Financial Markets Meltdown

[Map Maker]

Paradox of thrift is that you are so focused on saving money, you are not being mindful of using your money to make more money.
Just a guess.

[Dean2]

Originally Posted by Dean2

Top GIC rates are 5%. If you are in the 50% tax bracket, that means you are earning 2.5% after tax. Inflation, even by the government's artificially low numbers is, 3.1%. Your money is shrinking in spending power by .6% a year minimum.

Mutual funds have huge MERs, and are effectively just a collection of stocks or bonds, depending on type. They are a bad deal for almost all people due to the very large fees, and quite a few Mutual funds are actually funds holding other mutual funds, so your fee load can be double or triple the posted MER because each of those funds have MERs of their own.

ETFs are a much better deal, far lower MER. If it is in a taxable account, and you are already at $45,000 a year in dividend income, look at HXT and HXS. Make sure you understand the investments before you buy it, they are derivative plays on the indexs but as all your gain is Capital gain, you don't pay tax till you sell them. Vanguard has almost identical funds, their VFV is HXS, that are not derivative and produce almost identical yields, so your annual gain is part dividend and part capital gain. If you are under the dividend income above, these have no counter party risk. Hope the info below helps.

https://wealthawesome.com/best-etf-c...US-Equity-ETFs


https://www.fool.ca/2022/04/07/vfv-v...ian-investors/

https://etfinsider.co/blog/comparison-vce-vs-hxt

https://piggybank.ca/investing/etf/best-etfs-canada

The S&P 500 is up 24% in the past 12 months and 44% in the past 3 years.. The TSX is up just shy of 7% and 37% over 3 years. DAX (Germany) is up 8 and 2, China -31 and -54 over the same periods. The long time argument of Geographic diversification does not and never has held water long term. My geographic diversification is Canada and the States.

As Warren Buffet has often said, diversifying your holdings so the winners offset the losers, is a clear sign you have no idea what you are doing. Diversifying your holdings to have a selection of high performing, long term successful companies is an entirely different thing.

[fishtank]

Wow tech stock been killing it. First it’s facebook up 20%, today Arm just shot up 50% . These are 100+billion/ trillion dollar company moved 20% in a single day feel like 1999

[Trochu]

Originally Posted by fishtank

Wow tech stock been killing it. First it’s facebook up 20%, today Arm just shot up 50% . These are 100+billion/ trillion dollar company moved 20% in a single day feel like 1999

I just checked, maybe I'm looking at the wrong thing, but Meta/Facebook stock is up 0.087% today on the NAS.

Arm did have a big day!

[Map Maker]

Meta was last week. They came out with a new dividend and buyback plan. They shot up $88/share.
Meta was the AI company I bought a few weeks back when I calculated who had the largest war chest of cash on hand. Nice boost in the wallet.

[ab_hunter]

I have to admit sometimes it hurts watching individual tech companies skyrocket while I only make a few percent off of an ETF. lol.

[Map Maker]

Originally Posted by ab_hunter

I have to admit sometimes it hurts watching individual tech companies skyrocket while I only make a few percent off of an ETF. lol.

But I’m sure you get a chuckle when the bubble bursts and you’re not holding. Ie bitcoin

[Buckhead]

The markets really haven't done much in the past couple of years.
The S&P 500 is only up 5.5% from it's peak in late 2021.
The TSX is down 5% from it's peak in March 2022.
Just a lot of sideways movement over the past 2 years. Which can be a good thing if you are a stock picker and can make the right choices.
If you are holding the index or an ETF then returns are not so good.

[Dean2]

Anyone holding ARM at the current 127 should be thrilled with what it has done but you might want to look at taking profits, at least getting the initial investment back, or putting on a hedge or stop loss. There is a tremendous amount of short selling happening on this stock at this price.

Any large market rally that is narrowly driven by a few stocks, and this one has been driven by the magnificent 7, rarely ends well. Once again, high quality dividend payers, the pay you to wait and/or gives you the income you need in retirement are a good option. Share price aren't doing much but the quarterly income keeps rolling in, and it is pretty much tax free, depending on your other income levels, till you hit $50,000 each in dividend income..

Inflation in the U.S. and Canada is not abating, transitory my butt. Food, Fuel and housing costs are still rising rapidly. May wish to consider the effect of higher for longer rates on your strategies. Rates will eventually come down a bit but do not count on seeing 1 or 2% again in our lifetimes.

[flydude]

Originally Posted by Dean2

Anyone holding ARM at the current 127 should be thrilled with what it has done but you might want to look at taking profits, at least getting the initial investment back, or putting on a hedge or stop loss. There is a tremendous amount of short selling happening on this stock at this price.

Any large market rally that is narrowly driven by a few stocks, and this one has been driven by the magnificent 7, rarely ends well.

