# Finally a little blood on the street?



## STech (Jun 7, 2016)

I can't lie, I'm a little excited for some good sales. I just hope it's a good corection and buying opportunities ahead, instead of just a little bump in the road.

I'm a big believer in DCA overall, but happy I kept some cash resrves for discount times


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## john.cray (Dec 7, 2016)

STech said:


> I can't lie, I'm a little excited for some good sales. I just hope it's a good corection and buying opportunities ahead, instead of just a little bump in the road.
> 
> I'm a big believer in DCA overall, but happy I kept some cash resrves for discount times



What is your expectation? What kind of a drop do you hope for before you decide to use your cash?


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## gibor365 (Apr 1, 2011)

john.cray said:


> What is your expectation? What kind of a drop do you hope for before you decide to use your cash?


Everyone is so smart in theory


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## STech (Jun 7, 2016)

john.cray said:


> What is your expectation? What kind of a drop do you hope for before you decide to use your cash?


For Canada, if TSX, hits 13K, I'd buy a bundle. If it really drops, something under 10 or 11, I might take out a loan. 

For US and the rest of the world, I buy through XAW, and if that gets under $20, I'd buy a bundle as well.


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## gibor365 (Apr 1, 2011)

STech said:


> For Canada, if TSX, hits 13K, I'd buy a bundle. If it really drops, something under 10 or 11, I might take out a loan.
> 
> For US and the rest of the world, I buy through XAW, and if that gets under $20, I'd buy a bundle as well.


So , you gonna buy a bundle if TSX drops another 17%?! And what are you doing with your cash now?


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## cainvest (May 1, 2013)

gibor365 said:


> So , you gonna buy a bundle if TSX drops another 17%?! And what are you doing with your cash now?


Could be invested in other things, different assets that aren't falling like a stone ... might just need an "emergency re-balancing"!


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## TomB19 (Sep 24, 2015)

I view market corrections like going to the dentist. I dread it and hope it doesn't happen but I know I will be better off in the long run after it happens.


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## Eder (Feb 16, 2011)

We dropped 23% just 2 years ago...so far this time not so much. 
At any rate my dividends are higher this month than last so I'm pretty happy. 
My kids have been loading up on BCE & CNR...smarter than me.


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## james4beach (Nov 15, 2012)

For perspective, we're still basically at all time highs in the market. So nothing has really fallen yet.

TSX is only 5% below its recent all time high a month ago.
S&P 500 is only 4% below its recent all time high.


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## Calmoney (Dec 19, 2013)

Yea, here and the USA still way too high for some good buying opportunities for adding to the positions on the stocks I buy. Will be very interesting to see what the next few weeks bring. I have been waiting for the banks to come down about 10-15%.


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## leeder (Jan 28, 2012)

Certain sectors within Canada are interesting, such as utilities and pipeline. However, they may only be at fair value now that interest rates are increasing. US is mostly expensive, imo.


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## doctrine (Sep 30, 2011)

So, markets are down 5% from the peaks (TSX). S&P 500 is only down 4%.

Not even a correction yet.


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## james4beach (Nov 15, 2012)

doctrine said:


> So, markets are down 5% from the peaks (TSX). S&P 500 is only down 4%.
> 
> Not even a correction yet.


And yet somehow, feels more painful for me. My primary Canadian portfolio is down 7% since December, mainly due to ENB, BCE, FTS dropping sharply.

Ouch.


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## scorpion_ca (Nov 3, 2014)

Bring it on....need more discount in order to purchase more ETFs.


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## gibor365 (Apr 1, 2011)

james4beach said:


> And yet somehow, feels more painful for me. My primary Canadian portfolio is down 7% since December, mainly due to ENB, BCE, FTS dropping sharply.
> 
> Ouch.


This is psychology , you feel pain when your portfolio down much stronger then happiness when your portfolio is up , this is why my brother doesn't invest in equities at all....

My equity portfolio is already down 2%+ YTD, but still dividend income is going up  (at least for now)...

P.S. and many are telling that you need 100% equities allocation in retirement! Good luck with that!


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## STech (Jun 7, 2016)

gibor365 said:


> So , you gonna buy a bundle if TSX drops another 17%?! And what are you doing with your cash now?


Nothing exciting or too productive. And hopefully it'll be time to end it that soon.




scorpion_ca said:


> Bring it on....need more discount in order to purchase more ETFs.


Yup, bring it on. It sucks to see loses in my portfolio lately, but it's a good thing ultimately.


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## james4beach (Nov 15, 2012)

I still like using asset allocation targets consistently, instead of accumulating cash with the intention of buying large dips, or market timing.

I tried that for years, ended up with enormous cash levels and I just didn't execute the plan very well. But ever since I've moved to a static asset allocation, everything's become much simpler. An asset allocation that includes cash & bonds also naturally leads to buying cheap stocks when you rebalance.

Currently I am fully allocated on stocks but low on bonds. The next rebalance will involve buying the dip in bonds, unless something changes dramatically in the next month.


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## jargey3000 (Jan 25, 2011)

....didn't that woman who ran the Fed a couple years ago -cant recall her name - was it Yellen?- say we'll never see another crash in our lifetime...??/
darn, i can never find that quote....


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## Mukhang pera (Feb 26, 2016)

scorpion_ca said:


> Bring it on....need more discount in order to purchase more ETFs.


Let the bad times roll!


