This has been one of my favourites for a decade:
Eder knows this. He's in it for the dividends, not the equity.The GIC cannot fall 30% in the blink of an eye, as FTS did during the covid crash.
FTS had reached a high of $59.28 in early 2020, then swiftly crashed along with the market, reaching a low of $41.52 ... 30% decline in just one month.
The GICs are for capital preservation, obviously. They don't crash.
I hold tons of FTS myself too, but let's not forget they are equities and come with equity risk.
That's a positive spin on a negative situation.But wait, even though that's a bad increase, it's a percentage, it's relative to our prior debt. Maybe we aren't that bad in absolute terms.
I mean, let's say I make $100,000/year and I have $20,000 debt, then the next year I have $40,000 debt, an increase of +100%. And let's say my friend makes $100,000/year and had a debt of $80,000 and the next year $100,000, an increase of +25%. Even though I had a huge percentage increase of my debt, I'm better off in absolute terms.
Have fun making a positive real return with real estate rising more than annual salaries. You're just getting further behind, especially with your percentage of bonds and gold.Maybe you're forgetting about the whole point of investing. It's to get a positive real return, to preserve the value of your money.
If you're investing in a diversified portfolio, the odds are that you will beat inflation over time. It's the people who don't invest, or who don't have any assets, who are in big trouble due to inflation.
What's the point in trying to achieve a positive real return if you're so content to downsizing?Yeah we're the same age. Or I'm late 30s, not sure about you.
Falling behind in real estate? Then I'll buy a smaller place, or rent forever. Who cares ... I don't need a mansion. Square footage of homes has increased tremendously since the 1970s but I'll be OK living in a small place. I would be OK with something the size of a 1960 or 1970 home.
I can't speak for other Canadians but it's their problem, if they insist that they "deserve" a very large home that's beyond their means.
With my bonds in my asset allocation, yes I am getting a positive real return. Measuring it since I started tracking it about 6 years ago, my whole portfolio is performing at 7.0% CAGR which is well above the inflation rate. And that's with 50% bonds, annual rebalancing, Canada & US equities.
An excellent, positive real return along with stability. I barely noticed the drop during the 2020 crash.
Falling further behind? I don't see it. Maybe I'm just more of an optimist than you. As far as housing, somehow I'm not concerned about that either. IMO the market will calibrate the price of housing such that mortgage payments will be comparable to rent.
I can afford rent, so I can afford a mortgage too. To me it's kind of arbitrary which way to go.
I guess. But you're winning by a small amount while others are winning by large ones. So it's like you're winning a game that doesn't really matter.Even if you're got a 2% or 3% real return, you're winning.
There is no such thing as enough. Just because I have more than people my age doesn't mean I am satisfied. I'll be satisfied when my houses are paid off and I have a nice portfolio with a Porsche in the driveway. Until then, I will keep grinding. There are plenty of people who have more than us, who make more than us, who are doing better than us.I also don't know what you mean when you keep saying "get ahead". Get ahead of what? Aren't you already well ahead of countless other Canadians? As I recall, at age 32 you have a pretty significant net worth that's far above the median at your age.
I don't know how anyone around our age group is not experiencing FOMO looking at real estate prices.Sounds to me like you're experiencing a kind of FOMO and greed for riches.
Tell that to Australia, New Zealand, Canada, Norway and Sweden.Historical real house prices (red line) in developed countries. It doesn't only go up.
I'm up over 30% this year in my stock portfolio. I'd normally say that's really good, but this year that's actually not great. I thought there would be a bigger resurgence in some stocks that never materialized quite as well as I hoped and that hurt my returns.I think my returns are above average, not below.
I think you are taking social media-hyped, short term returns way too seriously. This is kind of like how people look on Facebook and think all their friends and neighbours are living amazing lives.
It's often fake or misleading. Social media is not an accurate reflection of reality.
Super high returns do not persist in the long term. Gamblers get high returns one moment, then lose it all the next moment. It can't be sustained.
If you've made it - you've made it. Then you're doing the right thing.My portfolio includes many stocks, real estate, and some crypto. It also includes many bonds and gold -- because it's designed to last.
You said that the thing you want most is to leave your shitty full time job. In your situation, I might want an aggressive portfolio too, so that I could strike it big and escape. If I were 32, and stuck in a job I hated, I'd probably invest aggressively too.
My situation is different. I have enough money that I don't need to work a day job, shitty or otherwise. And I haven't needed to for quite a few years now. At this point, I don't need to take big risks. I want capital preservation.
Once you have a large portfolio, I think your attitude might change. Once you've "won" the game, why go back to the casino? You're interested in preserving your wealth. Generally, in my experience, wealthy individuals are interested in capital preservation more than growth. If you already have lots of money, you're willing to sacrifice potential growth for safety.
I'm making about 8% CAGR and am quite happy with that. I could make more, but I'd be taking more risk. I'm interested in preserving my wealth for many years to come.
(And BTW, I live in a nice house and eat well. No 1 bedroom apartment or ramen here, don't worry.)
Bonds are broken. Absolutely. They don't make much sense unless you're old and/or rich as hell already.Now I hold algorithmic stablecoins that earn good yield unlike bonds and can be used to rebalance (I have used them for this several times now) Stablecoins are not all created equal, need to be regulated, and do pose a risk if you don't understand what they are. But bonds on the other hand are being manipulated, yield below inflation before tax, and don't hold up when you need them
Diversification is huge for the opportunity to rebalance during volatility. Bonds are broken imo and holding 50% of anything is far too much. Ideally 30-40% max of any asset class imo