# What is your plan? Where do you sit today?



## james4beach (Nov 15, 2012)

If anyone is interested in sharing, maybe we can talk about our investment plans and where we stand today. It could help alleviate some anxiety about markets... I find that having a plan helps me keep my head clear about what I should be doing, because the plan tells me what I need to do.


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## james4beach (Nov 15, 2012)

Here's my plan & status:

My plan involves keeping a cash cushion for a few years of living expenses. Separate from the cash cushion, I have all my investments in a standard asset allocation plan at 50% bonds, 30% stocks, 20% gold.

My current cash cushion is at 4 years of expenses. It's deliberately a bit high because I have some tax liability uncertainty, and I'm keeping it high until my liabilities shake out. However I think I will soon (maybe in the summer) get some tax clarity once I can meet with my CPA. Then, I will have excess cash to invest again.

As of Friday, my investments, separate from that cash, are 51% bonds and GICs, 29% stocks, and 20% gold. Pretty much exactly on plan.

What's next?

Well my weights are very close to my target allocations, so there's nothing to rebalance. In any case, I want to rebalance once a year, in December. I also don't have any spare cash as of today, so I will not be buying anything. However this summer, I think there will be some excess cash (as described above) and then I will buy whatever I have to in order to maintain my asset allocation.


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## newfoundlander61 (Feb 6, 2011)

Here is a list of my holdings spread out over 2 TFSA's (me and the wife) and 1 JWROS Non-reg account. No plan on selling anything, these are long term holds and generating pretty good dividends along with being solid companies to hold. Some are down, some are still up so its working out pretty good. At my age of 58 I am not worrying too much amount current markets conditions. A few years from now this will be a blip on the radar screen. Still have some cash mind you in the amount of $65k.

TD Bank
Royal Bank
Scotia Bank
Fortis
Enbridge
Restaurant Brands
BCE Inc
Loblaws
Telus
Suncor
Choice Properties REIT – Retail
Algonquin Power & Utilities Corp
A&W Revenue Royalties Income Fund


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## cainvest (May 1, 2013)

Sell nothing.
Take a wait and see view for this years TFSA/RRSP cash amount. If the sell off appears to be over I'll do my regular purchases, not overly concerned about getting them at the bottom level. Maybe pick up a few individual stocks if the discounts go low enough.


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## agent99 (Sep 11, 2013)

Right now I sit in our SC condo. Main concerns are golf weather forecasts for coming week that don't agree.

James - you post a lot about the current market and it's crash. Doesn't that 70% FI/Gold allocation (you keep telling us about) give you sufficient peace of mind to forget about the market for a while and enjoy other pastimes? 

https://www.cbc.ca/news/business/coronavirus-rate-cuts-1.5478258

Ms Market is looking after my equity allocation, which was getting a bit high  BOC may increase my FI allocation. Hopefully allocation won't get to that widely accepted 60/40 ratio some speak of.


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## lonewolf :) (Sep 13, 2016)

james4beach said:


> Here's my plan & status:
> 
> My plan involves keeping a cash cushion for a few years of living expenses. Separate from the cash cushion, I have all my investments in a standard asset allocation plan at 50% bonds, 30% stocks, 20% gold.


 J4B what happens to your plan if interest rates go negative ?


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## Jimmy (May 19, 2017)

I have a plan to deploy some cash and bought some on the dip. Market fell 6% so bought a little ,then it fell another 6% and bought a little more. Wish I had waited til Friday in hind sight but still have lots of cash to deploy. May wait a few weeks now until everything is setlled

FI 35%
Cash 10%
Alternative 5% 
Equities 50%

May add a private equity ETF from NBI once available in March. Something else to diversify away from the crazy machinations of the public markets.

This corona business should be over in a few months hopefully. It isn't a structural shock and people are still working and consuming though some sectors will see less growth - travel ,airlines. S&P bounces back 8.8% on avg in 6 months following epidemics but being a little cautious still.


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## Synergy (Mar 18, 2013)

My plan is not to worry about the markets. Focus on growing my business, earning more money and investing for the future. So much time and energy wasted on things we can't control....


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## lonewolf :) (Sep 13, 2016)

Synergy said:


> My plan is not to worry about the markets. Focus on growing my business, earning more money and investing for the future. So much time and energy wasted on things we can't control....


 No one can control the market though you do have some control if the market will punish or reward you.


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## james4beach (Nov 15, 2012)

lonewolf :) said:


> J4B what happens to your plan if interest rates go negative ?


I don't see why that would change my plan in any way. And I think there's a good chance rates will go to 0% and then negative.


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## james4beach (Nov 15, 2012)

agent99 said:


> James - you post a lot about the current market and it's crash. Doesn't that 70% FI/Gold allocation (you keep telling us about) give you sufficient peace of mind to forget about the market for a while and enjoy other pastimes?


Yes it does give me lots of peace of mind, but since I've only been on a solid plan for 4 years, I'm pretty new to all of this. I have much more money invested than during the last bear markets, which changes things (perception).

This is one of those consequences of going DIY. When you have an advisor, they are (presumably) helping keep you on track and doing behavioural coaching. _You're paying them to do that_.

Does it not make sense that a DIY investor should therefore put some effort into keeping themselves on track, maybe even behavioural coaching for themselves? That's where I'm at. Training myself to do this correctly, with some help from the board perhaps.

