# Does this make anyone else nervous?



## james4beach (Nov 15, 2012)

For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
http://schrts.co/hNZmQGbz

Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
http://schrts.co/MqDXvtYb

Does this make anyone else nervous? I actually felt more comfortable seeing some volatility in 2018 since that's normal.


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## Synergy (Mar 18, 2013)

If you're nervous you may want to re-think your asset allocation. Or are you just trying to time the market?

Look at a 5 yr chart. Between 2017 to 2018 we had a similar uptick in the market with relatively low volatility. Followed by a correction.

Enjoy the rise and buy more when it corrects. If you can't stomach a big correction adjust your asset allocation. We are due for a correction one of these days, or months or years....


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## bgc_fan (Apr 5, 2009)

Not really. I mean you can cherry pick and market time, but I don't have the patience for that sort of thing. If there is going to be a crash in the near future, so be it. My horizon is a few decades away, so it's not really a concern at the moment.

When I look back in my past returns, I've seen the 2008 give my portfolio a hit, but then a few years later, I ended up with a pretty large return. Maybe if I was thinking of winding down my portfolio in the next 5 years, I may consider this being an issue.


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## jargey3000 (Jan 25, 2011)

yup!


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## cainvest (May 1, 2013)

What's it look like on a 5 year chart?


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## Synergy (Mar 18, 2013)

^ take the OP's chart and put 5 instead of 2 and click update.
https://stockcharts.com/h-sc/ui


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## gardner (Feb 13, 2014)

james4beach said:


> Does this make anyone else nervous?


Yes. But not as much as a continuous downward spiral would have. Too-good-to-be-true beats how-low-can-it-go.


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## james4beach (Nov 15, 2012)

cainvest said:


> What's it look like on a 5 year chart?


Using AOK (an older version of VCNS), here is

5 year chart
all history back to 2009


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## cainvest (May 1, 2013)

Looks like a fairly consistant run up from 2009. Chart wise, what would have been your thoughts about it at the end of 2015?


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## james4beach (Nov 15, 2012)

cainvest said:


> Looks like a fairly consistant run up from 2009. Chart wise, what would have been your thoughts about it at the end of 2015?


You're right, it's pretty consistent.

To get more of a 'numerical' reading on this, I tried using some technical measurements to see if this really is a historical anomaly. I'm using the 100 day moving average, which is an intermediate term trend line. This can show the consistency of a rally. For example, in this 3 year chart, you can see a very steady rally in 2017 (above the trend line), then no rally in 2018, and then the current rally starting in 2019: http://schrts.co/YYJYRVai

Going back to 2009, I'm looking for long rallies of AOK above that trend line and counting how many months the price was above the trend line:

2010-2011 ... 12 months
2012-2013 ... 11 months
2013-2014 ... 12 months
2017-2018 ... 13 months
Since 2019 ... 13 months so far

This shows that the current, consistent rally in the stock/bond mix is pretty normal. It seems to happen reasonably often. I feel better about it after seeing this!


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## hfp75 (Mar 15, 2018)

I think that markets are exuberant over Powell’s January ‘19 comments that were supportive to the market.

As well the recent security of ‘not raising rates’ unless there is ‘sustained inflation’ or was it ‘persistent inflation’.

Plus there has been consensus among central banks that they want inflation to run higher than the interest rate. This will theoretically ever so slowly devalue the world debt. One way to help manage the like 50+ trillion debt market.

I think with that as the playbook, markets will continue to rise....effectively testing the feds resolve to hold to the above criteria.

IMHO, there will be a trigger and the house of cards will fall to the ground, and it will be spectacular to watch. The implosion could be 1-10 yrs away.... there’s no way to know.

Would a recession cause a market implosion, or would a market implosion cause a recession ? All depends on the ‘trigger’, 2018 fed rate increases, corona virus, debt market insolvency, somewhere a war, another economy cracking that causes contagion.... the list goes on and on and could be any or all.


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## lonewolf :) (Sep 13, 2016)

james4beach said:


> For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
> http://schrts.co/hNZmQGbz
> 
> Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
> ...


 No it actually makes me feel more confident for my trading plan of being long FNGU & TQQQ untill 5 up are complete from Oct 3 & or sell by mid Jan 2021 then add to my Dec 2022 SPX far out of the money puts then looking for a generational crash


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
> 
> Does this make anyone else nervous?


Stirring the pot by quoting another active, learned poster - perhaps you should re-think your asset allocation or maybe switch to a permanent portfolio to fit your comfort/risk zone? 
Oh wait ... :rolleyes2:


FWIW ... the timing of when I'll need some funds have changed so I moved significant amounts out of equity and into FI last year. If I lose some gains, it won't bother me and if I avoid losses, I have some dry power to take advantage.


Cheers


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## OptsyEagle (Nov 29, 2009)

All I know is that 3 years ago a monkey could have thrown a dart at a list of stocks and whatever the dart hit would be up a lot right now. Yeah, that kind of makes me nervous, but what can you do...throw another dart and hope to be as smart as a monkey.


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## MoldyOldy (Feb 9, 2020)

Sell High buy Low.
Buy Low sell High.
Ride it out for the long haul if you have the time.
To invest or not to invest a large lump sum today.
I think its on the minds of many but it all depends on ones time frame and there exit plan.


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## kcowan (Jul 1, 2010)

We have had to come up with an extra $300k US and counting for our new condo in Mexico. So our equity split has gone down by necessity. (44%)


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## Eder (Feb 16, 2011)

kcowan said:


> We have had to come up with an extra $300k US and counting for our new condo in Mexico. So our equity split has gone down by necessity. (44%)


I hope that isn't a Nuevo Vallarta "extra 300k if you want the keys to your condo senor" Mexican developer demand?


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Stirring the pot by quoting another active, learned poster - perhaps you should re-think your asset allocation or maybe switch to a permanent portfolio to fit your comfort/risk zone?
> Oh wait ... :rolleyes2:


Did someone else post the same? If so, I forgot about that. This was my own genuine thought. Every couple of days, I log in, and always see a higher account value. It started making me nervous because I'm feeling an expectation that my account value will "always go up".

I have considered my asset allocation, and went as conservatively as I can possibly go. I realistically can't get any more conservative than I am right now. The results are still kind of nuts; I've gotten 6.8% CAGR over 4 years ... that's compared to a historical long term average of 6.5% for my allocation.

That *is* good advice though; I know you're poking fun, but it's the right answer.

So taking my own advice, I would re-think my allocation, decide it continues to be OK, and recognize that we just happen to be in one of those "lucky" stretches where all assets just zoom straight up. It's normal, and it happens. The price history (in post #10) shows there are frequently stretches like this current one where the price just smoothly goes up.



OptsyEagle said:


> All I know is that 3 years ago a monkey could have thrown a dart at a list of stocks and whatever the dart hit would be up a lot right now. Yeah, that kind of makes me nervous, but what can you do...throw another dart and hope to be as smart as a monkey.


Yes, I think that's the reality of the situation. In a market like this where every asset class is up (stocks & bonds too) anything you picked would be up. And there's no way to predict whether it will keep going up, or not.

I still believe that the passive method of blindly sticking to the allocations is likely to outperform "tactical" shifts in anticipation of the market direction, at least in the long term.

The current situation seems like a good exercise in sticking to the plan. Putting my money where my mouth is, I just added a few thousand $ to my RRSP and deployed it right into my target asset allocation. This meant buying XIU (Canada) and XBB (bonds) which were relatively low versus other assets.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Did someone else post the same? If so, I forgot about that ...


In less detail where IIRC your comments were about asset allocation beyond equity and the need to be invested instead of having a cash drag.





james4beach said:


> ... This was my own genuine thought. Every couple of days, I log in, and always see a higher account value. It started making me nervous because I'm feeling an expectation that my account value will "always go up" ... That *is* good advice though; I know you're poking fun, but it's the right answer ...


I'm reminding you of your statements about asset allocation, the smoothing of the permanent portfolio, the need to stick to the plan and how market timing doesn't work.

Seems ironic to have these other comments made so often to other posters and now be driven by what appears to be fear with some market timing mixed in. The plan was to stick to the plan, n'est pas?




james4beach said:


> ... I still believe that the passive method of blindly sticking to the allocations is likely to outperform "tactical" shifts in anticipation of the market direction, at least in the long term.
> 
> The current situation seems like a good exercise in sticking to the plan. Putting my money where my mouth is, I just added a few thousand $ to my RRSP and deployed it right into my target asset allocation. This meant buying XIU (Canada) and XBB (bonds) which were *relatively low versus other assets*.


Again stirring the pot ... if you believe what you believe, relative costs shouldn't matter.
Or is the nervousness and/or focus on "low versus other investments" a gauge showing that the confidence in the plan is shaky?


Food for thought ...


Cheers


*PS*
It's good that you are following your plan.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Seems ironic to have these other comments made so often to other posters and now be driven by what appears to be fear with some market timing mixed in.


I don't know if irony is the right word. Whether it's other posters, or myself, we are all vulnerable to the same human tendencies and investor psychology:

- concern that prices seem 'too high'
- concern that there hasn't been any correction
- concern that turmoil is coming, or is imminent

I'm not somehow immune to the same investor psychology that everyone else experiences. We all experience it. Even when I am aware of the "theory" of how a person should invest, this does not eliminate the fear or concerns.

