Author Topic: Investment Culture  (Read 462 times)

Offline wilber

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Re: Investments
« Reply #15 on: February 11, 2017, 02:11:13 pm »
We use a financial advisor with an investment company that doesn't have any of its own products or invest in the market itself. Our advisor doesn't buy or sell anything without discussing it with us first. In spite of today's interest rates, at our age protecting capital is #1 so we try to keep our portfolio totals at around 35% or a bit less equities and the rest in GIC's and bonds. We have a bit in a couple of ETF's but except for a few capital gains plays, the rest of our equities are dividend paying individual stocks.

One thing we do is max out our TFSA's every year.
« Last Edit: February 11, 2017, 02:14:27 pm by wilber »

Offline SirJohn

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Re: Investments
« Reply #16 on: February 11, 2017, 04:24:01 pm »
We use a financial advisor with an investment company that doesn't have any of its own products or invest in the market itself. Our advisor doesn't buy or sell anything without discussing it with us first. In spite of today's interest rates, at our age protecting capital is #1 so we try to keep our portfolio totals at around 35% or a bit less equities and the rest in GIC's and bonds. We have a bit in a couple of ETF's but except for a few capital gains plays, the rest of our equities are dividend paying individual stocks.

One thing we do is max out our TFSA's every year.

I know that for the longest time the suggested ratio was about 30-40% stocks, and the rest in bonds when you were older. But I don't know that this still holds given the absurdly low rates you get from bonds, and the way bonds have been falling in the face of rising interest rates.

Offline wilber

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Re: Investments
« Reply #17 on: February 11, 2017, 04:58:12 pm »
I know that for the longest time the suggested ratio was about 30-40% stocks, and the rest in bonds when you were older. But I don't know that this still holds given the absurdly low rates you get from bonds, and the way bonds have been falling in the face of rising interest rates.

It depends on your risk tolerance and how much cash flow you need. I look for solid companies that pay a decent dividend when I buy stocks. A capital gain is nice but you have to sell to get it and then you are faced with buying something to replace it. I don't sell unless there is a good reason to. With bonds it depends on how much you pay for one and its yield. I look at bonds as income generators, not investments. I will get face value when it matures, so how much is it going to give me in the mean time.

I've been told interest rates are going to rise for at least ten years now and the opposite has happened. I'll probably be dead before they start rising. It depends on where you are in life.

Offline msj

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Re: Investments
« Reply #18 on: February 11, 2017, 05:18:48 pm »
Don't know what I will be like when I'm retired.

For now I tend to be all stocks except for now as I have moved to some cash as Imthink things through.

My philosophy for when I'm retired, at least what I think it will be, is this:

Move 5 years worth of living expenses to GIC ladders, conservative corporate bonds,  preferred shares, other conservative/ liquid investments.

Keep the rest in stocks and rotate stocks out each year to maintain the 5 year buffer.

Should be as simple as that but will see in time.



I've gotta have more cow bell! -Bruce Dickinson

Offline SirJohn

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Re: Investments
« Reply #19 on: February 12, 2017, 10:25:13 am »
It depends on your risk tolerance and how much cash flow you need. I look for solid companies that pay a decent dividend when I buy stocks. A capital gain is nice but you have to sell to get it and then you are faced with buying something to replace it.

I don't mind capital gains if they're in my RRSP or TFSA, both of which are maxed out. I am a lousy investor because I lack patience. I trade too much, and have lately realized that my nod to risk has been to buy smaller amounts in each company. That was costing since I had almost forty stocks. I've been paring that down and aiming to own no more than 25. I try to find dividend paying companies which have a long history of steady rises. Then I if I start to get bothered by the fact it's down 6-8% I can reassure myself that this stock has made money every year for the last 5-10 years without fail, and hope that gives me more patience. So far it seems to be working. I mix in these largely unexciting companies (A&W, Pizza-Pizza, Chartwell Retirement, Visa, Fortis, TD, with more reliable tech names like Apple, Google and Facebook and a few cutting edge ones like Shopify, Nvidea and Kinaxis.

Offline msj

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Re: Investments
« Reply #20 on: February 12, 2017, 10:54:11 am »
The problem with capital gains in an RRSP is that you will eventual pay tax on those at full tax rates.

In a TFSA there is not tax on it.

In a non-reg account you pay tax now but on only half the gain. 

I've gotta have more cow bell! -Bruce Dickinson

Offline SirJohn

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Re: Investments
« Reply #21 on: February 12, 2017, 11:32:48 am »
The problem with capital gains in an RRSP is that you will eventual pay tax on those at full tax rates.

