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Topo, I’ve owned Apple for decades, I bought it when everyone thought it was going under, I’ve made incredible returns on it, unlike bonds. I would recommend you don’t make assumptions about what I own.
 

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I fully understand Agent99's desire? insistence? that his FI component should provide a real return ON investment. I would suggest that will result in a volatile fixed income allocation NOT being the ballast one needs for return OF capital. One cannot have it both ways.
Not sure you read me correctly, but likely not far off the mark. I certainly won't make "investments" that are 'guaranteed' to lose me money. (almost all gov bonds and GICs these days)

Some of my alternatives, like perpetual pfds, may eventually lose, but their 5 or 6% yields will no doubt be high enough and around long enough for my needs. If interest rates drop as some suggest, maybe they will get called. No problem with using them as a buffer then!
 

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Topo, I’ve owned Apple for decades, I bought it when everyone thought it was going under, I’ve made incredible returns on it, unlike bonds. I would recommend you don’t make assumptions about what I own.
What about AMZN? It has done even better than AAPL.

And BTW, wouldn't you have done way better buying all AAPL and no BMO? You could have retired by now.

Even NA would have gotten you farther.
 

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Some of my alternatives, like perpetual pfds, may eventually lose, but their 5 or 6% yields will no doubt be high enough and around long enough for my needs. If interest rates drop as some suggest, maybe they will get called. No problem with using them as a buffer then!
I have a few of those too for similar reasons BUT if there is a surge of inflation in long term bonds in a few years, market prices will drop. The risk of holding these is thus two fold:
1) for those retirees that need to tap into the capital at some point, and timing is terrible, i.e. share prices are down
2) untimely death when an Executor may need to liquidate when share prices are down.

While you and I may not care about either of those two issues, the vast majority of retirees will care about 1) in particular, and some care about the legacy item 2). Hence why I prefer not to promote them without those qualifications.
 

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Bonds are yielding very low returns today. And XBB has enjoyed a nice runup in recent years. So in a way, it IS a bad time to buy bonds. BUT--timing bonds is very difficult. You have to know how to time interest rates and inflation. I can't time those. Can you?

I think asset allocation is still king. Come up with the right asset allocation for you. Then create a portfolio that matches that asset allocation. If it calls for bonds, bite the bullet and buy them at a "bad time." That's what I would personally do. But as you can see, there are different opinions here. So listen to everyone and make up your own mind.

And unless you lived through a market crash, where stocks fall 50% or so, don't underestimate how terrifying that can be. Most investors will be glad to have lots of bonds next time that happens.
 

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Since you're looking at past performance I guess I could chart the last 12 years of XBB Bonds versus XIU Equities. I'm not much interested in supporting you in my old age.


XBB vs XIU

View attachment 20624

ltr
I don't want to enter the debate about bonds because there's no single truth to this but I really don't like when a graph like this is used to try to prove a point. That's a specific point in time.

What if I show you this instead?

20625


There's no single graph to bonds vs stocks. It always comes back to risk. We should simply know that the spread of possibilities is bigger for stocks because of the volatility.

If you have 100% XBB, 1M$ invested and you withdraw 3000$ every month for 30 years VS same thing but 100% XIU then :
  • 10% probability to have 586k$ left in XBB VS 17% probability to have 0$ left in XIU before the end of the 30 years
  • 50% probability to have 1M$ left in XBB VS 50% probability to have 2.2M$ left in XIU
  • 10% probability to have 1.5M$ left in XBB VS 10% probability to have 10.9M$ left in XIU
If you have 100% XBB, 1000$ invested and you contribute 1000$ every month for 30 years VS same thing but 100% XIU, then :
  • 10% probability to have 912k$ in XBB VS 10% probability to have 658k$ in XIU
  • 50% probability to have 1M$ in XBB VS 50% probability to have 1.4M$ in XIU
  • 10% probability to have 1.18M$ in XBB VS 10% probability to have 3M$ in XIU
If you have 100% XBB, 1M$ invested sitting there for 30 years VS same thing but 100% XIU, then :
  • 10% probability to have 3.39M$ in XBB VS 10% probability to have 1.99M$ in XIU
  • 50% probability to have 4.12M$ in XBB VS 50% probability to have 6.5M$ in XIU
  • 10% probability to have 5M$ in XBB VS 10% probability to have 19M$ in XIU
(These are simulations, results may differ a bit)
Withdraw scenario with XBB
Withdraw scenario with XIU
Contribution scenario with XBB
Contribution scenario with XIU
Sit scenario with XBB
Sit scenario with XIU

Another thing, for the last 20 years :
  • XBB rolling 15-year return is min 4.22%, average 4.69%, max 5.35%
  • XIU rolling 15-year return is min 4.90%, average 7.12%, max 9.10%
 

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I don't want to enter the debate about bonds because there's no single truth to this but I really don't like when a graph like this is used to try to prove a point. That's a specific point in time.

What if I show you this instead?
Well, it still looks pretty good to me.

You may have missed my point of the graph though.

Member @JAG was telling us how much money he made on equities from 2008 and saying he was "Thinking of all the fools who bought ”safe” bonds and who I’m going to have to support in old age".

I simply wanted to show that bonds have done fine from 2008 and will probably do fine into the future.

ltr
 

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What about AMZN? It has done even better than AAPL.