And the advice I give to others is absolutely the same advice I should take myself. It's good when others remind me to follow the same advice!



> Again stirring the pot ... if you believe what you believe, relative costs shouldn't matter.
> Or is the nervousness and/or focus on "low versus other investments" a gauge showing that the confidence in the plan is shaky?


I think you misunderstood what I wrote here. I am not nervous about what was low versus others. Instead, this is plain & dumb asset allocation, maintaining target %. My % Canada was lower than the target, so I added to Canada.

e.g. my % bonds had fallen to 48%, so with the RRSP contribution, I bought more XBB to bring it back up to 50% bonds. Sticking to the dumb old asset allocation plan without attempting to time the market.


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## james4beach (Nov 15, 2012)

Reflecting on all of this does show me that a person can have a very tough time investing if they don't have a clear plan (or investor policy statement).

Whether it's a good market or a bad market, worries like what I've voiced here are going to happen ... to nearly everyone. Seems to me that a clear, written, plan is one of the best ways to counteract these human tendencies.

In this case, I still felt the worry, but then shrugged and said, well *I have a plan that must be followed*. The worry still exists; that's human nature.


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## bgc_fan (Apr 5, 2009)

james4beach said:


> Reflecting on all of this does show me that a person can have a very tough time investing if they don't have a clear plan (or investor policy statement).
> 
> Whether it's a good market or a bad market, worries like what I've voiced here are going to happen ... to nearly everyone. Seems to me that a clear, written, plan is one of the best ways to counteract these human tendencies.
> 
> In this case, I still felt the worry, but then shrugged and said, well *I have a plan that must be followed*. The worry still exists; that's human nature.


The bolded is the key. Usually emotions will get in the way even if you think you are rational and analytical. We're all humans.

It's probably why I only pop in once in a while to look at my accounts because if I were to look every day, I may start getting spooked by all the market gyrations.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Reflecting on all of this does show me that a person can have a very tough time investing if they don't have a clear plan (or investor policy statement).
> 
> Whether it's a good market or a bad market, worries like what I've voiced here are going to happen ... to nearly everyone. Seems to me that a clear, written, plan is one of the best ways to counteract these human tendencies ...


And hence why I used "irony" as it seems you've had the clear plan, the asset allocation beyond equities and other parts of the solution yet posted about it, including yourself in the nervous category while appreciating reminders from others.

IOW ... it seems a role reversal from other threads.




bgc_fan said:


> ... Usually emotions will get in the way even if you think you are rational and analytical. We're all humans.
> It's probably why I only pop in once in a while to look at my accounts because if I were to look every day, I may start getting spooked by all the market gyrations ...


That ... and remembering other times when concern was expressed but the results were different.


Cheers


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## MarcoE (May 3, 2018)

Yes, I'm nervous. I'm always emotional when it comes to investing. When stocks are soaring, I feel greed. When they're crashing, I feel fear. When an asset I'm not heavily invested in is soaring, I feel FOMO. I'm prone to make emotional mistakes -- buying too much when prices are high (greed), selling when prices are low (fear), and so on. I'm human and therefore an emotional being.

And... the markets are emotional too. Because the markets are not just mindless numbers. We're not looking at the laws of physics or chemistry. We're looking at a vast network of human psychology. We've taken human emotions and put them into numbers. Markets and psychology cannot be decoupled.

So I have a pre-determined asset allocation. And I (try to) stick to it. When markets fall, I'll feel fear. Hopefully I'm wise enough to stick to the asset allocation even then.

When it comes to investing, I think about my time horizon. When will I need the money? When will I be selling these assets? I think about three scenarios:

1) Reaching retirement age, ending my accumulation phase, and living off my wealth. Hopefully by this time, I'm in my 60s (I'm 39 today). And I'll want an asset allocation that is very conservative.

2) Behavioral risk. When markets are crashing, investors often make the mistake of selling low. This can be another scenario where I (unwisely) withdraw money from my portfolio.

3) Needing to retire earlier than expected. I'm self-employed in a volatile industry. My income is variable year to year. It swings wildly between feast and famine. It's possible that due to changes in my industry, I might have to retire early -- in my 50s or even 40s. And I'll begin living off my investments at this point.

I don't know which scenario will occur. If I did, I'd have an asset allocation perfectly geared toward it. But I don't know which scenario will occur. So I came up with an asset allocation that can reasonably prepare me for each scenario. It includes enough equity (33%) to grow long term (scenario 1). It includes enough gold and bonds to smooth out volatility, minimizing behavioral risk (scenario 2). And it's diversified enough that if scenario 3 comes true, it can provide stable fixed income but also long term growth.

Hopefully my portfolio also performs well with whatever happens in the market -- the economy growing or contracting, inflation or deflation.

This is all a long way of saying...

1) Come up with a plan that suits your life, and suits different possible end games.

2) Be aware that you are an emotional creature, and prepare to handle feelings of greed and fear.

3) Stick to the plan!


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## sinfullivingsolution (Jun 1, 2015)

I am getting so pumped for a correction. every stock I have is up minus 2 that were a poor choice which I learned from.

Im a bit cautious purchasing over valued companies atm, so Im purchasing stocks that I currently hold in my portfolio that are low on a yearly average and a decent roi. problem is that my lows are no longer low. first world problem indeed.

otherwise I dollar cost average my index funds and dont really buy individual stocks unless it falls in line with the above guideline.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> And hence why I used "irony" as it seems you've had the clear plan, the asset allocation beyond equities and other parts of the solution yet posted about it, including yourself in the nervous category while appreciating reminders from others.
> 
> IOW ... it seems a role reversal from other threads.


That's true!



MarcoE said:


> So I have a pre-determined asset allocation. And I (try to) stick to it. When markets fall, I'll feel fear. Hopefully I'm wise enough to stick to the asset allocation even then.


I think it's fair to say that everyone (who has $ in the market) will feel fear when markets fall.

Like you, I hope I will be wise enough to stick with the plan. I've invested through two market crashes before, but I hardly had any money back then. Today I have significantly more in stocks than in 2001 & 2008 so this is kind of a new situation for me, even though I've been investing for 20 years.


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## james4beach (Nov 15, 2012)

MarcoE said:


> 3) Needing to retire earlier than expected. I'm self-employed in a volatile industry. My income is variable year to year. It swings wildly between feast and famine. It's possible that due to changes in my industry, I might have to retire early -- in my 50s or even 40s. And I'll begin living off my investments at this point.


I'm glad you raised this point. I'm also in a very volatile field of work and it's possible that the rug could get pulled out from under me. Early retirement is very possible in my situation as well.

And I think it makes sense to consider this in one's time horizon. I have never assumed the traditional model of "working and accumulating money for 40 years". Sure, that could happen, but I'm not counting on it. This isn't the 1960s.

Frankly I'm surprised that so many planners still use this kind of model (work at your job for 40 years) for investment planning and time horizon assumptions. Do they really think that millennials or those in technical fields are going to have steady work for 40 years?

Best of luck to them. All kinds of jobs are being automated away before our eyes, and this is going to keep happening. The modern economy simply does not need this many people doing the things they are currently doing.



> 2) Be aware that you are an emotional creature, and prepare to handle feelings of greed and fear.


Absolutely. I've written this before, but I think it's a mistake to suppress emotions or pretend that humans aren't afraid of losing money in the market. Of course we're afraid of losing in the market; nobody in their right mind can watch their hard earned savings plummet in value and not feel stress.

So I choose to acknowledge my emotions, and make my investment plans with those in mind. For example, minimizing volatility -- to the extent that's possible.



> 3) Stick to the plan!


Yup. I find it helpful to have my plan & policy in writing.


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## humble_pie (Jun 7, 2009)

good time to sell OTM calls on stocks one holds

premiums are still high


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## Synergy (Mar 18, 2013)

james4beach said:


> Best of luck to them. All kinds of jobs are being automated away before our eyes, and this is going to keep happening. The modern economy simply does not need this many people doing the things they are currently doing.


No reason why one can not evolve with the times, start a new career path if need be, create a new product or service, etc. Lets not use technology as an excuse to roll over and play dead. There will be tons of jobs for those able and willing to change.


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## MarcoE (May 3, 2018)

Synergy said:


> No reason why one can not evolve with the times, start a new career path if need be, create a new product or service, etc. Lets not use technology as an excuse to roll over and play dead. There will be tons of jobs for those able and willing to change.


That is true. However, many jobs today tend to be highly technical and have large learning curves. You might need to live off your savings for a year, or even several years, while you pursue new education and a new potential career. That's why I value large savings and multiple streams of income.


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## kcowan (Jul 1, 2010)

Eder said:


> I hope that isn't a Nuevo Vallarta "extra 300k if you want the keys to your condo senor" Mexican developer demand?


No we like to visit Nuevo for a few days vacation but still don't want to live there!

We are upsizing from a 1750 sq.ft condo built in 1987 to new construction high-end closer to the beach built in 2020 and 2184 sq.ft. We hope the place will have some sentimental,value to our heirs.


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## Pluto (Sep 12, 2013)

No, I'm not nervous. 

"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves." Peter Lynch.

Besides, there seems to be nervousness while there is no sign of euphoria.