Also the ARM IPO lockup period that prevents company insiders from selling any of their stock expires on March 12. This could make for a very bumpy period. I dumped mine yesterday for a tidy 157% profit. Way too overpriced for my liking.

[Dean2]

So my wife just got done finalising the new Budget for the coming year. We have kept a detailed budget of all expenditures going back to 1985. Looking at this year's budget versus 3 years ago, monthly living costs are up almost 40%, and we have not changed anything material. (We pay zero in interest so that isn't a factor). The government claims inflation is MUCH lower than it actually is. Real world tracking and numbers show that it is closer to 13% a year, over the past 3 years.

This is a prime reason why all households need to pay off any non-tax deductible debt, as well as build an investment program that accommodates inflation. Invested in interest bearing securities like GICs, Bonds and the like, you would be backwards at least 9% per year against inflation, and further backwards by the tax on any interest on investments that aren't tax sheltered. Effectively, money in interest bearing investments will have lost at minimum 27% of its purchasing power, and if taxed on the interest the purchasing power is even more eroded.

Another issue to consider is, the budget numbers we are tracking do not account for increases in Fed and Provincial Government income taxes, CPP and the like, it only accounts for municipal taxes, utilities, and GST etc.

Inflation is a truly regressive tax. It hits low income people, who have to spend everything they make to live, far harder than it impacts higher income earners. The government is intentionally driving inflation as a way to reduce government debt and show growth in the economy. That growth is an illusion. We need to get rid of the current government before everyone truly has nothing and is completely dependant on government handouts.

[tirebob]

Originally Posted by Dean2

So my wife just got done finalising the new Budget for the coming year. We have kept a detailed budget of all expenditures going back to 1985. Looking at this year's budget versus 3 years ago, monthly living costs are up almost 40%, and we have not changed anything material. (We pay zero in interest so that isn't a factor). The government claims inflation is MUCH lower than it actually is. Real world tracking and numbers show that it is closer to 13% a year, over the past 3 years.

This is a prime reason why all households need to pay off any non-tax deductible debt, as well as build an investment program that accommodates inflation. Invested in interest bearing securities like GICs, Bonds and the like, you would be backwards at least 9% per year against inflation, and further backwards by the tax on any interest on investments that aren't tax sheltered. Effectively, money in interest bearing investments will have lost at minimum 27% of its purchasing power, and if taxed on the interest the purchasing power is even more eroded.

Another issue to consider, is the budget numbers we are tracking do not account for increases in Fed and Provincial Government income taxes, CPP and the like, it only accounts for municipal taxes, utilities, and GST etc.

Inflation is a truly regressive tax. It hits low income people who have to spend everything they make to live, far harder than it impacts higher income earners. The government is intentionally driving inflation as a way to reduce government debt and show growth in the economy. That growth is an illusion. We need to get rid of the current government before everyone truly has nothing and is completely dependant on government handouts.

That is some genuinely scary realities... You give much pause for thought good sir!

[tranq78]

Originally Posted by Dean2

So my wife just got done finalising the new Budget for the coming year. We have kept a detailed budget of all expenditures going back to 1985. Looking at this year's budget versus 3 years ago, monthly living costs are up almost 40%, and we have not changed anything material. (We pay zero in interest so that isn't a factor). The government claims inflation is MUCH lower than it actually is. Real world tracking and numbers show that it is closer to 13% a year, over the past 3 years.

This is a prime reason why all households need to pay off any non-tax deductible debt, as well as build an investment program that accommodates inflation. Invested in interest bearing securities like GICs, Bonds and the like, you would be backwards at least 9% per year against inflation, and further backwards by the tax on any interest on investments that aren't tax sheltered. Effectively, money in interest bearing investments will have lost at minimum 27% of its purchasing power, and if taxed on the interest the purchasing power is even more eroded.

Another issue to consider, is the budget numbers we are tracking do not account for increases in Fed and Provincial Government income taxes, CPP and the like, it only accounts for municipal taxes, utilities, and GST etc.

Inflation is a truly regressive tax. It hits low income people who have to spend everything they make to live, far harder than it impacts higher income earners. The government is intentionally driving inflation as a way to reduce government debt and show growth in the economy. That growth is an illusion. We need to get rid of the current government before everyone truly has nothing and is completely dependant on government handouts.

Doing a little piggyback on this post. If you don't want to read entire thing just jump to last paragraph.

Trudeau Liberals ink a deal with NDP to form coalition govt. The deal is basically to print money, which causes massive inflation. Plot twist! That was early 1970s under Pierre. Canadians would never be stupid enough to allow that to happen again, would they?

Remember Pierre's fix for inflation? Wage and price control. How well did that work?

