Are we too old, crusty and conservative

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scomac
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Re: Are we too old, crusty and conservative

Post by scomac »

LAJ wrote: 24 Dec 2017 09:41 I feel old, I'm grumpy if not crusty and I'm becoming more conservative with my investments. Recently pulled 400K out of the market to work on building a GIC ladder. I no longer need to chase income.
A month ago I felt positively ancient! I was also grumpy and crusty, but such is the way when we are hurting.

Today, I'm feeling far more youthful, if not a bit sore from the rigors of working at rediscovering my youthfulness. As a result I'm less grumpy and crusty too.

As far as the investments are concerned, can't say I'm seeing much of a change there in attitude or approach, just staying the course.
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Re: Are we too old, crusty and conservative

Post by SoninlawofGus »

LAJ wrote: 24 Dec 2017 09:41 I feel old, I'm grumpy if not crusty and I'm becoming more conservative with my investments. Recently pulled 400K out of the market to work on building a GIC ladder. I no longer need to chase income.
I have also been selling, though my wife wants us to hang on to Dollarama. She's definitely a contrarian indicator. Back in October of 1999, we had just gotten into stocks in the previous year -- I worked for Nortel, and we made a short-term killing on momentum tech stocks. Right at the market highs, we had dinner one night, and I said "We're either at the beginning of something or at the end. My gut says it's the end." She said, "I think it's the beginning." Six figures of losses later, I started selling (and a good thing too...)
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Re: Are we too old, crusty and conservative

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What is she saying now?
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Re: Are we too old, crusty and conservative

Post by JaydoubleU »

It may be that people here are conservative and crusty, or it may be that we have learned some lessons -- for most of us, the hard way.
Exactly. Many of us were invested through the Asian contagion, the dot com meltdown, the subprime mortgage crash. Being invested in speculative stocks in those days was a sure recipe for heavy losses. During a boom, there will always be articles about savvy pros who are making phenomenal returns, leaving the old Buffets behind. And then the correction comes, and Buffet steps in. Some of us have learned to be a little wary of the stock rush du jour. In the dot com boom, many of the new e-business stocks had no earnings to speak of, only a lot of hype; they share something in common with the current bitcoin craze and the marijuana rush. When the boom ends and the stocks crash, there may well be some survivors, but during this speculative stage, who can tell?

Another point is that some of us have reached a level of security in which it is no longer necessary or even interesting to take big risks. We are content with 6-8% annual returns with a side order of 3-4% dividends. Why risk money on complete unknowns when the old stodgy style of buy and hold the stocks of solid established companies works? Buffet once said that utilities were not the best way to get rich, but a good way to stay rich (or something like that).

I feel a sense that "I have seen this show before." We might be getting closer to a market top in this cycle. Stocks are getting expensive. It is not a bad time for us stodgy old timers to sit back, raise some cash, enjoy the cash we have made, and watch for the next crash. Then we happily wade in to buy some more shares of great companies that are being sold off because of the latest wave of fear.

It's all about time, as 2 yen said, and maybe you younger investors simply need to go through it all yourselves, repeating history, before you will get it.
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Re: Are we too old, crusty and conservative

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JaydoubleU wrote: 26 Dec 2017 19:02

Another point is that some of us have reached a level of security in which it is no longer necessary or even interesting to take big risks. We are content with 6-8% annual returns with a side order of 3-4% dividends. Why risk money on complete unknowns when the old stodgy style of buy and hold the stocks of solid established companies works? Buffet once said that utilities were not the best way to get rich, but a good way to stay rich (or something like that).

I feel a sense that "I have seen this show before." We might be getting closer to a market top in this cycle. Stocks are getting expensive. It is not a bad time for us stodgy old timers to sit back, raise some cash, enjoy the cash we have made, and watch for the next crash. Then we happily wade in to buy some more shares of great companies that are being sold off because of the latest wave of fear.
The first paragraph quoted reflects my views. This is especially true for those people who are retired (like me). Low double digit total returns seem pretty good to me, and much better than the TSX.

The next paragraph not so much. Sounds too much like market timing to me. I haven’t bought anything new for over two years. Have cashed out some and raised my spending somewhat.
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Re: Are we too old, crusty and conservative

Post by scomac »

SQRT wrote: 27 Dec 2017 02:42
JaydoubleU wrote: 26 Dec 2017 19:02

Another point is that some of us have reached a level of security in which it is no longer necessary or even interesting to take big risks. We are content with 6-8% annual returns with a side order of 3-4% dividends. Why risk money on complete unknowns when the old stodgy style of buy and hold the stocks of solid established companies works? Buffet once said that utilities were not the best way to get rich, but a good way to stay rich (or something like that).