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## james4beach (Nov 15, 2012)

Pluto said:


> "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves." Peter Lynch.


That's a really good point. Think of all the market timing, unnecessary hedging, and cash drag which has reduced people's returns.


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## Pluto (Sep 12, 2013)

There are other reasons why I am not nervous. Inflation is modest so no serious upward pressure on interest rates. Economies are not boiling hot so no serious inflation pressure. Lots of stocks are fully valued or over valued a bit, but so what? as a large chunk of the 1990's stocks were over valued. Just seems to me that stocks have paused, as well they should considering the recent run up. After the pause/consolidation stocks will likely resume their upward march. 

But even if I thought there was an bear market/recession in the near future I'd likely do nothing.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> That's a really good point. Think of all the market timing, unnecessary hedging, and cash drag which has reduced people's returns.


Yeah, think how many people went to cash in 2008 and then you hear that they never had the nerve to get back in and missed a huge run-up.

ltr


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## james4beach (Nov 15, 2012)

Looks like I'm up again today. Partially it's just the luck of what I happen to hold.

My 5-pack is up slightly, despite most stocks being down (strength is due to RY & FTS). My return is also boosted by gold, which is now hitting new all time highs in CAD.


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## Steve64 (Jun 28, 2016)

I'm somewhat new to this (trading) but have noticed the same trend.
If i'm heavy in SP500 stock and want to adjust asset allocation where should i be looking to invest?


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## like_to_retire (Oct 9, 2016)

Steve64 said:


> I'm somewhat new to this (trading) but have noticed the same trend.
> If i'm heavy in SP500 stock and want to adjust asset allocation where should i be looking to invest?


You'd have to tell us what your present asset allocation is and what allocation you want to move to.

ltr


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## Synergy (Mar 18, 2013)

james4beach said:


> Looks like I'm up again today. Partially it's just the luck of what I happen to hold.
> 
> My 5-pack is up slightly, despite most stocks being down (strength is due to RY & FTS). My return is also boosted by gold, which is now hitting new all time highs in CAD.


This is part of the problem. You seem overly focused on day to day changes, short term success, etc. If you have a proper asset allocation, diversified portfolio, etc. you shouldn't have to stress so much about the day to day market gyrations. Put your energy and focus on earning more money so you can continually add to your investments.


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## Eder (Feb 16, 2011)

After some decades I am now able to be quite stoic about being down a BMW on any given trading day. Of course if I'm up a Beemer I party like I won the lottery.


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## james4beach (Nov 15, 2012)

Eder - sounds like it comes with practice.

I'm working my way up to it and I find it gets easier with time. 10 years ago, I don't think I could have handled seeing my portfolio fluctuate by thousands of dollars in a day. It's getting easier now, so I'm adapting.

Synergy: agreed that it's not helpful to focus on daily movements


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## AltaRed (Jun 8, 2009)

Folks like Eder and myself also know it is percentages that matter more than absolutes with market movements. A $5M portfolio moving $50k is no more relevant than a $500k portfolio moving $5k.

In either case, random movements of a few percentage points are just noise, a well maintained gravel road instead of asphalt.


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## OptsyEagle (Nov 29, 2009)

Also, when you lose a BMW, you need to remind yourself that you probably never owned that BMW in the first place. It was just parked in your driveway for too long, but now the owner has come and taken it away.

If you ever try to take ownership of it, by moving it into your garage, they will probably take the Ford, that was parked in front of it, as well.


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## james4beach (Nov 15, 2012)

Why am I watching my numbers so much... the issue is that I have far more $ invested than in the past.

Up until roughly 400K of investments, the amount of new money I could save in a year exceeded the typical investment gains (assuming something like a balanced fund at 6% CAGR) so I didn't really pay too much attention to my investments. I just shrugged off cash drag. For example with only 200K invested, a good year might mean 12K increase, which was dwarfed by the 50K in new savings I added.

But above a certain threshold, the investment returns started to dominate. For example, since last summer, my investments are up ~55K whereas new savings from my volatile self employment income is about NIL. A more typical year (assume a balanced fund) may be something like ~40K investment gains vs 20K new savings. The new savings are still important, but the investments are the bigger factor.

Over the last year, I gradually realized that my investments are much more important than they used to be. So I started delving into them in more detail. Fixing the asset allocation, fixing the inefficiencies like cash drag. Refining my portfolio design, etc.

I don't think I will *always* be watching my portfolio numbers so closely, but at this point -- where I am still in the process of fixing my inefficiencies -- I think it's fine to keep a close eye on how things are doing. My RRSP, for example, now perfectly follows a model portfolio. It is ideal. However, my TFSA (which I just funded) and my American IRA are in a state of flux and need lots of work. I am trying to consolidate everything, reduce cash drag, and get closer to my ideal investment strategy.

In short time periods, benchmarking myself against my ideal (model) portfolio has really helped expose problems with my investments. For example since Feb 14, my couch potato-style model portfolio is up 1.1%. My actual investments are up 0.6%. So the question becomes; why? Investigating this helps uncover problems with my investments. I currently have cash drag in my TFSA and in aggregate, I'm also off my asset allocation targets.

I think my investments have really started improving ever since I began benchmarking myself to a model portfolio. And yeah, I do look at daily movements, and this practice seems to help illustrate what I'm doing wrong.


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## AltaRed (Jun 8, 2009)

You may also be reacting to random events in the market. No portfolio will follow the market exactly unless you have the exact passive indices representing that market. 

I doubt very much divergences between Feb 14 and today really tell you anything. I would not remotely consider such comparisons over such short time frames.


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## james4beach (Nov 15, 2012)

That's true AltaRed. Maybe this is too short a time frame even for this efficiency analysis; 6 or 12 months could be more useful.

In any case, I have an imminent problem with cash drag and the need to correct my asset allocation across a TFSA & IRA. This is unrelated to benchmarking perhaps, but it's the benchmarking activity which alerted me to the problem.

Perhaps it has been the benchmarking which has motivated me to take action; doing the right thing for the wrong reason?


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## AltaRed (Jun 8, 2009)

The market is a random walk down Wall St. Unless you own exactly what your model owns, by definition, it cannot be the same. Perhaps not evenly remotely close.

Some days, perhaps even a third of them, my portfolio moves in the opposite direction of the market.


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## cainvest (May 1, 2013)

james4beach said:


> I think my investments have really started improving ever since I began benchmarking myself to a model portfolio. And yeah, I do look at daily movements, and this practice seems to help illustrate what I'm doing wrong.


Maybe it's me but it sounds like you're over anaylizing your portfolio. If you're close to your set asset allocations there isn't any reason to sweat it out and certainly not be worring over daily, weekly or even monthly market movements.

IDK, maybe you enjoy the numbers, playing with model benchmarks and such but if it's causing you stress, that is not a good thing.


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## Synergy (Mar 18, 2013)

^ Agreed, paralysis by analysis. So much time and effort into tasks that won't likely have a significant impact on results. Best to K.I.S.S. and focus ones time and energy on earning more money. You can't go wrong with an aggressive passive portfolio if you can stomach the volatility in the short term. 

Stress is not a healthy hobby.


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## james4beach (Nov 15, 2012)

Not sure peeking at the portfolio is causing me stress. The concern I originally mentioned in this thread is due to the market going straight up for about 12 months. Look at the portfolio daily, monthly, or even quarterly and you'd see the same thing.

And if I didn't think about the portfolio and investment holdings, I'd keep suffering from cash drag... which is damaging in the long term.


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## cainvest (May 1, 2013)

james4beach said:


> Not sure peeking at the portfolio is causing me stress. The concern I originally mentioned in this thread is due to the market going straight up for about 12 months. Look at the portfolio daily, monthly, or even quarterly and you'd see the same thing.
> 
> And if I didn't think about the portfolio and investment holdings, I'd keep suffering from cash drag... which is damaging in the long term.


Maybe I should have said over analyzing the market, not your portfolio. Like you said above, the market is going straight up, maybe this year it'll go down or a correction will happen .... do you plan to change your current strategy or asset allocation? You built that portfolio to "weather" all market conditions in accordance to your risk factors ... so let it ride it out.

Not sure about your cash drag issues or if it's causing significant loses on your end, you have to lay out the details of that to see.


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## agent99 (Sep 11, 2013)

bgc_fan said:


> Not really. I mean you can cherry pick and market time, but I don't have the patience for that sort of thing. If there is going to be a crash in the near future, so be it. My horizon is a few decades away, so it's not really a concern at the moment.
> 
> When I look back in my past returns, I've seen the 2008 give my portfolio a hit, but then a few years later, I ended up with a pretty large return. Maybe if I was thinking of winding down my portfolio in the next 5 years, I may consider this being an issue.


I think bgc sums things up well. 

There will almost certainly be a pullback in markets sometime. Or markets may continue upwards and onwards. Interest rates my go up or down. We don't control these things. If we invest in simple smart ways AND plan our lives around these uncertainties, we should be able to get on without getting stressed over money. 

Personally, I didn't think much about investments until I was near retirement. Any spare money mostly went into GICs, bonds and MFs. (Hadn't heard of ETFs back then). This mainly because business, professional, family and sporting demands on time provided enough to keep us occupied.