And BTW, wouldn't you have done way better buying all AAPL and no BMO? You could have retired by now.

Even NA would have gotten you farther.
A couple years ago JAG was crowing about buying up "cheap" Kraft Heintz shares.............ouch !
 

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You may have missed my point of the graph though.

Member @JAG was telling us how much money he made on equities from 2008 and saying he was "Thinking of all the fools who bought ”safe” bonds and who I’m going to have to support in old age".

I simply wanted to show that bonds have done fine from 2008 and will probably do fine into the future.

ltr
Got it, sorry for that.

I have a radar for these kinds of graphs but I missed the context which justifies it.
 

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What about AMZN? It has done even better than AAPL.

And BTW, wouldn't you have done way better buying all AAPL and no BMO? You could have retired by now.

Even NA would have gotten you farther.
Glad to see you completely missed the point that any of the stocks I invested in have done multiple times greater than BONDS. even with the correction I’ve done better than bonds. Heck, a dead monkey could probably get better returns than bonds. It’s not about getting the maximum return, it’s about not investing in something which actually looses money and pretending it’s a great investment and everything else is too risky.
 

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Glad to see you completely missed the point that any of the stocks I invested in have done multiple times greater than BONDS. even with the correction I’ve done better than bonds. Heck, a dead monkey could probably get better returns than bonds. It’s not about getting the maximum return, it’s about not investing in something which actually looses money and pretending it’s a great investment and everything else is too risky.
Glad to see that you miss the point that "stocks are stocks, and bonds are bonds, and the two shall never meet." It is completely reasonable to compare common shares of BMO with common shares of AAPL. It is completely justifiable to compare bonds of BMO and bonds of AAPL. But, it makes no sense to compare common stock to bonds. The issue is not only returns, it is returns relative to risk.

You could have put 100k in AMZN 10 years ago and blown the rest of you money in the casino. You would still be well ahead. With all the gloating that you do, unless your portfolio is filled with ten-baggers, you are "all hat and no cattle."
 

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Forget ten baggers, Apple was way higher than that. But I also don’t lose money on any of my stock.

buying a bad investment, defined by me as money loosing, is for morons. Math doesn’t lie, bonds have tiny returns, sure there is less risk as you are guaranteed to loose money from the minute you buy them.

i suppose you’d recommend using swampland in Florida as a good investment as well, as you’d diversify your portfolio. It’s not a stock or bond, but it’s also likely to loose you money from the start, better get in on it quick.
 

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Ontario RE beat every other investment vehicle in the last decade. With RE people can borrow up to 95% of the home purchase price and keep all the gains. US housing collapse and the 1990 Toronto RE example are not valid in the current scenario.

IMHO, If you are in ON/ BC, RE should be your priority. COVID is not reducing the prices means RE will never go down and all govts ( federal/provincial) depend on RE so they will do anything and everything to protect RE.. people who lived/living within their means will be screwed big time in the coming years. people who invested in CDN index/CDN banks are also getting benefits of raising RE.

one of my colleagues said Govt doesn't need people like you (me), who save money instead of spending. I think he is Right.
 

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Ontario RE beat every other investment vehicle in the last decade. With RE people can borrow up to 95% of the home purchase price and keep all the gains. US housing collapse and the 1990 Toronto RE example are not valid in the current scenario.

IMHO, If you are in ON/ BC, RE should be your priority.
Counter-argument: gold has beaten every other asset class over 20 years and 15 years. It's outperformed stocks, bonds, and real estate. Why not invest in gold instead of these other things?

I don't really believe that, but I'm pointing out one should not chase performance in an asset.

20631
 

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Counter-argument: gold has beaten every other asset class over 20 years and 15 years. It's outperformed stocks, bonds, and real estate. Why not invest in gold instead of these other things?

I don't really believe that, but I'm pointing out one should not chase performance in an asset.
Simple.. with RE you only put 5% of your money, rest is borrowed and you live in the house, and the lender will not force you to sell when underwater unlike stocks/gold bought using margin money.

Even if the property is purchased as an investment, the renter pays for the mortgage and you make profits.

Try making 100k from stocks/gold vs buy a property and flip it. I think the second option is a lot easier.

For Example, Houses in my community that were sold 660k in 2018 are going for 800k now. one townhome was sold for 540k in 2018 was resold 720k in 18 months. This is on KWC area, not even GTA.
 

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Housing is a poor example unless you use affordability criteria, i.e. the monthly carrying cost. Absolute prices are very secondary. Prices would collapse with a doubling of mortgage nterest rates.
 

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US housing collapse and the 1990 Toronto RE example are not valid in the current scenario.
It would help if you explain why you think that's the case.

A minimum down payment means a 5% drop in prices will wipe out your equity. There are almost certainly condo owners in the GTA who are already in that position.
 

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Housing is a poor example unless you use affordability criteria, i.e. the monthly carrying cost. Absolute prices are very secondary. Prices would collapse with a doubling of mortgage nterest rates.

When gold, or stocks collapse, you lose money. When housing prices collapse, you still generate rental income every month. Who cares what the property is worth. Why would you sell a steady income? Oh right, you think bonds are a good investment.
 

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With all the govt stimulus, all assets are making money.... this is better than that, so on & so on.... if the Fed stops printing... or if there is real deflation / inflation, lots of us will be crying ......

when nothing makes money let’s re-hash this....
 
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