And Pierre's fix for the first 2 problems he created? National Energy Program, which stole Western Canada wealth and gave it to Eastern Canada. They used the excuse "pay your fair share". Now the feds are talking "just transition" which is code for another NEP.

Dean is right folks. Trudeau 2 (like Trudeau 1) unleashed the inflation monster and it is going to be costly for average Canadians. 1970's had 10 years of 8-10% annual inflation -- $1,000 in Jan 1970 had purchasing power of $100 by early 1980s.

The only thing that kept up with 10 years' inflation in the 1970s was being in the stock market. Cash in bank, GICs and bonds did not keep up with inflation. Trudeaus #1 and #2, book ending 40 years, and that is the reason we study history -- so we don't repeat our mistakes. And if we do, we can see what worked and what didn't.

[cowmanbob]

Thanks for posting.

[Twisted Canuck]

Originally Posted by tranq78

Doing a little piggyback on this post. If you don't want to read entire thing just jump to last paragraph.



Trudeau Liberals ink a deal with NDP to form coalition govt. The deal is basically to print money, which causes massive inflation. Plot twist! That was early 1970s under Pierre. Canadians would never be stupid enough to allow that to happen again, would they?



Remember Pierre's fix for inflation? Wage and price control. How well did that work?



And Pierre's fix for the first 2 problems he created? National Energy Program, which stole Western Canada wealth and gave it to Eastern Canada. They used the excuse "pay your fair share". Now the feds are talking "just transition" which is code for another NEP.



Dean is right folks. Trudeau 2 (like Trudeau 1) unleashed the inflation monster and it is going to be costly for average Canadians. 1970's had 10 years of 8-10% annual inflation -- $1,000 in Jan 1970 had purchasing power of $100 by early 1980s.



The only thing that kept up with 10 years' inflation in the 1970s was being in the stock market. Cash in bank, GICs and bonds did not keep up with inflation. Trudeaus #1 and #2, book ending 40 years, and that is the reason we study history -- so we don't repeat our mistakes. And if we do, we can see what worked and what didn't.

Bingo.

Sent from my SM-G990W2 using Tapatalk

[prarie_boy1]

Originally Posted by dean2

so my wife just got done finalising the new budget for the coming year. We have kept a detailed budget of all expenditures going back to 1985. Looking at this year's budget versus 3 years ago, monthly living costs are up almost 40%, and we have not changed anything material. (we pay zero in interest so that isn't a factor). The government claims inflation is much lower than it actually is. Real world tracking and numbers show that it is closer to 13% a year, over the past 3 years.

This is a prime reason why all households need to pay off any non-tax deductible debt, as well as build an investment program that accommodates inflation. Invested in interest bearing securities like gics, bonds and the like, you would be backwards at least 9% per year against inflation, and further backwards by the tax on any interest on investments that aren't tax sheltered. Effectively, money in interest bearing investments will have lost at minimum 27% of its purchasing power, and if taxed on the interest the purchasing power is even more eroded.

Another issue to consider is, the budget numbers we are tracking do not account for increases in fed and provincial government income taxes, cpp and the like, it only accounts for municipal taxes, utilities, and gst etc.

Inflation is a truly regressive tax. It hits low income people, who have to spend everything they make to live, far harder than it impacts higher income earners. The government is intentionally driving inflation as a way to reduce government debt and show growth in the economy. That growth is an illusion. We need to get rid of the current government before everyone truly has nothing and is completely dependant on government handouts.

----wisdom

[roper1]

Originally Posted by Dean2

So my wife just got done finalising the new Budget for the coming year. We have kept a detailed budget of all expenditures going back to 1985. Looking at this year's budget versus 3 years ago, monthly living costs are up almost 40%, and we have not changed anything material. (We pay zero in interest so that isn't a factor). The government claims inflation is MUCH lower than it actually is. Real world tracking and numbers show that it is closer to 13% a year, over the past 3 years.

This is a prime reason why all households need to pay off any non-tax deductible debt, as well as build an investment program that accommodates inflation. Invested in interest bearing securities like GICs, Bonds and the like, you would be backwards at least 9% per year against inflation, and further backwards by the tax on any interest on investments that aren't tax sheltered. Effectively, money in interest bearing investments will have lost at minimum 27% of its purchasing power, and if taxed on the interest the purchasing power is even more eroded.

Another issue to consider is, the budget numbers we are tracking do not account for increases in Fed and Provincial Government income taxes, CPP and the like, it only accounts for municipal taxes, utilities, and GST etc.

Inflation is a truly regressive tax. It hits low income people, who have to spend everything they make to live, far harder than it impacts higher income earners. The government is intentionally driving inflation as a way to reduce government debt and show growth in the economy. That growth is an illusion. We need to get rid of the current government before everyone truly has nothing and is completely dependant on government handouts.