AltaRed has been quite helpful in getting me pointed in the right direction.


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## hfp75 (Mar 15, 2018)

Well,

I seriously last month was considering just dumping equities cause they were at an all time high and fears of recession - BUT I held to my 'plan'. We will see if this was the correct thing to do. Sticking to the allocations through the thick and thin statistically is best, so here I am weathering the storm with everyone else.

I have a chunk of cash that was in PSA and all of this years RSP/TFSA ect, ect ... cash just sitting. I am watching to do my rebalance. I usually just rebalance by buying what is below my threshold and doing it that way... I dont know if I need to sell to much - I might sell a bit of gold - we will see.

When interest rates go below zero (this is new territory) I wonder if I still hold FI as the VAB yield gets to zero or do I drop it and just go all Gold... negative rates and a zero yield seem pointless to me, but all gold has no diversification. So, at this time I am not to sure but I am watching where FI $ goes at zero and below..... I see no point holding bonds at 0% anymore....


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## AltaRed (Jun 8, 2009)

No change in plan. My FI allocation to cover, along with annuity income and investment income, 3-5 years of expenses remains the same. The rest of the portfolio is in equities. 

I did a monthly update review today on the portfolio and my entire portfolio, including the FI component, is down 9.2% from its peak on Feb 12th to COB yesterday. I have no plans to slice off some of my FI to invest in beaten down equities, even if they fall into bear market territory for the reason given in the 2nd sentence. Discipline is needed. 

Some might argue why I wouldn't take a speculative opportunity to buy a beaten down stock, e.g. 50% down, with some of that FI on the premise I could have a 2 bagger when markets bounce back and replenish my FI. True, except my crystal ball is not clear enough to make that call. I will look at the portfolio again in a month, and only sooner if there is a wild, wild ride and there could be opportunity for an equity for equity swap to make a guaranteed killing. Nuff said.


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## james4beach (Nov 15, 2012)

I am not ruling out the possibility that we might get extremely challenging market conditions in the coming weeks. I appreciate hearing about people's plans, and I think being crystal clear on plans & strategy is useful.

As a "technical analysis" guy, I can't help but put on my technical goggles and see a possible support level for the S&P 500 around 2400. Even without killing the bull market, that's still 20% below current.

If such a thing were to happen (especially if it happens rapidly alongside scary news) it could create very emotional conditions for investors of all stripes.

I'm trying to get my guard up against emotions. I don't feel the fear yet, but these haven't been large % declines yet... it could get a lot scarier. Step 1 is defining the plan. Step 2 is committing to the plan and rehearsing robotic execution in the face of danger.

Investing is easy during calm, rising markets. It's a lot harder during market turmoil!


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## hfp75 (Mar 15, 2018)

most of the markets reactions are based on investor sentiment. Fear is a BIG one.... and I would say that if Corona hit N.America the fear could get worse.... right now we really dont know the damage the virus can do. We know that in 2nd & 3rd world countries it has wrecked havoc. SARS and MERS weren't as bad as feared... so will this ? If Flu season ends in April and this Corona virus drops off the radar.... we are in business... 

I just dont know how bad this thing will really get.... if it can spread like we think and it can kill as we think 1:10 then its formidable. BUT, dont forget that a lot of people have Corona-19 and have very mild -> no symptoms which means they are not included in the 'known infected' category. So then the Kill rate is less than 10%.... its just to early we dont know. I hate to say it BUT I dont trust numbers from China, Iran, ect ect ect.....

Italys numbers are fascinating to me... 

My hunch is that it is NOT as bad as we fear..... which means that once the world figures this out everything will correct... I see this as a time to profit from fear.....


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## doctrine (Sep 30, 2011)

I am waiting. The downside risk potential is very high. Governments are shutting down hard wherever outbreaks occur. There is going to be real economic damage; the world is heading to a recession. Markets predict 6-9 months out, and I do not reasonably foresee this being resolved by then.


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## 1989civic (Apr 28, 2017)

I'm a novice and have only a small amount of cash in the market (a little under 50 grand). The prevalent doctrine is to keep your positions and ride the roller coaster. No one can time the top or the bottom. Agreed.

Now to play the devil's advocate.... let's say a person holds a set amount of shares in some big companies that could be affected by the virus. Restaurant chains, transportation companies, airlines, ect. Let's say this person has 1000 shares per company. He sells everything and goes to cash. He waits awhile for the market to settle down, and buys back the same amount of shares at a discount. 

His positions are all identical and he has "earned" some cash to boot. What is wrong with this strategy? It rivals the buy and hold, in that he has the same amount of shares per company. The only difference is he made some money on the difference in price.

I know... dividends could have been lost and that would affect future results. Let's say for this example, no company paid dividends. 

Thoughts please?


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## doctrine (Sep 30, 2011)

The only thing wrong with that strategy 1989civic, is that this could be the bottom. What if the market pops 10% this week. There is no discount and you can only buy back 900 shares. It could happen. I think it will be much worse though before it gets better. The news is getting much worse. The coronavirus is now everywhere on the planet and uncontained on every continent.


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## agent99 (Sep 11, 2013)

1989civic said:


> No one can time the top or the bottom. Agreed.


