# So Far So Good or Not



## dogcom (May 23, 2009)

Has the year gone as you expected it would in the markets, sectors or in the world?

For me everything has gone by the book so far as the equity markets rallied to May and then did the usual turnaround. Europe is doing its usual song and dance of the last few years except it may be getting worse as Greece is getting close to saying get lost Euro. I didn't expect a war with Iran right now and so far so good. Gold stocks fell more then I thought they would but they are following the pattern of weakness until summer so I shouldn't be all that surprised. 

So all in all if I think about it everything is going as it should so far this year with no real surprises.


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## Belguy (May 24, 2010)

While I am usually positive about the markets, May was a pretty dismal month for stocks and things don't seem to be getting any better:

http://www.google.com/hostednews/uk...ceC5P5zbrdlcL5veA?docId=N0023391338495767054A


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## dogcom (May 23, 2009)

Belguy all in all was it really a shock to you especially after the run we had since October. Things also didn't seem to get better until October of last year either. At some point this easy to guess market will throw us a curve ball but so far it hasn't.


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## eulogy (Oct 29, 2011)

I'm happy with things, just because I'm on the newer side of investing for retirement, so I like the idea of throwing money in at declining prices. Up and down in the markets really doesn't have much of a net change for me. 

I'm surprised at a few things. Bonds and US Equities are positive for me. Canadian equities and International equities (mainly Europe) are getting pounded. Europe doesn't surprise me in this case, but Canadian equities does. Cheap buying either way.


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## dogcom (May 23, 2009)

With China slowing and Europe in the dumper this has been a drag on commodities and thus the Canadian market, it is good however that you are enjoying the cheap buying eulogy.


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## Belguy (May 24, 2010)

The younger you are, the more that you can just roll with the punches when it comes to market returns and just look at declining prices as a better buying opportunity.

When you are already retired, the concern becomes whether the markets will be able to bounce back at least in the relative short term so that you don't have to cash out at a loss.

Your time horizon is a very major consideration as to how you react to shorter term market moves.

In other words, should 70 year olds put their hard-earned savings at the whims of the equity markets?


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## sags (May 15, 2010)

The economy has stayed relatively healthy longer than I thought it would, given the circumstances.

Europe keeps delaying the inevitable, but it looks like they are heading for a worse recession than they would have earlier.

The USA is still hiding it's head in the sand. Politicians still fighting over tax cuts or government stimulus.......either way they haven't begun to get serious on their debt problems.

China slowing...........that is a surprise, I think.

We don't own any stocks at present, but do own some farm land in Saskatchewan. The value is rising nicely every month.

For me...........the numbers say one thing, but from talking to people, business owners and others, a lot of people are broke.

A guy I know owns a payday loan store. He said he has to move as he isn't earning enough to pay the office expenses. His customers used to borrow against 350 a week pays.........and now they have 150 a week pays, so he can only lend them half as much.

My sister has worked at Walmart for 35 years............since they were Woolco.

She started working 40 hours a week plus overtime on Saturdays. Then her hours were reduced to 32 hours a week and no overtime. Recently they went to her and told her they were cutting her hours to 24 hours a week. She said she worked for them for 35 years and cut someone else's hours. They did...........but she said it is inevitable she will be working less. She is in her mid 50s.

I know a Chinese restaurant owner and the place used to be very busy. The dining room was full and takeout and pickup was very busy. Not any more. Nobody in the dining room and a few orders every night. They have let cooks and staff go.

This is what I see everyday all around me, yet the business channels say the stock market is doing fine.

I just wonder how long before the stock market meets the real world.


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## Belguy (May 24, 2010)

The younger you are, the more that you can just roll with the punches when it comes to market returns and just look at declining prices as a better buying opportunity.

When you are already retired, the concern becomes whether the markets will be able to bounce back at least in the relative short term so that you don't have to cash out at a loss.

Your time horizon is a very major consideration as to how you react to shorter term market moves.

In other words, should 70 year olds put their hard-earned savings at the whims of the equity markets?


