Has your Investment Policy Changed After the US Election

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Re: Has your Investment Policy Changed After the US Election

Post by Shakespeare »

1) our supply management exclusions. I wouldn't shed a tear over them provided we get something in return.
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Re: Has your Investment Policy Changed After the US Election

Post by OnlyMyOpinion »

The thoughts of Stephen Harper on Trump and the US in his speech today at the ORF Conference - US discussion starts 20 minutes into the video:
https://www.youtube.com/watch?v=QHUnhTXA2CE
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Re: Has your Investment Policy Changed After the US Election

Post by CROCKD »

A change of more than philosophies.
13388617_1139738942713677_1049847925_n.jpg
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Re: Has your Investment Policy Changed After the US Election

Post by Spidey »

I watched the Harper speech above. Somewhat interesting but a little disappointing for lack of substance.

It may be early but it would interesting to see a thorough analysis of Trump economic policy. It seems Trump's lack of belief in globalization, or at least a change in direction in this regard, is very troubling to many republicans who tend to be free traders. After all, protectionism is traditionally the territory of the left (ie. Bernie Sanders, NDP) - What does it mean that Trump and the left appear to agree on this issue? ISTM that the main reason to do business with another country is that is that they offer a better product for the price. To give up such trade means you will either be paying more or receiving an inferior product. Granted there have always been arguments for protecting certain industries but Trump appears to be taking quite a broad brush to protectionism. What are the long-term consequences of this? Economists basically seem to agree that these policies will be inflationary. How is that going to affect the economy? Are there long-term dangers for the US economy to remove itself from free-trade deals? Do they risk losing business and influence? Is globalization stoppable or is it a force greater than Trump? Might China have more of economic arsenal against US protectionism than Trump appears to give them credit for? What will happen to the Canadian auto and softwood lumber industries?

Of course there are potential positives - pipelines, a lack of pandering to special interest groups and a business climate that currently seems positive. But how will the protesters be handled and will that be a further source of US strife, particularly if there is violence?

We live in interesting times.
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Re: Has your Investment Policy Changed After the US Election

Post by Spidey »

As there appear to be no armchair economists out there willing to speculate on the impacts of Trump economic policy, I will prognosticate a little with my admittedly amateur views.

It seems one of the first impacts will be a perhaps significant increase in prices of fruit/vegetables grown in the southern US states. There will be two reasons for this: the first being a lack of cheap Mexican labor after many Mexicans are sent home. The second will perhaps be an import duty on Mexican goods to both protect US industry and as a means of paying for the wall. We purchase much of our produce from the US and this will likely have an impact on inflation in our country. On the other hand, Mexican produce may be a bargain due to the lower peso and loss of some of the US market.

In a related vein, Andrew Coyne made some interesting points in today's paper:
Whether a country has a trade deficit or a trade surplus, that is — with the world in general, let alone with individual countries — does not make the slightest difference to its welfare. It is a primitive fallacy to think that it does.

To see this, it helps to remember that the balance of trade in goods and services, what economist call the current account, is only one type of international payments flow. The other is the capital account: the money we lend to or invest in other countries, or that they lend to or invest in ours. The two, current and capital, must sum to zero, a surplus on the current account matched by a deficit in the capital account and vice versa, not coincidentally but as an accounting identity: foreigners can only lend to us the Canadian dollars they earn from us on trade.

In today’s world of high capital mobility, trade deficits are more often driven by capital surpluses than the reverse. So, to take the United States as an example, high fiscal deficits (and low domestic savings rates) sucked in capital from abroad, much of it from China. To make that possible, China was obliged to run large trade surpluses with the U.S., which in turn required the U.S. dollar to rise against the yuan. That, rather than sneaky Chinese currency manipulation or subsidies, is the primary driver of the U.S. trade deficit.
http://news.nationalpost.com/full-comme ... r-nonsense

Hopefully I'm not straying too far from the purpose of the thread but such economic policies can have an impact on investment policy and I think we've all made our points about how it may affect us on a personal basis. I would be interested in other prognostications as I'm still formulating in my head how this all may play out.
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Re: Has your Investment Policy Changed After the US Election

Post by kcowan »

All the more reason to stay the course and stick to your IPS. It is like "whack-a-mole" and unintended consequences. Trump actions might cause a short term disruption but will have little long term impact. Of curse, such prognostications do not sell newspapers.