James - you no doubt analyze and worry too much about investments. If you no longer have employment income to invest - Get another job. If all you do in spare time is study markets, find another outlet for your energy and time. Take up golf or skiing or .. Having a partner can help, but may provide another kind of stress


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## james4beach (Nov 15, 2012)

agent99 said:


> James - you no doubt analyze and worry too much about investments. If you no longer have employment income to invest - Get another job. If all you do in spare time is study markets, find another outlet for your energy and time. Take up golf or skiing or .. Having a partner can help, but may provide another kind of stress


Markets are fun -- don't you think? I think the wacky things that happen are very interesting.

It might be different for you, but I've benefited from analyzing my investments. Many of the big improvements I've made to my investments over the last 5 or even 10 years came from taking them seriously, watching them, and tuning them. I am far better off today due to the watching & tuning, than if I had just shrugged off the investments accounts and left them alone for the last few years.

Perhaps some of you older guys have accounts in stable states, and well established strategies that you are now in "maintenance mode" on, but others -- like me -- are still trying to get our accounts into stable states, and our strategies are only newly formed. All of this takes time and effort, as it probably did for you as well some years ago.

Frankly it would have been irresponsible for me to rapidly increase my asset base without dedicating this time & attention to my investments.


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## Benting (Dec 21, 2016)

So, the market keep going up and you feel nervous ? I can't imagine how did you feel when the market went free fall in 2007 (the year I retired) and 2008. Well, I lost quite a few Bimmers in that period..... And now it all comes back and more since 2009. To me the value of equities one has is on paper only. It counts when you need to sell. One should be happy for last few year's gain to have enough cushion for the inevitable.....


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## james4beach (Nov 15, 2012)

Benting said:


> So, the market keep going up and you feel nervous ? I can't imagine how did you feel when the market went free fall in 2007 (the year I retired) and 2008. Well, I lost quite a few Bimmers in that period..... And now it all comes back and more since 2009. To me the value of equities one has is on paper only. It counts when you need to sell. One should be happy for last few year's gain to have enough cushion for the inevitable.....


I actually felt fine in 2007-2008 because I hardly had any money back then. I saw coworkers with larger investments really suffer and feel pain, but the crash meant very little to me. Part of the issue for me is that I have more net worth today; much more in stocks today than ever before. I can't help but notice fluctuations.

Obviously I will gradually get used to it. Normally someone would work over a long career and build up wealth, maybe gradually get used to fluctuations on their net worth. But due to the highly volatile nature of my work, I had low net worth in 2009 and have added a very significant amount in the last few years.

So I'm not yet used to having _this_ much money invested, and the volatility.


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## m3s (Apr 3, 2010)

Warren Buffett Torches Corporate America, Spells Doom for Stock Market


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## fireseeker (Jul 24, 2017)

m3s said:


> Warren Buffett Torches Corporate America, Spells Doom for Stock Market


That headline is ridiculously torqued. Buffett warns of several things, but he isn't "torching" or "spelling doom." In fact, he reiterates his belief in American capital markets.
Better to read the letter itself:
https://www.berkshirehathaway.com/letters/2019ltr.pdf


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## james4beach (Nov 15, 2012)

m3s, I don't think that author has any clue what he's talking about. Berkshire keeps a large cash amount both for large acquisitions, but also as a cash buffer and for solvency. It's explicitly stated in the 2018 letter, in which Buffett talks about roughly $100 billion cash equivalents being untouchable. It isn't because he thinks stocks are going to fall.

To be more precise, the actual "untouchable" cash level is much smaller, but from his text it sounds like Buffett is comfortable with roughly $100 billion cash. It's partly a safety cushion -- which is very important to him -- and also to have the opportunity to make a giant acquisition.

It should not be interpreted as a bearish view on US stocks. Besides, I don't think Buffett has any ability to forecast the stock market.

While we're on the topic though, perhaps we can all learn something from Buffett. Many people on this board complain about low yields in fixed income, and search for higher yields than regular bonds. How about Berkshire? The company's net value is $428 billion.

They have roughly $144 billion in a combination of cash, t-bills, and mainly government bonds. All of this is very low yielding, very safe stuff (yields nearly nothing). And that's 34% of their net value.

Last year it was actually higher at 37%

I mention this because some people on this board are always trying to boost yield and seem concerned that they are getting "zero real return" in useless cash and bonds. Buffett, meanwhile, takes plenty of risks elsewhere but he keeps a whopping 34% to 37% in ultra safe, mainly government bonds and t-bills.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> I mention this because some people on this board are always trying to boost yield and seem concerned that they are getting "zero real return" in useless cash and bonds.


Is this what you mean by the term "cash drag" that you mentioned earlier, as I still don't understand what it means?

ltr


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## james4beach (Nov 15, 2012)

By cash drag for my own portfolio, I meant amounts sitting in cash when they should be deployed in my asset allocation. The issue for me is not quite being on plan... e.g. my TFSA has stray cash which is not invested according to my plan; I need to take action on that.

Re: Berkshire Hathaway. I'm pointing out that they hold fixed income (including government bonds) which have very low yields. They don't seem to have a problem with low yielding fixed income, probably because safety is the more important consideration.

For example, I hold about 50% in low yielding, but safe, fixed income. Berkshire Hathaway holds about 34% to 37% in similar.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> For example, I hold about 50% in low yielding, but safe, fixed income.


Me too. I do have a steady stream of cash that dumps into my accounts, and once it reaches around $500, I always deploy to my HISA in that account - only takes a few clicks. Then I use that HISA money when appropriate to rebalance either equities or fixed income. Cash doesn't sit long earning nothing, so I guess you could say I don't have a cash drag, unless you consider HISA a cash drag?

ltr


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## james4beach (Nov 15, 2012)

I suppose it's a matter of terminology and what your plan is. But I'm calling it "cash drag" when it's not deployed according to my allocation plan. Example which is pretty close to my TFSA issue:

Say the account has a 50/50 stock bond split. If I had $14 K in a HISA within that account, even though the HISA earns a good rate, I would still call that "cash drag" because the $14 K isn't invested in the 50/50.

Being too busy with my job has resulted in this ^ kind of thing adding up to quite a few thousand bucks across all accounts, which isn't deployed in my asset allocation. The $14 K alone doesn't hurt performance much over the span of a few months, so it's easy to think it's not a big deal.

But add up all the other stray cash, across all accounts, and extend the time period it's sitting as cash, and this certainly has hurt my performance. My asset allocation returned 13% last year, but cash returned maybe 2%, so any amount in cash (in aggregate) hurt performance.

If a "fully invested" dollar returns 13%, whereas the ISA only returns 2%, is that not a cash drag problem?

This is why I'm being vigilant about cleaning up my accounts and making sure every dollar is deployed as it should be.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> If a "fully invested" dollar returns 13%, whereas the ISA only returns 2%, is that not a cash drag problem?
> 
> This is why I'm being vigilant about cleaning up my accounts and making sure every dollar is deployed as it should be.


I guess I look at it different. 

I don't consider the HISA a cash drag. It's simply part of fixed income and is a short term component of it. 

I have an asset allocation of 50:50 across my portfolio. My emergency fund is completely outside that consideration and consists of two to three years of expenses that I keep away from my portfolio. 

The 50% of the allocation in the portfolio assigned to fixed income contains an HISA cash amount that I like to keep around to deploy in case of opportunities. This is what is housed in the HISA's. Yes, it only returns 1.6%, but it's still fixed income and is held in the 50% allocation. 

My equity allocation is a true 50% (which consists of 24 individual stocks). The fixed income is all 5 year GIC's in three ladders in the Non-Registered, RSP and TFSA accounts. The amount of the 50% allocation assigned to fixed income that is in the HISA's varies from around 2% to 5%. (i.e. Stocks 50% / GIC ladders 48% / HISA 2%). I still consider that a 50:50 allocation even if the HISA rises to 5%. Since I dump all cash pretty quick into the HISA's I don't consider I have much cash drag. It's only a drag when it makes 0%. The HISA is the short term of my fixed income. Fixed income is capital preservation and shouldn't be considered a drag, but rather risk management.

(BTW - on a separate issue I am surprised you are talking about asset allocation with respect to an account? I consider asset allocation over the entire portfolio that has a Non-Registered account, an RRSP account and a TFSA account. I never concern myself what the allocation happens to be for a single account).

ltr


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## james4beach (Nov 15, 2012)

I get that LTR, and treating the ISA as part of fixed income makes sense. But if I count it that way, then I've chronically been higher in fixed income than my 50% target.

If you don't call it cash drag, then you might call it chronically being over-weight fixed income, in other words being more conservative than I intended to be. I may have actually been closer to 60% fixed income weight (counting misc ISAs as fixed income) and imagine the performance loss during this last while.

At the end of the day I'm just trying to get onto my exact investing plan. Planning to tackle the TFSA this week.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> I get that LTR, and treating the ISA as part of fixed income makes sense. But if I count it that way, then I've chronically been higher in fixed income than my 50% target.
> 
> If you don't call it cash drag, then you might call it chronically being over-weight fixed income, in other words being more conservative than I intended to be.


Well, I think if you keep your HISA component inside your 50% assigned to fixed income, then it ain't a drag.

What I consider a drag is if I got lazy and let all the coupons and dividends that are thrown off into cash just sit there and build up to many thousands because I am lazy and haven't swept it into the HISA's, then that 0% return is a "cash drag".

