market crash Feb 2018
Re: market crash Feb 2018
Fake News!!!
There is nothing abnormal about recent market behaviour!
In the last two weeks the Dow has lost a little over 2000 points. I admit that this appears to be quite an astounding number. Why has no one mentioned that less than 2 years ago that same Dow was hovering around 16000, more than 10000 points less than its recent all-time high!!!
I am happy (as most of my fellow FWFers) with my (or most of my) equity investments as ongoing viable entities. Heck, some of them have been pleasing me with positive dividend announcements.
Also, as many others, all of my near term (and medium term) needs are quite comfortably provided for by FI and dividends. After all, that is one of the main reasons why we have FI.
Goodnight everyone.
StuBee
There is nothing abnormal about recent market behaviour!
In the last two weeks the Dow has lost a little over 2000 points. I admit that this appears to be quite an astounding number. Why has no one mentioned that less than 2 years ago that same Dow was hovering around 16000, more than 10000 points less than its recent all-time high!!!
I am happy (as most of my fellow FWFers) with my (or most of my) equity investments as ongoing viable entities. Heck, some of them have been pleasing me with positive dividend announcements.
Also, as many others, all of my near term (and medium term) needs are quite comfortably provided for by FI and dividends. After all, that is one of the main reasons why we have FI.
Goodnight everyone.
StuBee
"The term is over: the holidays have begun. The dream is ended: this is the morning."-C.S.Lewis, The Last Battle
Re: market crash Feb 2018
Thanks everyone for answering my bond and portfolio questions.
I am glad we're having a lively chat about the 'correction'
I am glad we're having a lively chat about the 'correction'
"Speculation is an effort, probably unsuccessfully, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little." Fred Schwed " Where are the Customers’ Yachts?"
Re: market crash Feb 2018
Just added up all my accounts and compared them to the total at September 30, 2017. I'm $91 up at this point!
Interesting to see what happens to interest rates (ok, I know ). Will this market volatility cause them to hold off on the rate increases so many have predicted for this year? Or will they look at the employment numbers and other economic data and push them up anyway? A local news reporter interviewed a roofing guy on TV tonight; he said that he had so much work that he would hire almost anyone who wanted a job. Sounds like inflation on the way...
Interesting to see what happens to interest rates (ok, I know ). Will this market volatility cause them to hold off on the rate increases so many have predicted for this year? Or will they look at the employment numbers and other economic data and push them up anyway? A local news reporter interviewed a roofing guy on TV tonight; he said that he had so much work that he would hire almost anyone who wanted a job. Sounds like inflation on the way...
Re: market crash Feb 2018
Yes, indicators show the world economy in general and the U.S. economy in particular to be doing very well. Even Canada is doing well, despite today's disappointing jobs report. (Note that job losses were part-time jobs; full-time jobs went up at a healthy clip. Which all goes to show the folly of giving much weight to monthly numbers.)
Things can change, and change quickly. But for now, the outlook is quite positive. This leads me to think that the current blow-off in markets is temporary, and shouldn't last more than another couple of weeks. I suspect that, looking at a chart of stock indices in say 2020, the current events will be a barely noticeable blip.
But this forecast, like any other, is worth what you are paying for it. I'm certainly not acting on it.
I do believe that inflation will increase. Of course, I've been forecasting that for the past nine years, which goes to demonstrate my forecasting ability. But this time is different -- ahem! -- and wage pressures will drive prices up. Nominal interest rates should also rise, with a lag, while central bankers weigh the risks of acting. That is a reason that I do not hold any nominal bonds. I think that these could get hurt a lot worse than equities.
George
Things can change, and change quickly. But for now, the outlook is quite positive. This leads me to think that the current blow-off in markets is temporary, and shouldn't last more than another couple of weeks. I suspect that, looking at a chart of stock indices in say 2020, the current events will be a barely noticeable blip.
But this forecast, like any other, is worth what you are paying for it. I'm certainly not acting on it.
I do believe that inflation will increase. Of course, I've been forecasting that for the past nine years, which goes to demonstrate my forecasting ability. But this time is different -- ahem! -- and wage pressures will drive prices up. Nominal interest rates should also rise, with a lag, while central bankers weigh the risks of acting. That is a reason that I do not hold any nominal bonds. I think that these could get hurt a lot worse than equities.
George
The juice is worth the squeeze
Re: market crash Feb 2018
I agree with all of the above. Which means that something entirely different is likely to happen.
Re: market crash Feb 2018
Yes but we are the exceptions. The majority of people are busy getting out of the market. When the market goes up again they'll get back in and it will never really dawn on them that they have lost money.