This does not mean that we should not be on the prowl for short term advantages. But they will be short term and good for traders.
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Re: Has your Investment Policy Changed After the US Election

Post by kcowan »

bcjmmac wrote:Canada used to have a 13.3% manufacturing tax (IIRC) that was eliminated when the GST was introduced. GST/VATs apply to a wide range of domestic products/services while US, for now, is only talking on taxing imports. Any other countries have this model &/or is that model allowed under WTO rules?
That is one of the things Mulroney did right upon implementation of the FTA. GST/VAT works and import duties are prohibited under WTO rules. It is too late for the US to introduce a VAT because they already reduced import taxes and a VAT would be looked upon as a tax grab.
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Re: Has your Investment Policy Changed After the US Election

Post by zeno »

Seems Trump and/or Spicer don't really understand the proposed GOP tax. According to several newer analyses I've read, the tax isn't just on imported goods but on any domestically consumed goods. Exported goods would be exempt.

"In the House Republican’s tax reform plan, the border adjustments are similar to a Value Added Tax (VAT). Both foreign and domestically produced products would be taxed, but exports—things made in America that are not sold here—would be exempt from tax. "

https://www.theatlantic.com/business/ar ... nt/514640/

The most amusing report I've seen is that Trump just doesn't like the word "Adjustable" in Border Adjustable Tax.

https://www.bloomberg.com/politics/arti ... -escalates

"The official described the proposal as the “most nationalist” way for the U.S. to tax its companies and said Trump was previously opposed only because he doesn’t like the word “adjustable.” He would prefer to simply call it a border tax, the official said."

This is hilarious, but possibly fortuitous. If Trump wants to enact this plan and tell himself and his supporters that he enacted a border tax that targets Mexico, that's probably the least harmful result.
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Re: Has your Investment Policy Changed After the US Election

Post by ghariton »

Thanks for the links.

I'm still not clear on what a border adjustment tax might be. But under one interpretation, it's equivalent to a value-added tax on imports. To the degree there is a similar tax on domestic products, that just levels the playing field.

For example, if I order goods from a U.S. supplier, the import tariff might well be zero. But I'll still get hit with HST at the border.

Here Trump is talking, not about a sales tax, but about a profits tax (I think). But the principle would be the same. If so, it's not as outrageous as it is made out to be.

But then I have no idea what Trump actually meant -- and, I suspect, neither did he.

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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed »

Cripes! Trump finally says something that sounds presidential and the markets go nuts today. Clearly Congress is not going to give him a lot of what he asked for. Where is the euphoria coming from. Surely seasoned money managers are not that naive. Put on your crash helmet and your 5 point belt system. It feels like it is going to be a Formula 1 ride this year.
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Re: Has your Investment Policy Changed After the US Election

Post by gobsmack »

AltaRed wrote:Where is the euphoria coming from. Surely seasoned money managers are not that naive.
I don't know if I buy it but, according to Bloomberg, Mom and Pop Investors Are Behind This Historic Market Rally.
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Re: Has your Investment Policy Changed After the US Election

Post by Spidey »

It is admittedly difficult to lodge a strong rationale against staying the course as historically the odds have been stacked against market timing. That being said, I just sold off a chunk of my US index holdings - nothing overly crazy but I did lighten up. I'm placing the money in, what I consider, lower-volatility alternatives (given their current price). I've been purchasing Corby, BEI.UN and FCR and simply leaving a chunk of cash available for any opportunities that may arise. Looking for other low-volatility dividend players - perhaps Enbridge, Cineplex or FTS- any ideas out there??

I always look at worst-case scenarios. I figure worst-case, is that I give up a little return going forward. After receiving a very satisfactory return over the last couple of years, I can live with that. On the other hand if markets do tank, I am still invested heavily enough to feel the pain but that pain may be somewhat offset by having cash available to bargain hunt and knowing that it could have been worse. Perhaps the exercise is one of psychology more than investment logic but psychological comfort can be important.