That IS the problem. If we knew when to sell and when to buy back, then this would be a no-brainer. But it isn't. There were some CMFers who bought after the drop on the first Monday. I am sure they wish they hadn't.

Besides, many stocks have already been hit hard. You may now be selling near a bottom and then having to buy back at a higher price.

IF you are concerned about a big loss that you can't accept, maybe sell off part of your stocks and put the cash in a HISA for a while. I did this by accident. I sold some risky stocks a few weeks ago, just before the crash. I was looking for a good safe place to deploy the cash. Now I have it in a HISA. About same amount as your $50k.


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## Thal81 (Sep 5, 2017)

I have a low 5 figure cash buffer that I had been keeping aside as opportunity money. I'll put a few grands from this account plus new money from pay cheques every week until I run out, and if it keeps going down I'll start doing the same with my bonds. Basically I'm doing the same thing I did back at the end of 2018... it paid off quite well!


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## james4beach (Nov 15, 2012)

1989civic said:


> Let's say this person has 1000 shares per company. He sells everything and goes to cash. He waits awhile for the market to settle down, and buys back the same amount of shares at a discount.


That's timing the market. As others said, the problem with your idea is that you don't know if stocks are going up or down. We never know if stocks are going up or down. You are writing that assuming there is certainty that stocks are going down.

There's a second problem with your idea. Even if you make a lucky guess and are correct that the stock market is going down (and of course it may) what next? In market turmoil, those companies will start to look less appealing. And after some time, you may no longer be certain you want to buy them at all.

So in fact what might seem like a simple concept is, in fact, a combination of market timing (pure speculation) + placing yourself in an even more difficult predicament down the road.



Thal81 said:


> I have a low 5 figure cash buffer that I had been keeping aside as opportunity money. I'll put a few grands from this account plus new money from pay cheques every week until I run out, and if it keeps going down I'll start doing the same with my bonds. Basically I'm doing the same thing I did back at the end of 2018... it paid off quite well!


Just make sure you are keeping enough cash set aside for emergency costs / a few years of living expenses, depending on how stable your job is. For example as a consultant, I have extremely unstable income, and therefore I keep a significant amount of living expenses in cash (currently 4 years)


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## Beaver101 (Nov 14, 2011)

I'm gonna break my piggy-bank, see what goodies will come up at the markets this week and then throw the dice. If the markets tank, oh well, less tax for the government.


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## james4beach (Nov 15, 2012)

agent99 said:


> James - you post a lot about the current market and it's crash. Doesn't that 70% FI/Gold allocation (you keep telling us about) give you sufficient peace of mind to forget about the market for a while and enjoy other pastimes?


agent99, I thought about your suggestion and you are right.

Watching the market too closely is not healthy. I've already reviewed my plan and numbers in post #2. I've done what I need to do; everything looks good and I will stop watching market prices this week (exception: will buy a GIC as soon as a cash transfer arrives).

The weather here is looking pretty good this week, hovering near 0. Today I'm going out for a nice, relaxing walk. I'm going to avoid looking at market movements during the week.


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## MrMatt (Dec 21, 2011)

doctrine said:


> I am waiting. The downside risk potential is very high. Governments are shutting down hard wherever outbreaks occur. There is going to be real economic damage; the world is heading to a recession. Markets predict 6-9 months out, and I do not reasonably foresee this being resolved by then.


If they close schools for a month, Fortnite is going to make a LOT of money.


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## cainvest (May 1, 2013)

james4beach said:


> There's a second problem with your idea. Even if you make a lucky guess and are correct that the stock market is going down (and of course it may) what next? In market turmoil, those companies will start to look less appealing. And after some time, you may no longer be certain you want to buy them at all.


Why would you change your mind "after some time" about buying a company in relation to all markets being down? If you're buying a stock I would hope you've done some research on the company, just like buying it at any other time.

Also, with the total market sell off, this can apply to index ETFs as well. I might increase my S&P500 holdings if it drops significantly again this week.


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## AltaRed (Jun 8, 2009)

Just remember that to market time, i.e. to sell high and buy low, one has to be right twice. Once when one sells, and again when one re-purchases. Buy and hold has worked best for me in 30 years of investing.


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## Gumball (Dec 22, 2011)

I think its great to have a plan with respect to a few months worth of cash, etc...but I also think last week and the next few weeks are a great time to buy some Canadian Bank, Telco stocks, as well as some US blue chips.. stay the course and take advantage of these dips that create a buying opportunity.
The stocks I am buying I have no plans on ever selling, they will be bought to create a dividend for me when I retire in two decades time, Ive been waiting for quite some time for a chance to buy.
This might be a simplistic view on things but I see Canadian population growth steadily increasing in the next decade and the companies I am buying should be able to prosper from this growth..sure the Liberals have this country in a mess but Im hoping that sorts itself out


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## milhouse (Nov 16, 2016)

As with so many of these discussion, situational context is obviously important.
Personally, I'm looking to retire in 2 years so risks on my mind are potentially taking a hit to my nestegg just before retirement and/or also a poor sequence of returns after I make the jump. The scary thing for me at the moment isn't the magnitude of the drop as a 10% correction should be a somewhat regular occurrence, but the velocity of the drop and the fact that we don't know how contained things are or how much worse things can get. I think we all try to be rational and be mentally strong but it would be psychologically difficult of me to retire if the world is in a deep recession.

