# Markets tanking



## agent99 (Sep 11, 2013)

Asx and Asian markets are tanking this evening. Same with dow/S&P futures. Same for TSX tomorrow? Might be a time to find a home for spare cash?


----------



## james4beach (Nov 15, 2012)

Wake me up when the index falls below its 200 day moving average. For the S&P 500 that would take a 9% drop and for TSX, would take a 6% drop.

IMO nothing looks remotely bearish until then.


----------



## agent99 (Sep 11, 2013)

James is sleeping and doesn't want to be woken, but for those of us with an interest in the markets, tomorrow may be worth watching

At present US market futures are down 1.4-1.9%. These drops and similar ones in Australia and Asia are apparently as a result of spread of virus to Korea, Italy, Iran and elsewhere. As has happened in China, trade, tourism and other economic sectors will now be impacted in more and more countries. 

Not something to be ignored. More here:

https://www.cnn.com/2020/02/23/business/stock-futures-coronavirus/index.html


----------



## Eder (Feb 16, 2011)

Sounds like a lot of noise...we need a 20% pull back...maybe this virus can get us there?


----------



## doctrine (Sep 30, 2011)

If this drop in US futures holds, we may actually see the 3rd worst day in the last 4 weeks.


----------



## james4beach (Nov 15, 2012)

I thought we all had an understanding that the central banks just print money as needed and juice the stock index. I assumed this was a big reason everyone was investing in stocks. This thing doesn't exactly rise on its own...

https://www.cnbc.com/2019/11/07/the-feds-monetary-juice-has-tied-directly-to-the-rise-in-stocks.html
https://www.yardeni.com/pub/peacockfedecbassets.pdf

Notice how the central banks stopped printing in 2018, and the stock market immediately became more volatile. Then the index plunged in 2018; Wall Street and the media then started begging for more money-printing oomph and low interest rates. Which they got!

Again, I thought this was the deal... central banks drive the stock market. The 2009 rally *started* with central bank manipulation, and the stock market continues to need the central bank. If you have a moment on Monday, pray to the central bank, put out some candles, or whatever style of shrine you prefer.


----------



## Speculator (May 9, 2018)

james4beach said:


> I thought we all had an understanding that the central banks just print money as needed and juice the stock index. I assumed this was a big reason everyone was investing in stocks. This thing doesn't exactly rise on its own...


The Bond Market is also flashing trouble as the yield curve is flat to inverting. The real melt will start when investors start to flee the bond market. Will negative rates be coming to NA? The 30 year Canada now yields 1.9%. Yikes!
Should We Panic


----------



## newfoundlander61 (Feb 6, 2011)

A 10% correction give or take was due at some point. I will be looking to see what stocks hold up if any do, interesting to see that and if my holdings are diversfied enough. Mind you with the upwards trend we have had almost everything may drop today. Gold will likely go up but I not a holder of any gold stocks, never have been.


----------



## agent99 (Sep 11, 2013)

Speculator said:


> The Bond Market is also flashing trouble as the yield curve is flat to inverting. The real melt will start when investors start to flee the bond market. Will negative rates be coming to NA? The 30 year Canada now yields 1.9%. Yikes!
> Should We Panic


Thanks for the link. The part near the end is worth thinking about:


> * Watch the Bond Market*
> 
> A 30 year Canadian Gov't Bond now pays 1.39% interest
> A 5 year pays you 1.50%
> ...


Markets do go up and down for various reasons. You can't look back at market statistics and learn anything about effect of a future large event. The Corona virus is such an event. Hopefully it will resolve fairly quickly. But it will have an impact on the global economy. How large is still to be seen, especially seeing it is mainly China that will determine that.


----------



## agent99 (Sep 11, 2013)

TSX down 340 at open 

The Dow plunged as much as 997 points, or 3.4%, when US markets opened on Monday. The S&P 500 fell 3.1%, and the Nasdaq lost 3.9%. The VIX, a measure of market volatility, shot up 40%.

OK, going for bike ride. Que sera sera.


----------



## jargey3000 (Jan 25, 2011)

agent99 said:


> OK, going for bike ride. Que sera sera.


envious here....as i wait for plows to cut second lane in our snow-& ice-covered streets....:smiley_simmons:
might get mine out.....by june


----------



## Jimmy (May 19, 2017)

Perfect. Most below their 200MDA. Dow down 5% from 2 weeks ago. EAFE down 6%. Sitting on loads of cash after a property sale and time to start deploying some.

Does anyone think this will carry over into tomorrow?


----------



## cainvest (May 1, 2013)

Jimmy said:


> Does anyone think this will carry over into tomorrow?


Depends if the virus goes from epidemic to pandemic.


----------



## Jimmy (May 19, 2017)

cainvest said:


> Depends if the virus goes from epidemic to pandemic.


This maybe the market's reaction to that pandemic scenario - worst possible outcome. The large outbreak in Italy saw its MIB index fall the most in the EU overnite - 5.6%.


----------



## james4beach (Nov 15, 2012)

Jimmy said:


> Perfect. Most below their 200MDA. Dow down 5% from 2 weeks ago. EAFE down 6%. Sitting on loads of cash after a property sale and time to start deploying some.


I still see most things _above_ their 200 day moving averages. Charts:

TSX way above trendline: http://schrts.co/ctGiedbb
S&P 500 way above trendline: http://schrts.co/IKYjbVRF
MSCI EAFE has fallen to the 200 day: http://schrts.co/QcwqBsAq

The TSX and S&P 500 could fall several percent more without even breaking the pattern of the current bullish trend. I have no idea what will happen in the coming days, but this just does not seem like a serious decline at the moment.


----------



## Jimmy (May 19, 2017)

james4beach said:


> I still see most things _above_ their 200 day moving averages. Charts:
> 
> TSX way above trendline: http://schrts.co/ctGiedbb
> S&P 500 way above trendline: http://schrts.co/IKYjbVRF
> ...


I misread some general charts in the globe by accident ( had period at 3M vs 1 year) but was just looking at some ETFS mainly. CDN - FQC, EAFE - DQI and EM - ZEM all below the 200MDA.


----------



## agent99 (Sep 11, 2013)

James doesn't see this as a serious decline? Dow down 1000 points????? 
Still bogged down looking at moving averages?? 
Those are historical and have no meaning when unforeseen events take place. 
Maybe read this: https://www.investopedia.com/articles/trading/11/pitfalls-moving-averages.asp

A few news clips (Just after noon EST Feb 4th)



> South Korea's Kospi (KOSPI) index closed down nearly 3.9%, its worst day since October 2018, after coronavirus cases in the country surged past 800.
> 
> Italy's main index finished down 5.4%, after the number of cases there topped 200 — including five deaths — and authorities started shutting down public buildings, schools and sports events in parts of the country.
> 
> ...


----------



## curioso (Nov 22, 2018)

Just checked my portfolio and noticed I lost a lot of money that I had not made yet.


----------



## james4beach (Nov 15, 2012)

agent99 said:


> James doesn't see this as a serious decline? Dow down 1000 points?????


Admittedly these are big single day moves. S&P 500 is down 3.3%. TSX however is doing much better. XIU is only down 1.7% which is a bad day, but not a horrendous day.

So yeah... bad day. But Canada is handling it better than nearly everywhere else in the world.

Also look at the VIX. It's only at 25 which is not 'off the charts' fear by any means. The normal VIX range for decades has been 10 to 30 or so and VIX has not gone above that.

During the financial crisis, VIX went up to 80 and during the worst selloffs in recent years, it's usually been as high as 35. We're not there yet.

Here's the VIX "fear gauge" since 2010. The current reading is high, but still within normal. Not a stock market panic (yet)
http://schrts.co/ymevUZCZ


----------



## MarcoE (May 3, 2018)

1,000 DOW points ain't what it used to be. A drop of 1,000 used to be earth-shattering. Today it's "only" 3.5%. It's a big drop for one day, yes, but I wouldn't classify this as "markets tanking" just yet. Maybe tomorrow.


----------



## agent99 (Sep 11, 2013)

MarcoE said:


> 1,000 DOW points ain't what it used to be. A drop of 1,000 used to be earth-shattering. Today it's "only" 3.5%. It's a big drop for one day, yes, but I wouldn't classify this as "markets tanking" just yet. Maybe tomorrow.


As noted above, it is 1400 points in 3 trading days. Wiped out all 2020 gains. About 5%. Nothing to sneeze at! 

We will see what tomorrow and subsequent days bring. Can't see a quick correction, but eventually things will hopefully bounce back. 

I have almost nothing in US market, but some in Euro/UK/Global that were equally affected. Affect on overall portfolio value cushioned by fixed income/TSX allocation. Dividends not affected (yet), so really no affect expected on our retirement income. Times like this we appreciate holding dividend stocks!


----------



## MarcoE (May 3, 2018)

agent99 said:


> As noted above, it is 1400 points in 3 trading days. Wiped out all 2020 gains. About 5%. Nothing to sneeze at!


The 1,000 point drop was today. Even 5%, up or down, is a very normal movement for stocks. I have no idea what'll happen in the future. Maybe markets will tank and we'll enter a recession. But as of now, as I write this on Monday, this is just normal ups and downs.


----------



## agent99 (Sep 11, 2013)

MarcoE said:


> The 1,000 point drop was today. Even 5%, up or down, is a very normal movement for stocks. I have no idea what'll happen in the future. Maybe markets will tank and we'll enter a recession. But as of now, as I write this on Monday, this is just normal ups and downs.


If you say so. But 1400 points in 3 consecutive trading days or 1000 in 1 day, is not what I would call "very normal"  3rd worst point drop in history Almost tied for 2nd! % change would put it about top 20 all-time.

Historical drops in DJIA
1 2018-02-05 24,345.75 −1,175.21
2 2018-02-08 23,860.46 −1,032.89
3 2020-02-24 27,960.80 −1,031.61 
4 2018-10-10 25,598.74 −831.83


----------



## Jimmy (May 19, 2017)

A nice drop of 5% is a good time to add even if markets are getting back to normal valuations in some cases. Futures are up now so looks like a one day drop only like earlier this month on corona fears.


----------



## Synergy (Mar 18, 2013)

^ Agreed. This is not normal. COVID-19 is not your run of the mill Coronavirus.


----------



## Synergy (Mar 18, 2013)

Jimmy said:


> A nice drop of 5% is a good time to add even if markets are getting back to normal valuations in some cases. Futures are up now so looks like a one day drop only like earlier this month on corona fears.


Could be a "dead cat bounce"! I would give it until the Thursday before you start making prediction. Even then, COVID-19 will be pretty unpredictable for some time to come.


----------



## MarcoE (May 3, 2018)

agent99 said:


> If you say so. But 1400 points in 3 consecutive trading days or 1000 in 1 day, is not what I would call "very normal"  3rd worst point drop in history Almost tied for 2nd! % change would put it about top 20 all-time.


You're looking at point drops not percentage.


----------



## MarcoE (May 3, 2018)

Synergy said:


> Could be a "dead cat bounce"! I would give it until the Thursday before you start making prediction.


Nobody can predict the markets. That's why I have an All Weather style portfolio. All I know is the past and present.


----------



## agent99 (Sep 11, 2013)

MarcoE said:


> You're looking at point drops not percentage.


I looked at both - read my post!


----------



## agent99 (Sep 11, 2013)

Synergy said:


> Could be a "dead cat bounce"! I would give it until the Thursday before you start making prediction. Even then, COVID-19 will be pretty unpredictable for some time to come.


Agreed - nobody knows where this thing is going. Or the affect it has already had.


----------



## james4beach (Nov 15, 2012)

With the stock index within 5% of its historic all time high (TSX is within 2%), I don't think anyone is suffering that much. Just squint a bit, and the stock market is still at all time highs today... how can that be painful to anyone?

http://schrts.co/bsxwiSnW

^ this is still a picture of record profits & gains, not losses of any significance.


----------



## MarcoE (May 3, 2018)

MarcoE said:


> You're looking at point drops not percentage.


If you look at point drops, it seems scary -- third worst day ever! If you look at percentage drops, which is more important, today has been mundane. A drop of 3-5% in one day is a fairly typical bad day on Wall Street. We get bad days like this quite often. What happens in the future, I don't know. Maybe this is the beginning of a crisis. I can't tell you what will happen tomorrow.


----------



## MarcoE (May 3, 2018)

Somebody mentioned above that even if you look at percentages, this has been among the worst declines ever. I disagree. Here are 20 bad days for the Dow Jones, arranged by percentage.

1	1987-10-19	−22.61%
2	1929-10-28	−12.82%
3	1929-10-29	−11.73%
4	1929-11-06	−9.92%
5	1899-12-18	−8.72%
6	1932-08-12	−8.40%
7	1907-03-14	−8.29%
8	1987-10-26	−8.04%
9	2008-10-15	−7.87%
10	1933-07-21	−7.84%
11	1937-10-18	−7.75%
12	2008-12-01	−7.70%
13	2008-10-09	-7.33%
14	1917-02-01	−7.24%
15	1997-10-27	−7.18%
16	1932-10-05	−7.15%
17	2001-09-17	−7.13%
19	1933-07-20	−7.07%
18	1931-09-24	−7.07%
20	1914-07-30	−6.91%

We're nowhere near top 20 worst.


----------



## agent99 (Sep 11, 2013)

It is just a lucky coincidence that this happened at record highs in the markets. 



> " .. how can that be painful to anyone?"


 - Maybe those who have been infected or died and their families?? 

The full story still has to play out. The global economic affects could be serious and may trigger a recession.

Anyway, lets wait and see.


----------



## james4beach (Nov 15, 2012)

No question the disease is distressing. I'm worried about it too; the way this is shaping up is not good.

What I'm pointing out though is that the stock market really hasn't done much yet (has not fallen very severely)


----------



## lonewolf :) (Sep 13, 2016)

US treasuries the one month yield was higher then everything across the board except for the 30 yr


----------



## doctrine (Sep 30, 2011)

Hey look, market futures are already bouncing back quite a bit. Anyone who sold today will start to look silly if markets bounce back to all time highs in a few weeks.

All in perspective. I understand the panic, but there was less than 1000 new confirmed cases yesterday worldwide. There was probably 100,000 people tested. This is nearly contained in China, especially outside Hubei where new cases and deaths are dropping extremely rapidly. And so other countries will catch up.


----------



## OptsyEagle (Nov 29, 2009)

Let us also not forget that there is another serious concern out there. It's currently growing and expanding. I think the experts have identified the plague but have yet to warn the public about it. I don't want to worry anyone about it right now because it may not spread but I think they call this disease...Bernie Sanders.


----------



## agent99 (Sep 11, 2013)

doctrine said:


> Hey look, market futures are already bouncing back quite a bit. Anyone who sold today will start to look silly if markets bounce back to all time highs in a few weeks.


Had to go take a look before heading out. Most of our portfolio is on TSX and it is down over 100 points. This despite good bank results. DJ is up, but only 40 points compared with 1400 drop over previous 3 trading days. Nikkei also sharply down (3.35%). Doesn't look like this is over yet!


----------



## AltaRed (Jun 8, 2009)

It is not remotely over. Iran is in denial about the degree of infection in their country. Travelers from Iran have already infected a number of people in other countries. Already one in northern Iraq. Imagine Iranian militia transmitting the virus in their proxy countries of Iraq, Syria, Lebanon and Yemen. Imagine the virus in Idib and Syrian refugee camps.

The lid may be coming off as we speak. Very good chance of a 10% or more correction. Not an overly big deal itself. We were there in Dec 2018


----------



## krzc (Feb 21, 2019)

For the folks with diverse investments in equity, what's your approach at this moment? Of course we can't predict what the near future holds, but is this a good buying opportunity? Or is everyone sitting on the sidelines a little longer...


----------



## cainvest (May 1, 2013)

AltaRed said:


> The lid may be coming off as we speak. Very good chance of a 10% or more correction. Not an overly big deal itself. We were there in Dec 2018


Exactly, the S&P500 was in the 2400 range in Dec of 2018, around 3200 right now after a few blips down.


----------



## humble_pie (Jun 7, 2009)

OptsyEagle said:


> Let us also not forget that there is another serious concern out there. It's currently growing and expanding. I think the experts have identified the plague but have yet to warn the public about it. I don't want to worry anyone about it right now because it may not spread but I think they call this disease...Bernie Sanders.



:biggrin:

but consider this: if Sanders is elected the roles will remain the same

big media & congress will have to continue pitting themselves against the White House in order to save america


----------



## marina628 (Dec 14, 2010)

I am not looking at the markets as I am on set and forget mode and already bought my yearly TFSA AND RSP but we can afford a 10% correction and been waiting for one long time .


----------



## james4beach (Nov 15, 2012)

OptsyEagle said:


> Let us also not forget that there is another serious concern out there. It's currently growing and expanding. I think the experts have identified the plague but have yet to warn the public about it. I don't want to worry anyone about it right now because it may not spread but I think they call this disease...Bernie Sanders.


I've got news for you (and the other old men on this board). Public sentiment in America has shifted very dramatically over the years.

Whether Bernie gets elected or not, America is going to take a hard left turn pretty soon. There is a huge amount of public anger about ridiculously low tax rates on corporations and the rich, the growing wealth disparity, and repeated bailouts of big business (corporate welfare). Rich people, and big companies, get all the advantages in the US and their wealth has gone through the roof... while regular working Joes have no stable jobs, no health care, and pay way too much in taxes versus the ultra rich.

I expect American taxes to go up, public services to increase, etc. I wouldn't be surprised to see capital gains taxes go up as well.


----------



## OptsyEagle (Nov 29, 2009)

james4beach said:


> I've got news for you (and the other old men on this board). Public sentiment in America has shifted very dramatically over the years.
> 
> Whether Bernie gets elected or not, America is going to take a hard left turn pretty soon. There is a huge amount of public anger about ridiculously low tax rates on corporations and the rich, the growing wealth disparity, and repeated bailouts of big business (corporate welfare). Rich people, and big companies, get all the advantages in the US and their wealth has gone through the roof... while regular working Joes have no stable jobs, no health care, and pay way too much in taxes versus the ultra rich.
> 
> I expect American taxes to go up, public services to increase, etc. I wouldn't be surprised to see capital gains taxes go up as well.


I am not disagreeing with anyone, I am just pointing out, because it seems to be missed by the masses, that Bernie Sanders or the like are a much greater risk to the stock market then the virus, IMO. At least at this stage. But everyone is just watching the covid19 numbers and no one seems overly concerned about this bigger issue towards corporate profits, and the stock prices they correspondingly represent.


----------



## Eder (Feb 16, 2011)

I think Bernie winning would be a boost to markets as the odds of the Republicans winning the election go up no? 
Anyway as most allude to the markets are going to be markets & they rarely lose 10-20% slowly. Fast way down but a slow grind back up.


----------



## james4beach (Nov 15, 2012)

Yesterday I bought the S&P 500. Today I bought more bonds & gold. One might argue that I should have waited for calmer conditions, but I made my purchase plan on the weekend. About 60k of buys yesterday & today.


----------



## OptsyEagle (Nov 29, 2009)

Eder said:


> I think Bernie winning would be a boost to markets as the odds of the Republicans winning the election go up no?
> Anyway as most allude to the markets are going to be markets & they rarely lose 10-20% slowly. Fast way down but a slow grind back up.


I thought of that, and I would think that Trump would be best off with Bernie as his opponent, but since I can't really say the all democrats are completely stupid, I would think that they would have considered that issue before voting in the Primaries. If they think that Bernie can go all the way, with enough confidence to make him their front runner, then who am I to say he can't take the Presidency in November. 

Anyway, the world won't come to an end in either case, but I am more worried there then I am with the virus, although the virus is keeping me tuned in as well. 

I also don't like the fact that we are 11 years into a bull market. I don't like that a lot of the earnings growth in the last two years came from US tax cuts that will not be repeated (maybe even repealed by Bernie). I don't like that the world, especially our country, is heavily indebted. I don't like that the economy and stock market has been artificially fueled by outrageous government deficits and by the printing of money by the fed. And I really don't like the fact that if we do need the fed again, in the near future, he has almost no more bullets in the Fed gun. He fired them all at really useless stuff because Trump wanted to inflate the stock market for his own egotistical reasons.

Anyway, lots to worry about.


----------



## james4beach (Nov 15, 2012)

Trump did indeed inflate the stock market with tax cuts which juice valuations.

But, a counterpoint: there's _always_ lots to worry about.

Today, we also DO NOT have
- world war or imminent nuclear war
- any significant terrorism to deal with domestically
- civil unrest, major public uprising, or insurrection
- no major domestic disaster of a Fukushima magnitude
- no signs whatsoever of a banking crisis


----------



## like_to_retire (Oct 9, 2016)

OptsyEagle said:


> I thought of that, and I would think that Trump would be best off with Bernie as his opponent..


Yeah, the USA isn't ready to vote in a socialist quite yet, so he would be the best opponent for Trump.

ltr


----------



## OptsyEagle (Nov 29, 2009)

like_to_retire said:


> Yeah, the USA isn't ready to vote in a socialist quite yet, so he would be the best opponent for Trump.
> 
> ltr


I didn't think they were ready to elect a "Reality TV Celebrity" either, but here we are.

Oh well. It's for times like this that they invented single malt scotch. Have a good one everyone.


----------



## Money172375 (Jun 29, 2018)

humble_pie said:


> :biggrin:
> 
> but consider this: if Sanders is elected the roles will remain the same
> 
> big media & congress will have to continue pitting themselves against the White House in order to save america


I’ll take 9 months of poor markets if it means Trump loses. Elections are often decided on economic factors. I can’t wait to see how he might explain a prolonged downturn..........blame the immigrants and non-whites for importing covid 19?


----------



## Money172375 (Jun 29, 2018)

krzc said:


> For the folks with diverse investments in equity, what's your approach at this moment? Of course we can't predict what the near future holds, but is this a good buying opportunity? Or is everyone sitting on the sidelines a little longer...


Would like to hear opinions as well. I’m expecting my pension commutation any day. Low-mid 6 figures. Time frame around 20 years before I start to plan on withdrawing. I was planning to go all in on VGRO.


----------



## james4beach (Nov 15, 2012)

Money172375 said:


> Would like to hear opinions as well. I’m expecting my pension commutation any day. Low-mid 6 figures. Time frame around 20 years before I start to plan on withdrawing. I was planning to go all in on VGRO.


When I last had a chunk of money to invest, I invested some of it immediately, and put the rest in a short term GIC (a few months). This let me spread out my buying over a longer period.

But the real answer is to figure out which asset allocation you want, so you can be comfortable going forward. Only take on as much risk as you're comfortable with. VGRO is an aggressive investment. If you're going to invest in that, you have to be cool with the idea that you could see a 50% loss in your original value, and it may not come back in 20 years. There is never any guarantee that an investment will rebound after a decline; _that's why declines are so scary_.

In my personal opinion, many people really cannot tolerate as much risk as they think. Some food for thought:

Advisers generally recommend an 80 percent allocation to stocks, but that’s way too much. It should be more like 35 percent.


----------



## Money172375 (Jun 29, 2018)

james4beach said:


> When I last had a chunk of money to invest, I invested some of it immediately, and put the rest in a short term GIC (a few months). This let me spread out my buying over a longer period.
> 
> But the real answer is to figure out which asset allocation you want, so you can be comfortable going forward. Only take on as much risk as you're comfortable with. VGRO is an aggressive investment. If you're going to invest in that, you have to be cool with the idea that you could see a 50% loss in your original value, and it may not come back in 20 years. There is never any guarantee that an investment will rebound after a decline; _that's why declines are so scary_.
> 
> ...


A valid of school of thought. And having worked in the industry, I know most people are not comfortable with their own stated risk tolerance. I worked in asset management 2009-2011. Started one week after Lehman went broke. We produced training guides and advice tools. I remember producing a guide that should net inflows and net outflows in equities. The chart was an inverse mirror of market performance. Equities would hit all time highs, we’d see all time purchases........equities would hit lows, we would see record redemptions.

A new philosophy has emerged in the last 5 years or so. With interest rates so low, we are “forced” to go further out on the risk continuum in order to meet our investment goals. The classic advice of subtracting your age from 100 to come up with your equity component, has now changed to subtracting your age from 120 to find your optimal equity component. I generally agree with this philosophy but you need to have the nerves to stay in it. It’s time IN the market, not TIMING the market. My pension commutation probably makes up less than 20% of my investible assets and around 10% of my overall net worth including real estate. I’m pretty comfortable taking the risk, just wavering on how to dispatch the purchase(s).


----------



## james4beach (Nov 15, 2012)

Ah, I didn't realize you were in the industry.

Regarding that "new philosophy", I'm not convinced. The central banks deliberately keep interest rates low to _manipulate_ us into that pattern of behaviour. This is the explicit goal of ZIRP; to spur more risk-taking.

Why should I override my own instincts on risk, and adopt the behaviour they want me to have?

That doesn't seem like something an astute investor would do. Instead, I think an astute investor would stick with their own fundamentals (and beliefs) and not change their core strategy just because an external manipulator has pushed them one way.

I hate that the central banks see me as a stupid puppet who's going to throw their notion of risk-vs-reward out the window because they suppressed interest rates. "Oh gosh gee wiz, interest rates are 0% so I guess I'd better gamble all my retirement savings on the stock index!"

Let's keep things interesting and make our own decisions, no matter how they manipulate the system parameters.

I'm 30% stocks and will stay there, even if interest rates go to -1%


----------



## Money172375 (Jun 29, 2018)

james4beach said:


> Ah, I didn't realize you were in the industry.
> 
> Regarding that "new philosophy", I'm not convinced. The central banks deliberately keep interest rates low to _manipulate_ us into that pattern of behaviour. This is the explicit goal of ZIRP; to spur more risk-taking.
> 
> ...


Part of the problem is that in general people are not saving enough and starting too late. When you sit across someone who’s 40 years old and ask them about their retirement, savings, goals etc......it often boils down to saying....”well, you’re not on track right now”. You need to save more or lower your retirement income expectations or take more risk to try and make up the difference. unfortunately, the often pick the third option and only the third option........then pull the chute when the market goes down 15%....setting them further behind.


----------



## agent99 (Sep 11, 2013)

krzc said:


> For the folks with diverse investments in equity, what's your approach at this moment? Of course we can't predict what the near future holds, but is this a good buying opportunity? Or is everyone sitting on the sidelines a little longer...


krzc,
Personally, we are sitting tight. No selling or buying. Any cash we have has been put in a HISA. 

Being in retirement, with an almost 100% allocation to dividend stocks in our taxable accounts, our dividends keep rolling in. The actual value of the portfolio is not so important. 

For those in accumulation stage or soon to retire, things may look different.

Will watch what happens. 

Thanks for asking a question that is relevant to the thread title


----------



## agent99 (Sep 11, 2013)

Please keep politics out of this thread. People are infected and dying. As a result, the markets have tanked. Nothing to do with politics. For those who want to discuss US politics, please start your own thread and put it where it belongs.


----------



## agent99 (Sep 11, 2013)

Where are we this evening?

The recent skid puts the Dow 8.4% away from its Feb. 12 record-high close of 29,551.42. That means the Dow is approaching correction territory at 26,596.28, defined as a drop of at least 10%.

Nasdaq is 8.6% away from it's recent high.


----------



## Pluto (Sep 12, 2013)

krzc said:


> For the folks with diverse investments in equity, what's your approach at this moment? Of course we can't predict what the near future holds, but is this a good buying opportunity? Or is everyone sitting on the sidelines a little longer...


My approach at this moment is the same as at any moment. I have a list of what I believe to be quality stocks with an evaluation of what a fair price is. If the market price exceeds the fair price I do not buy. If its at or below the fair price, and I have cash, I buy. 

Presently I do not think most stocks on my list are a good buy so I'm biding my time, awaiting the inevitable correction.


----------



## Eder (Feb 16, 2011)

agent99 said:


> Please keep politics out of this thread. People are infected and dying. As a result, the markets have tanked. Nothing to do with politics. For those who want to discuss US politics, please start your own thread and put it where it belongs.


Wow...you don't think any softening of the market is due to Bernie's success, or over valuations,or any reason other than the virus?


----------



## Money172375 (Jun 29, 2018)

Trump spent the past 2 years slashing the government agencies responsible for handling the coronavirus outbreak.

Here are some other actions the Trump administration undertook to dismantle government-spending programs related to fighting the spread of global diseases, according to Foreign Policy:

Shutting down the entire global-health-security unit of the National Security Council.
Eliminating the US government's $30 million Complex Crises Fund.
Reducing national health spending by $15 billion.
Consistently attacking Mark Green, the director of the US Agency for International Development

Source: https://www.businessinsider.com/trump-cuts-programs-responsible-for-fighting-coronavirus-2020-2


----------



## Synergy (Mar 18, 2013)

james4beach said:


> In my personal opinion, many people really cannot tolerate as much risk as they think. Some food for thought:
> 
> Advisers generally recommend an 80 percent allocation to stocks, but that’s way too much. It should be more like 35 percent.


I'm sitting at just over 90% equities. Even if we corrected 30-40% I wouldn't be too concerned. Just look at the returns over the past 4-5 yrs. And if you got the DRIPs on and / or are in the accumulation stage it will be insignificant come 20-30 yrs from now.

Only time will tell. Good luck to us all!


----------



## MrMatt (Dec 21, 2011)

agent99 said:


> Please keep politics out of this thread. People are infected and dying. As a result, the markets have tanked. Nothing to do with politics. For those who want to discuss US politics, please start your own thread and put it where it belongs.


Actually political action is what is going to have a huge impact.

Governments are declaring states of emergency. 
I don't know if they have data to support it, or if it's just political gamesmanship, like the Climate Emergency.

The big impact will be if the governments let it spread, or restrict trade too much.
Whatever the reaction, it's an impossible balancing act.

Trudeau took weeks to figure out how to deal with illegal blockades, and enforcement of court orders, and that's simple.
How is going to handle a truly challenging situation.


----------



## james4beach (Nov 15, 2012)

Money172375 said:


> Part of the problem is that in general people are not saving enough and starting too late . . . take more risk to try and make up the difference . . . then pull the chute when the market goes down 15%....setting them further behind.


You're right, and it's a tough position to be in, when someone is older and realizes they don't have enough savings. But I worry about exactly the situation you describe, where someone who is already in a tough position steps into too much risk, can't handle the drawdown (or needs access to the money), and ends up with a worse return than they could have gotten with more conservative investments.

In any case, going back to your original question, I like the idea of using GICs to spread money out a bit so that you aren't buying all at once. I currently still have one short term GIC remaining, maturing soon. I promised myself that at maturity, it will be invested immediately.

Another approach could be to scale into your asset allocation and gradually dial up the risk. Perhaps initially you put half in VGRO and half in VCNS. Then in a year, you could switch the VCNS and make it 100% VGRO, for example.


----------



## Eder (Feb 16, 2011)

I have a GIC maturing in about 20 days...I'll be putting it into Brookfield Properties rather than lose more money to inflation. I could go the preferred stock route some more but I already have a boat load (full allocation) of them and I just can't get over how Ala Moana is printing money.


----------



## londoncalling (Sep 17, 2011)

agent99 said:


> Please keep politics out of this thread. People are infected and dying. As a result, the markets have tanked. Nothing to do with politics. For those who want to discuss US politics, please start your own thread and put it where it belongs.


https://www.bing.com/videos/search?...eo&qpvt=sleep+now+in+the+fire+video&FORM=VDRE

https://consequenceofsound.net/2015...ld-trumps-presidential-campaign-16-years-ago/


----------



## krzc (Feb 21, 2019)

agent99 said:


> krzc,
> Personally, we are sitting tight. No selling or buying. Any cash we have has been put in a HISA.
> 
> Being in retirement, with an almost 100% allocation to dividend stocks in our taxable accounts, our dividends keep rolling in. The actual value of the portfolio is not so important.
> ...


Thanks for answering. Hypothetically, lets say you were 20-30 years away from retirement, how would you handle such a situation which we're currently in?



Pluto said:


> My approach at this moment is the same as at any moment. I have a list of what I believe to be quality stocks with an evaluation of what a fair price is. If the market price exceeds the fair price I do not buy. If its at or below the fair price, and I have cash, I buy.
> 
> Presently I do not think most stocks on my list are a good buy so I'm biding my time, awaiting the inevitable correction.


Thanks. I have a pretty diverse portfolio, pretty much the couch potato mutual funds, along with other US Equity funds, and MAW104. I'm definitely not selling, and I myself am sitting on the sidelines, even though I was tempted to buy today before 4PM. All we can do is predict at this point, and I have a feeling the market will tank some more. I'm trying to set a threshold as to when to buy, and I was just curious how others are handling the current situation we're in. I think if the market hits a =>20% dip, I might buy a bit more of what I have...


----------



## james4beach (Nov 15, 2012)

I find it interesting that many people are commenting that if the market declines more (to say 10% or 20%) that this is the point they would start buying or deploying new money. One of my coworkers says the same thing.

I actually think that if the market drops 20%, then the real trouble starts -- this would probably mark the end of the 10 year bull market. I would expect the worst losses and most volatility (and stress) to occur *after* an initial 20% decline.

Or to be more precise, I think if the index drops below the 200 day moving average, we're in the danger territory.

This is due to a feature of the stock market which is that strength tends to follow strength, and weakness tends to follow weakness. Markets don't just revert to the mean; instead, they enter bull and bear modes where a trend persists for a long time.

And I think that "model" is important to keep in mind when dealing with the stock market. The key question is: are we in bull or bear mode? Since 2009, we've been in bull mode. But at some point, we are going to enter bear mode. Everyone has been waiting for it since it's somewhat overdue.

_If someone is trying to time the market_, I don't see the benefit in waiting for a 20% decline. If the market keeps rallying, they will miss out on the rally. And if the market really does fall that much, the probability of being in a bear market goes up significantly; the start of a bear market is a terrible time to buy.

And if you're not a market timer (say you're a passive investor) then I don't see any point in 'keeping cash on the sidelines' in anticipation for declines. You are just as likely to miss out on a rally to new all time highs, and then you'll be buying at a higher price than today.