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## Jimmy (May 19, 2017)

On the Globe there is an article about the TSX being a buying opportunity now in general. The RSI was below 30 (oversold mark) at 28.5. A US gdp report has q1 growth forecast at 5.4% so there will be many rate hikes now which set a lot of this off.


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## new dog (Jun 21, 2016)

Problems in the bond market has spread to the stock market and will continue if the bond market keeps falling. As pointed out in the link the inverted yield curve is what is really feared and this is going the opposite way. 

https://www.bloomberg.com/news/arti...inger-with-rout-raising-existential-questions

Hard to say where this will all end up or will it just correct back again.


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## 1980z28 (Mar 4, 2010)

I have sold shares this week to take profits from rrsp account,i am 100% equities, most time i am fully invested,i see this as rebalancing 
Will start to pickup shares while this pull back is on,nice opportunity 
Looks like yields are increasing


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## TomB16 (Jun 8, 2014)

Maybe it's a sign of the times but a 4.9% roll back from record highs is hardly blood on the street. Maybe we've gotten so used to the market progressing positively that we've forgotten what a correction is.

I'd love a correction but I'm skeptical the current trend will continue for long. Let's hope it does.


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## Eder (Feb 16, 2011)

doh


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## Benting (Dec 21, 2016)

For those of us with 100% equities has already built up enough reserve over last few years to weather this kind of drop. If you pick your stock right and it would come out of this with flying colour. For instance, my portfolio dropped 38% in 2008, but it went up 69% in 2009. And it had gained steadily ever since. The main thing is it has to be in long term, at least more than 10, 15 yrs, longer the better.
Looks to me the big boys are playing with us. Keep pumping up the index in a way nobody is expecting. Now once it drops the ball, I am expecting, but hope not, would carry on for little while (it is entirely my own opinion ONLY !).


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## Beaver101 (Nov 14, 2011)

Mukhang pera said:


> Let the bad times roll!


 ... convoluted or what? I guess the greed gets to the better of us investors, speculators, $$$ mongers, etc?


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## Beaver101 (Nov 14, 2011)

gibor365 said:


> Everyone is so smart in theory


 ... btw, who is the "everyone" you're referringto? CMFrs or the "real" industry experts????


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## gibor365 (Apr 1, 2011)

EVERYONE 

For example everyone knows rule "buy low, sell high" .... in theory... but in practice, who knows what price is high and what low?! Does TSX now already low or still high?!


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## fplan (Feb 20, 2014)

james4beach said:


> I still like using asset allocation targets consistently, instead of accumulating cash with the intention of buying large dips, or market timing.
> 
> I tried that for years, ended up with enormous cash levels and I just didn't execute the plan very well. But ever since I've moved to a static asset allocation, everything's become much simpler. An asset allocation that includes cash & bonds also naturally leads to buying cheap stocks when you rebalance.
> 
> Currently I am fully allocated on stocks but low on bonds. The next rebalance will involve buying the dip in bonds, unless something changes dramatically in the next month.


same for me.. trying to buy perfect price which is never going to happen..thats one of the reason I want to invest in new vanguard etfs..


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## simplesimon (Feb 10, 2015)

scorpion_ca said:


> Bring it on....need more discount in order to purchase more ETFs.


I'm curious. How long have you had this money in reserve, waiting for a big drop?

If it's been since last year, you've missed a big runup; if it's been since last week, then yes, perhaps you got the timing right on getting out, or just not buying if that money wasn't already invested. But then the market could just as easily snap back on Monday, or next week, or next month and you would likely still not be in the market, missing a big rally.

I agree that it's good to get some heat out of the market to reduce volatility, but the claims of backing the truck up to load up on a potential pullback just seem like pulling the lever on a slot machine.


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## Beaver101 (Nov 14, 2011)

gibor365 said:


> EVERYONE
> 
> For example everyone knows rule "buy low, sell high" .... in theory... but in practice, *who knows what price is high and what low*?! Does TSX now already low or still high?!


 ... no, not everyone and certainly not CMFrs (except for the winner of the Predictions Contest biggrin since they got it right eventually). 

I would expect the "industry" experts as the "smart" ones since they're paid and practice in determining (or even predict for that matter) what price is considered high or low for good buys. Isn't it?

And please, spare me the disclaimer of "past performance is not indicative of future performance", blab, blab, blab.


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## gibor365 (Apr 1, 2011)

> I would expect the "industry" experts as the "smart" ones since they're paid and practice in determining (or even predict for that matter) what price is considered high or low for good buys. Isn't it?


and how often they correct?!

I like analysts 12 months price forecast for specific stock .

I remember onr "anayst" was so proud that he predicted 2008-9 crush, but he was predicting the same for 15 years and finally got 1 time right


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## Beaver101 (Nov 14, 2011)

gibor365 said:


> and how* often* they correct?!


 ... *always* as they have to do a "sell" job.



> ...
> 
> I remember onr "anayst" was so proud that he predicted 2008-9 crush, but he was predicting the same for 15 years and finally got 1 time right


 ... and yet he/she gets paid to do that! By us - investors or ... suckers?


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## scorpion_ca (Nov 3, 2014)

simplesimon said:


> I'm curious. How long have you had this money in reserve, waiting for a big drop?
> 
> If it's been since last year, you've missed a big runup; if it's been since last week, then yes, perhaps you got the timing right on getting out, or just not buying if that money wasn't already invested. But then the market could just as easily snap back on Monday, or next week, or next month and you would likely still not be in the market, missing a big rally.
> 
> I agree that it's good to get some heat out of the market to reduce volatility, but the claims of backing the truck up to load up on a potential pullback just seem like pulling the lever on a slot machine.