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## Sampson (Apr 3, 2009)

Belguy said:


> In other words, should 70 year olds put their hard-earned savings at the whims of the equity markets?


Depends on how long you think you will live, and what returns you need to achieve a fulfilling twilight of your life.


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## Sampson (Apr 3, 2009)

The year has gone exactly as I suspected it would.

Truthfully, ever since late 2008, I expected a long 5-10 year period of deleveraging. How can the economy grow organically without debt? that is the answer to future returns.

In terms of markets this year. Absolutely. Europe is in trouble, but failing point has been tested before, most recently last Oct, and also (a combo of the US double dipping and contagion going to Europe) back in July of 2010.

In these volatile times, it isn't a surprise to me if we touch back to those lows. Roller coaster for the next couple years.


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## Vitalogy80 (Apr 12, 2009)

sags said:


> The economy has stayed relatively healthy longer than I thought it would, given the circumstances.
> 
> Europe keeps delaying the inevitable, but it looks like they are heading for a worse recession than they would have earlier.
> 
> ...


This is not what I see everyday...of course some people are having a rough time, that happens even in the best of times. It's easy to pick one business or one person and say that business used to be doing so well, now it's not...it must be the economy. Maybe the business just isn't popular anymore or their service has dropped or any number of reasons for losing business. 

I just get tired of the doom and gloom postings when it's not what I'm seeing out West everyday. Things are actually doing quite well in BC and Alberta and recovering quite nicely. There are tons of jobs out here, especially out on the rigs so if anyone needs a good high paying job, just take the bus out to Fort McMurray. Sure the place is terrible but they pay well and it's easy to get a job.


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## dogcom (May 23, 2009)

I am surprised by what sags says if he is talking from the Saskatchewan point of view because I thought Sask has a lot going for it right now.

Vitalogy80 out west may being doing fine now but there is a lag to when the poor economy hits us. A lot of oil companies and such do not want to lay people off until they absolutely have to because they are hard to replace when things are going well and they need to hire. I am not saying we are at the end of the line now but if oil keeps dropping and the economy goes into recession eventually companies will start to cut costs and then employees.


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## Vitalogy80 (Apr 12, 2009)

Or maybe out West will stay strong and the only reason Ontario is struggling is because of all the Manufacturing layoffs. The Oil Sands can't find enough people, they're still hiring strong. Sure Oil might be low right now, but I don't think it's going to stay here and that we'll see $100+ soon enough.

I'm not in the Oil business...actually Health Care, but that's another industry that is doing fine.


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## sags (May 15, 2010)

Actually we own farmland in Saskatchewan, but live in southwestern Ontario.

This area has the highest unemployment rate in Canada. The rate among young people is estimated at 30% or more, including part time employees looking for full time work.

Lots of jobs out west for sure...........but the well paid ones require specific skill sets and education.

GM is closing another plant in Oshawa..........2000 more jobs gone to the US.

RIM is laying off another 2000 workers.

Timkin Bearings are closing their doors and moving to the US.

All in the last few days to add to the unemployment misery.

It sounds like such an easy "fix" just to have people sell their belongings in Ontario and move their families out west, but what do they do when they get there..........if they don't have the skills required for the jobs?

Do they move from Ontario to work in a low income job in Alberta?

On the same day last week, Finance Minister Flaherty was talking about "there is no bad job", in reply to questions about the changes to unemployment benefits.........while across the lawn in an Ottawa committee meeting on immigration, Minister Baird was explaining how the government was cuttng 1,000,000 immigrant applications, because they were only coming to Canada without the right skill sets and were working in "survival" jobs.

Unfortunately, no one in the government is speaking much about increasing the training and education to bring people up to the skill set necessary to acquire employment.

If a person is on Ontario Works (welfare) and go back to school...........they are cut off all benefits.

If a person wishes to go back to school to become a licensed heavy duty mechanic, and don't have a Grade 12 diploma, they have to take courses for 9 months to a year that teaches them such valuable skills as developing a comparative English composition. 

