I don't think anything is "cheap".If you were investing in a balanced fund or 50/50, it's pretty clear what you would buy right now: bonds.
You could even diversify into more asset classes, like gold, and these days you would be buying gold & bonds since they both are relatively low in the portfolio.
I added over $100K to my portfolio this year so far, and most of it went into gold and bonds. Why would I buy stocks, when I'm already overweight in them, and other assets can be bought cheap
The pension deficit is a HUGE problem. We've got incredibly low rates and huge inflation, they're going to be in big trouble.I would assume our DB pensions and the CPP are doing quite well along with everyone else in the markets.
Maybe it is time to re-calculate the benefit payouts in relation to the capital. At least the pension "deficit" threat is a thing of the past.
Our autoworker health care fund is doing so well they stopped taking premiums 6 months ago and expanded the coverage.
Well it depends how they calculate the benefit, but many pensions do at least some indexing.Interesting that the recent reports are that the funding has improved to something like twenty year highs.
Why's inflation a problem for the DB pension?
At best, I've had a partially indexed pension so from my perspective, inflation is my problem.
People criticize others because that's what people do.I'm all good with this and I agree. I'm all good with passive investments. Most people should learn DIY passive investing. But I'm an active investor simply because I enjoy it.
What irritates me is when someone who uses a different strategy criticize the tools used by people using another strategy.
I mean, for instance, I don't like sports cars and I don't shop for sports cars. So why would I criticize the articles and magazines that people read about sports cars? All I say is that I don't spend my money on sports cars and I'm done, I don't have any added value in discussions about sports cars review magazines.
Or... I like guitar music. Most people will just listen to guitar music (passive), while I want to buy a guitar and learn to play the guitar (active) even if I'm a bad musician and it takes me years, even if I never do better than the average guitar player. But why would someone who prefers to listen to guitar music come and criticize the tools that I use and the content that I read to learn to play the guitar by myself?
Actually that has a lot to do with the DB pension liability.Huh? Big inflation, low inflation, middle of the road inflation has nothing to do with a DB pension using "last X years worked" in their benefit formula.
I'm not sure what the "complaint" was in that unreferenced post I allegedly made.BTW ... in another thread you complained about this formula for public sector pensions. I've always been in private sector DB pensions where all have used a "last X years worked". It seems you are concerned about DB pension formulas, public or private. Or do you have a private DB pension that you can point me to that uses a different formula?
Low rates mean there is less growth in the portfolio to pay the benefits, increasing the likelihood of a pension shortfall.IAC, low rates seem more to be more of a threat by increasing the CV for the payout to those leaving. New equity highs with low rates likely is increasing the funding for the DB pension ... unless the pension managers switched to and are staying with stuff like GICs.
NoAre you thinking that the pay raise is exempt from the pension contribution rates?
And the current principle needs to grow to catch up, that's the problem.More wages means more pension contributions made, going forward. Should that 5% raise bump one over YMPE then typically the over amount has it's pension contributions bumped by 2% or so, in addition to the base rate - depending on the plan.
I never made that claim.You'll have to explain how having more assets increases the likelihood of a pension shortfall.
For some plans, not enough. Look at the Sears pensions.Don't forget, there is money flowing into the plan with each pay so where the pension manager was doing their job properly, stocks were bought that have now doubled or more (plus paid income).
You proved my point, you claim that I'm not on the hook, then showed that I am. Thanks.I'm in a private DB pension so you are not on the hook for my DB pension.
If you are in Ontario, then if it were to fail then AFAICT, as a tax payer, your involvement would be the Ontario Pension Benefits Guarantee Fund.
Sorry typo, low rates means there is less growth to pay the benefits.Then perhaps your wording from post # 92 needs changing as it has you saying:
"Low rates mean there is growth in the portfolio to pay the benefits, increasing the likelihood of a pension shortfall.
Which will mean government bailouts that I have to pay for."
Paying the benefits is the liability.There's no mention I can see of liabilities.
I think consistently poor corportate management is why Sears and the Sears pension failed.You mean the one where a Sears shareholder is reported to have setup a $509 million dividend to shareholders while ignoring that the pension was short $109 million coupled with a loss of $118 million operating loss?
Sounds more like shenanigans instead of a failed DB pension.
The reality that I have to bail out failing businesses with my tax dollars is a problem.If it floats your boat to think you are on the hook for everything - far be it for me to get in your way.
Yeah, bit surprising, but a good time to buy!Well that's a sharper drop than I was expecting.
Stocks really ran up pretty fast, so any correction at this point could be painful. Even if they fell down to the 200 day moving average (very plausible), the bull market could still be intact.
The TSX could fall another 7% and S&P 500 could fall another 8%, while still remaining in an uptrend.
You can say that about any time the price changes by a fraction of a cent.It could also be the start of a major reversal.
Yeah, single day changes are in March/October.Historically corrections more often happened in fall, never during summer time. Wait for it.
This is game people play, a lot of people make claims, then after the event happens, they go back and pick those who were right, as if they have special knowledge.When you are making claims, it’s best to support them with facts.
I think people underestimate how much work it is to build a liberal western state.An interesting question. But it was obvious that Iraq and Afghanistan were US failures a long time ago.
Iraq turned into an unstable state of chaos, and Afghanistan was always tenuous. So I don't think there is any surprise here, or anything new.
YesThe level of complacency in the market is incredible.
Nobody really thinks stocks will fall and nobody has any fear. I wonder how long we can go on like this... it's just amazing how quickly everyone forgets.
Not really, like I said at the time, they were normal and to be expected.The declines in stocks in the 2020 crash were incredible.
It will happen again. It happened many times before.Those were some of the sharpest daily movements we've ever seen. It can all happen again, we just need one bad shock or big surprise. When everyone becomes so complacent and ultra bullish, the vulnerability to downside volatility increases.
People make bad decisions. Particularly if they ignore expected repeatable events.The short memories are amazing and dangerous
They didn't "save" the market.There is no free market anyways. The Fed will save the market, as we know.
Also, the Fed saved the market as soon as mid March 2020.
Yeah, we have lots of pent up inflation from all the market manipulation.Now we'll just pay with inflation, something ranging around 3% which will hold for 3+ years.
I think you have to look very carefully at what the definition of inflation is, and is not.The Statscan fudge factory produces what the government wants. They have to keep COLA down.