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Adding more to DW's RRSP - Tangerine 60/40 BAL fund. We're slightly above the overall portfolio 70/30 Allocation so should just be saving cash... but her RRSP needs money this year for deducting (pregnant again so won't be working next year). Keeping it all going into the Tangerine BAL account is the simplest, even if it ups our stock allocation a bit too high.
 

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Topped up my position in AQN.TO @ 18.50 averaging up from my original purchase price and ACB of 5.74. I do have some concerns regarding current debt levels and hope the plans to address them are followed but have owned followed this stock for a decade or longer.
 

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Initiated a 1/2 position in MFC.TO today at 23.82. The only insurer holding I have is by way of POW and needed to increase allocation to this sector due to the recent run up in commodities.
 

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I bought more KL.TO today.

I think their fundamentals are sound, the context is good (inflation) and I plan to hold long, so the remaining aspects to check were the technicals.

I believe I bought just a few days too soon, but I hope it's still a good entry point, though it could've been better since today we are in the red and I bought in the morning. I guess we may continue to go down a bit before shooting back up and that's why in retrospect I believe I bought too soon.

How I analysed the technicals:
  • RSI was low at 40, but again I think it's going even lower
  • 50D SMA is about to cross the 200D SMA on the upside, but it's not there yet, hence I should've waited a bit more
  • MACD should reverse soon
  • Same analysis applies to Gold, but with stronger technicals
I believe there is some long-term support line around $42 and $44, so maybe I should've waited a bit more. But anyways, I'm actually averaging down compared to when I bought in April 2020.

In the end, a few months from now, I hope that this slightly bad timing of a few days will be meaningless. I hope I'm not wrong with my long-term expectations.
 

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But not as high as 5 year GIC rates from the same website. Not that I am buying GICs any more.
I probably should have put that comment in context. As I motor through my '70s, I see less reason to hold "fixed term" products like GICs, debentures and bonds, if for no other reasons than: 1) management of the portfolio (renewals) and competence (odds of stroke or heart attack increase with age, and 2) lack of an efficient secondary market should I, or my POA/Executor, have to sell thee holdings. Simplification is the order of the day. By late 2025, I will have fully unwound my GIC/bond ladder, replaced with a single holding of VCNS.
 

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The GIC was Manulife Bank, 5 years, at 1.60%
I still don't get why you lock your money for 5 years at 1.60% when your main portfolio is the Permanent Portfolio which never had such low returns over any 5-year period.
 

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But not as high as 5 year GIC rates from the same website. Not that I am buying GICs any more.
I don't like the kind of business many of those lenders are involved in. I am not comfortable with the safety of those sketchier, mortgage-focused banks. I am aware of CDIC deposit insurance. This is for money that I don't ever want to have to worry about, and that means not worrying about bank insolvency or how the CDIC is going to handle my "brokered deposit" (which was actually quite messy in the US when the FDIC tried to restore brokered CDs).

Documents I've found from the CDIC also indicate that they are a bit unclear about how they will handle GICs within discount brokerages. I'm sure they will figure it out, just as the FDIC did, but there is some uncertainty around that process because it's very new.

During the 2008 crisis, I never once looked at (for example) my TD issued GIC paying 3.1% and thought to myself, why oh why didn't I get an extra 0.2% at a lower grade lender. High returns aren't the point here, at least for me.

I still don't get why you lock your money for 5 years at 1.60% when your main portfolio is the Permanent Portfolio which never had such low returns over any 5-year period.
This is the Permanent Portfolio. This GIC that I just bought is within that Permanent Portfolio construction. I have a 50% fixed income component, which is a mix of bonds and GICs. All my GICs "live inside" the Permanent Portfolio.

Both the GIC and gold purchases I just posted are the "microscopic" view, the little pieces of the portfolio. The aggregate, big picture is the Permanent Portfolio. One always has to look at this aggregate picture to see the important story: this is performing at 7.2% CAGR over the last 5.3 years, with minimal volatility and minimal drawdown during the COVID crash.

Hope that makes sense, but happy to answer more if that's not what you meant.
 

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I have a 50% fixed income component, which is a mix of bonds and GICs. All my GICs "live inside" the Permanent Portfolio.
I thought you kept it simple buying only XBB. It would do better than those GICs. Or why not hold XSB instead of GICs? My understanding of the PP requires to buy something like 25% XLB and 25% XSB which I thought you simplified with 50% XBB instead. I feel like GICs doesn't fit as they are even more conservative and if ever you need money during a huge crash, you're locked for 5 years as opposed to simply selling XSB for instance.

Not?
 

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I thought you kept it simple buying only XBB. It would do better than those GICs.
I hold XBB as well, but it's XBB and GICs together which make up my 50% fixed income allocation.

From the numbers I looked at, I think the performance of the two combined will be roughly the same as XBB. I've even repeated the 20 year back-testing using 5 year GICs and it hardly made any difference in the overall outcome. I will not suffer any performance loss due to GICs.

Why not hold XSB? GICs are sure to have superior performance as you can see by their yields. XSB has a yield to maturity 0.91% so my GIC at 1.60% has a much better return, and that relationship has held over many years. GICs yield more and therefore have higher returns.

I have enough liquidity due to the bond holdings (including in non-reg) so I'm not concerned that GICs are locked in.

Or maybe I can state it anther way:

Remember that the most accurate estimate of a bond ETF's future performance is the yield to maturity. I know from first hand experience that 5 year GICs frequently yield more than XBB, and they are always very similar. So replacing some XBB with 5 year GICs is not going to harm the long term returns. The Permanent Portfolio will have a similar outcome whether it's only XBB or mixed with GICs, and I've confirmed this using historical data.
 

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So why you bother buying GICs? What's the purpose of combining XBB+GICs instead of all XBB?
GICs are more tax efficient in non-reg and the tax handling is simpler as well, since they just generate a straightforward T5 without any concerns about distributions, ACB, phantom distributions, and T3 slips sent at the last moment.

As you know, they are also less volatile than XBB. So I think the XBB+GIC combination will have about the same long term performance as XBB, but with less volatility.

That results in a superior risk-adjusted return, which makes the XBB+GIC combo a superior investment to just XBB, as long as someone can tolerate the loss of liquidity.
 

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When the GIC doesn't pay out until 5 years from now, do they send you a T5 annually so you know how much to put on your tax return?
 

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I'd encourage anyone looking to buy into the market to read Gordon pape's article in the G&M.
Gordon Pape: Here’s what I expect for the TSX in the second half of 2021 - may be behind a paywall.
He recommends financials (I assume banks etc), as well as gives a nod to industrials (I assume magma, linamar??) , and tech stocks (Lightspeed). Says banks will increase divies by double digit % when they are given the nod by the superintendent of financial institutions.
He suggests that Oil and Oil co's will stay flat for the remainder of the year....but he liked CNQ.
I also read somewhere that REITS are expected to improve given the mood to lift restrictions.
 
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