My plan hasn't changed yet. I expect to continue to build my non-reg dividend portfolio with spare cash, continue to contribute to my DC pension with a 70:30 mix of index funds, and will buy my 2020 tax year RRSP once I figure out what my contri limit is. My only regret currently, is not re balancing my RRSP to 70:30 at the start of the year. Making lemonade out of lemons, I'm looking on the brightside that I can add to my dividend growers at a discount.
I'm still feeling confident with the core companies in my non-reg portfolio to not only, not cut their dividends but to continue to grow them. So far they seem to be but situations can obviously change of course. The dividends are important to me as I'm expecting them to fund the core part of my retirement income (with the index funds funding the discretionary part). 
If crap really hits the fan, I suppose I can put off retirement for a few years to let my portfolio heal without burdening it with withdrawals.


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## MarcoE (May 3, 2018)

I'm not doing anything drastically different. Two or three years ago, I decided that I want 30% of my net worth in equity. Since then, that allocation has grown to 33% (the price appreciated nicely), then shrank down to 31% (due to the recent market declines). So I'm only 1% away from my target allocation of 30%.

I'm just going to stick to this plan, and try to keep around 30% of my net worth in stocks. If stocks keep declining, I'll buy more of them. If they rise back up, then I'm fine. This can be a good buying opportunity.

I'm not selling anything to rebalance. I'm just using whatever little cash is available from my paycheck after all the bills are paid.

I bought some stocks on Wednesday. Markets dropped even more on Thursday and Friday. On Monday, I'll probably buy a bit more. Not a huge amount. I'm not changing my target asset allocation. I'm not selling my gold or FI to finance this. I'm just scooping up a few hard-to-resist bargains.

I never catch the bottom of these things. But nobody can do that. If stocks go 10% on sale, I buy a few. If the price keeps dropping, and they go 20% or 30% on sale, I can buy a few more. If they crash down 50% like in 2008, I'll probably be terrified, but I'll probably keep buying. I'll keep my asset allocation around 30% (plus/minus a few percentage points to allow for volatility).

Stocks are long term investments. When I buy them, I assume I'll hold onto them for years. So why not get them at a discount?

But... all the above is the rational part of me speaking. Given that I am a human, and have emotions, I too feel fear. Markets are uncertain. Dealing with the unknown can lead to fear. This is part of investing. For me and many others, at least.


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## james4beach (Nov 15, 2012)

cainvest said:


> Why would you change your mind "after some time" about buying a company in relation to all markets being down? If you're buying a stock I would hope you've done some research on the company, just like buying it at any other time.


Because it's hard to bring yourself to buy anything during a disaster scenario. In that scenario where you sell to avoid the catastrophe, that puts you in the position where you ideally should buy during the absolute worst, scariest time of the catastrophe. You have to bring yourself to do it.

I speak from personal, direct experience on this topic. I *did* sell out of the 2007 stock market to avoid catastrophe, once I saw lending troubles in the US. Exactly as 1989civic said. Then I watched the problem get worse -- _far_ worse -- than I thought it to be. Companies started going bankrupt and suddenly it was reported in the media as the 'end of the financial system as we know it'.

Boy was that scary (and it won't be the last time). Now imagine me sitting there with my cash and AAA government bonds. I'm hugging them.

Did I release my grip on those super-safe cash & bonds, and buy stocks in 2008 or 2009? No, absolutely not. In fact just like everyone else, I was pretty scared about the circumstances. When faced with the *option* to put those dollars back into the same market that I successfully escaped from before, I decided not to. Which of course was a mistake.

I stress the nature of the *option* here. When you have an option at your personal discretion, like me in 2009 asking himself if I should buy stocks, you may or may not get it right. These things look easy from a distance but get very different once you're in it.

If instead you don't have the option at all, if you say "buy and hold an asset allocation" then this removes the potential for incorrect steps.

Having lived this first hand, I think it's extremely difficult to strategically get out, and back in (market timing). This is now why I deprive myself of the *option* to "be smart and strategic" and instead stick to a conservative buy-and-hold strategy. It's more reliable.


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## cainvest (May 1, 2013)

james4beach said:


> Because it's hard to bring yourself to buy anything during a disaster scenario. In that scenario where you sell to avoid the catastrophe, that puts you in the position where you ideally should buy during the absolute worst, scariest time of the catastrophe. You have to bring yourself to do it.


That's where a predetermined plan comes into play, for better or worse, you execute it. If you're not one who can follow a plan due to emotional inputs, you probably shouldn't even try.

I'm not advocating selling off and buying again (bigger gamble) but taking a moment to assess the markets to deploy already tagged money (or rebalancing) for long term investment. You should already have a known stock or ETF pool to look at for purchases, like those you currently own and you may want to add to it. It might even be a good idea to have some price points set to buy on.

I guess a big difference is how you look at it. Where one may focus on a 10% drop in stock related holdings and see their portfolio dropping I see a 10% gain on current purchases. Of course my view builds in the fact that the stock market will recover, no guarantee there.


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## james4beach (Nov 15, 2012)

Absolutely agree with sticking with a plan.

As for markets recovering. Yes stocks tend to recover in 5 - 15 years most of the time. But over 2 years, not so much! That's the nature of stock markets, and it's normal.


