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Today the tsx is sitting at around 15000, pretty much where it was just before the big drop in 2008. I am confused as to the language I hear from multiple sources that we are in one of the
longest bull markets ever. Here's one. So many pundits are saying we need to prepare for a "correction". But for me it seems we haven't even grown past the crash of 08. Shouldn't the total tsx market value climb above 15000 by a significant amount before expectations and jitters of a collapse become real? I just feel like I am not following what people are saying and Im out of touch. Is every commentary on Bull markets coming from folks that started investing in November of 2008?
 

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A bull market starts at the low point of the bear, i.e. March 2009. That said, I understand those investing in the Cdn equity market could be disappointed over the anemic performance since then.

Added: Canada actually had a short bear in early 2016 (drop of 20%) primarily as a result of the commodity (O&G stock) crisis but most pundits ignored it. I am not sure Canada's stock market is going to be stellar going forward. Too many headwinds in the Canadian business environment although if we ever get pipelines built and an LNG facility built, the energy sector will give our economy a boost. I think Ottawa knows it has to get behind additional pipeline capacity, and that should give the TSX a boost.
 

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In 2008, with the TSX at 15000, a lot of people were laughing at the S&P 500, which had not gone anywhere in 10 years.

In 2018, the S&P 500 is laughing at the TSX, which hasn't gone anywhere in 10 years.

Moral? A 50% weighting in both indexes does well over time. It also might mean the TSX is undervalued compared to the S&P 500 and perhaps a good buy...
 

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Indeed a good reason to have equity in Canada, US, and even International. International has been a laggard for some time so it has room to blossom if the EU especially can get its act together.
 

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Today the tsx is sitting at around 15000, pretty much where it was just before the big drop in 2008. I am confused as to the language I hear from multiple sources that we are in one of the
longest bull markets ever. Here's one. So many pundits are saying we need to prepare for a "correction". But for me it seems we haven't even grown past the crash of 08. Shouldn't the total tsx market value climb above 15000 by a significant amount before expectations and jitters of a collapse become real? I just feel like I am not following what people are saying and Im out of touch. Is every commentary on Bull markets coming from folks that started investing in November of 2008?
Yeah, I've posted about this before and even though we've had multiple official bear markets since 2008 (as shown in the graph below along with the data), I do believe most articles you read from the business media about the longest bull market ever are actually a nod to the USA. They never make that point clear about how anemic the Canadian market has been over the same period. I feel that the absence of that distinction between the two markets simply gets investors in Canada nervous.

June 2008 - Mar 2009 = 49.8%
Mar 2011 - May 2012 = 20.9%
Aug 2014 - Jan 2016 = 24.2%

View attachment 19082

ltr
 

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Today the tsx is sitting at around 15000, pretty much where it was just before the big drop in 2008. I am confused as to the language I hear from multiple sources that we are in one of the
longest bull markets ever.
You need to look at total return. 2007-10-29 to now in a chart using XIC adjusted for dividends: http://schrts.co/8BQ9TQ

You can see the long bull market. From the low in 2009, there's a steady increase in the TSX. Even with the decline in 2016, that's a pretty steady increase for over 9 years. For this 11 year period, based on that 41.42% increase shown in the chart, the rate of return = 1.4142^(1/11)-1 = 3.2% annualized.

It's true that this is a relatively weak return for stocks (XBB bonds have returned more than stocks over 11 years) but the 3.2% annual return in TSX in these years is still actually higher than most global stocks. Globally speaking, Canadian stocks have done well. Our 11 year return is higher than much of Europe and emerging markets.

It's really just the US which has performed very strongly (many people think it's really due to the massive stimulus they pumped into their markets). Because US stocks tend to get such a heavy weight in global portfolios, it's brought up the performance for most global investors.

Anyway fryman, you're right that the TSX has been relatively weak over a long period. Returning less than bonds/GICs over 11 years is pitiful, but it has still been a positive return. And it has been a lengthy bull market, and it is actually about on par with many other global stock returns.