Once that cash is in an HISA and my fixed income allocations doesn't move beyond 50%, then no cash drag.

ltr


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## AltaRed (Jun 8, 2009)

> (BTW - on a separate issue I am surprised you are talking about asset allocation with respect to an account? I consider asset allocation over the entire portfolio that has a Non-Registered account, an RRSP account and a TFSA account. I never concern myself what the allocation happens to be for a single account).


I cannot comprehend that either. AA is intended to be holistic over a total portfolio.


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## james4beach (Nov 15, 2012)

AltaRed said:


> I cannot comprehend that either. AA is intended to be holistic over a total portfolio.


My AA is calculated across all accounts in all brokerages. I was trying to describe a simplified example.

For me, the problem remains that I have undeployed cash and am off my targets (in aggregate, across all accounts).


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## Synergy (Mar 18, 2013)

I'm totally confused. You have 60% fixed income and nervous about a potential market correction. While at the same time you're worried about cash drag? Wouldn't a little extra cash help you sleep better at night? You can't have your cake and eat it to. Perhaps you'd be better off with a 60-70% FI allocation in the near term? If the market corrects 10-30% you could slowly deploy the cash and alter your allocation. Not what I would do as you may miss out on gains over the next 1-5 yrs. But it may help to lower some of the worry.

I agree, it's not really a cash drag. It's more of an asset allocation issue.

For someone in the accumulation stage, 50% fixed income allocation is very conservative IMO. I wouldn't worry too much about volatility. It's your friend - buy more!


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## humble_pie (Jun 7, 2009)

i've mentioned this before ... the bright, attractive, no-charge free tools introduced recently by the TD were obviously designed for new accounts & smaller accounts.

youth, women, immigrants, refugees - the big green is going after non-traditional customer markets because it sees how these markets are going to become the profitable customer mainstream of the future.

other discount brokers have tools to help hesitant novice investors, but they charge for those tools. TD is the only discount broker offering learning centre, partial robo advisor, asset allocator, an extensive array of analyst opinions, plus dozens of other research resources, for free.

when it comes to older, bigger accounts with complicated holdings, some of the tools designed for new investors don't work so well. For example, the big green says it knows about the single-account limitations of Asset Allocator, is working to develop an aggregate whole-account allocator which would be more helpful for cmf's armies of retired millionnaires.

me i think we should rejoice that attention is finally being paid to the Generation Zeds & the millennials. Sometimes i think those 2 demographics tend to be neglected these days. It's nice to see something of quality being created with them in mind. For free, too.


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## james4beach (Nov 15, 2012)

Synergy said:


> I'm totally confused. You have 60% fixed income and nervous about a potential market correction. While at the same time you're worried about cash drag?


Yes it's true that a higher % fixed income insulates me from market drops. But I have decided on a 50% bond/GIC allocation, and want to stick with that. I've considered various options and do think it's the right amount for me, and there's "no time like the present" to practice sticking to an AA.

So it's time for me to practice sticking with the plan, anxieties and all. After years of some high income, having this kind of $ in the market is a new thing for me, but I'm going to have to get used to it.

And as I wrote earlier in post #10, once I took a look at some market history, I realized that what we're seeing now is not too out of the ordinary. I feel better about it after looking at some past history:



james4beach said:


> 2010-2011 ... 12 months
> 2012-2013 ... 11 months
> 2013-2014 ... 12 months
> 2017-2018 ... 13 months
> ...


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## john.cray (Dec 7, 2016)

like_to_retire said:


> My equity allocation is a true 50% (which consists of 24 individual stocks). The fixed income is all 5 year GIC's in three ladders in the Non-Registered, RSP and TFSA accounts.


Interesting composition. So, you have no non-Canadian equities at all. No US, International?
I know you're in retirement now, but I am curious -- have you always had this allocation or you switched to it
after retirement? If so, what did you hold before?

If you're interested in sharing of course.

Regards,
JC


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## like_to_retire (Oct 9, 2016)

john.cray said:


> Interesting composition. So, you have no non-Canadian equities at all. No US, International?
> I know you're in retirement now, but I am curious -- have you always had this allocation or you switched to it
> after retirement? If so, what did you hold before?............


Correct, I have no non-Canadian equities at all and no US or International or Emerging markets. I switched to this method in Nov 2011 after I had been retired since 2006.

I only invest in individual stocks, and in equal amounts to 8 sectors in Canadian stocks exclusively. I don't hold the Materials, Information Tech, or Health Care sectors, and the Energy sector is exclusively pipelines - no oil. I feel that I need at least 3 stocks in each sector to lower company specific risk within that sector, so I hold 24 stocks in 8 sectors of Financial Bank, Financial Non-Bank, Energy, Telecom, Utilities, Consumer Discretionary, Consumer Staples, Industrial. This calculates to 12.5% in each sector. When it gets out of whack I rebalance back. Most are blue chip dividend stocks, but there also a number of what I consider growth stocks such as CNR, MRU, ATD.B, TFII, SAP, DOL, etc, etc. 

I basically hold a stock forever until its fundamentals look terrible and then it's gone, or if they cut their dividend. The dividend rule is iron clad. In the far past, if I held a stock after a dividend cut, I was never rewarded, and quite the opposite. If you don't immediately sell a stock after a dividend cut, you're in for a world of hurt more times than not.

My experience before 2011 was that anything I owned but Canadian stocks didn't offer as good a total net return taking into the consideration the tax advantage of Canadian dividends and currency concerns. I use to index with ETF's in Canada, but the index contains a lot of duds that are drag on return, not to mention the cornucopia of tax junk they distribute on their T3's. The index in Canada is sector lopsided, so for myself, I wanted to equally represent all but the most volatile sectors.

Everyone has a reason why my method is a bad idea, but I keep beating the index that everyone seems to revere as the golden standard, so I have no plans to change my methods now, but never say never.

ltr


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## m3s (Apr 3, 2010)

like_to_retire said:


> My experience before 2011 was that anything I owned but Canadian stocks didn't offer as good a total net return taking into the consideration the tax advantage of Canadian dividends and currency concerns. I use to index with ETF's in Canada, but the index contains a lot of duds that are drag on return, not to mention the cornucopia of tax junk they distribute on their T3's. The index in Canada is sector lopsided, so for myself, I wanted to equally represent all but the most volatile sectors.


I like your method of individual Cdn stocks and agree Cdn ETFs are lopsided. Exposure to international currency has been good post 2011 though. CAD was 1.06 USD in 2011, 0.95 in 2013, 0.85 in 2014, 0.71 in 2016.


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## like_to_retire (Oct 9, 2016)

m3s said:


> I like your method of individual Cdn stocks and agree Cdn ETFs are lopsided. Exposure to international currency has been good post 2011 though. CAD was 1.06 USD in 2011, 0.95 in 2013, 0.85 in 2014, 0.71 in 2016.


Yeah, I know, and I feel you may just be making my point for me. I can't know what currency will do to me. It can be good or it can be bad. I just eliminate that problem. And it's not that I'm not getting international exposure as most stocks today in Canada have expanded to the US and beyond, and more-so every day it seems.

ltr


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## m3s (Apr 3, 2010)

I don't really see how that eliminates the problem if CAD is not in a vacuum from the global economy or a gold standard. I mean even if you don't leave Canada expenses are still impacted by foreign currencies and if you do leave Canada you are directly exposed. It's like holding one sector isn't it? We don't know what sectors will lag or outperform but having diversity gives you the chance to rebalance


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## Steve64 (Jun 28, 2016)

I heard (somewhere) that a good way to balance a portfolio that only has SP500 is by buying an equal amount of bonds. This was more of a general question.
I'm planning on purchasing the SP but want have a plan in place if/when it drops (even though my SP plan is +5 yrs - long term)

thanks,


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## james4beach (Nov 15, 2012)

You know that original nervousness I had when I created this thread? Funny thing is that I feel better after today. Stocks are *supposed* to do this kind of thing. What's unnatural is when they just go straight up without a hiccup.

Maybe I should be careful what I wish for, though.


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## MarcoE (May 3, 2018)

james4beach said:


> You know that original nervousness I had when I created this thread? Funny thing is that I feel better after today. Stocks are *supposed* to do this kind of thing. What's unnatural is when they just go straight up without a hiccup.


Yes, this is very normal! I don't know what'll happen tomorrow. Maybe markets will crash and burn, maybe they'll do something else. But a little pull back of 4-5% is very normal.


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## james4beach (Nov 15, 2012)

I'm enjoying watching this market action; pretty neat to see such big movements.

It's also funny to see what the media does with this. Yahoo Finance runs giant, scary, red banner headlines during times like this.

Yeah, I don't feel great about losing money, but any stock investor has to be prepared for losses. Stocks are dangerous... you could theoretically be down 50% a year from now in any stock portfolio. That's just the nature of the stock beast. One can always invest in GICs and bonds if you don't want losses.


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## cainvest (May 1, 2013)

james4beach said:


> I'm enjoying watching this market action; pretty neat to see such big movements.


Good timing for me, just about to commit my yearly RRSP/TFSA money. Might let it sit in HISA for a bit this year, see what happens though I'll likely just dump it all in MAW104 anyways.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> I'm enjoying watching this market action; pretty neat to see such big movements.


