Boot on 06.12.22 at 12:46 pm

Perhaps it’s a good time to remind the neophyte investors that a “financial advisER” is not the same animal as a “financial advisOR.

A financial adviser has a legally regulated, fiduciary duty to their clients. A financial advisor is the [email protected] who sells high fee mutual funds.

Incorrect. Either spelling is fine. [email protected] is not an advisor, but a salesperson. Ensure any advisor is IIROC-licensed. – Garth

#75 Robert B on 06.12.22 at 1:30 pm

Thanks for the blog Doug

Question for you.
Why isn’t gold or gold stocks held say a token 5-10%
of the portfolio ? We are in an inflationary
environment and based on the 80’s inflation gold
reacted well.
Why is Gold or gold stocks such a bad investment
in an inflationary period .
These big gold stocks pay a rising dividends yield north of 1-2%.

Please help me get my head around this .

#76 Barb on 06.12.22 at 2:05 pm

#67 Niagara
“Garth you may have mentioned it in the past so sorry to ask. What is the minimum investment amount for your organization to take on clients?

It makes economic sense to seek a fee-based advisor when your household has $200,000 or more to be managed. – Garth”
—————————-

THEN I’M AN ARSE FOR NOT BEING WITH YOU EARLIER!
(cue the kicking myself sound effects, fade to black).

#77 Old Boot on 06.12.22 at 2:24 pm

Why are you reluctant to point out the difference between a financial adviser with a legally regulated fiduciary duty to their clients, and a financial advisor with no such fiduciary duty? Seems pretty fundamental to choosing someone to entrust with your money.

#78 Faron on 06.12.22 at 2:27 pm

This thread on crypto and Pierre Poilievre is pretty good from a great reporter. Seems that he did everything short of suggesting people buy crypto. Since then, bitcoin is down a lot.

https://twitter.com/a_picazo/status/1524486849980424192

#79 Ustabe on 06.12.22 at 3:08 pm

It makes economic sense to seek a fee-based advisor when your household has $200,000 or more to be managed. – Garth

And most advisors will take on the young adult sons and daughters of existing clients even if they have far less.

#80 Quintilian on 06.12.22 at 3:10 pm

They only legitimate complaint against the DIY facilitators/ casino/ is that they should be licensed by the Gaming Commission.

If people want to light a match or gamble with their money that is one thing, but to call it an investment platform using weasel words like “vectors” and showing tv commercials of dads cuddling their babies assuring them a secure future- that’s just legal fraud.

Also… Crowdie, you still buying on the dips?
If so you are going to be very busy this summer.

#81 Doug Rowat on 06.12.22 at 3:28 pm

#75 Robert B on 06.12.22 at 1:30 pm
Thanks for the blog Doug

Question for you.
Why isn’t gold or gold stocks held say a token 5-10%
of the portfolio ? We are in an inflationary
environment and based on the 80’s inflation gold
reacted well.
Why is Gold or gold stocks such a bad investment
in an inflationary period .

—-

Gold reacted well during the 1973-79 inflationary period, but was negative during both the 1980-84 and 1988-91 inflationary periods. And, of course, has been a useless hedge this time around over the past year or so.

In other words, it’s track record as an inflation hedge in recent decades is poor. Therefore why own any now?

—Doug

#82 Say what on 06.12.22 at 4:12 pm

@#81

The original question and answer are both cherry-picking time frames to support their opinion.

Similarly one could also state from 2002 until today gold is up 7.5x while stocks are up a paltry 4x.

Or, from start of 2022 gold is up but stocks are down big time.

The main reason gold is not up more today in terms of an inflation hedge is because the fed said they would crush inflation so most who don’t own gold won’t allocate to gold because they trust the fed.

But when we see inflation continue higher they will start to shift – hint on Friday gold was up while US$ was up and stocks cratered for the day.

#83 Mattl on 06.13.22 at 12:31 pm

Recent history says that financial assets will rebound, because Central’s have stepped in to save markets with low rates and QE. But if you can put aside recency bias and believe the Centrals will stick to tightening, history shows long periods of low/no growth. I can’t see any scenario where rates rise, liquidity is removed from markets, RE gets crushed and stocks perform well. We are in for a long one unless the CB’s back off tightening.