Your wife have a sister? Actually, while never having a formal budget, we've always paid ourselves first, lived below our means, and kept our eye on the prize. Delayed gratification, both working, still have had it very good. Thanks Dean, for the frequent contributions & updates, it sure helps!

[Buckhead]

Here is an interesting chart;

https://www.macrotrends.net/1319/dow...storical-chart

The DJIA was at an all time high of 9400 in December of 1965.
From there it was a down trend until it bottomed at 2600 in July of 1982.
From there it was another 13 years until September of 1995 before it recovered to the previous high of 1965.

[Twisted Canuck]

I completely agree with Roper1, thank you Dean2. Your input on this thread is much appreciated, and a wise person would pay attention.

[DiabeticKripple]

I’ve been socking away a pile of money into my TFSA and my RRSP’s. Material purchases are wayyy down as I think things are going to get much worse in the next 2 years.

[Twisted Canuck]

Originally Posted by DiabeticKripple

I’ve been socking away a pile of money into my TFSA and my RRSP’s. Material purchases are wayyy down as I think things are going to get much worse in the next 2 years.

Money, or fiat currency? Not really the same. Not that I'm lecturing.

I've been socking away ammo, gold, silver, tinned food, toilet paper, whiskey, fuel for generator, some cigars, and got a comfy chair to sit back in and watch. Apart from that, my investment portfolio has been doing pretty good.

Oh, also, popcorn.

[DiabeticKripple]

Originally Posted by Twisted Canuck

Money, or fiat currency? Not really the same. Not that I'm lecturing.

I've been socking away ammo, gold, silver, tinned food, toilet paper, whiskey, fuel for generator, some cigars, and got a comfy chair to sit back in and watch. Apart from that, my investment portfolio has been doing pretty good.

Oh, also, popcorn.

Plain old fiat money from my pay cheques. I’m fortunate to have some excess after my bills so I’m squirreling it away into stocks and RRSP’s.

Averaged 17% on my RRSP’s last year, hoping to get at least that again this year but currently down 1%.

[tranq78]

Originally Posted by Twisted Canuck

Money, or fiat currency? Not really the same. Not that I'm lecturing.

I've been socking away ammo, gold, silver, tinned food, toilet paper, whiskey, fuel for generator, some cigars, and got a comfy chair to sit back in and watch. Apart from that, my investment portfolio has been doing pretty good.

Oh, also, popcorn.

Whiskey? Ugh, can't stand that stuff. Tastes/smells like paint thinner. I'm not hanging out with you during SHTF.

I know how to reload ammo. Will be using that skill to trade for essentials during zombie apocalypse. I know zombies are real cuz we are watching Fear the Walkind Dead. Plus I work in downtown Edmonton.

[KGB]

Originally Posted by tranq78

Whiskey? Ugh, can't stand that stuff. Tastes/smells like paint thinner. I'm not hanging out with you during SHTF.

I know how to reload ammo. Will be using that skill to trade for essentials during zombie apocalypse. I know zombies are real cuz we are watching Fear the Walkind Dead. Plus I work in downtown Edmonton.

Comrade! I have vodka! It’s good for a body and good for a soul! We can join our forces, lol! I hate whiskey too!

[Map Maker]

Originally Posted by DiabeticKripple

Plain old fiat money from my pay cheques. I’m fortunate to have some excess after my bills so I’m squirreling it away into stocks and RRSP’s.

Averaged 17% on my RRSP’s last year, hoping to get at least that again this year but currently down 1%.

Congrats on 17%. Musta had some good picks.
You got over double what the tsx gained.
I’d be careful trying to replicate double gains.
Just beating the tsx is a great return.

[pikergolf]

Originally Posted by DiabeticKripple

Plain old fiat money from my pay cheques. I’m fortunate to have some excess after my bills so I’m squirreling it away into stocks and RRSP’s.

Averaged 17% on my RRSP’s last year, hoping to get at least that again this year but currently down 1%.

Wow, I thought I was doing well at 8.5%.

[bigbuck]

Originally Posted by DiabeticKripple

Plain old fiat money from my pay cheques. I’m fortunate to have some excess after my bills so I’m squirreling it away into stocks and RRSP’s.

Averaged 17% on my RRSP’s last year, hoping to get at least that again this year but currently down 1%.

Interesting. Exact opposite for me. Down 16% last year on all investing accounts and up over 20% this year.

[Map Maker]

Interesting indeed.
All stocks are cyclical and hit at different times.

[DiabeticKripple]

I think I got lucky. I hand picked 8 different funds through which my work RRSP’s are invested through Manulife and I picked the winner in every grouping. The US market ones were the ones that went through the roof.

[cresp]

If you have a long term Investment, Its better to avoid the news