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How are you investing your money these days?

  • Cash: Mattress sounds best these days.

    Votes: 8 27.6%
  • Bonds: Deflation is just round the corner.

    Votes: 1 3.4%
  • Stocks: Stocks for the long run, right?

    Votes: 18 62.1%
  • Gold: The world is going to pieces.

    Votes: 2 6.9%

  • Total voters
    29
  • Poll closed .
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...Why do you say Canadian RE is in trouble? It looks pretty normal to me, (excluding the Van area lower mainland, which i never count as normal, by any stretch) although i haven't really looked under the hood lately. Are you suggesting that rates are going to take off? I can't imagine that.. I see that sales are dropping like a stone in a couple of cities, but that's not out-of-character with the scenario at large.
I am just cautious that Vancouver and Toronto have been increasing for over ten years at a rate that is significantly beyond inflation. So there will be a correction. It might be a long sideways period where the values do not keep up with inflation. We see both Ednonton and Calgary in their second year of corrections. But I am no longer familiar with those markets.
 

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I am just cautious that Vancouver and Toronto have been increasing for over ten years at a rate that is significantly beyond inflation. So there will be a correction. It might be a long sideways period where the values do not keep up with inflation. We see both Ednonton and Calgary in their second year of corrections. But I am no longer familiar with those markets.
One thing about the future, none of us are experts at predicting it. Nevertheless, we all know a correction to those markets is over due, at least by historical standards. I think you are doing the perfect thing, enjoying life in a carefree rental situ, in one of the best environments in the world. I've had a couple of penthouse apts in Van., and the last time round my friends from NYC visited a couple times, and they were simply in awe of the location verses the price i was paying. In NYC the same apt would cost 5k to 8K a month. (i was paying $2K, that was 10 years ago). By that yardstick, Vancouver is a super deal!

Have you thought about where you are going to retire? If its BC, you can always have fun window shopping, looking for deals.
 

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I think you are doing the perfect thing, enjoying life in a carefree rental situ, in one of the best environments in the world. I've had a couple of penthouse apts in Van., and the last time round my friends from NYC visited a couple times, and they were simply in awe of the location verses the price i was paying. In NYC the same apt would cost 5k to 8K a month. (i was paying $2K, that was 10 years ago). By that yardstick, Vancouver is a super deal!
If it was $2k 10 years ago, now it's between $5k to $8k. Living close by, I think Vancouver is one of the worst cities in Canada for a non-rich person to live in these days, especially if he wants to ever retire. The mortgage will eat your life away. And it rains all the time.
 

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And it rains all the time.
Have you ever been to Prince Rupert.. now there it really does rain all the time. I was working up there one summer into the fall, logging. It rained every day. I remember one afternoon in Oct., when the sun came out for an hour, it hurt the eyes.. lol.

Vancouverites must clear out in the winter, to preserve sanity. Go to Whistler, Mexico, Costa Rica, Caribbean, any darn place, and return in Feb. I recall one Nov it rained 30 days straight, a month of being cold dark and drenched. You don't forget months like that.
 

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Actually I think Vancouver is "the best place on earth" to live in the summer. Moderate temperature and low humidity. I rent 3300 sq.ft for $1/sq.ft. and sublet in the winter months to a lawyer friend for $2k/mo.

In the future we might choose to downsize, after all, 3300 sq.ft. is a bit much for 2 adults and 2 cats! But we will watch the market. We thought the market was overpriced in 1997 compared to rental and now it really is!

(I worked for a summer in Holberg on the island and they kept threatening that it was going to rain. From May 1st to August 15th, it was sunny every day. Then the clouds moved on blotting out the sun and the mountains. The only thing that kept me sane for the last month was working on the mountan-top at the radar site every day and often being above the clouds.)
 

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A piece on the Buy and Hold strategy and how things have changed.

Buy and hold gets old
Market-timing strategies score big with tense investors


Excerpt:

To trend followers, the notion of buy-and-hold investing -- picking stocks based on fundamentals and keeping the investments for months or years -- has no place in today's market and in fact is a recipe for defeat.

"You have to understand the game you're playing -- you're playing with sharks," said Kenny Landgraf, president of Austin, Texas-based, Kenjol Capital Management. "You may believe in buy-and-hold, but there are large players out there that don't."
 

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And so you become a market timer. Good luck with that as well!!!

Maybe the stock markets are only for the pros after all. The odds are stacked against the individual investor.