----------



## cainvest (May 1, 2013)

james4beach said:


> I actually think that if the market drops 20%, then the real trouble starts -- this would probably mark the end of the 10 year bull market. I would expect the worst losses and most volatility (and stress) to occur *after* an initial 20% decline.


You can guess at this until the cows come home ... nobody knows. Down 20% in one week, back up 20% the next? Maybe. Now with an apparent external factor at hand here (virus) that could pose real economic problems globally, the market may just follow based on the issues caused by it. Decreased production, shipping and travel not to mention the direct (and potentially very bad) effect of the virus could have on people that catch it. Now if an effective vaccine were to come to market (hopefully will happen sooner than later) that would really turn things around quickly. 

On a side note, for those that rebalance their portfolios yearly would you rebalance more often due to large offsets in allocation?


----------



## diharv (Apr 19, 2011)

agent99 said:


> Please keep politics out of this thread. People are infected and dying. As a result, the markets have tanked. Nothing to do with politics. For those who want to discuss US politics, please start your own thread and put it where it belongs.


I agree . So much angst and handwringing over drops in value of the markets and portfolios . People are dying and this thing is spreading and more effort and attention should be put towards containing this thing rather than agonizing over the "economic" impacts it is causing. Deaths are permanent , economic impacts are blips in the timeline. So China's economy grows only 6% instead of 8%, who cares and does it really matter in the grand scheme of things?


----------



## Eder (Feb 16, 2011)

I think we were down 20% only 14 months ago no? That didn't end the bull. Now we have banks reporting record earnings...they are early cycle out performers normally. I guess none of us know.


----------



## MrMatt (Dec 21, 2011)

diharv said:


> I agree . So much angst and handwringing over drops in value of the markets and portfolios . People are dying and this thing is spreading and more effort and attention should be put towards containing this thing rather than agonizing over the "economic" impacts it is causing. Deaths are permanent , economic impacts are blips in the timeline. So China's economy grows only 6% instead of 8%, who cares and does it really matter in the grand scheme of things?


Do you realize that these "economic blips", are going to put some people in serious financial distress.
When people are in serious financial trouble, it causes stress, lowers quality of life and even results in physical harm and death?

Do you know what will happen to people living paycheck to paycheck if they're quarantined for 2-3 weeks?
You'll have people starving, or losing their homes.
Companies will be going bankrupt.

You say "a small drop in growth". What if we're talking the 10% or higher fatality rates in some areas?
The political and economic reality of such an outcome will be disasterous, and those areas that get hardest hit will need help rebuilding.


----------



## OptsyEagle (Nov 29, 2009)

I have learned, from many decades of investing, that when the markets are dropping, I usually feel a little stupid for not doing anything about it earlier and when the markets are pounding strongly upwards, I feel brilliant for not doing anything to get in its way. The reality about my brilliance, I am sure, is somewhere in between, but the more important point is that by doing nothing (but drinking a little scotch perhaps) I have made a lot more money then I have lost.

You can't do anything about something that you can't know anything about. Any benefit you would obtain would come purely from luck. 

So, as Clint Eastwood would say, "Do you feel lucky... punk ... do you?"


----------



## cainvest (May 1, 2013)

Eder said:


> I think we were down 20% only 14 months ago no? That didn't end the bull. Now we have banks reporting record earnings...they are early cycle out performers normally. I guess none of us know.


Along with the drop in late 2018 the TSX Comp was about 20% down in 2016, took 8 months to recover.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> And if you're not a market timer (say you're a passive investor) then I don't see any point in 'keeping cash on the sidelines' in anticipation for declines. You are just as likely to miss out on a rally to new all time highs, and then you'll be buying at a higher price than today.


James, 
We are less than week into the _worldwide _market drop. This drop was caused by concerns about effect that Corona virus spread might have on world economy. It will take time for markets to get back to normal. They may get worse before they recover. Nobody knows. 

I am keeping our small amount of uninvested cash in HISAs. (I can accept negative real yield for a short time!) I may move that cash to preferreds once I figure out which ones. (~5% yield with good chance of short term return OF capital). 

Not buying more equities any time soon. I would not recommend anyone jump in at current market levels. We will hold our existing ~60% equity allocation (equity markets may caused that % to drop!) and ride out whatever the markets hands us. Meanwhile, will continue to collect dividends and have no need to sell anything for income.


----------



## AltaRed (Jun 8, 2009)

What one does has more to do with their investing journey. Those in accumulation mode should simply carry on investing in the asset class that is underweight, potentially choosing undervalued or defensive sectors. 

Those of us in withdrawal mode should not be doing anything if we have positioned our portfolios with a fixed income component that allows us to ride out equity bears. This market chaos can last X years and go though a major bear before I need to consider selling equities. 

I have not looked at my investment accounts for over 2 weeks. No idea how much they have dipped. I will look Friday night or Saturday due to it being my usual end of month look'see.


----------



## jargey3000 (Jan 25, 2011)

OptsyEagle said:


> I have learned, from many decades of investing, that when the markets are dropping, I usually feel a little stupid for not doing anything about it earlier and when the markets are pounding strongly upwards, I feel brilliant for not doing anything to get in its way. The reality about my brilliance, I am sure, is somewhere in between, but the more important point is that by doing nothing (but drinking a little scotch perhaps) I have made a lot more money then I have lost.
> 
> You can't do anything about something that you can't know anything about. Any benefit you would obtain would come purely from luck.
> 
> So, as Clint Eastwood would say, "Do you feel lucky... punk ... do you?"


....I feel much the same way....I also try to pay attention to what I call "the Mansbridge Principle"...(not to be confused with the Peter Principle).
derived back in the day when I'd listen to Peter Mansbridge announcing night after night a "new record high for the Cdn dollar again today...". I regret not cashing in more Cdn$ when i could get, what? $1.04US? at my local bank. kept thinking, gee maybe it'll go higher...
Now, when I hear "stock markets reached another record high" popping up regularly on the nightly news programs, I know it'll soon be time to run for cover...something's gotta give...
I think the converse is also true...
Too bad it takes most of us a lifetime to learn these things...


----------



## james4beach (Nov 15, 2012)

agent99 said:


> James,
> We are less than week into the _worldwide _market drop. This drop was caused by concerns about effect that Corona virus spread might have on world economy. It will take time for markets to get back to normal. They may get worse before they recover. Nobody knows.


A week into a worldwide market drop, yes, but we don't know if it will fall further. For all we know it could completely rebound tomorrow and global stocks could hit new all time highs in a few weeks.

There's no way to predict this stuff



agent99 said:


> Not buying more equities any time soon. I would not recommend anyone jump in at current market levels.


That sounds like market timing. If someone has excess cash they mean to deploy, and if their asset allocation says they need to buy stocks, I think they should buy today. If they are hesitant to do so, they should think about whether their asset allocation is too aggressive in stocks. Otherwise if they don't like the looks of today, how will they stick to their asset allocation after say a market crash or 10 year bear market?

Stocks could equally well go higher or lower from here. For all we know, central banks cut rates to 0% next week and juice stocks to new all time highs.



AltaRed said:


> Those in accumulation mode should simply carry on investing in the asset class that is underweight, potentially choosing undervalued or defensive sectors.
> 
> Those of us in withdrawal mode should not be doing anything if we have positioned our portfolios with a fixed income component that allows us to ride out equity bears. This market chaos can last X years and go though a major bear before I need to consider selling equities.


I agree


----------



## agent99 (Sep 11, 2013)

james4beach said:


> That sounds like market timing. If someone has excess cash they mean to deploy, and if their asset allocation says they need to buy stocks, I think they should buy today. If they are hesitant to do so, they should think about whether their asset allocation is too aggressive in stocks. Otherwise if they don't like the looks of today, how will they stick to their asset allocation after say a market crash or 10 year bear market?


James, I just hope not many follow your way of thinking. 

Why would you think that an investor's chosen asset allocation is correct and should be stuck to come hell or high water? When things change, they should adjust their FI/Equity allocation as well as sector allocations. Better to actually _think_, than stick to some arbitrary ratio read in a book, or heaven forbid, on a forum like this 

Allocation should not be thought of as a ratio or percentage. You should decide how much fixed income you need (in dollars, not percentages). Then let equity rise and fall with markets. At some fairly long interval, as your lifestyle/inflation changes, the FI amount can be revisited. Meanwhile, equity rides the wave. Don't buy/sell just to meet some imagined correct ratio.


----------



## james4beach (Nov 15, 2012)

agent99 said:


> James, I just hope not many follow your way of thinking.


I hope they do. It's also the recommendation of the couch potato, PWL Capital, etc... this is traditional asset allocation.



> Why would you think that an investor's chosen asset allocation is correct and should be stuck to come hell or high water? When things change, they should adjust their FI/Equity allocation as well as sector allocations. Better to actually _think_


So you are saying the person should strategically alter their asset allocation according to current market conditions? This is called 'tactical allocation' and there are many mutual funds which do this.

If one follows this strategy, they are going to try timing the market. They could be swayed by both fear and greed and all kinds of emotional effects. It gets particularly difficult during market extremes and bear markets.



> Allocation should not be thought of as a ratio or percentage. You should decide how much fixed income you need (in dollars, not percentages). Then let equity rise and fall with markets. At some fairly long interval, as your lifestyle/inflation changes, the FI amount can be revisited. Meanwhile, equity rides the wave. Don't buy/sell just to meet some imagined correct ratio.


Are Vanguard and iShares doing it wrong with VBAL, VGRO, VCNS, XBAL, etc?


----------



## AltaRed (Jun 8, 2009)

Agent99's thoughts on AA are more appropriate in withdrawal as a means to assure oneself of cash flow needs for a specific period of time. It is simply market timing in accumulation. If one is adjusting their AA in reaction to the past week, they most likely don't have a plan they can actually articulate in an IPS.

Too many posts don't qualify where they are at in the investing journey.


----------



## james4beach (Nov 15, 2012)

And I should clarify, I said that if they have excess cash (assuming their emergency needs and cash buffers are already fully funded)... we're talking cash that is _already marked for investment_... then this cash should be used to purchase whatever asset is needed to bring them closer to their asset allocation targets.

In the case of someone in withdrawal, I agree that's different. I would not think they would have 'excess cash' that's ready to invest in any case.


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> Why would you think that an investor's chosen asset allocation is correct and should be stuck to come hell or high water? When things change, they should adjust their FI/Equity allocation as well as sector allocations. Better to actually _think_, than stick to some arbitrary ratio read in a book, or heaven forbid, on a forum like this
> 
> Allocation should not be thought of as a ratio or percentage. You should decide how much fixed income you need (in dollars, not percentages). Then let equity rise and fall with markets. At some fairly long interval, as your lifestyle/inflation changes, the FI amount can be revisited. Meanwhile, equity rides the wave. Don't buy/sell just to meet some imagined correct ratio.


Crazy talk, sacrilege - agent99 has lost his mind. :love_heart: ... but seriously, I think the method of establishing your fixed income requirements in dollars and then assigning the rest to equity is used more in retirement than in the accumulation stage. In accumulation, I think the mix between fixed income and equity is determined by the individuals risk tolerance.

And really, I don't know if the "fixed income requirements in dollars method" is even that applicable to retirement. What do you do for someone that is able to easily live on their pensions and doesn't ever need to touch their investment portfolio? Do they invest 100% equities. It all gets messy.

I feel it's probably best to pick an asset allocation and stick to it. No problem with reviewing that allocation at different stages, but your willy-nilly method is probably not best for most people.

It does beg the question, in a market correction, when to re-establish your allocation. It's one of the reasons I keep a portion of my fixed income in an HISA. Basically it's the short term end of the fixed income, but it's ready for opportunities like market corrections or otherwise weird pricing on equities.

ltr


----------



## james4beach (Nov 15, 2012)

Here's my own approach, and I am basically in withdrawal, though not exactly retirement (I have sporadic new income).

I do keep a certain $ in cash, whatever is needed for anticipated upcoming living expenses. And it's a significant amount of cash.

But other than that, I invest everything else. And yes for all of this remaining part, I use fixed % weight asset allocation. There is a significant 50% bond and GIC weight in here and I think I can easily ride out even a long bear market by taking withdrawals out of the fixed income allocation.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> Are Vanguard and iShares doing it wrong with VBAL, VGRO, VCNS, XBAL, etc?


They are probably doing it it right - for themselves. They are also probably doing it right for those people who can't think for themselves. And there are a lot of them. 

An individual or couple's portfolio is not a Mutual Fund or ETF tailored to fit the masses. 
- For retirees, it is tailored to provide the cash flow needed to live off while having a substantial fixed income buffer in event a very bad situation should occur. It can also provide a legacy because there may never be a need to use it. 
- For those in accumulation stage, there is no way in a situation as we now have to know what will transpire. It is irresponsible to suggest investors rush out and buy equities now.

Trying to time the bottom may not be accurate, but it is better than not trying to time it at all. I would sit on cash and wait for the best opportunity to invest it. After a perceived bottom - not while all charts show a big downslide. 

When situation starts to stabilize, then invest in safe blue chips that will pay you a dividend regardless of the stock price. With TSX down another 100 points last time I looked (-135 at close), I wouldn't do that yet.


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> I feel it's probably best to pick an asset allocation and stick to it. No problem with reviewing that allocation at different stages, but your* willy-nilly *method is probably not best for most people.


Willy-Nilly???? Meaning - without direction or planning; haphazardly. 

In fact it exactly the opposite. It suggests investor/retiree decides (planning?) precisely how much of a cushion they would need should all there other investments tank. Nothing haphazard about that. They adjust as buying power and their needs change (direction?)

Using ratios or percentages results in a FI amount that goes up and down like a yoyo (as markets fluctuate). Why should the investors cushion change with the markets? 

The FI/Equity ratio method is the scary one. 

By the way, this concept has been discussed in more erudite forums than this one. You may have even participated


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> The FI/Equity ratio method is the scary one.
> 
> By the way, this concept has been discussed in more erudite forums than this one. You may have even participated


More erudite than CMF? No......

How is the "Fixed Income/Equity" ratio method a scary one?

The only variable in that method is when to re-balance.

I agree it gets a bit crazy in a correction, but the method seems sensible to me for most people. You establish the ratio and then stick to it to remove any emotion that might derail the goal. 

How could this be bad?

ltr


----------



## kcowan (Jul 1, 2010)

jargey3000 said:


> ....I feel much the same way....I also try to pay attention to what I call "the Mansbridge Principle"...(not to be confused with the Peter Principle).
> derived back in the day when I'd listen to Peter Mansbridge announcing night after night a "new record high for the Cdn dollar again today...". I regret not cashing in more Cdn$ when i could get, what? $1.04US? at my local bank. kept thinking, gee maybe it'll go higher...
> Now, when I hear "stock markets reached another record high" popping up regularly on the nightly news programs, I know it'll soon be time to run for cover...something's gotta give...
> I think the converse is also true...
> Too bad it takes most of us a lifetime to learn these things...


The C$ peaked at $1.10 overnight when we made an offer on our Mexican condo November 3, 2007. When we finally closed, it was $1.065 on December 15th.

I would like to say it was a strategic move out of equities rather than dumb luck!


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> More erudite than CMF? No......
> 
> How is the "Fixed Income/Equity" ratio method a scary one?
> 
> ...


Why would you let the markets dictate how much you need in FI as a cushion? Shouldn't you decide that for yourself based on your particular situation? Just makes ZERO sense to me to not do that. 

Remember when the "experts" used to say you should have 100-Age in equities. With that, you would have to religiously sell off equities every year on your birthday. Too bad if it happened to fall this week! More recently some have modified that formula:

- Some advisors/brokers have changed The 100 Rule to The 110 Rule. 
- Others opt for The 120 Rule. 

Both mean you should devote a bigger percentage of your investments to equities regardless of age. Why? Maybe broker commission income was dropping? (admittedly cynical comment  ) They justify it by longer average life spans. But will I or my wife live longer than our parents did? And will equities do better in our remaining years? Nobody can answer those questions better than us. Statistics are no use on a micro level.

So for those who wan to use a rule, which "rule" should an investor follow? And wouldn't rebalancing exactly on their birthday be considered market timing. James would not like that  Presumably the balanced funds balance at more frequent intervals - how do individuals replicate that without incurring high trading costs?

Anyway, I went off at a tangent. I will decide for myself how much of a fixed income cushion I need. It will be a fixed amount of $$ and will be adjusted as I see fit according to lifestyle needs. No magic formulas for me!


----------



## agent99 (Sep 11, 2013)

james4beach said:


> I am basically in withdrawal


Sorry to hear that  

Actually many may be if they were hooked on the never ending Bull market.


----------



## cainvest (May 1, 2013)

agent99 said:


> I will decide for myself how much of a fixed income cushion I need. It will be a fixed amount of $$ and will be adjusted as I see fit according to lifestyle needs. No magic formulas for me!


Interesting to see someone thinking outside the box ... let us know what formula or rule you create!


----------



## james4beach (Nov 15, 2012)

I agree there are many good approaches, many ways to manage these problems. There's no single right answer.

But I do like the idea of having a defined plan, as opposed to adjusting by feel.


----------



## AltaRed (Jun 8, 2009)

james4beach said:


> I agree there are many good approaches, many ways to manage these problems. There's no single right answer.
> 
> But I do like the idea of having a defined plan, as opposed to adjusting by feel.


Agent99 sometimes regularly repeats a specific withdrawal situation specific to Agent99. 

Doesn't make it right or wrong. It just does not have application to a broader mainstream situation.

P.S. I similarly work my withdrawal methodology on a fixed quantity of fixed income as well. I just don't reach for yield. 

As to LTR's comment on a situation where one is fortunate to have all their living expenses covered by pensions and annuities, why not have 100% of the rest in equities?


----------



## like_to_retire (Oct 9, 2016)

AltaRed said:


> As to LTR's comment on a situation where one is fortunate to have all their living expenses covered by pensions and annuities, why not have 100% of the rest in equities?


Or, have 100% of the rest in fixed income because you have no reason to take any risk.....

ltr


----------



## agent99 (Sep 11, 2013)

cainvest said:


> Interesting to see someone thinking outside the box ... let us know what formula or rule you create!


My "plan" if you can call that is very simple. 

If our equities tanked to 25% of their current value and their dividends dropped to same degree (They are mostly dividend payers), how much FI would we need to rebuild and provide our income?

When I first started into this, we were looking ahead for our investments to fund us for 38 years. Now ~20 years. With minimal draw down. This would be over and above CPP/OAS for both of us ~$35k pa total now). 

Assume that we thought that we could live off an income of $80k pa (2020$). Then we would need an extra $45k. If remaining dividends could provide, say, $10k of that, Then we would need another $35k pa. from our FI cushion.

For that, there are choices. Invest in GICS or similar and just draw down what we need. Or buy an annuity or two and draw from those.

Rough calc says FI we would need might be about $600k. As years go by we would adjust that number based on inflation, remaining years and probably reduced living costs. If we had to move to a retirement home, selling our present home would more than double the amount available.

These numbers are not actual, but give you the idea behind our thinking. 
- We maintain enough in FI to cover what we see as a worst case. 
- It is only us that can make that judgement. No Financial Advisor or Brokearage house or Text book or on-line "expert" can make that judgement. 

The ratios often espoused don't work. Funds like VBAL use 60/40. Why? Who does that work for? Some but not all. 

We need to do our own math. This whether in retirement or making sure we have enough for a loss of job or disability or whatever might create a need for a nestegg to draw from. 

Those Magic Formulae, ratios, percentage allocations make me cringe!


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> Or, have 100% of the rest in fixed income because you have no reason to take any risk.....
> 
> ltr


Either way you are choosing the amount and allocation yourself. As you should.


----------



## james4beach (Nov 15, 2012)

agent99, I want to understand your view, just in case there's some big problem I haven't understood yet. I don't like sharing my exact numbers so let's pretend I have 1,000K net worth.

Currently, I set aside enough cash so that 2 years worth of expenses are totally covered (this takes into account a conservative estimate of dividends and interest from the rest of my investments).

In this example that would mean 60K cash is set aside. Together with divs+interest, this can pay two full years of living expenses.

The remaining 940K is invested according to my asset allocation: 50% fixed income, 30% stocks, 20% gold. Meaning 470K fixed income, 282K stocks, 188K gold.

That 940K (everything other than the cash cushion) is happily performing at 6.5% CAGR since I started using this plan.

Now let's say the stock market crashes and stays low. I certainly would not be selling stocks. Instead I would steadily draw money out of that 470K fixed income allocation; there's interest and regularly maturing GICs and liquid bonds near maturity.

It seems unlikely I'd be forced to touch my equities with this huge 50% fixed income allocation.

Now let's say markets have another fantastic year (everything up 10%). That 940K grows to 1034K. Rebalancing preserves the bond portion at 50% = 517K fixed income.

So... what makes you cringe at this? I just don't see the problem.


----------



## Synergy (Mar 18, 2013)

The key is to work long enough until your portfolio is capable of generating enough income that you don't have to draw down the capital during tough times. Don't live beyond your means in retirement and have enough FI to support basic income.


----------



## james4beach (Nov 15, 2012)

Synergy said:


> The key is to work long enough until your portfolio is capable of generating enough income that you don't have to draw down the capital during tough times. Don't live beyond your means in retirement and have enough FI to support basic income.


That reminds me, Synergy. One advantage of using this 'traditional' asset allocation is that you can also analyze the portfolio using existing tools and frameworks.

Using those percent allocations, one can plug the portfolio into a Monte Carlo simulator, or historical back-test, and calculate things like how sustainable the capital is, how many years one can withdraw from it, etc.

It also means that existing well-established theory on SWR and variable withdrawals can be applied.

In contrast, using other "ad hoc" methods may work fine as well, but they can't be analyzed using existing tooling, or some leaps and assumptions have to be made especially if the investor is applying "intelligence" and "discretion" in making portfolio decisions. Those simply cannot be modelled and back-tested.

As a scientist and engineer, I am drawn towards the approach (traditional asset allocation) which is easier to model & analyze, even though it involves some dumb and robotic decisions such as maintaining % targets and rebalancing.


----------



## AltaRed (Jun 8, 2009)

Synergy said:


> The key is to work long enough until your portfolio is capable of generating enough income that you don't have to draw down the capital during tough times. Don't live beyond your means in retirement and have enough FI to support basic income.


I was going to slightly disagree with your first sentence until I read your second sentence upon which I fully agree. This is where likely 80% of retirees should aspire to land and where I think the bulk of useful discussion should be to be helpful for most CMFers.


----------



## AltaRed (Jun 8, 2009)

like_to_retire said:


> AltaRed said:
> 
> 
> > As to LTR's comment on a situation where one is fortunate to have all their living expenses covered by pensions and annuities, why not have 100% of the rest in equities?
> ...


That is clearly an option too and often referred to as 'why continue to play the game when you have already won'.

It comes down to what makes one tick. Too freaking boring for me unfortunately. I like to remain somewhat engaged.


----------



## james4beach (Nov 15, 2012)

AltaRed if you have a moment, could I get your feedback on the scenario I outlined in # 100? This isn't a full retirement situation, but imagine occasional new income & savings rolling in.

For example, in the current year, I actually have enough small business revenue to pay all my living expenses. That simply means the cash buffer isn't touched, and nothing is liquidated/withdrawn. Dividends get reinvested as a result.

But next year, it may be zero business revenue, in which case it's withdrawals.

I believe that my approach on the cash buffer is similar to your own, where it's calibrated such that anticipated dividends tops it up to equal X years of expenses.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> agent99,
> So... what makes you cringe at this? I just don't see the problem.


Your decision to quit work is another thing. Leave that aside.

When the markets tanked, lets say, as in my example, they dropped to 25% of their previous value. Now they are worth $70k instead of $282k. Total portfolio is now $728k. But you want 30% equity, so you must buy 218k of equity at a time that recovery may be uncertain. To do that, you have to sell part of your fixed income and gold. The total of those you have left is $510k compared with $658 before the crash. Your FI/Gold safety cushion has been reduced by 22.5%. No certainty of a recovery in markets, so don't count on that. 

If you had chosen a say $500k safety cushion, it would not have been affected by the market crash. As I said before, why let the markets decide how much of a FI/gold safety cushion you have?

BTW, Did you really need a $658k safety cushion in FI and gold? Way high for someone your age, I would think. Especially if it is earning less than the inflation rate. And why the 50/30/20 allocation. How did you arrive at those? By calculatiion based on your needs or gut feel or ???


----------



## agent99 (Sep 11, 2013)

Synergy said:


> The key is to work long enough until your portfolio is capable of generating enough income that you don't have to draw down the capital during tough times. Don't live beyond your means in retirement and have enough FI to support basic income.


Can't argue with that! Not everyone can do that, but is a worthy goal.


----------



## AltaRed (Jun 8, 2009)

James, generally yes as long as you replenish what you had to draw down from your cash/FI buffer in the following year or two, in your case either by selling equities or via earned/business income.

Where I differ from you is that other than my X years of cash buffer, my AA is almost 100% equities (my holding of MAW104 in my TFSA being the exception). IOW, my fixed income allocation is my X years of cash reserves.

Agent99 is challenging your 50/30/20 AA but I would say that is your decision and nothing you have to defend. Mine is 100% equity but that is simply my decision.


----------



## james4beach (Nov 15, 2012)

Thanks AltaRed. Yes I would replenish what comes out of the cash buffer. This could come from employment, or (in a great year for stocks) could come from stocks.

And for the record, I have not quit working... I'm just working less than I used to. Currently at a coffee shop doing some work at a rather high hourly rate.

(I don't bill for the time I waste on CMF)


----------



## feetfats (Jan 3, 2013)

I have been watching this virus very closely since early January. At this point I do not see a scenario where it does not do significant damage to most companies sales and production. I went 100% liquid in late January and I am very happy with that decision.

I think this will create some fantastic buying opportunities but not yet, I think it's way too early to start buying.


----------



## Synergy (Mar 18, 2013)

agent99 said:


> Can't argue with that! Not everyone can do that, but is a worthy goal.


Agreed. Some people would prefer to retire early or simply want to live life to the fullest during their golden years. Others may not be able to earn or save enough. health issues, bad luck, etc. A good goal to aspire to nonetheless. If more people looked at things this way I think retires would be in much better shape, even if they never fully reach a self sustaining portfolio.


----------



## james4beach (Nov 15, 2012)

Thanks for the reply, I appreciate it



agent99 said:


> Your decision to quit work is another thing. Leave that aside.


I have not quit working. I estimate that I will still work for another 40 years, if I remain in good health.



> When the markets tanked, lets say, as in my example, they dropped to 25% of their previous value. Now they are worth $70k instead of $282k. Total portfolio is now $728k. But you want 30% equity, so you must buy 218k of equity at a time that recovery may be uncertain.


I didn't check the exact numbers, but yes, I would have to buy a ton of equity when it's depressed. aka "buy low". And yes I would have less fixed income + gold after that operation.



> If you had chosen a say $500k safety cushion, it would not have been affected by e market crash. As I said before, why let the markets decide how much of a FI/gold safety cushion you have?


OK, so you're pointing out that the market's movements might force me to sell a bunch of my safety assets and buy equities, potentially leaving me with relatively few safety assets remaining. And you're saying, why let the market movements dictate how much safety assets I should be holding?

That's a reasonable criticism. However consider an alternate view, which is this means I would actually be buying stocks on sale. People always hope to buy things on sale... and this method actually lets you do it. This could be the purchase of a lifetime.



> BTW, Did you really need a $658k fixed income safety cushion in FI and gold? Way high for someone your age, I would think. Especially if it is earning less than the inflation rate. Andy why the 50/30/20 allocation.


I have my reasons, notably for the stability and lack of volatility, and personal comfort. The returns really aren't bad at all and in fact, this allocation has one of the best "risk versus reward" profiles of any out there. An excellent Sharpe and Sortino ratio.

The long term return of this allocation has been around 6.5% nominal or about _4% real return_. That's 4% real return with pretty good stability, and in fact, returns of most years have been positive... a rare feat.

As for the safety assets being too high for someone my age, keep in mind that I don't have regular income coming in (like most people my age). Because I occasionally withdraw from this portfolio, I need stability.

Nobody goes poor with 4% real return. But to understand why I like this allocation, you would have to be on board with 'modern portfolio theory' and the idea of optimizing between risk & reward. IMO this portfolio is an excellent optimization between risk & reward.


----------



## james4beach (Nov 15, 2012)

Additional note. Not only does my allocation have a good real return (just a wee bit lower than a balanced fund) but is has very *consistent* returns. That's another one of the appeals; it's somewhat insensitive to your exact start & end dates.

For example, the historical long term return was 6.5% which I think was a 25 year figure. I've actually used this allocation (more or less) for 4 years. My return in that period? Just checked ... it's 6.5% CAGR.

To actually get this return, you have to be willing to rebalance. If you don't rebalance... if you *don't* buy stocks when they crash, if you don't sell gold when it soars, then the return is lower.

I view my asset allocation as a black box. It's a box which can produce a relatively stable 6% CAGR. So I really don't think of my "fixed income" the way you think of yours, in dollar terms. Instead I up-level it, and think about the box which has god performance. To make that box work, I have to rebalance annually to target weights.

Using this black box view, in that situation where stocks have crashed and rebalancing forces me to sell a ton of bonds and buy a ton of stocks... that's just what's going on inside the box. It's still a black box to me.

VBAL and VCNS offer the same view of course. You don't get deeply involved in what's happening inside the box.

So I think there are some big differences in our ideology of this. My black box asset allocation which performs at 6% CAGR, versus your view of fixed income in dollar terms.


----------



## AltaRed (Jun 8, 2009)

And neither methodology is wrong.


----------



## james4beach (Nov 15, 2012)

AltaRed said:


> And neither methodology is wrong.


I agree, but I'm enjoying contrasting the styles of thought. It reminds me of some of the big differences in technical work, where two practitioners can approach problems in completely different ways with completely incompatible world views... but still solve the problem.

agent99: this is actually quite interesting the more I think about this (was thinking this through as I walked home at -22)

I think we fundamentally see our investments in different ways. Would you agree with the following?


*You*: view assets at a granular level. You see, and interact with your fixed income, and you're very interested in having your fixed income be of sufficient size. You want the fixed income to explicitly be big enough to supply enough years of living expenses under horrible market conditions and you manage the fixed income carefully to suit your goals. This is why you think it's shocking that someone would only be concerned with their % holdings in different assets... how can focusing on %s satisfy the need to have "enough fixed income"?

*Me*: view my assets at an abstract level, the portfolio (I called it a black box above). Same goes for something like VBAL. What I am primarily interested in is the _behaviour of the overall portfolio_. How does it fluctuate? How volatile is it? What is the CAGR? How does it act during bear markets? _What are the statistics_? Because I am looking at the portfolio level, the exact $ amount in fixed income really isn't my main concern. That's still important, under the hood (and withdrawals can come out of the fixed income) but it does not matter if my fixed income holdings shrink due to rebalancing back into equities. These are also the reasons that I don't really care that (a) gold is extremely volatile and (b) gold has a long term zero real return or (c) that fixed income has zero real return. That is true at the granular level, but I'm interested in what the _portfolio_ does. It's the behaviour of the portfolio that matters to me.... _not_ what gold does on its own, or what any asset does on its own. *I only care about them in aggregate, for the behaviour which emerges from the combination into a portfolio.*



Here's an alternate way I can explain this, if none of that makes any sense. Imagine that I am given a magic box. This box has the following behavioural characteristics which can you observe at this link by the way: when you put money into the box, it has some % return, tends to rise and fall in certain ways, and a certain worst-case behaviour.

In a recent poll on this board (link), I gave only the statistics of the magic boxes without saying what was in the box. One of the most popular answers was my portfolio allocation; people like it. Why? Because it has good traits. What's very interesting is that people usually do not approve of what I hold inside it, but if they view it as a black box, they actually do like it... because its statistics are really very good.

That poll demonstrated that people have different perceptions of the same portfolio based on what view they take. In the granular view, they would not like the portfolio. In the abstract portfolio view of the same portfolio, they do like the portfolio. Interesting, right?

I don't really have to care what mucky business is happening inside that box. The important part to me is the net, overall, observable result. Yes some absolutely wacky things can happen inside the box. Gold might spike 80% one year, and the money gets dumped back into bonds, truly wacky, scary, bizarre, things... but what does it matter?


----------



## agent99 (Sep 11, 2013)

I certainly agree that we view and conduct our investing in quite different ways. 
When I retired 18 years ago I decided that in dollar terms, 1/2 our portfolio should be in fixed income. We would draw what we needed using 4% SWR as guide. We would try to earn 4% or more on all investments. More recently, we have had to accept less on some. 
After 18 years we have increased our FI holdings to match inflation. We have continued to draw whatever we need, but because portfolio has almost doubled in value, the % withdrawal is lower. And of course, the % in FI is also lower, although the dollar amount is higher and more than enough to ride a storm. In the end it will likely be part of legacy for kids.

To sum up,
- enough in FI to cover a disastrous market crash. Inflation adjusted.
- Equity mostly in dividend payers.
- Dividends + cpp/oas enough to live off. 
- no rebalancing - value of equities allowed to grow unhindered. (up 95% in 18 years)

This has clearly worked for us. No knowledge or interest in "modern" portfolio theory. Just use common sense.


----------



## newfoundlander61 (Feb 6, 2011)

Watching the pre-market this morning, thinking how important it is to own solid dividend paying stocks for the long term.


----------



## kcowan (Jul 1, 2010)

like_to_retire said:


> Or, have 100% of the rest in fixed income because you have no reason to take any risk.....
> 
> ltr


After consulting with my spouse and heirs, they agree that it should be strongly equity focussed. They are willing to to tke the risk.


----------



## kcowan (Jul 1, 2010)

james4beach said:


> (I don't bill for the time I waste on CMF)


When I was doing billable consulting work, I stated in the contract that 20% of my time would be devoted to personal enhancement, including investment expertise and prospecting for my next gig. Never had any pushback.


----------



## like_to_retire (Oct 9, 2016)

kcowan said:


> After consulting with my spouse and heirs, they agree that it should be strongly equity focussed. They are willing to to tke the risk.