I have been investing gradually since 2013. At the same time I have been learning too. I am in accumulation stage and I don't mind if market is down next 5 to 10 years as I have no plan to sell my investment in the next 20 years.


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## Eder (Feb 16, 2011)

What me worry I invest in TSX dividend stocks (shown here total return)


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## blin10 (Jun 27, 2011)

that's no blood on the street... blood on the street = 2009 which was crazy/exciting


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## gibor365 (Apr 1, 2011)

scorpion_ca said:


> I have been investing gradually since 2013. At the same time I have been learning too. I am in accumulation stage and I don't mind if market is down next 5 to 10 years as I have no plan to sell my investment in the next 20 years.


So, you gonna "mind" 10-15 years from now?!


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## scorpion_ca (Nov 3, 2014)

gibor365 said:


> So, you gonna "mind" 10-15 years from now?!


No, I will adjust my assets allocation accordingly.


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## TomB16 (Jun 8, 2014)

scorpion_ca said:


> No, I will adjust my assets allocation accordingly.


I suspect most of us knew what you meant. If we were to shine a little ultraviolet light on the subject, we would see that a handful of posters will criticize nearly anything that is written. Good for you for holding your ground.

There is a ton of evidence showing that continuous, long term, investment outperforms attempts at market timing in almost every case. Steady and sure wins the race.

You are going to do extremely well, Scorpion_ca. :applause:


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## scorpion_ca (Nov 3, 2014)

Thanks TomB16. 

I was born in a lower middle class family but I am not gonna die poor though my plan is to donate most of my money.


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## TomB16 (Jun 8, 2014)

It looks as though the global sell off is going to continue today.


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## OptsyEagle (Nov 29, 2009)

> =scorpion_ca;1851321]Thanks TomB16.
> 
> I was born in a lower middle class family but I am not gonna die poor though my plan is to donate most of my money.


Just remember, we all die poor. 

_Currently I have more money then Steve Jobs._


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## STech (Jun 7, 2016)

TomB16 said:


> It looks as though the global sell off is going to continue today.


As it was said earlier, it sucks to see the account value keep dropping every day, but I hope it continues to do so, for at least all of February :encouragement:


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## james4beach (Nov 15, 2012)

More blood in the streets now, holy cow!! Was the TSX down 3% at one point?


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## gibor365 (Apr 1, 2011)

james4beach said:


> More blood in the streets now, holy cow!! Was the TSX down 3% at one point?


SPY is down 3.3% right now! Dow is down almst 4%! Holy ****! Bought a bit of VTI... 
P.S. With such trend in couple of days I will loose all my 10% gain for 2017


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## james4beach (Nov 15, 2012)

While many of us were expecting a correction, I don't think anyone expected the severity of today's move.

I'm seeing the US primary index ETF, SPY, down -4.1%

This could be more than a mild correction... we haven't seen any drops this large for a long time. Notice that bonds ended the day very strong, American AGG +0.39%, TLT +0.94% in a flight to safety.


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## milhouse (Nov 16, 2016)

gibor365 said:


> SPY is down 3.3% right now! Dow is down almst 4%! Holy ****! Bought a bit of VTI...
> P.S. With such trend in couple of days I will loose all my 10% gain for 2017


As of last Friday, my investable assets were back to Oct 2017 levels. :subdued:
One of my resolutions this year was to not look at my portfolio "as much" this year versus last year (which was close to daily). The market hit sure helps with that because it's not fun seeing my portfolio go down.  That said, I'm keeping my mind open for interesting buys.


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## james4beach (Nov 15, 2012)

Stocks are still basically at all time highs right now. Today was painful but in the big scheme of things, this is still practically an all time high.

I think the best approach is for someone to decide on an asset allocation they are comfortable with, and just stick with it. If your tastes lead you to 50/50, just stick with it. If your tastes lead you to 100/0 and you're OK with -50% drawdowns, then fine to stick with that as well.

Or if you're a lunatic like me and you're 25% gold, 25% stocks, 25% bonds, 25% cash ... again, just sticking with the plan.


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## james4beach (Nov 15, 2012)

S&P 500 is still falling after hours.

SPY is now down exactly 5.0% since Friday... this really is a crash. That's not a normal stock market day.


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## SixesAndSevens (Dec 4, 2009)

10%+ is correction threshold.
last such correction was Jan 2016....2 years ago.
there was a slightly smaller one in Aug 2015...and Aug/Sep 2011 before then IIRC...we have been spoiled....


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## cainvest (May 1, 2013)

It's been on a pretty steep climb since Oct last year, even more so since Dec ... had to happen *POP*.


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## james4beach (Nov 15, 2012)

cainvest said:


> It's been on a pretty steep climb since Oct last year, even more so since Dec ... had to happen *POP*.


Yeah but the problem is that normal/healthy big down days are only 1% or 2%.

Today's 5% down day (including AH) is outside the bounds of normal. It's about the severity of it, very unusual to see the big S&P 500 move five percent in a single day.


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## indexxx (Oct 31, 2011)

I'm sure Wolfy will have some completely plausible astrological explanation.


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## cainvest (May 1, 2013)

james4beach said:


> Yeah but the problem is that normal/healthy big down days are only 1% or 2%.
> 
> Today's 5% down day (including AH) is outside the bounds of normal. It's about the severity of it, very unusual to see the big S&P 500 move five percent in a single day.