I am sure lots of heavy equipment mechanics find the ability to write English compositions very valuable in their work.

And.............those determined enough to take the training...............receive no financial support while doing so.

As a country we have put little emphasis on the trades, which are now in great demand.

And now we are paying the price for it.


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## sags (May 15, 2010)

The US jobs report was out today........and it was dismal.

The most interesting comment on it that I heard was from someone who said there is a mismatch of jobs and training. He said companies need to take a role in hiring and training their own people, instead of expecting the government to train everyone for their convenience. As he said, companies used to do it.

The same problem exists in Canada.

If a Toyota plant opens up, and they need millwrights and electricians...........they just steal them by offering higher wages and benefits. They offer no apprenticeship programs.

I looked at many job sites for oil companies out west and there were no apprenticeship opportunities.

That is part of the problem as well.

A person can take the educational training for a trade.......but at some point they need an employment sponsor.

A friend of my son completed electrician training at a trade school. When he graduated he couldn't find an employer to take him on as an apprentice. He now owes 8,000 in student loans and no job.

Others his age look at his experience and say..............why bother?

It is a sad situation and these young people are never going to make up for their losses.


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## dogcom (May 23, 2009)

Good post sags and I agree with everything you have said. We need to help people become productive and help them to develop the skill sets the country needs instead of wasting a lot more tax dollars on the unemployed and dead end welfare.

We also need to help people who commit small crimes by making them pay back to society instead of going to jail to learn how to become worse citizens. Or sending drug users to mandatory treatment and withdrawal so they also might become productive and not a drag on society. Conservative want to build more jails and the Liberals and the NDP plan is to do nothing as an effective deterrent. Both plans are expensive and do nothing to help our country as one costs a ton for jails and the other allows criminals to run free and continue their pillaging. 

Sorry for that rant a little off topic but we really do need to get serious about the countries productivity and not wasting so much money and resources.


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## sags (May 15, 2010)

I agree with you completely..........

We have a "hateful" government, almost a dictatorship now, and a befuddled opposition with no cognizant ideas.

What happened to the middle of the road............common sense politician?


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## Eder (Feb 16, 2011)

Calling our gov a dictatorship is really getting out THERE. 

The sky is always falling....

I remember the Cuban missile crisis and our teacher showing us the "STOP DROP and COVER" method of hiding under our desks to avert the effects of an inevitable Soviet nuclear device blowing up our town.

The sky will always be falling.

And we will always blame economic cycles on the nearest Government.


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## HaroldCrump (Jun 10, 2009)

Any government that does not pander to every single lobby group and vested interest group is labeled as a dictatorship.
Thatcher was often accused of running a tight dictatorship govt. too.

The only way to be called democratic is to pillage tax payers money and line the pockets of every single lobby group that comes to the door with cap in hand.

For anyone who truly believes our current admistration is a dictatorship is welcome to buy a one-way ticket to North Korea.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> Any government that does not pander to every single lobby group and vested interest group is labeled as a dictatorship.
> Thatcher was often accused of running a tight dictatorship govt. too.
> 
> The only way to be called democratic is to pillage tax payers money and line the pockets of every single lobby group that comes to the door with cap in hand.
> ...


+1 & too good not to quote!

Spot-on, as usual. Every single word!


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## Belguy (May 24, 2010)

The economy is changing in fundamental ways and I fear that high unemployment will be the new norm especially in industrialized provinces such as Ontario which is in a deep mess that is only going to get worse. Goodbye to the good times!!


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## jet powder (May 29, 2012)

When the majority is the goverment & has the rich, who are always the minority, absolutelly @ its mercy. The day will come when a multitude of people who have had only a slice of bread to eat, will chose the goverment. Unlike the stateman they will devoure the seedcorn in a year of scarcity making the next year not of scarcity but of out right famine.


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## sags (May 15, 2010)

HaroldCrump said:


> Any government that does not pander to every single lobby group and vested interest group is labeled as a dictatorship.
> Thatcher was often accused of running a tight dictatorship govt. too.
> 
> The only way to be called democratic is to pillage tax payers money and line the pockets of every single lobby group that comes to the door with cap in hand.
> ...