Yeah, I'm on the fence with this issue, and since I'm in that boat personally, I have chosen 50:50 as my allocation - best or worst of both worlds I guess.

ltr


----------



## Money172375 (Jun 29, 2018)

So it looks like we’re officially in correction territory. 

If anyone has the data handy, I’m curious about the percentage losses and duration of the previous downturns.....perhaps going back to 1970.
Or, for the researchers and data miners out there.......where do you typically source this info?

Thanks


----------



## AltaRed (Jun 8, 2009)

Think you can Google that info, or just examine a 50 year S&P500 chart and eyeball it. 

There would be dozens of 10-19% corrections in that period of time, and perhaps a dozen bears of 20% or more.


----------



## cainvest (May 1, 2013)

Money172375 said:


> I’m curious about the percentage losses and duration of the previous downturns.....perhaps going back to 1970.


Google -> S&P500 bull and bear markets ... many charts to choose from.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> Wake me up when the index falls below its 200 day moving average. For the S&P 500 that would take a 9% drop and for TSX, would take a 6% drop.
> 
> IMO nothing looks remotely bearish until then.


Interesting reading some of the early responses in this thread. Looks like it will take some time still before markets get back to normal.

Personally, still doing nothing. ~$70k in cash is sitting in BMO HISA. Portfolio not down that much overall. Canadian companies not affected as much?


----------



## james4beach (Nov 15, 2012)

Hindsight is 20/20. The stock market is a risky place; if I could see the future I wouldn't have bought more S&P 500 early in the week.

But I proceed with my 30% stock allocation knowing that the stock market is a dangerous place that can wipe out large amounts of money. It's the name of the game. There's a reason I have 50% in super safe fixed income and CDIC backed instruments, plus another 20% gold including physical bars of metal in a safe.


----------



## cainvest (May 1, 2013)

agent99 said:


> Portfolio not down that much overall. Canadian companies not affected as much?


S&P500 and TSX are still well above the dip in Dec 2018.


----------



## dubmac (Jan 9, 2011)

What does the volume of trading tell about the low in the market. I'm wondering whether the low can be estimated based on volume


----------



## james4beach (Nov 15, 2012)

Sometimes pictures help provide perspective. Here are 5 year charts as total returns. You can see that stocks are _very high_ right now; they have not plummeted (yet) in the big scheme of things

Canada: http://schrts.co/AKWsPRmw
US: http://schrts.co/ikqijnse
World: http://schrts.co/YxnUDrDJ


----------



## cainvest (May 1, 2013)

james4beach said:


> Hindsight is 20/20. The stock market is a risky place; if I could see the future I wouldn't have bought more S&P 500 early in the week.


Timing was lucky for me, I could have been in the same boat as you and commited it a few weeks ago. My yearly TFSA/RRSP deposit money is just stilling there waiting for investment. I normally do my rebalance after estimating my taxes to optimize my RRSP amount. Now I'll wait and see how this plays out.


----------



## like_to_retire (Oct 9, 2016)

cainvest said:


> S&P500 and TSX are still well above the dip in Dec 2018.


For sure....











ltr


----------



## Money172375 (Jun 29, 2018)

james4beach said:


> Sometimes pictures help provide perspective. Here are 5 year charts as total returns. You can see that stocks are _very high_ right now; they have not plummeted (yet) in the big scheme of things
> 
> Canada: http://schrts.co/AKWsPRmw
> US: http://schrts.co/ikqijnse
> World: http://schrts.co/YxnUDrDJ


I just saw the 2000-2003 drop. 50% and lasted 929 days. Guess I was too young to remember that one. The 2008 crash was just as deep but only half as long.


----------



## james4beach (Nov 15, 2012)

The 2008 crash was pretty mild by historical standards, it was sharp, but very brief. The recovery was ultra fast.

In Canada, there weren't even any dividend reductions. Next time could be different. In past recessions, dividends have reduced by as much as 30%

I think an investor simply has to remember that stocks are dangerous. By "dangerous" I mean they can fall sharply and stay depressed for a long time


----------



## AltaRed (Jun 8, 2009)

Of course there were some dividend reductions, even in Canada. MFC is one.


----------



## milhouse (Nov 16, 2016)

Any thoughts/comments on how low/minimum volatility funds are faring during this turmoil? I don't hold any myself personally so I just searched for one on iShares: XMW which seems to be a global minimum volatility etf. It seems to only be down ~0.5% YTD and 4-5% off from this year's highs which seems reasonable all things considered.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> I think an investor simply has to remember that stocks are dangerous. By "dangerous" I mean they can fall sharply and stay depressed for a long time


Equities can be volatile. Entering the market at the wrong time can also hurt. (bad market timing). Entering at just the right time can be profitable (good market timing!). We consider ourselves very lucky that we started our DIY retirement investing in 2003. 

As can be seen from the following charts, equities can experience long periods with negative returns. Holding dividend payers helps avoid or reduce affect of those negative periods.

These are S&P charts from this site: https://www.advisorperspectives.com...-perspective-on-secular-bull-and-bear-markets I would like to see TSX equivalents.


----------



## james4beach (Nov 15, 2012)

milhouse said:


> Any thoughts/comments on how low/minimum volatility funds are faring during this turmoil? I don't hold any myself personally so I just searched for one on iShares: XMW which seems to be a global minimum volatility etf. It seems to only be down ~0.5% YTD and 4-5% off from this year's highs which seems reasonable all things considered.


They have done well so far, but I'm only watching ZLB. Here is the % drawdown from recent peak to now

XIU is down 7.2%
XIC is down 7.3%
ZLB is down 5.7%


----------



## MrMatt (Dec 21, 2011)

agent99 said:


> james4beach said:
> 
> 
> > Wake me up when the index falls below its 200 day moving average. For the S&P 500 that would take a 9% drop and for TSX, would take a 6% drop.
> ...


? Some time before markets get back to normal? 
I thought this was normal market behaviour. 
Every few months there are some jitters of a few percent in the equities markets,and people start talking about how shocking it is. 
Did anyone ever take those KYC risk assessment quizzes? 

Oh and why do people not realize that this drop was preceded by a crazy run-up in several sectors over the last few weeks. 

The markets have been and are behaving normally.


----------



## james4beach (Nov 15, 2012)

MrMatt said:


> Oh and why do people not realize that this drop was preceded by a crazy run-up in several sectors over the last few weeks.
> 
> The markets have been and are behaving normally.


Exactly. Is everyone forgetting that 1 year returns are currently TSX +7% and S&P 500 +13% ?

Even after these days of selling, we are still sitting on massive stock gains. If anything this is still a very strong period for stocks.

If people really can't handle a couple % of volatility then honestly, they should reduce their stock allocations. This is why I keep persistently hammering at this point over the years; people usually cannot handle as much risk as they think.

A lot of people go into this thinking that 60/40 or 80/20 sounds reasonable, and then after just a few days of panic they are re-thinking their stock holdings. If you want to be in stocks, you have to be prepared to handle absolutely insane swings -- at any time.

Me... I _don't_ like insane stock swings. That's why I'm 30% stocks.

If someone really is distressed by the way the stock market is moving right now, I think they should re-evaluate their asset allocation and maybe cut their stock holdings and go to a more conservative allocation -- _permanently_. I don't mean a temporary move due to COVID-19. I mean that if someone realizes this game is too crazy for them, they should dial down the level of risk they are continuously taking.

(Example: the moment the Federal Reserve decides they want to shrink their balance sheet, stocks are going to plunge and could enter a severe bear market. So once we're past COVID-19, you're going to have things like that to deal with... or whatever the next unforeseeable surprise is)


----------



## Benting (Dec 21, 2016)

agent99 said:


> I certainly agree that we view and conduct our investing in quite different ways.
> When I retired 18 years ago I decided that in dollar terms, 1/2 our portfolio should be in fixed income. We would draw what we needed using 4% SWR as guide. We would try to earn 4% or more on all investments. More recently, we have had to accept less on some.
> After 18 years we have increased our FI holdings to match inflation. We have continued to draw whatever we need, but because portfolio has almost doubled in value, the % withdrawal is lower. And of course, the % in FI is also lower, although the dollar amount is higher and more than enough to ride a storm. In the end it will likely be part of legacy for kids.
> 
> ...


Agree 99%.

Except, I do not have FI (I have 3 years expense in HISA that I do not consider as investment). I am just too greedy :tongue: The interest rate is too miserable so I rather gamble in the blue chip dividend stocks !


----------



## AltaRed (Jun 8, 2009)

Your HISA holdings is your FI component.


----------



## Eclectic12 (Oct 20, 2010)

AltaRed said:


> james4beach said:
> 
> 
> > ... In Canada, there weren't even any dividend reductions. Next time could be different. In past recessions, dividends have reduced by as much as 30% ...
> ...


Odd that in other threads, it was a blanket statement that the '08-'09 crash meant dividends were cut. From what I recall, my comment that only one stock I held cut it's dividend was questioned/doubted.

Now all of a sudden, there were no dividend cuts in Canada ... which as pointed out, isn't true. 

Income trusts cut where a fair number no longer exist (I'm not counting the ones that converted to a corp). H&R REIT, Husky Energy, Russel Metals, Kingsway Financial Services can be added to the list. I believe one of several TransAlta cuts was then as well.


Cheers


----------



## Benting (Dec 21, 2016)

AltaRed said:


> Your HISA holdings is your FI component.


Technically yes. But there is not much income from this with this low rate and after tax, just like cash.....


----------



## MarcoE (May 3, 2018)

james4beach said:


> If people really can't handle a couple % of volatility then honestly, they should reduce their stock allocations. This is why I keep persistently hammering at this point over the years; people usually cannot handle as much risk as they think.


Everyone's a tough guy at boot camp. You don't know how tough you are until you're actually in battle.


----------



## james4beach (Nov 15, 2012)

Eclectic12 said:


> Now all of a sudden, there were no dividend cuts in Canada ... which as pointed out, isn't true.


There were no dividend cuts on the broad Canadian index average. XIU for example (looking it up now) had eligible dividend _increases_ through each year: 2007, 2008, 2009, 2010 and then a slight reduction in 2011 before catching up in 2012.

Broadly speaking in Canada, there weren't many dividend reductions in the stock index. I think this has led to the broad belief that Canadian dividends are rock solid and somehow immune from recessions.

I don't think that's the case personally, and dividends actually correlate with stock prices... because both price gains and dividends originate from the same business conditions.

In a serious recession, I expect there will be dividend cuts. Retirees who are dividend focused investors should probably account for something like 30% reduction in dividends, as a possibility during a bear market.


----------



## james4beach (Nov 15, 2012)

Re-iterating my earlier point: the 2008 crash and recession were pretty mild. This was a mild bear market by historical standards.

Prices bounced back right away.
Dividends on the Canadian index remained intact.
Major banks were rescued from failure, though some came within an inch of their lives.

Personally I am planning for much worse bear markets than 2008. That was nothing.


----------



## Eder (Feb 16, 2011)

I guess I get a 30% haircut then but my dividend income has increased every year from 1996 I believe, (not going to do the correct for contributions thing I'm too lazy). So, ya, this time its different.


----------



## OptsyEagle (Nov 29, 2009)

Tanking problem solved. They just shut down the stock market. 

https://finance.yahoo.com/news/trading-halted-on-tsx-citing-order-entry-issue-191711889.html

Why didn't I think of that. lol


----------



## james4beach (Nov 15, 2012)

That's amazing. Are the electronic exchanges still trading? The TSX only carries half of Canada's trading volume.


----------



## james4beach (Nov 15, 2012)

HOLY COW. They shut down all Canadian exchanges. But don't worry, you can still sell Canada in the US using all the dual listed securities and EWC.


*The TSX, TSX Venture, and other Canadian exchanges are temporarily closed due to a technical issue which is impacting all Canadian brokerage firms. WebBroker, Advanced Dashboard and the TD App are all functioning normally. At this time, we are able to accept orders, cancellations or amendments to existing orders and they will be queued for release to the exchanges once they re-open.

We appreciate your patience and apologize for the inconvenience.*​


----------



## AltaRed (Jun 8, 2009)

Benting said:


> AltaRed said:
> 
> 
> > Your HISA holdings is your FI component.
> ...


Doesn't matter whether there is much income from the FI component or not. People forget FI is a stabilizing effect in the portfolio and return OF capital is way more important than return ON capital.


----------



## james4beach (Nov 15, 2012)

AltaRed said:


> Doesn't matter whether there is much income from the FI component or not. People forget FI is a stabilizing effect in the portfolio and return OF capital is way more important than return ON capital.


This gets back to what I was describing in my late night rant about the 'portfolio view' versus focusing on individual assets.

Fixed income does a great job at stabilizing a portfolio. That's why 60/40, 50/50 etc are so popular... the *resulting portfolio* has very desirable traits.

The whole is more than the sum of its parts. It's very hard to see the appeal if you focus too much on the individual constituents; why hold bonds? Why accept a zero real return? But you can see the appeal if you look at the overall portfolio and focus on the characteristics of _that_. Try not to get caught up on the individual pieces, but instead, look at the sum.


----------



## like_to_retire (Oct 9, 2016)

AltaRed said:


> Doesn't matter whether there is much income from the FI component or not. People forget FI is a stabilizing effect in the portfolio and return OF capital is way more important than return ON capital.


Yeah, I don't see the relevance of the income produced from fixed income. A portfolio's longer term fixed income will produce higher income, all the way down to very, very short terms (read HISA) that produce low income. Regardless, the fixed income preserves capital, unlike equity that has demonstrated quite nicely in the last week, does not preserve capital.

ltr


----------



## james4beach (Nov 15, 2012)

The technical damage to the stock market is worse now that the index has closed below its 200 day moving average:
http://schrts.co/nGDGqYsd

From a technical analysis standpoint, the next question is whether the S&P 500 struggles to get back above that level. Basically, each month that goes by below the 200 day moving average, the more likely the bull market is dead. But this will take months to evaluate... no easy or quick answers.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> If someone really is distressed by the way the stock market is moving right now, I think they should re-evaluate their asset allocation and maybe cut their stock holdings and go to a more conservative allocation


Is anyone here distressed? If so, I must have missed their posts. 

Except for day traders and those in 'growth' stocks, I doubt the sell off in markets has been caused to any extent by small investors. More likely computer trading & large investors. For them it makes sense. Sell now and buy back when company future performances look more positive. Virus will affect performance of many companies for some time. Especially airlines, tourism, hotels, others with Chinese manufacturing. This in turn will affect retailers, banks, and others. 

Many of us have a reasonably high equity allocation that is largely in dividend paying stocks. We have no trouble riding the ups and downs of the markets. And during downs, we can add to our dividend payers. Having a sufficient sum in FI helps allay concerns, even if we never touch it.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> The whole is more than the sum of its parts. It's very hard to see the appeal if you focus too much on the individual constituents; why hold bonds? Why accept a zero real return? But you can see the appeal if you look at the overall portfolio and focus on the characteristics of _that_. Try not to get caught up on the individual pieces, but instead, look at the sum.


The whole IS always the sum of the parts. 2+2 is never more than 4. I really don't know what you are talking about. Pay attention to each part and the whole will look after itself. Not the other way around.

James, you have convinced yourself that your way is correct. If it is for you, great!. You said you have a 4 yr track record. Stick to your plan and report back after 10 years


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> Yeah, I don't see the relevance of the income produced from fixed income. A portfolio's longer term fixed income will produce higher income, all the way down to very, very short terms (read HISA) that produce low income. Regardless, the fixed income preserves capital, unlike equity that has demonstrated quite nicely in the last week, does not preserve capital.
> 
> ltr


At the moment with GIC and bond interest lower than the inflation rate, fixed income invested in those does not preserve capital (especially if taxed). Capital gets eroded away. Hard to find these days, but there are bonds and pseudo FI products that provide yield higher than the inflation rate. 

Back when GICs paid over 5% and our SWR was 4%, I certainly appreciated the income our FI provided as income. Not so much now, but at least it allows our FI dollar allocation to grow in step with inflation.


----------



## MrMatt (Dec 21, 2011)

like_to_retire said:


> Yeah, I don't see the relevance of the income produced from fixed income. A portfolio's longer term fixed income will produce higher income, all the way down to very, very short terms (read HISA) that produce low income. Regardless, the fixed income preserves capital, unlike equity that has demonstrated quite nicely in the last week, does not preserve capital.
> 
> ltr


Asset allocation is about allocating by asset, not by "expected amount of return".
If you're a 50/50 allocation, and the stock market falls by 50%, you still have 75% of your portfolio.
Nobody would talk about "oh I only got 1% on my HISA", it would be "oh I didn't lose half my portfolio"


I'm surprised the markets are down so much, there have been delays, but China is starting to reopen their ports and get shipping going.

TD raised their dividend and they fell a bit.
If I had more money, I'd be shuffling it in.


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> Is anyone here distressed? If so, I must have missed their posts.
> 
> Except for day traders and those in 'growth' stocks, I doubt the sell off in markets has been caused to any extent by small investors. More likely computer trading & large investors. For them it makes sense. Sell now and buy back when company future performances look more positive.


It matters not to me, but I am always curious during these pullbacks that I have experienced many, many times before.

I am always aware that this large drop in stocks means that there must be sellers who are taking a loss - they want out I guess. 

We always caution against this, but it must be happening for these large drops to occur. This is the classic sell low panic from the novices. Is that not what's happening? Who are the people that are selling at these low prices? It's crazy, but it's what drives the market down I suppose, while others on CMF watch and wait and wring their hands ready to take advantage. 

I have all sorts of trigger levels for various stocks that I'll jump into if they reach a certain value, while the market continues to drop - who causes this drop other than the panic-ers........

What a crazy system.............

ltr


----------



## Eclectic12 (Oct 20, 2010)

james4beach said:


> There were no dividend cuts on the broad Canadian index average. XIU for example (looking it up now) had eligible dividend _increases_ through each year: 2007, 2008, 2009, 2010 and then a slight reduction in 2011 before catching up in 2012.
> 
> Broadly speaking in Canada, there weren't many dividend reductions in the stock index ...


You realise that going from "In Canada" to "broad Canadian index" for no dividend cuts then changing "in Canada, there weren't many" is confusing, right?


You realise that the net dividend increases don't tell you what's happening for the individual stocks?

Looking at a few of the changes to the TSX composite in 2009, Norbord cut the dividend and was cut from the composite index pretty much at the same time in Dec. Linmar cut their dividend in March but stayed in the index until Dec. 




james4beach said:


> ... I think this has led to the broad belief that Canadian dividends are rock solid and somehow immune from recessions.
> 
> I don't think that's the case personally, and dividends actually correlate with stock prices... because both price gains and dividends originate from the same business conditions.


So is your conclusion that a bigger than 40% drop is needed to line them up?


Cheers


----------



## james4beach (Nov 15, 2012)

agent99 said:


> The whole IS always the sum of the parts. 2+2 is never more than 4. I really don't know what you are talking about. Pay attention to each part and the whole will look after itself. Not the other way around.


I think a portfolio, like a machine, is more than just the sum of its parts. By this I mean that the whole thing is capable of doing things (shows behaviours) that the parts alone don't.

An airplane is made of some pieces of aluminum, some sharp metal blades, hydraulic pipes and wires. These parts alone have certain behaviours, but when constructed into a plane, it behaves in a very different way... doing things that the parts alone cannot do.

I think an investment portfolio is much the same. The _whole_ can do things that the individual parts can't do.



> You said you have a 4 yr track record. Stick to your plan and report back after 10 years


Fair enough, but there are a lot of 60/40 and 50/50 investors in the world who have been relying on this concept for much longer than me. It's not a new concept, nor is it a fringe theory. This is pretty much main stream portfolio design and asset allocation.


----------



## Eclectic12 (Oct 20, 2010)

james4beach said:


> HOLY COW. They shut down all Canadian exchanges.


Not the first time.

https://www.680news.com/2018/04/27/tsx-markets-technical-problems/


I seem to remember several other times as well.


Cheers


----------



## Eclectic12 (Oct 20, 2010)

like_to_retire said:


> ... We always caution against this, but it must be happening for these large drops to occur. This is the classic sell low panic from the novices ...


Not sure it's only novices ... when the pros needs money, they need money no matter what the market is doing.


Cheers


----------



## james4beach (Nov 15, 2012)




----------



## like_to_retire (Oct 9, 2016)

Eclectic12 said:


> Not sure it's only novices ... when the pros needs money, they need money no matter what the market is doing.


So you think that professionals drive the market down like this?

Do they take loses to do so, and then take advantage at the end?

ltr


----------



## krzc (Feb 21, 2019)

I'm reading way to in to the virus today, and things are not looking good at all! I'm now worried about my holdings and I'm on the fence on whether I should sell a portion of it until the market bottoms out to recoup a bit. I'm a huge believer in riding through the tough times and I always have, but I don't want to go in the red either and my gut is telling me to sell a bit (25%). What's everyone else doing?


----------



## MarcoE (May 3, 2018)

krzc said:


> I'm reading way to in to the virus today, and things are not looking good at all! I'm now worried about my holdings and I'm on the fence on whether I should sell a portion of it until the market bottoms out to recoup a bit. I'm a huge believer in riding through the tough times and I always have, but I don't want to go in the red either and my gut is telling me to sell a bit (25%). What's everyone else doing?


I'll buy from you.


----------



## krzc (Feb 21, 2019)

MarcoE said:


> I'll buy from you.


 Honestly, every day my mind changes, I'm like pong. Tough situation to be in at the moment. I really hope things turn around for this Covid 19, it's really shocking the world and I'm not enjoying the damage and fear it's putting the world in to.


----------



## Money172375 (Jun 29, 2018)

krzc said:


> I'm reading way to in to the virus today, and things are not looking good at all! I'm now worried about my holdings and I'm on the fence on whether I should sell a portion of it until the market bottoms out to recoup a bit. I'm a huge believer in riding through the tough times and I always have, but I don't want to go in the red either and my gut is telling me to sell a bit (25%). What's everyone else doing?



I’m holding..and..I’m waiting a bit to deploy a big chunk. Check out these charts. The market goes up in the long run.....this shows how it reacted to major geo-political events. https://www.marketwatch.com/story/the-dows-tumultuous-120-year-history-in-one-chart-2017-03-23

Is this worse than SARS? H1n1? I remember waiting in a 3 hour line to get my 3 year old son vaccinated. Worse than the Cuban missile crisis? 9/11? Spanish flu? We don’t really know. 24 hour news and social media is contributing to the fear, like wasn’t possible in the past. Unfortunately there probably will be a illness that kills 20% of those infected at some point. In our lifetime or not....nobody can say.

I’d be holding if I were you.....assuming your asset mix matches your risk tolerance, time horizon and investment objectives.


----------



## like_to_retire (Oct 9, 2016)

krzc said:


> I'm reading way to in to the virus today, and things are not looking good at all! I'm now worried about my holdings and I'm on the fence on whether I should sell a portion of it until the market bottoms out to recoup a bit. I'm a huge believer in riding through the tough times and I always have, but I don't want to go in the red either and my gut is telling me to sell a bit (25%). What's everyone else doing?


Knock yourself upside of the head and go take a nap. Quit with the crazy talk.........

ltr


----------



## agent99 (Sep 11, 2013)

james4beach said:


> An airplane is made of some pieces of aluminum, some sharp metal blades, hydraulic pipes and wires. These parts alone have certain behaviours, but when constructed into a plane, it behaves in a very different way... doing things that the parts alone cannot do.


That's a good analogy. Each part of the plane can't fly by itself. Each part must contribute in an efficient way to allow the plane to fly efficiently. 

Consider a portfolio that includes 50% of GICs and bonds plus 20% gold all of which are making a negative real return. This puts a large burden on the 30% equity if the objective is to earn even a barely positive real return. I would like to see the math that would produce the 4% real return you expect. .

A 60/40 equity/FI portfolio would do better. And that could be improved by choosing FI with yield that at least matches the inflation rate. Even if that adds a small margin of risk. 

If FI is not expected to contribute any positive real return, it should be kept to a minimum. As I have suggested before, that minimum should be estimated by the investor and be enough to cover whatever worst case scenario the investor foresees. During working career maybe 60/40 is appropriate? Is it? Are there calculations? Why 60/40 now instead of the usual recommendations of 100-age or 110-age or 120-age? Where do such numbers come from?? I would rather determine my own needs for FI rather than follow those baseless formulae.


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> So you think that professionals drive the market down like this?
> 
> Do they take loses to do so, and then take advantage at the end?
> 
> ltr


ltr, the pros are likely still making money selling at current levels. Just like we could if we sold say a bank stock we bought 25 years ago. Sometimes they are just rotating sectors or moving into bonds to wait things out. Only they can really move the market initially and then small investors may jump on. And sure, after being on sidelines they can buy and drive markets back up. Small investors are at their mercy.


----------



## james4beach (Nov 15, 2012)

agent99 said:


> If FI is not expected to contribute any positive real return, it should be kept to a minimum.


You talk as if fixed income doesn't give any real return. Sure, it may not today, but that's not what's important. From this Credit Suisse study of very long term returns, see page 21. The mean real return of bonds nearly everywhere has been positive 2%.

That's why it makes sense to invest in fixed income, especially using a passive strategy. We're trying to capture that long term 2% real return, just as we're trying to capture the long term 6% real return of equities.

Both stocks and bonds are expected to provide positive real return, long term. There's no problem with heavy fixed income investment. Returns (and therefore real returns) will fluctuate, but the long term performance is pretty good.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> You talk as if fixed income doesn't give any real return. Sure, it may not today, but that's not what's important. The mean real return of bonds nearly everywhere has been positive 2%.


No, there was a big IF in what I said. 
FI can provide positive real return. But to get that, you have to invest in FI that does better than inflation. That link you provided was to global markets. It is possible to get higher yield outside of NA, buy are you doing that? 

LTR and Alta say they don't care about FI yield. They just want guaranteed return of their capital. Again, fine if the FI chosen will provide that. But you have to go beyond GICs or gov bonds to get those yields.

I have no problem with having higher allocation to FI - So long as it pulls it's weight. And right now that doesn't easily happen.


----------



## cainvest (May 1, 2013)

agent99 said:


> A 60/40 equity/FI portfolio would do better. And that could be improved by choosing FI with yield that at least matches the inflation rate. Even if that adds a small margin of risk.
> 
> If FI is not expected to contribute any positive real return, it should be kept to a minimum. As I have suggested before, that minimum should be estimated by the investor and be enough to cover whatever worst case scenario the investor foresees. During working career maybe 60/40 is appropriate? Is it? Are there calculations? Why 60/40 now instead of the usual recommendations of 100-age or 110-age or 120-age? Where do such numbers come from?? I would rather determine my own needs for FI rather than follow those baseless formulae.


I think you're missing out on a large part of the equation ... human emotions. Risk is something many can't deal with, no matter how you lay it out. You say add better FI yield (junk bonds I gather) sure ... but why not just jump to blue chip stocks then? 

Also, calculating a worst case senario could be all over the place, where would you even start? Loss of job for three months? Sickness? How does one start to estimate FI amount based on that loose criteria?

Point being, everyone needs a rule set to apply to their own investment situation. For the lack of working out your own (which could be horribly wrong) people gravitate to the "classic examples" (age - X, 60/40, etc).


----------



## Rusty O'Toole (Feb 1, 2012)

It seems possible to me that the big boys are crashing the market to kill Trump's chances at re election next November. I base this on 2 things, one is that a virus outbreak in China is no reason for everyone in the world to dump their stocks all at the same time, and two is we already know some very powerful people will stop at nothing to stymie Trump in any way they can.


----------



## agent99 (Sep 11, 2013)

Those formula have no relationship to you as an investor. They are totally arbitrary and vary widely. Let's say someone is 35. Using those rules, should they have 65%, 75%, 85% or 60% equity? James chose 30%. How can you say that is better than sitting down and estimating how much of a buffer you should have to carry you through several possible scenarios that along with a market crash might affect you and your family. 

Re junk bonds - no, i was not talking about using those. It is possible to find reasonably rated corporate bonds with yields well above the 2.4% inflation rate. There are also convertible debentures that yield double that rate. Also split pdfs with fixed short term maturities yielding 5%. And others. More risky than a gic, but nothing like as risky as the equity side of portfolio.
I realize that many here don't buy my ideas. Not my problem. They should try thinking for themselves instead of following the crowd.


----------



## james4beach (Nov 15, 2012)

Well, like you agent99, I do think for myself. That's how I ended up with a totally bizarre allocation that nobody in their right mind would use. Yes it's asset allocation, but my allocation choices are seen as "nuts" by a lot of people.

20% gold? What kind of nut would hold that much gold? It doesn't even pay dividends =D

We should all think for ourselves. Ultimately one has to choose a strategy they are comfortable with. We can't chicken out of our approaches based on the mood of the day, or peer pressure.


----------



## cainvest (May 1, 2013)

agent99 said:


> Those formula have no relationship to you as an investor. They are totally arbitrary and vary widely. Let's say someone is 35. Using those rules, should they have 65%, 75%, 85% or 60% equity? James chose 30%. How can you say that is better than sitting down and estimating how much of a buffer you should have to carry you through several possible scenarios that along with a market crash might affect you and your family.


Possible senarios vary widely, likely just as much as some people's ability to stomach market crashes without doing silly things. In reality, market corrections and crashes have little to do with long term investments ... historically speaking. If someone is 35 and accumulating money for retirement, work is their priority .... their savings likely won't last very long no matter what percentage FI you have. On the other side, if you can't sleep at night because you feel your investments are too risky ... well, that's not a good way to live is it?



agent99 said:


> Re junk bonds - no, i was not talking about using those. It is possible to find reasonably rated corporate bonds with yields well above the 2.4% inflation rate. There are also convertible debentures that yield double that rate. Also split pdfs with fixed short term maturities yielding 5%. And others. More risky than a gic, but nothing like as risky as the equity side of portfolio.
> I realize that many here don't buy my ideas. Not my problem. They should try thinking for themselves instead of following the crowd.


Agreed, cooperate bonds will give a slight higher rate of return but likely only a small amount (little risk, little return). I do hear what you're saying but many would rather follow than lead, they just won't put the time into it to figure out a plan for themselves or don't know how to. IMO, for most people, these formulas, rules or guidelines will get them there provided they save enough and live within their means.


----------



## agent99 (Sep 11, 2013)

Agree 100% James. Nice to have something we can agree on 🙂

Cheers


----------



## james4beach (Nov 15, 2012)

Another way to look at this is that dumb old asset allocation is pretty dumb, but it's far better than many other options. I would rank them like this, from worst towards best

(a) Ad hoc, active trading
(b) Unsuccessful tactical allocations
(c) Unfocused passive investing (no plan)
(d) Disciplined passive investing (asset allocation, with plan)
(e) Successful tactical allocations and strategic selections

So maybe it's not that asset allocation is the best idea, but rather, it's far better than many other techniques -- and that's a huge win. When I started investing, I was doing a lot of (b) and that was pretty stupid. I worked my way up to (c) which was better, because it was passive, but I still lacked a plan. Now I'm at (d) which is unquestionably better, because it involves a clear strategy.

Maybe one day I can get to (e), the holy grail and the aim of hedge funds, but I'm pretty happy at (d). Yes maybe it has shortcomings, and maybe constant % weights isn't the "best" idea, but I am pretty sure it is a better idea than other methods.


----------



## MarcoE (May 3, 2018)

james4beach said:


> (a) Ad hoc, active trading
> (b) Unsuccessful tactical allocations
> (c) Unfocused passive investing (no plan)
> (d) Disciplined passive investing (asset allocation, with plan)
> (e) Successful tactical allocations and strategic selections



Interesting ranking of different tiers. I too have worked my way up to "d," making plenty of mistakes along the way. I think "e" is probably beyond my powers. I'm happy staying at "d."

A big step for me was abandoning actively managed mutual funds in favor of passive index fund investing.


----------



## james4beach (Nov 15, 2012)

I just wrote the ranking based on things I've done myself. I'm sure there are other worse things you could do, and maybe better things as well. After 20 years of investing, I strongly suspect that disciplined asset allocation is one of the best options.

Passive index investing is pretty good. Carefully selecting a good quality mutual fund is pretty good too. Many viable approaches are possible


----------



## cainvest (May 1, 2013)

I've seen a number of people start off with active trading then never return because they lost money.

So indeed, there are fair worse ways to enter into "investing" than some of the basic rules out there.


----------



## james4beach (Nov 15, 2012)

lonewolf :) said:


> Of course Trump hatters are clueless.


This is true. I've never seen Trump wear a decent looking hat, and those funny red ones he likes are kind of gauche.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> This is true. I've never seen Trump wear a decent looking hat, and those funny red ones he likes are kind of gauche.


Maybe Lonestar should have posted in the HAT thread? Or started a new one  This is no place for HAT posts.


----------



## agent99 (Sep 11, 2013)

james4beach said:


> HOLY COW. They shut down all Canadian exchanges. But don't worry, you can still sell Canada in the US using all the dual listed securities and EWC.


Looks like TSX is set to re-open and may need to do some catchup on what happened yesterday and overnight on US and Global markets. Will check back in tonight - have to go play golf 

It seems that volume has been very high and that was part of reason for closure:
https://www.investorvillage.com/groups.asp?mb=6781&mn=104131&pt=msg&mid=20328771


----------



## moderator2 (Sep 20, 2017)

agent99 said:


> Maybe Lonestar should have posted in the HAT thread? Or started a new one  This is no place for HAT posts.


Agreed that this thread should be kept on topic; it's not the place for partisan political posts.

If people want to specifically discuss upcoming US elections and market effects, make a separate thread for that. To keep this thread on track, I will remove political posts which are not on topic.


----------



## james4beach (Nov 15, 2012)

"Nowhere to hide"

It appears that even one of my hedges (gold) is now crashing. Oh well.

It's kind of interesting that so many assets are falling simultaneously. Currently, only bonds are holding up. To me this is looking like a broad portfolio liquidation: hedge funds and institutions just deciding they don't want to be "invested" as much, and liquidating everything in the portfolio.