True, was a heavy down day but some 2015 and 2016 days were close to today, at a quick glance at least.
Given the recent rally I bet many people were already sitting on the panic (read: sell) button and probably an extra few % due to the steep rise I mentioned before.

Still 4 more days this week ... place your bets ... bulls or bears!


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## cainvest (May 1, 2013)

indexxx said:


> I'm sure Wolfy will have some completely plausible astrological explanation.


Ummm ... Super moon and eclipse last week! Double wammy ...

P.S. Actually I think I know the actual cause but I'm not saying just yet ...


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## Eder (Feb 16, 2011)

Momentum is a powerful thing...is everyone comfortable with their allocation? I checked my account on the weekend 1st time in a week...I think I'll check it again next week lol. In the mean time a lot of good stuff is getting pretty juicy.


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## Italicum (Feb 10, 2017)

*Comfortably numb*

Watching the personal ebbs and flows of fear and greed. What i observe this time around is that, since restructuring years ago my portfolio towards dividends payers, i seem to be training my mind on the perceived relative stability of dividend payments (emphasis on 'perceived') and far less on the current share value turmoil. This restructuring is the only thing that changed personally, since the last big drop in share prices (whenever that happened. Have seen a few over the years). That and older age. I always liked Pink Floyd.


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## 1980z28 (Mar 4, 2010)

1980z28 said:


> I have sold shares this week to take profits from rrsp account,i am 100% equities, most time i am fully invested,i see this as rebalancing
> Will start to pickup shares while this pull back is on,nice opportunity
> Looks like yields are increasing



Sold my stocks with gains last week

Still holding cash,was temped to buy today,will wait until ?

All of what i sold last week is down,,want to collect dividends in the 4 to 5%


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## doctrine (Sep 30, 2011)

Now, we have some blood. -1100 is the biggest Dow drop ever in points although not nearly in %. 

Aftermarkets are red too, so the drop is continuing. I think central banks are going to have to say something to stop the drop. Everyone is panicking because the Fed is driving the yield curve negative, which is almost 100% correlated to economic turmoil. 

Correction is officially in with aftermarkets and it only took 6 trading days to drop 10%.


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## james4beach (Nov 15, 2012)

I can't resist... I'm doing it. I bought some XIV which has basically become worthless after hours, it fell 90% after hours. Just a small number of shares, kind of a call option on volatility reducing by morning.

Bought XIV @ $11, a tiny amount. Total outlay = $60 (sixty dollars).

If volatility remains elevated by morning, I will lose the entire amount. If volatility reduces and today goes back to normal, I might make several-fold my money.

My guess is that XIV and maybe SVXY will blow up by morning, causing billions of $ of losses for shareholders.


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## canew90 (Jul 13, 2016)

Isn't this what most were hoping for? A chance to buy more for less? We are fully invested and really hope the drop continues for the rest of the year, then our RRIF min withdrawal will be lower. As for our holdings 2 of the 13 have increased their dividend and I expect all to do so before the end of the year.


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## bgc_fan (Apr 5, 2009)

canew90 said:


> Isn't this what most were hoping for? A chance to buy more for less? We are fully invested and really hope the drop continues for the rest of the year, then our RRIF min withdrawal will be lower. As for our holdings 2 of the 13 have increased their dividend and I expect all to do so before the end of the year.


Personally I have some cash on the sidelines, so I am not too worried. Plus the fact that I am looking at a 15-20 yr timeline.


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## Italicum (Feb 10, 2017)

I can't resist either, so i will try another angle, encouraged by the tone of openness and respect here, although i do realize this forum is about finances: i like to think that most people here do fairly well and that an additional few thousand (or tens of thousands) will neither make a real difference in our life nor make us happy (unless we are for entirely different reasons). I suggest that what will make us happier is observing and, by that, dealing with the emotions of greed and fear. That's the real opportunity of market gyrations in my view, although also gently 'observing' 😊 a fatter account is ok too.


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## My Own Advisor (Sep 24, 2012)

Anyone with a 30+ year investing timeline was cheering today.


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## james4beach (Nov 15, 2012)

Really, the market has barely fallen. Context:

http://stockcharts.com/h-sc/ui?s=$SPXTR&p=D&st=2000-01-01&id=p91644423281


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## leeder (Jan 28, 2012)

It was mainly the US and international markets that fell. Canadian market held up pretty well, considering all things. I haven't felt the fear yet, so I wonder if it's because I'm more experienced or indifferent about this drop.

That said, for those people who have stated they are waiting for the markets to drop before buying and yet haven't pulled the buy trigger, what's holding you back? If your answer is you think the markets will continue to drop, then I ask, how do you know and where can I get this crystal ball?


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## crgf1k (Aug 8, 2015)

james4beach said:


> Really, the market has barely fallen. Context:
> 
> http://stockcharts.com/h-sc/ui?s=$SPXTR&p=D&st=2000-01-01&id=p91644423281


Ya the S&P500 was only set back by about 6 weeks. The Shiller CAPE ratio is still higher than it was in 1929 and 2007. The only time it was higher than now was in 2000.


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## Calmoney (Dec 19, 2013)

The CND market still doesn't have many of the big blue chippers at a buying level yet. Still need another 10% reduction in at least the banks. Was interesting to see the spread of EMA today.


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## peterk (May 16, 2010)

Oh jesus... I've made some bad decisions in the last week that are giving me a pounding now... Down 12k in 2 days.


