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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
I don't think anything is "cheap".
But I'm actually moving into commodities as an inflation hedge.

I don't buy commodities directly, just the companies that produce them.

KL gold, WFG (West Fraser Timber),

The Lumber market FYI is very volitile and cyclic

I'd like to get more copper, but not sure
 

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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.
The pension deficit is a HUGE problem. We've got incredibly low rates and huge inflation, they're going to be in big trouble.
 

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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.
Well it depends how they calculate the benefit, but many pensions do at least some indexing.
One I'm thinking of bases the pension off your last X years worked.
 

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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?
People criticize others because that's what people do.

Look at all the people criticizing gun ownership and shooting sports.
They don't own guns, they don't use guns, they don't even know about them, but they still criticize from their position of ignorance.

People seem to have an inherent desire to control others, even when it doesn't really affect them.
 

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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.
Actually that has a lot to do with the DB pension liability.
If you have 5% inflation, they'll likely push for a 5% raise, which will increase the DB pension liability by 5%.

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?
I'm not sure what the "complaint" was in that unreferenced post I allegedly made.
But yes there is a lot wrong with overly generous public sector benefits.

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.
Low rates mean there is less 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.

Really, why should I, the taxpayer be responsible for the fact that your employer promised you something that they didn't deliver?
 

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Are you thinking that the pay raise is exempt from the pension contribution rates?
No
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.
And the current principle needs to grow to catch up, that's the problem.

You'll have to explain how having more assets increases the likelihood of a pension shortfall. :)
I never made that claim.
If rates go down, and liabilities increase, the required assets increases significantly.
If the required assets increases too much, you'll have a shortfall.

Remember, if you have 30 years of contributions that's a lot of money, and if rates drop you can find that you have massive shortages, it's simple math.

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).
For some plans, not enough. Look at the Sears pensions.
And I don't think someone like myself, who has no pension, should be left holding the bag.

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.
You proved my point, you claim that I'm not on the hook, then showed that I am. Thanks.
 

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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."
Sorry typo, low rates means there is less growth to pay the benefits.

There's no mention I can see of liabilities.
Paying the benefits is the liability.

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.
I think consistently poor corportate management is why Sears and the Sears pension failed.

If it floats your boat to think you are on the hook for everything - far be it for me to get in your way.
The reality that I have to bail out failing businesses with my tax dollars is a problem.
I don't support it.
You have a contract with someone, it's your responsibility to hold them to it, not mine to give you money when they back out of the contract.
 

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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.
Yeah, bit surprising, but a good time to buy!
 

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It could also be the start of a major reversal.
You can say that about any time the price changes by a fraction of a cent.
Realistically I think 10-30% swings are a normal part of the stock market and nothing to get worked up about.

I think a 2-3% swing is less interesting than the latest clearance sale.
 

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Historically corrections more often happened in fall, never during summer time. Wait for it.
Yeah, single day changes are in March/October.

But those are "changes", both positive and negative.

Make your plan, stick to your plan.
Known that an equity portfolio will likely have 20-30% swings and significant periods of no or low growth, over any non-trivial period.
 

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Divide out interest rates and it's even less extreme.

Myself I think Shopify offers a great product at a very reasonable price.
If you look at the value these companies actually provide I think there is something there.

I have Netflix & Disney, much better than cable TV for a far lower price.
 

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When you are making claims, it’s best to support them with facts.
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.

Also I warned that massive government handouts and money printing would result in inflation. Paying people to not work, will also kill economic growth.

As far as other predictions,
"He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt."
Everyone with a clue predicted that. The US set up a system, where the government encouraged people to buy houses they couldn't afford, and banks to lend to them. The systematic effect was a bit more, but we all know that when you take a bad idea, and push it along letting it get bigger and bigger, the eventual reckoning will get larger.

We're doing this in Canada now with our Real estate bubble.
 

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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.
I think people underestimate how much work it is to build a liberal western state.

Particularly those who think destroying our system here will easily be replaced with something better.
 

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The 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.
Yes

The declines in stocks in the 2020 crash were incredible.
Not really, like I said at the time, they were normal and to be expected.
I still don't understand what the big deal is. Honestly it was just typical market volatility.
It was just as "shocking" as COVID19, which we were pretty much expecting since something we get a pandemic capable virus situation every 10 years, and conveniently COVID19 is even a nice round 100 years from the last major pandemic.

These are normal and expected things.

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.
It will happen again. It happened many times before.

The short memories are amazing and dangerous
People make bad decisions. Particularly if they ignore expected repeatable events.

I know a guy who kind of gets money management, and he got an emergency fund.
But then he had his emergency and depleted it, but he wasn't in a rush to replenish it, because "it was a one time thing that won't happen again ". I pointed out that he had 6 "one time things" in the last year, and maybe he should consider that he'll likely have an "emergency" every 2 months or so.
History doesn't repeat itself, but it rhymes.
 

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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.
They didn't "save" the market.

Now we'll just pay with inflation, something ranging around 3% which will hold for 3+ years.
Yeah, we have lots of pent up inflation from all the market manipulation.


When the government goes in and messes with stuff, ie "saving" the market, there will be a price to pay, and it will likely be higher. Printing money and all these games doesn't save the market or solve the problem, just adds more cost that we eventually end up paying for anyway.

The sad thing is most people don't realize how all this hurts them.
 

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The Statscan fudge factory produces what the government wants. They have to keep COLA down.
I think you have to look very carefully at what the definition of inflation is, and is not.

Statscan is pretty legitimate, and for most stats they do publish a full method.

The Dalhousie Report doesn't appear to show any methodology or be a peer reported study. Just a headline number.

It actually looks like they are publishing a report on peoples opinions and behaviors, which is very different from inflation, but in some ways actually more important.

Honestly you likely could come up with whatever inflation number you want.
Oat prices haven't changed much, if anything it's been on sale more. (I Buy the exact same box of Oats from Costco regularly)
Green onions and apples, oranges and a lot of in season produce are on sale for the same price as they've ben for the last year. Some other items seem more expensive.

Meat does seem more expensive.
 
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