How about a *trailing 6 month reality check* of some assets, real time as of right now:

TSX +0.7% ... still up
S&P 500 +1.4% ... still up
bonds +1.6% ... still up
gold +2.8% ... still up

The recent drops are worrying, and kind of insane, but is the 6 month picture bad in any way? All of these assets are UP! Even if those assets were down several percent, that still would not be a catastrophe.

I think this shows how much the short term movements impact us even while the longer term picture can be quite good. And 6 months is still a very short time frame in markets.


----------



## CPA Candidate (Dec 15, 2013)

What I find amusing is stocks like REITs declining materially. How is the long term value of real estate cashflows impacted by coronavirus? Same thing with utilities.

These times of derangement are usually good buying opportunities; although it is cringe inducing to do.


----------



## james4beach (Nov 15, 2012)

CPA Candidate said:


> What I find amusing is stocks like REITs declining materially. How is the long term value of real estate cashflows impacted by coronavirus? Same thing with utilities.


Yes, people are simply liquidating everything -- that's how I read the market action.

Some people have been concerned that the shift towards passive indexing would make this worse. Increasingly, portfolios around the world are held using indexes (not individual security selection). Therefore, when the portfolios are sold, everything is sold.

There is also clearly panic at play. Based on the news coverage, social media, and even our posts here... people are clearly in a panic.

Unfortunately however markets are a figment of the human imagination, and our psychology drives all of this. Human emotion, herd behaviour, fear, greed, panic, are all key drivers of prices. So yes unfortunately things can keep falling for a while, potentially. And I wouldn't be surprised if everything falls, due to liquidation of index portfolios.

I'm thinking that the most important thing right now is having an investment plan. There's no way a human can navigate this kind of emotion-driven panic without having a clear plan. My own plan instructs me to do _absolutely nothing_ right now. I am at my target allocations, don't have spare cash to invest, and it's not yet time to rebalance.

CPA, curious on your observations as well.


----------



## leeder (Jan 28, 2012)

Totally agreed with above posts on the panic selling that is going on right now. Not that I have anything to complain about since I am willing to buy high quality stocks on my watchlist and add to my index investment positions more so now than I was even a month ago. Aside from the obvious sad issue I have with the coronavirus and the illnesses and deaths, the other issue is that people have not experienced such declines - especially those who were not invested through the financial crisis. The other issue is that this decline has been so rapid. It kind of reminds me of December 2018 when the markets fell significantly over a course of about 2-3 weeks, just because Trump dictated the markets shall fall (by starting some trade war with China).


----------



## Video_Frank (Aug 2, 2013)

james4beach said:


> It appears that even one of my hedges (gold) is now crashing. Oh well.
> 
> It's kind of interesting that so many assets are falling simultaneously. Currently, only bonds are holding up. To me this is looking like a broad portfolio liquidation: hedge funds and institutions just deciding they don't want to be "invested" as much, and liquidating everything in the portfolio.


From here:




> I read that investors have been forced to liquidate gold in order to cover other investments, such as margin calls. The old saying is that in a market liquidity crunch "you have to sell what you can, not what you want." If this is the case, as I'm learning, gold is not much of a hedge when the market is tanking. I think this might have happened during the 2008 crunch also. Long treasuries are the only thing that rallied.


----------



## james4beach (Nov 15, 2012)

Yeah, that makes sense. It's broad liquidation of everything.

Long treasuries have indeed rallied. I hold one 30 year government bond, and its price is up 7% since I bought it a couple months ago. Which makes sense, because I think it's pretty clear interest rates are now headed towards 0% if not negative.


----------



## james4beach (Nov 15, 2012)

A major problem we have today is that with the central bank rates sitting only at around 1.75% there isn't much room to cut! Traditionally, interest rates would be at 6% or something, and therefore there would be plenty of "ammunition" to cut rates in case of crisis/panic like the current situation.

However, central banks stupidly kept interest rates ultra low ever since the 2009 bottom. I have been highly critical of this and have been saying for years that this only inappropriately fuelled (pumped) stock prices, and leaves the central banks _no ammunition for responding to an actual emergency_.

So the BoC could do an emergency 50 basis point cut, and then maybe another one. What next? We'll be at 0% rates before you know it.


----------



## KevinWaterloo (Mar 5, 2015)

james4beach said:


> I have been highly critical of this and have been saying for years that this only inappropriately fuelled (pumped) stock prices, and leaves the central banks _no ammunition for responding to an actual emergency_.
> .


I agree with this completely, and it was one of the reasons I moved all of my "self managed" portfolio to bonds in mid-December. The market feels like it has been artificially inflated for a long time.

While I generally agree that market timing is almost always a bad idea, I disagree that it is quite that black-and-white. Most of the time it isn't possible to time the market. But once and a while it gets more obvious. 
My view is that most of the time the probability of the market increasing is similar to the probability of it decreasing. Essentially impossible to predict. But sometimes the probability of it decreasing seems to be much higher. That was starting to occur late last year watching the high valuations continue to rise well above economic growth. 

I still have some of my portfolio managed professionally, but I'm considering going to cash on Monday. My argument is that this correction so far has just removed the gains in the 2nd half of 2019. The 12-month returns are still respectable. The valuations are now arguably closer to what they should have been with the expected economic growth before COVID-19. 

However I think there is a low-to-medium probability that COVID-19 is going to get much, much worse. Sadly the devastation could easily get much worse than it is today. That could result in countries restricting mobility, encouraging people not to leave their homes, and cancelling events. In that scenario it isn't that difficult to see a situation where the world economy shrinks significantly which would pop the (arguably) inflated stock market. Is the probably that high? I'm not sure. But I think it might be much higher than the probability that this just goes away and the market quickly recovers.

And to top it off (as James has highlighted above), the central banks do not have a lot of room to respond.


----------



## james4beach (Nov 15, 2012)

Kevin, what you wrote reminds me a bit of my experience in 2007. I was concerned about valuations and runaway euphoria in certain areas. Like you, I saw some of it coming, and loaded up very heavily in bonds. Reduced stock exposure, and even did some short selling in banks (successfully). So I did actually "trade around" 2007-2009 pretty well and I profited in 2008. Like you say, once in a while it gets more obvious.

2007-2009 was awesome for my investments. Either flat or slightly positive, far ahead of everyone else. And it went to my head, too. I concluded that was a genius with markets, then I had insights and was smarter than the average bear.

BUT that's where my successful market timing ended. I did not anticipate the various tricks that Wall Street could throw at markets. Long story short, the central banks juiced the market and pumped stocks sky high. It was manipulation and intervention, and QE, but a new bull market did start, and I missed most of it.

In recent years I went back and did some calculations. Although I've fared well through the bear market, and eventually joined the new bull market, would I have been better off if I just used a consistent (conservative) asset allocation the whole time? The answer was yes... a passive, consistent method would have profited more, despite the bear market.

Clarifying: even though I successfully anticipated the 2008 bear, and perfectly timed 2007-2009, and then eventually got back into stocks... I would have actually done better if I had kept a consistent 50/50 allocation the whole time. And it would have been far easier to implement.

After my 2008 experience, my thought is now that you can successfully time once in a while, but I don't see how you can pull it off long term. Kevin you might in fact get some of this timing correct, loading up in bonds and avoiding perhaps a horrible 2020. But when are you going to get back in? Will you be able to react and reposition yourself?

Speaking first hand, I can say that it really is not obvious when it's time to buy again. Part of the problem is one can get entrenched in their belief, seek confirmation bias, lose objectivity.

It's really, really hard to tactically trade through markets. Other market veterans like Bogle have talked about this same issue. There are people who successfully time the market for a stretch of a few years, but nobody successfully applies this kind of timing for 20 or 30 years. It's unheard of.

I know we all make our own decisions, but my advice to you would be to perhaps ride the market down a bit if you're well positioned at the moment, but seriously think about starting a passive asset allocation technique so that you have *consistent* exposure to stocks & bonds. This could be very conservative, like 70% bonds 30% stocks, but I think you will do better in the long term by using those kinds of techniques, instead of trying to read the market conditions and react.

_And if you do want to continue tactically adapting to markets_, I suggest a simple experiment. Buy a small amount of a conservative ETF such as VCNS (in Canada) or AOK (in the US). Keep it for many years. Measure your own performance against that all-in-one fund. I wish I had done this back in 2006. By perhaps 2012, I would have noticed that I was falling behind the passive asset allocation approach.

Th LUCK of timing the market eventually runs out, at least in my experience.


----------



## doctrine (Sep 30, 2011)

Markets tanked so hard this week that it literally ran out of sellers today. Both US and Cdn markets closed up from their opens. However, this weekend and the rise in cases may give people and institutions new motivation on Monday.


----------



## james4beach (Nov 15, 2012)

doctrine, with 72 million baby boomers in the US alone, and quite a few with large equity-based wealth, I don't think we're in any danger of running out of sellers. Especially with so many boomers now hitting retirement age and suddenly understanding they can't take this much equity risk in withdrawal mode.

In fact this is one of my primary (big picture) fears about the stock market, and my concern that it's ultimately a giant ponzi scheme. Younger generations (like me) simply don't have money needed to absorb selling by baby boomers. Similarly, underfunded pensions are in no position to buy up more risk; they are also likely net sellers. So I have a concern that there are far more potential sellers than potential buyers in the marketplace.


----------



## Retired Peasant (Apr 22, 2013)

james4beach said:


> Increasingly, portfolios around the world are held using indexes (not individual security selection). Therefore, when the portfolios are sold, everything is sold.


Not really.  Indexing is still a very small part of the overall market.


----------



## like_to_retire (Oct 9, 2016)

james4beach said:


> doctrine, with 72 million baby boomers in the US alone, and quite a few with large equity-based wealth, I don't think we're in any danger of running out of sellers. Especially with so many boomers now hitting retirement age and suddenly understanding they can't take this much equity risk in withdrawal mode.
> .


I don't know if that's a valid observation or not. I think of boomers as having a bit more experience in the market and they tend toward income portfolios in retirement. 

I know if I look at my portfolio, I don't see my income it generates as having changed a single cent so far this year except for the eight or nine dividend increases that have occurred. That's hardly fodder for me to get worried and start selling into a down market. Same thing happens every market crash in my experience - I look at income and tend to ignore market value. I guess for the minority that use a growth portfolio strategy in retirement probably are wise enough to have a large amount of fixed income to draw on until sense in the market prevails again.

Compare that to a young person who usually just looks at their market value and without much experience to back them up get stressed and sell.

What do you think?

ltr


----------



## Retired Peasant (Apr 22, 2013)

like_to_retire said:


> I don't know if that's a valid observation or not. I think of boomers as having a bit more experience in the market and they tend toward income portfolios in retirement.
> ltr


Agreed. Remember that boomers have lived through a number of crises
black monday 1987
tech bubble 2000
financial crisis 2008
lots of other downturns/selloffs/flash crashes


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> What do you think?
> 
> ltr


You were asking J4B. But, my 2c worth. 

As we have discussed many times, some/many? of us in retirement are able to live off our dividend income without need to sell any of our holdings.

I would hate to be in situation where I would have to sell FI to carry us through. We never do rebalance. Markets rise and FI % allocation gets less and less. They correct and the %allocation gets back to what is considered a safer level. This with no interference by us! As mentioned before (and discussed enough!), we maintain safe base level of FI.

Many younger people may have their equity only portfolios decimated. But at least they likely/hopefully have jobs and, unlike us oldies, have relatively small portfolios. It's the hot shots with margin accounts, heavily into growth stocks, that will be hurt.

By the way - Do you think the BOC governor reads this forum?


----------



## james4beach (Nov 15, 2012)

like_to_retire said:


> Compare that to a young person who usually just looks at their market value and without much experience to back them up get stressed and sell.
> 
> What do you think?


When I wrote that there are more potential sellers than potential buyers due to demographics, I'm talking about a structural thing... the participants in the market and the $ that they have. Age and wealth. I didn't mean it as a comment on trading behaviour or skittish tendencies.

I just think the reality is that older age groups have far more money in the stock market than younger demographics. And yes I know older age groups are always wealthier. I mean that compared to history, the current disparity between young wealth and old wealth is very lage... this can be seen in national wealth breakdown by demographic group. There is a high concentration of wealth among baby boomers:
https://www.canadianmoneyforum.com/...illennial-wealth-lagging-previous-generations

*The millennials are not the ones selling stocks; they aren't in the market to begin with*. Older people (and their wealth managers) are the ones selling stocks and that will be the case for a long time to go, because boomers are just retiring now.

Younger generations are not major participants in the stock market, and _that's different_ than in past history. Two reasons: (1) they were turned off from stocks due to their timing luck with markets and the economy (2) they don't have a lot of money

Take me for example. I'm a pretty wealthy millennial (barely) but I only am willing to commit 30% to the stock market, and it's already all in there. You *can't* talk me into buying more stocks because I just don't feel like it, and I don't trust stocks -- a common theme among my age group. Compared to my friends and peers of similar age, I actually think I'm one of the heavier stock investors out there. Many others in my age group don't touch stocks at all, or have a couple thousand bucks in there... it's just not significant.

By the way, as bearish as I sound, I'm also more bullish than many others in their 30s. Look at some of my interactions on this forum with others like m3s. He leans towards alternative places to put his money, and I try to talk _him_ into buying stocks. Many of my coworkers are the same. Look at places where younger people hang out (reddit) and see how much they like stocks. People in their 20s and 30s do not like stocks. They will not be buying.

*Who is going to buy?* All the other millennials who are working odd jobs and have no job security or excess savings? Or do you think Gen Y is going to buy, the generation who got screwed the most by the 2000 crash? I don't think they feel like buying stocks either, although they do have more money.

I'm just saying that among sellers in the market, I suspect they are overwhelming the older demographic (or money managers for them) and I don't think younger demographics have the willingness, or the money, to buy.

In my view the stock market of today is mostly baby boomers buying & selling to each other. I don't literally mean that a baby boomer is on the web site hitting the sell button; I mean the money being traded by these institutions, middle men, mostly belongs to baby boomers.


----------



## MarcoE (May 3, 2018)

James, my own anecdotal evidence is similar. Most people that I talk to, who are around my age (late 30s, early 40s), don't invest in stocks at all. Not 30%. Not even 1%. Nothing. I suspect that even younger people, in their 20s, aren't investing either. They should. Stocks are an important part of building one's wealth. But they're not. At least not the people I've spoken to. This is discouraging. Both because young people aren't investing for their future. But also because if people aren't interested in stocks, their value will struggle to rise over time (low demand).


----------



## l1quidfinance (Mar 17, 2017)

MarcoE said:


> James, my own anecdotal evidence is similar. Most people that I talk to, who are around my age (late 30s, early 40s), don't invest in stocks at all. Not 30%. Not even 1%. Nothing. I suspect that even younger people, in their 20s, aren't investing either. They should. Stocks are an important part of building one's wealth. But they're not. At least not the people I've spoken to. This is discouraging. Both because young people aren't investing for their future. But also because if people aren't interested in stocks, their value will struggle to rise over time (low demand).


So many people are just simply uneducated about the market. They fear it and do not take the time to gain a basic understanding. I've tried getting people to understand at work. I find most retail investors end up getting excited by something such as weed. Then they jump in too late get burnt and stop investing due to the risk. This is done without relaising that they were only gambling in the first place.
Personal

Robinhood in the US is aimed at milennials. Wealthsimple is much the same.


----------



## Longtimeago (Aug 8, 2018)

I learned my lesson on Black Monday, 1987 and have not invested in the stock market since then.

With the 2008 Great Recession struck, there were a lot of retirees having to go out and get a job as a Walmart greeter to make ends meet, I kid you not. Forums were full of them complaining that their capital and income were decimated. 

When I here or read about what the Coronavirus is currently doing to the stock market, I just shrug and ignore that completely, I am far more interested in what it might do to me personally in terms of my health. Things like this current situation just show you that the stock market is really just gambling. There are all kinds of things that can happen to upset the applecart overnight and most of them you will never even know about until they happen.


----------



## AltaRed (Jun 8, 2009)

I think J4B and others are falling into the same trap that has been discussed for decades. Every younger demographic has never had the money to be in the market in a significant way. They have been too busy raising families, paying the mortgage and the auto loans. I never really entered the financial markets until 1990 when I was 41 and our Gen-Xers adult children now in their 40s are not really much different. They are now just entering their significant RRSP/TFSA investment years having started in a small way perhaps 10 years ago with some TFSA and RRSP contributions and are now able to put away increasing percentages of their take home pay.

True the boomers are the first LARGE demographic that have been actively in the stock markets, but remember retail investors are still a small component of the market. Institutional organizations, endowments, foundations and pension funds have been the elephant in the bond and stock markets for decades. That is not going to change with the exception of the declining presence of DB pension funds in the private sector, but even then that is offset somewhat by more self-directed plans. While boomers will be slowly cashing in their stocks over the next 30 years or more, the oldest boomers are only 75 and beginning RRIF depletion or dying off, while the youngest are 56 and still building portfolios.


----------



## cainvest (May 1, 2013)

Longtimeago said:


> With the 2008 Great Recession struck, there were a lot of retirees having to go out and get a job as a Walmart greeter to make ends meet, I kid you not. Forums were full of them complaining that their capital and income were decimated.


You'll always have some that are on the edge of financial stability in retirement and will be required to take jobs again. Nothing new there and certainly not the stock markets fault. A few friends and some co-workers will be in this grey area soon enough, relying mainly on CPP+OAS to retire on.


----------



## Money172375 (Jun 29, 2018)

l1quidfinance said:


> So many people are just simply uneducated about the market. They fear it and do not take the time to gain a basic understanding. I've tried getting people to understand at work. I find most retail investors end up getting excited by something such as weed. Then they jump in too late get burnt and stop investing due to the risk. This is done without relaising that they were only gambling in the first place.
> Personal
> 
> Robinhood in the US is aimed at milennials. Wealthsimple is much the same.


A lot of discussion the last few months on the value of professional money management. I think this is where the bank branch based retail advice is underestimated. For novice investors or those who are disinterested in learning, they can offer some pretty simple, but effective solutions......even if it comes at a cost of a 2-3% MER. At least the investor is getting some balanced equity exposure and more importantly, starting a disciplined savings plan. Takes 1 hour to get started and one hour a year to have a review. Most millennials I know are happy to spend at least twice that researching their vacation options.


----------



## agent99 (Sep 11, 2013)

MarcoE said:


> But also because if people aren't interested in stocks, their value will struggle to rise over time (low demand).


Makes you wonder why markets recently hit record highs.

Thinking back, I don't recall having much interest in the markets until I was in mid 40s. Any spare cash was used to pay off our mortgage (and fund expensive hobbies  ). 
I still wonder how we got to where we are considering my lack of interest and lack of any plan until early 60s.

So maybe those in early stages are still accumulating assets like a home, car, family. At least until their 40s. No affect on markets now, and never did?


----------



## agent99 (Sep 11, 2013)

Money172375 said:


> A lot of discussion the last few months on the value of professional money management. I think this is where the bank branch based retail advice is underestimated. For novice investors or those who are disinterested in learning, they can offer some pretty simple, but effective solutions......even if it comes at a cost of a 2-3% MER. At least the investor is getting some balanced equity exposure and more importantly, starting a disciplined savings plan. Takes 1 hour to get started and one hour a year to have a review. Most millennials I know are happy to spend at least twice that researching their vacation options.


We both did that initially. My wife stayed with the bank for longer. I moved to a FS brokerage for a while. Finally saw the light and went to DIY and got rid of all those mutual funds. Managing our investments became my retirement job! Haven't looked back.

Bank MFs were never a good investment for us. We did buy GICs from bank at that time, mostly for our RRSPs. At that time, they were worth owning.


----------



## Eclectic12 (Oct 20, 2010)

MarcoE said:


> james4beach said:
> 
> 
> > When I wrote that there are more potential sellers than potential buyers due to demographics, I'm talking about a structural thing... the participants in the market and the $ that they have. Age and wealth. I didn't mean it as a comment on trading behaviour or skittish tendencies.
> ...


It's different than the past?

Let's see ... in my twenties and a good chunk of my thirties, I was working part time. Even after becoming full time, there's no way I had extra cash to put into equities. Those I talked to, even if they had full time work earlier than I did were saying the same things.

What was the most common investment that people talked about? 
Deposit accounts and GICs. Even the engineer offered four full time jobs before graduation at five times my eventual full time salary was sticking to GICs as his parents who'd lived through the depression had drummed into him that stocks were risky.

Seems more like the stage of life where spare cash isn't plentiful and investing is not a priority is the bigger driver.




james4beach said:


> ... *The millennials are not the ones selling stocks; they aren't in the market to begin with* ...
> Two reasons: (1) they were turned off from stocks due to their timing luck with markets and the economy (2) they don't have a lot of money ...


I wonder if millennials have *more* in the market than my generation and possibly the one before. 

With commissions being $200 a transaction, it was pretty much my forties before I could consider individual stocks. Even then, it was discount brokers at $40 a trade that was making equities possible (i.e. it probably would have been later if the commissions had stayed so high).

Seems pretty easy at $10 a transaction, never mind ETF buys being free etc.


As for being turned off from the markets due to their timing luck - that would be my parents/aunts/uncles who were in their teens during the depression. All but one went strictly GICs and term deposits for five decades or more.


Cheers


----------



## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> I learned my lesson on Black Monday, 1987 and have not invested in the stock market since then.
> 
> With the 2008 Great Recession struck, there were a lot of retirees having to go out and get a job as a Walmart greeter to make ends meet, I kid you not. Forums were full of them complaining that their capital and income were decimated.
> 
> When I here or read about what the Coronavirus is currently doing to the stock market, I just shrug and ignore that completely, I am far more interested in what it might do to me personally in terms of my health. Things like this current situation just show you that the stock market is really just gambling. There are all kinds of things that can happen to upset the applecart overnight and most of them you will never even know about until they happen.


With the above comments I find myself in respectful agreement.



MarcoE said:


> James, my own anecdotal evidence is similar. Most people that I talk to, who are around my age (late 30s, early 40s), don't invest in stocks at all. Not 30%. Not even 1%. Nothing. I suspect that even younger people, in their 20s, aren't investing either. They should. Stocks are an important part of building one's wealth. But they're not. At least not the people I've spoken to. This is discouraging. Both because young people aren't investing for their future. But also because if people aren't interested in stocks, their value will struggle to rise over time (low demand).


I think people increasingly are not interested because like James, and LTA, they are catching on to what James has figured out.



james4beach said:


> In fact this is one of my primary (big picture) fears about the stock market, and my concern that it's ultimately a giant ponzi scheme.


I am a boomer (one of only a handful perhaps) who has eschewed stocks. I dabbled a bit in my foolish youth. Did some on my own. One of my first trades was acting on a "tip" and buying a bunch of shares in something called "Breakwater Resources." Bought at $6 and sold a few weeks later for $16. Felt pretty good and smart. Then I bought "American Pyramid" and watched it get de-listed. Great. Both of those experiences made me wonder what kind of a crazy place is the stock market. Was breakwater really worth that much more in such a short time? Why? Why did American Pyramid disappear into the ether? What effect could I have on either? None that I could see. Just sit on the sidelines.

I also bought some RRSP mutual funds, but not enough to give much thought to, so I have largely ignored them for the last 20 years or so. I think I put in maybe a total of $25,000. Over the years, the funds have been passed around like a hot plate at a dinner party. I started out with an outfit in Vancouver styled "Great Pacific Management". Been through many transmogrifications since, including "Dundee Securities". Last I heard, my modest portfolio was in the hands of an august body carrying on business under the name and style of "HollisWealth" or some such. The last time I looked, my "investment" was said to be "worth" something like $135,000. Given what I am reading here, in the last week or so that might be down to $80,000, if it still exists at all. And not guaranteed by CDIC I don't think. I don't much care. I'll keep ignoring it. Not enough to be worth much thought. Not enough to think of moving what little might be there elsewhere. Just a curiosity and a relic of another time in life. I suppose someday it will be have to be converted to a RRIF, something else of which I know nothing and, again, makes me happy not to have a sufficient vested interest to have to study the topic. 

So, I am happy not to have any significant amount in so-called "equities". I prefer to have my money in things I can see, touch, live in or rent to others to live in, to grow food on, to raise timber on, etc. I don't much care to put money in things over which I have no control whatsoever and which can vanish overnight (assuming there was anything of value there in the first place). I say this, recognizing that there's a fair number of CMFers who have made millions in the market and live comfortably in (early) retirement as a result. Their gambles have paid off. I have followed a different path and probably never invested in things that have shown a return of 60, 80, 100% or so in a single year. None of the spectacular gains reported here sometimes. More slow and steady in my case. No pyrotechnical displays of investing brilliance. But, as my mummy used to say, the race is not always to the swift.


----------



## Money172375 (Jun 29, 2018)

I think history has proven up til now, that a well crafted portfolio requires some exposure to equities. Will this change, maybe? But I would say it is not likely. Might have been different when GICs were paying 7,10,12%, but not anymore. I was a branch advisor in my early years and in management/compliance officer for the bulk of my career. People become fearful of the stock market more often than not, when they follow a tip or a fad and end up getting their shirts taken. Whether it was the early days of dot-coms, weed or any other start-up industries. Rather than focusing on quality, dividend paying companies (that they know and understand) that may earn you 4-8% on average a year, people get jealous when they hear their neighbour made 50% on some obscure highyieldhashbudecommere.com. Balanced portfolios ranging from 10-40% equity seem like a good bet to me in almost any scenario. 

The resiliency of the markets has been proven time and time again and faced uncertainties such as two world wars, Cuban missile crises, assassinations, gas shortages, terrorism etc etc. Someone on cmf said, if the doomsday scenario ever appears, money will become useless any way. Think of a world like the Walking Dead, where guns and food will be the only thing that matters, and they’ll become the new currency.


----------



## like_to_retire (Oct 9, 2016)

Longtimeago said:


> I learned my lesson on Black Monday, 1987 and have not invested in the stock market since then.


A bit of a poor lesson since the S&P/TSX Composite in Canada from November 1987 is up about 1160%. Pretty decent return.

ltr


----------



## Eder (Feb 16, 2011)

Sort of like many claim to have sold equities 2 weeks ago...as if anyone believes that claim.


----------



## james4beach (Nov 15, 2012)

AltaRed said:


> True the boomers are the first LARGE demographic that have been actively in the stock markets, but remember retail investors are still a small component of the market. Institutional organizations, endowments, foundations and pension funds have been the elephant in the bond and stock markets for decades. That is not going to change with the exception of the declining presence of DB pension funds in the private sector, but even then that is offset somewhat by more self-directed plans. While boomers will be slowly cashing in their stocks over the next 30 years or more, the oldest boomers are only 75 and beginning RRIF depletion or dying off, while the youngest are 56 and still building portfolios.


This is actually a really good point. And yes, there's a huge institutional presence.

I did somewhat forget about that.


----------



## doctrine (Sep 30, 2011)

Also remember that companies, especially in the S&P 500, buy back a lot of stock. This may or may not always be a good idea, but they do it, and they can buy back stock faster than boomers sell it. They won't sell all at once, it will take a few decades.


----------



## OptsyEagle (Nov 29, 2009)

The stock market itself, is certainly not a ponzi scheme. Any individual stock might be, but not the overall market.

What I find interesting, is how little people talk about the fact that the level of the stock market at any particular time, is also determined by the number of and degree of negative events in the past, that have affected these companies.

For example. Let's look at bank stocks. The value of your bank stocks will be proportional to the amount of profits those companies can earn. I don't think it should be difficult to see, that if the 5 big banks merged to become 2 banks, that the profitability of those holdings would increase dramatically. 2 banks could provide all the banking services to Canadians much more profitably then when their are 5 banks, all competing with each other, for the same customer. 2 head offices to pay for instead of 5. 2 tech departments to pay for instead of 5. Hopefully that is not difficult to see.

Now, if those 5 banks decided to merge into 2, on Monday, we know the government would stop it. They actually tried this in the past and that is exactly what happened. Too bad for investors (definitely good for customers). Now, lets drop a really big problem into their lap. Perhaps it will be a virus, who knows. That problem is so big that 3 banks have to file bankruptcy. The other two survive, but take a couple hits. When the dust settles, you can be sure, everyone will still need to do banking. What are you going to do, if you were a customer of a bankrupt bank. It's obvious. You will walk across the street and open an account with one of the surviving banks. In other words, once the problem is resolved, all the banking business is now being conducted by 2 banks. Looks like a merger to me, and not only will the government not get in its way, they will probably organize it and maybe even help fund it.

This works in every industry the same way. The value of the stock market is so high because of all the dips and drops and ugly events from the past. As long as you own "all" the stocks, you cannot prevent yourself from owning both the losers, but more importantly, the winners in these events. The value of the winners, almost always will overwehm the losses you take on the losers, and when it is all added up, you will be much more wealthier because you went threw these events.

That is how the stock market works. When I say you need to own all the stocks, I really just mean you need to own a very large cross section of the stock market. The TSX300 or S&P500 will work just fine for that. Buy it and forget about it. You will be glad you did.


----------



## kcowan (Jul 1, 2010)

As of Friday close, my net worth has regressed to the value it had attained on January 8, 2020. I expect to see further correction, especially now there has been a death from Corona Virus in Washington state.

Fortunately it is all paper accounting as I did not spend any of those gains. As for the great buys, they are not greater than they were in January!


----------



## kcowan (Jul 1, 2010)

Duplicate


----------



## james4beach (Nov 15, 2012)

kcowan said:


> As of Friday close, my net worth has regressed to the value it had attained on January 8, 2020. I expect to see further correction, especially now there has been a death from Corona Virus in Washington state.


Yeah, that's not much of a pull back in net worth. Stocks are still up significantly from previous years.

After looking at this with a cool head, I'm observing that this really hasn't been a large selloff. Only 10% from the recent peak, and that was after a somewhat manic rally. Losing 10% from that is not out of the ordinary at all. Yes the speed was fast but that could be due to modern electronic trading and increasingly efficient markets which respond to news more quickly.

I agree with you and think there's more downside, and I wouldn't be surprised to see perhaps another 20% drop. Maybe even 30%. But of course now that's now total speculation, and there's no point in trying to trade around that.

Reality is that stocks have been inflated and "too good" for a long time now. What we're seeing now is exactly the kind of danger of an inflated stock market where nobody perceives any risk, and there are never any serious drops. Expectations had simply become too optimistic and now people's expectations are being shattered.

But looking at the actual market chart, I don't think this 10% drop is very significant looking and it may not be the end of the decline... and that's OK. This seems quite normal to me, it's what stocks do.


----------



## AltaRed (Jun 8, 2009)

The only thing one can be relatively certain on is there will be further downside, but that is all one can speculate on. The message probably is....don't catch a falling knife..for the time being. The wild card is the USA and its apparent lack of preparedness.


----------



## james4beach (Nov 15, 2012)

AltaRed said:


> The only thing one can be relatively certain on is there will be further downside, but that is all one can speculate on. The message probably is....don't catch a falling knife..for the time being. The wild card is the USA and its apparent lack of preparedness.


I agree AltaRed. I hate making directional predictions but I do think there's more downside and it may take a while to play out.


----------



## humble_pie (Jun 7, 2009)

big silence out of russia during this growing corona panic

does russia even officially have a COVID 19 patient? i believe they've announced something like one

china economy certainly damaged, US economy may follow, leaving russia in a better power position


----------



## AltaRed (Jun 8, 2009)

james4beach said:


> I agree AltaRed. I hate making directional predictions but I do think there's more downside and it may take a while to play out.


The point is there is almost certainly no need to rush 'buying the dip'. Don't know that for a fact but that is likely the trend.


----------



## Longtimeago (Aug 8, 2018)

like_to_retire said:


> A bit of a poor lesson since the S&P/TSX Composite in Canada from November 1987 is up about 1160%. Pretty decent return.
> 
> ltr


The first brand new car I ever bought was a 1971 Ford Mustang Fastback. I paid the princely sum of $3,100 for it. Today, a new fastback runs $31,000 (to $98,000).
https://carcostcanada.com/Canada/Prices/2020-Ford-Mustang/32536/ That's at LEAST a 1000% increase in price. 

The point being that 'paper profits' are meaningless taken out of context like_to_retire. It doesn't matter if your stocks gained 1000% if the price of goods(in this example a car) also gained 1000%, all you've done is break even. 

The stock market does not provide returns that are necessarily any better than other ways of investing your money and which YOU can CONTROL to a much greater degree. 

I'm fine with 'to each their own', I just get a bit bored as I did in 2009 when I was reading posts by retirees complaining they had to get a job as a Walmart greeter to make ends meet. They made their choice, then they wanted to cry about it.

Meanwhile my income producing investments outside of the stock market continued on producing income irregardless of what the stock market was doing.


----------



## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> Meanwhile my income producing investments outside of the stock market continued on producing income irregardless of what the stock market was doing.


I agree. Well, might have to hold my nose about the "irregardless" part. Why not make it "notwithstanding and irregardless", to really drive the point home?


----------



## Eclectic12 (Oct 20, 2010)

humble_pie said:


> big silence out of russia during this growing corona panic
> does russia even officially have a COVID 19 patient? i believe they've announced something like one ...


The US travel advisory says five.
https://ru.usembassy.gov/covid-19-information/


Cheers


----------



## GreatLaker (Mar 23, 2014)

Mukhang pera said:


> I agree. Well, might have to hold my nose about the "irregardless" part. Why not make it "notwithstanding and irregardless", to really drive the point home?


Eschew obfuscation. Espouse Elucidation.
Why use a big word when a diminutive utterance will suffice?


----------



## fstamand (Mar 24, 2015)

Markets are showing some positivism; you guys/girls started the buying frenzy yet?


----------



## marina628 (Dec 14, 2010)

So Friday I bought AAPL ,MSFT AND T(AT&T)


----------



## feetfats (Jan 3, 2013)

Longtimeago said:


> The stock market does not provide returns that are necessarily any better than other ways of investing your money and which YOU can CONTROL to a much greater degree. .



Oh my! your experiences are so different than my own. I have hard assets and they always cause me the most nightmares and they come with the least control. They are also way harder to sell. 