Harper has earned the right to implement his agenda, and the voters will pass judgement on it in a few years.

In the meantime though..........I think Canadians expect more than changes to laws and the creation of new laws being hidden in an omnibus bill.

I also think Canadians believe a debate in Parliament is a worthwhile endevour in a democracy.

Unless of course, Harper knows everything about everything and no advice or counsel should be taken from any quarter.

Maybe a dictatorship isn't the right word..........but Harper.........and only Harper is making all the decisions.


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## Belguy (May 24, 2010)

With Harper, it's his way or the highway!!


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## HaroldCrump (Jun 10, 2009)

sags said:


> Harper has earned the right to implement his agenda


Right on, via a majority govt.
And how is that different from any other elected govt. including the illustrious McGuinty govt. in Ontario?



> I also think Canadians believe a debate in Parliament is a worthwhile endevour in a democracy.


Last I checked, it was the opposition parties that actively collude to _prevent_ legislation from passing.
Recall the stalling tactics by the NDP last summer to prevent the passage of the back-to-work legislation for Canada Post and Air Canada?



> Harper.........and only Harper is making all the decisions.


How do you know that?
Are you privy to the private meetings within his cabinet?
From what we can tell, most cabinet ministers seem to be making their own decisions.
Couple of examples - Lisa Raitt has been a very active and vocal Minister of Labor and there is no evidence that Harper is pulling the strings.
Similarly, Flaherty is (IMO) one of the most competent Finance Ministers we have in a while, and it would be completely misguided to suggest he is not in full control of his portfolio/duties.

We don't know who said what behind closed doors in private cabinet meetings, however, there is no evidence that Harper's leadership style is in way hindering the smooth functioning of the federal govt.

And frankly, I'd rather have that sort of leader rather than a gutless, spineless puppet like Dalton McGuinty.


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## londoncalling (Sep 17, 2011)

You raise some very valid and important points Harold. I think the biggest failure of this and many other government leaders is that they refuse to reprimand their own members for overstepping the boundaries on expenses and inappropriate behaviour (Peter MacKay's little helicopter tour and Tom Lukiwski's anti-gay remarks are just two examples that come to mind). Don't even get me started on the behaviour of these "people" use in parliament. I am embarrassed to say that the people that hurl insults at each other in the name of good governance are my elected representatives. If I were to use the same language and exude a similar behaviour in my workplace I can guarantee I would be fired for misconduct and charged with harassment. These are the alleged leaders of our country? Give me a break! The above is just one of many reasons why voter apathy exists. The general public (especially the younger voters) paint them all with the same brush and realize that most of their elected officials are more concerned with career self interest and politicking then actually governing the country. I am not saying that only the current conservative government is guilty of this (they are all in the same boat). In my youth I was involved in Canadian politics to a great extent - in high school I was selected as 1 of 500 individuals nationwide to attend a week long conference on parliament hill about the role and operations of government, In university I was being romanced by the grassroots movement that eventually became the Sask Party. There were countless evenings where the leaders of this movement wined and dined myself and a group of my peers hoping to get us onboard. Some of these people are now in our provincial legislature or work in various provincial ministries. It took me awhile to realize that every party was more concerned with holding and wielding power than actually instituting any changes for the benefit of the public. I still think democracy is the best thing we got going at this time and make sure I exercise my right to vote even when I find there is no suitable candidate. It was only in our last civic election that I found a candidate that I felt could make a difference. She was amazing. I watched her canvas our neighbourhood numerous times during the campaign conversing with the electorate for as long as they wanted. She was definitely the underdog at the beginning of the election but her hard work and "refreshing" ideaof actually listening to the public paid off.

Maybe I am just a jaded Gen X er but to be honest I see little opportunity for change. Most of the people I work with and talk to care little for political involvement - be it at their place of employment, municipality, provincially or federally. My guess is that most people on this board are not like that. We seem to be of a different breed. There are smatterings of political activism around but I think the entire system is diseased and needs to be reformed.