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## cainvest (May 1, 2013)

james4beach said:


> Yes stocks tend to recover in 5 - 15 years most of the time. But over 2 years, not so much!


Really? So just eyeballing the TSX, how long were the recoveries for drops in 2016 and 2018?


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## londoncalling (Sep 17, 2011)

I was hoping to establish a position in a US bank. Unfortunately I am torn between JPM, WFC, and BAC. I have done most of my research but am still pondering which one. I don't want to split it 3 ways as I already hold many positions. This week has me fairly busy with meetings and work travel so in all likelihood I won't be making any moves. This may work to my advantage as I have difficulty sitting on cash and tend to buy too early when things like this occur. Some may know I bought TD last week and am happy with the price even though it could go down further. As far as the markets are concerned, IMO, much of what happens next will be based more on human emotion than news surrounding Corona. We have been long overdue for a correction. I do have some cash that had been in GICs until last fall that I had been considering moving to equities when we get a correction in the 15-20% range. Till then I keep picking away at some stocks that rarely go on sale. Have never grabbed a CP or CN but may get the chance depending on how things go.

My non expert research on Corona has provided the following:

The virus has a low mortality rate and as such will have a longer run. Higher mortality rate diseases tend to burn fast and fizzle out. They don't have as much of a chance to spread as they kill quicker than the transmission rate and don't have as many carriers in most cases. As a result its easier to quarantine. What is unique with this one is that we have less faith in the reports coming out of China and Iran. The numbers from Italy seem to be higher than many expected.

Back to the questions of what is the plan? and where do you sit today? I don't plan to change too much if anything. I will keep looking for what I perceive to be bargains. I don't see much fear yet and that makes sense. Although we did see a quick drop last week, the market saw tremendous gains not only in the last few months but also the past decade. We are also nowhere near the 2008-09 scenario where we saw months of decline. Back then I had just embarked on DIY and didn't have as much money in play. Should be an interesting week for sure. GLTA.


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## AltaRed (Jun 8, 2009)

cainvest said:


> Really? So just eyeballing the TSX, how long were the recoveries for drops in 2016 and 2018?


Recent bears have been aberrations of what it has taken historically for recovery. Recovery is almost a certainly, but how long it takes is a complete wild card.


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## hfp75 (Mar 15, 2018)

The numbers in China are 1/2 believable, the numbers in Iran could be 100% fake for all I know, the Iranian health minister was sweating during a press conference and he had it ! (Idiot).....

I am most interested in what’s going on in countries where I have some faith in the health system, right now Italy, Japan, S.Korea, etc etc etc.....

Check the link (below) and watch the numbers for Korea, Italy, and the other European countries ! The infected numbers are rising !! I’m holding for stock purchases..... let’s see what happens in developed countries.....

https://www.worldometers.info/coronavirus/


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## cainvest (May 1, 2013)

AltaRed said:


> Recent bears have been aberrations of what it has taken historically for recovery. Recovery is almost a certainly, but how long it takes is a complete wild card.


Definitely true, we'll never know until it's over and each time has been different in both cause and effect.


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## agent99 (Sep 11, 2013)

> agent99, I thought about your suggestion and you are right.
> 
> Watching the market too closely is not healthy.
> 
> The weather here is looking pretty good this week, hovering near 0. Today I'm going out for a nice, relaxing walk. I'm going to avoid looking at market movements during the week.


I played golf today and will again tomorrow. That provides enough frustration without letting the markets bother me 

I do have about $50k looking for a home. Was going to buy a split pfd as pseudo fixed income. Not affected much by markets and yield ~5%.

But as ltr posted, it may soon be possible to buy a bank or other blue chip now yielding 5% with good chance of gain when markets recover. At 5% yield, doesn't matter if that takes some time. Like ltr, I have often added to div payers in this way.
Rain forecast mid week, no golf, so will be watching to see what transpires.


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## james4beach (Nov 15, 2012)

Well you could buy HMMJ at new all time lows with roughly 14% dividend yield. You like yield, right? 

Joking! Do not buy this thing for its yield. Those distributions may not be sustainable.


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## capricorn (Dec 3, 2013)

Don't plan to sell anything. Might buy some TD. Not much cash sitting around to buy much of anything.


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## agent99 (Sep 11, 2013)

james4beach said:


> Well you could buy HMMJ at new all time lows with roughly 14% dividend yield. You like yield, right?


I had to look that one up. No interest whatsoever in Marijuana or business peddling it.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> If anyone is interested in sharing, maybe we can talk about our investment plans and where we stand today ...


Built up a bigger cash wedge as it looked like my job wasn't certain. New plans for a different role were outlined last week at work so some of the cash wedge can be moved into equities/FI.

I don't think the full hit for the corona virus has happened so I'm limiting how much for now.




james4beach said:


> ... It could help alleviate some anxiety about markets... I find that having a plan helps me keep my head clear about what I should be doing, because the plan tells me what I need to doe I've only been on a solid plan for 4 years ... I'm pretty new to all of this. I have much more money invested than during the last bear markets, which changes things (perception) ...


Having been through previous down markets - this drop hasn't generated anxiety. If it does, I expect it will take a simple reminder of the plan and what's happened in the past to move on.




james4beach said:


> ... Does it not make sense that a DIY investor should therefore put some effort into keeping themselves on track, maybe even behavioural coaching for themselves? That's where I'm at ...