One example I like to use is how when a stock drops in value it doesn't keep asking for more money. I have a home in an area that is now worth practically nothing yet it costs me electricity, gas, taxes, water, insurance etc. And who controls when the roof leaks or the dishwasher breaks?

When I have a stock that drops I can choose to hold it for free forever or choose to sell it in seconds. I wish I could say the same about that damn house.


----------



## feetfats (Jan 3, 2013)

marina628 said:


> So Friday I bought AAPL ,MSFT AND T(AT&T)


I think you are too early friend. This virus is only starting. This can damage business heavily.

I've been watching this virus since early/mid January. The growth we are seeing now in USA and other parts of the world is exactly what I saw happen to China. I dont think this is some world ending type problem but it will hurt companies hard. Sick workers, slow production, goods and materials not showing up on time. 

How much will it cost to replace some workers when they die? Of the current 'concluded' covid19 cases 3198 are dead and 50698 recovered. That math suggests to me that 5.9% of cases end up in fatality.

Also let's discuss the damage that plain old fear will do to this economy. Cruise ships, vacations, business travel, hotels, restaurants, shopping malls, live events, trade shows. 

Let's get this straight, I'm not talking about market investor fear, I am predicting large spending decline in North America.

Core businesses like grocery stores could do fine as long as supply chains are functional but I believe we will see some disruptions. There will likely be small/medium supply shortages coupled with panic buying. This will create short term issues. 

Needless to say I went completely cash liquid Jan 27 and I intend to hold this position until the virus retreats.


----------



## Eder (Feb 16, 2011)

I pretty sure Marina will do better than your cash in the next few years. Or perhaps once the market bounces back you will post you are back in...


----------



## feetfats (Jan 3, 2013)

Eder said:


> I pretty sure Marina will do better than your cash in the next few years. Or perhaps once the market bounces back you will post you are back in...


I do not plan to stay liquid for years

If I get off my *** go to my computer to capture some screenshots of my questrade sells will you believe me or will you still call me a liar?

I only come on here to share my concerns based on my experience, which I have plenty.

In the long term Marina will probably be fine. What I am talking about is avoiding short term loss.


----------



## doctrine (Sep 30, 2011)

So far, markets are taking this well. Japan and South Korea markets aren't doing that bad. Many are in correction territory, but hardly any are in bear territory and the 200 day moving averages are intact. 

Maybe markets are just gambling that Europe and USA will take measures like China eventually, and 'eventually' will be in enough time to avoid permanent economic damage, even in a few thousand or more die. 

But if those 200 day averages break, watch out below. May take a lot more bad news to make it there though.


----------



## jargey3000 (Jan 25, 2011)

feetfats, i like your style!
you should post more often!


----------



## Longtimeago (Aug 8, 2018)

feetfats said:


> Oh my! your experiences are so different than my own. I have hard assets and they always cause me the most nightmares and they come with the least control. They are also way harder to sell.
> 
> One example I like to use is how when a stock drops in value it doesn't keep asking for more money. I have a home in an area that is now worth practically nothing yet it costs me electricity, gas, taxes, water, insurance etc. And who controls when the roof leaks or the dishwasher breaks?
> 
> When I have a stock that drops I can choose to hold it for free forever or choose to sell it in seconds. I wish I could say the same about that damn house.


Well, would it help clarify if I said you couldn't pay me to own an individual house (presumably you own it for rental). When I talk about investing and control feetfats, I am talking about investing in businesses generally. But not businesses that are traded on the stock market, private businesses in which I may hold a percentage of that business and in which I may be a silent partner or an active partner. Nowadays, mostly a silent partner.

While selling MAY be harder in some cases, the returns outweigh that concern. I expect higher returns than the stock market provides on average. I also try to maintain a diversity of investments to cover specific market fluctuations. Whether it takes me longer to sell my percentage of a business really doesn't matter if I don't need to sell it TODAY. Nor does it matter too much if it does not constitute a significant percentage of my total income. 

For example, say you own a piece of an online Classic (or Exotic) Car Rental Company. You own the rental business but you do NOT own any cars. Nor do you have any property (showroom, etc.). Think of it as an Airbnb of car rentals. You provide a 'platform' online for people who want to rent and people who have a car they are wiling to rent to them. You and perhaps a handful of other investors put up the money to develop the platform, add a few staff to man a small office and start recruiting car owners who will rent their cars. It's not a complicated business model really is it. It does not take a huge initial investment to start a company of that kind (the same applies to many other potential business investments as well). https://www.bookaclassic.com/

You sit in the middle, collecting money and if all goes well, you collect a lot of money. If all goes badly, you lose your initial investment which if you are doing things right you can afford to lose. A business may have 'hard assets' or not feetfats and I have no objection to hard assets when they are needed in a business but they aren't the ONLY alternative to the stock market these days.


----------



## james4beach (Nov 15, 2012)

This is somewhat incredible... the USD/CAD exchange rate has been holding pretty stable through this market turmoil.

That's despite oil being down 8% today! So it seems the loonie is treated differently than it was in the past. Now, even with crashing oil, we are getting a stable USD exchange rate.

That's one positive thing happening, anyway.


----------



## MrMatt (Dec 21, 2011)

It's panicky market sell off.
Even if this year is a total wipe out, 5% of the world population dies, and everyone reshuffles their supply chains. 
Next year we'll be back up and running.

I am just fearful that we are already over leveraged, and it's going to get worse. 

Realistically, in a few month or a year or two we'll be back to "normal".


----------



## doctrine (Sep 30, 2011)

OPEC+ certainly tanked oil. Most oil production in North America including almost all shale is uneconomic at $41. But because of hedging, it takes a while for a reaction. Maybe even 2-3 months to see production start to drop.

I think oil could go below $30 if nothing changes, because it does take months for production to slow down.

I'm not touching oil, but if it does go below $30, SU may be worth a look. It can operate down to $30 and maybe even a little below, depending on refining margins.


----------



## peterk (May 16, 2010)

MrMatt said:


> It's panicky market sell off.
> Even if this year is a total wipe out, 5% of the world population dies, and everyone reshuffles their supply chains.
> Next year we'll be back up and running.
> 
> ...


To put the shoe on the other foot - The fact that 75% of forum commentary is about how the rest of the world and the stock markets are "panicky" may be a good indication that it's not actually panicky, and there is still more available emotional and market downside to come... Things seemed a lot more gloomy and panicky here during the 2016 correction, IIRC.


----------



## jargey3000 (Jan 25, 2011)

MrMatt said:


> It's panicky market sell off.
> Even if this year is a total wipe out, 5% of the world population dies, and everyone reshuffles their supply chains.
> Next year we'll be back up and running.
> 
> ...


.....jeepers, I just hope i'm not in that 5%.....ta hell with everything else......know what I'm sayin'...?


----------



## Beaver101 (Nov 14, 2011)

^ No, because $$$$ is waaaayyyy more important to some people. In fact, they want to be in the 5% (or more like the 1%)and the hell with everything and everybody else!!!!


----------



## Eder (Feb 16, 2011)

peterk said:


> Things seemed a lot more gloomy and panicky here during the 2016 correction, IIRC.


It will get much gloomier once we are all down 20% but the price list of stocks in XIU is beginning to look like money porn lol.


----------



## james4beach (Nov 15, 2012)

I think the % drops just haven't gotten large enough to cause that gloomy feeling yet. Also, the 5-pack type of stocks which many of us use (a popular strategy on this board) have been holding up very well so far. It's possible that many of us just are not feeling the pain, yet.

For example with my 5-pack of RY, ENB, CNR, BCE, FTS, the year-to-date return is slightly positive (which is much better than both the TSX and S&P 500 index) I think around +1%

In comparison from May 2015 - Jan 2016, my 5 pack was down -10% which is obviously much more severe. The broad TSX was down -20% in that period. Both of those drops, back then, were much heavier than what the TSX has done recently.

So to me it looks pretty clear... the current market drops, at least on Canadian stocks and in particular the favourite large caps, are *much milder* than 2015-2016


----------



## james4beach (Nov 15, 2012)

Not sure that image works, so here's a link: http://schrts.co/sFrYkNvf

I think this long term chart will help give some context on the current situation with the TSX index. This shows XIC total return including dividends along with the prices at the peaks and troughs.

Usually it's the % drawdown (the drop from a peak to the low) which causes pain. Here are the drawdown figures for the various corrections since 2014:

2015-2016: this drop was 21.9%
2018: dropped 15.6%
2020 so far: dropped 9.6%

So while the current drop was fast, *it has been a milder drop compared to these past corrections*. At only 9.6% drawdown currently this isn't even as severe as the 2018 correction and simply nowhere near the 2015-2016 drop.


----------



## Money172375 (Jun 29, 2018)

james4beach said:


> View attachment 19974
> 
> 
> Not sure that image works, so here's a link: http://schrts.co/sFrYkNvf
> ...


Keep it up! Let me know when we’re down to 15% and 20%.


----------



## james4beach (Nov 15, 2012)

Money172375 said:


> Keep it up! Let me know when we’re down to 15% and 20%.


Well and I think that's when the "gloomy" feeling will appear around here. We're just not feeling it yet, because it hasn't been a large drop.


----------



## Jimmy (May 19, 2017)

The US markets were a little overvalued and I think investors knew it. Everything in the US returned over 20% in 2019 and much of it was inflated P/E as earnings certainly didn't rise that amount. The Dow is down ~14% from its peak.

I think the sell off started in the US and world markets are just getting dragged down w it.


----------



## capricorn (Dec 3, 2013)

Looks like oil has much lower to go.. Saudi has declared war in oil marker with deep price cut and flood of oil.


----------



## doctrine (Sep 30, 2011)

doctrine said:


> OPEC+ certainly tanked oil. Most oil production in North America including almost all shale is uneconomic at $41. But because of hedging, it takes a while for a reaction. Maybe even 2-3 months to see production start to drop.
> 
> I think oil could go below $30 if nothing changes, because it does take months for production to slow down.
> 
> I'm not touching oil, but if it does go below $30, SU may be worth a look. It can operate down to $30 and maybe even a little below, depending on refining margins.


On Friday I thought oil might go below $30. Now, below $25 is a possibility. 

Saudi Arabia is turning on the taps. The difference between now and 2014 is that oil demand has already dropped by as much as 5 million boe/d and may go down further. Looking for a nice sub $25 signal and seeing what is left.

This will be a big hit to oil for sure. Production has to drop and it has to come out of variable costs, which might need below $25 to really see production shut in. $20 is not impossible. Tanks are going to start overflowing.


----------



## sags (May 15, 2010)

The Canadian oil index lists the price at $28 - $30 a barrel.

Another scenario looming where oil companies will have to rely on borrowing and debt until lenders cut them off.

https://oilprice.com/oil-price-charts/block/49


----------



## peterk (May 16, 2010)

Sheesh! This timing is not good for me at all...

Having a baby soon, wife stops working, extra baby expenses, and we're house shopping...

Plan was to cash out some stocks for my house downpayment, along with some cash savings. Might have to dip much deeper into the cash and leave the investment accounts as-is.

Plus I'm still very oil-heavy, which is getting hammered extra hard.

*sigh*


----------



## feetfats (Jan 3, 2013)

peterk said:


> Sheesh! This timing is not good for me at all...
> 
> Having a baby soon, wife stops working, extra baby expenses, and we're house shopping...
> 
> ...


What are the downsides for you to hold off on the house purchase for a few more weeks?


----------



## marina628 (Dec 14, 2010)

feetfats said:


> I do not plan to stay liquid for years
> 
> If I get off my *** go to my computer to capture some screenshots of my questrade sells will you believe me or will you still call me a liar?
> 
> ...


I have been buying these stocks for years never sold anything in 2008 and won't sell now .


----------



## james4beach (Nov 15, 2012)

peterk said:


> Sheesh! This timing is not good for me at all...
> . . .
> Plan was to cash out some stocks for my house downpayment, along with some cash savings. Might have to dip much deeper into the cash and leave the investment accounts as-is.


Well the TSX index is only down 10% from its peak, so this is a pretty mild correction. Barely even registers as a drop in stocks in the big picture. Though I can understand if you are oil-heavy, you see a larger drop.

Might be worthwhile considering moving house money to a more conservative / less volatile holding as it seems likely that stock volatility will continue for a while.

I know that the typical reaction would be saying, well you can't sell now since stocks are down, but consider

(1) matching the investments with your time horizon, looking forward (not back)
(2) the TSX really isn't down much at all. It's up so much from previous years


----------



## doctrine (Sep 30, 2011)

sags said:


> The Canadian oil index lists the price at $28 - $30 a barrel.
> 
> Another scenario looming where oil companies will have to rely on borrowing and debt until lenders cut them off.
> 
> https://oilprice.com/oil-price-charts/block/49


Canadian oil may be $20 by the end of the day Monday. Saudi cut prices by $8 below Brent. That means they are now selling crude into Europe at $37.


----------



## Eder (Feb 16, 2011)

peterk said:


> Sheesh! This timing is not good for me at all...
> 
> Having a baby soon, wife stops working, extra baby expenses, and we're house shopping...


Grats on the upcoming rugrat...he/she won't know or care whether you own a house or rent.


----------



## AltaRed (Jun 8, 2009)

May be behind paywall https://www.nytimes.com/2020/03/08/business/saudi-arabia-oil-prices.html but Saudi is clearly prepared to punish Russia for not agreeing to a cooperative production cut. Dropping oil prices also hurts Iran and Venezuela even more from continued sanctions which Saudi may well like, and it may cause growth in Permian production to stall as well. A decision to pump more oil is probably the only recourse Saudi can realistically take to punish and perhaps enforce discipline. 

It will also drive the nail in the coffin home for dozens of marginal Canadian oil producers, mostly in Alberta, that really should be 'taken out' anyway. The downside is obviously additional job and revenue losses for the short term anyway. May force Kenney to actually have to introduce a VAT which has been sorely lacking for at least 2 decades, if not 3-4 decades.


----------



## Northof60 (Nov 22, 2010)

marina628 said:


> I have been buying these stocks for years never sold anything in 2008 and won't sell now .



Not specific to your case, and I get how the "hang on and ride it out" strategy is good for the masses, but I don't see how (under these circumstances) it makes sense for any "individual" investor to act that way. 

We had/have an overheated market and we have COVID-19. One could argue that the market was begging for a correction. At first sign I really see no problem with people who sold their stock holdings and retained fixed holdings and had cash ready to buy back in. 
And even right now, selling seems instinctively like a good idea. The only reason to not sell imo is that one would expect COVID to be overplayed and that absent that, 2020 was expected to be a promising year with little chance of a correction. But it was not, was it? I mean you only don't sell if the upside is more likely than the downside, right?

Instead, why not sell your stocks in x, y , and z, sit on cash and then buy back into the market in 6 months to 2 year when the stocks are lower. And, if you missed or mis-timed that buy back time, you will still probably be in a better spot because you missed a big chunk of the drop in the stock price while you were on the sidelines.. I know trying to time the market is a fools game, but getting out when things are dropping for logical reasons does not seem to be foolish. It is probably because I know very little about all this, but I see little loss of upside in selling (even right now, let alone in the past few weeks) than I do in holding on and watching things drop. I mean do people really not only expect things to level out, but also for the TSX to shoot to 18,000 plus soon after the dust settles?

I am ready to buy in and have cash for it, but I don't see buying anything soon, and if I miss the best window, so be it.

PS. I should add that my trading experience over the years, if I shared it, would prove I don't have a clue. lol. I did luck out recently though. We are retired so I bought a ton of ZAG in January and it is doing great. Bought some ZCON and VCIP which are just hanging on. Might sell the ZCON to free up more cash.. also did two GIC ladders in January..


----------



## james4beach (Nov 15, 2012)

Northof60 said:


> And even right now, selling seems instinctively like a good idea. . . . why not sell your stocks in x, y , and z, sit on cash and then buy back into the market in 6 months to 2 year when the stocks are lower.


Because for all we know, stocks could be dramatically higher by then. This could be a brief correction, and we might have already seen the lows, and it's possible there will be new highs in stocks before you know it.

There's no way to know if stocks are going up or down from here.


----------



## doctrine (Sep 30, 2011)

Stocks are going down until the developed world gets serious about containment. There is unlimited upside to the pandemic until actual effective measures are put in place. Because the longer countries wait, the harder it gets. If markets pop on Monday I am convinced you could short with ease.

Look at the disaster unfolding in Italy and Europe. Meanwhile no enforced quarantine and open borders. Tens of thousands of people fleeing before more measures enforced - how many infected among them?


----------



## james4beach (Nov 15, 2012)

I don't think it's certain that stocks are going down from here. If it were that obvious, price discovery would have already moved the price down there. And just because there are infected people and deaths doesn't mean stocks go down. Even 10,000 global deaths would not guarantee that stocks go down.

I feel there's slightly higher than 50% chance stocks go down for the rest of March, but only a bit higher than 50/50 odds


----------



## MoldyOldy (Feb 9, 2020)

Northof60 said:


> Not specific to your case, and I get how the "hang on and ride it out" strategy is good for the masses, but I don't see how (under these circumstances) it makes sense for any "individual" investor to act that way.
> 
> We had/have an overheated market and we have COVID-19. One could argue that the market was begging for a correction. At first sign I really see no problem with people who sold their stock holdings and retained fixed holdings and had cash ready to buy back in.
> And even right now, selling seems instinctively like a good idea. The only reason to not sell imo is that one would expect COVID to be overplayed and that absent that, 2020 was expected to be a promising year with little chance of a correction. But it was not, was it? I mean you only don't sell if the upside is more likely than the downside, right?
> ...


I'm new to this also and wish I knew then what I now.
I've been reading a lot and trying to educate myself on DIY Investing.
I didn't even know about Option trading and envy the ones who have the knowledge and the risk tolerances to bet against a falling stock market. There are many who made money with puts in these last few months but I'm guessing that many have lost a lot too.
I have long term investments locked in and don't lose any sleep over any of these recent dips or corrections in the market.
I do have a good amount of liquid assets that are not involved or have any part of my retirement plan. Am I sitting on it and timing the market? You bet I am. Does it make sense for me to buy low and sell high. That's my plan and if the market doesn't allow for that plan then that's OK.


----------



## doctrine (Sep 30, 2011)

james4beach said:


> I don't think it's certain that stocks are going down from here. If it were that obvious, price discovery would have already moved the price down there. And just because there are infected people and deaths doesn't mean stocks go down. Even 10,000 global deaths would not guarantee that stocks go down.
> 
> I feel there's slightly higher than 50% chance stocks go down for the rest of March, but only a bit higher than 50/50 odds


I appreciate your optimism. Tomorrow will be a bloodbath on the Canadian markets, but maybe better on the US markets. WTI oil may open at $32 US given Saudis selling Brent today for $37. That is pretty crazy.


----------



## james4beach (Nov 15, 2012)

doctrine said:


> I appreciate your optimism. Tomorrow will be a bloodbath on the Canadian markets, but maybe better on the US markets. WTI oil may open at $32 US given Saudis selling Brent today for $37. That is pretty crazy.


Curious, if we're talking about the rest of this month, what would you say is the % chance stocks (let's say Canada + US) go down? Like I said, I'm thinking just a bit higher than 50% chance.


----------



## feetfats (Jan 3, 2013)

Let me wake you guys up to some very spooky math. Calculate concluded cases. So look at a country and compare dead vs recovered. 

Italy for example 366 dead 622 recovered. You folks are probably the mathy types so we can perhaps agree that of the concluded cases in Italy 58% concluded in fatality.

Media likes to compare total infected vs deaths (currently 3.5%). This is flawed because with exponential growth of a virus you will have very large numbers of people that just got the virus but haven't concluded yet.

Sorry if I wrecked your day. Dont calculate USA's current ratio if you don't want your day to get worse. It's no wonder there are 5 (or more now)? states declaring state of emergency.


----------



## james4beach (Nov 15, 2012)

Counterpoint: that math is flawed. It depends a lot on how many people are tested, and in most countries, the testing methodology involves only testing people who are suspected of being sick. To get a true of reading you'd have to go around doing a random sampling of regular people, including those that don't appear to be sick at all.

We just don't have good statistics on this at all. We don't know how many people are carrying the virus to begin with. It's still possible that only a small percent of infected people become very sick.

Additional point: in Italy, it's killing very old people. I don't say this to sound callous, but it's the reality: people in their 70s and 80s are retired, and are not a big factor in GDP and active economic growth. They aren't at jobs and bringing home paycheques, not buying all the consumer goods, homes, nor are they the ones driving loan demand. The stock market is about corporate earnings and business growth. You have to ask the question; does a large number of deaths for people over 60 even matter that much to corporate earnings?

In the short term, it's all very bad news. But even looking out a bit, say 1-2 years (as the stock market does) I am not sure it's certain yet whether global earnings would take much of a hit.

Lots of uncertainty but I think it's easy to imagine the bad scenarios and downplay the good scenarios.

I should clarify: in general I am very bearish, but that's primarily about my belief that the central banks have manipulated and inflated artificial growth and an artificial stock rally. My concern at the moment is that COVID-19 could burst a psychological bubble, and make people realize that central banks can't control the economy and drive prices higher with low interest rates. So the reason I am bearish on stocks isn't about the destruction from the virus, but rather that the "magic" of low interest rates might be over... and frankly, low interest rates are the only thing the stock market had going for it.


----------



## feetfats (Jan 3, 2013)

james4beach said:


> Counterpoint: that math is flawed. It depends a lot on how many people are tested, and in most countries, the testing methodology involves only testing people who are suspected of being sick. To get a true of reading you'd have to go around doing a random sampling of regular people, including those that don't appear to be sick at all.
> 
> We just don't have good statistics on this at all. We don't know how many people are carrying the virus to begin with. It's still possible that only a small percent of infected people become very sick.


Yes and they are probably only testing the ones with the worst symptoms. As sample size increases we will hopefully see a major change and the death rate drops. But as sample size increases so will the load on the medical system. I can only calculate today's numbers because that's all we have but they dont look very good.


----------



## doctrine (Sep 30, 2011)

james4beach said:


> Curious, if we're talking about the rest of this month, what would you say is the % chance stocks (let's say Canada + US) go down? Like I said, I'm thinking just a bit higher than 50% chance.


I am trying not to be too pessimistic but I would say 90% likely markets are down in the month of March; markets are very forward looking but with this virus it is challenging to see how either monetary and fiscal stimulus can help other than launch the rocket ship once it's over. But when is it over? No one knows or can even guess, and so down we go.


----------



## james4beach (Nov 15, 2012)

doctrine said:


> I am trying not to be too pessimistic but I would say 90% likely markets are down in the month of March; markets are very forward looking but with this virus it is challenging to see how either monetary and fiscal stimulus can help other than launch the rocket ship once it's over. But when is it over? No one knows or can even guess, and so down we go.


Very interesting, thanks for sharing.

I don't think monetary policy or stimulus can do anything. I can't believe the Federal Reserve and Bank of Canada did that 50 basis point rate cut; I thought this was a total waste of ammo. Pointless.

In fact I think those emergency rate cuts added to the sense of panic. I'm actually pretty angry they did that, hurt all of us savers too.


----------



## james4beach (Nov 15, 2012)

Looking at futures quotes on ino.com. Um, is this right?
Crude oil $31.73 down 21%

Yahoo finance seems to verify that, 32.28 or -21.80%

Down twenty percent over the weekend? Isn't this going to blow up some hedge funds?

Anyone putting in stink bids on XEG? Perhaps bid 4.01 or something like that.


----------



## AltaRed (Jun 8, 2009)

Doesn't mean much right now but wouldn't be surprised to see $30 oil, especially if Saudi is firm in their desire to teach Russia in particular a message. 

Remember Saudi also has no love for Russia messing in the Saudi's backyard politically and militarily.


----------



## fireseeker (Jul 24, 2017)

Could collapsing energy prices do for the global economy what rate cuts cannot? And do it quickly?


----------



## doctrine (Sep 30, 2011)

Low oil prices are another boost. 

Markets tanking overseas already. Oil down 22% on top of the 10% drop Friday. DOW will likely only be 1000 points from official bear market status tomorrow. Could easily get there by the end of the week.


----------



## peterk (May 16, 2010)

Holy Hell!

Tomorrow is going to suck... I think I better not look.


----------



## james4beach (Nov 15, 2012)

peterk said:


> Holy Hell!
> 
> Tomorrow is going to suck... I think I better not look.


Well, maybe it was priced in already? I think there was knowledge of OPEC action coming up. Perhaps this isn't too big a surprise (?)


----------



## doctrine (Sep 30, 2011)

S&P 500 futures at 2820; this is well below the 52 week low of 2855. So, new lows coming. That is 17% below all time highs, only 3% away from bear market territory. It just seems like we are inevitably going to get there. If we do, I'm looking at a rebalance at that stage, although not necessarily much new buying.


----------



## AltaRed (Jun 8, 2009)

@James: Energy shares will continue to sink because of the Saudi action but that too will pass in due course. No one in the industry would have guessed $30 oil, other than perhaps on a spurious basis.

@Peterk: For some time I supposed that you might work in the O8G sector? Production side? If so, why would you own shares of any O&G companies, i.e. in the same industry that you work? If you do, obviously I would suggest you ride it out on any company that has a decent balance sheet. It's the leveraged ones that are highly risky.


----------



## peterk (May 16, 2010)

^Well I knowww that's not what I'm _supposed_ to do... that's probably why I did it! :stupid: What's so hard to understand about that? Lol

No choice but to ride it out. Still, very glad I am not $300k down on Alberta real estate...


----------



## peterk (May 16, 2010)

Eder said:


> Grats on the upcoming rugrat...he/she won't know or care whether you own a house or rent.


Thanks Eder!  Yup you're right. Please inform DW for me, thanks.

We're settled in here now though till the summer at least. See how the real estate market goes with these latest negative events.


----------



## dubmac (Jan 9, 2011)

Hang Seng market (China Index) down 3.7 % early trading. Tomorrow (March 9th) may see more red ink


----------



## robfordlives (Sep 18, 2014)

Hang Seng still only down 14% from peak which is kinda absurd given they were at the forefront of this. Once again the media totally ignores that there are more than 60% recovered already. 1.3Billion people and only 80,000 infected but let's drop the market by Trillions. Sigh. Starting to doubt the validity of stocks as long term investment


----------



## james4beach (Nov 15, 2012)

robfordlives, stocks are notoriously volatile and fundamentally irrational. I really don't think COVID-19 is as disastrous as people are saying, but the shock is enough to burst the mental bubble (burst the bull psychology). That's the key IMO. Once the bull market (uptrend) is violated, the psychology changes completely.

Federal Reserve contributed to the panic by doing that 50 basis point cut, which basically screams "we're in a market emergency!"

Then what happens is that everyone who was investing for the last few years, aware they are buying an over-priced bubble mania, suddenly shifts from greed towards fear. They rush to the exits. This is the natural consequence of a low interest rate fuelled stock bubble. It was going to happen eventually. The reason isn't so important... COVID-19, shrug. Could have been just about anything else.

Big news today. The US index futures hit their 5% down limit, so they were halted. *That means they are frozen for the rest of the night* due to excess downward move.

Going limit down is not necessarily disastrous, just means there is intense volatility. The same thing happened in 2016 and the index immediately recovered.

Hope everyone has an investment plan and good quality holdings. Now we get to experience real investing, not the mind numbing "index goes higher every day" situation which makes this game look awfully simple. _Investing is NOT simple_.

This should flush out a lot of participants.


----------



## robfordlives (Sep 18, 2014)

There has only been four other cases in history where the market has fallen as much in this short period. The Great Depression, Hitler invading France, Black Monday and a timeframe during the Financial Crash of 2008. A few people with sniffles does not compare to any of those.


----------



## humble_pie (Jun 7, 2009)

sidebar ... lebanon will default on a 1.5 billion eurobond issue tomorrow, ie 9 feb/20

don't know who the bondholders are though


----------



## robfordlives (Sep 18, 2014)

humble_pie said:


> sidebar ... lebanon will default on a 1.5 billion eurobond issue tomorrow, ie 9 feb/20
> 
> don't know who the bondholders are though


FOOLS


----------



## humble_pie (Jun 7, 2009)

it's mid-sunday evening here in NA & mid-morning tomorrow in most asian markets

dow future is down 1,254 while asian markets are down 4-6% or so. Strangely, the shanghai stock exchange is only down 2%, would that be a good sign.


----------



## humble_pie (Jun 7, 2009)

robfordlives said:


> FOOLS



could be your own pension fund though


----------



## robfordlives (Sep 18, 2014)

humble_pie said:


> could be your own pension fund though


hAHA, wish I had a pension. Wonder how many of the striking Ontario teachers have lost sleep the last two weeks due to declining markets.


----------



## Butter (Nov 26, 2017)

if any of you know when this downward pressure will stop let me know, im looking to buy!

im still a bit novice, but what are some things I could look for that will signal time to buy

Wait for Q1 numbers????


----------



## doctrine (Sep 30, 2011)

Bond markets predicting a 75 point further rate cut this month. How is that for an emergency? There is a chance at a 100 basis point cut.


----------



## humble_pie (Jun 7, 2009)

robfordlives said:


> hAHA, wish I had a pension.



you do have a pension. It's the CPPIB. Manages the federal investment portfolio. Pays for all social benefits including old age pensions.

actually i'd imagine the lebanese bond might possibly be held by a subsidiary of the world bank, which would be good news for pension funds like the CPPIB which no doubt holds some world bank issues, since the WB stands behind repayment at bond maturity.


----------



## robfordlives (Sep 18, 2014)

Butter said:


> if any of you know when this downward pressure will stop let me know, im looking to buy!
> 
> 
> im still a bit novice, but what are some things I could look for that will signal time to buy
> ...


Look at what led the decline....VIX and teh transport stocks


----------



## robfordlives (Sep 18, 2014)

humble_pie said:


> you do have a pension. It's the CPPIB. Manages the federal investment portfolio. Pays for all social benefits including old age pensions.


True but the Fed gov't doesn't believe in fiscal management so they can add billions upon billions to the deficit with no consequences /s


----------



## james4beach (Nov 15, 2012)

humble_pie said:


> you do have a pension. It's the CPPIB. Manages the federal investment portfolio. Pays for all social benefits including old age pensions.


Wish they would add an option to explicitly pay extra into the CPP. It's a good pension.


----------



## james4beach (Nov 15, 2012)

doctrine said:


> Bond markets predicting a 75 point further rate cut this month. How is that for an emergency? There is a chance at a 100 basis point cut.


Of course. I think rates are headed to zero, and very possibly negative.

Government bonds at 1.5% and GICs at 2.3% were quite possibly the deal of a life time. I loaded up.


----------



## humble_pie (Jun 7, 2009)

Butter said:


> if any of you know when this downward pressure will stop let me know, im looking to buy!
> 
> im still a bit novice, but what are some things I could look for that will signal time to buy
> 
> Wait for Q1 numbers????



sit tight novice Butter. Storm still coming over. Hold tight to the gunwales. Don't let premature greedy remarks from others sweep you out to sea.


----------



## humble_pie (Jun 7, 2009)

james4beach said:


> Wish they would add an option to explicitly pay extra into the CPP. It's a good pension.



agree, the CPPIB as pension fund manager is a bright jewel in the federal crown

just think, if they'd increased mandatory contributions to the CPP way back 25-30 years ago this forum wouldn't even need to exist


----------



## james4beach (Nov 15, 2012)

humble_pie said:


> agree, the CPPIB as pension fund manager is a bright jewel in the federal crown
> 
> just think, if they'd increased mandatory contributions to the CPP way back 25-30 years ago this forum wouldn't even need to exist


That's a really deep thought


----------



## cainvest (May 1, 2013)

humble_pie said:


> just think, if they'd increased mandatory contributions to the CPP way back 25-30 years ago this forum wouldn't even need to exist


Sure it would ... can you imagine retiring on only CPP and OAS, even with the increases?


----------



## feetfats (Jan 3, 2013)

@robfordlives 

80,000 is a nice number. Too bad the Chinese Government is completely untrustworthy and they quarantine and or kill anyone who tries to get any real information out to the public. I'll feel a lot better when we get positive recovery stats from other countries that are more credible. It might feel comforting to say it's just a few sniffles but actions speak louder than words. While china says there is no big deal their actions involved pretty much shutting down their entire economy for weeks. One could argue that it worked and that's why their numbers are doing better. If that's the case good but it came at quite an economic cost. 

Last I looked Chinas emissions were pretty much non existent showing they are still down and out ( maybe someone on here has more current info, I'm a week old on this tidbit)

That is pretty wild that there have only been 4 other times the market crashed like this.


----------



## feetfats (Jan 3, 2013)

@Butter

I think the market will improve when the virus shows signs of retracting. But my opinion will change based on how long the damage to the economy continues. For example if next week the virus goes away I think the economy could be right back to normal in no time at all. On the other hand, if piles of companies lose profits because of sick workers and quarantines to the point that they go broke and we see a huge recession then who knows how long it can take?


----------



## MarcoE (May 3, 2018)

feetfats said:


> @Butter
> 
> I think the market will improve when the virus shows signs of retracting. But my opinion will change based on how long the damage to the economy continues. For example if next week the virus goes away I think the economy could be right back to normal in no time at all. On the other hand, if piles of companies lose profits because of sick workers and quarantines to the point that they go broke and we see a huge recession then who knows how long it can take?


There's a chance the virus will go away in the Northern Hemisphere once the weather warms up, and hopefully we haven't destroyed the economy by then! I heard the virus likes cold weather, so it might travel down south to follow the winter.


----------



## james4beach (Nov 15, 2012)

MarcoE said:


> There's a chance the virus will go away in the Northern Hemisphere once the weather warms up, and hopefully we haven't destroyed the economy by then! I heard the virus likes cold weather, so it might travel down south to follow the winter.


I think it will go away soon, especially as the weather warms up.

However I think the damage to the stock bull market is more psychological. Everyone knew it's been a long rally, a long bull market and about due to end. However, sometimes it takes an impetus to switch the crowd pscyhology. The stock market is not much more than a crowd delusion, a reason many people (like myself) don't take it that seriously or put too much faith in it.

