# CNBC Live Coverage on NOW



## Belguy (May 24, 2010)

CNBC currently has live coverage of the Asian markets!!


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## Belguy (May 24, 2010)

So, what do you think so far??


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## ddkay (Nov 20, 2010)

I don't get CNBC.. I read there was a "Markets in Turmoil" special on tonight though. It's probably better I missed it.


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## gibor365 (Apr 1, 2011)

NIKKEI down 1%


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## Four Pillars (Apr 5, 2009)

I'll probably check the numbers before I go to bed, but there is no way I'm watching live coverage of a stock market. I'm just not that interested.


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## liquidfinance (Jan 28, 2011)

Bloomberg has good coverage online. 
nikkei down 1.31%
kospi 1.4%
ASX 200 down 1%
Newzealand down 2.2%


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## PMREdmonton (Apr 6, 2009)

ASX: -0.75%
Nikkei: 0%
Shanghai: -0.01%
Hang Seng: -2.56%


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## ddkay (Nov 20, 2010)

Why is everyone turning into quote tickers?


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## Belguy (May 24, 2010)

Asian markets down in the one to three percent range. U.S. futures well off their lows but still down sharply.

Gold up $43.00 (and climbing) the last time that I looked at it.

Donald Trump puts a lot of blame on Obama and calls him "a weak president". He also believes that Geithner should have left.


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## ddkay (Nov 20, 2010)

In summary

Europe: US must get fiscal house in order
US: Europe must get fiscal house in order
All emerging economies: US and Europe must get fiscal house in order


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## Belguy (May 24, 2010)

If I were younger, and had it to do all over again, I might have just stuck with GIC's!!

http://www.theglobeandmail.com/glob...ts-for-this-gic-only-investor/article2121182/


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## KaeJS (Sep 28, 2010)

Belguy said:


> If I were younger, and had it to do all over again, I might have just stuck with GIC's!!
> 
> http://www.theglobeandmail.com/glob...ts-for-this-gic-only-investor/article2121182/


No freaking way.

GICs are a condiment and Equities are the meal.

You put ketchuppy GIC's on your nice Equity burger to diversify some flavour.

You wouldn't eat a whole bottle of ketchup only, would you? 

And the guy retired in 2002. Big mistake he made. Look what happened to the S&P 500 from 2002-2007. It _only_ went from 800 to 1550 and doubled in value 

Oh, and in 1980, when he went "GIC only", the S&P 500 was valued at 100!!!!!!


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## ddkay (Nov 20, 2010)

The article doesn't say how much he invested in GICs. I would have bought 10 year GICs when interest rates were 17% too.


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## fatcat (Nov 11, 2009)

> If I were younger, and had it to do all over again, I might have just stuck with GIC's!!
> 
> http://www.theglobeandmail.com/globe...rticle2121182/


this is the wrong forum to cheer gic's but i think the guy's reasoning is impeccable ... he's a smart man

you young guys should be in the stock market because you have time to make it back but those over 60 need to approach investing differently (especially in todays environment)

i'd bet my house that the guy in the article lives simply and is debt-free ... what the heck is wrong with that kind of choice ?

i fortunately have only a small chunk in equities for the exact reason that the fellow cites (and bond funds and lots of cash at the moment)

maybe i'll start a gic ladder too

maybe it's better to take less returns and know the principal will always be coming back

ps. belguy, it's not too late, maybe now is the best time to do it


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## doitnow! (May 28, 2011)

KaeJS said:


> No freaking way.
> 
> GICs are a condiment and Equities are the meal.
> 
> ...


Although I agree with you in a general sense, one's outlook changes, (protecting your portfolio takes precedence over gains) when one is retired or decides to retire within a few years. Hence, Belguy's point: "if I were younger...". 

I second Fatcat, "It's not too late". I think I read in another posting that you were going to be revising your equity bond allocation.

What keeps me us sleeping well during these turbulent times is our real estate investments income (real bricks), and our jobs, both of which thankfully do not fluctuate with these equity markets.


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## ddkay (Nov 20, 2010)

Trend following vs buy and hold http://www.capitalexchangeblog.com/trend-following/


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## andrewf (Mar 1, 2010)

ddkay said:


> The article doesn't say how much he invested in GICs. I would have bought 10 year GICs when interest rates were 17% too.


I think you may have been less pleased with those GICs in a taxable account. You probably would have been receiving a negative after-tax real return.


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## HaroldCrump (Jun 10, 2009)

This topic probably deserves a separate thread since it's misleading under this title, however, since everyone is jumping onto the bandwagon...

This gentleman is not the only one expressing this GIC vs. equity (risky) investing.
David Tahriar's last book _Enough Bull_ was precisely focused on this philosophy.
Ironically, that book was written during the deep dog days of Spring 2009 and reflected the pessimism of those days.
I'd say it's back in vogue again given the events of past 2 weeks.
The book focuses on a retirement strategy based on having nothing to do with the stock/bond markets.
Purely a retirement strategy built upon laddered GICs, frugality, staying debt free (including mortgage free), and optimizing govt. benefits like OAS, pension splitting, and other age related credits.