I'd have thought the reminders of what the AA did for you, in other threads as well as following past threads would have lessened the anxiety and the need to behvioural coach ... but it is what it is.


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> agent99 said:
> 
> 
> > ... I do have about $50k looking for a home. Was going to buy a split pfd as pseudo fixed income. Not affected much by markets and yield ~5%.
> ...


You want to quell anxiety by finding out about plans, you say sticking the plan needs behavioral coaching and then you respond to a plan by suggesting a stock that's *nothing* like their plan?

Joking or not ... seems pointless to me.


Cheers


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> I'd have thought the reminders of what the AA did for you, in other threads as well as following past threads would have lessened the anxiety and the need to behvioural coach ... but it is what it is.


I think all those things did lessen the anxiety.

It's an additive process; each step brings me closer to perfection. We aren't all so perfect.


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## Eclectic12 (Oct 20, 2010)

It's not about being perfect ... it's about paying attention.

Cheers


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## GreatLaker (Mar 23, 2014)

I'm down somewhere between a Tesla S and a Porsche Taycan. But since I am retired I did not plan on buying one of those anyway. I plan to keep my 8 year old vehicle for another 4 years at least and hopefully 7 more years.

I'm retired with no pension so at this time all my spending comes from my own savings. I use a variable percent withdrawal method and have a considerable cushion between non-discretionary expenses and what VPW says I can spend, so not too worried. Plus dividend and interest income will cover a bear bones budget if things get really bad. Most of my investments are indexed ETFs with 60/40 allocation. FI is split between VAB and 5 year GIC ladders. That gives me a lot of fixed income to ride out a loooong bear market. I chose that allocation after looking at historical market returns in the 1970s and the 2000+2008 market crashes and realizing that recovery from a serious bear market can take a decade or more. J4B you can relate to my thinking there.

I started investing in the mid 1980s, so one of my first investing recollections is the crash of Oct 87 where the Dow crashed >20% in one day. I also stayed invested through 2000 and 2008. I bought my first property in 1995, and closed just after some Mexican currency crisis that caused markets to drop and interest rates to rise. I bought my second property a pre-construction condo in early 2000 before the first tremors of the dot com crash and closed in 2002, deep into S&P500 Bear territory. Nonetheless, every percent drop in my holdings hurts. Somehow though, I get inured to bigger drops like 5 or 10% or more.

I find it helpful to look back and see what markets have done in the past and recovered from. I guess this time could be different, but this link shows that despite huge corrections and bear markets, stocks have been a great investment over the long term, so I am staying the course.

Keep in Mind, Stocks Rose 1,100-fold During This Period. Constant mayhem amid long prosperity.


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## james4beach (Nov 15, 2012)

I think studying market history is really useful. It's helped alleviate my own fears. History also provides some template for what you might expect, e.g. the % of losses, how long markets can stay low, that kind of thing. Personally I think it's very important to have a grasp on maximum drawdown to set mental expectations.

One exercise I did on the weekend was reminding myself of the maximum drawdown of my portfolio; how much it would have declined (worst case) in past bear markets.

GreatLaker, I have more or less the same FI strategy as you and exactly as you said, history shows that it can take 10+ years to recover from a serious bear market. No better example than the recent S&P 500 from 2000-2012, a whopping 12 years with no gains. Hardly ancient history, and yet, quickly forgotten!


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## Spudd (Oct 11, 2011)

james4beach said:


> Well you could buy HMMJ at new all time lows with roughly 14% dividend yield. You like yield, right?
> 
> Joking! Do not buy this thing for its yield. Those distributions may not be sustainable.


I wouldn't suggest this either, but since the yield comes from them loaning out their marijuana securities for shorting, it might be sustainable for the near future at least, given the trend! Of course the capital value could easily decline more than 14%.


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## Pluto (Sep 12, 2013)

My plan is 100% individual stocks. Got some cash to deploy so I await the maturing of this correction. After taking the cable broke brakes failed elevator down, stocks will have to huff and puff taking the stairs back up, so no rush to deploy.


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## MrMatt (Dec 21, 2011)

My plan hasn't changed, because the situation hasn't changed. 
I fully expect a whole bunch of unexpected unpredictable stuff to happen. 

Oh no, something scary is going on, again. 
Today it is a pandemic, or a blackout, or a terrorist attack, or a war, or a political party gains power. 

My plan is unchanged. 
I try to pick companies with good management, and I expect them to do their best. That's why I stay away from scummy companies, or opportunistic investments.


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## james4beach (Nov 15, 2012)

Spudd said:


> I wouldn't suggest this either, but since the yield comes from them loaning out their marijuana securities for shorting, it might be sustainable for the near future at least, given the trend! Of course the capital value could easily decline more than 14%.


I shouldn't have brought it up but it was supposed to be a joke. Thought I clarified that when I said "Joking!"

HMMJ is nothing but a joke and fascination to me, a horrible bubble sector that is nothing more than a fad/speculation that will likely keep crashing in value. I do not recommend it to anyone and I have never held it, nor am I considering buying it.


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## agent99 (Sep 11, 2013)

james4beach said:


> I shouldn't have brought it up but it was supposed to be a joke. Thought I clarified that when I said "Joking!"


It was aimed at me and I took it just as a joke, as you intended.