"Why do I have to go to school? If I watch YouTube I'll know everything."
- Grandson #2
- Grandson #2
Re: market crash Feb 2018
True enough. We do know the future. We know that the markets will crash. And that they will rise. Just not when or in what order.
Re: market crash Feb 2018
Canada has been one of the lucky countries when it comes to investing. In some countries out there, an investor would have had negative real returns in what equates to a whole investment lifetime.
- scomac
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Re: market crash Feb 2018
Indeed! I have always maintained that we won the genetic lottery in terms of when we were born, where we were born and to whom we were born.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Thomas Babington Macaulay in 1830
- Peculiar_Investor
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Re: Feb 2018 is now a correction
If some of your questions about fixed income investing strategy and implementation remain unanswered or not clearly answered, why not start a new topic for them as they probably are outside the scope of the discussion whether this is a pullback, correction, bear market, ...
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Re: market crash Feb 2018
That's really good if your accounts total is less than $1000.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Feb 2018 is now a correction
A critical part of their presentation,
The information seems to be presented to discourage market timing but it seems to me that if one invested heavily in equities during 30% or greater corrections and perhaps re-balanced once the market had recovered that it would be a profitable strategy. Thoughts?Vanguard wrote:Downturns aren’t rare events. You’ll likely endure many of them, in all markets, during your lifetime.
<snip>
Timing the market is futile. The best and worst trading days happen close together.
If life seems jolly rotten, then there's something you've forgotten -- and that's to laugh and smile and dance and sing. - Eric Idle
- Shakespeare
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Re: market crash Feb 2018
That's market timing and emh proponents say that doesn't work.
Course, some of us contrary bastards do it anyway.
Course, some of us contrary bastards do it anyway.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
Re: Feb 2018 is now a correction
All of the disaster stocks Nortel, RIM, VRX, to name a few, were great investments up to a point. All you had to do to lose money was to hold them as they fell.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Feb 2018 is now a correction
What about buying the index?
If life seems jolly rotten, then there's something you've forgotten -- and that's to laugh and smile and dance and sing. - Eric Idle
Re: Feb 2018 is now a correction
You get the index returns.
Just hold on and hope you outlive any correction.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: market crash Feb 2018
Another good article by John Heinzl G&M
A simple secret to laughing at market mayhem
I have been mainly ignoring the gyrations of the past couple of weeks. I usually only check prices once a week anyway. In light of others on this forum talking about losing cars etc (Disclosure: I don't own a car) I looked at my non reg portfolio. It is down about 6% from the peak of a couple of weeks ago and down about 2% from the value on Sept.30, 2017. In other words NOISE.
And as Heinzl points out in his article my good dividend stocks continue to crank them out.
A simple secret to laughing at market mayhem
I have been mainly ignoring the gyrations of the past couple of weeks. I usually only check prices once a week anyway. In light of others on this forum talking about losing cars etc (Disclosure: I don't own a car) I looked at my non reg portfolio. It is down about 6% from the peak of a couple of weeks ago and down about 2% from the value on Sept.30, 2017. In other words NOISE.
And as Heinzl points out in his article my good dividend stocks continue to crank them out.
" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
Re: market crash Feb 2018
I use market timing to limit my losses;Shakespeare wrote: ↑10 Feb 2018 11:46 That's market timing and emh proponents say that doesn't work.
Course, some of us contrary bastards do it anyway.
Better to hold cash when the market is rising than to hold stocks when the market is falling.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
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Re: market crash Feb 2018
I only really noticed because I was in the middle of a transaction.
I had a quantity of money in non-registered TD eFunds (US Index, International Index). My plan was to get them converted to two US-domiciled ETFs all on one day in Questrade, and then get it into my RRSP. (Having the money already in my RRSP would have been difficult as Questrade can't do a one-day Norbert's Gambit without margin.)
So in advance of this I temp-moved some emergency fund cash into my Questrade margin account in the same quantity as the eFunds I was to sell. On the day I started the transaction, pre-crash, I did all of the following: 1) Ordered the redemption of the eFunds, 2) Shorted an interlisted stock in Questrade on the USD side, 3) Bought back the same immediately on the CAD side, 4) Bought the desired US ETFs, 5) Requested the journal to flatten. Then I waited for settlement and flattening before pushing to RRSP.