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## carson (Apr 28, 2011)

The Asian markets are open right now (It's already Tuesday morning) and there is definitely more blood on the streets. This is looking more and more like a full market correction to me rather than a pull back.

Shanghai 3,416.56 -70.94 (-2.03%)
Nikkei 225 21,487.87 -1,194.21 (-5.26%)
Hang Seng Index 30,855.94 -1,389.28 (-4.31%)
TSEC 10,445.35 -500.90 (-4.58%)

It's still early though, might rebound by morning in north America.


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## james4beach (Nov 15, 2012)

none: I removed one of your comments that seemed like an attack/insult against lonewolf and maybe New Dog. Please do not insult other forum members.


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## KevinWaterloo (Mar 5, 2015)

I had been getting more and more concerned with the shape of the S&P graph and the large online discussions about the US market being significantly over valued. In mid January I started to get the feeling that the probability of a significant market drop was a much higher than the probability of continued rise. 

While I am usually a strong advocate of buy-hold-forget, I'm also a very strong believer that nothing is really black and white and there are exceptions to every rule. The crazy-high PE ratio of the S&P convinced me that it was too risky to stay in the market so I sold all of my stock ETFs on January 31st (just leaving about 20% in XQB-bonds). Sitting pretty happy at the moment with a lot of cash ready to buy back in. But I am also very aware that deciding when to buy can be just as hard as deciding when to sell. The S&P is still highly overvalued compared (measured by PE at ~25) compared to historical standards.

Using my same 'logic' as before I still think the probability of the market declining further is still higher than the probability of an immediate recovery. But the economy fundamentals are still excellent which means most of the big investors are expecting a correction but not a long drawn-out free fall. So it isn't 2008. Although in 2008 I stayed in the market because my financial advisor convinced me that staying-in was always better. I have since moved to ETFs and manage most of my investments myself. Holding only 4 ETFs make it really easy to quickly get in or out. 

It will be an interesting day tomorrow.

James your purchase of XIV in after-hours was brilliant. Clearly a gamble in true Vegas fashion, but the payout could be 10x and has great odds. Wish I had thought of that myself


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## new dog (Jun 21, 2016)

We are getting oversold in the US market and should soon expect a rally from bargain hunters and short covering. If that rally fails and we go to new lows this year then the market could be in real trouble. It will then probably take a massive QE of some kind to pump it up again.


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## gibor365 (Apr 1, 2011)

This is crazy , S&P Futures traded in range 2,634.75 - 2,529.00, almost 4.2%!!! I've never seen such huge range.





> A quick survey by Bloomberg News of 10 sell-side and buy-side traders and money managers did not point to any specific economic or fundamental data point or news as the driver of the late-session plunge in equity markets. Some traders cited quantitative algorithms and sell programs. There was also little demand for new protection as investors monetized hedges by selling puts or rolling strikes down.
> 
> The sell-side traders Bloomberg spoke with noted they had very few fundamentally driven accounts selling into market weakness. Others echoed the lack of news behind the moves, with one sell-side trader saying it "feels all ETF driven."


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## gibor365 (Apr 1, 2011)

In 1 hours S&P futures dropped from +20 to -70, now in 1 hour from -70 to +13... and nothing happened in thw World!


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## gibor365 (Apr 1, 2011)

in 5 min futures already +20 and Dow from -300 went to +25...Who the hell is trading so furiously?! Algo vs Algo?! . it will be very interesting how Tue markets will starts and ends


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## newfoundlander61 (Feb 6, 2011)

Amazing how the media freaks out about a correction in the market, they use words like "crumble; bloodbath; rout; freakout; etc etc. Investors should just ignore this stuff.


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## My Own Advisor (Sep 24, 2012)

newfoundlander61 said:


> Amazing how the media freaks out about a correction in the market, they use words like "crumble; bloodbath; rout; freakout; etc etc. Investors should just ignore this stuff.


Agreed. It is good entertainment though.


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## STech (Jun 7, 2016)

newfoundlander61 said:


> Amazing how the media freaks out about a correction in the market, they use words like "crumble; bloodbath; rout; freakout; etc etc. Investors should just ignore this stuff.


I'd say investors shouldn't panic along with the media freak out, but absolutely don't ignore it. You're going to buy the good steak and triple ply toilet paper anyway, so why would you ignore bargains on them, just because they're going on sale?


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## TomB16 (Jun 8, 2014)

STech said:


> I'd say investors shouldn't panic along with the media freak out, but absolutely don't ignore it. You're going to buy the good steak and triple ply toilet paper anyway, so why would you ignore bargains on them, just because they're going on sale?


Amen.


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## Eder (Feb 16, 2011)

SixesAndSevens said:


> 10%+ is correction threshold.
> last such correction was Jan 2016....2 years ago.
> there was a slightly smaller one in Aug 2015...and Aug/Sep 2011 before then IIRC...we have been spoiled....


TSX corrected 23% Jan 2016.


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## TomB19 (Sep 24, 2015)

The fire sale seems to be over, for now. It's a shame. I'd love our DRIPs to kick a little harder. These cheaper prices are great.


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## Mookie (Feb 29, 2012)

Of course nobody likes seeing tens of thousands evaporate from their investment balance, but I'm not losing any sleep over it. I've lived through far worse, and came through it fine. 

If prices keep falling, I may consider increasing my leverage, but not yet...


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## peterk (May 16, 2010)

Market seems to be not gyrating a whole lot throughout today, but VIX is still as high as yesterday's close?...What does that mean?