This is a funny thing about the stock market. It never guarantees you a good return, and certainly not over periods as short as 5 or 10 years. As the time period gets longer (more like 20 to 30 years) it tends to be more certain that you'll have a high return. But even then it's never a guarantee. Frankly I would not be surprised if GICs or even gold outperforms stocks over the next decade, but it's impossible to forecast the future.
 

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You need to look at total return. 2007-10-29 to now in a chart using XIC adjusted for dividends: http://schrts.co/8BQ9TQ
In terms of comparing performance returns of the market, and one's own portfolio, I agree it is important to look at total return. On that basis, the TSX Composite has been anemic but overall positive since the end of the last bear in March 2009. On a 20 year basis, it has been rather good.

It is important to understand the definitions of a 'bear' or a 'correction'. These are based on market prices alone, i.e. raw index numbers since the low point of the last bear. We don't yet know if we are heading into a true bear from the "recent peak" or whether these markets will bounce around in correction territory of -10% to -20% for awhile....before resetting and heading higher, or turning down into a true bear.
 

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I do believe most articles you read from the business media about the longest bull market ever are actually a nod to the USA. They never make that point clear about how anemic the Canadian market has been over the same period.
It's also the subtle trick from the stock/investment industry to lean towards covering what has been the excellent performer in hindsight. They always do this. Their schtick is to keep people interested and excited about investing and frame things to show high returns. If Canadian stocks had performed much better than US stocks, I assure you that the media would be talking about the same amazing bull market, but this time de-emphasizing US stocks.

The same goes for salespeople/financial advisers. They will always try to convince you by cherry picking something that, in hindsight, worked out well. It's also human nature, even if not deliberate. We all chase returns.

Why is the Mawer Balanced Fund so incredibly popular? Well, it heavily weighted the US during these last years of amazing US strength, so it ended up with a high return. Looking at its yearly assets under management, you see that money starts pouring in around 2014-2015, well into the bull market, chasing what happened to be excellent returns in hindsight.

What about all the popular investment themes and portfolio styles from long ago, such as the "BRIC" theme in 2005 (emerging markets)? They turned out horribly. Guys used to show up on BNN on a daily basis and pitch BRIC themes. What happened to all those guys? I'll tell you... these days they're pitching US index investing.

The best you can do in stock investment is to construct a globally diversified portfolio, or at the very least, Canada + S&P 500 which has plenty of multinationals. I think it's also best to keep your country weights constant, otherwise you're going to end up chasing returns. And then accept that there are no guarantees in the stock market, even over long periods, but global diversification increases the chances that you will end up with a decent return.
 

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What about all the popular investment themes and portfolio styles from long ago, such as the "BRIC" theme in 2005 (emerging markets)? They turned out horribly. Guys used to show up on BNN on a daily basis and pitch BRIC themes. What happened to all those guys? I'll tell you... these days they're pitching US index investing.
I fell for the BRIC theme. Should have been called BRICK by the way it flopped.

A Bear investor holds on, hoping for a better ROI. "Long term investment" is their mantra.
A Bull investor charges in and snags whatever looks like a good deal at the time. "Buying opportunity" is their mantra.
I've become the third type - the Chicken investor runs away from any risk. "HISA or GIC, that's all for me" is my mantra.
 

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Let me use this opportunity to once again endorse diversifying into multiple asset classes. While it's important to diversify outside of Canadian stocks, it's also important to diversify beyond just stocks.

Let's look at 11 years, as the OP refers to. Annual returns are in CAD.

Asset classCAGR (CAD)
Stocks: Canada3.2%
Stocks: EAFE (developed)3.0%
Stocks: S&P 500 (mostly US)10.2%
Bonds: Canada XBB4.1%
Gold: bullion ETF6.7%

Where's the bull market? In this period, global stocks (other than US) have done poorly. Canada performed the same as MSCI EAFE. Some other asset classes did well. Bonds had a strong return despite the recent drops, as did gold. Both beat Canadian stocks.