I thought it would be good to put the pullback into context, so I looked back at my 2008 archive records (I keep really good records back to 1993).

For the months of Sep/Oct/Nov 2008 I lost respectively -13.5%, -15.7%, -12.6% for a total of -41.8% in three months.

We're not even scratching the surface yet.....

ltr


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## james4beach (Nov 15, 2012)

like_to_retire said:


> For the months of Sep/Oct/Nov 2008 I lost respectively -13.5%, -15.7%, -12.6% for a total of -41.8% in three months.
> 
> We're not even scratching the surface yet.....


Good point, and I agree. These have been two dramatic days but it really isn't that big a decline (yet)


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## like_to_retire (Oct 9, 2016)

james4beach said:


> Good point, and I agree. These have been two dramatic days but it really isn't that big a decline (yet)


Yeah, for sure, not much to be concerned about yet, but it shouldn't stop people from getting their truck ready. You want to be able to back a truck up and load it if the **** hits the fan like it did in 2008. Cash is important to have around just in case. I remember backing up a truck on preferred shares in 2008. Many people made a ton of money on prefs in 2008. Anyway, nothing worse than having bargain basement prices and no cash to take advantage.

ltr


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## james4beach (Nov 15, 2012)

Asset allocation and a routine rebalancing process also takes care of that and may actually be better than keeping cash on the sidelines. If you keep cash aside waiting for deals, how long might you keep such cash on the sidelines? That's performance loss (cash drag).

"Buying low" using rebalancing has the additional advantage of removing emotion and tendency to want to time the market. In 2008, for example, with annual or semi-annual rebalancing, an investor would have sold bonds and bought stocks at depressed prices.

In other words, it gives you "buy low, sell high" automatically while keeping you fully invested the whole time. It's the only reliable way I've found to achieve that.


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## londoncalling (Sep 17, 2011)

That is the beauty of the market. Many ways to make money and just as many if not more to lose it. There is also a school of thought that says sell your losers and let your winners run. Regardless every investor should have an IPS and an asset allocation that works for them. The past few days I have seen declines (I don't believe any of my positions were in the green today). I am ready to deploy funds and have a few orders in place at prices lower than current. Will I feel the same if markets drop in the same manner as 08? Hard to say. I am also a long way from retirment. If I was retiring in the next few years my asset allocation would be less risky to remove the volatility (and likely the upside). Money can be made in up markets, down markets and sideways markets. It's just that one person's gain is another person loss. GLTA.


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## james4beach (Nov 15, 2012)

james4beach said:


> For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher . . . Does this make anyone else nervous? I actually felt more comfortable seeing some volatility in 2018 since that's normal.


Just one week ago, I said that the steadily rising market (which never falls, ever) was making me nervous. It seemed unnatural and too smooth.

Amazing how fast this nervousness has been answered! The market *did* fall, and very sharply, which actually looks kind of healthy to me. This is normal, and investing _should_ be difficult.

I feel better now. Wonder what I should wish for next... I think I'll wish for COVID-19 to be no big deal, so that it turns out all the current fears are over blown.


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## MarcoE (May 3, 2018)

It's a nasty virus, many people have died, and it's heartbreaking. It might also get worse. But it's worth remembering something. Long term, the stock market is amazingly resilient. Think about everything the stock market has faced in modern times. Two world wars. The Spanish Flu. Revolutions, coups, civil wars. Fascist and communist dictatorships. Wars, terrorist attacks, famine, genocides. Humanity has gone through very dark times. Times when all seemed lost. And throughout these events... the stock market churned on. There were ups and downs. There were crashes. Some very big crashes. There were periods of recession, even times of hunger. But the stock market kept going. Industry continued. The world recovered.

It's possible the coronavirus will spread across Earth, millions will die, and stock markets will crash 1929-style. Those will be dark, scary times. But long term, the stock market will recover and grow. The world and its economy can survive almost anything.

Maybe someday we'll get hit with something SO bad -- a big nuclear war, an asteroid impact, an alien invasion, a zombie apocalypse -- that civilization collapses. In this case, money will be useless anyway. What will become important are canned goods and guns. Anything short of that -- we'll get through it!


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

It seems much more likely that the big boys are crashing the stock market to kill Trump's chances of re election in November. The coronavirus is just an excuse. I base this on nothing more than these 2 things, a virus is no reason for everyone in the world to suddenly dump their stocks all at the same time and number 2, some very powerful people have already shown us they will stop at nothing to get rid of Trump.


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## james4beach (Nov 15, 2012)

So very rich and powerful people are deliberately crashing stocks, and inducing panic (which could get out of hand) to.... hurt Trump? Even though it's simultaneously wiping out their own money and causing economic contraction which is guaranteed to hurt their own finances?

That doesn't sound plausible to me.


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## capricorn (Dec 3, 2013)

Also, bit early if the crash was engineered. People have short memory. Looks like fear of unknown impact to supply chains.


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## MarcoE (May 3, 2018)

Rusty O'Toole said:


> It seems much more likely that the big boys are crashing the stock market to kill Trump's chances of re election in November. The coronavirus is just an excuse. I base this on nothing more than these 2 things, a virus is no reason for everyone in the world to suddenly dump their stocks all at the same time and number 2, some very powerful people have already shown us they will stop at nothing to get rid of Trump.


Sounds implausible to me. The stock market is in a correction. That is a very normal, healthy, and _ordinary_ part of the stock market cycle. This might turn into something worse. We'll see. Coronavirus is causing a lot of fear and uncertainty in the world, and fear and uncertainty are bad for business.


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

More than 10% drop in a week is not normal or healthy, it is almost unprecedented. The last bear market was 2008 - 2009 when the mortgage market collapsed and America's biggest banks, desperate to raise money, dumped stocks regardless of price. Even then prices fell slowly at first, taking 7 months to fall 40%. 

As for who might be behind it I would suspect political operatives who do not have a stake in the stock market themselves.

Maybe you can tell me why the coronavirus crashed the markets but the SARS outbreak in 2003 had no effect at all?


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## Butter (Nov 26, 2017)

China's has a bigger footprint today, than it did 17 years ago. So many exports. Starbucks, Disney, tons of businesses are closed in China, let alone the thousands of cancelled flights. Global tourism is dramatically more affected now.

MasterCard, Disney, Starbucks, etc have revised lower guidance for earnings in 3 months. I think we will hear the full story by summer.


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## humble_pie (Jun 7, 2009)

londoncalling said:


> I am ready to deploy funds and have a few orders in place at prices lower than current. Will I feel the same if markets drop in the same manner as 08?



do you remember dMoney? the youngest cmffer ever to become a millionnaire - believe he was only 26 at the time. Dmoney would have said If you have already Figured out your Buy price, then Sell Puts while you are Waiting.

the upside is that one harvests the cash premium from selling the puts

the downside is that the Buy position gets locked in. Never mind that the Buy price is lower than market at the time the puts were sold, the short put remains a tradeable security which the put seller has to repurchase in order to exit the position. Whereas one can simply cancel a below-the-market Buy order if the market plummets ... assuming that one can get to the order fast enough.

starting at 23 years of age, dMoney was utliizing a strategy that was smart & appropriate for his age. He knew that he was very young & just beginning a long period of investment accumulation. By steadily selling puts first, he was acquiring all of his chosen stocks at below-market prices.


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## MarcoE (May 3, 2018)

Rusty O'Toole said:


> More than 10% drop in a week is not normal or healthy, it is almost unprecedented. The last bear market was 2008 - 2009 when the mortgage market collapsed and America's biggest banks, desperate to raise money, dumped stocks regardless of price. Even then prices fell slowly at first, taking 7 months to fall 40%.
> 
> As for who might be behind it I would suspect political operatives who do not have a stake in the stock market themselves.
> 
> Maybe you can tell me why the coronavirus crashed the markets but the SARS outbreak in 2003 had no effect at all?


Yes, you are right. I too am concerned at the speed in which this is happening. And concerned that even after reaching correction territory, the freefall continues. Probably "healthy" is the wrong word. But -- I want to discourage all sorts of "conspiracy theories" about mysterious forces behind the scenes, manipulating the stock market for political gain. I'm not wearing my tinfoil hat. While this correction is particularly fast and brutal, corrections are quite normal. They happen a lot. This might just be another correction, like many that we've lived through before. Or it might be the beginning of something worse. I don't know how it will play out. I don't think anybody does.


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## marina628 (Dec 14, 2010)

Rusty O'Toole said:


> It seems much more likely that the big boys are crashing the stock market to kill Trump's chances of re election in November. The coronavirus is just an excuse. I base this on nothing more than these 2 things, a virus is no reason for everyone in the world to suddenly dump their stocks all at the same time and number 2, some very powerful people have already shown us they will stop at nothing to get rid of Trump.


If this is case then 2021 should be a great comeback year lol


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## CPA Candidate (Dec 15, 2013)

Does anyone understand why XSP.TO is down 6% but the SP500 index is down only 2%? Morningstar says XSP is trading at a 3% premium, but surely that is actually a 3% discount?


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## OptsyEagle (Nov 29, 2009)

CPA Candidate said:


> Does anyone understand why XSP.TO is down 6% but the SP500 index is down only 2%? Morningstar says XSP is trading at a 3% premium, but surely that is actually a 3% discount?


