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@Jimmy, @MrBlackhill and @james4beach, I think all opinions help people reading this forum, no matter which opinion you hold.

Is it better to hold index ETFs or individual stocks? Depends who you ask. I’ve done both, and wouldn’t have learned a new way without reading differing opinions.

I don’t know what will happen in the future, and neither does anyone else.

The way @james4beach invests is not eccentric in my view. I’m diversified among asset classes, I once was all equities and learned it doesn’t suit my personality after 2008. I suspect others will come to the same realization in the future. (Not saying this will be Jimmy or MrBlackhill).
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?
 

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He absolutely is writing about market timing. He is predicting interest rates and inflation, and changing the asset allocation decision based on that. That's a tactical allocation change which may, or may not, work out positively for the investor.

I realize that some people like timing the markets and asset classes. That's fine, but I am pointing out that it's market timing.
Timing teh market implies predicting market tops and bottoms. He isn't predicting anything. He just sees rightly the returns on Lt bonds are not worth the risk and moving some $ into St bonds w in his FI portfolio. Same for everyone else including the recent advisor. That isn't timing the market. That is tactical investing. Either way I am not going to argue semantics w you
 

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The way @james4beach invests is not eccentric in my view. I’m diversified among asset classes, I once was all equities and learned it doesn’t suit my personality after 2008. I suspect others will come to the same realization in the future. (Not saying this will be Jimmy or MrBlackhill).
Some of the plans discussed here ie the permanent portfolio are a little eccentric IMO. I never said diversification was eccentric. I have stocks in all markets, st bonds, cash, alts and preferred shares.
 

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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?

I totally understand. I suppose I view James’ comments in a different light and not as an attack, more of a counter viewpoint.

I enjoy active investing as well. I was a 100% equity, somewhat active investor at the beginning of my investing journey. I then diversified among asset classes. Now, I find I’m too busy (young kids, long commute to work) to be active so I’m passive investing now.

Did I read somewhere you have a child on the way soon? Congratulations. (Maybe the baby has arrived?)
 

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Some of the plans discussed here ie the permanent portfolio are a little eccentric IMO. I never said diversification was eccentric. I have stocks in all markets, st bonds, cash, alts and preferred shares.
I mistook what you were getting at, my apologies.

The permanent portfolio is not the most conventional approach, I agree. I’ve met a handful of people who follow a modified permanent portfolio similar to what James has and it works for them. I find the PP concept interesting, personally, but I don’t follow it. It has similarities to Jakob Fugger, perhaps it’s the history that intrigues me, that people have follow a similar approach for a long time.
 

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Now, I find I’m too busy (young kids, long commute to work) to be active so I’m passive investing now.
Yes, that's true.

I know I won't have time to try to find hidden gems throughout the next years. I'll still want to keep investing all in equities and stock picking but I'll take less risk (less research and less due diligence required). As long as I'm having fun. I'll slowly adapt my style to the context.

Finding the right balance between all my interests and passions has always been my most frustrating life quest.

Did I read somewhere you have a child on the way soon? Congratulation
The baby has arrived last Wednesday, on July 7th. Thanks!

We're currently pretty busy with all the back and forth at the hospital and some other issues, but otherwise everybody is healthy.
 
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Yes, that's true.

I know I won't have time to try to find hidden gems throughout the next years. I'll still want to keep investing all in equities and stock picking but I'll take less risk (less research and less due diligence required). As long as I'm having fun. I'll slowly adapt my style to the context.

Finding the right balance between all my interests and passions has always been my most frustrating life quest.



The baby has arrived last Wednesday, on July 7th. Thanks!

We're currently pretty busy with all the back and forth at the hospital and some other issues, but otherwise everybody is healthy.
That’s great! It’s definitely a busy time. Enjoy it! Before you know it your child will be helping you make coffee!
 

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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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Well it depends how they calculate the benefit, but many pensions do at least some indexing ...
You really think 30% indexing on the full benefit paid is a problem?
That's all my pension has.


... One I'm thinking of bases the pension off your last X years worked.
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.

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?

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.


Cheers
 

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I looked at my portfolio again on the weekend. Crazy, yet another all time high. Maybe this is what it felt like in the late 90s. Every day you look at the account, it's higher ...
Doesn't feel like it to me.
I'm not seeing the high tech mania (ex. Nortel) and don't have as many co-workers talking about firing their advisor as they allegedly can do better one their own.


Cheers
 

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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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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% ...
Are you thinking that the pay raise is exempt from the pension contribution rates?

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'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 ...
Basically that "X years average" was a bad feature of public service DB pensions. As I say, it's a feature of DB pensions, whether the pension is public or private (including business owners setting up their own DB pension).


... Low rates mean there is growth in the portfolio to pay the benefits, increasing the likelihood of a pension shortfall ...
You'll have to explain how having more assets increases the likelihood of a pension shortfall. :)

If you meant "low rates means slow or no growth", it makes logical sense but the reporting of increased growth in the funding says there has been significant growth. IIRC, the posted link had DB pensions at a twenty year high for funding.

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).


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


Considering that like other DB pensions, mine is reporting that the funding has improved - I'm doubting bankruptcy anytime soon.


Cheers

PS
The simple answer as to why a tax payer is on the hook for public service pensions is because you are the employer. :oops:
 

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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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Doesn't feel like it to me.
I'm not seeing the high tech mania (ex. Nortel) and don't have as many co-workers talking about firing their advisor as they allegedly can do better one their own.
Well, Yahoo Finance is running a massive webinar, an introduction to trading meme stocks and crypto currencies. So there are a few signs of weirdness.

Valuations in the US are getting pretty extreme too. The most recent Morningstar survey that I saw, which cites analysts from JPMorgan, Vanguard, and Morningstar's own team, makes a projection of roughly 0% real return in US stocks over the coming decade.

It's pretty rare to see forward-looking forecasts of zero returns in stocks, so things are getting a bit heated for sure.
 

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... 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 ...
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."

There's no mention I can see of liabilities.


... 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 ...
It's also smoke and mirrors to an extent.

Whether rates have dropped or not - those who are retired have what benefits they are owed.
As I say, I suspect the bigger issue for low rates is people encouraged to take a CV that is inflated.


... For some plans, not enough. Look at the Sears pensions.
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.


... You proved my point, you claim that I'm not on the hook, then showed that I am.
If it floats your boat to think you are on the hook for everything - far be it for me to get in your way.


Cheers
 

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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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“Unfortunately, earnings reported in corporate financial statements are no longer the dominant variable that determines whether there are any real earnings for you, the owner. For only gains in purchasing power represent real earnings on investment. If you (a) forego 10 hamburgers to purchase an investment; (b) receive dividends which, after tax, buy two hamburgers; and (c) receive, upon sale of your holdings, after-tax proceeds that will buy eight hamburgers, then (d) you have had no real income from your investment, no matter how much it appreciated in dollars. You may feel richer, but you won’t eat richer.
 
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