As it would happen, both funds dropped in value about 6% between purchase and contribution to RRSP. Which means I have a denied capital loss but still get taxed on the capital gain from when the eFunds had the same rise in value. The efforts I took to not be out of the market during the transaction backfired And I wasn't interested in playing games to try and squeeze out that capital loss as it would have just meant more commissions and ending up with an ETF other than what I wanted.
Plus side? It consumed less of my contribution room. Minus? I get less of a deduction for contributing it.
I had a quantity of money in non-registered TD eFunds (US Index, International Index). My plan was to get them converted to two US-domiciled ETFs all on one day in Questrade, and then get it into my RRSP. (Having the money already in my RRSP would have been difficult as Questrade can't do a one-day Norbert's Gambit without margin.)
So in advance of this I temp-moved some emergency fund cash into my Questrade margin account in the same quantity as the eFunds I was to sell. On the day I started the transaction, pre-crash, I did all of the following: 1) Ordered the redemption of the eFunds, 2) Shorted an interlisted stock in Questrade on the USD side, 3) Bought back the same immediately on the CAD side, 4) Bought the desired US ETFs, 5) Requested the journal to flatten. Then I waited for settlement and flattening before pushing to RRSP.
As it would happen, both funds dropped in value about 6% between purchase and contribution to RRSP. Which means I have a denied capital loss but still get taxed on the capital gain from when the eFunds had the same rise in value. The efforts I took to not be out of the market during the transaction backfired And I wasn't interested in playing games to try and squeeze out that capital loss as it would have just meant more commissions and ending up with an ETF other than what I wanted.
Plus side? It consumed less of my contribution room. Minus? I get less of a deduction for contributing it.
Re: market crash Feb 2018
I found the most difficult thing about buying during a severe downturn, next to overcoming one's own emotions, is what I will call the "spousal effect". For example, we might know that after a 30% drop the market will eventually recover and chances are historically pretty good that in 2 to 5 years you will be pretty happy. But we can't know the bottom or whether the market will not drop another 5 - 20%. When one's spouse see's ever declining financial statements and further sees that you have been buying into further losses it can cause a certain degree of trepidation.
If life seems jolly rotten, then there's something you've forgotten -- and that's to laugh and smile and dance and sing. - Eric Idle
Re: market crash Feb 2018
An anecdote from the recent correction:
https://www.wsj.com/articles/investors- ... 1519560001Many of the hardest-hit investors were those who had used exchange-traded products to wager that low volatility would persist and stock prices would remain stable.
Harvey Hajiyan, a 35-year-old financial adviser who lives in Toronto and has been investing for more than a decade, assumed stocks would continue to grind higher this year, similar to the gains the Dow and the S&P 500 had posted for much of the past two years without a pullback.
“All of the strategists agreed the market would go up,” said Mr. Hajiyan.
At the end of January, he placed an ill-timed bet and used only margin to fund a large position in the ProShares Short VIX Short-Term Futures exchange-traded fund (SVXY), which rises as long as stock prices remain stable. When the S&P 500 fell into correction territory to erase one of its best starts in years, Mr. Hajiyan’s investment in the ProShares fund tracking expected market swings was nearly wiped out, forcing him to liquidate hundreds of thousands of dollars of securities to answer the margin call.
“I was in denial,” said Mr. Hajiyan after he realized he lost about 600,000 Canadian dollars (US$472,260) worth of his C$1.1 million investment portfolio.
<snip>
Despite losing a sizable portion of his wealth, Mr. Hajiyan says the experience hasn’t soured him on using margin debt. “If I wasn’t using margin, I wouldn’t be at this level,” Mr. Hajiyan said of his profits before the pullback. “As my money grows, I’ll limit the amount of margin I use.”
- snowback96
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Re: market crash Feb 2018
It says he's a "Financial Advisor". Good grief.
Re: market crash Feb 2018
I guess it serves to remind us who is on the other side of the market from us boring types...
Reminds me of a quote from The Big Short: "'I’m telling you, your bet is against dumb money. I think it’s time you meet that dumb money."
Reminds me of a quote from The Big Short: "'I’m telling you, your bet is against dumb money. I think it’s time you meet that dumb money."
- Norbert Schlenker
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Re: market crash Feb 2018
Easy come, easy go. He's 35. Lots of time to recover.
OTOH, I wonder at the marketing value to a Sun Life mutual fund salesman in Vaughan of having your crash and burn written up in the Wall Street Journal. It seems a bit of a strange thing to use as a draw for new clients. Perhaps Vaughan is full of plungers who would admire a 35 year old who had a million dollar investment portfolio for at least a few days?
Nothing can protect people who want to buy the Brooklyn Bridge.