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This is kind of hilarious. On the evening news, the first story was about how rising interest rates are going to cause problems for all the people who took mortgages at record low rates. Lots of worried homeowners.

The second story? People still have trouble finding items, for all their home renovations and furnishings.

You've gotta be kidding me! The homeowners are greedily using those historically low mortgage rates, and blowing the money on luxury renovations and home furnishings.
Because ... people are stupid.

This isn't news it's also why I want them to leave me alone, they're dumb and they make bad decisions.
 

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The steady drip may not be enough to put the brakes on inflation.

It sounds like the BOC is willing to sacrifice overstretched consumers.
... imagine seeing the prime rate go to 5% by the end of July. And then 6% by end of September. And then 7% by year end. I wonder if this will be enough for a 2022 recession?
 
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Personally this brings a lot of relief. I feel like I've been living in crazy land with how the Canadian RE market has been going for the last 10 years. I've been a firm believer that the housing market only makes sense at extremely low interest rates. If you think they will never go up then you're good. If you think they might - who knows when, then RE has been a highly risky investment.

Anyway, this belief has made me look and feel like a moron that last decade. I'm hoping for some vindication.
 

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Personally this brings a lot of relief. I feel like I've been living in crazy land with how the Canadian RE market has been going for the last 10 years. I've been a firm believer that the housing market only makes sense at extremely low interest rates. If you think they will never go up then you're good. If you think they might - who knows when, then RE has been a highly risky investment.

Anyway, this belief has made me look and feel like a moron that last decade. I'm hoping for some vindication.
I'm sure you'll get the vindication you're looking for. Give it a year or 2.
 

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I've noticed a number of headlines regarding companies laying off staff. Wealth Simple 13%, Hexo 450, Coinbase 18%, Tesla 10%, TomTom 500, BBC 1000, Uber, Meta, Aliexpress......

Could be a bumpy road ahead.
 

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I would be surprised if in 2 years interest rates aren't down to <1% sadly
Very possible, and it's one reason I keep saying that bond investors shouldn't try to time interest rates.

If you hold XBB today you're getting 4.1% yield. Same reason one shouldn't avoid the 5 year GICs which are now around 4.5% yield. If your time horizon is long enough, you should be doing long term fixed income investments. We never know where interest rates will go.
 

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It currently appears central bankers are determined to get inflation under control. Assuming they continue to have the backbone to do so and don't blink when the going gets tough, this will be a great opportunity to flush all the excesses out of the system.

There is a need for a great cleansing whack-a-moling all those who took out HELOCs for grandiose home renovations and leveraged* stock market investing, those who have been speculating with pre-construction contracts on the premise condo market values had nowhere to go but up, etc, etc. Every now and then, the overly ambitious and extended smart a**es need their heads handed back to them. This one has been 10 years in the making. May the next 1-2 years be a time for the 'great reset'.

Lest those comments sound too vindictive, I do hope that not many will lose their principal residences in this process. Only that they get the appropriate number of lashes to reset their lifestyles to live within their means. .

* I have not yet seen much written about folks struggling with margin calls. Perhaps the situation is not as bad as I thought it might be.
 

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@AltaRed - If I am not mistaken, you buy VEQT in all of your accounts. I am done contributing to my registered accounts. I am thinking to start contributing to my non-registered account and buy XEQT there. I am not sure if I will be paying more foreign taxes if I buy XEQT in my non-registered account or should I just buy Canadian equities such as VCN or XDIV?
 

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I only buy VEQT in my TFSA and VCNS in my RRIF. I accept the loss of foreign withholding taxes because it is not material to intent nor return.

You really won't pay more taxes owning VEQT or XEQT in your non-registered accounts than you would by holding the component ETFs individiually. Any foreign tax withheld will show on your T3 tax slip and be a foreign tax credit on your tax return.
 

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It currently appears central bankers are determined to get inflation under control. Assuming they continue to have the backbone to do so and don't blink when the going gets tough, this will be a great opportunity to flush all the excesses out of the system.

There is a need for a great cleansing whack-a-moling all those who took out HELOCs for grandiose home renovations and leveraged* stock market investing, those who have been speculating with pre-construction contracts on the premise condo market values had nowhere to go but up, etc, etc. Every now and then, the overly ambitious and extended smart a**es need their heads handed back to them. This one has been 10 years in the making. May the next 1-2 years be a time for the 'great reset'.
I completely agree with you on all parts of this.

However, let's keep in mind that they might chicken out, which is an important reason to also maintain exposure to your various assets (especially stocks) because if the CBs chicken out, these assets may be your only protection from continuing runaway inflation.

Some investors these days will be tempted to dump their assets and go to cash. But then, >> if << the CBs fail to follow through, those cash investors will be absolutely screwed.
 

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I am not changing anything in my portfolio. I didn't in any of the prior market implosions and don't intend to do so now. I won't like it but if we had another 2008 style event, one needs to remember the S&P500 peaked in Oct 2007, hit bottom in Mar 2009 and didn't return to its prior peak until about Oct 2013.... 6 full years later (dividends not included). Investors need to consider that as a real possibility, notwithstanding they'd be collecting dividends in the meantime.
 
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