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## gibor365 (Apr 1, 2011)

Mookie said:


> Of course nobody likes seeing tens of thousands evaporate from their investment balance, but I'm not losing any sleep over it. I've lived through far worse, and came through it fine.
> 
> If prices keep falling, I may consider increasing my leverage, but not yet...


I'd be much more worried if my core holdings , like Canadian banks, Telcos, Utilities and US dividend champions would start to cut dividends...


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## james4beach (Nov 15, 2012)

peterk said:


> Market seems to be not gyrating a whole lot throughout today, but VIX is still as high as yesterday's close?...What does that mean?


It might be because two short-volatility funds blew up yesterday, putting upward pressure on the VIX futures. Check out the other thread, some theories on what might be happening.


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## james4beach (Nov 15, 2012)

To be honest, I don't think we've seen anything yet. The market hit all time highs and then fell a tiny % off those highs.

Yawn.

It's not like there's been any serious panic, fear, or flight from equities.


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## james4beach (Nov 15, 2012)

In fact, I don't think yesterday had any effect on people. There isn't nearly enough fear out there.

Today I heard from several coworkers who are now MORE interested in trading volatility ETFs. They are talking about using different ETFs and some variants of the same strategy.

When a market really blows up, like 2007-2008, it's so painful for all involved that people are put off from speculating in it, period. People just walk away and try to forget it ever happened. This kind of psychology is not present in the market today, not even after yesterday. My sense is that people generally still feel bold and fearless. They think it's good enough that they weren't in the ETFs that blew up, and think they can still make the same kind of gambles and win.

That tells me we're still nowhere near the lows. This is still "game-on", the music is still playing. Gotta keep dancing!

*EDIT*: exactly 2 minutes after writing this post, another coworker just came to me and said he's going to buy SVXY (inverse volatility) to bet on the market returning to normal... this is exactly what I mean!


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## cainvest (May 1, 2013)

j4b, how'd your gamble on XIV work out ?


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## OnlyMyOpinion (Sep 1, 2013)

james4beach said:


> In fact, I don't think yesterday had any effect on people. There isn't nearly enough fear out there. Today I heard from several coworkers who are now MORE interested in trading volatility ETFs. They are talking about using different ETFs and some variants of the same strategy... *EDIT*: exactly 2 minutes after writing this post, another coworker just came to me and said he's going to buy SVXY (inverse volatility) to bet on the market returning to normal... this is exactly what I mean!


Hmmm. Is this another example of desperate millenials? I lean towards plain, dumb greed, which by the way has existed amongst all generations. Per your #619 bitcoin post:



james4beach said:


> It's also an attempt by millennials to get rich, against seemingly endless obstacles the modern economy presents (no job security, no pensions, unaffordable housing, and automation).
> The current excitement in crypto currencies is really about desperation IMO. A millennial says to themselves: there is no way I will ever afford a home or retire. At least if I try this route, I have a chance of ending up with some real money.
> And I somewhat agree with them. The average millennial household that might earn 60K income in full time work (if they're lucky enough to find any) and who buys a 600K home can't possibly build enough wealth for a comfortable life or retirement. The equation has no solution.
> Crypto currency gambling offers a hope. And if their coins crash & burn? Big deal... they're not any worse off.
> I don't agree with this logic but I think this might be what people are thinking. I think they will be worse off once they lose money in crypto currency gambling.


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## james4beach (Nov 15, 2012)

OnlyMyOpinion said:


> Hmmm. Is this another example of desperate millenials? I lean towards plain, dumb greed, which by the way has existed amongst all generations. Per your #619 bitcoin post:


Yeah, maybe I'm just picking on millenials. The $4 billion invested in those two funds certainly wasn't just millenials!


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## james4beach (Nov 15, 2012)

cainvest said:


> j4b, how'd your gamble on XIV work out ?


Considering I bought a fund that collapsed overnight and almost blew up the futures market, I'm not doing too badly. I bought shares at $11. The issuer published the fair value as $4 overnight and said the shares will trade until ultimate liquidation February 20.

The shares came live again near today's close and were around $7. Presently I am down around 40%. The shares will trade until Feb 20 and I'm trying to figure out if they still have the 'short VIX' exposure and whether there is still upside potential. At this point I'm willing to hold on a bit to see what happens.

Can anyone figure out whether XIV can possibly rise at this point? Or is it just a scramble to the exits to see which shareholder gets to take home some money before the issuer distributes the remains?


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## OnlyMyOpinion (Sep 1, 2013)

Well, I'm certainly glad that you don't post as Lilkanna on reddit:

*XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’ *
“I started with 50k from my time in the army and a small inheritance, grew it to 4 mill in 3 years of which 1.5 mill was capital I raised from investors who believed in me... but now that’s all gone.”

James, you might find some discussion/speculation on the referenced thread about XIV's prospects over the next couple of weeks.
https://www.marketwatch.com/story/xiv-trader-ive-lost-4-million-3-years-of-work-and-other-peoples-money-2018-02-06


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## andrewf (Mar 1, 2010)

My UVXY put was down ~5% from its all-time high. I am still up 46% from when I bought it in June.


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## newfoundlander61 (Feb 6, 2011)

Markets are just returning to normal.


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## SixesAndSevens (Dec 4, 2009)

OnlyMyOpinion said:


> Well, I'm certainly glad that you don't post as Lilkanna on reddit:
> 
> *XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’ *
> “I started with 50k from my time in the army and a small inheritance, grew it to 4 mill in 3 years of which 1.5 mill was capital I raised from investors who believed in me... but now that’s all gone.”


this person can always apply for a job at Target....remember that guy?