I suspect it is because of the "catching up" affect from being closed at 1:30pm yesterday due to the TMX trading kafuffle. 

I should add, it's price data was shut down. I do believe it traded on other exchanges until the end of the day, but its data, which comes from TMX, ended at 1:30pm yesterday.


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## cainvest (May 1, 2013)

Eder said:


> After some decades I am now able to be quite stoic about being down a BMW on any given trading day.


I guess BMW sales will really be down this week.


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## james4beach (Nov 15, 2012)

CPA Candidate said:


> Does anyone understand why XSP.TO is down 6% but the SP500 index is down only 2%? Morningstar says XSP is trading at a 3% premium, but surely that is actually a 3% discount?


Today's change %s are completely useless, because of the Canadian shutdown yesterday. Some securities probably traded a bit longer than others on the non-TSX exchanges yesterday so _even among Canadian_ securities, you can't compare % moves today, since they are not synced to the same point in time. Yesterday's "closing" prices in Canada are useless, and the percent change as of right now is also useless.

It's messing up my own tracking too. I suggest looking up February 26 close and comparing everything to that.


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## jargey3000 (Jan 25, 2011)

...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc


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## MrMatt (Dec 21, 2011)

jargey3000 said:


> ...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
> to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc


I bought some Bank stock instead of paying my mortgage 10 years ago, that was a great idea.
I think we're in for a rough ride, but this should be a great buying opportunity.


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## AltaRed (Jun 8, 2009)

The primary unknown is going to be the depth and severity of the global virus crisi and thus investor sentiment/speculation about GDP growth, or lack thereof. A global recession is not outside the range of possibilities. I am neither a buyer nor a seller, so I don't care, but I think it is still early days in a downward trend.


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## james4beach (Nov 15, 2012)

jargey3000 said:


> ...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
> to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc


Stocks are only down about 10% (less in Canada!) from their recent peak price. This is actually NOT a very low stock market. Stocks have fallen rapidly, but haven't fallen very much.

Stocks are still very high in absolute terms. So I would not describe today as a 'great buying opportunity'.

Example: S&P 500 closer to 2000 (meaning the index, not the year) would be a great buying opportunity. We are nowhere near that now.

Today this looks like a pretty normal level to me. Could go higher, could go lower.


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## OptsyEagle (Nov 29, 2009)

james4beach said:


> Stocks are only down about 10% (less in Canada!) from their recent peak price. This is actually NOT a very low stock market. Stocks have fallen rapidly, but haven't fallen very much.
> 
> Stocks are still very high in absolute terms. So I would not describe today as a 'great buying opportunity'.
> 
> Example: S&P 500 closer to 2000 (meaning the index, not the year) would be a great buying opportunity. We are nowhere near that now.


The only problem with that is that for that index to ever trade at 2000 again, a very, very large number of people will need to be absolutely sure that the future direction of the stock market, from there, will be much lower. If that is the case, will you be able to buy it. Remember at that point, only sellers have looked smart. Buyers have been brutalized. 

The fear has to be higher at 2000 then it is at 3000. If one is nervous now, good luck buying then.


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> The only problem with that is that for that index to ever trade at 2000 again, a very, very large number of people will need to be absolutely sure that the future direction of the stock market, from there, will be much lower. If that is the case, will you be able to buy it. Remember at that point, only sellers have looked smart. Buyers have been brutalized.
> 
> The fear has to be higher at 2000 then it is at 3000. If one is nervous now, good luck buying then.


I'm not sure it would require ongoing fear; it would only require a growing distaste for stocks, or less willingness to over-pay.

Look at the CAPE value, the market currently sits at a 28x multiple. Earnings could actually stay the same -- no business impact at all -- and the multiple could shrink down towards a historical average such as 17x.

The CAPE has sit at such levels for very long stretches of time in the past, many decades, and basically all of 1940 - 1960 and then again 1970 - 1990. Were those bad times full of constant fear? Of course not. Pretty normal decades.

It's the recent period with chronically high CAPE which is the anomaly. Analysts had shrugged off these high multiples and said, well I guess we just live in a new era where people are willing to pay more for stocks.

The market's P/E multiple is one of those things that's totally psychological, and it has a huge impact on stock levels. In other words you can have the same earnings forecasts as today, no deterioration in business conditions, and the multiple could shrink if people just don't feel like paying as much for stocks. If it shrinks all the way to historical averages, that would be a 40% decline in the S&P 500.

People's feelings and moods affect the P/E multiple, which turn can add volatility onto the stock index... even while corporations remain profitable and the index continues trending upward over time. It does *not* mean the end of businesses nor the end of economic growth. It just means people aren't willing to pay as much for stocks.

I have no idea whether the era of chronically high CAPE is coming to a close, but it's a possibility. For many years, I've written my theory on this forum that we have been in a period with inflated stock valuations due to stimulus from the central banks.


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## OptsyEagle (Nov 29, 2009)

james4beach said:


> I'm not sure it would require ongoing fear; it would only require a growing distaste for stocks, or less willingness to over-pay.


It would require more fear. 

In order for that index to go from 2100 to 2000 a boat load of investors would have to be worried that it was going to go a lot lower. Why else would they sell. It's not like a bell will go off at any level for investors to know it is the bottom. A bottom is formed when the fear is greatest and the lion's share of investors have sold as much as they have or as much as they ever will. That is called the point of maximum pessimism and it is what forms stock market bottoms.

It is very difficult to go against that since it must be accompanied by some amount of logic or reasonableness to get so many people to behave like that.

What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independantly but almost none of us can or do. Many that have are mistaking luck for brilliance, 9 out of 10 times.


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## like_to_retire (Oct 9, 2016)

OptsyEagle said:


> What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independently but almost none of us can or do.


Like many older investors here I have lived through many of these pullbacks and it always seems that, "it's different this time". Except it's not.

I find a great indicator to buy is yield. I won't point out any specific stock, but many of the blue chips can be considered a buy when they're yielding a certain figure. So if there's a well run blue chip stock that historically yields 4% and during a market pullback the yield moves to 5%, then that's a good trigger to buy. 

Generally the market is an ***, resulting in the market price of this particular stock (that is now yielding 5%) dropping along with every other stock because of some situation that has nothing to do with that company's fundamentals, but it's price is down and subsequent yield is up because the market is crazy.

Buying on that dip gets you a solid blue chip stock that pays 5% for the long term. If you had purchased in the past during normal times, you would have gotten a solid company, but only at 4%.

So whether we think the market is at a bottom or not, I usually rely on yield to tell me when it's a decent time to buy.

ltr


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independantly but almost none of us can or do. Many that have are mistaking luck for brilliance, 9 out of 10 times.


Totally agree. I have no clue if it's going up or down.

Some factors are business conditions + emotion + irrationality + herd behaviour + Federal Reserve + ECB + virus contagion + virus mutation + other unknowns

Obviously, no way to predict such wildcards. I've given up trying... sticking with my predefined allocation plan. At least it's consistent and always gives me clear guidance on what to do next.


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## robfordlives (Sep 18, 2014)

The most likely scenario by December 2020 is that we have:
-Coronavirus totally gone or subsided. As a side note hate how the media reports total cases while ignoring the 45K who have now already recovered. They should be reporting the net number
-Trump re-election and Tax Cut 2.0
-Fed rate at 1.0% along with all other Central Banks pumping like crazy on this "threat"
-All factories going 24/7 gangbusters to catch up on any remaining supply chain issues. 
-Massive China stimulus to get the economy going again. Ghost cities galore!!
-All this against a 10 year Fed treasury yield under 1% probably....stock market looks pretty good then

There will be a rip your face off rally never before seen in history...mark my words

Now if Sanders gets in........look out below


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## Jimmy (May 19, 2017)

The Bank of Japan is lowering interest rates in response and Nikkei is up 1 %. China is bailing out an airline , their index is up ~ 3%. S&P futures up 1%. FRC Powell said Friday they are monitoring and may need to cut rates to boost the economy. Some optimism out there finally


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## sags (May 15, 2010)

The Breakeven Fallacy.

Many investors forget about simple mathematics and take in losses that are greater than they realize. 

They falsely believe that if a stock drops 20%, it will simply have to rise by that same percentage to break even.

Note how the recovery % becomes wider as the initial losses deepen.

% Loss % Rise To Break Even
15% 18%
20% 25%
25% 33%
30% 43%


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## robfordlives (Sep 18, 2014)

Told you guys this would happen. Definitely more volatility coming up but this thing is gonna be up huge end of year


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## Synergy (Mar 18, 2013)

robfordlives said:


> Told you guys this would happen. Definitely more volatility coming up but this thing is gonna be up huge end of year


I say you have a 50% chance of being right and a 50% chance of being wrong. If you have a fix, a loaded coin or a crystal ball please do tell.


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## robfordlives (Sep 18, 2014)

Synergy said:


> I say you have a 50% chance of being right and a 50% chance of being wrong. If you have a fix, a loaded coin or a crystal ball please do tell.


I posted my reasons for a massive runup into Dec 2020. Today is nothing, just wait. Which of my points do you disagree with?


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## Synergy (Mar 18, 2013)

robfordlives said:


> I posted my reasons for a massive runup into Dec 2020. Today is nothing, just wait. Which of my points do you disagree with?