I think COVID-19 was that impetus. I don't think the virus is going to be a catastrophe, but I think it DID end the bull market.

I don't think the bull market is coming back, and I don't think anyone cares about low interest rates any more. The magic is over.


----------



## doctrine (Sep 30, 2011)

Two weeks ago, we crossed into correction territory, down 10%.

This week, we will cross into bear territory, down 20%. 

The virus is pretty bad. And governments are treating it like nothing until they are forced to shut down the economy. That's why this is going to crap.

When the US outbreak hits major sustained levels with mandatory quarantines, it might be time to start buying. That will probably push the markets below 30%. In my mind, that is a time to look around and see what prices look like. 

It could go lower, but I think taking the top 30% of the froth off the market will put a lot of P/E ratios below 15 and maybe some below 10.


----------



## sags (May 15, 2010)

It was the best of times (2009 - 2020) and it was the worst of times (2020 - ?).


----------



## james4beach (Nov 15, 2012)

Today is going to be WILD. Premarket I can see that SPY (the S&P 500 index ETF) is down 7.5% ... that's the broad index.

We call that a crash, folks.

Ok... making the pledge now. I am not going to post about movements during market hours today.


----------



## MarcoE (May 3, 2018)

Trading just started, but the DOW is down almost 8% right now. Wow.


----------



## Money172375 (Jun 29, 2018)

The yields on some blue chips are looking real good. TD down 10%, ENB down 16%, SU down 26%


----------



## marina628 (Dec 14, 2010)

Even bitcoin down 23% this month LOL


----------



## MrMatt (Dec 21, 2011)

Early last week I said they'd start to panic in 1-3 weeks, was a bit surprised to see it happen at the short end.

I expect next week, March break will be very interesting. 

Too bad I'm not sitting on a massive irresponsible pile of cash like Berkshire is. 
Can you imagine the deals he's going to be able to make? 
There is going to be some emotional stuff and I can just smell some great companies being pushed to the edge.

I'll let Berkshire and Brookfield figure out the details.


----------



## cainvest (May 1, 2013)

Money172375 said:


> The yields on some blue chips are looking real good. TD down 10%, ENB down 16%, SU down 26%


Some stocks are holding fairly well, BCE and FTS less than 5% down.


----------



## jargey3000 (Jan 25, 2011)

cainvest said:


> Some stocks are holding fairly well, BCE and FTS less than 5% down.


....yeeeaaaaaaa!......


----------



## MrMatt (Dec 21, 2011)

cainvest said:


> Money172375 said:
> 
> 
> > The yields on some blue chips are looking real good. TD down 10%, ENB down 16%, SU down 26%
> ...


Walmart is up today. Not sure why, they have significant China exposure, however I think they've been trying to diversify that a bit.


----------



## james4beach (Nov 15, 2012)

I know I said I wouldn't post, but looking at some spare cash, I couldn't help it.

Bought a few thousand $ worth of XIU today when it was down 8%

Basically like buying at 2017 prices, however, I don't plan to do any further stock buying until either (a) I have new cash to invest or (b) it's time for year end rebalancing


----------



## cainvest (May 1, 2013)

james4beach said:


> I know I said I wouldn't post, but looking at some spare cash, I couldn't help it.
> 
> Bought a few thousand $ worth of XIU today when it was down 8%


It's hard to resist the sale prices isn't it. 

I slated a number of stocks that I would start looking at if the prices fell below the lowest dec 2018 levels. But now with the oil price-war influence I've decreased those numbers again today and the markets continue to fall. I might start to pick some blue chips up (a CDN bank or two) before close today, we'll see how low it goes.

Wasn't really looking at XIU but it's still above the dec 2018 levels anyways. I thought I might be able to get some FTS but it's holding up very well, way above my buy in price limit.


----------



## robfordlives (Sep 18, 2014)

cainvest said:


> It's hard to resist the sale prices isn't it.
> 
> I slated a number of stocks that I would start looking at if the prices fell below the lowest dec 2018 levels. But now with the oil price-war influence I've decreased those numbers again today and the markets continue to fall. I might start to pick some blue chips up (a CDN bank or two) before close today, we'll see how low it goes.
> 
> Wasn't really looking at XIU but it's still above the dec 2018 levels anyways. I thought I might be able to get some FTS but it's holding up very well, way above my buy in price limit.


What an opportunity to buy an index that is the same levels of 2008!


----------



## cainvest (May 1, 2013)

robfordlives said:


> What an opportunity to buy an index that is the same levels of 2008!


For sure 2008 levels would be hard to pass on but if we get that low I think things would be really, really bad.


----------



## peterk (May 16, 2010)

james4beach said:


> Ok... making the pledge now. I am not going to post about movements during market hours today.


I did NOT look at or sign into my unregistered account today. Partly because I'm too scared and party because there was no need, since I wasn't planning to do any transactions.

I _did_ login to my other broker with my RRSP account, as I just added 5k cash on Friday. Today I bought more XOM and ENB. Nice to see that my oil supermajor pick, the only one I hold, held up way better than all the others on this news. Only down 12% lol.

Unclear to me why Enbridge was hit so excessively hard.


----------



## Eder (Feb 16, 2011)

ENB might lose a few customers due to bankruptcies on their take or pay, as well as not being able to charge top buck when producers are getting 40% less for their product, dividend might get expensive for them.

On the other hand fossil fuel energy is cheap and should lead to increased use and require greater capacity once the world figures out it was just a virus and ENB is a steal at this level.

jmo.


----------



## Eder (Feb 16, 2011)

On another note I was perusing Rt news to see any fall out there...looks like our oil might be lower for longer...

*While American energy majors like Exxon Mobil and Chevron would still be able to subsidize their shale oil fields, the closures of those small businesses that are focused exclusively on shale would partly eliminate the supply glut and could finally bring more long-awaited stability to the markets. This ‘shock therapy’ will take up to two years to yield results, and when the situation changes, Kopylov believes, Russia and OPEC may finally to return to the negotiating table.*

rt.com


----------



## londoncalling (Sep 17, 2011)

https://theirrelevantinvestor.com/2020/03/09/the-fastest-bear-market-ever/

We are potentially heading into the fastest bear ever. Not only would it be the fastest but the median and average time for previous ones took months not days or weeks. The previous record (1929) took twice as long. I believe much of the difference is that news travels much quicker and markets are automated and algo based to some extent.


----------



## OptsyEagle (Nov 29, 2009)

Eder said:


> On another note I was perusing Rt news to see any fall out there...looks like our oil might be lower for longer...
> 
> *While American energy majors like Exxon Mobil and Chevron would still be able to subsidize their shale oil fields, the closures of those small businesses that are focused exclusively on shale would partly eliminate the supply glut and could finally bring more long-awaited stability to the markets. This ‘shock therapy’ will take up to two years to yield results, and when the situation changes, Kopylov believes, Russia and OPEC may finally to return to the negotiating table.*
> 
> rt.com


The best defense against low prices are low prices. Markets always fix themselves.


----------



## robfordlives (Sep 18, 2014)

cainvest said:


> For sure 2008 levels would be hard to pass on but if we get that low I think things would be really, really bad.


TSX on June 6, 2008....drumroll please 14,969.....so that is what nearly 12 years with zero growth!!


----------



## Eder (Feb 16, 2011)

robfordlives said:


> TSX on June 6, 2008....drumroll please 14,969.....so that is what nearly 12 years with zero growth!!


Perhaps for those only in index funds not including reinvested dividends?


----------



## cainvest (May 1, 2013)

robfordlives said:


> TSX on June 6, 2008....drumroll please 14,969.....so that is what nearly 12 years with zero growth!!


Ah, I thought you meant the Dec 2008 levels near 8,123.


----------



## MrMatt (Dec 21, 2011)

Eder said:


> Perhaps for those only in index funds not including reinvested dividends?


Hehe, Mr Wonderful (Kevin O'Leary) had a throwaway line on Dragons Den or something.
It was along the lines of the only companies worth investing in are those that pay out earnings, Yahoo went from nothing to huge to nothing, never paying out a penny.

I look at my YoC - Yield on Cost and I'm pretty happy.


----------



## MrMatt (Dec 21, 2011)

Futures looking good, should have bought yesterday.


----------



## sags (May 15, 2010)

The markets like Trump's tax cut idea, but it sounds like the Democrats have their own ideas.

I doubt Nancy Pelosi is going to do Trump any favors during an election year.


----------



## Eder (Feb 16, 2011)

I wish kcowan would start a contest as to where the TSX bottoms & what the price of RY, CNR, ENB,FTS and BCE is on that day. imo not enough blood let yet.


----------



## cainvest (May 1, 2013)

Eder. It's not over yet ...


----------



## feetfats (Jan 3, 2013)

Have you guys seen the toilet paper panic yet?

I predicted the heck out of this crash but I certainly did not forsee this Canada toilet paper frenzy. 

It's funny but scary. Times are changing. History is being made. 

My Question: during economic crash what currency will rule supreme?


----------



## doctrine (Sep 30, 2011)

US cash is where it's at. Of course, it's getting late to sell CAD at 72 cents already.

Lots of time and opportunity to buy. We just entered bear markets in North America. This won't be a quick rebound.


----------



## OptsyEagle (Nov 29, 2009)

feetfats said:


> Have you guys seen the toilet paper panic yet?
> 
> I predicted the heck out of this crash but I certainly did not forsee this Canada toilet paper frenzy.
> 
> ...


The toilet paper is a perfect example of the problems social media is having, with this virus. I suspect one person said something about loading up on toilet paper and now, since everyone can't say for sure if toilet paper will or will not get hoarded by others, is deciding to load up themselves. Let's face it. We all need it and it won't go bad. Except for storage, there is no downside to buying more of it.

That said, if social media was not so viral, this issue would have got a small laugh from the one or two people who first heard the joke and it would have ended there. But with social media, it is now part of the panic.


----------



## MrMatt (Dec 21, 2011)

cainvest said:


> Eder. It's not over yet ...


I'm thinking Berkshire might be the buy here. There will be some amazing deals to be made.


----------



## redsgomarching (Mar 6, 2016)

I can't seem to pull the trigger on any buys because this is horrible. I held out on deploying my TFSA contribution for the year but I did not set any stop losses and got hammered, is there a point to averaging down on blue chips that were already seeing +15% growth? now holding them at -15% due to this overall decline.


----------



## agent99 (Sep 11, 2013)

cainvest said:


> Eder. It's not over yet ...


Just looked at date when I started this thread. Not even 3 weeks ago. Look what has happened since (and is still happening today). Markets may be scary, but the virus itself is even moreso. Especially for us oldies. Only investing I have done is buy a minimum number of shares of CHE.UN in RRIF. 

Some of cash I had in unregistered HISA (from selling IPL prior to crash) , I used to buy more of a split preferred. They are less affected by markets than equities and pay a healthy dividend. Sort of like a bond, but more liquid. I don't read of others doing this, but it seems (to me) a reasonable defensive play. Capital side of slits are down almost 50%, so some risk to pfds if that gets even worse.


----------



## Beaver101 (Nov 14, 2011)

I'm buying in a non-registered when the costs are only for the commissions. Still not a free lunch, rats!

I'm finished buying in my registereds however. And now to sit tight and watch the sky-fall ... or wait for armageddon day.


----------



## Saniokca (Sep 5, 2009)

OptsyEagle said:


> The toilet paper...
> Let's face it. We all need it and it won't go bad. Except for storage, there is no downside to buying more of it.


I would understand beans, tuna cans, rice, etc. but TP? Heck, worst case just wash your butt! I honestly don't get it...


----------



## sags (May 15, 2010)

I suspect people are planning to use TP as a cheap replacement for Kleenex boxes, paper towels, and for cleaning surfaces.

Some older people may be stocking up on everything simply because they think of such things while their kids do not. A stocked pantry may have to be used by different family members.

I doubt they have stocked much of anything in my son's household. They just don't have a lot of extra cash so we stock up with them in mind.


----------



## MrMatt (Dec 21, 2011)

sags said:


> I suspect people are planning to use TP as a cheap replacement for Kleenex boxes, paper towels, and for cleaning surfaces.
> 
> Some older people may be stocking up on everything simply because they think of such things while their kids do not. A stocked pantry may have to be used by different family members.
> 
> I doubt they have stocked much of anything in my son's household. They just don't have a lot of extra cash so we stock up with them in mind.


Tp is a horrible cloth. I use cloths and my washing machine. 

Stocking up isn't very expensive, and it's way cheaper than being sick for a week.


----------



## sags (May 15, 2010)

MrMatt said:


> I'm thinking Berkshire might be the buy here. There will be some amazing deals to be made.


I agree with that. I think Berkshire might be the pick of the stock market.

Berkshire shares have lost value along with everyone else, but they are sitting on a huge pile of cash to buy stocks or companies.

They recently cancelled billions of dollars in investment in a natural gas project and bought millions of Kroger grocery store shares.

Kroger shares have done fairly well in this downturn and pay a 2% dividend. Buffet paid about $27 per share and they are over $29 today.

It won't be known until they have to report if Berkshire has purchased anything.

Edit.....basically you can buy Berkshire a discount while they buy other companies at a discount. It might be a big double whammy when the markets recover.

One thing about Berkshire is they don't need to depend on lenders to do anything. 

I also suspect Buffet may be standing there with a welcoming hand to companies who need some cash, as he did during the Great Recession. 

Of course, borrowers will have to agree to his terms.


----------



## Beaver101 (Nov 14, 2011)

Saniokca said:


> I would understand beans, tuna cans, rice, etc. but TP? Heck, worst case just wash your butt! I honestly don't get it...


 ... me too not sure what's the play/discussions here with TP stock-pilings and the market(s) tanking... tissues for flood of tears? Or maybe put a red on TP producers? Each to their own ... including the Costco herd.


----------



## jargey3000 (Jan 25, 2011)

Saniokca said:


> I would understand beans, tuna cans, rice, etc. but TP? Heck, worst case just wash your butt! I honestly don't get it...


...I'm still hoarding old Sears catalogues, telephone books, newspapers......ya never know....


----------



## jargey3000 (Jan 25, 2011)

sags: _"Edit.....basically you can buy Berkshire a discount while they buy other companies at a discount. It might be a big double whammy when the markets recover."_

not sure what you mean here? do you mean double whammy - in a good way? or in bad way?


----------



## AltaRed (Jun 8, 2009)

agent99 said:


> Just looked at date when I started this thread. Not even 3 weeks ago. Look what has happened since (and is still happening today). Markets may be scary, but the virus itself is even moreso. Especially for us oldies.


I agree. I am way more concerned about if/when I get the virus if there will be a bed and a ventilator available to save my life. The portfolio has been designed to withstand a tsunami, for at least a suitable period of time.


----------



## jargey3000 (Jan 25, 2011)

oops...edit...


----------



## jargey3000 (Jan 25, 2011)

Quote Originally Posted by MrMatt View Post
I'm thinking Berkshire might be the buy here. There will be some amazing deals to be made. 


is there a " canadian" Berkshire to buy??


----------



## MrMatt (Dec 21, 2011)

jargey3000 said:


> Quote Originally Posted by MrMatt View Post
> I'm thinking Berkshire might be the buy here. There will be some amazing deals to be made.
> 
> 
> is there a " canadian" Berkshire to buy??


Fairfax and Brookfield. 

I have bip and bep, both of which have taken quite a kicking.


----------



## jargey3000 (Jan 25, 2011)

thanks.
wasnt there a Burgundy fund on the go. that basically tried to mimic Berkshire?


----------



## feetfats (Jan 3, 2013)

I don't have the balls for this game. You guys are probably gonna make some big money. Too big of waves for me and my little boat.


----------



## jargey3000 (Jan 25, 2011)

feetfats said:


> I don't have the balls for this game. You guys are probably gonna make some big money. Too big of waves for me and my little boat.


timing is everything, feet! (heh heh heh)


like i said somewhere before...ive lived throo about 6 of these things...
always in the woulda coulda shoulda mode
i figure this is my last big chance...
if not for me, maybe the kids'll reap the gains...

im goin' all in....but not just yet...it'll go lower....


theres a lot of stuff to hit the fan yet....that we haven't even thought about
dont ask me what, ...but there will be....


----------



## feetfats (Jan 3, 2013)

jargey3000 said:


> timing is everything, feet! (heh heh heh)
> 
> 
> like i said somewhere before...ive lived throo about 6 of these things...
> ...


Best of luck, don't buy too soon. I'm going to shore. Enjoy the fishing.

And yes I agree poop is only just starting to hit the fan.


----------



## jargey3000 (Jan 25, 2011)

feetfats said:


> Best of luck, don't buy too soon. I'm going to shore. Enjoy the fishing.
> 
> And yes I agree poop is only just starting to hit the fan.


i named my row-boat "Titanic". what cud possibly go wrong?
actually, i named it Cinatit.....but still.....


----------



## cainvest (May 1, 2013)

feetfats said:


> And yes I agree poop is only just starting to hit the fan.


With these events you never really know how much poop is left or if something/someone will adjust the fan speed.


----------



## feetfats (Jan 3, 2013)

cainvest said:


> With these events you never really know how much poop is left or if something/someone will adjust the fan speed.


I like that analogy a lot. Saudi definitely adjusted fan speed over this last weekend. 

Ritchi Brothers auction today I do believe. That will be interesting.


----------



## jargey3000 (Jan 25, 2011)

cainvest said:


> With these events you never really know how much poop is left or if something/someone will adjust the fan speed.


maybe that's what people need all that toilet paper for.....


----------



## cainvest (May 1, 2013)

feetfats said:


> Saudi definitely adjusted fan speed over this last weekend.


Trump definitely adjusted the fan speed with the airline news last night.


----------



## cainvest (May 1, 2013)

jargey3000 said:


> maybe that's what people need all that toilet paper for.....


Could also be for those that looked at the recent portfolio loses and s**t their pants.


----------



## killuminati (Mar 14, 2011)

How bad is this gonna be for Canadian Oil companies? Most never recovered from the heyday before 2008/09. Things look pretty bleak for some of them, like baytex and others.


----------



## feetfats (Jan 3, 2013)

killuminati said:


> How bad is this gonna be for Canadian Oil companies? Most never recovered from the heyday before 2008/09. Things look pretty bleak for some of them, like baytex and others.


bad


----------



## Rusty O'Toole (Feb 1, 2012)

Another spectacular face plant for the stock market. Dow is now down over 8000 points in a month or 28%. I'm still keeping my powder dry. Where will it end?


----------



## sags (May 15, 2010)

Norwegian Cruise lines has lost 82% of their stock price and market cap. Their market cap is now $2 billion.

Pretty low for a company with 8% of the market share and owns 17 cruise ships.

I wonder what Warren and Charlie are loading up on these days.


----------



## Rusty O'Toole (Feb 1, 2012)

Cruise business is in trouble and I don't expect it to recover for years. It will take that long for everyone to forget they are floating incubators for any kind of infection and by that time the boomers who are their main customer base will be dead or too far gone for cruises.


----------



## milhouse (Nov 16, 2016)

Princess and Viking just scrapped about 2 months worth of sailings. Who know if more lines will follow, particularly of the same family (ex. Carnival Corp own Carnival, Princess, HAL, etc). My question is how long can the cruise lines go without revenue. What if everything calms down in a few months but there's a repeat in December again? 
I'd like to be optimistic about the cruise industry long term but there's so much near term uncertainty.


----------



## Eder (Feb 16, 2011)

MrMatt said:


> Tp is a horrible cloth. I use cloths and my washing machine.
> 
> Stocking up isn't very expensive, and it's way cheaper than being sick for a week.


I try to keep fecal matter out of my washing machine.

Anyway...as long as we get big down days I'll hold longer on to my deployment money. But the buffet table is looking better every day....I hope young'uns are pulling the trigger or intend to.

As to worrying about whether a ventilater is available , well thats out of anyone's control so why worry? Every day is a gift...I'm heading to the beach.


----------



## nobleea (Oct 11, 2013)

milhouse said:


> Princess and Viking just scrapped about 2 months worth of sailings. Who know if more lines will follow, particularly of the same family (ex. Carnival Corp own Carnival, Princess, HAL, etc). My question is how long can the cruise lines go without revenue. What if everything calms down in a few months but there's a repeat in December again?
> I'd like to be optimistic about the cruise industry long term but there's so much near term uncertainty.


The same thing is said whenever there's a problem in the industry. There's been multiple outbreaks of norovirus on various ships with hundreds sickened. There was a fire and complete disaster on that Carnival ship a few years ago. Of course, the costa concordia sunk in spectacular fashion. But cruises always survive. For many, they're a cheap easy vacation and many find them entertaining. I'm sure they'll rebound in a couple years like they always do. MAybe future ships will be able to market the fact that they have proper hospital grade HVAC systems that are better at preventing stuff like this.


----------



## MrMatt (Dec 21, 2011)

Rusty O'Toole said:


> Cruise business is in trouble and I don't expect it to recover for years. It will take that long for everyone to forget they are floating incubators for any kind of infection and by that time the boomers who are their main customer base will be dead or too far gone for cruises.


They've always been Norovirus factories, nobody seems to mind.


----------



## sags (May 15, 2010)

Jargey.....tomorrow is Friday the 13th. Tomorrow's moon is a Waning Gibbous with 80% illumination.

What does it all mean for stock markets ?


----------



## sags (May 15, 2010)

These are the kinds of markets where rich people become really really rich people. While everyone else worries about their retirement future, the wealthy are snatching up future profits.


----------



## like_to_retire (Oct 9, 2016)

sags said:


> These are the kinds of markets where rich people become really really rich people. While everyone else worries about their retirement future, the wealthy are snatching up future profits.


Well, why are people worrying about their retirement future? There's a sale on. Take advantage. You don't have to be rich.

ltr


----------



## dotnet_nerd (Jul 1, 2009)

Just in, futures look grim for tomorrow's open as the bloodbath continues.

The yields look pretty tasty on some blue-chips, DOUBLE-DIGIT yields on some

But I'm not ready to pull the trigger yet. Not even close. But man, what a buying opportunity this is going to be when the dust settles....


----------



## cainvest (May 1, 2013)

dotnet_nerd said:


> The yields look pretty tasty on some blue-chips, but I'm not ready to pull the trigger yet.


I'm pretty sure many yields will get pulled back, even on the trusty blue chips. The economic fall out will take a while to recover.


----------



## GGuy (Mar 21, 2018)

sags said:


> Jargey.....tomorrow is Friday the 13th. Tomorrow's moon is a Waning Gibbous with 80% illumination.
> 
> What does it all mean for stock markets ?


Lots of bad news today fuelling the panic in the markets (and at the stores). All the cancellations and closures, Trudeau and his wife in self-isolation really making this hit home in Canada now. 

Could be another short bounce tomorrow but I can't see the news getting any better on the weekend as more cases confirmed and unfortunately more deaths likely too.

Couple that with the slow response from Trump on all fronts and I think we see continued selling next week. 

I don't fault anyone for buying at these levels because there are some entry levels not seen for years but I'm still waiting.


----------



## GGuy (Mar 21, 2018)

cainvest said:


> I'm pretty sure many yields will get pulled back, even on the trusty blue chips. The economic fall out will take a while to recover.


For sure we'll see that, especially oil stocks but the banks, BCE, Telus have never cut their dividend. One of the reasons I will buy them.


----------



## cainvest (May 1, 2013)

GGuy said:


> For sure we'll see that, especially oil stocks but the banks, BCE, Telus have never cut their dividend. One of the reasons I will buy them.


Some companies may not have to, depends on how long this goes on for. 

Also, unless the data is wrong for the sites I'm looking at, looks BCE suspended dividends between 3/12/2008 - 12/19/2008 and Telus decreased between 2001 -2004. Not sure about Telus, two different sites show two different things ...


----------



## sags (May 15, 2010)

like_to_retire said:


> Well, why are people worrying about their retirement future? There's a sale on. Take advantage. You don't have to be rich.
> 
> ltr


A lot of people can only afford to save and invest on a regular basis from their paycheques. For them the market returning to 2018 levels has wiped out 2 years of hard earned savings.

People who have DC pension plans may have their contributions and those of their employer since 2018 wiped out. These aren't just "paper losses" for them. They also lost time.

Given the losses of today, it doesn't look like the markets are anywhere near bottom. There has to be something to turn it around and there is nothing visible there.


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> Well, why are people worrying about their retirement future? There's a sale on. Take advantage. You don't have to be rich.
> 
> ltr


Interested in how us retirees can take advantage. Maybe borrow against our homes and invest in the markets? Or........????


----------



## Eder (Feb 16, 2011)

GGuy said:


> For sure we'll see that, especially oil stocks but the banks, BCE, Telus have never cut their dividend. One of the reasons I will buy them.


Premium Brands just upped their divy 10% today...I expect a dividend cut or two but I also expect most of the companies I own will up their dividend again this year as usual.


----------



## MrMatt (Dec 21, 2011)

sags said:


> A lot of people can only afford to save and invest on a regular basis from their paycheques. For them the market returning to 2018 levels has wiped out 2 years of hard earned savings.
> 
> People who have DC pension plans may have their contributions and those of their employer since 2018 wiped out. These aren't just "paper losses" for them. They also lost time.
> 
> Given the losses of today, it doesn't look like the markets are anywhere near bottom. There has to be something to turn it around and there is nothing visible there.


Yeah, I "lost" 2 years, but I'm still up nicely over the last decade.


----------



## cainvest (May 1, 2013)

agent99 said:


> Interested in how us retirees can take advantage. Maybe borrow against our homes and invest in the markets? Or........????


Well for the retired that have deep pockets, like overly large FI allocations, you could shuffle some of it over to stocks!


----------



## agent99 (Sep 11, 2013)

cainvest said:


> Well for the retired that have deep pockets, like overly large FI allocations, you could shuffle some of it over to stocks!


My _percentage_ FI allocation is getting better every day! It will soon be in James' territory. I guess that is good????????

Actually, in dollar terms it hasn't changed much.


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> Interested in how us retirees can take advantage.


1. Use the cash portion of your fixed income to purchase stocks.

2. Book loses and re-purchase similar securities. They're money in the bank.

3. Re-align asset allocation that has been skewed by large drops in the equity market. Sell fixed/buy equity to re-balance.

ltr


----------



## milhouse (Nov 16, 2016)

cainvest said:


> Some companies may not have to, depends on how long this goes on for.
> 
> Also, unless the data is wrong for the sites I'm looking at, looks BCE suspended dividends between 3/12/2008 - 12/19/2008 and Telus decreased between 2001 -2004. Not sure about Telus, two different sites show two different things ...


IIRC, BCE suspended its dividend as it was getting ready to be taken private by OTPP, which obviously fell through. 
And T decreased/cut its dividend in the early aughts to help get its finances in shape after it took on massive debt to buy Clearnet to get into the national wireless game.


----------



## twowheeled (Jan 15, 2011)

GGuy said:


> For sure we'll see that, especially oil stocks but the banks, BCE, Telus have never cut their dividend. One of the reasons I will buy them.


ridiculous, price doesn't matter at all to you? You'll happily collect a 4% dividend while the underlying shares depreciate 40%?


----------



## MrMatt (Dec 21, 2011)

twowheeled said:


> ridiculous, price doesn't matter at all to you? You'll happily collect a 4% dividend while the underlying shares depreciate 40%?


Easy way to get the dividend up to 7%

As much as people are freaking out, most portfolios have been set back 1-4 years. My 10 year returns are still quite decent.

We get a recession/correction every 5-10 years.
Pandemics are very predictable, this was definately going to happen.
We've been "stimulating" the economy with low rates for years.

We've had an unjustifiable hike in stock prices over the last few years.

The 5 year return of the S&P 500 is 7%/yr, which is just fine.

People who have a high equity portfolio who are freaking out, didn't pay attention.

Those with lots of equity who feel emotions, well, that's reasonable. I'm not happy that I've lost 20%+ in the last few days. But I just have to look at my 5 & 10yr to see I've done quite well.


----------



## AltaRed (Jun 8, 2009)

I have very few stocks underwater although a few more may start to show losses if this keeps up for a few more days. Regardless, I may look at a few swaps to capture tax loss selling WHEN the down draft steadies.


----------



## andrewf (Mar 1, 2010)

agent99 said:


> Interested in how us retirees can take advantage. Maybe borrow against our homes and invest in the markets? Or........????


Maybe get the financing in place, but I would wait for the market to stabilize. A -20% week is not the time to be jumping in. This bear run is just getting started. Recession at this point is just about guaranteed.


----------



## cainvest (May 1, 2013)

AltaRed said:


> I have very few stocks underwater although a few more may start to show losses if this keeps up for a few more days. Regardless, I may look at a few swaps to capture tax loss selling WHEN the down draft steadies.


Yup, the once total sea of green is turning more red day by day. Somewhat surprisingly, the MAW104 I bought early last year is still above water. Not sure when the panic will stop ...


----------



## dubmac (Jan 9, 2011)

get ready. 
Hang seng is down -6% March 13 early trading. likely be another "hide under the mattress" day.
Friday the 13th n'all. Jason's BBaaaccck.
"According to the Stress Management Center and Phobia Institute in Asheville, North Carolina, an estimated 17 to 21 million people in the United States are affected by a fear of this day, making it the most feared day and date in history. Some people are so paralyzed by fear that they avoid their normal routines in doing business, taking flights or even getting out of bed. "It's been estimated that [US]$800 or $900 million is lost in business on this day".....(from wikipedia)


----------



## sags (May 15, 2010)

The Zimbabwe stock exchange is doing pretty good.

https://www.zse.co.zw/


----------



## Saniokca (Sep 5, 2009)

dubmac said:


> get ready.
> Hang seng is down -6% March 13 early trading. likely be another "hide under the mattress" day.


Looks like everything's up pre-market.


----------



## doctrine (Sep 30, 2011)

Circuit breakers pre-market blew on the way up (+5%).


----------



## cainvest (May 1, 2013)

doctrine said:


> Circuit breakers pre-market blew on the way up (+5%).


Dead cat bounce today?


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> 1. Use the cash portion of your fixed income to purchase stocks.
> 
> 2. Book loses and re-purchase similar securities. They're money in the bank.
> 
> ...


Not taking advantage, just trying to limit losses.

- No cash in fixed income, but when something matures, I have been holding the cash in HISAs (that has done a lot better than equities!) I put some into split pfds - they have not been affected too much and pay about 5%. 
- Not many losses to book. Most have been held for long enough that they are still green. The few in red are small losses, so not much to gain there.
- Re-align asset allocation? You mean go to 100-age? Or whatever the 'new' ratio is for an 80 year old? Either way, I would have to sell *equity* to get to those ratios! The market is doing that for us!

As in 2008, we are sitting this out. In time, I will start to use the HISA cash. But we are nowhere near that yet.

Back to suggestion 2. Just looked at my portfolio. I have a loss of $5k on BMO . So how would selling that and buying another similar stock (another bank?) help in any way? Both should recover equally when recovery comes.


----------



## PabloPenguino (Dec 10, 2019)

cainvest said:


> Dead cat bounce today?


Maybe. I think there's more turbulence to come. The spread of the virus in the US is still relatively early and from the sounds of things, their processes for testing are deficient to say the least. If people are getting sick and everything continues to shut down, it won't matter how much the Fed sinks into the financial markets. It is the mainstreet economy that will really feel this, so I am surprised (maybe not really) that the fiscal stimulus isn't directed toward small businesses instead of the financial markets.

It will be nice to see things recover a bit today, but I'm expecting more news will develop over the weekend that will set things up for another choppy week.


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> Back to suggestion 2. Just looked at my portfolio. I have a loss of $5k on BMO . So how would selling that and buying another similar stock (another bank?) help in any way? Both should recover equally when recovery comes.


If you show a $5K loss on BMO and sold it on the market at a loss, you now have booked that loss to be used against a capital gain. After selling BMO, use the proceeds to purchase a different bank (not BMO, or the superficial loss rule comes into effect). You've now lowered your cost base and have a loss that you can use any time in the future to eliminate capital gains.

If you don't use the booked loss in the present year, you can carry it forward indefinitely to be used against any gains you might have in the future.

ltr


----------



## cainvest (May 1, 2013)

PabloPenguino said:


> It will be nice to see things recover a bit today, but I'm expecting more news will develop over the weekend that will set things up for another choppy week.


Yup, already starting to see red again today so that rally was short lived.


----------



## twowheeled (Jan 15, 2011)

PabloPenguino said:


> Maybe. I think there's more turbulence to come. The spread of the virus in the US is still relatively early and from the sounds of things, their processes for testing are deficient to say the least. If people are getting sick and everything continues to shut down, it won't matter how much the Fed sinks into the financial markets. It is the mainstreet economy that will really feel this, so I am surprised (maybe not really) that the fiscal stimulus isn't directed toward small businesses instead of the financial markets.
> 
> It will be nice to see things recover a bit today, but I'm expecting more news will develop over the weekend that will set things up for another choppy week.


not a time to buy the dip. I don't think stimulus can overcome panic. People lose all sense of logic as we have seen in the toilet paper lineups. What happens if your friends, coworkers, people at church get it? 

Not to spread fear but with exponential growth that's just how it plays out. The rate at which this doubles is roughly 5 days. So if on day 100, 100% of the population is sick, at day 90 only 25% were sick, etc. (oversimplified model yes I know)


----------



## GGuy (Mar 21, 2018)

twowheeled said:


> ridiculous, price doesn't matter at all to you? You'll happily collect a 4% dividend while the underlying shares depreciate 40%?


Of course price matters to me. That's why I'm going to buy at some point and take advantage of these prices. And if you think the banks, BCE and Telus will be down 40% from these current levels in 1,2,5,10 years time then we have a strong difference of opinion. 

But good luck to you. And what are you buying?


----------



## PabloPenguino (Dec 10, 2019)

twowheeled said:


> not a time to buy the dip.


Agreed. I'm not sure I would really call this a "dip" even. That would imply that the market is headed for an immediate recovery, which I am not sure is the case.