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## andrewf (Mar 1, 2010)

Betting other people's savings on a pure XIV strategy is criminally negligent. That guy should end up in jail.


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## gibor365 (Apr 1, 2011)

In last 15 min of the session SPY droped from 270.58 to 267.67 and another 0.5% AH...algorithms in action?!


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## STech (Jun 7, 2016)

gibor365 said:


> In last 15 min of the session SPY droped from 270.58 to 267.67 and another 0.5% AH...algorithms in action?!


I don't think the volatility has been weeded out yet. It feels like any day now we'll see a few more drops, or people will get over excited again and run up the market sharply again. However, my crystal ball is in the shop for repairs.


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## new dog (Jun 21, 2016)

Again look at the bond market and it looks to be spooking the equity markets again. If the longer end is expecting inflation and those expectations can't be stopped then the Fed has to raise rates and that is a big problem for the stock market. Normally we see the inverted yield curve before we get into big trouble but since everything is so badly managed and manipulated we just don't know what a real return to normal really means.

https://www.bloomberg.com/news/arti...r-more-volatility-as-bonds-slide-markets-wrap


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## OptsyEagle (Nov 29, 2009)

Investors are way too optimistic. You see it in every commentator on the recent volatility. "Just a normal correction and no change to the ongoing bull market", seems to be the repeated message.

Unfortuneatly bear market corrections usually end when investor truly get spanked for their giddy behaviour.


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## Eclectic12 (Oct 20, 2010)

We must be following different commentators as several I have heard have pointed out loan default issues in the US where they are hoping this is a normal correction instead of being similar to 2008.


Cheers


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## jargey3000 (Jan 25, 2011)

For once, I'd like to hear a "commentator" tell the truth & comment: 
"I really don't know why this happened. And I really don't have a clue what's GOING to happen!"


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## OptsyEagle (Nov 29, 2009)

Eclectic12 said:


> We must be following different commentators as several I have heard have pointed out loan default issues in the US where they are hoping this is a normal correction instead of being similar to 2008.
> 
> 
> Cheers


Yeah, I probably heard 1 out of 20 give a negative opinion as well. 

If you look at the sentiment numbers, except for the very short term ones like relative strength, etc., most are still in the overly optimistic range. That usually needs to change ... but who knows.


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## Thal81 (Sep 5, 2017)

Well well, looks like we're gonna get another sizable drop today. Maybe TSX goes below 15k before the weekend... I wish I had not done a lump sum buy in early Jan, now I'm a bit too low on cash to take advantage on this. And considering how bonds have gone down the drain too, it's not like I want to pick from there...

*sigh*


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## OptsyEagle (Nov 29, 2009)

Thal81 said:


> Well well, looks like we're gonna get another sizable drop today. Maybe TSX goes below 15k before the weekend... I wish I had not done a lump sum buy in early Jan, now I'm a bit too low on cash to take advantage on this. And considering how bonds have gone down the drain too, it's not like I want to pick from there...
> 
> *sigh*


At least you are not alone. This is why markets go down, when fundamental economics are still fine.


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## OnlyMyOpinion (Sep 1, 2013)

Thal81 said:


> Well well, looks like we're gonna get another sizable drop today. Maybe TSX goes below 15k before the weekend... I wish I had not done a lump sum buy in early Jan, now I'm a bit too low on cash to take advantage on this. And considering how bonds have gone down the drain too, it's not like I want to pick from there...
> *sigh*


I've done the same in the past just before a market drop. If you bought for long term I expect you will look back in 5 years and it will be a small blip on the graph. We absolutely do not know what the markets will do. My portfolio is down ytd as well (but not as much as the TSX) but I don't look at it day to day - its long term holdings.


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## Eclectic12 (Oct 20, 2010)

jargey3000 said:


> For once, I'd like to hear a "commentator" tell the truth & comment:
> "I really don't know why this happened. And I really don't have a clue what's GOING to happen!"


Closest I have heard so far is "Here is what is worrisome that seems to be make this more than a run of the mill correction. It relates close to what happened in 2008 but there is no guarantee so I am hoping it won't be a repeat".


Cheers


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## peterk (May 16, 2010)

peterk said:


> ... Down 12k in 2 days.


UHG. -20k now!


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## doctrine (Sep 30, 2011)

There is plenty of evidence that tightening leads to market crashes and recessions, especially after interest rates have been hiked 2-3 times. At least the yield curve isn't going negative.


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## lonewolf :) (Sep 13, 2016)

Arch Crawford as well as Elliott wave International nailed this one. 

Crawford in the summer was looking for a powerful rally into Dec & Jan with Jan 26 the last of the Mars cycles to peak out with 2018 high probability of crash.

Elliott wave international sent out a special report on Jan 24th that the wave count in the stock market was @ or very close to an historical peak along with sentiment indicators that were close to or setting extremes


Since fast exponential rises & falls go farther then you expect but never end going sideways I went long both out of the money calls & puts as the premium was very inexpensive. 

The top wave count is for yesterdays high to be either a top of a wave 2 or part of a 4th wave correction. If it was top of a wave 2 the market is starting to fall hard in a wave 3 down


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## lonewolf :) (Sep 13, 2016)

doctrine said:


> There is plenty of evidence that tightening leads to market crashes and recessions, especially after interest rates have been hiked 2-3 times. At least the yield curve isn't going negative.