I feel a sense that "I have seen this show before." We might be getting closer to a market top in this cycle. Stocks are getting expensive. It is not a bad time for us stodgy old timers to sit back, raise some cash, enjoy the cash we have made, and watch for the next crash. Then we happily wade in to buy some more shares of great companies that are being sold off because of the latest wave of fear.
The first paragraph quoted reflects my views. This is especially true for those people who are retired (like me). Low double digit total returns seem pretty good to me, and much better than the TSX.

The next paragraph not so much. Sounds too much like market timing to me. I haven’t bought anything new for over two years. Have cashed out some and raised my spending somewhat.
I guess it comes down to how one interprets the written word. ISTM that you have been doing something very similar to what you were criticizing. :wink:
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Re: Are we too old, crusty and conservative

Post by SQRT »

scomac wrote: 27 Dec 2017 07:35
SQRT wrote: 27 Dec 2017 02:42
JaydoubleU wrote: 26 Dec 2017 19:02

Another point is that some of us have reached a level of security in which it is no longer necessary or even interesting to take big risks. We are content with 6-8% annual returns with a side order of 3-4% dividends. Why risk money on complete unknowns when the old stodgy style of buy and hold the stocks of solid established companies works? Buffet once said that utilities were not the best way to get rich, but a good way to stay rich (or something like that).

I feel a sense that "I have seen this show before." We might be getting closer to a market top in this cycle. Stocks are getting expensive. It is not a bad time for us stodgy old timers to sit back, raise some cash, enjoy the cash we have made, and watch for the next crash. Then we happily wade in to buy some more shares of great companies that are being sold off because of the latest wave of fear.
The first paragraph quoted reflects my views. This is especially true for those people who are retired (like me). Low double digit total returns seem pretty good to me, and much better than the TSX.

The next paragraph not so much. Sounds too much like market timing to me. I haven’t bought anything new for over two years. Have cashed out some and raised my spending somewhat.
I guess it comes down to how one interprets the written word. ISTM that you have been doing something very similar to what you were criticizing. :wink:
Yes, I guess I’m half a market timer. Still, I think, it’s a lot easier to sell when the market is up and then spend the money, than it is to sell high and then buy low. No?
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Re: Are we too old, crusty and conservative

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JaydoubleU wrote: 26 Dec 2017 19:02
It may be that people here are conservative and crusty, or it may be that we have learned some lessons -- for most of us, the hard way.
Exactly. Many of us were invested through the Asian contagion, the dot com meltdown, the subprime mortgage crash. Being invested in speculative stocks in those days was a sure recipe for heavy losses. During a boom, there will always be articles about savvy pros who are making phenomenal returns, leaving the old Buffets behind. And then the correction comes, and Buffet steps in. Some of us have learned to be a little wary of the stock rush du jour. In the dot com boom, many of the new e-business stocks had no earnings to speak of, only a lot of hype; they share something in common with the current bitcoin craze and the marijuana rush. When the boom ends and the stocks crash, there may well be some survivors, but during this speculative stage, who can tell?

Another point is that some of us have reached a level of security in which it is no longer necessary or even interesting to take big risks. We are content with 6-8% annual returns with a side order of 3-4% dividends. Why risk money on complete unknowns when the old stodgy style of buy and hold the stocks of solid established companies works? Buffet once said that utilities were not the best way to get rich, but a good way to stay rich (or something like that).

I feel a sense that "I have seen this show before." We might be getting closer to a market top in this cycle. Stocks are getting expensive. It is not a bad time for us stodgy old timers to sit back, raise some cash, enjoy the cash we have made, and watch for the next crash. Then we happily wade in to buy some more shares of great companies that are being sold off because of the latest wave of fear.

It's all about time, as 2 yen said, and maybe you younger investors simply need to go through it all yourselves, repeating history, before you will get it.
spot on brother. That's why I still hold Concordia - the 90% loss reminds me of what happens when I chase and go outside of my investment criteria. Every time I start thinking I can take on bit more risk I see CXR and I come back to reality pretty quickly. These days I'll take the almost 9% total return on BCE and call it a day.
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Re: Are we too old, crusty and conservative

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Sounds too much like market timing to me.
Actually, I was talking about value investing. Currently, I don't see a whole lot of value in the market. Stocks like POW may be reasonably valued, but if you acquired some in the low 20s or even less, you tend to feel that the low 30s is too expensive. Ditto for the banks. As for bitcoin and marijuana, how do you even value these outfits?

I wasn't trying to predict a crash. I was merely saying that along with age and crustiness, some of us have also acquired patience, and while the market keeps reaching new heights, we are patiently awaiting the inevitable correction. A crash would be even better.
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Re: Are we too old, crusty and conservative

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These days I'll take the almost 9% total return on BCE and call it a day.
Funny you should mention BCE. My youngest son has saved up a little money, and we were talking about where to invest it that would be relatively safe. The .05% offered by his TD Youth Account is 99.9% safe, but I reckon with inflation, he is actually LOSING money! So I suggested he save up a little more and buy shares of the bank instead, and forget about the bank's lousy GIC offerings. Or, as we were watching TV while having this discussion, I said, "what about Bell? It is providing the hockey game we are watching, as well as our home phone, internet, and my mobile. Sure it isn't 99.9% safe; there is competition, changing technology, etc. etc. But 4.75% is 95 times .05, and it should grow, and the demand for data is also growing..."