I disagree with the fact that you can predict the near future with any degree of certainty. How things transpire over the remainder of the year is nothing more than a coin toss. Long term, if the past is any predictor of future events (and this is somewhat questionable) earnings should grow, the stock market should rise, etc. But, short term / over the next 8-10 months, the market performance is just a gamble.

Trying to time the market is a waste of time. 50% of the time you'll be right and 50% of the time you'll be wrong...


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## OptsyEagle (Nov 29, 2009)

Retail sales dropped 21% year over year, in Hong Kong, in January. That is one heck of a drop in economic activity, if you ask me. I don't know how many people our companies would need to lay off if that kind of pull back is seen in the rest of the developed world, but lets just say it would be a lot of people getting pink slips.

https://www.scmp.com/news/hong-kong...ng-kongs-retail-sales-plummet-21-cent-january


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## james4beach (Nov 15, 2012)

It's happening again. I'm feeling nervous about perpetual, unrelenting gains without corrections. No fear, no corrections, no disappointment. That makes me nervous.

The day I started this thread -- saying I felt nervous -- was actually the stock market PEAK of February 19 preceding the crash. I only noticed this today when I found the old thread.

I hope I'm wrong. One would think that the volatility of the last few months would flush out speculators and greedy investors, but my worry is that they are back. I think people have short memories, plus we might have a new crop of greedy investors now.


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## calm (May 26, 2020)

Why would anyone be nervous when nobody is working and the markets are rising in value?


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## :) lonewolf (Feb 9, 2020)

james4beach said:


> For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
> VCNS.TO - Vanguard Conservative ETF Portfolio
> 
> Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
> ...


 Its all good investors get burned when they get complacent. The complacency can be seen of late in the trust of Government. Some people trust government so much that they wear masks.


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## Topo (Aug 31, 2019)

Year after year, crisis after crisis, big business is winning and small business is losing.


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## hboy54 (Sep 16, 2016)

:) lonewolf said:


> Its all good investors get burned when they get complacent. The complacency can be seen of late in the trust of Government. Some people trust government so much that they wear masks.


I wear a mask indoors in public places because the cost to me doing so is so close to zero, it might as well be zero, and the benefit over the whole population doing this is much further from zero. In other words I am rational.


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## newfoundlander61 (Feb 6, 2011)

For me I will not need any of my investment money for a few years to come so I have been sticking to my plan.


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## Pluto (Sep 12, 2013)

james4beach said:


> It's happening again. I'm feeling nervous about perpetual, unrelenting gains without corrections. No fear, no corrections, no disappointment. That makes me nervous.
> 
> The day I started this thread -- saying I felt nervous -- was actually the stock market PEAK of February 19 preceding the crash. I only noticed this today when I found the old thread.


Good call. And it is a good skill to develop ones emotions to be opposite the crowd.


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## Pluto (Sep 12, 2013)

Topo said:


> Year after year, crisis after crisis, big business is winning and small business is losing.


Perhaps your observation is one among many clues on how to beat the market.


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## Topo (Aug 31, 2019)

Pluto said:


> Perhaps your observation is one among many clues on how to beat the market.


The best way to beat it is to join it!


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## james4beach (Nov 15, 2012)

What makes me nervous is how smoothly my portfolio is gaining value since April. The chart pasted below is my portfolio value over the last 4 months (normalized to 100 starting).

And you can see the exact same thing in this chart of RPAR (ETF) that uses a similar strategy as me. This kind of steady gain seems unnatural.

You can also see the same theme in charts like XBAL and VCNS. Unrelenting, almost daily gains in all portfolio assets.


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## MrMatt (Dec 21, 2011)

james4beach said:


> What makes me nervous is how smoothly my portfolio is gaining value since April. The chart pasted below is my portfolio value over the last 4 months (normalized to 100 starting).
> 
> And you can see the exact same thing in this chart of RPAR (ETF) that uses a similar strategy as me. This kind of steady gain seems unnatural.
> 
> You can also see the same theme in charts like XBAL and VCNS. Unrelenting, almost daily gains in all portfolio assets.


Completely natural.
Stocks aren't going up, they're just printing money and inflating the currency.

Divide out by the price of gold, and your graph magically becomes flat.


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## james4beach (Nov 15, 2012)

MrMatt said:


> Completely natural.
> Stocks aren't going up, they're just printing money and inflating the currency.
> 
> Divide out by the price of gold, and your graph magically becomes flat.


That's a good point


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## james4beach (Nov 15, 2012)

I had started this thread on February 19, 2020 just days before the market crash started.

One funny thing about this thread is that reading back over it, after post #77 the market had truly started to crash, and I said that it made me feel better. Oh boy, if I only knew what was coming.

I'm feeling a bit nervous again today. Mainly because *every* position I have is green. Every single one, in every account! Even my speculative stocks, even my tiny weird positions in WDO and FNV... everything green. I guess I can't help but get nervous whenever all positions are going extremely well.


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## londoncalling (Sep 17, 2011)

be interesting to see if your spidey sense will be right again. I am having a hard time building cash in my equity portfolio as a % for the following reasons 

1. The recent share price appreciation has lowered my portfolio yield.
2. The recent share price appreciation has overshadowed my regular contributions
3. US$ weakness lowered the C$ value of my US$ divvies.

None of this concerns me at the present time. I am seeing dividend growth in several positions. Trimmed some overweight positions. And purchase US equities with my US$ dividends.

I have some GICs coming due this fall which I plan to move to my equity allocation depending on rates. In the meantime I will keep watching and looking for potential buys.


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## AlexInvestSavvy (Oct 13, 2020)

james4beach said:


> I had started this thread on February 19, 2020 just days before the market crash started.
> 
> One funny thing about this thread is that reading back over it, after post #77 the market had truly started to crash, and I said that it made me feel better. Oh boy, if I only knew what was coming.
> 
> I'm feeling a bit nervous again today. Mainly because *every* position I have is green. Every single one, in every account! Even my speculative stocks, even my tiny weird positions in WDO and FNV... everything green. I guess I can't help but get nervous whenever all positions are going extremely well.


Haven't read everything here, but Very Interesting...
I have the same sentiment, am I being too bearish?...
My financial advisor called me yesterday for the first time in a long time; I thought, oh, she's calling to urge me to shelter my investment and take things down a notch following these unprecedented market returns (it seems bigger than 1999 and 2007 combined! lol), but she said the exact opposite! lol. "I think your fund is too conservative; take things up a notch to a higher growth level." I was totally perplexed. Is there something I am missing here? lol. I was like, why didn't you make this call in April 2020(?)! loll. I'm not sure where she got this from. Maybe she's spot on, no one has a crystal ball, but of all points in time, I can't see how now is the time to become more aggressive!
Thank you for sharing this James, I can relate to it!


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## londoncalling (Sep 17, 2011)

My cash position is at an all time high both in dollar amount and as a percentage of my equity account. I have a few orders in place to add to existing positions. I also have a few sell orders in place on some positions I want to trim at a higher target. Am I nervous? Not really. But that is because I am fine with a move of 10% or 20% percent either direction. Even the market's reaction to the pandemic didn't scare me. However, if I was retired or near retirement I can assure you may have felt much differently.


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## james4beach (Nov 15, 2012)

AlexInvestSavvy said:


> but she said the exact opposite! lol. "I think your fund is too conservative; take things up a notch to a higher growth level." I was totally perplexed. Is there something I am missing here


I wouldn't do it. I really don't think now is the time to shift to something more aggressive.

Plus it's easy for advisors to tell people to get less conservative. It's not their money (not their stress) when things go wrong


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## AlexInvestSavvy (Oct 13, 2020)

james4beach said:


> I wouldn't do it. I really don't think now is the time to shift to something more aggressive.
> 
> Plus it's easy for advisors to tell people to get less conservative. It's not their money (not their stress) when things go wrong


Absolutely! Don't worry, I didn't do it ; -) I would have understood her making that call over a year ago, but I can't see what would prompt it now.


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## MrMatt (Dec 21, 2011)

james4beach said:


> I wouldn't do it. I really don't think now is the time to shift to something more aggressive.
> 
> Plus it's easy for advisors to tell people to get less conservative. It's not their money (not their stress) when things go wrong


Yup, it's not in their interest to sell low commission fixed income products instead of pricey actively managed funds.

really pick a plan, and follow it. There are lots of sites with no conflict of interest providing simple clear advise.


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## kcowan (Jul 1, 2010)

I would ask her. I would express everything you have heard here and ask for her defence of this timing after two good years!


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## londoncalling (Sep 17, 2011)

I agree with @kcowan but my guess would be that the advisor would show you a chart indicating how you much gain you lost out on the past two years and that its not too late to make a change to capture better returns in the future. She will totally ignore the fact she should have offered the allocation strategy before the current performance and try to put that on you as the kyc process but that you actually are able and willing to take more risk now that she has been your advisor this long.... blah blah blah. My assessment is that you know more than she does about your investment strategy.


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## AlexInvestSavvy (Oct 13, 2020)

Thank you guys, much appreciate  It's OK, it's a relatively minimal amount (it's from an old group insurance plan, I go DIY + other company for my other stuff), I was actually surprised she called a little guy like me, as it's so hard to get a hold of advisors these days! ;-)


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