Worth a read for someone interested in this matter (and who isn't).

Note that the gentleman reviewed in this article, as well as the examples in David's book, are based on a typical retirement at 65.

P.S. I have read the book but obviously I'm not following its recommendations 
I like to read everything and then do whatever the hell I want


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## andrewf (Mar 1, 2010)

I'm not really sold on that strategy, myself. It is an awfully expensive way to fund your retirement. It's not even risk-free--there are other risks to worry about, not least inflation risk. Real GIC yields have been pretty horrific for a while now, and they might get even worse.


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## Sampson (Apr 3, 2009)

andrewf said:


> I'm not really sold on that strategy


nor am I.

The risks and volatility of such a portfolio are clearly lower than a portfolio that includes equities.

However, the risk is actually the _strategy_ itself. Few people are capable of amassing adequate cash to fund their retirement with returns of cash and fixed income alone - that's why people take the added risk of equities markets to begin with.

I haven't read Trahir's book, but I'm curious to know whether he looks at this element. If everyone invested with GICs alone for their entire investing life, would they even reach a savings level that is adequate?


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## CanadianCapitalist (Mar 31, 2009)

David Trahair seems to be a well-meaning person but he is as mistaken as an advisor who would have suggested back in 2007 that one should be in 100% stocks because of their past performance. The point is bonds and GICs have had an extraordinary two decades run and the market conditions that enabled that (ever decreasing interest rates) are unlikely to be repeated. 

To add to Sampson's point, a GIC-only investor is also taking risk -- the risk that *future* returns will not keep up with inflation especially after taking taxes into account. A retired GIC-only investor is also taking reinvestment risk -- risk that when it is time to renew that GIC, the interest payments are lower. How is the investor supposed to make up the difference? By consuming capital at a faster rate! The trouble with inflation risk is that is a lot harder to see than market risk because markets fall in a hurry but inflation eats through capital slowly. 

So, we come back to diversification. A young investor owns mostly stocks but also some bonds to provide stability to the portfolio. An older investor owns mostly bonds but also some stocks to provide good odds of providing some growth.


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## fatcat (Nov 11, 2009)

> David Trahair seems to be a well-meaning person but he is as mistaken as an advisor who would have suggested back in 2007 that one should be in 100% stocks because of their past performance. The point is bonds and GICs have had an extraordinary two decades run and the market conditions that enabled that (ever decreasing interest rates) are unlikely to be repeated.
> 
> To add to Sampson's point, a GIC-only investor is also taking risk -- the risk that *future* returns will not keep up with inflation especially after taking taxes into account. A retired GIC-only investor is also taking reinvestment risk -- risk that when it is time to renew that GIC, the interest payments are lower. How is the investor supposed to make up the difference? By consuming capital at a faster rate! The trouble with inflation risk is that is a lot harder to see than market risk because markets fall in a hurry but inflation eats through capital slowly.
> 
> So, we come back to diversification. A young investor owns mostly stocks but also some bonds to provide stability to the portfolio. An older investor owns mostly bonds but also some stocks to provide good odds of providing some growth.


 good post cc, your numbers are impeccable ... 

but i have to add that you are missing the prime reason that this strategy has value - it appeals to the psyche of the investor that chooses it ... while it might make less sense from a numbers point of view, it makes a lot of sense for the personality of the people who often choose it .. 

there is a gic broker down the street from me and they do a nice friendly brisk, happy little business ... the thought of risking their nest egg is just too much for some people and for them it is the perfect strategy ... they sleep well at night, what is that worth ?

finally, we can look at research, but going forward from today, can anyone say which investing strategy will win over the next decade ?


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## the-royal-mail (Dec 11, 2009)

Gosh. GICs are looking pretty attractive at the moment. So is the solid 1.25% offered for TFSA cash balances. 

I do think GICs are given a bad rap, however. We must all keep in mind that there are some older investors who save a few extra dollars from time to time. This group cannot recoup any losses they may suffer in stock market risk. So the GIC preserves their capital, esp when it's shielded in their TFSA.

Does everyone also now see how absurd it would be to borrow to invest? Hopefully our lurkers are watching the falling sky and deciding to keep their cash.


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## HaroldCrump (Jun 10, 2009)

fatcat said:


> but i have to add that you are missing the prime reason that this strategy has value - it appeals to the psyche of the investor that chooses it ... while it might make less sense from a numbers point of view, it makes a lot of sense for the personality of the people who often choose it ..


^ exactly!
And that is why I brought this up even though I don't follow the strategy myself.