We do seem to be in a very unique situation in that we have record high markets combined with probably the most unpredictable president in the history of the US, also combined with several investigations into his conduct. Perhaps the markets will just keep smoking along and I hope they do but I think the chances of something nasty hitting the fan is a little higher than usual.
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Re: Has your Investment Policy Changed After the US Election

Post by Flaccidsteele »

Flaccidsteele wrote: 19 Nov 2016 01:32 No need to be dramatic. No big changes forthcoming. Steady as she goes.
Flaccidsteele wrote: 21 Nov 2016 00:26No big changes forthcoming to my investment policy and no big changes forthcoming to the US economy. We will all forget this in another 10 years. As we always do.

It just seems that many people are being overly dramatic for no particular reason. Similar to listening to my 5 year old.
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Re: Has your Investment Policy Changed After the US Election

Post by couponstrip »

The US market is absolutely on fire right now, in spite of Trump.

Since the crash in 2009 (dividends excluded):

EAFE is up ~85%
Canada is up ~90%
USA is up ~340%


Since April 2011:

EAFE ~3%
Canada ~ 15%
USA ~85%


Since the US election in November:

EAFE ~ 11%
Canada ~8%
USA ~ 16%

Some day, the USA armageddon'ers are going to be correct, but man, it's hard to bet against the USA with returns like that.

Several people I know are scared to invest in the USA right now. I am scared not to.

I'm staying the course with the couch potato (40:40:20 VTI:VEA:VCE), and daydreaming about having put everything into VTI March, 2009. :)
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Re: Has your Investment Policy Changed After the US Election

Post by couponstrip »

An update here.

Since USA elected Trump a little over a year ago, the returns with dividends are:

EAFE ~ 28% (in USD)
USA ~ 27% (in USD)
Canada ~ 14% (in CAD)

I would never have predicted this on election night Nov 8. I thought the global markets were going to tank, especially USA and on that night went to bed wishing I had less exposure. Now I'm thankful I had exposure I did.
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Re: Has your Investment Policy Changed After the US Election

Post by twa2w »

The US market is absolutely on fire right now, in spite of Trump.
I know the above quote is from an older post but

Paraphrased from the article linked below

Trump removed a lot of Obama's regulations that were effectively smothered the economy and signed the first comprehensive tax reform in 3 decades.
The USA has now had 3 consecutive quarters of near 3% growth.

Something no one predicted he could do :-o except, somehow, the markets.

In spite of continually tweeting stupid things, he is getting things done but gets little credit. He may yet prove to be one of the most effective presidents.

https://www.washingtonpost.com/opinions ... b0f644607a

The author also wrote the other side as well.
https://www.washingtonpost.com/opinions ... d76daae04f
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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed »

You're not on cannabis about six months too early? :wink:

P.S. Perhaps the market in spite of politics.
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Re: Has your Investment Policy Changed After the US Election

Post by Spidey »

While Trump has done a couple of things that boost the economy, I'm starting to think that the economy is performing more due to his lack of interest and intervention than some grand plan. I don't appear to be the only one with this opinion:

https://www.vox.com/policy-and-politics ... mmigration

I suspect that especially doing away with policies that impede the energy industry has a far greater benefit to the economy than we imagine. Conversely, Canada appears to have taken a rather sharp left turn, possibly as somewhat of a backlash against what is happening south of us. It will be interesting to watch the two economies and stock markets in the year ahead.
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Re: Has your Investment Policy Changed After the US Election

Post by kumquat »

Indeed. That's why I've uped the US part of my AA (and lowered Cdn).

That said, the Jerk in Chief is still a jerk, in both countries.
I don't intend to offend anyone, that part is just a bonus.

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Re: Has your Investment Policy Changed After the US Election

Post by kcowan »

kumquat wrote: 17 Jan 2018 02:25 Indeed. That's why I've uped the US part of my AA (and lowered Cdn).

That said, the Jerk in Chief is still a jerk, in both countries.
It seems that both countries are chugging along in spite of their ineffective leaders. It seems that Reagan was right: The best government is less government!
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Re: Has your Investment Policy Changed After the US Election

Post by Peculiar_Investor »

twa2w wrote: 16 Jan 2018 20:01
The US market is absolutely on fire right now, in spite of Trump.
I know the above quote is from an older post but

Paraphrased from the article linked below

Trump removed a lot of Obama's regulations that were effectively smothered the economy and signed the first comprehensive tax reform in 3 decades.
The USA has now had 3 consecutive quarters of near 3% growth.