----------



## twowheeled (Jan 15, 2011)

GGuy said:


> Of course price matters to me. That's why I'm going to buy at some point and take advantage of these prices. And if you think the banks, BCE and Telus will be down 40% from these current levels in 1,2,5,10 years time then we have a strong difference of opinion.
> 
> But good luck to you. And what are you buying?


that's definitely what a see, a lack of growth opportunity in the Canadian economy. In 2017 I sold all Canadian stocks and moved 95% of my net worth out of CAD into gold, USD and equities and uranium. I think the CAD has a lot further to fall when our real estate bubble pops. Mainly I just don't understand the slant towards home country bias, we're a developed nation that's focused its attention squarely on environmental and indigenous issues. While being resource rich, projects can't get permitted and approved. What is there to be bullish about? Where is GDP growth going to come from, infinite Chinese capital trickling into our real estate market? Oligopolies continuing to fleece Canadians with no other options?


----------



## GGuy (Mar 21, 2018)

twowheeled said:


> that's definitely what a see, a lack of growth opportunity in the Canadian economy. In 2017 I sold all Canadian stocks and moved 95% of my net worth out of CAD into gold, USD and equities and uranium. I think the CAD has a lot further to fall when our real estate bubble pops. Mainly I just don't understand the slant towards home country bias, we're a developed nation that's focused its attention squarely on environmental and indigenous issues. While being resource rich, projects can't get permitted and approved. What is there to be bullish about? Where is GDP growth going to come from, infinite Chinese capital trickling into our real estate market? Oligopolies continuing to fleece Canadians with no other options?


Agree with some of this. Very frustrating seeing the Trudeau government over-rotating on environmental issues crippling projects (Pipelines) not getting approved to the determent of Western Canada. I'm sure there's a separate thread for this discussion somewhere.

I think as Canadians we have a natural bias to investing in our home country because it's what we know and the truth is that the Canadian Banks, BCE and Telus are solid blue chip companies that most Canadians are comfortable with as long term holds. You can find higher growth opportunities elsewhere but I consider my Canadian banks low risk with consistent yields albeit slower growth. 

Your tolerance for risk looks to be much higher with 95% of your net worth into gold, USD and equities and uranium. I don't own much gold and I don't want anything to do with Uranium. But US equities have performed well for me as well.

Now maybe we'll go into a prolonged recession, the real estate bubble will blow, the banks will drop another 40%, cut their dividends for the first time and we'll all wish we had bought Uranium and Gold or at least Apple and Microsoft (and toilet paper).


----------



## MrMatt (Dec 21, 2011)

GGuy said:


> Now maybe we'll go into a prolonged recession, the real estate bubble will blow, the banks will drop another 40%, cut their dividends for the first time and we'll all wish we had bought Uranium and Gold or at least Apple and Microsoft (and toilet paper).


MSFT is next on my list. They are doing great things with the cloud. 
Already have amzn, goog, aapl, baba.


----------



## cainvest (May 1, 2013)

MrMatt said:


> MSFT is next on my list. They are doing great things with the cloud.
> Already have amzn, goog, aapl, baba.


Keep an eye on the pentagon deal, might swing MSFT and/or Amazon prices.


----------



## cainvest (May 1, 2013)

Looks like we've gained a little bit of stability today, probably short lived but better than continuous panic I think.


----------



## Dilbert (Nov 20, 2016)

BOC just cut the rate again.


----------



## GGuy (Mar 21, 2018)

MrMatt said:


> MSFT is next on my list. They are doing great things with the cloud.
> Already have amzn, goog, aapl, baba.


MSFT is on my list as well. I sold it years ago taking profit and have been kicking myself since. This drop is a chance to get back in.
Will also be adding to AAPL and Verizon. I have enough google. AMZN and BABA are on my watch list. 

Not that concerned about timing the bottom. I'd rather be late and get in when markets are more stable. Whenever that is...


----------



## fstamand (Mar 24, 2015)

Is this it ?


----------



## nobleea (Oct 11, 2013)

fstamand said:


> Is this it ?


No way. I think there's a few more disastrous trading days coming up in the next week or two.
I wouldn't expect any stability until at least mid April.


----------



## fstamand (Mar 24, 2015)

I sold yesterdays stink bids and starting to regret lol


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> agent99 said:
> 
> 
> > Back to suggestion 2. Just looked at my portfolio. I have a loss of $5k on BMO . So how would selling that and buying another similar stock (another bank?) help in any way? Both should recover equally when recovery comes.
> ...


Ok, so only do this is for possible tax reductions. 

I think I might rather sell something I want to get rid of, like my remaining IPL and then use the proceeds to buy a bank or utility. Even if taxes dont dictate this.


----------



## like_to_retire (Oct 9, 2016)

agent99 said:


> Ok, so only do this is for possible tax reductions.
> 
> I think I might rather sell something I want to get rid of, like my remaining IPL and then use the proceeds to buy a bank or utility. Even if taxes don't dictate this.


Well sure, but it's always smart to examine unexpected losses during times like this. This is especially true for securities that have fairly strong equivalents such as in preferred shares which I remember that you seem to like. You can replace a pref share with a close equivalent and still claim the loss.

If you have a $5000 loss, then you can claim half that in net losses of $2500. If you are in a marginal bracket of 40%, then that loss is worth $1000 cash in your pocket. Why leave that on the table? And remember the nice Liberal government is batting around changing the 50% capital gains tax deduction to perhaps 75%. It's a good time to take advantage before that happens.

ltr


----------



## agent99 (Sep 11, 2013)

like_to_retire said:


> If you have a $5000 loss, then you can claim half that in net losses of $2500. If you are in a marginal bracket of 40%, then that loss is worth $1000 cash in your pocket. Why leave that on the table? A


Sure, I could sell off my BMO and get a $5000 capital loss. But that on it's own doesn't put $1000 in my pocket. Besides, I want to keep BMO! I do understand how swapping for another bank might give me a small tax saving eventually. But I have to sell something at a profit first. I am sure I read this somewhere, maybe here  _“Don't let the tax tail wag the investment dog”
_
By the way, other than split preferreds, preferreds are not a class that I like or even follow. I have one rate reset and two perpetuals, one of which is about to be called. It is true that I could swap the split pfds, and that might be an idea. But, I will have to research alternatives to the ones I own. I will get onto it - once weather here deteriorates. Otherwise playing golf and biking keeps me busy


----------



## privateEquityExec (Mar 15, 2020)

My plan is to simply average buy for the next several years. I think the market will slowly dip little by little for a while to come.


----------



## Eder (Feb 16, 2011)

*Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program*

https://www.cnbc.com/2020/03/15/fed...-700-billion-quantitative-easing-program.html

The Fed also cut reserve requirement ratios for thousands of banks to zero. In addition, in a global coordinated move by centrals banks, the Fed said the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank took action to enhance dollar liquidity around the world through existing dollar swap arrangements.

Wow!!! Canada will need to cut rates again it looks like.


----------



## doctrine (Sep 30, 2011)

Tomorrow is going to be a wild day. If markets stay above Thursday lows that is a positive. There is a good chance that it will be ugly though.


----------



## jargey3000 (Jan 25, 2011)

...place yer bets!


----------



## twowheeled (Jan 15, 2011)

https://www.cnn.com/2020/03/15/investing/stock-futures-global/index.html

US stock futures limit down, can someone explain the circuit breaker to me in layman's terms? Does this imply that the open tomorrow will be close to or lower than the price where the limit was triggered? If the market opens and gaps down to the 1st breaker, what does that mean for market orders placed prior to open?

Edit: google had the answer
"Circuit breaker" kicks in on US equity futures when E-mini futures fall 5%.

ES is S&P500 futures. 
Limit down means the contract is not allowed to move down more than 5% in overnight 
that is, there can be no trades lower until 9:30 am NY time
trade above the lower limit is permitted
that is price can trade up, just not any further down

---
So, in summary:
5% up-and-down limits
effective 5:00 p.m. - 8:30 am CT, Sundays through Fridays


----------



## fstamand (Mar 24, 2015)

dow futures quad digits in the red atm.


----------



## MrMatt (Dec 21, 2011)

jargey3000 said:


> ...place yer bets!


100 Dogecoin that the NYSE hits the 3rd breaker and shuts down for the day.


----------



## fstamand (Mar 24, 2015)

And.... Pre market halted for the night after it hit the "breaker"


----------



## sags (May 15, 2010)

The US government is all in now. Corporate debt of $12 Trillion dollars with much of it owed to high risk non bank lenders and this is what happens in a crisis.

It seems investors think the US government has fired their last bullet and there are still waves of the enemy coming over the hill.


----------



## doctrine (Sep 30, 2011)

There are more bullets. US Fed hasn't even started buying equities yet, unlike ECB and Japan. And rates can definitely go negative. On the other hand, the yield curve is steeper than it has been in a while.


----------



## robfordlives (Sep 18, 2014)

Seeing many reports on twitter of people going to banks and no cash available. Banks now suspending buybacks. Hmmmm


----------



## andrewf (Mar 1, 2010)

robfordlives said:


> Seeing many reports on twitter of people going to banks and no cash available. Banks now suspending buybacks. Hmmmm


Like, ABMs out of cash? Possible, but you don't need cash. The banks are liquid (this is not a financial crisis) and the governments will provide all required additional liquidity to keep things going. No need to run on the banks--our plastic bills make lousy toilet paper.


----------



## humble_pie (Jun 7, 2009)

dow futures down -1040

futures markets suspend/freeze trading after US fed reportedly cuts rates to zero


----------



## cainvest (May 1, 2013)

andrewf said:


> No need to run on the banks--our plastic bills make lousy toilet paper.


They should have kept all the old Canadian dollar bills, could have been repurposed ... but I guess they're not environment friendly either.


----------



## gardner (Feb 13, 2014)

The ASX200 is down about 7% right now. We are in for a rough day.


----------



## humble_pie (Jun 7, 2009)

we should stop dithering w overnight futures between this thread & a new one recently opened under Finance Talk

imho best to stick to this thread

australia & NZ down 7% but at this hour - 11:15 pm sunday night - london futures are notsobad, only off -2%

https://ca.investing.com/indices/uk-100-futures


----------



## doctrine (Sep 30, 2011)

The real key is will markets dip below Thursday or is that the low. If they stay above then at least that is one positive sign and a place where you can measure if this is getting worse or better.


----------



## robfordlives (Sep 18, 2014)

doctrine said:


> The real key is will markets dip below Thursday or is that the low. If they stay above then at least that is one positive sign and a place where you can measure if this is getting worse or better.


There is no way thursday low priced in a full lockdown in the US. Will it happen? I can't see how it's avoided. Hearing from multiple credible sources that Canada will announce a lockdown within two days


----------



## hfp75 (Mar 15, 2018)

robfordlives said:


> There is no way thursday low priced in a full lockdown in the US. Will it happen? I can't see how it's avoided. Hearing from multiple credible sources that Canada will announce a lockdown within two days



I think Canada is making an announcement tomorrow (Monday). Hope travellers out of the country can get back in time !


----------



## doctrine (Sep 30, 2011)

robfordlives said:


> There is no way thursday low priced in a full lockdown in the US. Will it happen? I can't see how it's avoided. Hearing from multiple credible sources that Canada will announce a lockdown within two days


It's been obvious it has been heading that way for at least a week. Both Canada and US are heading for a lockdown equal to or greater than Italy. 

I don't see a real lockdown for maybe another week. A real lockdown being defined as restriction of movement to within cities and towns and everything shut down except groceries. No travel in and out of Los Angeles and New York and Chicago. That's coming though. Maybe next weekend in the US. In two weeks for Canada.


----------



## andrewf (Mar 1, 2010)

doctrine said:


> It's been obvious it has been heading that way for at least a week. Both Canada and US are heading for a lockdown equal to or greater than Italy.
> 
> I don't see a real lockdown for maybe another week. A real lockdown being defined as restriction of movement to within cities and towns and everything shut down except groceries. No travel in and out of Los Angeles and New York and Chicago. That's coming though. Maybe next weekend in the US. In two weeks for Canada.


I don't think last week's correction priced it in though. I think people were still overly optimistic about containment (and what would be needed to achieve it). But last week was kind of an unprecedented week of volatility,


----------



## cainvest (May 1, 2013)

This thread has really gone to gloom and doom ... think I'll have my finger on the sell button this morning when the market opens. 

Of course I won't press it though


----------



## doctrine (Sep 30, 2011)

andrewf said:


> I don't think last week's correction priced it in though. I think people were still overly optimistic about containment (and what would be needed to achieve it). But last week was kind of an unprecedented week of volatility,


Yeah, perhaps. Thursday was definitely clearing day. I was busy at work or I probably would have deployed some cash for sure. Maybe on the next panic day. I feel that will be "shutdown" day, as it can't get much worse after that, unless there is "flare up" day two months later when the lockdown ends.


----------



## :) lonewolf (Feb 9, 2020)

Did Goldman paint the tape?

Their projection number was hit spot on Thursday. Then cause a strong short covering rally into the close on Friday since who wants to be short going into the weekend with the uncertainty? Gap the market down hard on Mondays open with almost no shorts.


----------



## MrMatt (Dec 21, 2011)

andrewf said:


> Like, ABMs out of cash? Possible, but you don't need cash. The banks are liquid (this is not a financial crisis) and the governments will provide all required additional liquidity to keep things going. No need to run on the banks--our plastic bills make lousy toilet paper.


There is all the money we need, the government will print as much as required. 
I'm expecting they'll have a cash handout as this continues. 

Paper money, some stores are refusing physical cash.


----------



## andrewf (Mar 1, 2010)

MrMatt said:


> There is all the money we need, the government will print as much as required.
> I'm expecting they'll have a cash handout as this continues.
> 
> Paper money, some stores are refusing physical cash.


I think it's a good idea to use cash handouts to create additional liquidity. This is a mistake we made in 2008. It is more equitable to give every Canadian X dollars (aka Helicopter Money) than pressing the yield curve down or propping up equities. The problem was that velocity of money was dropping. Giving rich people money doesn't help when they are hiding under their beds. Giving a little bit of money to the low and middle income hordes ensures it is spent, propping up demand and reducing defaults.


----------



## OptsyEagle (Nov 29, 2009)

andrewf said:


> I think it's a good idea to use cash handouts to create additional liquidity. This is a mistake we made in 2008. It is more equitable to give every Canadian X dollars (aka Helicopter Money) than pressing the yield curve down or propping up equities. The problem was that velocity of money was dropping. Giving rich people money doesn't help when they are hiding under their beds. Giving a little bit of money to the low and middle income hordes ensures it is spent, propping up demand and reducing defaults.


This is a different problem. We actually do not want anyone in the shopping malls, or electronics stores. Giving money away "right now" would be ill advised.


----------



## OptsyEagle (Nov 29, 2009)

Calm down people. You are mistaking the fix for the problem. Right now you are observing everyone focusing on the problem at hand. Less then a week ago, probably 2/3rds of our population had no idea the threat we were actually facing. When the population ignores it, the press pretty much ignore it and of course the democratic governments also ignore it. That was the problem, not this mindless pathetic virus. As you should be observing now is, that is not the case anymore. There is no other news then Virus. Everyone is talking virus. That problem of ignorance, which was our biggest problem, has finally been resolved.

Right now it appears we are in panic mode but what you are actually seeing/hearing is a VERY LOUD "all hands on deck" alarm. Everyone now is finally focused on the problem. We will get through this. We will lose some great people, sure, but the majority will live on. Your children will live on. As long as we live on, the stock will live on.

Just relax. Work the problem. This is a mindless, weak and incredibly stupid virus that if we just focus, it will kill itself. This is not rocket science. The world will be OK and back to normal by 2021. It is just this "all hands on deck" alarm that is scaring us. We can handle this. We are now focus. This virus chose the wrong species to pick a fight with.


----------



## newfoundlander61 (Feb 6, 2011)

Having sold any holdings, this is good test for long term investors to stick to the game plan.


----------



## sags (May 15, 2010)

The government can spread cash around so people can pay their rent and other bills, or they can pass legislation that freezes all debt payments until further notice.

So if you are a landlord....you may not get the rent and won't be able to evict the tenant. If you are the cable company you won't be able to collect or cut off services.

The choice is that the government pays or the pain is shared by business and debt holders, who would themselves struggle financially.

It is not a great choice, but one that will have to be made. Since we don't know how long the virus will continue to spread, I think the government should start with giving out cash.

If the virus persists for a long time, the government may have to institute some kind of temporary debt forgiveness program.


----------



## :) lonewolf (Feb 9, 2020)

MrMatt said:


> There is all the money we need, the government will print as much as required.
> I'm expecting they'll have a cash handout as this continues.
> 
> Paper money, some stores are refusing physical cash.


 It is good to always have some cash on hand incase of a banking freeze. Some junk silver coins for barter might come in handy also. Near the 08 low will be looking to load up with silver & gold.


----------



## :) lonewolf (Feb 9, 2020)

Saw the dia down 11% this morning. The bulls can not have all the fun


----------



## MrMatt (Dec 21, 2011)

There are still a lot of people who think it is no big deal and that everyone is overreacting.
I think the government should take adequate steps so nobody ends up homeless or starving, then we should all just sit at home, Netflix and chill. 

I think we'll see waves of panic, but it looks like the weekend rush ended nicely. 
Well see more, particularly if there are supply disruptions anywhere. 

The Alberta school closings were a shock, but many areas will end up doing the same. 

Asking what to expect, how long has the Wuhan quarantine been going on for?


----------



## sags (May 15, 2010)

_then we should all just sit at home, Netflix and chill. _

Perhaps the wisest statement in the thread, but unlikely when 50% of Republican supporters think the virus is a hoax to impeach Trump.

Watch Fox News. They are mocking and making jokes about the virus.


----------



## andrewf (Mar 1, 2010)

OptsyEagle said:


> This is a different problem. We actually do not want anyone in the shopping malls, or electronics stores. Giving money away "right now" would be ill advised.


People have bills, and many poorer people are going to be facing lost wages as most places of business shut down. I think not using helicopter money will cause some panic, cause people to go to work sick, and lead to knock-on issues if people stop paying bills/rent. Most people live paycheque to paycheque. This was a disaster that people were not counting on.


----------



## :) lonewolf (Feb 9, 2020)

sags said:


> _then we should all just sit at home, Netflix and chill. _
> 
> Perhaps the wisest statement in the thread, but unlikely when 50% of Republican supporters think the virus is a hoax to impeach Trump.
> 
> Watch Fox News. They are mocking and making jokes about the virus.


 You can only cry wolf so many times without there being a real wolf. When there is a real wolf no one believes there is a real wolf when you call wolf. The Dems backed by the globilists have tried everything they can to get rid of Trump


----------



## OptsyEagle (Nov 29, 2009)

andrewf said:


> People have bills, and many poorer people are going to be facing lost wages as most places of business shut down. I think not using helicopter money will cause some panic, cause people to go to work sick, and lead to knock-on issues if people stop paying bills/rent. Most people live paycheque to paycheque. This was a disaster that people were not counting on.


Wasn't EI supposed to deal with that problem. Helicopter money to some Canadians would be like dropping heroin to drug addicts. They would go to the mall way, way, earlier then the prevailing risk level would warrant. Eventually we want them in the mall, just not now.

No that is not a good idea. By the way, our government is probably going to have to fund EI. Probably bail out our banks. Probably bail out other businesses. Pay for a gigantic stimulus package when this virus runs its course. All while running huge current budget deficits when at the exact same time their tax revenues will be dropping like a lead balloon. Can you even imagine the budget deficit we are looking at for 2020 and probably 5 years after that?

While all that is happening we are now suggesting throwing cash out a helicopter type strategy. Come on people. How long do you think the investors with all that money are going to keep funding that type of behavior, when the bonds they are offering are only providing 0.80%?


----------



## andrewf (Mar 1, 2010)

OptsyEagle said:


> Wasn't EI supposed to deal with that problem. Helicopter money to some Canadians would be like dropping heroin to drug addicts. They would go to the mall way, way, earlier then the prevailing risk level would warrant. Eventually we want them in the mall, just not now.
> 
> No that is not a good idea. By the way, our government is probably going to have to fund EI. Probably bail out our banks. Probably bail out other businesses. Pay for a gigantic stimulus package when this virus runs its course. All while running huge current budget deficits when at the exact same time their tax revenues will be dropping like a lead balloon. Can you even imagine the budget deficit we are looking at for 2020 and probably 5 years after that?
> 
> While all that is happening we are now suggesting throwing cash out a helicopter type strategy. Come on people. How long do you think the investors with all that money are going to keep funding that type of behavior, when the bonds they are offering are only providing 0.80%?


The malls are going to be closed shortly.

Helicopter money doesn't need to be funded by the government. It could be done through QE (ie, dollars from BoC).


----------



## MrMatt (Dec 21, 2011)

andrewf said:


> OptsyEagle said:
> 
> 
> > Wasn't EI supposed to deal with that problem. Helicopter money to some Canadians would be like dropping heroin to drug addicts. They would go to the mall way, way, earlier then the prevailing risk level would warrant. Eventually we want them in the mall, just not now.
> ...


The thing is the low income at risk people need the help the most. 
I think encouragement to allow deferred debt payments is good,but you need a clear definition of what "debt" is. 

I think UBI is a bad idea, because it will encourage people to sit at home on their couch and watch Netflix instead of going to work. 
Since that is the desired outcome, a temporary UBI is likely a good idea.
Bad in general, but UBI might be the right solution for now.


----------



## GGuy (Mar 21, 2018)

newfoundlander61 said:


> Having sold any holdings, this is good test for long term investors to stick to the game plan.


Did you mean sold or not sold? 

I'm still torn. Buy the dip (prices keep getting better) or sell some to avoid even more loss or just hold and not look at markets for 6 months. 

Unfortunately I think it's going to get worse.


----------



## gardner (Feb 13, 2014)

GGuy said:


> just hold and not look at markets for 6 months.


This is kind of what I am leaning towards. I still have a stack of cash that I was putting into dividend stocks over the coming year or so. I will slow right down now and sit on the cash until the dust settles, I think. When the recovery comes, it will not be anywhere near as fast as it's been going down.


----------



## GGuy (Mar 21, 2018)

gardner said:


> This is kind of what I am leaning towards. I still have a stack of cash that I was putting into dividend stocks over the coming year or so. I will slow right down now and sit on the cash until the dust settles, I think. When the recovery comes, it will not be anywhere near as fast as it's been going down.


Sounds like we are in a similar position. 

I agree the recovery won't be the "V" some are talking about considering the fallout won't be felt for a few quarters at least. So buying can wait.

I think the bottom is at least weeks away but how much lower... Going back to sleep.


----------



## OptsyEagle (Nov 29, 2009)

gardner said:


> When the recovery comes, it will not be anywhere near as fast as it's been going down.


There is a lot of wishful thinking in that. 

Take a close look at other rebounds, from large downswings, in the past. I mean a really close look and remember that as they went up 10%, it was called a technical rebound. Up 20% bargain hunters trap. This can go on for many 10% up moves before someone starts to think that things are getting better. Then investors will say, I should have got in earlier, but when it pulls back a little, which it should, I am going to start to redeploy my cash. Guess what happens. It does not pull back. You know why. Because you are not alone. Everyone with the same misconceptions are trying to get back in.

Anyway, the market always bottoms at a point where most participants, looking at the current state of the problem at hand, are absolutely sure it is going to go down more. Why else would it be so low. The start market rises, from these bottoms, on a real wall of worry. I mean REAL wall of worry.

I have been through these many times and I can absolutely assure you that the bottom is never obvious to many people. I can also assure you that investors do not see better times ahead and then start buying and driving up the stock market. Most investors see the stock market going up AND THEN determine that we will have better times ahead.

So with that said. Good luck.


----------



## Rusty O'Toole (Feb 1, 2012)

OptsyEagle said:


> There is a lot of wishful thinking in that.
> 
> Take a close look at other rebounds, from large downswings, in the past. I mean a really close look and remember that as they went up 10%, it was called a technical rebound. Up 20% bargain hunters trap. This can go on for many 10% up moves before someone starts to think that things are getting better. Then investors will say, I should have got in earlier, but when it pulls back a little, which it should, I am going to start to redeploy my cash. Guess what happens. It does not pull back. You know why. Because you are not alone. Everyone with the same misconceptions are trying to get back in.
> 
> ...


This may be the wisest thing I have read all day.


----------



## GGuy (Mar 21, 2018)

OptsyEagle said:


> There is a lot of wishful thinking in that.
> 
> Take a close look at other rebounds, from large downswings, in the past. I mean a really close look and remember that as they went up 10%, it was called a technical rebound. Up 20% bargain hunters trap. This can go on for many 10% up moves before someone starts to think that things are getting better. Then investors will say, I should have got in earlier, but when it pulls back a little, which it should, I am going to start to redeploy my cash. Guess what happens. It does not pull back. You know why. Because you are not alone. Everyone with the same misconceptions are trying to get back in.
> 
> ...


Nice to read a perspective from a savy (I won't say old) investor. 

The bottom won't be obvious for sure but considering we are still at the LHS low end of the bell curve for cases and deaths I think that the bad news will continue to significantly out-weigh the good for a number of weeks. And that will continue to fuel the hysteria that is driving these 10% down days. IMHO.


----------



## Rusty O'Toole (Feb 1, 2012)

There is another angle on this I have not seen mentioned, and that is the trend of the last 10 years for companies to buy back their own stock using borrowed money. This seemed like a clever idea at the time, with interest rates so low the money was practically free. But it means a lot of companies have a lot of debt they may not be able to service if times are hard.

Suppose for example, you have a company that makes good profits, that is worth $100 a share or $100 million on paper. But they have $75 million in debt. No problem there is $25 million in equity. Now suppose business dries up, the stock drops to $50 and they still have $75 million in debt. Now they are unable to service the debt and have negative equity in other words they are bankrupt. I think there are a lot of companies in this situation, or soon will be. Then what happens?


----------



## redsgomarching (Mar 6, 2016)

Rusty O'Toole said:


> There is another angle on this I have not seen mentioned, and that is the trend of the last 10 years for companies to buy back their own stock using borrowed money. This seemed like a clever idea at the time, with interest rates so low the money was practically free. But it means a lot of companies have a lot of debt they may not be able to service if times are hard.
> 
> Suppose for example, you have a company that makes good profits, that is worth $100 a share or $100 million on paper. But they have $75 million in debt. No problem there is $25 million in equity. Now suppose business dries up, the stock drops to $50 and they still have $75 million in debt. Now they are unable to service the debt and have negative equity in other words they are bankrupt. I think there are a lot of companies in this situation, or soon will be. Then what happens?


I asked a friend in finance about this. This is why the US lowered rates to 0 so such companies can essentially refinance at 0 and continue.


----------



## sags (May 15, 2010)

No revenue = no profits = no debt payments.

This virus will continue for another 18 months unless researchers can find a cure. I would hold off buying stocks until a cure or vaccine is produced.

The government will issue cash for awhile, then there will be a forced debt jubilee. It is the only way a capitalist system can reset when it is so broken.


----------



## OptsyEagle (Nov 29, 2009)

Rusty O'Toole said:


> There is another angle on this I have not seen mentioned, and that is the trend of the last 10 years for companies to buy back their own stock using borrowed money. This seemed like a clever idea at the time, with interest rates so low the money was practically free. But it means a lot of companies have a lot of debt they may not be able to service if times are hard.
> 
> Suppose for example, you have a company that makes good profits, that is worth $100 a share or $100 million on paper. But they have $75 million in debt. No problem there is $25 million in equity. Now suppose business dries up, the stock drops to $50 and they still have $75 million in debt. Now they are unable to service the debt and have negative equity in other words they are bankrupt. I think there are a lot of companies in this situation, or soon will be. Then what happens?


That is a great theory but very few ever do this. Most company buybacks are not a great idea because history shows that companies tend to only do it when things are going really well for them. That may sound good but we all know that when things are going really well, their share prices are at the highest. Managements don't really care because they are using shareholder money to overpay for their stock and it is better then a dividend, for them, when you consider they usually own options which don't receive dividends, but do benefit if the buyback somehow works out well...which quite a few times overpaying for stock does not. For some reason however, shareholders seem to applaud it. Another mystery of the mind. I only applaud the successful ones.

That said, you will definitely see a lot of future news releases increases a companies ability to buyback shares but you will rarely see many companies actually doing it, at times like these. They will wait until the share prices are much higher.


----------



## londoncalling (Sep 17, 2011)

I flew back from the US on Friday and as a result I am self isolating. I thought I would have some time to watch the markets but aside from 30 secs shortly after the market opened I didn't get a chance. May be a good thing as I likely would have put in a bid. I find it interesting that there have been posts at FWF today on purchases made while there has been very little here at CMF. Only thing I saw so far was Alta's swap of IPL for PPL.

https://www.canadianmoneyforum.com/showthread.php/6784-Inter-Pipeline-Fund-(IPL-UN)/page60


----------



## Eder (Feb 16, 2011)

I'm thinking we will have time to add to positions in the coming months....when markets fluctuate 10-12% as a matter of course it becomes no market for old men.Once we get to boring 3% moves might be a better spot no?


----------



## cainvest (May 1, 2013)

londoncalling said:


> I find it interesting that there have been posts at FWF today on purchases made while there has been very little here at CMF. Only thing I saw so far was Alta's swap of IPL for PPL.


Many stocks were cheaper last week, could be some bought then instead of today and others are waiting for deeper discounts.


----------



## gardner (Feb 13, 2014)

The ASX was up 5.8% today. Maybe we will get some relief.


----------



## feetfats (Jan 3, 2013)

Double Post


----------



## feetfats (Jan 3, 2013)

Which Canadian food companies are on a hiring spree right now? I want to know. Some players are probably renting warehouses for pennies and filling them with food. Only an idiot wouldn't fill their warehouses with inventory before their workers get sick.


----------



## MrMatt (Dec 21, 2011)

Nobody is hiring. At best they are running overtime, like the tp producers have been since February.

Plus this is just a pull forward of demand, in a few months people will deplete their stockpiles.


----------



## feetfats (Jan 3, 2013)

MrMatt said:


> Nobody is hiring. At best they are running overtime, like the tp producers have been since February.
> 
> Plus this is just a pull forward of demand, in a few months people will deplete their stockpiles.


Thank you Matt, my concern is that they are wrong. Workers will get sick and production will slow just like China. When food production is not ramped up right before a labor shortage we could be in big trouble as a country.


----------



## OptsyEagle (Nov 29, 2009)

Watching ticker tapes is a little mesmerizing these days. It's like watching a camp fire.

It is always fun when you see a stock go by that you sold a couple months ago and you kind of give yourself a high five and pat yourself on the back for such a brilliant and financially successful move. That stock has literally tanked. But while you are are basking in the joy of it all, along comes another stock on the tape. You soon realize that it is the stock where you invested all that money you received from the sale of the other stock. 

When you see what has now happened to that stock, it really wrecks the moment, you know what I mean?


----------



## :) lonewolf (Feb 9, 2020)

MrMatt said:


> Nobody is hiring. At best they are running overtime, like the tp producers have been since February.
> 
> Plus this is just a pull forward of demand, in a few months people will deplete their stockpiles.


Just read headline Amazon is hiring 100,000. (People scared to go to stores)


----------



## MrMatt (Dec 21, 2011)

feetfats said:


> MrMatt said:
> 
> 
> > Nobody is hiring. At best they are running overtime, like the tp producers have been since February.
> ...


Food companies already have rigid contamination procedures, i think high levels of absenteeism could be an issue, but there is a huge pool of recently unemployed to help out.


----------



## nobleea (Oct 11, 2013)

Despite what happened today on the markets, I still think we have some drops heading our way the rest of the week.


----------



## OptsyEagle (Nov 29, 2009)

The other thing we haven't seen yet are the "black swan" events that tend to follow these types of events. What I mean is that the stock market investors are currently looking at this virus and the response and the effect it will have on the economy. Although it is still early and difficult to calculate, I think the stock market has done a pretty good job of discounting a lot of the obvious economic events. We could argue about exact amounts but at least it went in the proper direction we would expect.

What is still waiting to show its ugly head are the "black swan" events. For instance in the credit crises we saw Lehman Brothers go down and it created a cascading event as we started to think about what it meant. At that time, however, we had no idea that 30 people working in London, England for AIG Insurance, were leveraging credit default swaps in the multi $Trillion dollar amounts and were about to be the next huge problem. That is a "black swan" event, if people are not familiar with the term. 

So that said, I have to assume that if this virus gets annihilated by Christmas, as I think it might, there must be one or two or more black swan events just waiting to show its ugly head, that none of us could possibly predict. As Warren Buffet likes to say, it is when the tide rolls out that you get to see who has been swimming without a bathing suit.

That said, I am sure we have at least a few more interesting days ahead of us, on top of the stuff we already are preparing for. That seems to be how it always seems to happen in the past.


----------



## GGuy (Mar 21, 2018)

nobleea said:


> Despite what happened today on the markets, I still think we have some drops heading our way the rest of the week.


I don't think so.

I think the drops will continue for rest of the month. At least.


----------



## milhouse (Nov 16, 2016)

Yeah, Canadian and US markets are going to continue to be susceptible to drops with all the uncertainty. It's not going to stabilize until we're on the downslope in number of cases and some of the economic numbers come out to give a better feel of what the damage is looking like.


----------



## OptsyEagle (Nov 29, 2009)

A reasonable rule of thumb to invest by is that you can expect the stock market to drop more if the news coming out is "worse then expected" 

The point to keep in mind is the above is not the same thing as "worse then now".

Always keep that in mind. The stock market will begin its assent when the news is about as bad as it can be. I agree, I am not sure we are there yet but when we are there I am absolutely sure, I will not think we are. I hope that helps. lol


----------



## andrewf (Mar 1, 2010)

:) lonewolf said:


> Just read headline Amazon is hiring 100,000. (People scared to go to stores)


Amazon is also stopping the fulfillment of non-essential third party (FBA) orders.


----------



## MrMatt (Dec 21, 2011)

andrewf said:


> Amazon is also stopping the fulfillment of non-essential third party (FBA) orders.