A diversified portfolio that includes multiple countries and multiple asset classes will give you good returns over time. Consider that an average of this table -- which would actually be a pretty good portfolio -- gave approx 5.5% annual return after fees.

My own asset allocation plan is similar to the table:
15% Canadian stocks
15% S&P 500
50% bonds and GICs
20% gold bullion
 

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Let me use this opportunity to once again endorse diversifying into multiple asset classes. While it's important to diversify outside of Canadian stocks, it's also important to diversify beyond just stocks.

Let's look at 11 years, as the OP refers to. Annual returns are in CAD.

Asset classCAGR (CAD)
Stocks: Canada3.2%
Stocks: EAFE (developed)3.0%
Stocks: S&P 500 (mostly US)10.2%
Bonds: Canada XBB4.1%
Gold: bullion ETF6.7%

Where's the bull market? In this period, global stocks (other than US) have done poorly. Canada performed the same as MSCI EAFE. Some other asset classes did well. Bonds had a strong return despite the recent drops, as did gold. Both beat Canadian stocks.

A diversified portfolio that includes multiple countries and multiple asset classes will give you good returns over time. Consider that an average of this table -- which would actually be a pretty good portfolio -- gave approx 5.5% annual return after fees.

My own asset allocation plan is similar to the table:
15% Canadian stocks
15% S&P 500
50% bonds and GICs
20% gold bullion
Can I ask which gold bullion etf you are referencing here that returned 6.7% CAGR over the past 11 years? That seems high to me. I know 2010 was a great year for gold but since then it's been a steady decline as far as I know.
 

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Can I ask which gold bullion etf you are referencing here that returned 6.7% CAGR over the past 11 years? That seems high to me. I know 2010 was a great year for gold but since then it's been a steady decline as far as I know.
I used GLD for these figures because that one existed back then. 11 years ago, GLD was at 78.10 USD @ 0.954 = 74.51 CAD per unit. Today it's 116.31 USD @ 1.313 = 152.72 CAD per unit, so more than doubled in value, helped by USD strength over the years. The return is (152.72/74.51)^(1/11) = 6.7% per year.

These days, I hold gold via MNT (trades in Canada) and IAU (trades in US). Both are newer funds with lower fees than GLD.
 

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Eder, I wrote this in response to the original poster who specifically said the time frame starting from before 2008 where the TSX was around 15,000. I rounded to an even 11 years to match the time span he asked for; I didn't choose the time period.

The point is that different assets perform differently, and diversification is a good idea. In the next 10 years, we could have gold perform terribly, and Canadian stocks perform great. Who knows. Maybe US stocks will get destroyed and every other asset will do well. Diversifying among several assets is the best approach... always has been.

I'm also getting a kick out of the fact that you took so much offense when I showed that gold has outperformed the TSX over 11 years. I'm just listing major asset classes and performances. If it makes you feel better, bonds and GICs also outperformed the TSX.
 

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I'm also getting a kick out of the fact that you took so much offense when I showed that gold has outperformed the TSX over 11 years. I'm just listing major asset classes and performances. If it makes you feel better, bonds and GICs also outperformed the TSX.
Ya I see now you didn't pick the time period....sorry. Its just lol that it is one of the very few spots gold can be graphed in a favorable light and that stood out to me. As you can tell I'm no fan of advising newer investors to buy rocks. I'll delete my response if that helps.

My generic TSX portfolio easily outperformed tsx, gold & bonds during that 11 year period as have most here that invest in individual equities.
 

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No problem Eder, I'm just presenting thoughts here. I know gold isn't for everyone, and I've often suggested the 50/50 or 60/40 portfolio to people without ever mentioning gold. When a coworker asks me how to make a portfolio, I point them to a good quality 60/40 balanced fund.

Your portfolio has been a good one. One of the original X-packs at CMF!
 
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