Maybe if Jargey had posted that, the others here might have taken it same way. I guess they must assume you are always serious


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## james4beach (Nov 15, 2012)

Thanks agent99, glad to hear that.

OK getting us back on seriousness again. With stocks falling, I definitely felt the urge to buy something. I found it helpful to review my current weightings again... I just did this and found that my stock allocation has not dropped low enough to warrant any new buying.

If I looked at it and found I'm underweight my stock allocation by 5%, yeah, I'd buy with spare cash. But as of today I'm just not there.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I shouldn't have brought it up but it was supposed to be a joke. Thought I clarified that when I said "Joking!" ...


Leading with that it's a joke and skipping the bit about yield chasing when it's buying what one likes while lower probably would have made it clearer.




james4beach said:


> ... OK getting us back on seriousness again. With stocks falling, I definitely felt the urge to buy something. I found it helpful to review my current weightings again... I just did this and found that my stock allocation has not dropped low enough to warrant any new buying.
> 
> If I looked at it and found I'm underweight my stock allocation by 5%, yeah, I'd buy with spare cash. But as of today I'm just not there.


Good to see you are reviewing and sticking to the plan.


Cheers


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## agent99 (Sep 11, 2013)

james4beach said:


> I found it helpful to review my current weightings again... I just did this and found that my stock allocation has not dropped low enough to warrant any new buying.


An anecdote,based on actual experience a long time ago. Just for fun:

Let's say I am running a business. For one product we sell, our stock inventory plan says we should keep 100 units in stock. However, because of an unforeseen event (like the virus), our supplier has more of these items in his inventory than his plan dictates. His salesman offers us 100 at a 50% additional discount. Do we accept his offer?

Well, I would, but someone who sticks blindly to their stock inventory plan may not. Problem is, that these plans do not take into account unexpected event, like the special offer we received. Sometimes you have to bend your self imposed rules.

Same is true right now. We are being offered stocks at a deep discount. In my retail business case, I knew what the true wholesale value of the product was and how much profit I could make when I sold it (even if it took a year or so). Right now, the stocks being offered at a discount were probably overpriced to start with. So I decline the stock offer. But may take it up when the discount is large enough


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## james4beach (Nov 15, 2012)

agent99 said:


> Same is true right now. We are being offered stocks at a deep discount.


I know you said just for fun, but I don't think it's clear whether what we see today is a steep discount. Certainly not in the US, with CAPE still at 29. It's possible what we're being offered today are still over-priced stocks, just a little less over-priced than a few weeks ago.


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## cainvest (May 1, 2013)

james4beach said:


> It's possible what we're being offered today are still over-priced stocks, just a little less over-priced than a few weeks ago.


My "buy at a discount level" is near the Mid-Dec 2018 drop, anything above that isn't much of a discount IMO. Of course that's not to say I won't just buy my regular yearly investments before those levels are reached but I certainly won't take any additional positions.


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## Synergy (Mar 18, 2013)

agent99 said:


> james4beach said:
> 
> 
> > I found it helpful to review my current weightings again... I just did this and found that my stock allocation has not dropped low enough to warrant any new buying.
> ...


What happens if you can't sell or use those items without taking a loss. Who's to say that the cost doesn't continue to drop and you end up with inventory you can't get rid of.

It's really not a fair comparison as the assumption would be that the stock inventory is being purchased at a much lower price than what you could sell it for. When you purchase an equity you don't have that luxury.

Additionally, stock inventory doesn't pay a dividend, it normally cost you (interest, storage space, climate control, etc).

A discount today could end up to be a bad decision tomorrow or 6 months from now.

I would just stick to your plan and keep buying irrespective of what the market is doing. Overtime you will be rewarded.


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## agent99 (Sep 11, 2013)

james4beach said:


> I know you said just for fun, but I don't think it's clear whether what we see today is a steep discount. Certainly not in the US, with CAPE still at 29. It's possible what we're being offered today are still over-priced stocks, just a little less over-priced than a few weeks ago.


James, I thought I had made it clear that I considered stocks offered at today's prices may have a deep discount from their recently over-inflated prices. But I would not buy them. Read the last paragraph.


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## agent99 (Sep 11, 2013)

Synergy said:


> What happens if you can't sell or use those items without taking a loss. Who's to say that the cost doesn't continue to drop and you end up with inventory you can't get rid of.
> 
> It's really not a fair comparison as the assumption would be that the stock inventory is being purchased at a much lower price than what you could sell it for. When you purchase an equity you don't have that luxury.
> 
> ...


First two para somewhat contradictory. I would buy at a discount hoping to sell at a good profit. But as you said, not certain. But because I had 25 years of experience selling that product, I am not likely to lose. Same might be the case, if we bought a stock we know well at bargain price. We may lose, but because of track record, unlikely if we buy at right price.

You are right! Stock inventory doesn't pay a dividend. It might if wholesale price goes up. I believe there are quite a number of stocks that don't pay a dividend either.

Last para - Plan?? I don't have much of a plan. Just maintain enough FI to cover worst case event. Everything else in equity. In retirement, so no cash flow to keep buying irrespective......

This was just for fun . Don't take it too seriously. My only point was to be prepared to deviate from preconceived plans, if an opportunity presents itself.