Something no one predicted he could do :-o except, somehow, the markets.
Yabbut ...
couponstrip wrote: 16 Jan 2018 13:03 Since USA elected Trump a little over a year ago, the returns with dividends are:

EAFE ~ 28% (in USD)
USA ~ 27% (in USD)
Canada ~ 14% (in CAD)
The data in NormR's Periodic Table of Annual Returns for Canadians for 2017 shows

EM - 28.7%
EAFE - 17.4
S&P 500 - 13.4
S&P/TSX - 9.1
All in CAD.

It also shows S&P 500 returns and more importantly 'placement on the chart' had wandered all over the past decade, as would be expected. So I'm not sure how anyone draws conclusions, specifically for their investments and asset allocation, based on one year of data.

While it may be fun to draw conclusions after one year, I stand by what I originally wrote in this topic
Peculiar_Investor wrote: 09 Nov 2016 18:41
8Toretirement wrote:Does this US election change your investment policy.
It didn't even cause me to review it, let alone change it. Why should it? Governments change on a regular basis, good companies and good investment strategies should for the most part be timeless.

If you investment policy is subject to review/change on political matters, did it change after the Brexit vote? The change in government in Canada?
Insomniac wrote:No. I think I would only revisit my investment policy in the case of some big personal event. e.g. Pension is unexpectedly reduced, marriage breakup, etc.
I agreed, personal life events are a reason to review and consider revisions.
Just continue to execute our plan and ignore the noise.
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Re: Has your Investment Policy Changed After the US Election

Post by couponstrip »

The data in NormR's Periodic Table of Annual Returns for Canadians for 2017 shows

EM - 28.7%
EAFE - 17.4
S&P 500 - 13.4
S&P/TSX - 9.1
Yes, but Trump wasn't elected on Jan 1, 2017.
All in CAD
Indeed.
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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed »

While it is true US markets started to surge upwards right after the November, 2016 election, Trump was elected close enough to Jan 1, 2017 to make comparisons on a year-to-year basis close enough for government work. Markets anticipate future changes so they react accordingly.

There is no preciseness or accuracy one can attribute to a specific individual, only a roll of the dice as to how tax/business/regulatory policy might be a headwind or a tailwind. It is ultimately more important as to what the legislative bodies will do.

Canada's stock market behaviour is tied rather closely to the health and wealth of commodity markets and that is mostly a global characteristic than a US economy or Ottawa effect. JT is taking credit for Canada's economic improvement in 2017 but I'd suggest the Libs had nothing to do with it at all, and if anything, actually caused a headwind with higher taxes, including carbon taxes, and potentially ill-advised NAFTA approach.

So.... I suggest, ignore the politicians for the most part and watch global economic indicators for the direction of major sectors of the economy.
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Re: Has your Investment Policy Changed After the US Election

Post by Peculiar_Investor »

couponstrip wrote: 17 Jan 2018 09:42
The data in NormR's Periodic Table of Annual Returns for Canadians for 2017 shows

EM - 28.7%
EAFE - 17.4
S&P 500 - 13.4
S&P/TSX - 9.1
Yes, but Trump wasn't elected on Jan 1, 2017.
All in CAD
Indeed.
Fair enough. Your previous post showing returns had a mix of USD and CAD so I went to the quickest source I knew to gather another datapoint all in CAD.

It is also one of the problems when comparing returns and other such data, picking slightly different starting and endpoint dates can change the resultant data to the point of making it less reliable as a resource for making a judgement call. The mutual fund advertising industry has gotten this fact down to a science :twisted: to the detriment on investors who don't 'trust but verify'.
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Re: Has your Investment Policy Changed After the US Election

Post by twa2w »

AltaRed wrote: 16 Jan 2018 20:11 You're not on cannabis about six months too early? :wink:

P.S. Perhaps the market in spite of politics.
I wasn't agreeing with the article, just paraphrasing some of the content. :rofl:
Although there are days I wonder if I should be smoking a little of the good stuff.
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