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## HaroldCrump (Jun 10, 2009)

londoncalling said:


> You raise some very valid and important points Harold. I think the biggest failure of this and many other government leaders is that they refuse to reprimand their own members for overstepping the boundaries on expenses and inappropriate behaviour (Peter MacKay's little helicopter tour and Tom Lukiwski's anti-gay remarks are just two examples that come to mind).


Agreed, Peter MacKay is not the brightest star of the cabinet by any means.
Oda's conduct and expense account abuse is shameful, to say the least.
Every political party has their own versions of the Bev Odas and the Peter MacKays
But we can't extend that argument to say that Harper is running an dictatorial government.


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## kcowan (Jul 1, 2010)

Belguy said:


> In other words, should 70 year olds put their hard-earned savings at the whims of the equity markets?


Or the bond markets? Yes, unless they need the money to live on. But we know that they are smart enough to have a year of expenses in cash plus an emergency fund. So what is the problem?

(Are we talking about real problems here or imaginary problems?)


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## Spudd (Oct 11, 2011)

That's presumably why they say that your exposure to equities should equal a hundred minus your age (i.e. age 70, 30% in equities).


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## Vitalogy80 (Apr 12, 2009)

sags said:


> The US jobs report was out today........and it was dismal.
> 
> The most interesting comment on it that I heard was from someone who said there is a mismatch of jobs and training. He said companies need to take a role in hiring and training their own people, instead of expecting the government to train everyone for their convenience. As he said, companies used to do it.
> 
> ...


Well I'm out west in Kelowna and 2 of my friends just finished their Electrical apprenticeship...now one of them is working for the mines around here making $40/hour plus lots of OT and the other went up north to work for an Oil company and he's making thick cash. You don't need education to make money on the oil fields, you need a good work ethic and that's about it. If you're willing to work, you can make $100,000/year. If you have a trade that's in demand up there, it's even easier to get a job and make more money. 

There are good times and bad times, we always make it through...or is "this time is different" and we're going to be a 3rd world country with 40% unemployment as the norm pretty soon? The sky is falling!


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## kcowan (Jul 1, 2010)

Spudd said:


> That's presumably why they say that your exposure to equities should equal a hundred minus your age (i.e. age 70, 30% in equities).


That is assuming there is no inflation. If inflation increases from its current rate of about 5.5%, then the need for equities is higher to protect against it in the next 15 years. But yes it is an old ROT. I would say 40% now(not 30% nor 50%).


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## Belguy (May 24, 2010)

My plan now is to wait for the next selling opportunity, if and when it comes, and reduce my equity component to 40 per cent.

That still leaves the problem of what to do with the other 60 per cent when interest rates and bond yields are at rock bottom.


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## AMABILE (Apr 3, 2009)

Belguy, please expand on "NEXT SELLING OPPORTUNITY"


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## Vitalogy80 (Apr 12, 2009)

AMABILE said:


> Belguy, please expand on "NEXT SELLING OPPORTUNITY"


It should be the next time he says that the economy is turning around and growth is starting to happen...basically any time he thinks things are going well, it's time to sell. When it's all doom and gloom from him, it's time to buy!


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## 44545 (Feb 14, 2012)

I expect nothing over such a short time window other than volatility.


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## Lucy (Mar 10, 2012)

Yes, volatility seems to be the order of the day. And if enough crap surfaces, we will see all stocks roll over and capitulate. Capitulation is the talk of last week. Imagine if and when our real estate bubble bursts! Imagine the ubemployment rates then. Yes, Flaherty is going a great job letting prices go to the moon. (sarcasm)


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## kcowan (Jul 1, 2010)

"the next selling opportunity" will be a long time. The last selling opportunity was 1Q2012. We know that because belguy is our bellweather! When he is optimistic, it is time to sell.


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## Mike59 (May 22, 2010)

Belguy said:


> My plan now is to wait for the next selling opportunity, if and when it comes, and reduce my equity component to 40 per cent.
> 
> That still leaves the problem of what to do with the other 60 per cent when interest rates and bond yields are at rock bottom.