And my son's eleven-year-old eyes lit up like Christmas lights.
Last edited by JaydoubleU on 27 Dec 2017 15:35, edited 1 time in total.
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Re: Are we too old, crusty and conservative

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SQRT wrote: 27 Dec 2017 08:32
scomac wrote: 27 Dec 2017 07:35
SQRT wrote: 27 Dec 2017 02:42

The first paragraph quoted reflects my views. This is especially true for those people who are retired (like me). Low double digit total returns seem pretty good to me, and much better than the TSX.

The next paragraph not so much. Sounds too much like market timing to me. I haven’t bought anything new for over two years. Have cashed out some and raised my spending somewhat.
I guess it comes down to how one interprets the written word. ISTM that you have been doing something very similar to what you were criticizing. :wink:
Yes, I guess I’m half a market timer. Still, I think, it’s a lot easier to sell when the market is up and then spend the money, than it is to sell high and then buy low. No?
Absolutely. I have been following along as well, selling off a few things and then spending the proceeds. A new car and a sizeable donation come to mind. Will continue along that vein as we are hosting our youngest son's wedding on our property this summer. Don't know what the market is going to do, but my spending priorities have already been set!
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Re: Are we too old, crusty and conservative

Post by SQRT »

JaydoubleU wrote: 27 Dec 2017 10:10
Sounds too much like market timing to me.

I wasn't trying to predict a crash. I was merely saying that along with age and crustiness, some of us have also acquired patience, and while the market keeps reaching new heights, we are patiently awaiting the inevitable correction. A crash would be even better.
Right. But having sold some “at the high” and hoping to buy some later at a lower value, sounds like market timing? Now if you haven’t sold anything what’s the point of “waiting for the inevitable correction”? If you are in the accumulation phase maybe makes some sense but that would be more like Dollar cost averaging?

I have plenty of patience. Don’t buy anything anymore, just sell a bit from time to time (if markets cooperate) to help fund my “lavish” lifestyle.
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Re: Are we too old, crusty and conservative

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Now if you haven’t sold anything what’s the point of “waiting for the inevitable correction”?
Dividend income accumulates and exceeds living expenses. Besides, I keep a cash buffer, an emergency fund for the unforeseen, such as stock market crashes or other fortuitous disasters :)
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Re: Are we too old, crusty and conservative

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I pulled that money out of the market permanently. I'm not trying to time the market and have no intention of re-investing those funds. At our stage in life, with our assets, I no longer see the need to subject so much to market risk. We still have a sizable amount in the market. If the market crashes, we're good. If the market climbs, we're good. If the market stays the same, we're good. If the Apocalypse hits :shock: , well then we're not so good but I don't think I'll worry too much about that.
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Re: Are we too old, crusty and conservative

Post by SQRT »

JaydoubleU wrote: 27 Dec 2017 13:45
Now if you haven’t sold anything what’s the point of “waiting for the inevitable correction”?
Dividend income accumulates and exceeds living expenses. Besides, I keep a cash buffer, an emergency fund for the unforeseen, such as stock market crashes or other fortuitous disasters :)
Ok makes sense. But if you don’t even spend your divs sounds like you are not investing for yourself but rather your heirs?
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Re: Are we too old, crusty and conservative

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But if you don’t even spend your divs sounds like you are not investing for yourself but rather your heirs?
I suspect a major purchase will come in the next 2-3 years: car or house or car and house....other than that I really want nothing. I do spend the divs, just not all of them. I also work part-time :wink:
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Re: Are we too old, crusty and conservative

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The very low interest rates over the past few years led me to reduce my fixed income % in favour of conservative dividend plays with conservative stocks such as banks.I feel at my age I should be at 70% fixed but 2% interest is not on.
I still like to keep 5% as my "gambling" pot which is currently playing in the POT business.
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Re: Are we too old, crusty and conservative

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biker wrote: 30 Dec 2017 11:05 The very low interest rates over the past few years led me to reduce my fixed income % in favour of conservative dividend plays with conservative stocks such as banks.I feel at my age I should be at 70% fixed but 2% interest is not on.
I still like to keep 5% as my "gambling" pot which is currently playing in the POT business.
Glad to hear that you're still with us, biker! It has been a long time since you have posted something.