On the other hand, you can always get lucky. You could also win the lottery.

We live in uncertain times and the markets don't like uncertainty.

Good luck!! You'll likely need it.
 

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And so you become a market timer. Good luck with that as well!!!
Maybe the stock markets are only for the pros after all. The odds are stacked against the individual investor.
On the other hand, you can always get lucky. You could also win the lottery.
We live in uncertain times and the markets don't like uncertainty.
Good luck!! You'll likely need it.

Belguy, the take-away from that article i thought was that the buy-and-hold strategy is not controlling the pulse of the market these days, instead there are huge assets in the market that are playing the trends, managed by professionals using sophisticated strategies. They don't care if it moves up or down, as long as it moves.

I'm sitting with a 65% cash position, and like everyone heavy in cash, waiting to see how far this bear leg will go. I'm not a trader. I'm a buy-and-hold type, who thinks its perfectly fine to be heavy in cash when the market's barometer is plunging (like now). Over the past cycle i got the highs and lows approximately correct, coming thru with a respectable gain, so i can afford to be a bit high-risk with some of the portfolio, such as buying BP in the mid '30's. (i flipped a coin).

Also, let me say that liquidating half the equities portfolio in the first wk of Oct. '08, and then sitting with cash watching wide-eyed as the market dropped like a rock, giving up 40% of its value in 6 months left a big impression on me. It was a very good feeling, sort of like almost getting run over by a train It broke me free of the buy-and-hold straight-jacket I guess.
 

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Basically, the markets seem to tank on any tidbit of bad news from anywhere.

Tomorrow, it will probably be because somebody hiccuped in Swaziland.:mad:
 

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Basically, the markets seem to tank on any tidbit of bad news from anywhere.

Tomorrow, it will probably be because somebody hiccuped in Swaziland.:mad:
It might be Swaziland but it certainly won't be Switzerland.. check this out =>

Switzerland’s budget deficit is just 1pc of GDP; gross public debt is 40pc; the current account surplus is 9pc; unemployment is 3.9pc. Above all, the eight million Swiss are still world’s unchallenged uber-rich with half a trillion dollars of external assets to back them up. "Whatever the problem, they can cover it," said Mr Bloom.

source
 

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A lot of quality American large caps are on sale right now.. WMT, XOM, JNJ, etc... good time to load up the shopping bag..

Two articles from 'guru's' confirming same:

General - http://www.gurufocus.com/news.php?id=100675
Bill Miller - http://www.gurufocus.com/news.php?id=100765
Jeremy Grantham - http://www.gurufocus.com/news.php?id=100763
Jeremy Sigel - http://www.gurufocus.com/news.php?id=100873

...

Grantham offers his opinion on this mispricing by the market:

One is the population profile: there are more new retirees per new worker than there used to be. Retirees are selling stocks to pay the bills and to buy more conservative fixed income investments. And what stocks are they selling? By the time they retire, they probably own blue chips, having sold down most of their speculative stocks in the decade before retirement. This is just a guess; I have no good data to prove it. But it does seem reasonable.

A second candidate, accompanied by stronger circumstantial evidence, is the “Let’s all look like Yale” syndrome. In the last 10 years, institutions and even ultra-rich individuals have, in general, been increasing the share of their portfolios that is invested in private equity and hedge funds, commodities, and real estate. And even within their equities, they have been increasing their share of foreign equities, including emerging markets and small caps. At the second derivative level, hedge funds may feel that they do not get paid to buy Coca-Cola, and private equity firms, particularly now, do not go after many of the great franchise companies. So what is being liquidated to buy all of this new stuff? Old-fashioned blue chip U.S. stocks and U.S. government bonds that used to completely dominate even sophisticated institutional accounts and now no longer do. In the case of U.S. bonds, we have the noble Chinese to step into the breach for a powerful reason: they have no alternative if they want to run trade surpluses. But blue chip stocks are on their own, without any natural offsetting buyers.”
 

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Discussion Starter #79
A lot of quality American large caps are on sale right now.. WMT, XOM, JNJ, etc... good time to load up the shopping bag..
I agree with the contention that US blue chips are detested by investors these days because they've gone nowhere (or worse) in 10 years. But with every passing year, these stocks are getting cheaper and cheaper (valuation-wise). It seems to me that many of the large blue chips are now priced to deliver high single digit returns -- better than the over all market and much better than bonds.
 
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