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## Synergy (Mar 18, 2013)

^ Stick to the plan was just a general comment, not directed at you personally. I've seen people burnt in the past from trying to catch the bottom, backup the truck, forgo their the plan, dip into emergency funds, FI, etc. I volunteer on a board for an alternative lender, people get themselves into trouble by not following a plan.


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## Synergy (Mar 18, 2013)

^^ Contradictory, Yes. I was just trying to point out that it's not really a fair comparison one way or the other...


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## Retired Peasant (Apr 22, 2013)

james4beach said:


> Thanks agent99, glad to hear that.
> 
> OK getting us back on seriousness again. With stocks falling, I definitely felt the urge to buy something. I found it helpful to review my current weightings again... I just did this and found that my stock allocation has not dropped low enough to warrant any new buying.
> 
> If I looked at it and found I'm underweight my stock allocation by 5%, yeah, I'd buy with spare cash. But as of today I'm just not there.


I thought you weren't going to watch the market this week....



james4beach said:


> Watching the market too closely is not healthy. I've already reviewed my plan and numbers in post #2. I've done what I need to do; everything looks good and I will stop watching market prices this week (exception: will buy a GIC as soon as a cash transfer arrives).
> 
> The weather here is looking pretty good this week, hovering near 0. Today I'm going out for a nice, relaxing walk. I'm going to avoid looking at market movements during the week.


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## james4beach (Nov 15, 2012)

Retired Peasant said:


> I thought you weren't going to watch the market this week....


I've done an OK job ignoring quotes and tickers, but couldn't help doing some calculations to see if I can justify buying stocks.


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## AltaRed (Jun 8, 2009)

james4beach said:


> I've done an OK job ignoring quotes and tickers, but couldn't help doing some calculations to see if I can justify buying stocks.


Based on what? Daily or weekly gyrations on asset allocations?


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## james4beach (Nov 15, 2012)

AltaRed said:


> Based on what? Daily or weekly gyrations on asset allocations?


Is that question about justification for buying stocks?

In my case I looked at where my % stock allocation was sitting as of Tuesday am. If it was significantly below my % target weight, then I'd buy. Turns out it was pretty close to target so there was no justification to buy.


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## agent99 (Sep 11, 2013)

james4beach said:


> Is that question about justification for buying stocks?
> 
> In my case I looked at where my % stock allocation was sitting as of Tuesday am. If it was significantly below my % target weight, then I'd buy. Turns out it was pretty close to target so there was no justification to buy.


James, how often do you rebalance? Daily? 

Not being into rebalancing between FI and equities, I just wondered what you would recommend


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## agent99 (Sep 11, 2013)

james4beach said:


> I've done an OK job ignoring quotes and tickers, but couldn't help doing some calculations to see if I can justify buying stocks.


Did you go for that long walk? I planned on playing golf, but got rained out. Did walk and practice between showers.


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## AltaRed (Jun 8, 2009)

Yes...that was the question. 

To my knowledge anecdotally and what I read about methodology, investors typically do not look at their asset allocations more than once a year, albeit when new money is going in to the account, or withdrawals are coming out, one might look at their asset allocation quarterly. Perhaps warranted more often in times of corrections or bears, but this sounds like micro-management, don't you think? 

Daily and weekly gyrations on the roller coaster shouldn't warrant any action. By way of exaggerated example, what do you do if we have 3 days of 3% gains now over the course of rest of this week? Are you going to sell your stock over-allocation because you might have bought Tuesday to top it up as a result of the past week or so?


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## james4beach (Nov 15, 2012)

Yes, I did have a great walk yesterday. About 1 hour outside, and so much sun here on the prairies that I could barely keep my eyes open. Cloudy today, though.

This might answer a couple of the question above, but this was new money that I ended up with in the account. Recent and somewhat unexpected employment income. I know I've said that I'm in semi-retirement and withdrawal mode, but I still have occasional bursts of income.

I only rebalance once a year... what I was saying about looking at the allocations was about deciding where to deploy new cash.

I completely agree, stocks or bonds in the portfolio should not be sold in such time frames. There should be no internal trading until it's rebalancing time. And yes it might have been micro management to look at my AA for just adding a few thousand $.

That being said, what else would one do with new money? I could either add it to the cash pile (which is fully funded in my case) or invest it. I really have too much cash on hand and didn't want to add to the pile. And if I'm going to invest it, shouldn't I peek at my AA to see where it should go?

Example, in February I added a few thousand to my RRSP and also peeked at my AA to see where to add it. I don't see any problem with doing that. By the way, I bought the TSX at precisely its peak price!


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## AltaRed (Jun 8, 2009)

It is a judgement call on your part how you manage your accounts. My main point was to recommend avoidance of micro-management, if that is what you were doing as it will drive you crazy. Obviously with new money, a look is warranted.


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## agent99 (Sep 11, 2013)

Fair enough James. Some of us old guys can barely recall when we last had new money coming in


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## Gator13 (Jan 5, 2020)

I added to existing positions on Thursday, Friday and Tuesday as well as adding TD Bank. I never seem to time the market right so I just stick to my allocation plan and try to buy good quality stocks. This is a good test to see how our investment income strategy weathers the storm. 

I did a net worth snapshot this past weekend and I have to admit that it wasn't pretty and made the sphincter pucker factor shoot up a notch or five. 

btw....I'm jealous of you guys that are down south golfing. Enjoy!


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