"BELGUY LEAVES THE REBALANCING SCHOOL, ACCEPTS SCHOLARSHIP AT THE MARKET TIMING SCHOOL!"
(this should be front page news on the Canadian Money forum front page!) :tongue-new:


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## londoncalling (Sep 17, 2011)

Vitalogy80 said:


> Well I'm out west in Kelowna and 2 of my friends just finished their Electrical apprenticeship...now one of them is working for the mines around here making $40/hour plus lots of OT and the other went up north to work for an Oil company and he's making thick cash. You don't need education to make money on the oil fields, you need a good work ethic and that's about it. If you're willing to work, you can make $100,000/year. If you have a trade that's in demand up there, it's even easier to get a job and make more money.
> 
> There are good times and bad times, we always make it through...or is "this time is different" and we're going to be a 3rd world country with 40% unemployment as the norm pretty soon? The sky is falling!



There is a huge difference between completing an apprenticeship and starting an apprenticeship. Everybody knows once you have that Journeyperson card with the red seal designation you are home free. I know of others that have taken schooling (pre-employment programs) who have had difficulty getting an apprenticeship for a variety of reasons here in Saskatchewan. It seems to be there are way more apprentices than JPs which is why the JP is in such high demand. I would agree with both sags and Vitalogy however they are making two very different points. I can claim to be an expert here as I hold to journeyman tickets and currently instruct apprenticeship training in both. The media and politicians can complain about a shortage of skilled labour but what they should really be saying is why didn't we think about this labour shortage years ago and get some people trained. It's only gonna get more difficult for apprentices to find JPs to apprentice under as the boomers leave the workforce. In this province some concessions have been made by the apprenticeship branch by allowing the ratio of apprentice to JP to go from 1:1 to 2:1 and increasing the allowable trade time from non JP supervision to be used. The numbers of training spaces have been increased for most of the construction trades (carpentry, plumbing, electrical). This has helped to remove some glut from the system however it is not enough. The biggest hold up is that most companies need JPs and not first and second year apprentices.


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## Belguy (May 24, 2010)

I generally rebalance my individual holdings on a semi-annual or annual basis as necessary.

I last adjusted my asset allocation early in the year after the markets had had a good run. I plan to do this again if and when the markets have another good run.

If this is market timing, so be it but I am not waiting to sell low and buy high but rather the other way around.

I will remain patient until the markets recover from their current (or lower) levels and adjust my allocation when I can sell individual holdings at or above their January levels.

OK, go ahead and shoot back with your criticisms!!


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## kcowan (Jul 1, 2010)

Belguy said:


> I last adjusted my asset allocation early in the year after the markets had had a good run. I plan to do this again if and when the markets have another good run.
> 
> If this is market timing, so be it but I am not waiting to sell low and buy high but rather the other way around.
> 
> ...


Since you rebalanced in 1Q2012, all you have to do is wait. Your equity portion will meet your 40% of your allocation after a 25% meltdown. This reallocation is well underway. Congratulations! No need for market timing.


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## Belguy (May 24, 2010)

I love the stock market!!

P.S. "You must keep a portion of your retirement savings in equities if you want to keep up with inflation."

Ya, right!!!:upset:

Maybe I should change my target asset allocation to 100% non equities and then do nothing and I still might achieve my target sooner rather than later the way that things look these days.

Bulldozer: Someone who can sleep through their annual meeting with their financial advisor.


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## kcowan (Jul 1, 2010)

How much (%) of your current portfolio will you spend on living expenses this year? After deducting any pensions.


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## kcowan (Jul 1, 2010)

Seabreeze Partners Founder and President Doug Kass:


> *When you should buy stocks:*
> 1. You no longer want to watch your stock screen
> 2. If you have a stock broker, you no longer take his calls
> 3. You no longer want to watch CNBC and Bloomberg
> ...


Sounds like Letterman's List for why to invest in GICs...


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