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## fatcat (Nov 11, 2009)

i wonder if something like a modified gic strategy might work best where 80% is in laddered gic's and 20% split between growth stocks and precious metals (like 12.5 stocks and 7.5% metals or 15/5 ?

you would have inflation covered which i think is one of the main risks to the gic-only portfolio

i agree with cc that we may well be looking at gic and savings rates at very low levels for a long time


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## CanadianCapitalist (Mar 31, 2009)

fatcat said:


> there is a gic broker down the street from me and they do a nice friendly brisk, happy little business ... the thought of risking their nest egg is just too much for some people and for them it is the perfect strategy ... they sleep well at night, what is that worth ?


The sleep at night factor is priceless. One should sell down to the point of sleeping well at night. That point will be different for different people. 

However it's a very tricky one to figure out. When markets are good, most investors will tell you that their risk tolerance is high. They are more worried about missing out on further gains. When markets are choppy, most investors don't want anything to do with risky assets. In other words, the sleep-at-night-point is different based on prevailing market conditions.

If an investor decides that they cannot endure a single blip in the stock market, then yes, they should go all GICs. My suspicion is it's not true for most people. Most people can handle some volatility. Where they stand is up to them to decide themselves or with the help of a good advisor. And then the all-GIC investor has to worry about sticking to her plan because surely the temptation will be there to jump into the market when it starts going up!


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## Sampson (Apr 3, 2009)

the-royal-mail said:


> Does everyone also now see how absurd it would be to borrow to invest? Hopefully our lurkers are watching the falling sky and deciding to keep their cash.


Not at all. I've never agreed with this point.

Certainly stocks are tumbling and will probably continue to do so, but truthfully, most of my holdings are still up from when I bought them, and had I borrowed the money to invest in them, the returns would be greater than the interest paid on those loans.

I believe using leverage has more to do with financial circumstances than a strict good vs. bad.

Take for example, some one with 3- savings buckets (or even 4-buckets) completely full, taking out an investment loan representing 10% of their 3rd bucket. If they lose it all, so what.

That being said, most people that borrow to invest probably should not, but it doesn't mean that it is an absurd strategy. Like any other strategy (100% GICs, age-related allocation to fixed income vs. equities, or anything else) it has inherent risks, but that itself doesn't make it bad. In combination with consumer debt, no savings, etc. is what can make it a poor strategy.


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## fatcat (Nov 11, 2009)

> The sleep at night factor is priceless. One should sell down to the point of sleeping well at night. That point will be different for different people.
> 
> However it's a very tricky one to figure out. When markets are good, most investors will tell you that their risk tolerance is high. They are more worried about missing out on further gains. When markets are choppy, most investors don't want anything to do with risky assets. In other words, the sleep-at-night-point is different based on prevailing market conditions.
> 
> If an investor decides that they cannot endure a single blip in the stock market, then yes, they should go all GICs. My suspicion is it's not true for most people. Most people can handle some volatility. Where they stand is up to them to decide themselves or with the help of a good advisor. And then the all-GIC investor has to worry about sticking to her plan because surely the temptation will be there to jump into the market when it starts going up!


right, excellent ... the biggest problem i face in investing is my emotions and my irrationality ... as you say, when markets are rising, everyone is a player ...


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## HaroldCrump (Jun 10, 2009)

Sampson said:


> but truthfully, most of my holdings are still up from when I bought them


Most stocks are getting close to their 2010 valuations, if not already there.
The stuff that you would have bought during the dog days of 2008 and 2009 is probably still up but most of the 2010 gains are in the process of being erased (esp. if this continues for the rest of this week).


> That being said, most people that borrow to invest probably should not, but it doesn't mean that it is an absurd strategy. Like any other strategy (100% GICs, age-related allocation to fixed income vs. equities, or anything else) it has inherent risks, but that itself doesn't make it bad. In combination with consumer debt, no savings, etc. is what can make it a poor strategy.


Good point. I'd also like to point out that the same discretion should be exercised when leveraging against RE.
Most folks that consider leveraged investing risky don't bat an eyelid when buying a $600K house with a 5% down, 30 year variable rate mortgage.
Doesn't get any riskier than that!


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## dogleg (Feb 5, 2010)

I have no issues with Belguy and his GIC argument. If it works for him fine but for me risk/reward investing is part of my DNA . A golfing buddy has plenty of money and it is all in GICs . He says why would I risk a dime of my money when I have more money now than I will ever spend. Hard to argue with that isn't it ?


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## Belguy (May 24, 2010)

Do you buy into the argument that the markets will likely languish for many years and these will not be boom years for equity investors?

That, plus my increasing age, is what makes me think that capital preservation has become more important than ever!!

I say to let the young gaffers play around with their money but that we retirees should be doing a better job of protecting our hard-earned savings and not listen so much to the advice of those younger and more risk tolerant.


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## andrewf (Mar 1, 2010)

Belguy: no one knows with any certainty. The professional prognosticators have to prognosticate. You can find one to confirm almost any bias. I don't think most of them add any value, they just fill time on the business channels.


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