I think companies are being responsible.
1. It's the right thing to do, considering the circumstances it's going to be bad, say COVID-19, and you'll be excused.
2. Getting blamed as responsible for deaths is bad for business.
3. Dead customers buy less.
4. The government is making a lot of noise that they'll help keep businesses and individuals from collapsing due to this crisis. You better stay on their good side.


----------



## nobleea (Oct 11, 2013)

GGuy said:


> I don't think so.
> 
> I think the drops will continue for rest of the month. At least.


That's what I was suggesting. MArkets went up today, I say it's going to be a very red week, despite what happened today.
The rest of the month as well.

The US has not got the virus even close to in control. There's clearly thousands of unknown cases walking around.


----------



## AltaRed (Jun 8, 2009)

nobleea said:


> That's what I was suggesting. MArkets went up today, I say it's going to be a very red week, despite what happened today.
> The rest of the month as well.
> 
> The US has not got the virus even close to in control. There's clearly thousands of unknown cases walking around.


And tens of thousands yet to come if this scene plays out in many areas around the Gulf Coast https://www.cnn.com/videos/health/2020/03/17/clearwater-beach-spring-break-coronavirus-mxp-vpx.hln


----------



## doctrine (Sep 30, 2011)

I'm anxiously waiting to buy. I have been picking up some things like SU and WEF, but not full positions really. Today new lows were set in Canada and the US, so that means that this is likely to continue. Markets aren't even holding a 5 day moving average, let alone a 10 or 20 day moving average, which are some of the first signs of a bottom. 

I get the feeling once we're all sitting in a mandatory quarantine that we'll be looking at the new normal. Likely cases will drop, but not disappear, and so we'll have some kind of awkward state where you have to be tested to do anything. Everything slows, but maybe stops collapsing.


----------



## gardner (Feb 13, 2014)

doctrine said:


> Markets aren't even holding a 5 day moving average, let alone a 10 or 20 day moving average, which are some of the first signs of a bottom.


Australia is down another 7% today (Wednesday) and I bet the TSX follows suit. I think we are in for a lot more ratcheting down 5%, up 2% with the ultimate bottom not yet in sight. We have a double-whammy of this SARS-2 mess and oil plumbing the deepest basement depths. Oil could get ironed out if the pissing match between Saudi and Russia winds down, but the total uncertainty about even the rough timeline of COVID19 effects, let alone the final outcome for the economy means that it's pure speculation right now. I suspect it will be four more weeks before we even know how many more weeks of lockdown and isolation will be wanted. And we will be lied to or mislead more than once in that time, further exacerbating the uncertainty. The total could easily stretch into July. I think we are in for a rough ride, and when things do settle down, nothing will be the same as it was.


----------



## MrMatt (Dec 21, 2011)

gardner said:


> Australia is down another 7% today (Wednesday) and I bet the TSX follows suit. I think we are in for a lot more ratcheting down 5%, up 2% with the ultimate bottom not yet in sight. We have a double-whammy of this SARS-2 mess and oil plumbing the deepest basement depths. Oil could get ironed out if the pissing match between Saudi and Russia winds down, but the total uncertainty about even the rough timeline of COVID19 effects, let alone the final outcome for the economy means that it's pure speculation right now. I suspect it will be four more weeks before we even know how many more weeks of lockdown and isolation will be wanted. And we will be lied to or mislead more than once in that time, further exacerbating the uncertainty. The total could easily stretch into July. I think we are in for a rough ride, and when things do settle down, nothing will be the same as it was.


The thing is people look at the economy as numbers. We've basically pushed pause, and they're trying to figure out measures to keep essentials running.

All restaurants are closed, employees are out of work, the food supply chains have been disrupted, even advertising spend is going to be cut. Vehicle sales and gas sales will drop. That alone is devastating.
But there is no way out of it, that economic activity is GONE.
We can't stimulate it back, you literally can't pay people enough to go out to a restaurant (and you shouldn't right now)

The numbers look bad economically. But the governments appear to be doing the right steps.
Keep food and essentials flowing, prevent the shutdown from causing a financial calamity for individuals and companies directly.

In a year or two we'll be back to normal economic operation, and who knows how long for the mindset and finances of people to recover.

Really that 10% earnings yield is gone this year, but it will be back in 2 years. Assuming the company doesn't go under, and the government has been very clear they don't want lenders to squeeze borrowers, and we'll be back.

Regarding squeezing borrowers, or consumers in general, the government shouldn't stand for it.
When the banks say contact them if you're under financial pressure, I think they're being somewhat honest.
A real estate crash is entirely possible, if people are at home watching Netflix, eating canned food, they might be ok. You shut off their power and leave them to starve in the dark, you have a problem.

I honestly think a 10-20 even 30% drop for some companies is warranted.
I'm sure some will go under.
I don't think a widespread 50% drop makes sense. 

Cruise lines will have trouble, but Norovirus didn't' stop them, and once this recovers I think people will get back on the boats.
Do you really think the medical companies are going to see significant and sustained revenue drops?
Esports is going to have massive growth, because there are no physical sports for a year. 

There is going to be pain, but we'll come out of this.


----------



## OptsyEagle (Nov 29, 2009)

AltaRed said:


> And tens of thousands yet to come if this scene plays out in many areas around the Gulf Coast https://www.cnn.com/videos/health/2020/03/17/clearwater-beach-spring-break-coronavirus-mxp-vpx.hln


So much for my optimism. Looks like we are all going to die. lol

Seriously though, isn't there a smaller prison cell we could stuff all those criminals into.


----------



## jargey3000 (Jan 25, 2011)

AltaRed said:


> And tens of thousands yet to come if this scene plays out in many areas around the Gulf Coast https://www.cnn.com/videos/health/2020/03/17/clearwater-beach-spring-break-coronavirus-mxp-vpx.hln


...those americans! tsk tsk tsk...


----------



## Money172375 (Jun 29, 2018)

AltaRed said:


> And tens of thousands yet to come if this scene plays out in many areas around the Gulf Coast https://www.cnn.com/videos/health/2020/03/17/clearwater-beach-spring-break-coronavirus-mxp-vpx.hln



I was down there to witness it. Drove through Clearwater. I’ve stated before, there was no sense of urgency on any news outlet. Unless you were tied to Twitter, there was no information to isolate. All the isolation news I was seeing was coming from Canadian news sources and Canadian friends. The joke is that no Floridian is ever in Clearwater. These were all tourists. And how often do people on their vacation regularly check the news? Just another example of how poor communication is in the US.


----------



## Barwelle (Feb 23, 2011)

I've been holding on to what I have and waiting with cash to buy once north american cases start to plateau.

Seeing how seriously the Americans are taking it (with comment above and twitter), and how bungled the CDC is thanks to Trump cuts makes me want to sell some of my VUN. the worst is yet to come.


----------



## Money172375 (Jun 29, 2018)

Predictions on the bottom? I keep stopping myself from buying more Suncor, banks, telcos, pipelines, insurers.. so tempting!

Give me some bottoms to look for......just a game.......appreciate we’re talking about market timing.


----------



## nobleea (Oct 11, 2013)

Money172375 said:


> Predictions on the bottom? I keep stopping myself from buying more Suncor, banks, telcos, pipelines, insurers.. so tempting!
> 
> Give me some bottoms to look for......just a game.......appreciate we’re talking about market timing.


Who knows, at the current rate, could be another 40% down from here. Canada will fare better except for oil stocks, which will be decimated. US is going to be a crap show. If they don't get things sorted out, we're going to have a fresh food issue here in Canada come fall/winter.

I'm not sure the CAD oil industry will be a going concern going forward in 2021 if this continues.


----------



## hfp75 (Mar 15, 2018)

nobleea said:


> I'm not sure the CAD oil industry will be a going concern going forward in 2021 if this continues.


People go after O&G cause there is cash there to try and corner. If O&G prices implode I bet environmentalism wanes too....


----------



## nobleea (Oct 11, 2013)

hfp75 said:


> People go after O&G cause there is cash there to try and corner. If O&G prices implode I bet environmentalism wanes too....


I'm not sure SA and Russia can keep this up til the end of the year. Eventually they will get hit hard with the virus (Russia probably already is), and then they will have to spend heavily at home. However, they may plan on sacrificing some of their population to get rid of the US shale problem.


----------



## MrMatt (Dec 21, 2011)

I don't think we will hit the bottom until, we get a treatment and turn the economy on.
There will be drops at the next panics, which will be a US lockdown, shortages, deaths of celebrities, particularly younger celebrities or and Pro athletes.


----------



## GGuy (Mar 21, 2018)

MrMatt said:


> The thing is people look at the economy as numbers. We've basically pushed pause, and they're trying to figure out measures to keep essentials running.
> 
> All restaurants are closed, employees are out of work, the food supply chains have been disrupted, even advertising spend is going to be cut. Vehicle sales and gas sales will drop. That alone is devastating.
> But there is no way out of it, that economic activity is GONE.
> ...


Most companies are already down 30% or more with no bottom in sight. A widespread 50% drop is not unrealistic by the time we do bottom hopefully sometime in the summer months.

On a more optimistic note, the Conference Board of Canada yesterday published their Spring 2020 report and are not forecasting a technical recession (two consecutive qtrs of negative growth). They do highlight a huge downside risk due to Corona uncertainty. 

https://www.conferenceboard.ca/e-library/abstract.aspx?did=10648

They also see a rebound to more normal economic growth in 2021. If true the market recovery should be strong and in 12 months or less.

"... economic growth will contract
by a projected 2.7 per cent in the second quarter.
However, growth should resume in the third quarter,
allowing the economy to avoid a technical
recession. Unfortunately, there are huge downside
risks to our outlook due to the unpredictability of the
coronavirus pandemic. Overall, we expect growth of
just 0.3 per cent in 2020 followed by a rebound to
2.5 per cent growth in 2021."

Stay healthy and stay home my friends!


----------



## Money172375 (Jun 29, 2018)

The environmentalists will say.....”humans weren’t working fast enough to stop climate change, so Mother Nature is taking over”


----------



## GGuy (Mar 21, 2018)

MrMatt said:


> I don't think we will hit the bottom until, we get a treatment and turn the economy on.
> There will be drops at the next panics, which will be a US lockdown, shortages, deaths of celebrities, particularly younger celebrities or and Pro athletes.


Totally agree. Death of a young celebrity or athlete although terrible would not be any further impact to the economic background but would cause even more panic and drops. Aside form the human toll, this damn Corona is a worst case scenario for markets.


----------



## Money172375 (Jun 29, 2018)

Just a reminder that Telus split today. Did a double take a first.


----------



## Money172375 (Jun 29, 2018)

BARREL of Canadian oil is about the same as a Big Mac meal


----------



## Mukhang pera (Feb 26, 2016)

Money172375 said:


> BARREL of Canadian oil is about the same as a Big Mac meal


That will mean that BC gasoline prices will go up. Here in BC, if oil prices drop, gasoline goes up. If oil prices go up, gasoline goes up. If oil prices remain level, gasoline goes up. One of those immutable laws of economics.


----------



## fireseeker (Jul 24, 2017)

Money172375 said:


> BARREL of Canadian oil is about the same as a Big Mac meal


The Grease Index?


----------



## like_to_retire (Oct 9, 2016)

Money172375 said:


> Just a reminder that Telus split today. Did a double take a first.


Yeah, I missed that until just a short while ago. 

I had run my spreadsheet this morning as usual and just shrugged at the loses for yesterday, but then later looked at my Yahoo Watchlist and it didn't seem so bad for yesterday, so I looked into it. 

Of course, I forgot to double my Telus shares today. I even had a note about it in an excel cell to do just that, but when you're old and addle minded these things slip through the cracks.

Recently, being down between $50K and $100K on many days, you hardly notice $25K extra lost because of a split, so it passed right by me. That shows how volatile it has been when you don't miss or concern yourself with $25K after doing an update for the day before.

I took the opportunity today to add a few round blocks of stock here and there and lower my cost base on several positions. I do enjoy a sale. I get nervous when things keep going up and up, year after year. This present situation has had a calming effect for me and gives rise to investigation of where to deploy cash. I would rather a sale where you can do something constructive.

The yields are obscene on many of my blue chips. I doubt they'll hold, but I think back to 2008 and I didn't experience a single dividend cut. Will that be the case this time? The yields are a result of crazy prices and little to do with fundamentals that I like to look at. But, what will the fundamental be when no one is buying your product or wares?

Either way, best to monitor portfolio income loses rather than share price losses, and see the latter as a sale opportunity to take advantage.

Really interesting to see how my equal sector approach trounces the index during these tough times (I've seen this before). When times are good I seem to beat the index by a very small amount, but during tough times, it works great. No surprise, it's happened before, time and time again. The heavy financial and energy percentages in the index in Canada control how the index fares. The equal sector approach takes advantage of returns in tough times to lower allocations to financial and energy sectors and in this situation of better returns from utilities, and consumer staples.

Anyway, I'm just rambling - ignore.

ltr


----------



## marina628 (Dec 14, 2010)

Money172375 said:


> Just a reminder that Telus split today. Did a double take a first.


Telus Corp Temp +391511% I liked that one lol


----------



## newfoundlander61 (Feb 6, 2011)

Missed that one, just looked at the stock and my eyes opened wide. Do you have a link for the split info?


----------



## Money172375 (Jun 29, 2018)

newfoundlander61 said:


> Missed that one, just looked at the stock and my eyes opened wide. Do you have a link for the split info?



No sorry. I was reminded by TDDI. It popped up as soon as I logged on......right below an informational post explaining how circuit breakers work.


----------



## james4beach (Nov 15, 2012)

Decided that since I'm still riding a high from being back in Canada, I'm going to take a look at my accounts and see what the damage has been (I haven't looked in over a week). Better to tackle this while I'm in a good mood.


----------



## Eclectic12 (Oct 20, 2010)

Money172375 said:


> I was down there to witness it. Drove through Clearwater. I’ve stated before, there was no sense of urgency on any news outlet. Unless you were tied to Twitter, there was no information to isolate ...


The east coast side seems to have been different as there was lots of news on the way down, while in Miami and on the way back that talked about avoiding hospitals, going to testing centres after calling and as more closures/cancellations were reported - reports on how to stay isolated while keeping care of kids at home and profiles of people in quarantine.


Not that those at walking around were worried about it.

Cheers


----------



## peterk (May 16, 2010)

OK - Finally looked at my Unregistered account after 2 weeks of ostriching.

I'm only down 45% from the February peak - thought it would be more like 60-70%... I have some LEAPS calls that are now way OTM that I need to figure out what to do with.

My TFSA actually fared worse than this account with options, I have a lot mid cap oil in my TFSA.


----------



## MrMatt (Dec 21, 2011)

GGuy said:


> Totally agree. Death of a young celebrity or athlete although terrible would not be any further impact to the economic background but would cause even more panic and drops. Aside form the human toll, this damn Corona is a worst case scenario for markets.


My worries are
1. Panic
2. Disease control - I don't want millions dead.
3. Supporting people to keep them from becoming destitute. 
- the economy was turned off to support #2, which is good. But we have to help people.
4. Mental health of ongoing isolation
5. Long term economic damage, or bad policy arising from the actions taken
- Paying a basic income so people can stay home is good in this circumstance.
- Paying a basic income so people can stay home and never work a day in their life is a disaster.


----------



## gardner (Feb 13, 2014)

https://www.cbc.ca/news/business/stock-market-shutdown-1.5501352



> The unprecedented stock market sell-off underway has many Canadians wondering if the time hasn't come to shut down stock markets entirely for a while, in order to give everyone a breather while the world economy deals with the coronavirus.


Seems highly unlikely, and all the actual experts they talk to agree that it's impossible. But an interesting thing to consider: I wonder what the fallout would be.


----------



## MrMatt (Dec 21, 2011)

gardner said:


> https://www.cbc.ca/news/business/stock-market-shutdown-1.5501352
> 
> 
> 
> Seems highly unlikely, and all the actual experts they talk to agree that it's impossible. But an interesting thing to consider: I wonder what the fallout would be.


The fallout would be far worse than letting them trade.
The thing is, the ONLY reason prices are falling is because a seller is willing to sell at that price.


----------



## Jimmy (May 19, 2017)

Money172375 said:


> Just a reminder that Telus split today. Did a double take a first.


Does anyone know when were they going to be adding in the new Telus shares to the accounts?


----------



## milhouse (Nov 16, 2016)

newfoundlander61 said:


> Missed that one, just looked at the stock and my eyes opened wide. Do you have a link for the split info?


See page 7 "TELUS announces two-for-one share-split"

I pulled the above pdf off the Telus Investor Relations page under quarterly reports.


----------



## Jimmy (May 19, 2017)

milhouse said:


> See page 7 "TELUS announces two-for-one share-split"
> 
> I pulled the above pdf off the Telus Investor Relations page under quarterly reports.


Thanks. They still didn't say when the new shares were actually going to be added. Spoke to a few here who have yet to see them.


----------



## peterk (May 16, 2010)

Jimmy said:


> Thanks. They still didn't say when the new shares were actually going to be added. Spoke to a few here who have yet to see them.


I'm seeing double the shares @ half the price in my IB account, today.

Why would they split a $40 stock, anyway?


----------



## like_to_retire (Oct 9, 2016)

peterk said:


> I'm seeing double the shares @ half the price in my IB account, today.
> 
> Why would they split a $40 stock, anyway?


Seems silly to me. Even the old excuse that they were increasing liquidity by making the shares cheaper doesn't mean much anymore since retail isn't required to buy shares in board lots. It just seems like a waste of money to me. It ain't cheap to do a split with all the paper work involved for them.

And then not long after they announced an equity offering.

ltr


----------



## Money172375 (Jun 29, 2018)

Jimmy said:


> Thanks. They still didn't say when the new shares were actually going to be added. Spoke to a few here who have yet to see them.


TDDI said the new shares should appear today, but mine haven’t shown up yet. Perhaps end of day.


----------



## Jimmy (May 19, 2017)

Money172375 said:


> TDDI said the new shares should appear today, but mine haven’t shown up yet. Perhaps end of day.


Their investor relations and they said the shares will be distributed to the brokers today and should be in accounts in 3-5 business days.


----------



## gardner (Feb 13, 2014)

The ASX is down another 8% at mid day Monday. I think it's going to be rough here too.


----------



## peterk (May 16, 2010)

^ S&P500 futures down 4% now


----------



## doctrine (Sep 30, 2011)

Everything is very volatile. Pre-markets hit the limit multiple times at -5% but have been bouncing up to around -3%/-4%. Oil cratered -10% and now is up 1%.


----------



## agent99 (Sep 11, 2013)

It is just 1 month since I started this thread on Feb 23rd. Interesting to go back and read the posts on page 1. Obviously we (and our governments) had no idea of what was coming even on that late date.

What will things be like on April 23rd?


----------



## peterk (May 16, 2010)

So is this the famous "dead cat bounce" I hear so much about? Or should we all jump back in while the prices are still low?


----------



## nobleea (Oct 11, 2013)

peterk said:


> So is this the famous "dead cat bounce" I hear so much about? Or should we all jump back in while the prices are still low?


Investors are optimists, but I just don't think americans know what's going to hit them over the next month.
Maybe they're all ok with sacrificing their grandparents for the mighty dollar.

I'm surprised TSX is up so much.


----------



## james4beach (Nov 15, 2012)

peterk said:


> So is this the famous "dead cat bounce" I hear so much about? Or should we all jump back in while the prices are still low?


What I remember from trading during the 2008 crash is that the crash comes with violent/giant moves both up and down. I wouldn't read too much into any single day (or week's) movements


----------



## GGuy (Mar 21, 2018)

nobleea said:


> Investors are optimists, but I just don't think americans know what's going to hit them over the next month.
> Maybe they're all ok with sacrificing their grandparents for the mighty dollar.
> 
> I'm surprised TSX is up so much.


So much emotional over reaction to news that markets seem overbought and oversold even on a daily basis. I can see TSX rising on news of stimulus package but not 10%. But there is so much cash on the sidelines and lots of emotional investors so the gyrations continue.

But there is still so much negative news to come out in next couple months as cases and deaths sky rocket in the US and some of the economic numbers start coming out that confirm how the economy is being impacted that we could see even lower lows. 

If this is the bottom, I'll miss it. Still waiting.


----------



## sags (May 15, 2010)

The most likely scenario I heard on CNBC is that long term investors are buying companies with strong balance sheets, little debt, a good business model and solid management.

The private equity funds managers say they buy now.....buy when it drops down.....buy when it drops down......etc. They spread their money over various price points.

Then they wait 6 months or 20 years for the big bull market again. This is how people with lots of money they don't really need, make a lot more money they don't need.

US Treasury Secretary Steve Minuchin made his fortune buying distressed real estate and selling it later.


----------



## sags (May 15, 2010)

It will be interesting to see what Warren Buffet has been buying with his big stash of cash.


----------



## andrewf (Mar 1, 2010)

I'm too busy working to watch the markets during the day. Things are absolutely nuts. Now dealing with presumptive positive cases in several locations and resulting business disruption!


----------



## doctrine (Sep 30, 2011)

I think there is a good chance the bottom is in. This is big institutional buying today. And we're up quite a bit over the lows. I've been buying. I may be buying more tomorrow to ensure everything is balanced for the ride back up.


----------



## Northof60 (Nov 22, 2010)

I am shorting XIU... Up to now I have been buying and shorting it small chunks and doing OK. Making up for some losses in other areas. Also, just sold off ZCON thinking it may not be higher than now for a while..


----------



## james4beach (Nov 15, 2012)

Northof60 said:


> I am shorting XIU... Up to now I have been buying and shorting it small chunks and doing OK. Making up for some losses in other areas. Also, just sold off ZCON thinking it may not be higher than now for a while..


This is good. We need more people short selling stocks and especially the index. In fact I think one reason we got such a brutal selloff was the absence of short sellers.

Short sellers add liquidity to markets. They become the only buyers when nobody else in their right mind would buy. So I really hate the scapegoating of short sellers, when in fact they assist price discovery and ADD liquidity to markets.

Everyone who is short is guaranteed to be a buyer in the future.
Everyone who is long is guaranteed to be a seller in the future.


----------



## cainvest (May 1, 2013)

Alright ... who poked the Bear today?


----------



## nobleea (Oct 11, 2013)

cainvest said:


> Alright ... who poked the Bear today?


Reality.


----------



## peterk (May 16, 2010)

Just sold 10k worth of XIU today, to keep as cash.

Now the recovery may begin!


----------



## james4beach (Nov 15, 2012)

TSX is only down 4%. That's a yawn of a day!


----------



## james4beach (Nov 15, 2012)

This guy is selling the current rally: Why I Cashed Out of the Covid-19 Rally



> A gentle reminder to Wall Street: There is in fact a pandemic.
> . . .
> One more thing. Bear in mind that the market wasn’t cheap even before the pandemic came along. Yes, analysts argue endlessly about valuation measures, and the standard metrics are especially hard to read when interest rates are very low. (The Shiller cyclically-adjusted price-to-earnings ratio has been saying “sell” for at least five years.) Still, it’s fair to say that the stock market’s current view of future earnings would look pretty optimistic even if Covid-19 had never happened. A gentle reminder: Covid-19 is in fact happening — and the new risks it has introduced are large and notably skewed, as they say, to the downside.
> 
> If you ask me, not that you should, it’s a case of _really_ irrational exuberance.



But I don't really expect stocks to mirror reality, nor the economy. I view them as pretty different things, and with the amount of central bank intervention in the market, it's plausible that stocks could keep rallying even as we enter a Depression. The Federal Reserve alone (not even including other central banks) has printed about $2.5 trillion in just a few weeks, and today they will start buying ETFs in the next phase of their market manipulation campaign.

The pandemic is not the only factor affecting stock prices. And when you've got central banks manipulating markets to such an enormous degree (as they have done since 2009) I don't think one should expect stocks to match economic reality.


----------



## agent99 (Sep 11, 2013)

With markets tanking again today, interesting how little discussion there is about our investments. 

Seems CMF has become just a chat room  Not that that is a bad thing. For serious discussion of investments, there are likely alternatives


----------



## james4beach (Nov 15, 2012)

agent99 said:


> With markets tanking again today, interesting how little discussion there is about our investments.
> 
> Seems CMF has become just a chat room  Not that that is a bad thing. For serious discussion of investments, there are likely alternatives


I agree, where's all the discussions about investing and trading? These are by far the most interesting markets we've had in years!


----------



## sags (May 15, 2010)

I watch CNBC a lot for a change of pace, and they are all shaking their heads trying to figure the markets out.

The worst economic news comes out and markets go up. They know that future corporate reports will be nasty and markets go up.

It has not gone unnoticed that Warren Buffet has sold stocks and is sitting on his mountain of cash.

With the Fed dispensing all the cash, he can't even find distressed companies to lend to, as he did in the 2007 recession.

Up....down....up.....down.....it makes no sense, so what can you say about it.

Personally, I think as long as there is a tiny light at the end of the COVID tunnel, there remains a huge amount of optimism.

If there is a second wave and everything gets closed down again........that little light goes out.

Mark Zandi of Moody's Analytics said......we are in a recession. If there is a second wave, we will be in a depression.

I think he is probably right.


----------



## cainvest (May 1, 2013)

agent99 said:


> With markets tanking again today, interesting how little discussion there is about our investments.


I wouldn't call 1-2% drop a big change these days ... everyone is used to it now.


----------



## james4beach (Nov 15, 2012)

sags said:


> I watch CNBC a lot for a change of pace, and they are all shaking their heads trying to figure the markets out.


You should only watch CNBC for pure entertainment. These people have no clue why the market does anything (nobody really knows) but they come up with elaborate stories and rationalize the movements.

I promise you that they have no idea why the market moved X% on any given day


----------



## agent99 (Sep 11, 2013)

cainvest said:


> I wouldn't call 1-2% drop a big change these days ... everyone is used to it now.


True - we have become numb to triple figure drops. We don't even talk about them or what the cause might have been.


----------



## james4beach (Nov 15, 2012)

agent99 said:


> True - we have become numb to triple figure drops. We don't even talk about them or what the cause might have been.


What excites me is not the daily movements at this point, but the big questions about where in the market cycle we are.

Is this just a pause in the bull market? Are we still in a long term uptrend? Or are we now experiencing a shift into a bear market, with many bad years to come?

For the last 10 years, whenever there was a drop like this, it was always a "buy the dip" opportunity and then the market rocketed to new all time highs. Is that what's going to happen?

It's very tough to get a reading on where we're headed. For example, in 2000, the market started crashing and fell for over a year. When 9/11 happened, stocks crashed for just a couple days, and then started a massive rally. I think the NASDAQ rallied 50% right after 9/11. Imagine how many people thought the bull market was back. Many people probably even bought stocks, only to then get destroyed by the next leg down in the bear market.


----------



## doctrine (Sep 30, 2011)

agent99 said:


> With markets tanking again today, interesting how little discussion there is about our investments.
> 
> Seems CMF has become just a chat room  Not that that is a bad thing. For serious discussion of investments, there are likely alternatives


In March, the S&P 500 on average was trading up and down 5% a day. Down 1-2% is nothing. 

I pretty much only talk about investments here. I can chat anywhere!

But there is a lot of FOMO and wishful thinking about the March lows. The reality of March lows is that lots of people thought it would go lower and refused to buy. It was chaotic, but perspective was necessary. March was a massive drop. 40% drop in markets in just weeks! That is economic chaos levels! And we're still 15-20% below the all time highs. 

This isn't green pastures - markets might take several years to return to all time highs. 7-8% a year will take 3-4 years before most markets have recovered solidly. Sure stocks are up. But from a massively oversold bottom.


----------



## MrMatt (Dec 21, 2011)

Right now I think it's a boring market.

All the pandemic news has been priced in. I think we're in for a few months or years of catchup, then things will be back to normal.

It would be nice if I could see something clearly undervalued, but I'm not.


----------



## agent99 (Sep 11, 2013)

doctrine said:


> In March, the S&P 500 on average was trading up and down 5% a day. Down 1-2% is nothing.
> 
> This isn't green pastures - markets might take several years to return to all time highs. 7-8% a year will take 3-4 years before most markets have recovered solidly. Sure stocks are up. But from a massively oversold bottom.


I don't watch the S&P500 much (nothing invested there), but you are right that 1-2% is small compared with the volatility we had before and after the March bottom. Nevertheless, down 1-2% in one day USED to get our attention! Now we just accept it as the new norm. Not much we can do about it anyway, unless we want to do day trading!

Our overall portfolio including fixed income is down in value about 15%, but cash flow from dividends and interest is now actually higher. (due to changes in holdings). Now fully invested. Equity allocation lower at about 50%, in part due to market valuation.

Hard to believe we won't have another market pull back once the full effects of the lockdowns are felt. Maybe larger than 1-2% so it will get out attention


----------



## cainvest (May 1, 2013)

agent99 said:


> Hard to believe we won't have another market pull back once the full effects of the lockdowns are felt. Maybe larger than 1-2% so it will get out attention


Didn't have to wait long for that ...


----------



## agent99 (Sep 11, 2013)

cainvest said:


> Didn't have to wait long for that ...


2% per day may get sneezed at by some. Perhaps a few of those in a row may get their attention!


----------



## Pappa Tigger (Apr 17, 2020)

sags said:


> I watch CNBC a lot for a change of pace, and they are all shaking their heads trying to figure the markets out.
> 
> The worst economic news comes out and markets go up. They know that future corporate reports will be nasty and markets go up.
> 
> ...


I missed buying at the March lows. Put in an order and price went up afterwards. I've been holding cash for months until the recent weeks where I have been buying the dips including today (mostly dividend paying stocks that I think will maintain their dividend). I was scared to buy and still scared to buy but I figure that I am already buying at 5 year lows (if you take out the March lows) and I am too impatient to sit on cash and have it do nothing. I guess there's the old adage don't try to time the market?

Personally, I'm betting that there won't be any more huge dips. Perhaps some slow steady decline over the next few months.


----------



## cainvest (May 1, 2013)

agent99 said:


> 2% per day may get sneezed at by some. Perhaps a few of those in a row may get their attention!


Yup, a few more downturns and I'll start looking to buy again.


----------



## scorpion_ca (Nov 3, 2014)

I won't be buying anything until the Fear and Greed Index comes down to around 20.






Fear & Greed Index - Investor Sentiment - CNNMoney


Fear & Greed is CNNMoney's investor sentiment tool that comprises of 7 markets indicators.



money.cnn.com


----------



## james4beach (Nov 15, 2012)

scorpion_ca said:


> I won't be buying anything until the Fear and Greed Index comes down to around 20.


And what if everyone remains afraid, the disease risk continues for the next 3 years, while markets also keep rallying to new all time highs?

What if central banks pump a few trillion $ into stocks, as they've already been doing, and push the market higher than it's ever been? The Federal Reserve is already buying bond ETFs and it may not be long before they start buying stock index ETFs, just like Japan and Switzerland have done for years.


----------



## Eder (Feb 16, 2011)

I agree with James....don't fight the Fed. They are putting unlimited funds to backstop the economy.


----------



## agent99 (Sep 11, 2013)

This article on negative interest rates gives some idea on how central banks use those unlimited funds. Will US fed start buying Apple, Microsoft etc or at least the shares that certain people would benefit from as a result? Could be very political.









Negative Interest Rates: Rewarding Profligacy | L. Dwayne Barney, Paul A. Cleveland


Listen to the Audio Mises Wire version of this article. Presently there are trillions of dollars of bonds throughout the world with negative interest rates. This is an unprecedented turn of events, and one that has many nonprofessional investors confused.




mises.org


----------



## scorpion_ca (Nov 3, 2014)

james4beach said:


> And what if everyone remains afraid, the disease risk continues for the next 3 years, while markets also keep rallying to new all time highs?
> 
> What if central banks pump a few trillion $ into stocks, as they've already been doing, and push the market higher than it's ever been? The Federal Reserve is already buying bond ETFs and it may not be long before they start buying stock index ETFs, just like Japan and Switzerland have done for years.


I strongly believe that the market would drop again later this year similar to what happened in 2018. I will buy at that time. I am still fully invested and will have another $35K to invest by 2020.

Fed will do whatever they need to do to reelect Trump in November. After that, there is not much incentive to help the market keep going.


----------



## james4beach (Nov 15, 2012)

It will be interesting to see if the Fed starts directly buying stocks. If they do, my guess is that they will do it via the S&P 500 index.

But even without direct stock purchases, stimulus and money printing have the same effect; it just makes other parties do the buying. This pattern has been observed for years; when the Fed grows their balance sheet, the S&P 500 index goes up. These have a very strong correlation since 2009, actually.

I don't quite understand the mechanics, but I believe that the Fed QE (balance sheet expansion) provides monetary stimulus that circulates within large financial institutions. It prints money into the institutional/banking system, but not into the broad market or economy.

Once the new money is inside that institutional system, it "finds a home" in various places, including corporate bonds and the stock index. This is also really good for pension plans. Consider the catastrophic position of pensions (which could result in municipalities and even US states going bankrupt) the Federal Reserve is likely pretty happy about inflating the stock market, and helping pensions, solvency of states, *and directly helping retirees* along the way.

This is what I suspect has been happening for 10 years, and I think it's going to continue. The Federal Reserve has been inflating stocks without sparking broader (dangerous) inflation. So far, it's only been "asset price inflation" which has been purely beneficial.


----------



## nobleea (Oct 11, 2013)

scorpion_ca said:


> I won't be buying anything until the Fear and Greed Index comes down to around 20.
> 
> 
> 
> ...


Did you buy when it was under 20 in late March/early April?


----------



## scorpion_ca (Nov 3, 2014)

nobleea said:


> Did you buy when it was under 20 in late March/early April?


Yes, I started to buy at the end of February. I wish I had found out the Fear and Greed index earlier that I could wait further to buy ETFs. I found it from one of the Facebook groups in the middle of March.


----------



## james4beach (Nov 15, 2012)

scorpion_ca said:


> Yes, I started to buy at the end of February. I wish I had found out the Fear and Greed index earlier that I could wait further to buy ETFs. I found it from one of the Facebook groups in the middle of March.


If the question is fear, just look at the VIX and it gives a pretty good indication of anxiety and fear of market participants.


----------