There is that, but I don't think I'll be in the same tax bracket as I am now (the highest) when I have to pay that tax. I do put my biggest growth names into my TFSA, but keep my dividend payers in my non-registered account.

Offline msj

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Re: Investments
« Reply #22 on: February 12, 2017, 07:06:29 pm »
Generally speaking:

Foreign income should be earned in RRSP's so that no foreign withholding tax is withheld (assuming tax treaty in place which is usually the case). 

Interest bearing in RRSP's and TFSA's since it would be taxed at full tax rates anyway.

Eligible dividends ( dividends from most public CDN companies) ideally are earned in non-reg accounts (but depends...).

Cap gains earned in non-reg accounts too since inclusion rate is only 50%.

But all of that assumes a person is paying tax at high marginal tax rates, has fully loaded RRSP's and TFSA's, and still has excess savings to invest in non-reg accounts.

And the person wants to invest in interest bearing and/or Cdn dividend investments.

So we are talking about 5% or so of the population, if that.
I've gotta have more cow bell! -Bruce Dickinson

Offline wilber

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Re: Investments
« Reply #23 on: February 12, 2017, 07:13:49 pm »
There is that, but I don't think I'll be in the same tax bracket as I am now (the highest) when I have to pay that tax. I do put my biggest growth names into my TFSA, but keep my dividend payers in my non-registered account.

Interesting that. My wife thought the same thing but with income splitting, she wound up in a higher bracket after she retired and converted her RRSP to a RRIF. Because of that she has been taking out the minimum every year, but in those four years the thing has still grown by over 20%, in spite of her making the minimum withdrawals. Before someone says cry me a river, I realize it is a good place to be but she would have been better off contributing to a TFSA all those years, had they existed.

Offline msj

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Re: Investments
« Reply #24 on: February 18, 2017, 11:35:05 am »
Without any identification, what do you think of this plain, simple, chart?

Is that change in 2014/2015 an indication that it will revert to the mean and break the trendline to go up?

Or am I being too optimistic and this is just a blip for a long term downward trend?


Will provide more details later....

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I've gotta have more cow bell! -Bruce Dickinson

Offline SirJohn

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Re: Investments
« Reply #25 on: February 18, 2017, 11:38:37 am »
I'd need to know what caused the multi-year fall, and what changed, as well as whether the uptrend continued through 2016.

Offline cybercoma

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Re: Investments
« Reply #26 on: February 18, 2017, 12:46:35 pm »
You've got to say that as a rule something that's been failing for a decade is going to continue to fail unless there's a drastic change.

Offline ?Impact

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Re: Investments
« Reply #27 on: February 18, 2017, 02:26:36 pm »
Without any identification, what do you think of this plain, simple, chart?

Not sure, it it related to an investment or crime?

Offline Manob

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Re: Investments
« Reply #28 on: February 21, 2017, 06:02:33 pm »
Without any identification, what do you think of this plain, simple, chart?

Is that change in 2014/2015 an indication that it will revert to the mean and break the trendline to go up?

Or am I being too optimistic and this is just a blip for a long term downward trend?


Will provide more details later....

Much like previous flips of a coin have no effect on the outcome of subsequent ones, the previous prices on a chart have no effect on the future ones.

Any correlations that can be found in decades long data sets between certain "technical" features of price action and what follows are results of data drudging.

Offline msj

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Re: Investments
« Reply #29 on: February 26, 2017, 11:30:31 am »
Yes, the graph is not of a stock but of the violent crime rate over the past ten years.

The graph has little to no predictive value, imo.

At best, one can say that the downward trend has broken in 2014/2015. Which is visually true.

But that may be a blip which tells nothing of the future. 

Knowing other information such as demographic, economic, etc.... may help us think we can project the future trajectory of the trend line but we will probably only really begin to understand any correlations or causes years later.

The same principles hold for looking at stock charts.

Sure we have moving averages, RSI, advance/decline lines etc, but while price may have some "memory" the underlying trend will always regress to the fundamentals.

Not to say that some people cannot do well with technical analsyis and trading. But sometimes a big deal is made out of small countertrends which may be a fluke rather than any substantive change to the underlying secular trend. 

IOW, violent crime in the US could, ironically, roar back to the good old days when the country was more violent. 

Or this could be a dead cat bounce which will turn over and fall/flatline into the future.

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I've gotta have more cow bell! -Bruce Dickinson