 The fed can not come to the rescue when the margin clerks have the power


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## milhouse (Nov 16, 2016)

jargey3000 said:


> For once, I'd like to hear a "commentator" tell the truth & comment:
> "I really don't know why this happened. And I really don't have a clue what's GOING to happen!"


I've actually heard that a couple of times. Most recently, I was flipping channels and Ian Hanomansing was interviewing Preet Banerjee on CBC asking what was going on. Preet actually initially said he didn't know as it's just part of market gyrations and you kind of have to expect this kind of volatility. However, that's no fun so Ian pressed Preet for some kind of analysis so he just regurgitated all the standard chatter going on now about rising interest rates, etc, etc.


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## redsgomarching (Mar 6, 2016)

considering selling all green positions and buying into those that have taken a beating when they go lower.


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## Pluto (Sep 12, 2013)

Typically bull markets end when unemployment is low, but that's too rough of an indicator to say the bull is over now. My guess is this sell off is about done. Markets get more volatile as they near a top, but I don't think we are there yet. markets will end the year higher, and bull will end in 2019. What will kill it is inflation fighting rising rates. Too, Mr. Market surely has nagging thoughts about US tax cuts exacerbating government debt.


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## new dog (Jun 21, 2016)

There is also the problems of the banks and derivatives and that big mess coming back if things don't stabilize. Doctrine the problem as I mentioned above is the longer end of the bond market sees inflation and that is cornering the Fed to raise rates. The dollar is also a concern as countries start putting contracts in other currencies and not using the dollar. 

The way I see it is the Fed needs to come to the rescue and it can't provide the liquidity when the longer yields are rising. Without the Fed the market needs to come down a lot.


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## gibor365 (Apr 1, 2011)

peterk said:


> UHG. -20k now!


So far my portfolio YTM -4.8%, 7 years XIRR dropped from almost 11% to 9.44% annualized. 

In just 5 weeks: TSX -7% , SPY -3.5% ...


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## sags (May 15, 2010)

A couple of funds that bet on the VIX.......down 90% in 1 day.

Wall Street has created new derivatives that are blowing up. Some people are complaining about a lack of regulation on them.

As Yogi said..........Deja vue all over again.


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## hebsie (Mar 5, 2017)

Mawer 105, my old faithful, reset to September 1st pricing


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## james4beach (Nov 15, 2012)

This has been a brutal week, and I say that even as someone who is very conservatively positioned. This is the kind of scenario that causes pain & losses for pretty much everyone.


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## Jimmy (May 19, 2017)

Interesting one sector unscathed by all of this is teh TSX Preferred share index. Even had a gain today.

Makes sense because it benefits from interest rate hikes.


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## carson (Apr 28, 2011)

Jimmy said:


> Interesting one sector unscathed by all of this is teh TSX Preferred share index. Even had a gain today.
> 
> Makes sense because it benefits from interest rate hikes.


Yeah I hold TSE:RPF and DFN.PRA.A and they've held up very well during this correction. I switched from bonds to prefs for fixed income back in November as I believe they will outperform in a rising interest rate environment. YMMV.


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## james4beach (Nov 15, 2012)

Jimmy said:


> Interesting one sector unscathed by all of this is teh TSX Preferred share index. Even had a gain today.
> 
> Makes sense because it benefits from interest rate hikes.


Canadian tech is also doing very well, see XIT -- still strong!


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## Jimmy (May 19, 2017)

carson said:


> Yeah I hold TSE:RPF and DFN.PRA.A and they've held up very well during this correction. I switched from bonds to prefs for fixed income back in November as I believe they will outperform in a rising interest rate environment. YMMV.


Yes. I have some HPR. In the past the perpetuals PS were more like corp bonds and more correlated. The new resets benefit from rising rates in contrast to the general indexes.


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## Jimmy (May 19, 2017)

james4beach said:


> Canadian tech is also doing very well, see XIT -- still strong!


Yes. I was looking at PEGs for the S&P Tech sector and it is about fair valued now too.


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## Bruins63 (Jan 18, 2018)

78% equities (banks, utilities, telecom, Reits, oil etc) , 22% bonds...down 5.7% from high


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## SixesAndSevens (Dec 4, 2009)

Jimmy said:


> Yes. I was looking at PEGs for the S&P Tech sector and it is about fair valued now too.


ha ha...


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## lonewolf :) (Sep 13, 2016)

The US had record trade deficit going into crash of 1987. Recently US set record high trade deficit going into recent sell off


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## OptsyEagle (Nov 29, 2009)

OptsyEagle said:


> Investors are way too optimistic. You see it in every commentator on the recent volatility. "Just a normal correction and no change to the ongoing bull market", seems to be the repeated message.
> 
> Unfortuneatly bear market corrections usually end when investor truly get spanked for their giddy behaviour.


Hey. Let me know when you feel like you have been spanked like an unruly child. I have a little money I would like to put to work. lol.


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## robfordlives (Sep 18, 2014)

carson said:


> Yeah I hold TSE:RPF and DFN.PRA.A and they've held up very well during this correction. I switched from bonds to prefs for fixed income back in November as I believe they will outperform in a rising interest rate environment. YMMV.


Although you are probably right and moved into the space myself six months ago do not mistake prefs as being part of your fixed income allocation. They are at best a hybrid.


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## Jimmy (May 19, 2017)

SixesAndSevens said:


> ha ha...


Tech is fair valued. Click on 'Sector' then Technology

http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx


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