I suspect that many of us should have a much higher fixed income percentage based on our ages, but that really isn't realistic when factoring in return requirements for a 3% - 4% withdrawal rate over one's expected lifetime unless one has substantial assets beyond needs. I don't really want to be that guy that lives poor and dies rich in order to conform to an artificial constraint based on planning models from prior eras.
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Re: Are we too old, crusty and conservative

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I am staying the course which probably makes me the topic of this thread. I have increased spending from the 1.8% VWR from last year but have not made major changes to the asset mix. Replaced some FI with blue chip dividend payers. But these are tiny steps in the scheme of things when I look back on 2017.
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Re: Are we too old, crusty and conservative

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Ditto for staying the course almost 12 years into retirement. Like many others in a similar stage of life, I likely have too much equity allocation given today's low interest rates, but I have a DB pension which covers essentials, and:
1) I keep an HISA reserve to tide me over multiple years of a bear equity market, plus
2) I have some prefs, both fixed reset and straight perpetuals, to backstop the HISA, plus
3) I have a smallish RRSP fully in a ~6 year bond/GIC/debenture ladder I could raid.

I thus don't mind having an overall 85% allocation to quality dividend paying Cdn equities and broad market ex-Canada ETFs. My returns have been competitive and thus I have no desire or interest in chasing momentum stocks or even having play money for speculative investing. I get my thrills in other aspects of my life. A boring investment strategy is good at this stage of life.

I will do a bit of tinkering in early 2018, primarily to replenish my HISA cash I recently used to fund 2 major trips, and I may swap out a few sluggish equities for alternatives if/when the opportunity arises and I happen to be paying attention at the time.

Lastly, a new vehicle purchase will be forthcoming in the next year or two, but not seriously shopping until the fever hits. I will sell equities to pay for it.
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Re: Are we too old, crusty and conservative

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I'm staying the course, too.

As I've posted on another thread, I'm keeping the amount of my fixed income constant. Because those are premium bonds, whose value declines slowly as I receive coupons that are higher than the yield, I've purchased a few new bonds so as to keep the total constant. On the other hand, the coupons from the bonds are reinvested into equities. As a result of dividend reinvestment and growth in equities, I have gone from 60 per cent fixed income some nine years ago (after the crash) to some 28 per cent now.

I still haven't started to draw down from either registered or non-registered accounts, except for a new roof and a kitchen make-over, and various gifts to family and deserving causes. I'm still working part time and that, together with government pensions to me and my wife, are sufficient for day-to-day living expenses.

Yes, I'm enjoying the work, except for actual court appearances, which I'm starting to find stressful.

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Re: Are we too old, crusty and conservative

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Scary that I'd be old and crusty in my forties, but I'm contemplating going to 25 or 30% bonds/cash, after 15 years or so of 100% stocks, ditching REITs as separate category. That would make my portfolio almost a typical standard four fund couch potato portfolio, with mostly individual stocks for Canada and some increasingly less relevant remnants of experiments with small/value/emerging market tilts (VBR, VSS, VTV etc).
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Re: Are we too old, crusty and conservative

Post by 2 yen »

Definitely getting crusty. Not conservative, at least in terms of respecting difference. 20% Fixed, 80% equities. No plan to change. The pensions have yet to kick in and they are a form of fixed income.

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Re: Are we too old, crusty and conservative

Post by longinvest »

I don't consider myself old, crusty, or conservative.

For one thing, I'm still in my 40s.

For another, I actually dare invest half of my portfolio into the most feared asset class of this last decade: bonds!

I invest the other half into stock ETFs.

I'm not sure how to exactly define a conservative investor, these days. Would a conservative investor be 100% invested into high-interest savings accounts and GICs*? This seems so twentieth century to me. I think that in the twenty-first century a really conservative investor would be 100% invested into dividend stocks**.

* A conservative investor wouldn't assume so much inflation risk.
** A conservative investor would only care about the regular and increasing income, not about the stock price.

What do others think?
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Re: Are we too old, crusty and conservative

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JaydoubleU wrote: 27 Dec 2017 10:28
....as we were watching TV while having this discussion, I said, "what about Bell? It is providing the hockey game we are watching, as well as our home phone, internet, and my mobile. Sure it isn't 99.9% safe; there is competition, changing technology, etc. etc. But 4.75% is 95 times .05, and it should grow, and the demand for data is also growing..."
And my son's eleven-year-old eyes lit up like Christmas lights.
No Kidding!
Bell was in my home today changing everything from Roger's cable to Fibre-optic. All my telephones, internet and TV on one bundle. It took the guy 5 hours to set it up but after it is done my bill goes down significantly.
I'm happy so far with the result.
I've owned Bell for many years. It is a steady dividend payer and there's very little competition so far. My daughter has gone the route of streaming and the results so far are very spotty. Watching TV at her house is a disaster.

BTW, I don't think people get crusty and conservative as they get older. Crusty old conservatives usually come from crusty young ones!
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